United States
                       Securities and Exchange Commission
                             Washington, D.C. 20549

                                   FORM 10-Q/A
                                (Amendment No. 1)

   [X]   Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
         Exchange Act of 1934 For the Period Ended July 31, 2001
                                  -----------
                                       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 0-22636
                                    -------

                       DIAL-THRU INTERNATIONAL CORPORATION
 ----------------------------------------------------------------------------
              (Exact name of registrant as specified in its charter)

                Delaware                              75-2461665
 -------------------------------------      ---------------------------------
    (State or other jurisdiction of                (I.R.S. Employer
     incorporation or organization)              Identification No.)

       700 South Flower, Suite 2950
         Los Angeles, California                         90017
 ----------------------------------------   ---------------------------------
   (Address of principal executive offices)           (Zip Code)

                              (213) 627-7599
 ----------------------------------------------------------------------------
             (Registrant's telephone number, including area code)
 ----------------------------------------------------------------------------
             (Former name, former address and former fiscal year,
                        if changed since last report)

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

 As of  September 12,  2001,  11,547,925 shares  of  common stock,  $.001 par
 value per share, were outstanding.



 PART I.  FINANCIAL INFORMATION

   Item 1.  Financial Statements



             DIAL-THRU INTERNATIONAL CORPORATION AND SUBSIDIARIES
                          CONSOLIDATED BALANCE SHEETS

                                     ASSETS
                                     ------            July 31,     October 31,
                                                         2001          2000
                                                      -----------   ----------
                                                      (unaudited)   (Restated)
                                                      (Restated)
                                                             
 CURRENT ASSETS
   Cash and cash equivalents                         $    315,528  $    73,867
   Trade accounts receivable, net of allowance for
     doubtful accounts of $88,561 at July 31, 2001
     and $930,766 at October 31, 2000                     896,993      455,819
   Prepaid expenses and other                              67,162      116,785
                                                      -----------   ----------
     Total current assets                               1,279,683      646,471
                                                      -----------   ----------
 PROPERTY AND EQUIPMENT, net                            1,235,526    1,539,544
 PROPERTY AND EQUIPMENT NOT IN USE, SECURING
   CONVERTIBLE DEBENTURES                                 320,307      320,307
 ADVERTISING CREDITS, net                               2,453,027    2,453,027
 EXCESS OF COST OVER FAIR VALUE OF NET ASSETS OF
   COMPANY ACQUIRED, net of amortization
   of $220,809 at July 31, 2001 and $104,148
   at October 31, 2000                                  1,851,866      937,327
 OTHER ASSETS                                             235,896      205,473
                                                      -----------   ----------
 TOTAL ASSETS                                        $  7,376,305  $ 6,102,149
                                                      ===========   ==========

                   LIABILITIES AND SHAREHOLDERS' EQUITY
                   ------------------------------------
 CURRENT LIABILITIES
   Current portion of convertible debentures, net of
     debt discount of none and $315,988 at July 31,
     2001 and October 31, 2000, respectively         $          -  $   684,012
   Note payable to shareholder                            755,958      346,000
   Current portion of capital lease obligation            118,582      102,472
   Trade accounts payable                               3,515,346    3,930,315
   Accrued liabilities                                    197,910      365,765
   Deferred revenue                                        86,156       47,190
                                                      -----------   ----------
     Total current liabilities                          4,673,952    5,475,754
                                                      -----------   ----------
 CONVERTIBLE DEBENTURES, net of debt discount of
   $347,338 at July 31, 2001                              652,662            -
 CAPITAL LEASE OBLIGATION, net of current portion          71,549      118,615

 SHAREHOLDERS' EQUITY

   Common stock, 44,169,100 shares authorized;
     $0.001 par value; 11,625,425 shares issued and
     11,613,403 shares outstanding at July 31, 2001
     and 9,895,090 shares issued and 9,883,068
     outstanding at  October 31, 2000                      11,625        9,895
   Additional paid-in capital                          36,719,233   33,838,158
   Accumulated deficit                                (34,675,350) (33,262,907)
   Accumulated other comprehensive income (loss)           (5,416)      (5,416)
   Treasury stock, 12,022 common shares at cost           (54,870)     (54,870)
   Notes receivable - common stock                        (17,080)     (17,080)
                                                      -----------   ----------
   Total shareholders' equity                           1,978,142      507,780
                                                      -----------   ----------
 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY          $  7,376,305  $ 6,102,149
                                                      ===========   ==========

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





             DIAL-THRU INTERNATIONAL CORPORATION AND SUBSIDIARIES
                    CONSOLIDATED STATEMENTS OF OPERATIONS
                                (UNAUDITED)

                                THREE MONTHS ENDED        NINE MONTHS ENDED
                                      July 31,                 July 31,
                              -----------------------  -----------------------
                                2001          2000        2001        2000
                              ----------   ----------   ----------   ----------
                              (Restated)   (Restated)   (Restated)   (Restated)
                                                        
REVENUES

 Revenues                    $ 1,654,079   $  952,667  $ 3,448,338  $ 7,583,138

COSTS AND EXPENSES
 Cost of revenues              1,081,179      463,057    2,357,552    7,935,782
 Sales & marketing               202,818       54,668      499,641      841,451
 Non-cash sales and marketing
  expense                              -            -      258,616    1,937,184
 General & administrative        702,317    1,142,366    2,042,678    3,824,400
 Depreciation and amortization   165,527      141,202      468,029      415,649
                              ----------   ----------   ----------   ----------
   Total costs and expenses    2,151,841    1,801,293    5,626,516   14,954,466
                              ----------   ----------   ----------   ----------
 Operating loss                 (497,762)    (848,626)  (2,178,178)  (7,371,328)

 OTHER INCOME (EXPENSE)
   Amortization of debt
     discount                    (52,101)    (123,010)    (527,296)    (363,270)
   Interest income
     (expense), net              (34,008)       6,565      (49,522)      26,617
   Write off of investment
     in marketable securities    (11,000)           -     (446,820)           -
   Other income related to
     settlement of disputes            -            -    1,789,373            -
                              ----------   ----------   ----------   ----------
     Total other income
       (expense)                 (97,109)    (116,445)     765,735     (336,653)
                              ----------   ----------   ----------   ----------

 NET LOSS BEFORE INCOME TAXES   (594,871)    (965,071)  (2,192,443)   7,707,981)

 PROVISION FOR INCOME TAXES            -            -            -            -
                              ----------   ----------   ----------   ----------
 NET LOSS                       (594,871)    (965,071)  (1,412,443)  (7,707,981)
                              ----------   ----------   ----------   ----------

BASIC AND DILUTED LOSS PER SHARE:
 Basic and diluted loss
   per share                 $     (0.05) $     (0.11) $     (0.14) $     (0.93)

SHARES USED IN THE CALCULATION
  OF PER SHARE AMOUNTS:
                              ----------   ----------   ----------   ----------
  Basic and diluted
    common shares             11,523,403    8,616,383   10,677,487    8,289,012
                              ==========   ==========   ==========   ==========

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





             DIAL-THRU INTERNATIONAL CORPORATION AND SUBSIDIARIES
                    CONSOLIDATED STATEMENTS OF CASH FLOWS
                                (UNAUDITED)

                                                           NINE MONTHS ENDED
                                                                JULY 31,
                                                       ------------------------
                                                           2001         2000
                                                       ----------    ----------
                                                       (Restated)    (Restated)
                                                              
 CASH FLOWS FROM OPERATING ACTIVITIES
   Net loss                                           $(1,412,443)  $(7,707,981)
   Adjustments to reconcile net loss to net
    cash used in operating activities:
     Stock and warrants issued for services               258,616             -
     Amortization of debt discount                        527,296       363,270
     Write off of investment in marketable securities     446,820             -
     Other income related to settlement of disputes    (1,789,373)            -
     Warrants issued for services                               -     1,937,184
     Depreciation and amortization                        468,029       415,649
     (Increase) decrease in:
       Trade accounts receivable                         (441,174)      282,790
       Accounts receivable - other                              -       (20,075)
       Inventory                                                -        82,491
       Prepaid expenses and other                          49,623       113,078
       Other assets                                       (30,423)     (143,628)
     Increase (decrease) in:
       Trade accounts payable                             927,584     1,812,988
       Accrued liabilities                               (167,855)      (99,411)
       Deferred revenue                                    38,966      (193,261)
       Other payable                                            -      (100,000)
                                                       ----------    ----------
       Net cash used in operating activities           (1,124,334)   (3,256,906)
                                                       ----------    ----------

 CASH FLOWS FROM INVESTING ACTIVITIES
   Purchase of property and equipment                     (47,350)     (249,574)
   Payments on note receivable                                  -       300,000
   Cash in DTI at acquisition date                              -        69,137
                                                       ----------    ----------
   Net cash provided by (used in) investing activities    (47,350)      119,563
                                                       ----------    ----------

 CASH FLOWS FROM FINANCING ACTIVITIES
   Payments on note payable                                     -      (724,000)
   Payments on shareholder note payable                  (189,619)      (54,000)
   Proceeds from convertible debentures                 1,000,000     1,000,000
   Proceeds from shareholder note payable                 599,577             -
   Payments on capital leases                             (30,956)      (48,455)
   Change in restricted cash                                    -     1,137,733
   Issuance of common shares for cash                           -       512,322
   Proceeds from common stock subscription                      -     1,000,000
   Proceeds from exercise of stock options                 34,343             -
                                                       ----------    ----------
   Net cash provided by financing activities            1,413,345     2,823,600
                                                       ----------    ----------

 NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS     241,661      (313,743)

 Cash and cash equivalents at beginning of period          73,867       846,141
                                                       ----------    ----------
 Cash and cash equivalents at end of period           $   315,528   $   532,398
                                                       ==========    ==========


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




                      DIAL-THRU INTERNATIONAL CORPORATION
                              AND SUBSIDIARIES

            NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


 NOTE A - BASIS OF PRESENTATION

 The condensed consolidated financial  statements of Dial-Thru  International
 Corporation and its subsidiaries included in  this Form 10-Q are  unaudited.
 Accordingly, they  do  not include  all  of the  information  and  footnotes
 required by generally accepted accounting principles for complete  financial
 statements.  In the  opinion of management,  all adjustments (consisting  of
 normal recurring adjustments), considered necessary for a fair  presentation
 of the financial position and operating results for the three and nine month
 periods ended July 31, 2001 and 2000 have been included.  Operating  results
 for the nine month period ended July 31, 2001 are not necessarily indicative
 of the results that may  be expected for the  year ending October 31,  2001.
 For further information, refer to the consolidated financial statements  and
 footnotes thereto included in the Company's annual report on Form 10-K/A for
 the year ended October 31, 2000.

 On November 2, 1999, the Company acquired substantially all of the  business
 and  assets  of  Dial-Thru   International  Corporation  ("Dial  Thru"),   a
 California corporation, now known as DTI-LIQCO, Inc., along with the  rights
 to the name   "Dial-Thru International Corporation."   On January 19,  2000,
 the Company changed  its name from  ARDIS Telecom   & Technologies, Inc.  to
 Dial-Thru International Corporation ("DTI").

 During fiscal 1998 and 1999, the Company's operations included mainly  sales
 and distribution  of prepaid  domestic and  international calling  cards  to
 wholesale  and  retail  customers.  Starting  January  2000,  following  the
 acquisition of Dial Thru, the Company changed its focus from prepaid calling
 cards to becoming a full  service, facility-based provider of  communication
 products  to  small  and  medium  size  businesses,  both  domestically  and
 internationally.  The Company  now provides a  variety of international  and
 domestic communication services including international dial-thru,  Internet
 voice  and  fax  services,   e-Commerce  solutions  and  other   value-added
 communication services,  using its  Voice  over Internet  Protocol  ("VoIP")
 Network to effectively deliver the products to the end user.

 In addition  to  helping  companies achieve  significant  savings  on  long-
 distance voice and  fax calls  by routing calls  over the  Internet, or  the
 Company's private network,  the Company  also offers  new opportunities  for
 existing Internet Service Providers who want to expand into voice  services,
 private corporate networks  seeking to lower  long-distance costs, and  Web-
 enabled corporate call centers engaged in electronic commerce.

 DTI is also introducing "VoIP" to a new segment of customers by delivering a
 high quality, reliable  and scaleable solution  that uniquely addresses  the
 needs of the rapidly growing "VoIP" industry.


 NOTE B - REVENUE RECOGNITION

 Revenues from prepaid services sold are recognized from customer usage.  The
 Company sells products to retailers and distributors at a fixed price.  When
 the retailer or distributor is invoiced, deferred revenue is recognized. The
 Company recognizes revenue, and reduces the deferred revenue account as  the
 customer utilizes calling time or upon expiration of cards containing unused
 calling time.

 Revenues generated by  international re-origination  and dial-thru  services
 are based  on  minutes  of customer  usage.  The  Company  records  payments
 received in advance as deferred revenue until such services are provided.


 NOTE C - STATEMENTS OF CASH FLOWS

 During the nine months ended July 31, 2001 and 2000, the Company paid $0 and
 $21,099, respectively, for interest.  For the same periods, no cash was paid
 for income taxes.

 Non-cash investing  and financing  activities are  as follows  for the  nine
 months ended July 31, 2001 and 2000:

                                                   2001            2000
                                                 ---------      ---------

 Conversion of debt to equity                   $1,000,000     $        -
 Stock issued in connection with acquisition    $1,031,200     $        -
 Warrants issued to debtor recorded as debt
   discount                                     $   86,875     $  492,000
 Convertible debt issued with below market
   conversion feature                           $  329,931     $  117,000


 NOTE D - ACQUISITION

 On  November  2,   1999,  the   Company  consummated   the  acquisition   of
 substantially all  of the  assets and  business of  Dial-Thru  International
 Corporation (the "Seller"), a California  corporation.  The acquisition  was
 effected pursuant to the  terms of an Asset  Purchase Agreement between  the
 Company, a  wholly owned  subsidiary of  the Company,  the Seller  and  John
 Jenkins, the  sole shareholder  of the  Seller. The  Company issued  to  the
 Seller an aggregate of  1,000,000 shares of common  stock, recorded a  total
 purchase price of   $937,500 using the Company's  common stock price at  the
 time the  acquisition  was announced,  and  agreed to  issue  an  additional
 1,000,000 shares of its  common stock upon  the acquired business  achieving
 specified goals.  In March 2001,  the additional 1,000,000 shares of  common
 stock were issued to the  Seller in accordance with  the terms of the  Asset
 Purchase Agreement, and  the Company recorded  additional purchase price  of
 $1,031,200 using the Company's common stock price at the time of approval of
 the issuance.  The acquisition was accounted  for as a purchase.    Goodwill
 initially recorded in the acquisition is being amortized over a period of 10
 years beginning November 1999.  Incremental goodwill is being amortized over
 its remaining life,  approximately 8.5 years  (See Note L).  The results  of
 operations  of  the  acquired  entity  are  included  in  the   consolidated
 operations of the Company from November 1, 1999.



 NOTE E - CONVERTIBLE DEBENTURES

 In February 2000, the Company executed non-interest bearing convertible note
 agreements (the  "Notes") with  nine  accredited investors,  which  provided
 financing of $1,000,000.  The Notes were payable on the earlier of one  year
 from the date of issuance or the Company's consummation of a debt or  equity
 financing in excess of $5,000,000.  If  the Notes were not repaid within  90
 days of issuance, they were convertible into shares of common stock at $4.00
 per  share  while remaining outstanding.  The Company recorded debt discount
 of approximately  $117,000  in  February  2000  related  to these Notes  for
 the difference in  the conversion  price of $4.00  and the  market price  of
 $4.47 on the date the Notes  were approved by the  Board of Directors.   The
 Company also  issued to  the holders  of the  Notes warrants  to acquire  an
 aggregate of 125,000 shares of common stock  at an exercise price of   $3.00
 per share, which expire  five years from the  date of issuance. In  February
 2000,  the  Company  recorded  debt  discount  of   approximately  $492,000.
 This  amount  represents  the  Company's  estimate  of  the  fair  value  of
 these  warrants  at  the date of grant using the Black-Scholes pricing model
 with the following assumptions:  applicable risk-free interest rate based on
 the current treasury-bill interest  rate at the grant  date of 6%;  dividend
 yield of  0%;  volatility  factors  of the  expected  market  price  of  the
 Company's common stock  of 1.62;  and  an expected life  of the warrants  of
 three years.   The  Company is  amortizing this  discount over  the  initial
 maturity of these Notes of one year.   The amount was fully amortized as  of
 April 30, 2001.   Under the terms of  the agreement, additional warrants  to
 acquire up to an aggregate of 125,000 shares of common stock at an  exercise
 price of   $2.75 per  share were issued  to the  holders of  the Notes  upon
 conversion of the  debt to  equity as  discussed below.  During March  2001,
 terms of the  Notes were modified  and the debt  was converted into  400,000
 common shares.    Additionally,  in  connection  with  the  conversion,  the
 warrants to purchase 250,000 shares of  common stock were modified to  allow
 for an exercise price  of  $0.01 per  share and 150,000 additional  warrants
 with  an exercise price of $3.00 per share  were issued to the note holders.
 In  connection with  the  grant of  the additional  150,000 warrants to  the
 note   holders,  the   Company   recorded   additional   debt  discount   of
 approximately $142,000 which was  immediately  expensed as the warrants were
 exercisable  at the date  of grant.  This amount  was  calculated using  the
 Black-Scholes  pricing  model with  the  following  assumptions:  applicable
 risk-free interest  rate  based on  the current treasury-bill  interest rate
 at the grant date  of  5%; dividend yields of 0%; volatility  factors of the
 expected  market  price  of  the  Company's common  stock  of 1.47;  and  an
 expected life of the warrants of three years.

 On  April 11, 2001,  the Company  executed  a 6% Convertible  Debenture (the
 "Convertible  Debenture")  with  Global  Capital  Funding Group  L.P,  which
 provided  financing  of  $1,000,000.   The  Convertible  Debenture  maturity
 date is April 11,  2003.  The Debenture  is secured by  $320,307 of property
 and equipment.   The conversion price is equal  to the lesser  of   (i) 100%
 of the volume weighted average of sales  price as reported  by the Bloomberg
 L.P. of the common stock on the  last trading day immediately  preceding the
 Closing Date   ("Fixed Conversion  Price") and (ii)  80%  of the  average of
 the  five (5) lowest  volume weighted  average  sales prices as  reported by
 Bloomberg L.P.  during the  twenty  (20) Trading Days  immediately preceding
 but  not including the  date  of  the related  Notice of  Conversion   ("the
 "Formula  Conversion Price"). In  an event  of  default the  amount declared
 due  and payable  on  the Convertible  Debenture shall  be  at  the  Formula
 Conversion  Price. The  Company  has calculated  the  beneficial  conversion
 feature embedded  in the Convertible Debenture  in accordance  with Emerging
 Issues  Task  Force (EITF)  #00-27  and  recorded  $329,931  as  a  deferred
 financing fee.  This fee is being amortized  over the  two-year life  of the
 Convertible  Debenture.  During the  nine months  ended July  31, 2001,  the
 Company  recorded approximately $59,000  as interest  expense.  The  Company
 also issued to the holder of  the Convertible Debenture warrants  to acquire
 an  aggregate of 100,000  shares of common  stock at  an exercise  price  of
 $0.89  per  share,  which expire  on April  11, 2006.  The Company  recorded
 deferred financing  fees of  approximately  $80,000 related to  the issuance
 of  the warrants. This  amount  represents  the relative  fair value of  the
 warrants in  accordance with  EITF  #00-27, using the  Black-Scholes pricing
 model with  the following  assumptions:  applicable risk-free  interest rate
 based on  the current  treasury-bill interest rate at the grant  date of 6%;
 dividend yields  of  0%; volatility factors of the expected  market price of
 the Company's  common  stock of 1.53; and  an expected life of  the warrants
 of five  years. The  warrant  is being amortized  over the two-year  life of
 the Convertible  Debenture.  The amount  charged to expense  and accumulated
 amortization for the nine  months  ended July 31, 2001 totaled approximately
 $14,000.



 NOTE F - NOTE PAYABLE TO SHAREHOLDER

 In connection with the acquisition of Dial-Thru International Corporation on
 November 2, 1999, the  Company assumed a related  party note payable to  the
 sole owner of the acquired entity of approximately $400,000.  The note bears
 interest at 6% per  annum, is payable in  quarterly installments of  $50,000
 plus interest beginning November 1, 1999, and is currently due upon  demand.
 The Company  is currently  in  arrears of  quarterly  payments to  the  note
 holder. During  the three  month period  ended July  31, 2001  there was  no
 change in the balance due on the  note. The outstanding balance at July  31,
 2001 was  $755,958, and is classified as a current liability.



 NOTE G - COMMON STOCK ISSUANCES

 During the nine months ended July 31, 2001, the Company issued an additional
 121,000 shares in connection with the exercise of options for $34,343.

 On  December 15,  2000,  we  issued  90,000  shares of  common  stock to  an
 accredited  investor,  Scotty  Cook,  a  former  Director,  at  no  cost  as
 compensation for consulting services.



 NOTE H - MARKETABLE SECURITIES

 Marketable securities  included one  investment in  a common  stock and  was
 classified as available-for-sale  and carried at  market value.   Unrealized
 holding  gains  and  losses  are  reported   as  a  separate  component   of
 Stockholders' equity until realized.  Realized gains and losses on the  sale
 of investments are  based upon the  specific identification  method and  are
 included in the statement of operations.  During the nine months ended  July
 31, 2001,  a reduction  in  market value  which  was considered  other  than
 temporary resulted in recording a loss  of $446,820, an amount equal to  the
 full value of the investment (see Note K).



 NOTE I - SETTLEMENT OF LEGAL/CARRIER DISPUTES

 During the  quarter ended January 31,  2001, the Company  settled  a pending
 lawsuit  with  Star  Telecommunications,  Inc.   In   conjunction  with  the
 settlement  the Company received  a carrier usage  credit  in the  amount of
 $780,000 for  previous services and future  services  comprised of  one year
 of  no charge domestic  carrier services  for  transporting  traffic between
 Los  Angeles,  New York  and  Miami. The  Company  also  received  1,100,000
 shares of  common stock of Star Telecommunications, which  were  recorded at
 fair  value totaling   $446,820, which were  subsequently written  off  (See
 Note H).  On March 13, 2001,  Star Telecommunications filed  for  Chapter 11
 reorganization.  It  is uncertain  whether  the  Company  will  be  able  to
 utilize   its  carrier  services  agreement  with  Star  Telecommunications.
 Given  this uncertainty,  the  Company  has placed  no value  on the  future
 services.   The Company  has recorded  the carrier  usage credit, the  fair
 value  of the shares received and subsequent  write down as other income and
 expense.

 The Company  also  recorded  income  of  $465,000  in  connection  with  the
 settlement of disputes with RSL Communications, Inc. ("RSL") during the nine
 months ended July  31, 2001.   This amount  was originally  credited to  the
 Company by RSL during  the year ended October  31, 2000.  Subsequently,  the
 credit was rescinded and as the outcome was unclear no benefit was  recorded
 during  fiscal  2000.   During  the  first   quarter  2001, RSL   management
 acknowledged the credit.   The vendor is in  the process of liquidating  its
 United States operations.  Accordingly, the  Company has applied the  credit
 to amounts owed to  the vendor and  recorded the effect  as income in  other
 income and expense.

 During the  nine months  ended  July 31,  2001,  the Company  settled  other
 disputes in connection with  carrier services resulting  in other income  of
 $97,186.



 NOTE J - SEGMENT INFORMATION

 The Company is organized by line  of business.  Historically, the two  major
 lines of business operating segments are prepaid calling cards and dial thru
 services.   The  accounting  policies of  the  line  of  business  operating
 segments are  the same  as those  described in  the summary  of  significant
 accounting policies.  Revenue represents revenue from external customers.

 During the nine  months ended July  31, 2001 substantially  all revenue  and
 expenses related to dial thru services.  At July 31, 2001, all assets  other
 than property and equipment  not in use  securing debt are  now used in  the
 dial thru business  operations.   Revenue and net loss for the prepaid  card
 business and dial thru business for the nine months ended July 31, 2000 were
 $2,749,000, $6,425,000  and  $4,834,000 and $1,283,000 respectively.   Total
 assets of the prepaid business and dial thru business at July 31, 2000  were
 $2,247,000 and $2,428,000, respectively.



 NOTE K - RESTATEMENT

 The Company  is restating its Form 10-Q/A  Amendment No. 1  for  the quarter
 ended January 31, 2001,  to include a  non-cash charge to its operations for
 the issuance of  stock and warrants in exchange  for  services for $258,616.
 The  Company  is restating its Form 10-Q/A  Amendment No. 1 for  the quarter
 ended  April 30,  2001 to reflect additional financing fees  of $156,000 for
 warrants  issued  to the former holders  of the Company's  convertible notes
 and  amortization of  deferred  financing fees for  the amortization  of the
 beneficial  conversion   feature  embedded   in  the  Company's  Convertible
 Debentures,  in accordance  with  Emerging Issued  Task  Force  #00-27.  The
 Company is  also restating its long-term  liabilities and  equity to reflect
 the deferred financing  fee  of approximately $330,000, which represents the
 fair value  of  the beneficial conversion feature, which  is being amortized
 over the life of the Convertible Debenture of two years.

 The Company  is restating  its  Form 10-Q for  the third quarter  ended July
 31,  2001  to  reflect  $41,000   of   additional  financing  fees  for  the
 amortization of the deferred financing fees noted above.

 The restatements  had  the effect of reducing long-term  liabilities and net
 equity  by $275,000, increasing  additional paid-in capital by $730,000, and
 increasing accumulated deficit by $455,000.

 August 3, 2001 Restatements

 On  August 3, 2001  the Company  restated  Form  10-Q for  the three  months
 ended  April 30, 2001  to include  the  write  off of marketable  securities
 available for  sale.  The Company had previously reflected  this decrease in
 value as  a temporary  decline within shareholders' equity.   The adjustment
 increased  net  the  net  loss  in  the  period.   In  addition,  the  prior
 comparative  Form  10-Q for  the  three  months  ended  April 30,  2000  was
 restated  to   include  a  charge   for  compensatory  warrant   issued   to
 distributors  (in  the prepaid  calling card business)  totaling $1,937,184.
 Both of  these  adjustments increased net losses or decreased  net income in
 each  period,  respectively.  These adjustments  are reflected in  the nine-
 month results ended July 31, 2000 and 2001.

 The consolidated balance  sheet  as of July 31, 2001 includes  the effect of
 previous restatements  applied  to the October 31, 2000 Form  10-K/A.  These
 restatements, and  the restatement noted  above had the effect of increasing
 additional   paid-in  capital  and   accumulated  deficit   by   $2,512,726;
 increasing  the   accumulated  deficit   by  $2,948,546;   decreasing  other
 comprehensive loss  by $435,820; with no change to net equity.



 NOTE L - RECENT ACCOUNTING PRONOUNCEMENTS

 In July 2001, the Financial Accounting  Standards Board issued Statement  of
 Financial  Accounting  Standards  No.  141  "Business  Combinations"   which
 requires  the  purchase  method  of  accounting  for  business   combination
 transactions initiated after June 30, 2001.

 In July 2001, the Financial Accounting  Standards Board issued Statement  of
 Financial Accounting  Standards  No.  142  "Goodwill  and  Other  Intangible
 Assets". The  statement  requires  that goodwill  recorded  on  acquisitions
 completed prior to  July 1,  2001 be  amortized through  December 31,  2001.
 Goodwill amortization is precluded on acquisitions completed after June  30,
 2001. Effective January 1,  2002, goodwill will no  longer be amortized  but
 will be  tested  for  impairment as  set  forth  in the  statement.  We  are
 currently reviewing  the new  standard and  evaluating the  effects of  this
 standard on  our  future financial  condition,  results of  operations,  and
 accounting policies and practices.


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


 FORWARD-LOOKING STATEMENTS

 With the exception of historical information, the matters discussed in  this
 quarterly Report on  Form 10-Q include  "forward-looking statements"  within
 the meaning of Section 27A of the Securities  Act of 1933, as amended   (the
 "Securities Act") and Section 21E of the Securities Exchange Act of 1934, as
 amended (the   "Exchange Act").   Forward-looking statements are  statements
 other than historical information or statements of current condition.   Some
 forward-looking statements may  be identified by  the use of  such terms  as
 "expects", "should", "will", "anticipates", "estimates", "believes," "plans"
 and words of similar  meaning.  These  forward-looking statements relate  to
 business plans, programs, trends, results of future operations, satisfaction
 of future cash requirements, funding of future growth, acquisition plans and
 other matters.  In light of the risks and uncertainties inherent in all such
 projected matters, the inclusion of forward-looking statements in this  Form
 10-Q should not be regarded as a representation by the Company or any  other
 person that the objectives or plans of the Company will be achieved or  that
 operating expectations will be realized.  Revenues and results of operations
 are difficult to forecast and could differ materially from those projects in
 forward-looking statements  contained herein,  including without  limitation
 statements regarding  the Company's  belief of  the sufficiency  of  capital
 resources and its  ability to  compete in  the telecommunications  industry.
 Actual results  could differ  from those  projected in  any  forward-looking
 statements  for,  among  others,  the  following  reasons:    (a)  increased
 competition from  existing and  new competitors  using Voice  over  Internet
 Protocol ("VoIP") to provide telecommunications services, (b) the relatively
 low  barriers  to  entry  for  start-up  companies  using  VoIP  to  provide
 telecommunications services,   (c)  the price-sensitive  nature of  consumer
 demand, (d)  the  Company's  dependence  upon  favorable  pricing  from  its
 suppliers to  compete  in  the telecommunications  industry,  (e)  increased
 consolidation in the telecommunication industry, which may result in  larger
 competitors being  able to  compete more  effectively,  (f) the  failure  to
 attract or  retain key  employees, (g)  continuing changes  in  governmental
 regulations affecting the telecommunications industry and the Internet,  (h)
 changing consumer demand, technological  development and industry  standards
 that characterize  the  industry, and  (i)  the "Certain  Business  Factors"
 identified in the  Company's  Annual  Report on Form   10-K/A  for the  year
 ended October 31, 2000.  In light of the significant uncertainties  inherent
 in the forward-looking statements included in this Form 10-Q, you should not
 consider the  inclusion  of such  information  as a  representation  by  the
 Company or anyone else that we will  achieve our objectives and plans.   The
 Company  does  not  undertake  to  update  any  forward-looking   statements
 contained herein.  Readers are cautioned not to place undue reliance on  the
 forward-looking statements made in, or incorporated by reference into,  this
 Quarterly Report on Form 10-Q or  in any document or statement referring  to
 this Quarterly Report on Form 10-Q.

 GENERAL

 Dial-Thru International Corporation is  a facilities-based, global  Internet
 Protocol   ("IP")   communications   company   providing   connectivity   to
 international  markets  experiencing  significant  demand  for  IP   enabled
 services. The Company provides a variety of international telecommunications
 services targeted  to  small and  medium  sized enterprises  ("SME's")  that
 include the transmission of voice and data traffic and the provision of Web-
 based and other communications products and services.  The Company  utilizes
 Voice over Internet Protocol ("VoIP") packetized voice technology (and other
 compression  techniques)   to  improve   both  cost   and  efficiencies   of
 telecommunication transmission mechanisms,  and is developing  a private  IP
 Telephony network.

 IP Telephony, or VoIP, is voice  communication that has been converted  into
 digital packets and is then addressed, prioritized, and transmitted over any
 form of  broadband network,  utilizing the  same technology  that makes  the
 Internet possible.   These technologies allow the Company to transport voice
 communications with the same high-density compression as networks  initially
 designed for  data transmission,  and  at the  same  time utilize  a  common
 network  for  providing  customers  with  enhanced  Web-based  products  and
 services.

 The Company's primary focus is in niche markets where competition is not  as
 keen, thereby giving it opportunities for greater profit margins and  market
 share.  These markets include regions of the world where the deregulation of
 telecommunications services  has  begun, or  is  in early  development.  The
 Company also targets smaller  markets that have  not attracted large  multi-
 national providers.   Africa, Asia,  and parts  of South  America offer  the
 greatest abundance of these target markets.

 Cooperating with  overseas  carriers  and the  incumbent  operator,  usually
 government owned telephone  companies, gives the  Company a  high degree  of
 leverage  to  engage  in  the  co-branding  of  jointly  marketed  products,
 including IP based enhancements  that it has  developed, rather than  simply
 basing a  strategy on  pricing arbitrage.     As a  result, the  Company  is
 proactively invited  to participate  rather than  reactively prevented  from
 entering these new markets.

 Unlike many other  wholesale VoIP  carriers in  the market,  the Company  is
 focused on  retail telecommunications  sales  to business  customers,  which
 allows the Company to provide a complete package of communication  services,
 not just wholesale voice traffic. A portfolio of enhanced offerings provides
 the Company  with  the opportunity  for  higher profit  margins  and  better
 customer loyalty, thus  making the Company  less susceptible to  competitive
 forces and market churn.

 In tandem with  overseas partners, the  Company is deploying  a   "book-end"
 strategy by targeting markets at both ends of international circuits.  As an
 example, while  cooperating with  partners to  target the  SME market  in  a
 selected foreign region, the Company also targets corresponding  expatriates
 and foreign owned businesses back in  the U.S.  By providing these  services
 in cooperation with the carrier that will ultimately terminate the calls  in
 the caller's "home"  country, the Company  enjoys reduced facilities  costs,
 increased economies of scale, lower  customer acquisition costs, and  higher
 customer retention.

 Focusing on cooperation  in emerging markets  also gives  the Company  added
 benefit of being able to develop and exploit labor cost advantages not found
 in industrial markets.   For example, the Company  plans to develop new  and
 extremely low-cost call center applications that  will tie into and  enhance
 its new Web and VoIP applications.  By  relying on VoIP and IP, rather  than
 traditional  voice  technology,  the   Company  ensures  that  its   network
 infrastructure is extremely cost-effective and state-of-the-art.

 The following discussion should  be read in  conjunction with the  Company's
 Form 10-K/A and  the consolidated financial  statements for  the year  ended
 October  31,  2000,  and  the  Form  10-K  and  the  consolidated  financial
 statements for the years ended 1999,  and 1998; the Company's Form 10-Q  for
 the quarter ending July 31, 2000; and the consolidated financial  statements
 and related notes  for the quarter  ended July 31,  2001 found elsewhere  in
 this report.

 RESULTS OF OPERATIONS

 THREE MONTH COMPARISON

 REVENUES

 The Company's primary source of revenue is the sale of voice and fax traffic
 internationally over  its  VoIP  network,  which  is  measured  in  minutes,
 primarily to  small and  medium sized  enterprises ("SME's").   The  Company
 charges its customers  fees per minute  of usage that  are dependent on  the
 destination of the call and is recognized in the period in which the call is
 completed.

 Revenues were  $1,654,000 for the  quarter ended July 31, 2001, compared  to
 $953,000 for the quarter  ended July 31, 2000,  representing an increase  of
 74% from  the prior  period. All  of the  Company's revenues  for the  three
 months ended  July  31, 2001  were  from the  Company's  international  long
 distance business described above,  compared to 96% for  the same period  of
 2000.  The  remaining 4%  of revenue for  2000 was  generated from  existing
 prepaid long distance.  The increase  in revenues for this quarter  compared
 to the prior year resulted primarily  from growth in the Company's  customer
 base as  it continues  to expand  its market  presence internationally.  The
 Company  expects  revenues   to  increase   as  it   continues  to   develop
 opportunities in new markets and expand existing relationships.

 EXPENSES

 The Company's costs of revenues are termination fees, purchased minutes  and
 fixed cost for  specific international and  domestic private  lines used  to
 transport the Company's minutes. Termination fees are paid to local  service
 providers and other international and  domestic carriers to terminate  calls
 received from the Company's network. This traffic is measured in minutes, at
 a negotiated contract cost per minute.

 Costs of revenues were $1,081,000, or 65% of revenues, for the quarter ended
 July 31, 2001,  compared to $463,000,  or 49% of  revenues, for the  quarter
 ended July 31, 2000.  The cost of  revenues for the three months ended  July
 31, 2000 included credits of  approximately $390,000 related to  settlements
 of disputed  carrier overcharges.   Without  this credit,  cost of  revenues
 would have been $853,000,  or 90% of  revenues.  Costs  of revenues for  the
 three months ended July 31, 2001  and 2000 are primarily from the  Company's
 international long distance business. By focusing its business away from low
 margin prepaid  calling  cards  to delivering  higher  margin  international
 communication services to SME's in niche markets utilizing its VoIP network,
 the Company  has been  able to  demonstrate the  ability to  realize  higher
 margins on revenues across its product lines.

 Sales and  marketing expenses  include expenses  relating to  the  salaries,
 payroll taxes,  benefits and  commissions that  the Company  pays for  sales
 personnel  and  the  expenses  associated  with  advertising  and  marketing
 programs,  including  expenses relating  to  the  Company's  outside  public
 relations firms.

 Sales and  marketing expenses  were $203,000,  or 15%  of revenues  for  the
 quarter ended July 31, 2001, compared to $55,000, or 6% of revenues, for the
 quarter ended July 31, 2000. Sales  and marketing expenses for both  periods
 are attributable to the Company's international long distance business.  The
 increase in  sales and  marketing  expenses in  absolute  dollars and  as  a
 percentage of  revenue is  the result  of the  Company's costs  incurred  in
 startup operations in Latin America.  In the short term, the Company expects
 that sales and marketing expenses will increase in absolute dollars and as a
 percentage of  revenues as  the Company  begins to  utilize its  advertising
 credits to promote its products and services.  In the long term, the Company
 expects a  decrease in  sales  and marketing  expenses  as a  percentage  of
 revenues as it realizes increasing revenues from its advertising programs as
 well as its costs incurred in Latin America.

 General and  administrative expenses  include salary,  payroll  tax, benefit
 expenses and  related  costs  for  general  corporate  functions,  including
 executive management,  finance  and administration,  legal  and  regulatory,
 information technology and human resources.

 General and administrative expenses  were $702,000, or  42% of revenue,  for
 the quarter ended July 31, 2001, compared to $1,142,000, or 120% of revenue,
 for the quarter ended July 31,  2000.  For the  three months ended July  31,
 2001,  general  and   administrative  expenses  relate   to  the   Company's
 international long distance  business, compared  to $519,000  for the  three
 months ended  July  31, 2000.    The remaining  general  and  administrative
 expenses  for  the  three  months  ended  July  31,  2000  of  $623,000  are
 attributable to  the  prepaid long  distance  business. The  change  in  the
 Company's business away from prepaid calling  cards, which requires a  large
 infrastructure to support  and control a  large volume  of transactions,  as
 well as  management's decision  to consolidate  its US  operations into  one
 location, has resulted in an overall drop of its general and  administrative
 expenses.   As  the  Company's  revenues  continue  to  grow,  it  does  not
 anticipate a significant increase in general and administrative expenses  in
 absolute dollars to support this growth.  As a result, in future periods the
 Company anticipates a further reduction of these expenses as a percentage of
 revenue.


 During the quarter  ended July  31, 2001,  the Company  incurred $52,000  of
 debt  discount and $34,000 of net interest expense compared with $123,000 of
 debt discount  and $7,000 of net interest income for the quarter ended  July
 31, 2000.  The decrease  in debt discount is attributable to the  conversion
 of the Company's  $1.0 million convertible  notes to equity  in March  2001,
 which had an original debt discount of $492,000 and was being amortized over
 three years.

 As a result of the foregoing, the  Company incurred a net loss of  $595,000,
 or $.05 per share for the quarter ended July 31, 2001, as compared to a  net
 loss of $965,000, or $0.11 per share, for the quarter ended July 31, 2000.



 NINE MONTH COMPARISON

 REVENUES

 Revenues were $3,448,000 for the nine  months ended July 31, 2001,  compared
 to $7,583,000  for the  nine  months ended  July  31, 2000,  representing  a
 decrease of 55% from the prior period.   Revenues for the nine months  ended
 July 31, 2001 were from the  Company's international long distance  business
 as described above, compared  to $4,834,000 for the  nine months ended  July
 31, 2000.  The remaining revenue for 2000 of $2,749,000 was derived from the
 prepaid long distance business. Costs associated with the    discontinuation
 of the prepaid  business, as  well as, a  shift in  the Company's  strategic
 focus have prevented  the Company from  fully developing  and marketing  its
 redirected business, resulting in a  decline in revenues from  international
 long distance services.   The Company  now devotes all  of its resources  to
 providing international  communication services  in niche  markets to  SME's
 either through direct sales efforts or  resellers in each market.  Now  that
 costs have been eliminated  and new markets have  been reached, the  Company
 anticipates significant revenue growth in future periods.

 EXPENSES

 Costs of revenues were $2,358,000, or  68% of revenues, for the nine  months
 ended July 31, 2001,  compared to $7,936,000, or  105% of revenues, for  the
 nine months ended  July 31, 2000.   Costs of  revenues for  the nine  months
 ended July 31, 2001 were from the international long distance business.  For
 the nine months ended July 31, 2000, $4,088,000 of cost of revenues  related
 to the international long distance business,  with the remainder related  to
 the prepaid long distance business.  By focusing its business away from  low
 margin prepaid  calling  cards  to delivering  higher  margin  international
 communication services to SME's in niche markets utilizing its VoIP network,
 the Company  has been  able to  demonstrate the  ability to  realize  higher
 margins on sales across its product lines.


 Sales  and marketing expenses  were $500,000,  or 15%  of  revenues for  the
 nine months ended July 31, 2001, compared  to $841,000,  or 11% of revenues,
 for  the nine  months ended  July 31,  2000.  Sales  and marketing  expenses
 exclude  non-cash  charges  of  $1,937,184  for  stock  warrants  issued  to
 distributors (previously  employees)  of the Company's prepaid  products for
 the period ended July  31, 2000  and $258,616 for common  stock and warrants
 issued  for services for  the  period  ended July  31, 2001.  The sales  and
 marketing expenses  for the nine  months ended  July 31, 2001 relate  to the
 international long  distance business,  while a majority of  the expense for
 2000 related to the prepaid long  distance  business.  The increase in sales
 and marketing  as a percentage of revenues  is the  result of  the Company's
 costs  incurred in startup  operations in  Latin  America.    In  the  short
 term, the Company  expects that  sales and marketing costs  will increase in
 absolute  dollars  and as a percentage of revenues  as  the Company   begins
 to   utilize  its   advertising credit  asset to promote  its   products and
 services.   In  the long term, the Company expects  a decrease in sales  and
 marketing expenses as a  percentage of revenues  as  it  realizes increasing
 revenues from its advertising programsas well as its costs incurred in Latin
 America.


 General and administrative expenses were $2,043,000, or 59% of revenues, for
 the nine  months ended  July 31,  2001, compared  to $3,824,000,  or 50%  of
 revenues, for the  nine months ended  July 31, 2000.   For  the nine  months
 ended  July  31,   2001,  the  general   and  administrative  expenses   are
 attributable to  the  international  long  distance  business,  compared  to
 approximately $1,306,000  for the  nine months  ended July  31, 2000.    The
 remaining general and administrative expenses of $2,518,000 are attributable
 to the prepaid long distance business. The change in the Company's  business
 away from prepaid calling cards, which  requires a larger infrastructure  to
 support and control a large volume of transactions, as well as  management's
 decision to consolidate its US operations into one location has resulted  in
 an overall  drop of  its general  and  administrative expenses  in  absolute
 dollars.  Although general and administrative expenses for the international
 business have increased to support the Company's initial growth, the Company
 believes its current infrastructure is  positioned to handle future  growth.
 As a result,  the Company  anticipates a reduction  of these  expenses as  a
 percentage of revenue in future periods.

 During the nine months ended July 31, 2001, the Company incurred $527,000 of
 debt  discount and $50,000 of net interest expense compared with $364,000 of
 debt discount and  $27,000 of net interest income for the nine months  ended
 July 31, 2000.   The  2000 and  2001 debt discount  are attributable to  the
 Company's $1.0 million convertible notes,  which had original debt  discount
 totaling  $609,000, which  were being  amortized over  a  three year period.
 The  convertible  notes  were converted to equity in  March  2001,  and  the
 remaining unamortized debt discount  was charged  to expense.   In addition,
 during the current  2001 period  the Company  is  amortizing  debt  discount
 in connection with additional debt financing obtained in April 2001.


 Settlements with two major carriers  over charges  in prior periods amounted
 to a  total credit to  the statements  of  operations of $1,800,000  for the
 nine months ended  July 31, 2001. Of this  amount, $780,000 is the result of
 our  settlement  with  Star  Telecommunications ("Star").  Also included  is
 $446,820  representing  common stock received  from Star in  connection with
 our dispute settlement.

 As a result of the foregoing, the Company generated a net loss of $1,412,000
 or $0.14 per share, for the nine months ended July 31, 2001, as compared  to
 a net loss of $7,708,000, or $0.93 per share, for the nine months ended July
 31, 2000.


 LIQUIDITY AND CAPITAL RESOURCES

 At July 31, 2001, the Company had cash and cash equivalents of $316,000,  an
 increase of $243,000 from the balance at October  31, 2000.  As of July  31,
 2001, the Company had a working capital deficit of $3,394,000, compared to a
 working capital deficit of   $2,932,000 at July  31, 2000.   As of July  31,
 2001, the  Company's  current assets  of  $1,280,000 included  net  accounts
 receivable of $897,000, which has increased as a result of the growth in the
 Company's revenues.


 During  the nine months  ended July 31,  2001,  net  cash used  in operating
 activities  was  $1,124,000,  compared   to  net  cash  used  in   operating
 activities  of $3,257,000 for  the  nine months  ended July  31, 2000.   The
 decrease  in net  cash used  in  operating  activities for  the nine  months
 ended July 31, 2001 was primarily  due to a  net loss of $1,412,000 versus a
 net loss of 7,708,000  from the  comparable period in the  prior year offset
 partially  by  other changes  in current  assets and  liabilities and  other
 non-cash items.


 Cash used in investing activities was $47,000 for the nine months ended July
 31, 2001, compared to cash provided by investing activities of $120,000  for
 the nine months  ended July 31,  2000. For the  nine months  ended July  31,
 2000, the Company had receipts of $300,000 from notes receivable, offset  by
 $250,000 of capital  expenditures.  The  investing activities  for the  nine
 months ended July 31, 2001 are attributable to capital expenditures.

 Cash provided by  financing activities for  the nine months  ended July  31,
 2001, totaled $1,413,000, compared to cash provided by financing  activities
 of $2,824,000  for the  nine months  ended July  31, 2000.  During the  nine
 months ended  July 31,  2001, significant  components  of cash  provided  by
 financing activities  include  $1,000,000  in proceeds  from  a  convertible
 debenture and net proceeds  from shareholder of $410,000.   During the  nine
 months ended July 31, 2000, cash  provided by financing activities  included
 payments of  $724,000  on  a  note payable  and  the  resulting  release  of
 restricted cash of $1,138,000, the raising  of  $1,000,000 through the  sale
 of a convertible debenture and $1,000,000  through the issuance of a  common
 stock subscription agreement,  and $512,000  in proceeds  received upon  the
 exercise of stock options.

 Because the Company is in a growth mode  and at the same time refocused  its
 operations during fiscal  2000, cash flow  was constrained  and resulted  in
 slow payment to  vendors and  growth in  payables. The  Company's cash  flow
 commitments entering fiscal  2001 included  operating overhead,  outstanding
 debt of $1 million, and settling a significant portion of its trade payables
 of $3.9 million (as of Oct. 31, 2000).   The Company has made a  significant
 reduction in monthly  overhead expenses and  the Company  has converted  the
 debt to  equity.  Although the  Company  has  been able  to  reduce  certain
 payables though  settlements  with carriers,  it  continues to  pay  certain
 vendors slowly, resulting in a moderate decline in its accounts payable from
 October 31, 2000.

 The Company believes that it will be able to significantly improve its  cash
 flows in the next twelve months for the following reasons:

   1. The  Company  has  lowered  operating  expenses  by  reorganization  of
      operating staff and  changing channels  of distribution  over the  past
      twelve months.   This has  resulted in  reduced expenses  in excess  of
      $250,000 per month.  The Company will continue to closely monitor these
      expenses and make adjustments as necessary.
   2. The Company  converted $1  million  of debt  into equity.  The  Company
      anticipates converting  an additional  $1  million of  its  Convertible
      Debentures to equity.  (See additional discussion further).
   3. The Company expects to be able  to bring in additional financing of  $1
      to $3 million during fiscal year  2001, with $1 million of  convertible
      debt financing having  already been  completed in  the second  quarter.
      (See additional discussion further).
   4. The  Company  is  in  negotiations  to  convert  the  Note  Payable  to
      Shareholder to long-term.
   5. The Company expects an increase in recurring revenues and  improvements
      in profit margin due to changes in product focus sufficient to  produce
      positive monthly operating cash flow by fiscal year end.
   6. Additionally, during the next twelve month period the Company  believes
      it will need approximately $1  million through improved operating  cash
      flow or additional financing transactions.

 In February 2000 the Company consummated  a private placement of  $1,000,000
 in principal amount of convertible debentures.  During the second quarter of
 2001, the notes were converted into  400,000 shares of the Company's  common
 stock at a conversion price of  $2.50 per share.   The holders of the  notes
 were also issued warrants to acquire  an aggregate of 250,000 shares of  the
 Company's common stock at an exercise price  of one half at $3.00 per  share
 and one half at $2.75 per  share.  As a condition  of the conversion of  the
 notes into common stock, the exercise price of these warrants were  repriced
 to $0.01, and an  additional 125,000 warrants were  issued with an  exercise
 price of $3.00.

 On April 11,  2001, the  Company executed  a 6%  convertible debenture  (the
 "Debenture"")  with  Global  Capital  Funding  Group  L.P,  which   provided
 financing of  $1,000,000.   The Debenture maturity  date is April 11,  2003.
 The conversion price equals the lesser of   (i) 100% of the volume  weighted
 average of sales price as reported by the Bloomberg L.P. of the common stock
 on the  last  trading ay  immediately  preceding the  Closing  Date  ("Fixed
 Conversion Price") and (ii) 80% of the average of the five (5) lowest volume
 weighted average  sales prices  as reported  by  Bloomberg L.P.  during  the
 twenty  (20) Trading Days immediately  preceding but not including the  date
 of the related Notice of Conversion  ("the "Formula Conversion Price").   In
 an event of  default the amount  declared due and  payable on the  Debenture
 shall be at the Formula Conversion Price.

 The Company also issued to the holders of the Debenture warrants to  acquire
 an aggregate  of 100,000  shares of  common stock  at an  exercise price  of
 $0.89 per share, which expire on April 11, 2006. In April 2001, the  Company
 recorded debt discount of approximately   $86,875.   This  amount represents
 the  Company's  estimate  of  the  fair  value  of  these  warrants  at  the
 date of  grant using  the Black-Scholes  pricing  model with  the  following
 assumptions:  applicable  risk-free  interest  rate  based  on  the  current
 treasury-bill interest rate at the grant  date of 6%; dividend yield of  0%;
 volatility factors  of the  expected market  price of  the Company's  common
 stock of 1.53;  and an expected  life of the  warrants of five  years.   The
 Company is amortizing this discount over the initial maturity of these notes
 of  two  years.

 The Company's growth models for its business are scaleable, but the rate  of
 growth is  dependent on  the availability  of future  financing for  capital
 resources.  The Company  plans to commit at  least $1.0 million for  capital
 investment in the next twelve month period, and plans to finance  additional
 infrastructure development externally through  debt and/or equity  offerings
 and internally through  the operations of  its Telecommunications  Business.
 The Company plans  to obtain  vendor financing for  a major  portion of  its
 equipment needs associated with expansion.  The Company believes that,  with
 sufficient capital, it can  significantly accelerate its  growth plan.   The
 Company's failure to obtain  additional financing could significantly  delay
 the Company's  implementation  of its  business  plan and  have  a  material
 adverse effect on its business, financial condition and operating results.

 PART II.  OTHER INFORMATION

 ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

 (a) The following Exhibits are required to be filed with this quarterly
     report on Form 10-Q:

      None.


 (b) Reports on Form 8-Ks

      None.


  SIGNATURES

 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 thereunto duly authorized.


                                     Dial-Thru International Corporation
                                     (Registrant)

 DATE: February 5, 2002              /s/  John Jenkins
       --------------------------    --------------------------------------
                                     John Jenkins
                                     President, and Chief Operating Officer
                                     (Principal Financial Officer)