U.S. Securities and Exchange Commission
                             Washington, D.C. 20549

                                    Form 10-Q


(Mark One)

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

                For the quarterly period ended December 31, 2001

[ ]      TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

      For the transition period from __________________ to ______________

Commission file number: 1-14219

                             Stelax Industries Ltd.
        (Exact name of small business issuer as specified in its charter)

British  Columbia                                         None
 (State or other jurisdiction of               (IRS Employer Identification No.)
incorporation or organization)

4004     Beltline Road, Suite 107, Dallas TX                    75244
(Address of principal executive offices)                      (Zip Code)

                                 (972) 233-6041
                         (Registrant's telephone number)


(Former  name, former address and former fiscal year, if changed since last
         report)

         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 X No ____


                      APPLICABLE ONLY TO CORPORATE ISSUERS

         State the number of shares outstanding of each of the issuer's classes
of common equity, as of December 31, 2001: 42,772,775









                         PART I - FINANCIAL INFORMATION
               Item 1. Financial Statements.Stelax Industries Ltd

                           CONSOLIDATED BALANCE SHEETS
                      (Presented in United States dollars)

                                     ASSETS



                                                                 December 31,         March 31,
                                                                     2001               2001
                                                                   Unaudited

CURRENT ASSETS:
                                                                              
     Cash and cash equivalents                                  $      15,075       $     800,696
     Note Receivable                                                  141,480             141,480
     Inventory-Raw materials                                           98,125              23,851
       Work in process                                                 14,693              35,128
       Finished goods                                                  30,607             121,530
     Accounts Receivable-Trade, net (allowance for
       doubtful accounts at  Dec. 31 and March 31,
       2001, $0 and $0, respectively)                                  76,802             111,981
     Prepaids and other current assets                                  9,839              45,690
                                                                -------------       -------------
     Total Current Assets                                             386,621           1,280,356

PROPERTY & EQUIPMENT-AT COST:
     Plant & Machinery                                              9,503,575           9,489,345
     Building                                                         848,843             848,843
     Land                                                             270,136             270,136
                                                                -------------       -------------
                                                                   10,622,554          10,608,324
     Accumulated Depreciation                                      (2,546,172)         (2,186,221)
                                                                -------------       -------------
     Total Property & Equipment                                     8,076,382           8,422,103

INTANGIBLE ASSETS (accumulated amortization
     Of $346,736 and $276,556 at Dec. 31 and
     March 31, 2001, respectively)                                    503,225             566,135

OTHER ASSETS                                                          131,405             201,804
                                                                -------------       -------------
TOTAL ASSETS                                                    $   9,097,633       $  10,470,398
                                                                =============       =============











                        See notes to financial statements


                                       1



                              Stelax Industries Ltd

                           CONSOLIDATED BALANCE SHEETS
                      (Presented in United States dollars)

                      LIABILITIES AND STOCKHOLDERS' EQUITY



                                                                 December 31,         March 31,
                                                                     2001               2001
                                                                   Unaudited
                                                                -------------        ----------
CURRENT LIABILITIES:
                                                                              
     Accounts payable                                         $   1,569,662         $     767,707
     Payable to related parties                                     835,990               960,328
     Accrued interest                                                71,763                37,934
     Note payable--short term                                     3,645,833             1,250,000
                                                              -------------         -------------
     Total Current Liabilities                                    6,123,248             3,015,969

NOTE PAYABLE--LONG TERM                                                   -             2,916,666

STOCKHOLDERS' EQUITY:
     Common stock - 50,000,000 shares
       authorized, no stated par value;
       issued and outstanding 42,772,775
       & 39,240,175 shares at Dec 31
       & March 31, 2001, respectively.                           25,182,717            24,183,962
     Cumulative translation adjustments                             208,609               222,132
     Accumulated deficit                                        (22,416,941)          (19,868,331)
                                                              -------------         -------------
     Total Stockholders' Equity                               $   2,974,385         $   4,537,763
                                                              -------------         -------------
TOTAL LIABILITIES AND
     STOCKHOLDERS' EQUITY                                     $   9,097,633         $  10,470,398
                                                              =============         =============


















                        See notes to financial statements

                                       2




                              Stelax Industries Ltd

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                      (Presented in United States dollars)
                                    Unaudited




                                                                              Nine Months Ended
                                                                      ------------------------------
                                                                       December 31,     December 31,
                                                                           2001              2000
                                                                      --------------    ----------------
OPERATING ACTIVITIES
                                                                                  
  Net loss                                                           $    (2,548,610)   $     (2,057,472)
  Adjustments to reconcile net loss
  to net cash provided by operating
  activities:
     Depreciation & amortization                                             491,888             424,602
     Foreign currency transaction gain (loss)                                (12,931)             84,601
     Changes in operating assets and
       liabilities:
     Decrease (increase) in receivables                                       35,179             (21,113)
     Decrease (increase) in inventory & other assets                          74,272            (295,134)
     Increase (decrease) in accounts
       payable & accrued interest                                            711,446          (1,212,276)
                                                                     ---------------    ----------------
Net cash (used) provided by operating activities                          (1,248,756)         (3,076,792)


INVESTING ACTIVITIES
     Purchase of property, equipment & intangibles                           (14,787)           (203,609)
                                                                     ---------------    ----------------
Net cash used by investing activities                                        (14,787)           (203,609)


FINANCING ACTIVITIES
     Common stock issue                                                      998,755             375,000
     Note payable issue (payment)                                           (520,833)          4,504,166
                                                                     ---------------    ----------------
                                                                             477,922           4,879,166


Increase (decrease) in cash and cash
     equivalents                                                            (785,621)          1,598,765

Cash & cash equivalents at beginning
     of period                                                               800,696              44,660
                                                                     ---------------    ----------------
Cash & cash equivalents at end of period                             $        15,075    $      1,643,425
                                                                     ===============    ================
Interest paid                                                        $       230,270    $        241,739
                                                                     ===============    ================
Income taxes paid                                                    $             -    $              -
                                                                     ===============    ================



                       See notes to financial statements.

                                       3



                              Stelax Industries Ltd

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                      (Presented in United States dollars)
                                    Unaudited




                                              Three Months Ended                     NineMonths Ended
                                        -------------------------------      ------------------------------
                                           December 31,     December 31,      December 31,     December 31,
                                               2001             2000              2001           2000
                                        --------------      ------------     ------------    --------------
                                                                                 
Sales                                   $      35,007       $    39,029      $   567,842     $     228,022
Cost of sales                                 192,880           300,199        1,336,441           652,002
                                        -------------       -----------      -----------     -------------
Gross loss                                   (157,873)         (261,170)        (768,599)         (423,980)

Selling, general and administrative
     Expenses (including depreciation
     and amortization of $491,888
     and $424,602 for the nine months
     ending Dec. 31, 2001 and 2000,
     respectively)                            465,756           536,603        1,479,258         1,352,979
                                        -------------       -----------      -----------     -------------
Loss from operations                         (623,629)         (797,773)      (2,247,857)       (1,776,959)

Other income (expense):
     Interest income                                -            36,913            2,503            55,473
     Interest expense                         (98,491)         (150,302)        (303,256)         (335,986)
                                        -------------       -----------      -----------     -------------
Net loss                                $    (722,120)      $  (911,162)     $(2,548,610)    $  (2,057,472)
                                        =============       ===========      ===========     =============

Weighted average shares of
     common stock                          42,750,492        37,798,616       42,140,061        37,614,169
                                        =============       ===========      ===========     =============


Net loss per share                            $(0.02)           $(0.02)          $(0.06)           $(0.06)
                                        ============        ==========       ==========      ============















                       See notes to financial statements.



                                       4



                             STELAX INDUSTRIES LTD.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                      (Presented in United States Dollars)
                                    Unaudited

(1)  INTERIM FINANCIAL STATEMENTS

In the opinion of management, the interim financial statements reflect all
adjustments necessary to a fair statement of the results for the interim periods
presented. The results for the nine months ended December 30, 2001 are not
necessarily indicative of results to be expected for the entire year. These
financial statements, notes and analyses should be read in conjunction with the
Company's annual financials for the fiscal year ended March 31, 2001.

(2)  LOSS PER SHARE

Loss per share was based on the weighted average number of common shares of
42,140,061 and 37,521,442 outstanding during the nine month period ended
December 31, 2001, and 2000, respectively.

(3)  INCOME TAXES

The Company has net operating loss carry forwards of approximately $420,000 for
Canada and $6,200,000 for the U.K.

(4)  RELATED PARTY TRANSACTIONS

As of December 31, 2001, funds are owed by the Company totaling $931,391 to the
President of the Company and his affiliates. As of March 31, 2001, the Company
owed the President $751,134. The president and a director of the subsidiary are
owed $92,919 and $209,194 as of December 31, 2001 and March 31, 2001,
respectively.




                                       5



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

Forward-Looking Information

The Management's Discussion and Analysis of Financial Condition and Results of
Operations and other sections of the Form 10-Q contain forward-looking
information. The forward-looking information involves risks and uncertainties
that are based on current expectations, estimates, and projections about the
Company's business, management's beliefs and assumptions made by management.
Words such as "expects", "anticipates", "intends", "plans", "believes", "seeks",
"estimates", and variations of such words and similar expressions are intended
to identify such forward-looking information. Therefore, actual outcomes and
results may differ materially from what is expressed or forecasted in such
forward-looking information due to numerous factors, including, but not limited
to, availability of financing for operations, successful performance of internal
operations, impact of competition and other risks detailed below as well as
those discussed elsewhere in this Form 10-QSB and from time to time in the
Company's Securities and Exchange Commission filings and reports. In addition,
general economic and market conditions and growth rates could affect such
statements.

General

For the fiscal years ended March 31, 1999, and March 31, 2000, the Company
developed the market for its Nuovinox product, a product that clads rebar with
stainless steel. Much of this product development involved extensive testing to
determine the product's utility for use in highways and bridges. This testing
occurred principally in the United States for federal and state transportation
authorities. By March 31, 2000, this testing process was completed sufficiently
to commence sales, and the Company's assets were, at that time, unencumbered.

In July 2000, the Company's United States subsidiary entered into a loan and
security agreement with Banc of America Commercial Finance Corporation (the
"Loan Agreement") whereby the Company obtained a term loan as well as a
revolving credit and credit accommodation. The maximum amount that can be
borrowed under the Loan Agreement is $5,750,000.

The Company shipped some product prior to entering into the Loan Agreement, but
the proceeds of the Loan Agreement were used to refine production processes so
that the Company could begin volume productions. However, despite having a
significant market for the product, the Company has been unable to achieve
efficient volumes with the its current capital resources. Without additional
capital, the company lacks the financial resources to fund inventory and
receivables as well as invest in people and equipment that would make its
processes economically efficient.

On October 30, 2001, the Company announced that it had entered a letter of
intent with Mitsubishi International Corporation to form a joint venture in the
development and distribution of the Nuovinox line of products. Under the terms
of the letter of intent Mitsubishi would provide global distribution of Stelax's
existing products and its to be developed product lines and aid in the
establishment of manufacturing facilities in the U. S. and elsewhere in the
world. Mitsubishi would also assist in general and strategic planning for the
growth and development of Stelax and its product lines.

Nine months ended December 31, 2001, compared to nine months ended December 31,
2000

The Company's revenues increased to $657,842 in the later period compared to
revenues of $228,022 in the earlier period. Revenues had only begun to occur in
the later part of the first quarter. Consequently, labor costs and other fixed
costs that the Company had in place throughout the quarter were absorbed by
relatively small amounts of revenue. General and administrative expenses
increased significantly as the Company began to staff to levels required to
support full production. Finally, the Company incurred significant interest
expense of $303,256 in the first nine months of fiscal 2002, essentially
interest expense on the Loan Agreement.

                                       6


Liquidity and Capital Resources

The proceeds from the Loan Agreement have been used to fund operational losses
to extent necessary to cover the start up period for Nuovinox sales and to
finance inventory and receivables to the extent that the Company needs funds in
excess of borrowing under the Loan Agreement for inventory and receivables.

However, by the end of fiscal 2001 on March 31, 2001, the Company had used the
maximum amount available under the Loan Agreement. The Company has had to reduce
staffing and limit production in the second quarter of fiscal 2002 due
principally to the unavailability of capital to expand production and meet
demand. The Company is seeking additional equity funding, nonetheless, to make
certain that operations are adequately supported.

Because of the losses incurred in fiscal 2001, at March 31, 2001, the Company
was in technical default under the Loan Agreement. During the first quarter of
fiscal 2002, the Company's operations were funded by sales of securities and
sales of product.

The Company's audit report for the fiscal year ended March 31, 2001, is
qualified because of the concern over the Company's ability to continue as a
going concern.

                                       7



Inflation

The Company's operations may be impacted by the effects of inflation and
changing prices as increased prices may reduce the demand for steel products.
Additionally, the price of nickel has direct impact on the Company as nickel is
an integral component to the price of the stainless steel utilized in Nuovinox.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

The Company does not engage in any hedging activities. In particular, the
Company does not hedge its sales for currency fluctuations, and, accordingly,
does not acquire market risk sensitive instruments. Over the last two fiscal
years, market risks have been negligible because of the small amount of
operations in which the Company has engaged.

The Company's primary market risk is anticipated to be a currency exchange rate
risk and the Company does not, at the present time, anticipate engaging in
management of that risk. For the next fiscal year, the Company's operations will
be principally conducted in the United Kingdom with sales anticipated in the
United States and Canada. In addition to currency market risk resulting from
trade accounts receivable, the Company's loan with Bank of America is
denominated in U.S. Dollars. The amounts available to the Company under the Bank
of America loan agreement are principally based upon assets located in the
United Kingdom, and a large increase in the value of the Dollar relative to the
Pound could diminish the amounts that could be available under that loan
agreement. A significant increase in the Pound relative to Dollar would make
United States trade receivables worth less in the United Kingdom, decreasing
profit margins for products produced in the United Kingdom and sold in the
United States.

                                       8



                                    PART - II

Item 6. Exhibits and Reports on Form 8-K

None


                                       9



                                   SIGNATURES

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

Stelax Industries, Ltd.


Dated: February 20, 2002                         /s/ Harmon S. Hardy
                                                 -------------------
                                                 Harmon S. Hardy, President and
                                                 Principal Financial Officer






                                       10