Form of Subscription Agreement

DISCOUNT MORTGAGE SOURCE, INC.
SUBSCRIPTION AGREEMENT


July ____, 2000


DISCOUNT MORTGAGE SOURCE, INC. 750 i-30 East, Suite 170 Rockwall, Texas 75087


Ladies and Gentlemen:


1. PURCHASE OF COMMON STOCK. Intending to be legally bound, I hereby agree to purchase ________ shares of voting, no par value common stock (the "Shares") of Discount Mortgage Source, Inc. (the "Corporation") for ______________ U.S. Dollars (number of Shares to be purchased multiplied by $0.25). This offer to purchase is submitted in accordance with and subject to the terms and conditions described in this Subscription Agreement (the "Agreement"). I acknowledge that the Corporation reserves the right, in its sole and absolute discretion, to accept or reject this subscription and the subscription will not be binding until accepted by the Corporation in writing.


2. PAYMENT. I agree to deliver to the Corporation immediately available funds in the full amount due under this Agreement, by certified or cashier's check payable to the "DMS 2000 Public Offering Escrow Account." The Corporation shall promptly deposit the funds into the Escrow Account.


3. ISSUANCE OF SHARES. The Shares subscribed for herein will only be issued upon acceptance by the Corporation as evidenced by the Corporation returning to the investor an executed Agreement acknowledging acceptance and upon satisfaction of the terms and conditions of the Escrow Agreement.


4. REPRESENTATION AND WARRANTIES.
A. I understand that the offering and sale of the Shares is registered under (i) the Securities Act of 1933, as amended (the "Securities Act"), and (ii) various States' Divisions of Securities in compliance with their administration and enforcement of the respective States' Blue Sky Laws and Regulations. In accordance therewith and in furtherance thereof, I represent and warrant to and agree with the Corporation as follows:


[1] I am a resident of the State of ________________ as of the date of this Agreement and I have no present intention of becoming a resident of any other state or jurisdiction;


[2] I have received and have rev ...