UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                   Form 10-QSB

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


(Mark one)
      XX            QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
--------------      EXCHANGE ACT OF 1934


                      For the quarterly period ended March 31, 2001

                    TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE
--------------      ACT OF 1934



                      For the transition period from ____________ to ___________

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


                         Commission File Number: 0-29582
                                                 -------

                         United Community Holdings, Inc.
        (Exact name of small business issuer as specified in its charter)

           Nevada                                            75-2300997
----------------------------                        ----------------------------
  (State of incorporation)                            (IRS Employer ID Number)

                   3935 Interstate 55 South, Jackson, MS 39212
                   -------------------------------------------
                    (Address of principal executive offices)

                                 (601) 371-0009
                                 --------------
                           (Issuer's telephone number)


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


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    NO X
                                                             ---   ---

State the number of shares outstanding of each of the issuer's classes of common
 equity as of the latest practicable date:    July 5, 2001: 8,000,818
                                              -----------------------


Transitional Small Business Disclosure Format (check one):     YES    NO X
                                                                  ---   ---



<PAGE>



                         United Community Holdings, Inc.

                Form 10-QSB for the Quarter ended March 31, 2001

                                Table of Contents


                                                                           Page
                                                                           ----
Part I - Financial Information

Item 1 Financial Statements                                                   3

Item 2 Management's Discussion and Analysis or Plan of Operation             15


Part II - Other Information

Item 1 Legal Proceedings                                                     16

Item 2 Changes in Securities                                                 16

Item 3 Defaults Upon Senior Securities                                       16

Item 4 Submission of Matters to a Vote of Security Holders                   16

Item 5 Other Information                                                     17

Item 6 Exhibits and Reports on Form 8-K                                      17


Signatures                                                                   17




                                                                               2

<PAGE>



Part 1 - Item 1 - Financial Statements

                 United Community Holdings, Inc. and Subsidiary
                           Consolidated Balance Sheets
                             March 31, 2001 and 2000


                                   (Unaudited)

                                                       March 31,     March 31,
                                                          2001          2000
                                                      -----------   -----------
                                     ASSETS
                                     ------
Current assets
   Cash on hand and in bank                           $    11,927   $     1,471
   Restricted cash                                         84,204       105,043
   Accounts receivable-at need, net of allowance
     for doubtful accounts of $12,500, respectively        64,281         4,316
   Other current assets                                     1,488         4,143
                                                      -----------   -----------

     Total current assets                                 161,900       114,973
                                                      -----------   -----------


Property and equipment - at cost
   Buildings                                            2,354,061     2,354,061
   Roads, common cemetery areas and landscaping           347,325       338,504
   Vehicles, equipment and office furnishings             258,626       253,072
                                                      -----------   -----------
                                                        2,960,012     2,945,637
   Accumulated depreciation                              (579,723)     (412,124)
                                                      -----------   -----------
                                                        2,380,289     2,533,513
   Land                                                   107,580       107,580
                                                      -----------   -----------

     Net property and equipment                         2,487,869     2,641,093
                                                      -----------   -----------


Other assets
   Cemetery property - at cost                          1,098,354     1,110,045
   Prearranged funeral contracts                        1,184,745     1,419,994
   Long-term receivables for cemetery property sales      244,429       336,977
   Other                                                    9,547        13,587
                                                      -----------   -----------

     Total other assets                                 2,537,075     2,880,603
                                                      -----------   -----------

     TOTAL ASSETS                                     $ 5,186,844   $ 5,636,669
                                                      ===========   ===========


                                  - Continued -



The  financial  information  presented  herein has been  prepared by  management
without audit by independent certified public accountants.

The  accompanying  notes are an integral  part of these  consolidated  financial
statements.
                                                                               3

<PAGE>



                 United Community Holdings, Inc. and Subsidiary
                     Consolidated Balance Sheets - Continued
                             March 31, 2001 and 2000

                                   (Unaudited)

                                                       March 31,     March 31,
                                                          2001          2000
                                                      -----------   -----------
                      LIABILITIES AND SHAREHOLDERS' EQUITY
                      ------------------------------------
Current liabilities
   Notes payable                                      $   300,000   $   300,000
   Current maturities of long-term debt                    72,033        68,451
   Accounts payable and other accrued liabilities         122,452        91,644
                                                      -----------   -----------

     Total current liabilities                            494,485       460,095
                                                      -----------   -----------


Long-term liabilities
   Long-term debt, net of current maturities            2,059,338     2,121,116
   Deferred prearranged funeral contract revenues       1,944,330     1,956,068
   Deferred cemetery property sale revenues               436,387       408,763
   Shareholder loan                                          --         159,958
                                                      -----------   -----------

     Total liabilities                                  4,934,540     5,106,000
                                                      -----------   -----------


Commitments and contingencies


Shareholders' Equity
   Preferred stock - $0.00001 par value
     10,000,000 shares authorized
     None issued and outstanding                             --            --
   Common stock - $0.00001 par value
     50,000,000 shares authorized
     8,000,818 shares issued and outstanding                   80            80
   Additional paid-in capital                           3,152,142     2,954,705
   Accumulated deficit                                 (2,899,918)   (2,424,116)
                                                      -----------   -----------

     Total shareholders' equity                           252,304       530,669
                                                      -----------   -----------

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY            $ 5,186,844   $ 5,636,669
                                                      ===========   ===========

The  financial  information  presented  herein has been  prepared by  management
without audit by independent certified public accountants.

The  accompanying  notes are an integral  part of these  consolidated  financial
statements.
                                                                               4

<PAGE>



                 United Community Holdings, Inc. and Subsidiary
         Consolidated Statements of Operations and Comprehensive Income
                   Three months ended March 31, 2001 and 2000

                                   (Unaudited)

                                                      Three months  Three months
                                                         ended         ended
                                                        March 31,     March 31,
                                                          2001          2000
                                                      -----------   -----------
Revenues
   Funeral revenues                                   $    70,846   $    39,461
   Cemetery sales                                          26,550        21,357
   Finance charge and related revenues                      2,736         5 504
                                                      -----------   -----------
     Total revenues                                       100,132        66,322
                                                      -----------   -----------

Cost of sales and direct expenses
   Allocated cost of cemetery spaces and crypts             5,120         4,071
   Cost of cemetery merchandise and funeral services       17,261        14,485
   Sales commissions                                        5,845         7,552
                                                      -----------   -----------
     Total cost of sales and direct expenses               28,226        26,108
                                                      -----------   -----------

Gross profit                                               71,906        40,214
                                                      -----------   -----------

Operating expenses
   General and administrative expenses                     75,564        71,472
   Interest expense                                        29,637        58,592
   Depreciation and amortization                           40,651        42,133
                                                      -----------   -----------
     Total operating expenses                             145,852       172,197
                                                      -----------   -----------

Loss from operations                                      (73,946)     (131,983)

Other income (expense)
   Interest and other income                                    4         1,094
                                                      -----------   -----------

Loss before income taxes                                  (73,942)     (130,889)

Income taxes                                                 --            --
                                                      -----------   -----------

Net Loss                                                  (73,942)     (130,889)

Other comprehensive income                                   --            --
                                                      -----------   -----------

Comprehensive Loss                                    $   (73,942)  $  (130,889)
                                                      ===========   ===========

Net loss per weighted-average share
   of common stock outstanding,
   calculated on Net Loss - Basic                     $     (0.01)  $     (0.02)
                                                      ===========   ===========

Weighted-average number of shares
   of common stock outstanding - Basic                  8,000,818     8,000,818
                                                      ===========   ===========


The  financial  information  presented  herein has been  prepared by  management
without audit by independent certified public accountants.

The  accompanying  notes are an integral  part of these  consolidated  financial
statements.
                                                                               5

<PAGE>
<TABLE>
<CAPTION>



                 United Community Holdings, Inc. and Subsidiary
                      Consolidated Statements of Cash Flows
                   Three months ended March 31, 2001 and 2000

                                   (Unaudited)

                                                                       Three months     Three months
                                                                           ended            ended
                                                                         March 31,        March 31,
                                                                           2001             2000
                                                                         ---------        ---------
<S>                                                                       <C>              <C>
Cash flows from operating activities
   Net loss for the year                                                 $ (73,942)       $(130,889)
   Adjustments to reconcile net loss to net
     cash provided by operating activities
       Depreciation and amortization                                        41,661           43,143
       Allocated cost of cemetery spaces and crypts                          2,680            4,071
       (Increase) Decrease in:
         Accounts receivable                                                (7,581)              43
         Other assets                                                        8,757            4,966
       Increase (Decrease) in:
         Accounts payable and other accrued liabilities                        366            3,191
         Deferred revenues                                                 (17,390)         (20,850)
                                                                         ---------        ---------
Net cash used in operating activities                                      (45,449)         (96,325)
                                                                         ---------        ---------

Cash flows from investing activities
   Transfers (to)/from trust funds and restricted cash                       5,101          (46,123)
   Capital expenditures for property, equipment and cemetery property         (440)          (6,576)
   Cash collected on prearranged funeral contract receivables               29,795           59,551
   Cash collected on long-term receivables for cemetery property sales      22,407           37,332
                                                                         ---------        ---------
Net cash used in investing activities                                       56,863           44,184
                                                                         ---------        ---------

Cash flows from financing activities
   Net activity on bank line of credit                                        --           (100,000)
   Principal (paid) received on long-term notes and leases payable         (10,537)         (14,929)
   Additional capital contributed by shareholder                             3,318          159,958
                                                                         ---------        ---------
Net cash provided by financing activities                                   (7,219)          45,029
                                                                         ---------        ---------

Increase (Decrease) in cash                                                  4,195           (7,112)

Cash at beginning of year                                                    7,732            8,583
                                                                         ---------        ---------

Cash at end of year                                                      $  11,927        $   1,471
                                                                         =========        =========

Supplemental disclosure of interest and income taxes paid
     Interest paid for the year                                          $  28,627        $  57,582
                                                                         =========        =========
     Income taxes paid for the year                                      $    --          $    --
                                                                         =========        =========
</TABLE>


The  financial  information  presented  herein has been  prepared by  management
without audit by independent certified public accountants.

The  accompanying  notes are an integral  part of these  consolidated  financial
statements.
                                                                               6

<PAGE>



                 United Community Holdings, Inc. and Subsidiary

                   Notes to Consolidated Financial Statements


Note A - Organization and Description of Business

United Community Holdings, Inc. was incorporated as Professionalistics,  Inc. on
May 31, 1989, under the laws of the State of Delaware. On December 17, 1998, the
Company changed its State of Incorporation from Delaware to Nevada by means of a
merger  with and into a Nevada  corporation  formed  solely  for the  purpose of
effecting the  reincorporation.  The Articles of Incorporation and Bylaws of the
Nevada corporation are the Articles of Incorporation and Bylaws of the surviving
corporation. Such Articles of Incorporation did not change the capital structure
of the  Company.  The effect of this action also changed the  Company's  name to
United Community Holdings, Inc.

The Company's wholly-owned subsidiary, Rosemont Gardens Funeral Chapel-Cemetery,
Inc.  was  incorporated  on  March  4,  1994  under  the  laws of the  State  of
Mississippi.

United  Community  Holdings,  Inc.  and its  wholly-owned  subsidiary,  Rosemont
Gardens Funeral Chapel-Cemetery, Inc. are collectively referred to as "Company".

The  Company's  operations  consist of a funeral home and cemetery  operation in
Jackson, Mississippi.  Company personnel at the funeral service location provide
all  professional  services  related to funerals,  including  the use of funeral
facilities  and  motor  vehicles.  Funeral  related  merchandise  is sold at the
funeral service location. The Company sells prearranged funeral services whereby
a customer contractually agrees to the terms,  conditions and price of a funeral
to be performed at an unknown  future date at the time the contract is executed.
The Company's cemetery provides cemetery  interment rights (including  mausoleum
crypts and lawn  spaces)  and  certain  merchandise  including  stone and bronze
memorials and burial vaults. These items may be sold on either a pre- need or an
at-need basis. Company personnel at the cemetery site perform interment services
and provide management and maintenance of the cemetery grounds.

During interim periods, the Company follows the accounting policies set forth in
its Annual Report Pursuant to Section 13 or 15(d) of The Securities Exchange Act
of 1934 on Form 10-KSB filed with the U. S. Securities and Exchange  Commission.
The information  presented  herein may not include all  disclosures  required by
generally accepted accounting  principles and the users of financial information
provided for interim  periods should refer to the annual  financial  information
and footnotes  contained in its Annual Report Pursuant to Section 13 or 15(d) of
The  Securities  Exchange Act of 1934 on Form 10-KSB when  reviewing the interim
financial results presented herein.

In the opinion of management,  the accompanying  interim  financial  statements,
prepared in accordance with the instructions for Form 10-QSB,  are unaudited and
contain  all  material   adjustments,   consisting  only  of  normal   recurring
adjustments  necessary to present  fairly the  financial  condition,  results of
operations  and cash flows of the Company  for the  respective  interim  periods
presented.  The  current  period  results  of  operations  are  not  necessarily
indicative of results which ultimately will be reported for the full fiscal year
ending December 31, 2001.

The preparation of financial  statements in conformity  with generally  accepted
accounting principles requires management to make 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.
Actual results could differ from those estimates.



                                                                               7

<PAGE>



                 United Community Holdings, Inc. and Subsidiary

             Notes to Consolidated Financial Statements - Continued


Note B - Summary of Significant Accounting Policies

1.   Cash and cash equivalents
     -------------------------

     The  Company  considers  all cash on hand  and in  banks,  certificates  of
     deposit and other highly-liquid investments with maturities of three months
     or less, when purchased, to be cash and cash equivalents.

     Cash  overdraft  positions may occur from time to time due to the timing of
     making bank deposits and releasing checks, in accordance with the Company's
     cash management policies.

2.   Accounts receivable
     -------------------

     In the normal course of business,  the Company extends  unsecured credit to
     its  at-need  customers  which are  regionally  concentrated  in and around
     Jackson,  Mississippi.  Because of the credit risk involved, management has
     provided an allowance for doubtful  accounts  which reflects its opinion of
     amounts  which  will  eventually  become  uncollectible.  In the  event  of
     complete  non-performance,  the  maximum  exposure  to the  Company  is the
     recorded amount of trade accounts  receivable shown on the balance sheet at
     the date of non- performance.

3.   Inventory
     ---------

     Inventory  consists  of  funeral  merchandise  and  cemetery  property  and
     merchandise  and are  stated  at the  lower of cost or  market,  using  the
     first-in, first-out method.

4.   Property, plant and equipment
     -----------------------------

     Property and  equipment are recorded at  historical  cost.  These costs are
     depreciated  over the  estimated  useful  lives of the  individual  assets,
     generally  four (4) to  twenty-five  (25)  years,  using the  straight-line
     method.

     Maintenance and repairs are charged to expense  whereas  renewals and major
     replacements are capitalized. Gains and losses from disposition of property
     and equipment are recognized as incurred and are included in operations.

     For the three months ended March 31, 2001 and 2000, depreciation expense of
     approximately $40,651 and $42,133, respectively, was charged to operations.

5.   Funeral operations
     ------------------

     Funeral revenue is recognized when the funeral service is performed.

     The Company sells prearranged funeral services and funeral merchandise that
     provide for the delivery of price  guaranteed  services and  merchandise at
     prices prevailing when the agreement is signed.  Revenues and related costs
     associated  with sales of  prearranged  funeral  contracts are deferred and
     later   recognized  when  the  funeral   service  is  actually   performed.
     Prearranged  funeral services and merchandise are generally financed either
     through  trust  funds or escrow  accounts,  depending  on State  Regulatory
     requirements,  established by the Company or through  insurance.  Principal
     amounts  deposited in trust funds or escrow  accounts are  available to the
     Company as funeral services are performed and merchandise is delivered.

                                                                               8

<PAGE>



                 United Community Holdings, Inc. and Subsidiary

             Notes to Consolidated Financial Statements - Continued


Note B - Summary of Significant Accounting Policies - Continued

5.   Funeral operations - continued
     ------------------------------

     These amounts may be refundable to the customer in those  situations  where
     state law provides for the return of those  amounts  under the  purchaser's
     option to cancel  the  contract.  Certain  jurisdictions  provide  for non-
     refundable  trust funds or escrow accounts where the Company  receives such
     amounts upon cancellation by the customer.

     The Company  recognizes  as revenue on a current  basis all  dividends  and
     interest earned, and net capital gains realized, by all prearranged funeral
     trust  funds or escrow  accounts,  except in those  states  where  earnings
     revert  to  the  customer  if a  prearranged  funeral  service  or  funeral
     merchandise contract is canceled. Principal and earnings are withdrawn only
     as  funeral  services  and  merchandise  are  delivered  or  contracts  are
     canceled,  except in  jurisdictions  that permit  earnings to be  withdrawn
     currently and in unregulated jurisdictions where escrow accounts are used.

     Commissions   and  other  related  direct   marketing   costs  relating  to
     prearranged  funeral services and prearranged funeral merchandise sales are
     expensed as paid,  subject to a nominal  percentage  which is withheld  and
     paid at the time the service is performed.  Other indirect costs, including
     telemarketing  and  advertising  costs,  are  expensed  in the period  when
     incurred.

     Funeral  services sold at the time of need are recorded as funeral  revenue
     in the period performed.

6.   Cemetery operations
     -------------------

     Cemetery  revenue  is  accounted  for in  accordance  with  the  principles
     prescribed  for  accounting  for  sales of real  estate.  Those  principles
     require,  among other things,  the receipt of a certain portion  (generally
     25%) of an  installment  sale price prior to  recognition of any revenue or
     cost  on  a  contract.   The  Company   recognizes  income  currently  from
     unconstructed mausoleum crypts sold to the extent the Company has available
     inventory.

     Costs  related to the sales of cemetery  mausoleum  or lawn crypts  include
     property and other costs related to cemetery  development  activities which
     are  charged  to  operations  using  the  specific  identification  method.
     Allowances  for  customer  cancellations  are  provided at the date of sale
     based upon historical experience. Costs related to merchandise are based on
     actual costs  incurred or  estimates of future costs  necessary to purchase
     the merchandise, including provisions for inflation when required.

     Pursuant to  applicable  state law, all or a portion of the  proceeds  from
     each sale of  cemetery  merchandise  may also be  required  to be paid into
     trust  funds until such  merchandise  is  purchased  by the Company for the
     customer. The Company recognizes realized trust income on these merchandise
     trusts in current  cemetery  revenues  as trust  earnings  accrue to defray
     inflation costs recognized related to the unpurchased cemetery merchandise.

                                                                               9

<PAGE>



                 United Community Holdings, Inc. and Subsidiary

             Notes to Consolidated Financial Statements - Continued


Note B - Summary of Significant Accounting Policies - Continued

6.   Cemetery operations - continued
     -------------------------------

     Additionally,  pursuant to perpetual  care  contracts  and laws, a portion,
     generally 15.0%, of the total sales price of cemetery property is deposited
     into perpetual care trust funds or escrow accounts.  In addition,  in those
     jurisdictions  where trust or escrow  arrangements are neither  statutorily
     nor  contractually  required,  the Company typically on a voluntary basis a
     portion,  generally  15.0%,  of the sale price into  escrow  accounts.  The
     income from these funds,  which have been established in most jurisdictions
     in which the Company operates cemeteries,  is used for maintenance of these
     cemeteries,  but principal,  including in some jurisdictions,  net realized
     capital gains, must generally be held in perpetuity. Accordingly, the trust
     fund  corpus is not  reflected  in the  financial  statements,  except  for
     voluntary escrow funds established by the Company.  The Company  recognizes
     and withdraws  currently all dividend and interest income earned and, where
     permitted, capital gains realized by perpetual care funds.

     A portion of the sales of cemetery  property and  merchandise is made under
     installment  contracts  bearing  interest  at 9.75%.  Finance  charges  are
     recognized  as a component  of  cemetery  revenue  under the  straight-line
     method over the terms of the related installment receivables.

     Commissions  and other related direct  marketing costs relating to cemetery
     spaces or  mausoleum  crypts  are  expensed  as paid,  subject to a nominal
     percentage  which  is  withheld  and paid at the  time  the  related  sales
     contract  service  is  paid  in  full.  Other  indirect  costs,   including
     telemarketing  and  advertising  costs,  are  expensed  in the period  when
     incurred.

7.   Organization costs
     ------------------

     Costs related to the formation  and  organization  of the Company have been
     capitalized  and are being  amortized  over a five year  period,  using the
     straight-line method.

8.   Income taxes
     ------------

     The Company uses the asset and liability  method of  accounting  for income
     taxes. At March 31, 2001 and 2000, respectively, the deferred tax asset and
     deferred tax liability accounts, as recorded when material to the financial
     statements,  are entirely the result of  temporary  differences.  Temporary
     differences   represent  differences  in  the  recognition  of  assets  and
     liabilities for tax and financial reporting purposes, primarily accumulated
     depreciation and amortization, allowance for doubtful accounts and vacation
     accruals.

     As of March 31, 2001 and 2000,  the  Company's  deferred tax asset is fully
     reserved.

9.   Income (Loss) per share
     -----------------------

     Basic  earnings  (loss) per share is computed  by  dividing  the net income
     (loss) by the weighted-average  number of shares of common stock and common
     stock  equivalents  (primarily  outstanding  options and warrants).  Common
     stock equivalents  represent the dilutive effect of the assumed exercise of
     the  outstanding  stock  options and  warrants,  using the  treasury  stock
     method.  The calculation of fully diluted earnings (loss) per share assumes
     the dilutive effect of the exercise of outstanding  options and warrants at
     either the  beginning  of the  respective  period  presented or the date of
     issuance,  whichever is later.  As of March 31, 2001 and 2000,  the Company
     had no  warrants  and  options  outstanding  which  could be  deemed  to be
     dilutive.


                                                                              10

<PAGE>



                 United Community Holdings, Inc. and Subsidiary

             Notes to Consolidated Financial Statements - Continued


Note B - Summary of Significant Accounting Policies - Continued

10.  Accounting standards to be adopted
     ----------------------------------

     Upon  the  adoption  of a  formal  stock  compensation  plan,  the  Company
     anticipates   using  the  "fair  value  based  method"  of  accounting  for
     compensation  based  stock  options  pursuant  to  Statement  of  Financial
     Accounting  Standards No. 123,  "Accounting for Stock-Based  Compensation".
     Under the fair value based  method,  compensation  cost will be measured at
     the grant date of the respective option based on the value of the award and
     will be recognized as a charge to operations over the service period, which
     will usually be the respective vesting period of the granted option(s).


Note C - Fair Value of Financial Instruments

The following  methods and  assumptions  were used to estimate the fair value of
each class of financial  instruments:  Cash,  accounts  receivable  and accounts
payable,  The carrying amounts approximated fair value because the demand nature
of these instruments.


Note D - Long-Term Receivables

As of  December  31,  2000,  the  Company's  long-term  receivables  related  to
prearranged funeral contracts and cemetery sales are anticipated to be collected
pursuant to contractually scheduled payments as follows:

            Year ending     Funeral      Cemetery        Total
            December 31,   Contracts       Sales       Principal
            ------------  ----------    ----------    ----------
               2001       $  128,814    $   67,452    $  196,266
               2002          120,250        52,815       173,065
               2003          114,404        42,774       157,178
               2004          107,103        28,441       135,544
               2005          104,897        18,226       123,123
            Thereafter       629,677        34,656       664,333
                          ----------    ----------    ----------

              Total       $1,205,145    $  244,364    $1,449,509
                          ==========    ==========    ==========


Note E - Trust Funds and Restricted Cash

Pursuant to State law or Company policy,  certain portions of contracts  related
to the  sales of  prearranged  funeral  services  and  funeral  merchandise  and
cemetery spaces,  mausoleum crypts and related  merchandise are deposited into a
common trust to provide funds for the  fulfillment of the  underlying  contracts
and/or perpetual care of the cemetery property.


                                                                              11

<PAGE>
<TABLE>
<CAPTION>



                 United Community Holdings, Inc. and Subsidiary

             Notes to Consolidated Financial Statements - Continued


Note E - Trust Funds and Restricted Cash - Continued

The Company  recognizes as revenue on a current basis all dividends and interest
earned, and net capital gains realized,  by all prearranged  funeral trust funds
or escrow accounts, except in those states where earnings revert to the customer
if a prearranged  funeral service or funeral  merchandise  contract is canceled.
The Company  recognizes  realized  trust income on these  merchandise  trusts in
current  cemetery  revenues as trust earnings  accrue to defray  inflation costs
recognized  related  to  the  unpurchased  cemetery  merchandise.   The  Company
recognizes and withdraws  currently all dividend and interest income earned and,
where permitted, capital gains realized by perpetual care funds.

As of March 31, 2001 and 2000,  the trust funds and  resultant  restricted  cash
consist of the following components:

                                                                       2001         2000
                                                                     ---------    ---------
<S>                                                                  <C>          <C>
       Trust cash                                                    $     376    $   1,338
       Marketable securities, at fair market value                      56,264       63,600
       Unrealized (gains) losses on marketable securities              113,016      105,680
       Amounts due to trust funds from future contract collections     (85,452)     (65,575)
                                                                     ---------    ---------

         Restricted cash                                             $  84,204    $ 105,043
                                                                     =========    =========

Marketable securities are considered available-for-sale. All unrealized gains or
losses are excluded from earnings  until such time that such gains or losses are
realized  upon the sale of the  underlying  security.  For purposes of computing
realized gains and losses, the specific identification method is used.

As of March 31, 2001 and 2000, the marketable securities held in the trust funds
consist entirely of equity securities and are summarized as follows:
                                                                       2001         2000
                                                                     ---------    ---------

       Aggregate fair value                                          $  56,264    $  63,600
       Gross unrealized holding gains                                $    --       $   --
       Gross unrealized holding losses                               $ 113,016    $ 105,680
       Amortized cost basis                                          $ 169,280    $ 169,280


       Note F - Cemetery Property

Cemetery  property  consists  of the  following  at March  31,  2001  and  2000,
respectively:

                                                                     March 31,    March 31,
                                                                       2001         2000
                                                                     ---------    ---------
Developed cemetery gardens, net of
  spaces sold with revenue recognition                               $  73,378    $  81,284
Cemetery gardens in development                                         27,390       27,390
Mausoleum crypts, net of crypts sold                                   340,112      343,897
Undeveloped                                                            657,474      657,474
                                                                     ---------    ---------

  Total                                                              $1,087,354   $1,110,045
                                                                     ==========   ==========
</TABLE>

                                                                              12

<PAGE>
<TABLE>
<CAPTION>



                 United Community Holdings, Inc. and Subsidiary

             Notes to Consolidated Financial Statements - Continued


Note G - Notes payable

Notes payable consist of the following at March 31, 2000 and 1999, respectively:

                                                                           2000           1999
                                                                       -----------    -----------
<S>                                                                    <C>            <C>
$300,000 revolving line of credit payable to a bank
   Interest at the Bank's prime rate. Interest payable
   monthly.  Principal and unpaid interest due at
   maturity in October 2001.  Secured by land, accounts
   receivable from prearranged funeral contracts and
   cemetery property sales contracts and the personal
   guarantee of the Company's majority shareholder                     $   300,000    $   300,000
                                                                       -----------    -----------

     Total notes payable                                               $   300,000    $   300,000
                                                                       ===========    ===========


Note H - Long-Term Debt

Long-term debt consists of the following at March 31, 2001 and 2000:
                                                                           2001           2000
                                                                       -----------    -----------
$2,220,000 note payable to a bank.  Interest at 8.00%
   Payable in monthly installments of approximately
   $18,569, including interest.  Any unpaid principal
   and interest is due at maturity in June 2003.  Secured
   by land, accounts receivable from prearranged funeral
   contracts and cemetery property sales contracts and
   the personal guarantee of the Company's shareholder                 $ 2,099,430    $ 2,145,202

$21,082 installment note payable to a bank.  Interest at
   7.25%.  Payable in monthly installments of approximately
   $655, including interest.  Final maturity in August 2002
   Secured by a vehicle                                                     10,911         17,043

$23,500 capital lease payable to a finance company
   Interest at 15.6%.  Payable in monthly installments of
   approximately $539, including interest.  Final maturity
   in December 2003.  Secured by furniture and equipment               $    14,031    $    18,571

$14,850 capital lease payable to a finance company
   Interest at 18.9%.  Payable in monthly installments of
   approximately $530, including interest.  Final maturity
   in December 2001.  Secured by furniture and equipment                     6,999          8,751
                                                                       -----------    -----------

     Total long-term debt                                                2,131,371      2,189,567

     Less current maturities                                               (72,033)       (68,451)
                                                                       -----------    -----------

     Long-term portion                                                 $ 2,059,338    $ 2,121,116
                                                                       ===========    ===========
</TABLE>


                                                                              13

<PAGE>
<TABLE>
<CAPTION>



                 United Community Holdings, Inc. and Subsidiary

             Notes to Consolidated Financial Statements - Continued


Note H - Long-Term Debt - Continued

Future maturities of long-term debt are as follows:      Year ending
                                                         December 31,   Principal due
                                                         ------------   -------------
<S>                                                      <C>            <C>

                                                         2001           $      72,033
                                                         2002                  69,036
                                                         2003               2,000,839


                                                         Total          $   2,141,908
                                                                        =============
</TABLE>

Note I - Contingencies

During 2000, the Company began to sell certain  long-term  contract  receivables
related to prearranged funeral contracts and cemetery sales to unrelated finance
companies on a recourse  basis.  The  purchasing  entity  manages all collection
activities related to the long-term contract receivables and the Company remains
contingently  liable  to  repurchase  the  accounts  in the event  that  certain
defaults occur, as defined by each purchasing  entity.  To provide for potential
collection  problems,  each purchasing  entity  maintains a reserve fund ranging
between  15.0% and 25.0% of the amounts  collected.  As of March 31,  2001,  the
following summarizes the activity on sold long- term contracts receivable:

Contingent liability (approximate) for sold accounts   $215,000
                                                       ========
Reserves held by the contract purchaser
  which are included in current accounts
  receivable in the accompanying balance sheet         $ 59,965
                                                       ========



                (Remainder of this page left blank intentionally)




                                                                              14

<PAGE>



Management's  Discussion  and  Analysis of  Financial  Condition  and Results of
Operations


(1)    Caution Regarding Forward-Looking Information

This  quarterly   report  contains   certain   forward-looking   statements  and
information relating to the Company that are based on the beliefs of the Company
or management as well as assumptions made by and information currently available
to  the  Company  or  management.   When  used  in  this  document,   the  words
"anticipate,"   "believe,"   "estimate,"   "expect"  and  "intend"  and  similar
expressions,  as they relate to the Company or its  management,  are intended to
identify forward-looking statements. Such statements reflect the current view of
the  Company   regarding  future  events  and  are  subject  to  certain  risks,
uncertainties  and  assumptions,  including the risks and  uncertainties  noted.
Should  one or more of  these  risks or  uncertainties  materialize,  or  should
underlying assumptions prove incorrect,  actual results may vary materially from
those  described  herein  as  anticipated,   believed,  estimated,  expected  or
intended. In each instance,  forward-looking information should be considered in
light of the accompanying meaningful cautionary statements herein.

(2)    Results of Operations

Three months  ended March 31, 2001  compared to the three months ended March 31,
--------------------------------------------------------------------------------
2000
----

The  operations  for the three months ended March 31, 2001 compared to the three
months ended March 31, 2000 show a continued maturation and market acceptance of
the products and  operations of the Company's  Rosemont  subsidiary.  Recognized
revenues  for the first  three  months of 2001 were  approximately  $100,000  as
compared to approximately $66,000 for the comparable period of 2000. The Company
recognizes  revenues  upon the provision of funeral  services,  sale of funeral,
cemetery  or  related  merchandise  or upon the  receipt  of at least 25% of the
initial  sales  price  for  cemetery  spaces  and/or  crypts.  Accordingly,  the
Company's  revenues and cash flows are dependent  upon the level of need for the
Company's services and receipts on long-term  contracts for the sale of cemetery
spaces/crypts.

The Company  incurred  cost of sales and  providing  services  of  approximately
$28,000 and $26,000, respectively, for the three months ended March 31, 2001 and
2000. Costs related to cemetery  merchandise and funeral services are recognized
at the time the service is  provided.  Sales  commissions,  for both at-need and
pre-need  funeral sales and sales of cemetery spaces and/or crypts,  are charged
to expense,  less a nominal  percentage,  in the month the  related  contract is
recorded.  The  allocated  cost of cemetery  spaces  and/or crypts is charged to
operations  at the  time  that at least  25% of the  initial  contract  price is
received by the Company in cash. Total commissions expense, principally incurred
on the sales of pre-need  contracts for funeral  services and/or cemetery spaces
or crypts was approximately  $5,800 and $7,500,  respectively,  during the first
three months ended March 31, 2001 and 2000.

The Company  realized gross profits of  approximately  $72,000  (71.81%) for the
first quarter of 2001 as compared to  approximately  $40,000  (60.63%) for first
quarter of 2000.  This change in gross profit  percentage is due to management's
value-based  product  pricing  policies  to provide  quality  funeral and burial
services  to the  general  public  and  the  direct  charge  to  operations  for
commissions  at the  inception  of a long-term  receivable  for either pre- need
funeral  services  or  cemetery  spaces/crypts.  Periods in which there are high
sales of new  long-term  contracts  without  either  the  provision  of  funeral
services  or the  receipt  of at  least  25% of the  initial  contract  price on
cemetery  spaces or crypts  will  cause  fluctuations  and  lower  gross  profit
percentages due to the Company's revenue recognition policies.

The  Company  continues  to  monitor  its  expenditures  for  general  operating
expenses,  principally  personnel costs and  professional  fees. The Company had
aggregate general and administrative  expenses of approximately  $76,000 for the
first quarter of 2001 as compared to approximately $71,000 for the first quarter
of  2000.   Depreciation  and  amortization  is  also  relatively   constant  at
approximately $41,000 for the first quarter of 2001 as compared to approximately
$42,000 for the first quarter of 2000.

                                                                              15

<PAGE>

The principal  source of cash to support daily  operations is the  collection of
contractual  receivables for both prearranged  funeral services and the sales of
cemetery  spaces or crypts.  This area  continues  to  experience  growth in the
number and dollar amount of contracts placed in effect on a cumulative basis and
the related cash flows therefrom.

Earnings  per share for the  respective  quarters  ended March 31, 2001 and 2000
were $(0.01) and $(0.02).

(3)    Liquidity and capital resources

The Company is  principally  dependent upon cash flows related to the collection
of long-term contract  receivables  related to prearranged funeral contracts and
sales of cemetery spaces and/or crypts. The Company had negative cash flows from
operations of  approximately  $(45,000) and $(96,000) for the three months ended
March 31, 2001 and 2000, respectively.

Operating cash deficits in excess of cash collected on long-term receivables for
funeral  services and/or cemetery spaces or crypts are currently being supported
through  either  advances  from or  additional  capital  contributions  from the
Company's  controlling  shareholder.  However,  there is no legal obligation for
either  management or  significant  stockholders  to provide  additional  future
funding.

The Company continues the process of constructing  Phase II to its Mausoleum and
the second and third cemetery gardens as internally generated funds and consumer
demand  permits.  Management is of the opinion that it has  sufficient  cemetery
spaces and mausoleum  crypts to meet current  demands and  construct  additional
capacity within the parameters of existing cash flows.

The Company has identified no significant  capital  requirements for the current
annual period.  Liquidity requirements mandated by future business expansions or
acquisitions,  if any are specifically identified or undertaken, are not readily
determinable  at this  time as no  substantive  plans  have been  formulated  by
management.

Additionally,  management is of the opinion that there is  additional  potential
availability  of incremental  mortgage debt and the  opportunity for the sale of
additional   common  stock  through  either  private   placements  or  secondary
offerings.  There is,  however,  no  assurance  that the Company will be able to
obtain  additional  funding through the sales of additional  securities or, that
such funding, if available, will be obtained on terms favorable to or affordable
by the Company.

Part II - Other Information

Item 1 - Legal Proceedings

   None

Item 2 - Changes in Securities

   None

Item 3 - Defaults on Senior Securities

   None

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

     The Company has held no regularly scheduled,  called or special meetings of
     shareholders during the reporting period.


                                                                              16

<PAGE>


Item 5 - Other Information

   None

Item 6 - Exhibits and Reports on Form 8-K

   None

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


                                   SIGNATURES

In accordance with the  requirements of the Exchange Act, the registrant  caused
this  report to be  signed on its  behalf  by the  undersigned,  thereunto  duly
authorized.

                                                 United Community Holdings, Inc.


July 5 , 2001                                       /s/ James F. Robinson.
    ---                                          -------------------------------
                                                               James F. Robinson
                                                          Chairman and President


July 5 , 2001                                       /s/ Margaret R. Lauro
    ---                                          -------------------------------
                                                               Margaret R. Lauro
                                                         Secretary/Treasurer and
                                                        Chief Accounting Officer



                                                                              17