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                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549
                                   FORM 10-QSB

                Annual Report Pursuant to Section 13 or 15(d) of
                       The Securities Exchange Act of 1934



                For the Quarterly Period Ended December 31, 2001

                         Commission File Number 0-18515




                            SPECTRASOURCE CORPORATION
--------------------------------------------------------------------------------
             (Exact Name of Registrant as specified in its charter)



                NEVADA                                    93-0960302
    -------------------------------         ------------------------------------
    (State or other jurisdiction of         (IRS Employer Identification Number)
     incorporation or organization)


                     10450 WESTOFFICE, HOUSTON, TEXAS 77042
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                    (Address of Principal Executive Offices)



        Company's telephone number, including area code: (713) 783-0443


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

As of December 31, 2001, there were 6,015,850 shares of ($0.001) par value
Common Stock (the Company's only class of voting stock) outstanding.

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<PAGE>
                                   FORM 10-QSB

                            SPECTRASOURCE CORPORATION

                                TABLE OF CONTENTS





PART I    FINANCIAL INFORMATION

Item  1.  Financial Statements (Unaudited)

          a)  Consolidated Balance Sheets at December 31, 2001 and September 30,
              2001

          b)  Consolidated Statements of Income for the three months ended
              December 31, 2001 and December 31, 2000

          c)  Consolidated Statements of Cash Flows for the three months ended
              December 31, 2001 and December 31, 2000

          d)  Notes to Consolidated Financial Statements


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






PART II   OTHER INFORMATION

           None


SIGNATURES



















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<PAGE>
PART I    FINANCIAL INFORMATION
------    ---------------------

ITEM 1.   FINANCIAL STATEMENTS (UNAUDITED)

                   SPECTRASOURCE CORPORATION AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEET
<TABLE><CAPTION>
                                                                    December 31       September 30
                                                                        2001              2001
                                                                    ------------      ------------
                                                                    (UNAUDITED)
<S>                                                                 <C>               <C>
                                     ASSETS
                                     ------
Current Assets
   Cash                                                             $    204,873      $    165,414
   Accounts Receivable, less allowances of $68,585 and $24,080           855,366           905,601
   Prepaid Expenses                                                       88,896            35,863
   Inventory                                                           1,025,346           897,323
                                                                    ------------      ------------
Total Current Assets                                                   2,174,481         2,004,201
                                                                    ------------      ------------
   Fixed Assets, net of accumulated depreciation of
      $327,623 and $321,692                                              411,816           431,953
   Other Assets and Investments                                           13,000            13,000
   Deferred Tax Asset                                                    438,572           470,244
                                                                    ------------      ------------
Total Assets                                                        $  3,037,869      $  2,919,398
                                                                    ============      ============
                   Liabilities and Stockholders' Equity
                   ------------------------------------
Current Liabilities
   Accounts payable and accrued expenses                            $    514,950      $    341,785
   Short Term Debt                                                       749,176           847,143
   Current Maturities of Long Term Debt                                   87,930            87,430
   Due To Affiliates                                                     143,888           127,790
                                                                    ------------      ------------
Total Current Liabilities                                              1,495,944         1,404,148
                                                                    ------------      ------------
Long Term Debt
   Notes Payable, Banks                                                   75,562           114,745
   Notes Payable, Related Parties                                      1,366,268         1,374,313
   Commitments and Contingencies                                            --                --
                                                                    ------------      ------------
Total Long Term debt                                                   1,441,830         1,489,058
                                                                    ------------      ------------
Stockholders' Equity (Deficit)

   Common stock, $.001 par value, 10,000,000 shares authorized,
     and 6,015,850 shares issued and outstanding at December 31,
     1999 and September 30, 2000                                          16,190            16,190
   Capital in excess of par value                                      3,338,043         3,338,043
   Accumulated Deficit                                                (3,254,138)       (3,328,041)
                                                                    ------------      ------------
Total Stockholders' Equity                                               100,095            26,192
                                                                    ------------      ------------
Total Liabilities and Stockholders' Equity                          $  3,037,869      $  2,919,398
                                                                    ============      ============
</TABLE>
           The Accompanying Notes to Consolidated Financial Statements
                    are an integral part of these statements.

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<PAGE>
                   SPECTRASOURCE CORPORATION AND SUBSIDIARIES
                     CONSOLIDATED STATEMENT OF INCOME (LOSS)


<TABLE><CAPTION>
                                                              THREE MONTHS ENDED    THREE MONTHS ENDED
                                                              December 31, 2001     December 31, 2000
                                                              ------------------    ------------------
<S>                                                           <C>                   <C>

Sales                                                         $        1,673,359    $        1,686,058
Cost of Sales                                                            937,317             1,052,960
                                                              ------------------    ------------------
    Gross Profit                                                         736,042               633,098
                                                              ------------------    ------------------

Costs of Products Sold
    Selling and administrative expenses                                   15,055                21,946
    Depreciation and amortization                                         23,776                17,115
    Other costs and operating expenses                                   593,013               613,949
                                                              ------------------    ------------------
Total Costs of Products Sold                                             631,844               653,010
                                                              ------------------    ------------------

Income (Loss) from operations                                            104,198               (19,912)

Other Income:
    Interest Income                                                           45                   778
    Miscellaneous Other Income (Expense)                                   1,332
                                                              ------------------    ------------------
Total Other Income                                                         1,377                   778
                                                              ------------------    ------------------

Income from consolidated companies before income taxes                   105,575               (19,134)

Provision for income taxes                                                31,672                     0
                                                              ------------------    ------------------
Net Income or (Loss)                                          $           73,903    $          (19,134)
                                                              ==================    ==================

Basic earnings (loss) per common share:                                     0.01                 (0.00)

Weighted average number of common shares                               6,015,850             6,015,850

</TABLE>














                      See Notes to Consolidated Statements

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                            SPECTRASOURCE CORPORATION
                         CONSOLIDATED STATEMENT OF CASH FLOW


<TABLE><CAPTION>
                                                              THREE MONTHS ENDED    THREE MONTHS ENDED
                                                              December 31, 2001     December 31, 2000
                                                              ------------------    ------------------
                                                                   (UNAUDITED)          (UNAUDITED)
<S>                                                           <C>                   <C>

CASH FLOWS FROM OPERATING ACTIVITIES
Net Income From Operations                                    $           73,903    $          (19,134)
Adjustments to reconcile net income:
    Depreciation                                                          23,776                17,115
    Allowance for bad debt                                                 4,403                 2,705
    Deferred Taxes                                                        31,672
    (Increase) Decrease in Accounts Receivable                            45,832               553,644
    Due from related parties
    (Increase) Decrease in Inventory                                    (128,023)              (60,251)
    (Increase) Decrease in Prepaid                                       (53,033)              (80,203)
    Increase (Decrease) in Accounts Payable                              173,165              (566,299)
                                                              ------------------    ------------------

Net cash provided from (used in) operations                              171,694              (152,423)
                                                              ------------------    ------------------

CASH FLOW FROM INVESTING ACTIVITIES
    Equipment purchases                                                   (3,639)             (147,895)
    Decrease in LT Deposits                                                                     30,888
                                                              ------------------    ------------------

Net cash from investing activities                                        (3,639)             (117,007)
                                                              ------------------    ------------------

CASH FLOW FROM FINANCING ACTIVITIES
    Increase (Decrease) in ST debt                                       (97,967)
    Proceeds (Payment) from LT debt                                      (46,728)              107,587
    Draws on Lines of Credit                                                                    73,969
    Payment of LT Notes to Shareholder                                                         (25,618)
    Proceeds from Related Party Financing                                                       18,631
    Increase (Decrease) in due to affiliates                              16,098
                                                              ------------------    ------------------

Net cash provided by financing activities                               (128,597)              174,569
                                                              ------------------    ------------------

Net Increase (Decrease) in cash and equivalents                           39,459               (94,861)
Cash and equivalents, beginning of period                                165,414               219,257
                                                              ------------------    ------------------
Cash and equivalents, end of period                           $          204,873    $          124,396
                                                              ==================    ==================

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
    Cash paid for interest                                    $           16,408    $           27,013
</TABLE>



                 See Notes to Consolidated Financial Statements.

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<PAGE>
                            SPECTRASOURCE CORPORATION
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)


NOTE 1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION

The accompanying interim financial statements have been prepared by the Company,
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 generally accepted
accounting principles have been condensed or omitted pursuant to such rules and
regulations. These combined financial statements should be read in conjunction
with the financial statements and the notes thereto included in the Company's
Annual Report on Form 10-K for the year ended September 30, 2000.

In the opinion of management, all adjustments (which include only normal
recurring adjustments) necessary to present fairly the financial position,
results of operations, and cash flows as of December 31, 2001 and for the three
months ended December 31, 2001 and December 31, 2000, have been made. The
results of operations for the period ended December 31, 2001 are not necessarily
indicative of the operating results for the full year.

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the accounts of the Company and
its subsidiaries after elimination of all significant inter-company
transactions.

USE OF ESTIMATES

The preparation of these financial statements requires the use of certain
estimates by management in determining the Company's' combined assets,
liabilities, revenues and expenses. Actual results could differ from those
estimates.

CASH AND CASH EQUIVALENTS

Cash and cash equivalents consist of highly liquid investments that are readily
convertible into cash and have a maturity of three months or less.

REVENUE RECOGNITION

The Company recognizes revenue at the time of sale. The Company accrues for
allowances for doubtful accounts based on its experience.

INVENTORIES

Inventories are carried at the lower of cost, on a first-in first-out basis, or
market.

PROPERTY AND EQUIPMENT

Property and equipment is stated at cost less accumulated depreciation. Property
and equipment is depreciated on an accelerated depreciation method over their
estimated useful lives, which in the opinion of management is adequate to
allocate the cost of the property and equipment over their estimated useful
lives. Expenditures for renewals, replacements, and betterments are capitalized.
Maintenance and repairs are charged to operating expenses as incurred. Upon sale
or other disposition, the applicable amounts of

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<PAGE>

asset cost and accumulated depreciation are removed from the accounts and the
net amount, less proceeds from disposal, is charged against or credited to
income.

INCOME TAXES

The Company follows the asset and liability approach to account for income
taxes. Under this method, deferred taxes are recognized for temporary
differences between the book and tax basis of assets and liabilities. These
temporary differences are measured using the applicable enacted tax rates and
provisions of the enacted tax laws.

COMPREHENSIVE INCOME

Financial Accounting Standards Board ("FASB") Statement No. 130, "Reporting
Comprehensive Income", became effective for fiscal years beginning after
December 15, 1997, and establishes standards for reporting and display of
comprehensive income and its components (revenues, expenses, gains and losses)
in a full set of general-purpose financial statements. This Statement requires
that all items that are required to be recognized under accounting standards as
components of comprehensive income be reported in a financial statement that is
displayed with the same prominence as other financial statements. The Company
had no comprehensive income other than net income during the periods included in
the accompanying financial statements.

EARNINGS PER COMMON SHARE

Earnings per common share is computed by dividing net income by the weighted
average number of common shares outstanding during the year.

RECENT ACCOUNTING PRONOUNCEMENTS

In June 1998, the FASB issued Statement of Financial Accounting Standards No.
133, "Accounting for Derivative Instruments and Hedging Activities" (SFAS 133").
SFAS 133, as amended, establishes accounting and reporting standards for
derivative instruments and hedging activities. It requires an entity to
recognize all derivatives as either assets or liabilities on the balance sheet
and measure those instruments at fair value. Management does not expect the
pronouncement to have a material effect on the Company's financial statements in
the near future.




















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<PAGE>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS.

Certain statements contained in this Quarterly Report on Form 10-QSB, including,
without limitation, statements containing the words "believes", "anticipates",
"estimates", "expects", "projections", and words of similar import, constitute
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. Investors are cautioned not to put undue reliance
on forward-looking statements. All forward-looking statements are made as of the
date hereof and are based on information available to the parties as of such
date. The Company does not undertake any obligation to update any
forward-looking statements to reflect events or circumstances after the date of
this Form 10-QSB. It is important to note that actual outcome and the actual
results could differ materially from those in such forward-looking statements.
Factors that could cause actual results to differ materially include risks and
uncertainties such as future economic conditions, corporate and marketplace
changes, all as more fully described in the Company's Report on Form 10-K for
the period ended September 30, 2001 under Management's Discussion and Analysis
of Financial Conditions and Results of Operations "Assumptions Underlying
Certain Forward-Looking Statements and Factors that May Affect Future Results"
and elsewhere from time to time in the Company's other SEC reports.

Plan of Operations
------------------

The Company is a leading provider of electrical components, advanced wiring,
home networks and hardware to the residential and commercial markets. Over the
next twelve months, the Company expects to focus on its nationwide expansion
program by leveraging the customer base of its long established Texas divisions.
These divisions currently sell to most of the major builders in its market, many
of whom have national operations. The Company anticipates that its subsidiary,
Connect Source Communications, will substantially complete the start-up phase of
its residential fiber optics and structured wiring product line. In November,
2001, Connect Source expanded its commercial fiber optics and advanced wiring
networks division to include the residential building market. At that time it
entered into an agreement with Carlisle Homes to provide and install CAT 5E/RG6
quad advanced wiring and Grayfox Network Systems for 135 homes. In December,
2001, the Company furthered its penetration into the custom residential market
with the providing of home networks to Gordon/Klein Custom Homes.

The company has expanded it's licensed Old Jacksonville Ceiling Fan product line
to include several new high end models that are generating high demand in their
target markets with a much higher than average profit margins as well as a
substantially higher profit per unit.

With the possible exception of raising funds for expansion purposes, the Company
does not anticipate the need to raise additional funds in the next twelve
months. Cash flow is expected to improve as Connect Source completes its
start-up phase. In addition, cash uses as a percentage of gross revenue, is
expected to decrease with the recent completion of an internally financed
facility expansion that consolidates the Company's Houston divisions.

The Company anticipates no substantial performance of product research and
development, purchases of significant equipment, or significant changes in the
number of employees over the next twelve months.




                                        8
<PAGE>

Financial Results
-----------------

For the quarter ended December 31, 2001, the Company reported net income of
$73,903 compared to a net loss of ($19,134) for the quarter ended December 31,
2000. The increase in earnings is due to higher gross margins resulting from the
company's ability to continue to reduce cost of goods through volume importing
due to consolidated purchases of the various departments. This, coupled with the
Company's expansion of the high end, high margin Old Jacksonville product line
and strategy of marketing its entire product and service line in one turnkey
product package is expected to add considerably to net earnings and help fuel
the profitable growth of the Company. Operating costs decreased slightly due to
the absence of non-recurring professional fees incurred in the quarter ended
December 31, 2000 related to the Company's merger. Going forward, the Company
expects to realize a decrease in general and administrative costs as a result of
the recent consolidation of subsidiary headquarter functions into one physical
facility.

Gross revenues for the quarter ended December 31, 2001 remained steady at
$1,691,003 compared to $1,686,058 for the quarter ended December 31, 2000.
Excellent quarterly revenues from the Company's Gulf Coast Fan subsidiary
counteracted recessionary pressures on the Company's industry and the economy in
general.

Net cash flow for the quarter ended December 31, 2001 was $39,458 compared to
($94,861) for the quarter ended December 31, 2000. During the 12 months ending
December 31, 2001, the Company invested approximately $450,000 in start-up costs
at its Connect Source subsidiary and in non-recurring capital investments
without increasing total liabilities. The Company believes these strategic
investments position the Company to successfully focus on its nationwide
expansion program.


PART II. OTHER INFORMATION

         None.



                                   SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused
this report on Form 10-QSB to be signed on its behalf by the undersigned,
thereunto duly authorized.

February 14, 2002

SPECTRASOURCE CORPORATION

By:  /s/ CHARLES E. SHEFFIELD
     ----------------------------------------------
     Charles E. Sheffield, Chief Executive Officer,
     President and Director






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