UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D. C. 20549

                                   FORM 10-QSB

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

                  For the Quarterly Period Ended March 31, 2002

                                       OR

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

       For the transition Period from ________________ to ________________

                        Commission file number 000-24057

                         Rushmore Financial Group, Inc.
                     ---------------------------------------
             (Exact name of registrant as specified in its charter)

                Texas                                75-2375969
                -----                                ----------
      (State of Incorporation)        (I. R. S. Employer Identification No.)

                 13355 Noel Road, Suite 300, Dallas, Texas 75240
                 -----------------------------------------------
                                  972-308-8858
                ------------------------------------------------
                (Issuer's telephone number, including area code)

         Check whether the issuer filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the  distribution  of
securities under a plan confirmed by the court.

                              Yes ______ No ______

         Check whether the issuer (1) filed all reports  required to be filed by
Section 13 or 15(d) of the  Exchange  Act during the past 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  XXX   No ______

         State the number of shares  outstanding of each of the issuer's classes
of common equity as of March 31, 2002:  7,901,684 shares of common stock,  $0.01
par value.

         Transitional Small Business Disclosure Format;

                              Yes ______ No  XXX


<PAGE>

PART I.     FINANCIAL INFORMATION
Item 1.     Financial Statements










                                                                               2
<PAGE>
<TABLE>
<CAPTION>

                 RUSHMORE FINANCIAL GROUP, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS

                                                                           (Unaudited)
                                                                            March 31,        December 31,
                                ASSETS                                         2002              2001
                                                                         --------------    --------------
<S>                                                                      <C>               <C>
Cash and cash equivalents                                                  $    259,934      $    261,761
Accounts receivable                                                             179,477           338,747
Prepaid expenses and deposits                                                   491,545           227,449
Developed software, at cost                                                   1,925,070         1,739,257
Property and equipment, net of accumulated depreciation                         373,816           413,598
Goodwill, net                                                                 1,253,932         1,253,932
                                                                         --------------    --------------
                Total assets                                               $  4,483,774      $  4,234,744
                                                                         ==============    ==============

                 LIABILITIES AND SHAREHOLDERS' EQUITY

Liabilities:
     Accounts payable                                                      $  1,012,823      $  1,012,529
     Notes payable                                                              328,151           150,154
     Liabilities acquired in 2001 acquisition                                   349,318           375,812
     Accrued expenses and other liabilities                                     170,448           136,751
                                                                         --------------    --------------
                Total liabilities                                             1,860,740         1,675,246
                                                                         --------------    --------------

Shareholders' Equity:
     Preferred stock - cumulative; $10 par value; 14,063 shares issued
          and outstanding                                                       140,630           140,630
     Preferred stock - convertible cumulative; $10 par value;
          86,480 shares issued and outstanding                                  864,800           864,800
     Preferred stock subscriptions pending                                       65,000              --
     Common stock - $0.01 par value, 10,000,000 shares authorized;
          8,588,562 shares issued at March 31, 2002; 7,229,633                   85,886            72,296
          shares issued at December 31, 2001
     Common stock subscriptions receivable                                       (4,118)           (4,118)
     Additional paid in capital                                              12,453,876        12,154,388
     Treasury stock, at cost - 686,878 shares                                  (421,022)         (421,022)
     Accumulated deficit                                                    (10,562,018)      (10,247,476)
                                                                         --------------    --------------
                Total shareholders' equity                                    2,623,034         2,559,498
                                                                         --------------    --------------
                Total liabilities and shareholders equity                  $  4,483,774      $  4,234,744
                                                                         ==============    ==============

</TABLE>

           See accompanying notes to consolidated financial statements

                                                                               3
<PAGE>
<TABLE>
<CAPTION>

                 RUSHMORE FINANCIAL GROUP, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                      For the three months ended March 31,
                                   (unaudited)

                                                                 2002             2001
                                                           -------------    -------------
<S>                                                        <C>              <C>
Revenue:
     Direct access brokerage services
         Commissions and fees                                $   233,394      $    52,634
     Retail brokerage services
         Commissions and fees                                  1,399,970        1,370,591
     Other revenue                                                12,662           37,672
                                                           -------------    -------------
            Total revenue                                      1,646,026        1,460,897
                                                           -------------    -------------

Expenses:
     Direct access brokerage services
         Commission expense                                      183,645            1,760
         Other direct access brokerage services expenses         145,352          109,964
     Retail brokerage services
         Commission expense                                    1,062,037          950,112
         Other retail brokerage services expenses                 20,454           84,936
     General and administrative                                  482,626        1,062,087
                                                           -------------    -------------
            Total expenses                                     1,894,114        2,208,859
                                                           -------------    -------------
Operating loss                                                  (248,088)        (747,962)
Other income (expense):
     Depreciation and amortization                               (58,577)         (51,966)
     Interest expense                                             (7,877)          (7,430)
                                                           -------------    -------------
Loss from continuing operations                                 (314,542)        (807,358)
                                                           -------------    -------------

Loss from discontinued operations                                   --            (54,274)

                                                           -------------    -------------
  Net loss                                                   $  (314,542)     $  (861,632)
                                                           =============    =============

Basic and diluted loss per share of
     common stock, continuing operations                     $     (0.05)     $     (0.16)
Basic and diluted loss per share of
     common stock, discontinued operations                          --              (0.01)
                                                           -------------    -------------
Basic and diluted net loss per share of
     common stock                                            $     (0.05)     $     (0.17)
                                                           =============    =============


  Weighted average common shares outstanding                   6,705,239        5,159,047
                                                           =============    =============

</TABLE>

           See accompanying notes to consolidated financial statements


                                                                               4
<PAGE>
<TABLE>
<CAPTION>

                 RUSHMORE FINANCIAL GROUP, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                      For the three months ended March 31,
                                   (unaudited)

                                                                        2002             2001
                                                                  -------------    -------------
<S>                                                               <C>              <C>
Cash flows from operating activities:
       Loss from continuing operations                              $  (314,542)     $  (807,358)
       Adjustments to reconcile loss from continuing operations
         to net cash used in operating activities
            Common stock issued for compensation and expenses            30,494             --
            Depreciation and amortization                                58,577           51,966
            Change in assets and liabilities, net of effect
               of the 2001 acquisition:
               (Increase) decrease in assets:
                 Accounts receivable                                    159,270         (229,390)
                 Prepaid expenses and deposits                           35,904          (33,413)
               Increase (decrease) in liabilities:
                 Accrued expenses and other liabilities                   7,497          353,581
                                                                  -------------    -------------
Net cash used in operating activities-continuing operations             (22,800)        (664,614)
                                                                  -------------    -------------
Cash flows from investing activities:
       Purchase of equipment                                            (18,795)         (25,030)
       Capitalization of software development costs                    (185,813)        (319,486)
       Cash received on the 2001 acquisition                               --             11,047
                                                                  -------------    -------------
Net cash used in investing activities                                  (204,608)        (333,469)
                                                                  -------------    -------------
Cash flows from financing activities:
       Proceeds from sale of Common Stock                                   390           (6,200)
       Proceeds from sale of Preferred Stock                             65,000             --
       Preferred Stock dividends paid                                   (17,806)         (10,769)
       Payments on notes payable                                        (22,003)         (42,479)
       Proceeds from notes payable                                      200,000           53,456
                                                                  -------------    -------------
Net cash provided by (used in) financing activities                     225,581           (5,992)
                                                                  -------------    -------------

Net cash used in continuing operations                                   (1,827)      (1,004,075)

Net cash provided by discontinued operations                               --               --
                                                                  -------------    -------------

Net decrease in cash and cash equivalents                                (1,827)      (1,004,075)
Cash and cash equivalents at beginning of period                        261,761        1,218,317
                                                                  -------------    -------------
Cash and cash equivalents at end of period                          $   259,934      $   214,242
                                                                  =============    =============

Supplemental Disclosure of Cash Flow Information:
       Cash paid for interest                                       $     6,645      $     5,370
       Cash paid for income taxes                                   $      --        $      --
Supplemental Disclosure of Non-Cash Information:
       Common stock issued as dividends on preferred stock          $     2,126      $      --
       Common stock issued in the 2001 acquisition                  $      --        $   679,800
       Common stock issued in the OTA client acquisition            $   300,000      $      --

</TABLE>

           See accompanying notes to consolidated financial statements

                                                                               5
<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.   Basis of Presentation

     The  financial  statements  included  herein have been prepared by Rushmore
Financial Group, Inc. ("Company" or "RFGI") without audit, pursuant to the rules
and regulations of the Securities and Exchange  Commission.  Certain information
and footnote  disclosures  normally included in financial statements prepared in
accordance with accounting principles generally accepted in the United States of
America have been condensed or omitted  pursuant to such rules and  regulations,
although the Company believes that the disclosures contained herein are adequate
to make the information presented not misleading.  In the opinion of management,
the information  furnished in the unaudited  consolidated  financial  statements
reflects all  adjustments  which are ordinary in nature and necessary to present
fairly the Company's  financial  position,  results of operations and changes in
financial position for such interim period.  These interim financial  statements
should be read in conjunction  with the Company's  financial  statements and the
notes thereto as of December 31, 2001,  included in the Company's  annual report
on Form 10-KSB for the year ended December 31, 2001.

     The accompanying  financial statements have been prepared assuming that the
Company will  continue as a going  concern.  At March 31, 2002,  the Company had
$1,860,740 in liabilities,  and cash and accounts receivable of $439,411.  Also,
the Company had net losses from  continuing  operations  of  $1,057,635 in 2000,
$2,203,896  in 2001,  and  $314,542 in the first  quarter of 2002.  Although the
Company  believes that it will be able to continue to raise the necessary  funds
until it reaches a  sustainable  level of  profitability,  these  matters  raise
substantial  doubt about the Company's  ability to continue as a going  concern.
The financial  statements do not include any adjustments  that might result from
the outcome of this uncertainty.

     Rushmore  Insurance  Services,   Incorporated  ("Rushmore  Agency")  is  an
insurance agency and an affiliate of the Company by means of service agreements.
The Company has entered into an  administrative  services  agreement whereby net
revenues and expenses are charged via a management fee to the Company.  Rushmore
Agency has been consolidated in the Retail Brokerage segment of the accompanying
consolidated financial statements.

2.   Industry Segment Information

     The  Company's  assets,  revenue,  and expenses are  attributable  to three
identifiable  business  segments:   Direct  Access  Brokerage  Services,  Retail
Brokerage Services, and Corporate.

     The   Direct   Access   Brokerage   Services    division,    operating   as
"RushTrade(TM)",  is being  developed  to meet the needs of the  active  on-line
investor.  RushTrade  will  offer two  products  to meet the needs of the active
online  investor,  RushTrade  Direct,  its Level I  browser-based  product,  and
RushTrade Direct Pro, its Level II software-based  product. Both products are in
the final stages of beta  testing,  and are  scheduled for final release in July
2002.

     The  Retail  Brokerage  Services  division  consists  of retail  securities
brokerage  services,  mutual fund  distribution,  variable  life  insurance  and
annuities  sales and other  financial  services  offered by Rushmore  Securities
Corporation ("Rushmore Securities"). In addition, Rushmore Investment Management
Corporation  ("Rushmore  Management")  provides  fee-based  investment  advisory
services and portfolio  management.  The Company's  insurance  services business
selects  and  markets a wide  range of life,  disability,  accident  and  health
insurance   and   annuity   products    distributed   through   its   registered
representatives  and  independent  agents  of its  affiliated  agency,  Rushmore
Insurance Services, Inc. ("Rushmore Agency").

     The Corporate  division  includes all business  assets and  activities  not
directly related or allocated to the other two divisions.

     The  following  summarizes  the Company's  identifiable  assets by industry
segment as of the dates indicated:

                                                  March 31,
                                        ------------------------------
             Identifiable Assets             2002               2001
          ---------------------------   -------------    -------------
          Direct Access Brokerage       $   2,128,888    $     961,692
          Retail Brokerage                  1,687,689        2,403,795
          Corporate                           667,197          792,504
                                        -------------    -------------
                    Total               $   4,483,774    $   4,157,991
                                        =============    =============

                                                                               6
<PAGE>

     The following  summarizes the Company's industry segment operating data for
the periods indicated:

                                          Three Months Ended March 31,
                                         ------------------------------
                   Revenues                    2002             2001
           ---------------------------   -------------    -------------
           Direct Access Brokerage       $     233,394    $      52,634
           Retail Brokerage                  1,412,624        1,385,412
           Corporate                                 8           22,851
                                         -------------    -------------
                     Total               $   1,646,026    $   1,460,897
                                         =============    =============


                                          Three Months Ended March 31,
                                         ------------------------------
                    Expenses                   2002             2001
           ---------------------------   -------------    -------------
           Direct Access Brokerage       $     396,006    $     212,201
           Retail Brokerage                  1,290,494        1,573,519
           Corporate                           274,068          482,535
                                         -------------    -------------
                     Total               $   1,960,568    $   2,268,255
                                         =============    =============


                                          Three Months Ended March 31,
               Income (Loss) from        ------------------------------
             Continuing Operations             2002             2001
           ---------------------------   -------------    -------------
           Direct Access Brokerage       $    (162,612)   $    (159,567)
           Retail Brokerage                    122,130         (188,107)
           Corporate                          (274,060)        (459,684)
                                         -------------    -------------
                     Total               $    (314,542)   $    (807,358)
                                         =============    =============

3.   Capitalized Software Development Costs

     The Company  capitalizes  certain costs  associated with the development of
the RushTrade software  products.  During the first quarter of 2002, the Company
capitalized $185,813 in costs versus $319,486 for the same period in 2001. As of
March 31, 2002, the total of all capitalized costs was $1,925,070.  Upon release
of each of the RushTrade  products or modules,  costs related to that product or
module  will be  charged to  operating  expenses  instead of being  capitalized.
Additionally,  all presently capitalized costs relating to a released product or
module  will  be  amortized  by  the  greater  of  the  revenue  method  or  the
straight-line method over a three-year period.

4.   Recent Event

     In March 2002, the Company entered into an Agreement, as an amendment to an
earlier  revenue-sharing  agreement,  with NewportX.com,  an affiliate of Online
Trading  Academy of Irvine,  CA.  ("OTA") to acquire a block of up to 150 active
trader  accounts which are to be referred or directed to RushTrade over the next
six months in exchange for 1,200,000  shares of RFGI common stock.  These shares
were issued  during March 2002 and the Company has  recorded a prepaid  asset of
$300,000,  the fair  value of the stock on the date of  issuance.  As the active
trader accounts are received,  the Company will  reclassify  these amounts to an
intangible asset. OTA is an education  provider and conducts  classroom training
for those  interested  in day  trading or other  active  investors  who seek the
latest  investment  tools and techniques in the active trader market.  RushTrade
has entered into a strategic  relationship  with OTA as an industry  partner for
training  and  education   whereby  OTA  will  conduct  training  classes  using
RushTrade's Direct Pro software trading platform.

5.   Subsequent Event

     On April  9,  2002,  RushTrade  Software  Services,  Inc.,  a wholly  owned
subsidiary  of the  Company,  entered into a  non-binding  Letter of Intent with
Fidelity Asset  Management co. of Huntington  Beach,  CA ("Fidelity") to license
the  RushTrade  Direct  Pro  software.  This  Letter of Intent is subject to the
execution of definitive  documents,  which are expected to require  RushTrade to
provide to Fidelity a co-branded "private label" version of the RushTrade Direct
Pro software,  which will include a customized graphical user interface modified
for the  Chinese  language.  The  documents  are also  expected to provide for a
24-month  exclusive  territorial  rights usage in Hong Kong and Mainland  China,
subject  to  the  approval  of  various  governmental  officials  or  regulatory
authorities. If the transaction is consummated, RushTrade is expected to receive
an  initial  front-end  license  fee in the  amount of  $500,000  plus a monthly
license fee.

                                                                               7
<PAGE>

6.   Discontinued Operations

     In September 2001 the Company entered into an agreement,  with an effective
date of August 1, 2001, to sell Rushmore  Investment  Advisors,  Inc. ("Rushmore
Advisors") to Mr. John Vann in exchange for the redemption and  cancellation  of
597,405 shares of the Company's  common stock plus a note for $200,000.  As part
of the sale,  Mr. Vann also  retained the right to prepay his  existing  note of
$280,319 to the Company at a discount.  Both notes were subsequently  discounted
to a total of  $250,000  and  paid.  The sale,  including  the  discounted  note
payoffs,  resulted in a one-time non-operating loss of approximately  $2,900,000
in  September  2001.  The  financial  data  relating  to  Rushmore  Advisors  is
classified as discontinued operations for all periods presented.

7.   Reclassification

     Certain  2001  balances  have  been  reclassified  to  conform  to the 2002
presentation.

8.   Earnings (Loss) Per Share

     Earnings (loss) per share for the periods  indicated are computed using the
following information:

                                                Three months ended March 31,
                                               ------------------------------
       Loss From Continuing Operations               2002             2001
  ------------------------------------------   -------------    -------------
  Loss from continuing operations              $    (314,542)   $    (807,358)
  Dividends on preferred stock                       (19,932)         (10,769)
                                               -------------    -------------
  Loss from continuing operations
       applicable to common shareholders       $    (334,474)   $    (818,127)
                                               =============    =============

9.   Goodwill

     In July 2001 the FASB issued  Statement of Financial  Accounting  Standards
No. 142 (SFAS 142), Goodwill and Intangible Assets, which revises the accounting
for  purchased  goodwill and  intangible  assets.  Under SFAS 142,  goodwill and
intangible assets with indefinite lives will no longer be amortized, but will be
tested  for  impairment  annually,  and  also  in  the  event  of an  impairment
indicator.  SFAS 142 is effective for fiscal years  beginning after December 15,
2001. The elimination of the  amortization of goodwill upon adoption of SFAS 142
is expected to reduce annual operating  expenses by approximately  $89,000.  The
Company adopted SFAS 142 on January 1, 2002.


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

1.   Recent Development

     In March 2002 the Company's technology  development  subsidiary,  RushTrade
Software Services,  Inc. entered into a non-exclusive agreement with CentraTrade
Services,  Ltd.  of Houston  whereby  CentraTrade  would  become a licensee  and
distributor of RushTrade's  RushTrade  Direct and RushTrade  Direct Pro software
platforms to other NASD member  broker/dealers.  Upon the  completion  and final
release  of the  RushTrade  software  and  its  associated  Penson  Back  Office
Administrative  Tool,  the Company  expects to begin to derive  various  revenue
streams  in the  form of  licensing  fees  and  royalties  from  these  expected
licensing arrangements.

2.   RushTrade(TM)Direct Access Online Services Software Development

     RushTrade      Direct      Access      Online       Services--RushTrade.com
(http://www.rushtrade.com),   a  division  of  Rushmore  Securities,   is  being
developed to meet the needs of the active on-line investor. RushTrade will offer
its clients real-time Level I and Level II investment price quotes combined with
direct  access to  Electronic  Communications  Networks  ("ECN"s)  and the major
Exchanges.  The  RushTrade  product is being  developed  by  RushTrade  Software
Services,   Inc.,  and  will  be  deployed  for  retail   distribution   through
RushTrade.com,  a division  of  Rushmore  Securities.  The  products  offered by
RushTrade.com are currently in beta testing,  and is expected to ready for final
release in July 2002.


                                                                               8
<PAGE>

     RushTrade will offer two distinct  products to meet the needs of the active
online  investor,  RushTrade  Direct,  its Level I  browser-based  product,  and
RushTrade Direct Pro, its Level II software-based product.

     RushTrade  Direct  will  fulfill  the  needs  of  the  online  investor  by
delivering  real-time quotes and information,  RushTrade's Direct Access Routing
Technology  (DART(TM)),  and customer service provided by experienced registered
representatives.  This product will be delivered to investors  via the Internet,
and therefore will be able to be accessed from virtually any computer with a web
browser.

     RushTrade  Direct  Pro,  RushTrade's  proprietary  software-based  Level II
product,  will  meet  the  more  sophisticated  on-line  investors'  demands  by
providing  the  latest  trading   technologies  and  service   available  in  an
easy-to-use trading system. Significant features of the Level II product include
streaming,  real-time Level II securities quotes,  news, charts,  research,  and
RushTrades'  proprietary Direct Access Routing Technology  (DART(TM)).  DART(TM)
will enable  investors  to route their  orders  directly to the  specific ECN or
Exchange with the best market price,  thus saving the investor time and money by
providing  improved trade execution  quality.  RushTrade Direct Pro clients will
have access to the same customer service support that all RushTrade Direct users
receive.

     The RushTrade  products were released into various stages of testing during
2001-2002.  Beta testing began for RushTrade  Direct in July 2001.  Beta testing
for  RushTrade  Direct Pro began in  November  2001,  and again with  additional
features in February 2002. Both products are scheduled for final release in July
2002. RushTrade's Penson Back Office Administrative tool, a module necessary for
licensing the software to other  broker/dealers  who have clearing  arrangements
with Penson  Financial,  is currently under  development,  and is expected to be
ready for beta  testing  in May or June  2002.  Final  release  of the module is
expected to occur no sooner than July 2002.


2.   Results of Continuing Operations

Three Months Ended March 31, 2002 and 2001

Revenues

The following table sets forth the components of the Company's  revenues for the
periods indicated:

                                          Three Months Ended March 31,
                                         ------------------------------
                    Revenues                   2002             2001
           ---------------------------   -------------    -------------
           Direct Access Brokerage       $     233,394    $      52,634
           Retail Brokerage                  1,412,624        1,385,412
           Corporate                                 8           22,851
                                         -------------    -------------
                     Total               $   1,646,026    $   1,460,897
                                         =============    =============

     Total revenue for the first quarter increased  $185,129,  or 13%, from 2001
to 2002.  This  increase was  comprised  primarily of increases of $180,760 from
Direct Access Brokerage operations and $27,212 from Retail Brokerage operations,
offset by a decrease of $22,843 in corporate revenue.

     Direct Access Brokerage revenue increased  $180,760,  or 343%, from 2001 to
2002.  This  increase was  generally  the result of $228,247  generated by a new
trading firm customer licensed in late December 2001.

     Retail Brokerage revenue increased  $27,212,  or 2%, from 2001 to 2002. The
increase consisted mainly of increases of $226,023 brokerage commission revenue,
$105,164 in  asset-based  12-b-1 fees,  and $14,552 in other  various  products,
offset by decreases of $158,577 in mutual fund  commissions and $159,950 in life
and health insurance  products.  The decrease in insurance  revenue is primarily
due to management's decision to reposition its insurance marketing resources and
efforts to concentrate  on the  development  and launch of its RushTrade  direct
access on-line trading system.

     Corporate  revenue  decreased  primarily  due to the  decrease  in interest
income from 2001 to 2002, as  interest-earning  assets such as  investments  and
notes receivable decreased.



                                                                               9
<PAGE>

Expenses

     The following table sets forth the components of the Company's expenses for
the periods indicated:

                                          Three Months Ended March 31,
                                         ------------------------------
                    Expenses                   2002             2001
           ---------------------------   -------------    -------------
           Direct Access Brokerage       $     396,006    $     212,201
           Retail Brokerage                  1,290,494        1,573,519
           Corporate                           274,068          482,535
                                         -------------    -------------
                     Total               $   1,960,568    $   2,268,255
                                         =============    =============

     Total expenses  decreased $307,687 or 14%, from 2001 to 2002. Direct Access
Brokerage expenses increased $183,805, while Retail Brokerage expenses decreased
$283,025 and Corporate expenses decreased 43%, or $208,467.

     Direct Access Brokerage expenses increased  $183,805,  or 87%, from 2001 to
2002.  This increase is primarily due to commissions of $183,645 paid to the new
trading firm licensed in December.

     Retail Brokerage  expenses decreased  $283,025,  or 18%, from 2001 to 2002.
Commission  expense increased  $111,925.  All other major categories of expenses
decreased $394,950.

     Retail  Brokerage  commission  expense  increased  12%,  from  $950,112  to
$1,062,037,  although  commissionable revenue increased only 6%, from $1,258,654
to  $1,329,880.  This is caused by two main reasons.  Health  insurance  product
sales,  with average  commission payout rates of 63%, declined from 13% of sales
in  2001  to only 4% of  sales  in  2002.  Average  commission  rates  on  other
investment  securities  products  rose  from 77% in 2001 to 81% in 2002,  as the
Company focused on recruiting  higher-producing  representatives,  who generally
command higher commission payout rates.

     Other Retail Brokerage expenses decreased $394,940 from 2001 to 2002. After
the  Northstar  acquisition  in February  2001,  the Company  began to implement
cost-reduction  policies  designed to  consolidate  job  functions and eliminate
duplicated  expenses.  These  consolidation  efforts are shown in decreases from
2001 to 2002 of  $43,723  in  insurance,  $47,385 in office  rent,  $233,955  in
salaries,  $14,569 in payroll  taxes,  $8,114 in  postage,  and $45,218 in quote
services.

     Corporate expenses decreased $208,467,  or 43%, from 2001 to 2002, with the
primary reason being the cost reduction policies implemented after the Northstar
acquisition.  Cost reduction amounts from 2001 to 2002 were $76,930 in salaries,
$33,004 in office rent,  $36,803 in general operating  expenses,  and $17,597 in
legal expenses.


Operating income (loss) from continuing operations

     The  following  table sets forth the  components  of the  Company's  income
(loss) for the periods indicated:

                                          Three Months Ended March 31,
               Income (Loss) from        ------------------------------
              Continuing Operations            2002             2001
           ---------------------------   -------------    -------------
           Direct Access Brokerage       $    (162,612)   $    (159,567)
           Retail Brokerage                    122,130         (188,107)
           Corporate                          (274,060)        (459,684)
                                         -------------    -------------
                     Total               $    (314,542)   $    (807,358)
                                         =============    =============

     Operating  losses  declined  $492,816,  or 61%,  from 2001 to 2002.  Retail
Brokerage recorded operating income of $122,130 in 2002 versus an operating loss
of $188,107 in 2001. Corporate operating losses declined $185,624,  or 40%, from
2001 to 2002. These operating loss reductions are generally  attributable to the
Company's  continual  efforts to control and reduce  general and  administrative
expenses.


                                                                              10
<PAGE>

Liquidity

     Cash  Flows  from  Operating  Activities  - The  Company  had a  loss  from
continuing  operations  of $314,542 for the quarter  ended March 31, 2002.  This
amount was adjusted  for non-cash  expenses  totaling  $89,071.  Cash flows from
operating activities were increased by a decrease in receivables of $159,270 and
by  various  other  cash flow  adjustments  aggregating  a net source of cash of
$43,401; thus yielding a net cash flow used by operating activities of $22,800.

     Cash  Flows  From  Investing  Activities  - Cash  flow  used  by  investing
activities  during  the  quarter  ended  March  31,  2002 was  $204,608,  due to
capitalizing  $185,813 in  development  costs  related to the  RushTrade  direct
access software and purchasing various fixed assets for $18,795.

     Cash Flows from  Financing  Activities - During the quarter ended March 31,
2002, the Company raised $65,390 from the sale of common and preferred stock and
$200,000 from borrowings.  The Company paid $22,003 as payments on notes payable
and $17,806 as preferred stock dividends.

     The Company's cash and cash  equivalents  available for operations at March
31, 2002 were  $259,934,  and the  Company's  liabilities  exceeded its cash and
receivables  by  $1,421,329.   The  Company's   requirements   for  normal  cash
expenditures,  as well as costs for the  further  development  and launch of the
proprietary on-line RushTrade software, have historically been supplemented with
borrowings  and  equity   capital  raised  through  the  private   placement  of
securities;  however,  there can be no assurance that these sources of cash will
be available in the future.

     The accompanying  financial statements have been prepared assuming that the
Company will  continue as a going  concern.  At March 31, 2002,  the Company had
$1,860,740 in liabilities,  and cash and accounts receivable of $439,411.  Also,
the Company had net losses from  continuing  operations  of  $1,057,635 in 2000,
$2,203,896  in 2001,  and  $314,542 in the first  quarter of 2002.  Although the
Company  believes that it will be able to continue to raise the necessary  funds
until it reaches a  sustainable  level of  profitability,  these  matters  raise
substantial  doubt about the Company's  ability to continue as a going  concern.
The financial  statements do not include any adjustments  that might result from
the outcome of this uncertainty.

     The  Company  has  taken  several  steps  to  increase  cash  by the use of
borrowings and equity.  In the first quarter of 2002 the Company raised $200,000
through  the  sale of  convertible  debentures  and  $65,000  from  the  sale of
preferred  stock.  Early in April 2002, the Company  signed a selling  agreement
with an institutional broker/dealer in Houston to complete the remaining amount,
approximately  $500,000,  of the  current  preferred  stock  offering on a "best
efforts" basis.

     The  Company  has  undergone  an  extensive  internal   reorganization  and
reduction  of  staff  to  adjust  to the  current  level  of  activity  and  has
implemented  additional  steps  to more  closely  monitor  expenses.  Additional
marketing efforts are being implemented to enhance revenue and take advantage of
the upcoming release of the RushTrade software products.  The RushTrade products
are still in beta testing,  and have so far generated only minimal revenue.  The
Company  is  pursuing  additional  agreements  similar  to the OTA and  Fidelity
agreements  (as  discussed in  Footnotes #4 and #5 of this  document) to further
increase revenue.


Forward-looking statements

     This document  includes  statements  that may constitute  "forward-looking"
statements,  usually  containing  the words  "believe",  "estimate",  "project",
"expect", or similar expressions. These statements are made pursuant to the safe
harbor  provisions  of the  Private  Securities  Litigation  Reform Act of 1995.
Forward-looking statements inherently involve risks and uncertainties that could
cause actual results to differ materially from the  forward-looking  statements.
Factors that would cause or contribute to such differences  include, but are not
limited to, continued  acceptance of the Company's  products in the marketplace,
competitive  factors,  changes  in  regulatory  environments,  and  other  risks
detailed in the  Company's  periodic  report  filings  with the  Securities  and
Exchange Commission.  By making these  forward-looking  statements,  the Company
undertakes  no obligation  to update these  statements  for revisions or changes
after the date of this filing.



                                                                              11
<PAGE>

PART II.        OTHER INFORMATION


Item 5.  Other Information

     The Company has been  notified by the Nasdaq Stock Market that it has until
August 13, 2002 to comply  with its minimum  continued  listing  requirement  by
maintaining  a minimum  closing  bid price of $1.00 for at least 10  consecutive
trading  days.  The Company has also been  reminded by the Nasdaq  Stock  Market
that,  to  comply  with its  minimum  continued  listing  requirements,  it must
maintain a minimum balance of $2,500,000 in  Shareholder's  Equity and a minimum
of  $1,000,000  in market value in the public  float.  There can be no assurance
that the Company will  demonstrate  compliance  with these  requirements  in the
future.

Item 6.  Exhibits and Reports on Form 8K

     On May 7, 2002, the Company appointed the accounting firm of King Griffin &
Adamson P.C. as its independent  auditors for the fiscal year ended December 31,
2002, and chose not to renew the engagement of Grant Thornton LLP, who served as
the Company's  independent auditors for the fiscal year ended December 31, 2001.
Since  January 1, 2000,  the  Company has not had any  disagreements  with Grant
Thornton LLP on any matter of  accounting  principles  or  practices,  financial
statement  disclosure  or  auditing  scope  or  procedures  that  would  require
disclosure in the current Report on Form 8-K.



                                    SIGNATURE

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

                                            Rushmore Financial Group, Inc.

Dated: May 15, 2002                         By /s/ Howard M. Stein
                                            ----------------------------
                                            Howard M. Stein
                                            Controller








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