United States

Securities and Exchange Commission

Washington, D.C. 20549

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Form 10-KSB

[X] Annual Report Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

For the Fiscal Year Ended December 31, 1999

[ ] 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 0-28153

(Exact Name of Registrant as Specified in its Charter)

Registrant's Telephone Number, Including Area Code: (718) 363-0588

Securities Registered Pursuant to Section 12(b) of the Act: NONE

Securities Registered Pursuant to Section 12(g) of the Act:

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 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 [ ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-B is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-KSB or any amendment to this Form 10-KSB. [ ]

The number of shares of Common Stock outstanding as of December 31, 1999

was 885,100.

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DOCUMENTS INCORPORATED BY REFERENCE

Sections of the registrant's definitive Proxy Statement for the

registrant's Annual Meeting of Stockholders, which will be filed with the Securities and Exchange Commission, are incorporated by reference into Part III of this Report to the extent stated herein.

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The following discussion contains, in addition to historical information, forward-looking statements that involve risks and uncertainties. The Company's actual results could differ significantly from the results discussed in the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed below and in Item 6, "Management's Discussion and Analysis of Financial Condition or Plan of Operation."

PART I

ITEM 1 -- BUSINESS.

Digital Music Creations, Inc. ("DMC" or the "Company"), a Nevada corporation incorporated on September 29, 1998, is a developmental stage company with a principal business objective to design, develop, and market interactive file software for the control and use of sound on personal computers. The Company's products will be designed tothat adds music, voice, and other audio content to a variety of PC environments. At the time of this filing, the Company has completed the development of its website. The Company, however, does not have any customers, nor its own products at the design, development, or marketing stage. The company is filing this Form 10-SB voluntarily with the intention of establishing the fully reporting status with the SEC. The fully reporting status with the SEC is a necessary step in accomplishing the Company's goal of having its stock listed on the OTCBB in the future. Consequently, the Company will continue voluntarily to file all necessary reports and forms as required by existing legislation and the SEC rules.

The Company plans to enter a growing and highly-competitive market. On the demand side,Since 1986, the market for interactive files software for the control and use of sound on personal computers has expanded from a small segment of computers used by hobbyists to virtually every computer shipped by all systems manufacturers. In addition, the growth of the Internet has accelerated the growth of this market and has created the facility through which sound, voice messages and music can be used to enhance communications sent world-wide. On the supply side, several computer audio development tools are available from various vendors. Additionally, actual audio files are available from a variety of sources including the World Wide Web, which is becoming the primary channel of distribution of such products.

The Company believes that it may have an advantage over its competitors in this market because it will offer a more versatile product: unlike most competitors' products, the company's software will support several widespread computer audio formats as opposed to a single format; market its products aggressively but selectively, using a client-tracking database and focused marketing tools; and employ cost-effective and wide-reaching distribution channels with primary focus on the World Wide Web and Internet delivery.

Early generations of personal computers had either very limited or, in many cases, no audio capability. The multimedia computer boom of the early 1990's brought the audio capabilities of high quality, low cost sound cards to the average home computer. The enhanced audio capabilities of today's personal computer make software applications informative, entertaining, interactive and easier to use, and it is clear that such audio capabilities will continue as a standard component of all PCs in the future. The Company believes that the following trends are important to the continued growth in the use of sound on personal computers and the expansion of its targeted markets:

• Integration of sound chips into PC motherboards as standard components;
• Increases in the quality of wave audio with the migration of sound card and chip resolution from 8 bit to 16 bit;
• Substantial improvement in the quality and richness of MIDI playback on sound cards with the introduction of wavetable synthesis;
• Continued increases in microprocessor speeds and the introduction of the Windows 95 multi-tasking, multi-threaded operating system which expands the range of music and sound processing options available to software developers;
• Integration of high speed (14.4 Kbits/sec and 28.8 Kbits/sec) modems into PCs; - Exponential growth of the Internet and Intranet with rapid improvement in the tools that make all forms of communication on the Internet/Intranet possible; and
• Introduction of voice modems which allow the computer to be used as a telephone.

Further, Original Equipment Manufacturer (OEM) customers are increasingly licensing system software products so that they can release products to market faster, increase product content and reduce or eliminate product development risks and costs. Price competition and time to market pressures are creating this trend by OEMs to outsource system software to third parties. The Company believes that it may benefit from this trend. In addition, the significant growth of home computer usage, coupled with the fact that there are approximately 62 million amateur musicians in the U.S., suggests that music, a non-traditional segment of the computer industry, is poised for expansion.

The Company plans to provide an environment for creating, editing and controlling all three audio formats specified for multimedia computers: MIDI, Wave audio and CD audio. In addition, the Company plans to sell actual MIDI or Wave audio files that can be downloaded by purchasers via the Internet or sent to purchasers on a CD in the mail. At the time of this filing, the Company does not have any tangible products. The company plans to provide a website in directory format which has listings for (a) providers of software modules and packages that would allow the user to create, edit, and control the three most widespread audio formats specified for multimedia computers: MIDI, Wave audio, and MP3, (b) actual audio files such as music samples, and (c) websites that offer instruction for the creation of digital music. The three standards of computer audio that the Company will offer (MIDI, Wave, and MP3) are different technologies of creating, manipulating, and storing audio signals in digital format. By supplying software in all three formats, Tthe Company's products will promote the convergence of sound with other technologies onto the personal computer. The products would allow users to enhance their computing experience and to communicate more effectively with and through computers. The Company believes sound will play an increasing role in all aspects of computer communications and the Company will continue to develop products that expand and leverage the use of computer telephony and the Internet.

The name, age and position of the Company's directors and executive officers are as follows:

Frank B. Treadway III, President, Treasurer, CEO and Sole Director - Mr. Treadway is the former CEO of an $8-million per year sports company, WWTS Worldwide Sports (1994-1997). He has been a purchasing agent for the 40th largest construction company in the United States, a position he occupied for 10 years. Since 1997, Mr. Treadway has been an Internet business entrepreneur and stock market investor.

Bert K. Blevins III, Secretary - Mr. Blevins brings marketing expertise and leadership to Digital Music. The internal and external marketing components of Digital Music's marketing program were created and developed by Mr. Blevins. He is also currently the President of Janeva Corporation and has been working exclusively in developing marketing applications for the online community for the past twenty-four (24) months. Prior to founding Janeva Corporation, Mr. Blevins was the marketing coordinator for Harte-Hanks Direct Marketing in Cincinnati, Ohio. He started as an account executive handling the day to day coordination and management of national accounts such as: Matchmaker International, Waccamaw Pottery, Wolohan Lumber, Scotty's Lumber and Cellular One. Mr. Blevins created electronic marketing applications and multimedia presentations internally for sales, training, corporate meetings, as well as externally for companies such as the GAP and its subsidiary, Banana Republic. Mr. Blevins created corporate, multimedia presentations for the CEO, CIO and COO for the $600-million Harte- Hanks. Also at Harte-Hanks, Mr. Blevins developed the internal marketing database for the more than 200 employee-sales organization. This was the first full-scale, database marketing training program and all of the collateral for the implementation. Mr. Blevins has executed over 20 business-to- business direct mail campaigns with Harte-Hanks.

Mr. Blevins received his management training from Organizational Dynamics International, a leading management training corporation based in Burlington, MA, as a Quality Action Team Facilitator and with Quality Management Skills. In addition, he received consultative sales training from the Consulting Group in Westport, Connecticut. Before working with Harte-Hanks, Mr. Blevins attended Western Kentucky University (WKU) as an Honor Student and studied advertising in the country's leading School of Journalism. His minors were marketing and mass communication with an emphasis in law. While attending WKU, Mr. Blevins was President and Vice President of Delta Tau Delta Fraternity; Vice President of Student Government; Treasurer for the exclusive SpiritMasters (School Ambassadors and Recruiters); and Public Relations for WKU's Inter- fraternity Council.

ITEM 2. PROPERTIES.

The Company's corporate headquarters are located at 2209 Fawn Ridge Street, Las Vegas, Nevada 89134. The office space is provided by an officer and director of the Company at no cost to the Company. The Company does not have any additional facilities. Additionally, there are currently no proposed programs for the renovation, improvement or development of the properties currently being utilized by the Company.

ITEM 3 -- LEGAL PROCEEDINGS.

The Company is not subject to any legal proceedings.

ITEM 4 -- SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

Not applicable.

PART II

ITEM 5 -- MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

Footnotes to Principal Shareholders:

1. The address of each executive officer and director is c/o 2209 Fawn Ridge Street, Las Vegas, NV 89134.

Item 6. Management's Discussion and Analysis or Plan of Operation.

FORWARD LOOKING STATEMENTS

The statements contained in this report that are not historical facts are forward-looking statements within the meaning of the Private Securities Litigation Reform Act. Forward-looking statements are made based upon management's current expectations and beliefs concerning future developments and their potential effects upon the Company. There can be no assurance that future developments affecting the Company will be those anticipated by management. Actual results may differ materially from those included in the forward-looking statements. These forward-looking statements involve risks and uncertainties including, but not limited to, the following:

- the Company's status as a start-up company with less than two years of operating history;

- the Company's expectation of significant losses during the first two years of operations;

- the competitive disadvantage resulting from the Company's status as a

highly-regulated, start-up company;

- the Company's dependence on key management personnel;

- the Company's ability to implement developments in technology to be competitive.

Readers are also directed to other risks and uncertainties discussed in other documents filed by the Company with the Securities and Exchange Commission. The Company undertakes no obligation to update or revise any forward-looking information, whether as a result of new information, future developments or otherwise.

Overview

The Company was organized on September 29, 1998, and is considered a developmental stage company with a principal business objective to design, develop, and market interactive file software for the control and use of sound on personal computers. The Company's products will be designed so that it adds music, voice, and other audio content to a variety of PC environments. At the time of this filing, the Company has completed the development of its website. The Company, however, does not have any customers, nor its own products at the design, development, or marketing stage. The Company has filed a Form 10-SB voluntarily with the intention of establishing the fully reporting status with the SEC. The fully reporting status with the SEC is a necessary step in accomplishing the Company's goal of having its stock listed on the OTCBB in the future. Consequently, the Company will voluntarily continue to file all necessary reports and forms as required by existing legislation and the SEC rules.

Management's Plan of Operation

Management of the Company believes that the need for additional capital going forward will be derived somewhat from internal revenues and earnings generated from the sale of its products and services. If the Company is unable to generate revenues from its products and services, however, management believes the Company will need to raise additional funds to meet its cash requirements. It is the intent of the Company to seek to raise additional capital via a private placement offering, once the Company is trading on the OTC-BB. In the meantime, management of the Company plans to advance funds to the Company on an as-needed basis although there is no definitive or legally binding arrangement to do so. The Company currently has no arrangements or commitments for accounts and accounts receivable financing. There can be no assurance that any such financing can be obtained or, if obtained that it will be on reasonable terms. This is a development stage company. The Company believes that its initial revenues will be primarily dependent upon the Company's ability to cost effectively and efficiently provide interactive file software to the end-user PC consumer market. Realization of sales of the Company's products and services during the fiscal year ending December 31, 2000, is vital to its plan of operations. There are no guarantees that the Company will be able to Compete successfully or that the competitive pressures the Company may face will not have a material adverse effect on the Company's business, results of operations and financial condition.

The company intends to establish the fully reporting status with the SEC. The fully reporting status with the SEC is a necessary step in accomplishing the Company's goal of having its stock listed on the OTCBB in the future. Consequently, the Company will continue voluntarily to file all necessary reports and forms as required by existing legislation and the SEC rules.

This is a developmental stage company. The Company's initial revenues will be primarily dependent upon the Company's ability to effectively and efficiently provide software technology to end-users. The Company designates as its priorities for the next twelve (12) months of operations as developing and emphasizing its software products to establish its business in the software and technology market. The Company's primary interest is the design and development of interactive files software solutions to enable users to control and use audio content on a variety of PC environments.

The Company's product development does not involve any intense expenditures such as significant costs for labor or facilities. The Company will take existing recorded audio content and convert it into MIDI, Wave, or MP3 format using computer equipment.

It is important for the Company's success that it enhances its visibility in the highly crowded and competitive Internet marketplace. With this goal in mind, the Company is using the service SUBMIT IT to list its website in major search engines.

Realization of sales of the Company's products, services and/or technology during the fiscal year ending December 31, 1999, is vital to its plan of operations.

Management does not anticipate any significant changes in the number of employees over the next approximately twelve (12) months.

Period from January 1, 1999 to December 31, 1999.

Revenues. Digital is a developmental stage enterprise as defined in SFAS #7. The Company has not generated any revenues to date. The Company has devoted substantially all of its present efforts to completing its 12(g) reporting requirements with the Securities Act of 1934 and its commencement of trading on the NASD Over-the-Counter Bulletin Board ("OTC-BB").

Expenses. The Company incurred significant expenses for the operating period January 1, 1999 to December 31, 1999, totaling $7,398. Expenditures were primarily due to costs incurred for professional fees, services and general and administrative expenses.

Net Loss. Due to the significant operating expenses, Digital Music experienced a net loss of $7,398. The Company anticipated incurring a loss during this initial commencement of operations until such time that it will realize revenues from providing interactive file software to consumers.

The Company has generated no revenues during this period and it is unknown when it will generate significant revenues. It is anticipated that the Company will realize revenues from marketing interactive file software during the next twelve (12) months, of which the Company cannot guarantee. The receipt of funds from Private Placement Offerings or loans obtained through private and public sources by Digital Music may be anticipated to offset its near term cash equivalents for the next twelve (12) months. The Company has financed its cash flow requirements through issuance of common stock. During its normal course of business, the Company may experience net negative cash flows from operations, pending receipt of revenues. Further, the Company may be required to obtain additional financing to fund operations through common stock offerings and bank borrowings, to the extent available, or to obtain additional financing to the extent necessary to augment its working capital.

Year 2000 Issue

The "Year 2000" issue arises because many computerized systems use tow digits rather than four to identify a year. Date-sensitive systems may recognize the year 2000 as 1900 or some other date, resulting in errors when information using year 2000 dates is processed. In addition, similar problems may arise in systems which use certain dates in 1999 to represent something other than a date. The effects of the Year 2000 issue may be experienced before, on or after January 1, 2000, and if not addressed, the impact on operations and financial reporting may range from minor errors to significant systems failure which could affect an entity's ability to conduct normal business operations. It is not possible to be certain that all aspects of the Year 2000 issue affecting the entity, including those related to the efforts of customers, suppliers, or other third parties will be fully resolved. If the Company is required to implement a contingency plan to remedy the predicament posed by the Year 2000 issue, such a plan or plans could have a material adverse effect on Finders Keepers business.

PART III

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT.

The information required in this item is incoproated by reference to this document and the section entitled "EMPLOYEES".

ITEM 10. EXECUTIVE COMPENSATION.

The Company does not currently have employment agreements with its executive officers. All executive officers of the Company have not drawn a formal salary from the Company. Over the next twelve (12) months, however, each executive officer is expected to draw the following annual compensation. The Company does not currently have an employee stock option plan. However, Frank B. Treadway currently holds an option to purchase 1,000,000 shares of Common Stock of the Company at an option price of $0.001 per share. This option terminates on May 1, 2000, and has not yet been exercised.

1. No executive officer of the Company has drawn a salary from the Company.
2. There were no arrangements, pursuant to which any director of the Company was compensated for the period from inception for any service provided as a director. While the Company's only directors are its current executive officers who are already drawing a salary for the management of the Company it may be necessary for the Company to compensate newly appointed Directors in order to attract a quality governance team. At this time the Company has not identified any specific individuals or candidates nor has it entered into any negotiations or activities in this regard.

EMPLOYMENT AGREEMENTS

The Company does not currently have employment agreements with its executive officers but expects to sign employment agreements with each in the near future.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

The information required by this Item concerning the stock ownership of management and five percent beneficial owners is incorporated herein by reference to ITEM 5 of this document entitled, "MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS".

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

On October 2, 1998, one (1) founding shareholder purchased 700,000 shares of the Company's authorized treasury stock for cash. This original stock offering was made pursuant to Section 4(2) of the Securities Act of 1933, as amended.

On October 2, 1998, the Company issued the Company's founder and CEO, Frank B. Treadway III, an option to purchase 1,000,000 shares of Common Stock of the Company at an option price of $0.001 per share. This option terminates on May 1, 2000, and has not yet been exercised.

Additionally, in December of 1998, the Company completed an offering of one hundred eighty five thousand one hundred (185,100) shares of the Common Stock of the Company to approximately forty-seven (47) affiliated shareholders. This offering was made in reliance upon an exemption from the registration provisions of Section 4(2) of the Securities Act of 1993, as amended, pursuant to Regulation D, Rule 504 of the Act.

The Company has entered into a web site consulting agreement with Janeva Corporation. Under this agreement, Janeva hosts and markets the Company's website for a total cost of $45 per month. Marketing the Company's website involves the management of submitting the Company's reference information to major search engines through the SUBMIT IT and other free search engine listing services. The agreement with Janeva Corporation also covered an initial development cost of $1750. will market the Company's web site with the major search engines (e.g. Yahoo, Lycos, etc.) in order to increase traffic across the Company's web site.

ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K.

(a) Exhibits:

A list of exhibits required to be filed as part of this Annual Report is set forth in the Index to Exhibits, which immediately precedes such exhibits and is incorporated herein by reference.

(b) Reports on Form 8-K

The Company has not filed any reports on Form 8-K during the last quarter of the period covered by this Report.

SIGNATURES

In accordance with the requirements of Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

DIGITAL MUSIC CREATIONS, INC.

By:

Date: March 30, 2000

/s/Frank B. Treadway

President, Chief Executive Officer,

Treasurer and Director

By:

Date: March 30, 2000

/s/Bert K. Blevins

Secretary

INDEX TO EXHIBITS

(1) The copy of this exhibit filed as the same exhibit to the Company's Registration Statement on Form 10-SB and amendments thereto, is incorporated herein by reference.

SIGNATURES

In accordance with Section 12 of the Securities Exchange Act of 1934,

the registrant caused this registration statement to be signed on its behalf by

the undersigned, thereunto duly authorized.

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(Registrant)

Date: March 30, 2000

By:

/s/Frank B. Treadway III,

President, Chief Executive Officer Treasurer and Director