UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549


                                    FORM 10-Q



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

                  For the quarterly period ended June 30, 2004

         [ ]      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                  SECURITIES EXCHANGE ACT OF 1934

                  For the transition period from __________ to __________

                           Commission File No. 0-26917

                                    UCN, INC.
             ------------------------------------------------------
             (Exact Name of Registrant as Specified in Its Charter)


           Delaware                                        87-0528557
--------------------------------               ---------------------------------
(State or Other Jurisdiction of                (IRS Employer Identification No.)
 Incorporation or Organization)

                 14870 Pony Express Road, Bluffdale, Utah 84065
                -----------------------------------------------
                    (Address of Principal Executive Offices)

                                 (801) 320-3300
               ---------------------------------------------------
              (Registrant's Telephone Number, Including Area Code)

                               Buyers United, Inc.
       -------------------------------------------------------------------
      (Former Name, Address and 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 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 whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [X]


                      APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date: 13,742,579 shares of common
stock as of July 31, 2004.



                                    FORM 10-Q
                                    UCN, INC.

                                      INDEX

                                                                            Page
PART I.   FINANCIAL INFORMATION

          Item 1.  Financial Statements

                   Condensed Consolidated Balance Sheets as of
                   June 30, 2004, and December 31, 2003 (unaudited)           3

                   Condensed Consolidated Statements of Operations for the
                   Three Months Ended June 30, 2004 and 2003 (unaudited)      4

                   Condensed Consolidated Statements of Operations for the
                   Six Months Ended June 30, 2004 and 2003 (unaudited)        5

                   Condensed Consolidated Statements of Cash Flows for the
                   Six Months Ended June 30, 2004 and 2003 (unaudited)        6

                   Condensed Consolidated Statements of Stockholders'
                   Equity for the Six Months Ended June 30, 2004              8

                   Notes to Condensed Consolidated Financial Statements      10

          Item 2.  Management's Discussion and Analysis of Financial
                   Condition and Results of Operations                       14

          Item 4.  Controls and Procedures                                   18


PART II.  OTHER INFORMATION


          Item 2.  Changes in Securities and Use of Proceeds                 18

          Item 4.  Submission of Matters to a Vote of Security Holders       18

          Item 5.  Other Information                                         19

          Item 6.  Exhibits and Reports on Form 8-K                          20

          Signatures                                                         21

                                       2



                                                    UCN, INC.

                               CONDENSED CONSOLIDATED BALANCE SHEET - (Unaudited)



                                                                                             June 30,         December 31,
                                                                                               2004               2003
                                                                                        -----------------  -----------------
                                                                                                      
                                        ASSETS
Current assets:
      Cash and cash equivalents                                                          $     2,128,606    $     3,055,384
      Restricted cash                                                                          1,698,339          1,569,336
      Accounts and other receivables, net                                                      8,577,271          8,162,483
      Other current assets                                                                       283,608            243,844
                                                                                        -----------------  -----------------
            Total current assets                                                              12,687,824         13,031,047

Property and equipment, net                                                                    3,116,892          2,424,642
Intangible assets, net                                                                         7,346,085          8,018,682
Other assets                                                                                     479,830            496,787
                                                                                        -----------------  -----------------

            Total assets                                                                 $    23,630,631    $    23,971,158
                                                                                        =================  =================



                    LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
      Line of credit                                                                     $       754,559    $     4,093,782
      Current portion of long-term debt and capital lease obligations                          2,586,201          7,781,484
      Trade accounts payable                                                                   9,137,253         11,248,152
      Accrued liabilities                                                                      2,311,895          1,828,864
                                                                                        -----------------  -----------------
            Total current liabilities                                                         14,789,908         24,952,282

Long-term debt and capital lease obligations                                                      38,394            646,126
                                                                                        -----------------  -----------------

            Total liabilities                                                                 14,828,302         25,598,408

Stockholders' equity (deficit):
      Preferred stock, $0.0001 par value, 15,000,000 shares authorized; Series A
        8% cumulative convertible preferred stock; 1,827,500 and 1,865,000
        shares issued and outstanding (liquidation values of $3,655,000
        and $3,730,000)                                                                              183                187
      Series B 8% cumulative convertible preferred stock; 417,800 and
        721,729 shares issued and outstanding (liquidation values of
        $4,178,000 and $7,217,290)                                                                    42                 72
      Common stock, $0.0001 par value; 100,000,000 shares authorized;
        13,732,579 and 7,604,584 shares issued and outstanding                                     1,373                760
      Additional paid-in capital                                                              31,123,541         20,193,148
      Warrants and options outstanding                                                         3,392,046          3,928,110
      Accumulated deficit                                                                    (25,714,856)       (25,749,527)
                                                                                        -----------------  -----------------
            Total stockholders' equity (deficit)                                               8,802,329         (1,627,250)
                                                                                        -----------------  -----------------

            Total liabilities and stockholders' equity (deficit)                         $    23,630,631    $    23,971,158
                                                                                        =================  =================


                                             See accompanying notes

                                                       3




                                                    UCN, INC.

                          CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - (Unaudited)


                                                                              Three Months Ended June 30,
                                                                          ------------------------------------
                                                                                2004               2003
                                                                                        
Revenues from telecommunications services                                  $    16,727,909    $    16,291,636

Operating expenses:
      Costs of revenues                                                          8,975,366          8,591,879
      General and administrative                                                 3,763,203          4,104,409
      Selling and promotion                                                      3,623,583          2,691,314
                                                                          -----------------  -----------------
            Total operating expenses                                            16,362,152         15,387,602
                                                                          -----------------  -----------------

            Income from operations                                                 365,757            904,034

Other income (expense):
      Interest income                                                                7,456              2,800
      Interest expense                                                            (191,692)          (506,166)
                                                                          -----------------  -----------------
            Total other expense, net                                              (184,236)          (503,366)
                                                                          -----------------  -----------------

            Net income                                                             181,521            400,668

8% Preferred dividends on Series A and B preferred stock                          (156,351)          (215,193)
                                                                          -----------------  -----------------

            Net income applicable to common stockholders                   $        25,170    $       185,475
                                                                          =================  =================



Net income per common share:
            Basic                                                          $          0.00    $          0.03
            Diluted                                                                   0.00               0.03


Weighted average common shares outstanding:
            Basic                                                               13,534,770          6,330,142
            Diluted                                                             14,649,308          6,354,982



                                                     See accompanying notes

                                                               4




                                                    UCN, INC.

                          CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - (Unaudited)


                                                                               Six Months Ended June 30,
                                                                          ------------------------------------
                                                                                2004               2003
                                                                                        
Revenues from telecommunications services                                  $    33,471,616    $    31,772,756

Operating expenses:
      Costs of revenues                                                         18,151,558         17,256,646
      General and administrative                                                 7,780,487          7,731,109
      Selling and promotion                                                      6,727,575          5,022,383
                                                                          -----------------  -----------------
            Total operating expenses                                            32,659,620         30,010,138
                                                                          -----------------  -----------------

            Income from operations                                                 811,996          1,762,618

Other income (expense):
      Interest income                                                               21,306              5,401
      Interest expense                                                            (549,117)          (992,095)
      Gain on early extinguishment of debt                                         109,150                   -
                                                                          -----------------  -----------------
            Total other expense, net                                              (418,661)          (986,694)
                                                                          -----------------  -----------------

            Net income                                                             393,335            775,924

8% Preferred dividends on Series A and B preferred stock                          (358,664)          (397,088)
                                                                          -----------------  -----------------

            Net income applicable to common stockholders                   $        34,671    $       378,836
                                                                          =================  =================



Net income per common share:
            Basic                                                          $          0.00    $          0.06
            Diluted                                                                   0.00               0.06


Weighted average common shares outstanding:
            Basic                                                               11,160,476          6,287,453
            Diluted                                                             12,490,536          6,322,395



                                             See accompanying notes

                                                        5




                                                    UCN, INC.

                          CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - (Unaudited)


                                                                                    Six Months Ended June 30,
                                                                                 --------------------------------
                                                                                      2004             2003
                                                                                             
Cash flows from operating activities:
      Net income                                                                  $     393,335    $     775,924
      Adjustments to reconcile net income to net cash used in
        operating activities:
            Depreciation and amortization                                             2,014,915        1,784,215
            Amortization included in interest expense resulting from
              issuing stock with notes                                                        -            5,312
            Amortization of discount on long-term debt                                  104,106          231,010
            Amortization of note financing costs                                         50,000           81,424
            Amortization of deferred consulting fees                                          -           10,417
            Changes in operating assets and liabilities:
                  Accounts and other receivables                                       (414,788)      (2,977,483)
                  Other assets                                                          (17,299)        (660,476)
                  Trade accounts payable                                             (2,115,965)       3,314,524
                  Accrued liabilities                                                   694,314          755,182
                                                                                 ---------------  ---------------

                        Net cash provided by operating activities                       708,618        3,320,049
                                                                                 ---------------  ---------------


Cash flows from investing activities:
      Decrease in other assets                                                          (22,124)         (52,126)
      Acquisition of customer base                                                     (757,856)               -
      Purchases of property and equipment                                            (1,237,631)        (524,402)
                                                                                 ---------------  ---------------

                        Net cash used in investing activities                        (2,017,611)        (576,528)
                                                                                 ---------------  ---------------


Cash flows from financing activities:
      Increase in restricted cash                                                      (129,003)        (463,055)
      Net borrowings and payments under line of credit                               (3,339,223)        (382,665)
      Borrowings on long-term debt, net of debt issuance costs                                -        2,299,955
      Proceeds from exercise of options and warrants                                  1,849,500                -
      Private placement of common stock, net of offering costs                        8,108,062                -
      Repurchase of common stock                                                       (500,000)          (2,684)
      Principal payments on long-term debt                                           (5,607,121)      (4,678,422)
                                                                                 ---------------  ---------------

                        Net cash provided by (used in) financing activities             382,215       (3,226,871)
                                                                                 ---------------  ---------------


Net decrease in cash and cash equivalents                                              (926,778)        (483,350)
Cash and cash equivalents at the beginning of the period                              3,055,384          994,360
                                                                                 ---------------  ---------------

Cash and cash equivalents at the end of the period                                $   2,128,606    $     511,010
                                                                                 ===============  ===============



                                             See accompanying notes

                                                       6




                                                    UCN, INC.

                          CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - (Unaudited)


                                                                                    Six Months Ended June 30,
                                                                                 --------------------------------
                                                                                      2004             2003
                                                                                             
Supplemental cash flow information:
      Cash paid for interest                                                      $     544,202    $     548,914


Supplemental schedule of noncash investing and financing activities:
      Issuance of common shares in payment of preferred stock dividend            $     473,533    $     377,688
      Accrual of dividend payable on preferred stock                                    358,664          397,088
      Issuance of common shares for officer's personal guaranty                               -           36,300
      Issuance of warrants with private placement of common stock                       189,336                -
      Issuance of warrants with consulting contract                                      72,465                -
      Retirement and replacement of note payable                                              -          800,000
      Conversion of note payable into common stock                                      300,000                -
      Increase in Touch America obligation with amended agreement                             -        3,098,000
      Issuance of preferred stock to acquire VoIP assets                                 91,348        1,400,738




                                                     See accompanying notes

                                                               7




                                                            UCN, INC.

                         CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) - (Unaudited)



                                                                        Preferred Stock            Common Stock         Additional
                                                                    ------------------------  -------------------------   Paid-in
                                                                        Shares       Amount      Shares       Amount      Capital
                                                                    -------------  ---------  -------------- ---------- ------------
                                                                                                        
Balance at January 1, 2004                                             2,586,729      $ 259     7,604,584      $ 760   $ 20,193,148

  Issuance of preferred stock in connection with the
    acquisition of VoIP assets                                            16,071          2             -          -         91,346
  Conversion of preferred shares to common                              (357,500)       (36)    1,637,500        164           (128)
  Exercise warrants to purchase common stock                                   -          -       647,000         65      2,039,747
  Exercise employee options to purchase common stock                           -          -       255,000         26        554,974
  Conversion of promissory note to common stock                                -          -       150,000         15        299,985
  Expiration of warrants to purchase common stock                              -          -             -          -         52,553
  Private placement of common stock, net of offering costs                     -          -     3,782,000        378      7,918,348
  Issuance of warrants for services                                            -          -             -          -              -
  Preferred stock dividends                                                    -          -             -          -              -
  Issuance of common shares as payment of preferred stock dividends            -          -       171,055         17        473,516
  Repurchase shares from stockholder                                           -          -      (514,560)       (52)      (499,948)
  Net income                                                                   -          -             -          -              -
                                                                    -------------  ---------  ------------ ---------- --------------

Balance at June 30, 2004                                               2,245,300      $ 225    13,732,579    $ 1,373   $ 31,123,541
                                                                    =============  =========  ============ ========== ==============



                                                             See accompanying notes

                                                                       8




                                                            UCN, INC.

                         CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) - (Unaudited)


                                                                                  Warrants/
                                                                                   Options         Accumulated
                                                                                 Outstanding         Deficit            Total
                                                                               ---------------  -----------------  ---------------
                                                                                                            
Balance at January 1, 2004                                                        $ 3,928,110      $ (25,749,527)    $ (1,627,250)

      Issuance of preferred stock in connection with the acquisition
        of VoIP assets                                                                      -                  -           91,348
      Conversion of preferred shares to common                                              -                  -                -
      Exercise warrants to purchase common stock                                     (745,312)                 -        1,294,500
      Exercise employee options to purchase common stock                                    -                  -          555,000
      Conversion of promissory note to common stock                                         -                  -          300,000
      Expiration of warrants to purchase common stock                                 (52,553)                 -                -
      Private placement of common stock, net of offering costs                        189,336                  -        8,108,062
      Issuance of warrants for services                                                72,465                  -           72,465
      Preferred stock dividends                                                             -           (358,664)        (358,664)
      Issuance of common shares as payment of preferred stock dividends                     -                  -          473,533
      Repurchase shares from stockholder                                                    -                  -         (500,000)
      Net income                                                                            -            393,335          393,335
                                                                               ---------------  -----------------  ---------------

Balance at June 30, 2004                                                          $ 3,392,046      $ (25,714,856)     $ 8,802,329
                                                                               ===============  =================  ===============


                                                             See accompanying notes

                                                                       9



                                    UCN, INC.

       NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Unaudited)

                                  June 30, 2004

1.  Basis of presentation

    These unaudited interim financial statements of UCN, Inc. and its subsidiary
    (collectively, "UCN" or "the Company") have been prepared in accordance with
    the rules and regulations of the United States Securities and Exchange
    Commission (the "Commission"). Such rules and regulations allow the omission
    of certain information and footnote disclosures normally included in the
    financial statements prepared in accordance with accounting principles
    generally accepted in the United States, so long as the statements are not
    misleading. In the opinion of Company management, these financial statements
    and accompanying notes contain all adjustments (consisting of only normal
    recurring adjustments) necessary to present fairly the financial position
    and results of operations for the periods shown. These interim financial
    statements should be read in conjunction with the audited financial
    statements and notes thereto contained in our Annual Report on Form 10-KSB
    for the year ended December 31, 2003, as filed with the Commission on March
    30, 2004.

    The results of operations for the three and six month periods ended June 30,
    2004 are not necessarily indicative of the results to be expected for the
    full year.


2.  Summary of significant accounting policies

    Net Income Per Common Share: Basic net income per common share ("Basic EPS")
    excludes dilution and is computed by dividing net income applicable to
    common shareholders by the weighted average number of common shares
    outstanding during the quarterly and year-to-date periods. Diluted net
    income per common share ("Diluted EPS") reflects the potential dilution that
    could occur if stock options or other common stock equivalents were
    exercised or converted into common stock. The computation of Diluted EPS
    does not assume exercise or conversion of securities that would have an
    antidilutive effect on net income per common share.

    Following is the reconciliation of Basic and Diluted EPS:


                                                                Three months                   Six months
                                                               ended June 30,                ended June 30,
                                                         -------------------------       ------------------------
                                                            2004           2003             2004          2003
                                                         ----------     ----------       ----------    ----------
                                                                                           
    Net income applicable to common
      stockholders, as reported                          $   25,170     $  185,475       $   34,671    $  378,836
                                                         ==========     ==========       ==========    ==========

    Basic EPS:
      Weighted average number of common shares
        outstanding                                      13,534,770      6,330,142       11,160,476     6,287,453
                                                         ==========     ==========       ==========    ==========

      Basic net income per share                         $     0.00     $     0.03       $     0.00    $     0.06
                                                         ==========     ==========       ==========    ==========
    Diluted EPS:
      Common and common equivalent shares
        outstanding:
          Weighted average number of common
            shares outstanding                            13,534,770       6,330,142    11,160,476       6,287,453
          Common stock equivalents from options and
            warrants computed on the Treasury Stock
            method, using the average fair market
            value of common stock outstanding during
            the period                                    1,114,538         24,840        1,330,060        34,942
                                                         ----------     ----------       ----------    ----------

          Shares used in the computation                 14,649,308      6,354,982       12,490,536     6,322,395
                                                         ==========     ==========       ==========    ==========

      Diluted net income per share                       $     0.00     $     0.03       $     0.00    $     0.06
                                                         ==========     ==========       ==========    ==========

                                       10



    Stock-Based Compensation: Employee compensation expense is measured using
    the intrinsic method. No stock-based compensation cost is reflected in net
    income applicable to common stockholders, since all options had an exercise
    price equal to or greater than the market price of the underlying common
    stock at the date of grant. The following table illustrates the effects on
    net income (loss) applicable to common stockholders and earnings (loss) per
    share if expense was measured using the fair value recognition provision of
    Statement of Financial Accounting Standards ("SFAS") No. 123, Accounting for
    Stock-Based Compensation:


                                                                              Three months             Six months
                                                                             ended June 30,           ended June 30,
                                                                         ---------------------    ----------------------
                                                                            2004       2003          2004        2003
                                                                         ---------   ---------    ---------    ---------
                                                                                                   
    Net income (loss) applicable to common stockholders:
    As reported                                                          $  25,170   $ 185,475    $  34,671    $ 378,836
    Pro forma stock-option based compensation                             (163,808)    (88,677)    (276,900)    (157,809)

    Pro forma net income (loss) applicable to common stockholders        $ (34,841)  $  96,798    $(138,433)   $ 221,027

    Basic and diluted net income (loss) per common share:
    As reported                                                          $    0.00   $    0.03    $    0.00    $    0.06
    Pro forma basic and diluted net income (loss) per common share       $    0.00   $    0.02    $   (0.01)   $    0.04


    We estimated the fair value of options granted under our employee
    stock-based compensation arrangements at the date of grant using the
    Black-Scholes model with the following weighted-average assumptions:

                                                       Six Months Ended
                                                            June 30,
                                                      --------------------
                                                       2004         2003
                                                       ----         ----
         Dividend yield                                 None         None
         Expected volatility                             95%          75%
         Risk-free interest rate                       4.39%        2.89%
         Expected life (years)                           4.5          4.8
         Weighted average fair value of grants         $1.37        $1.42

    Other Comprehensive Income: There were no components of other comprehensive
    income other than net income.

    Long-Lived Assets: We evaluate the carrying value of long-lived assets,
    including intangibles, when events or circumstances indicate the existence
    of a possible impairment, based on projected undiscounted cash flows, and
    recognize impairment when such cash flows will be less than the carrying
    values. Measurement of the amounts of impairments, if any, is based upon the
    difference between carrying value and fair value. Events or circumstances
    that could indicate the existence of a possible impairment include
    obsolescence of the technology, an absence of market demand for the product,
    and/or continuing technology rights protection. Management believes the net
    carrying amount of long-lived assets will be recovered by future cash flows
    generated by commercialization of the technology related to the long-lived
    asset and from cash flows generated from customer lists.

    Capitalized Software Costs: In accordance with Statement of Position 98-1,
    Accounting for Costs of Computer Software Developed or Obtained for Internal
    Use, the Company capitalizes certain costs incurred for the development of
    internal use software. These costs include the costs associated with coding,
    software configuration, upgrades, and enhancements. During the three and six
    months ended June 30, 2004, the Company capitalized $200,594 and $413,270,
    respectively.

    Recent Accounting Pronouncements: In March 2004, the Financial Accounting
    Standards Board ("FASB") reached a consensus on Emerging Issues Task Force
    (EITF) Issue No.03-1, The Meaning of Other-Than-Temporary Impairment and Its
    Application to Certain Investments. This pronouncement provides guidance to
    determine the meaning of other-than-temporary impairment and its application
    to investments classified as either available-for-sale or held-to-maturity
    (including individual securities and investments in mutual funds), and
    investments accounted for under the cost method or the equity method. The
    guidance for evaluating whether an investment is other-than-temporarily
    impaired is to be applied in other-than-temporary impairment evaluations
    made in reporting periods beginning after June 15, 2004. Management believes
    the adoption of Issue No. 03-1 will not have a material impact on the
    financial statements.

                                       11


3.  Acquisitions

    UCN entered into an agreement to purchase 37 dedicated long distance
    customers from Source Communications, LLC for $757,856 in cash in February
    2004. The transaction was closed in March 2004. The total purchase price was
    entirely allocated to customer lists acquired, and is included in intangible
    assets in the accompanying condensed consolidated balance sheets.


4.  Gain on early extinguishment of debt

    During 2003 the Company entered into a Purchase Agreement to acquire
    approximately 12,000 long distance customers from Glyphics Communications,
    Inc. Subsequently, the two parties agreed that UCN would accelerate payments
    under the agreement in exchange for a discount on the purchase price. The
    final payment under the agreement was made in February 2004, and the Company
    recorded a $109,150 gain on the early extinguishment of the debt.


5.  Intangible assets

    Intangible assets consisted of the following:


                                               June 30, 2004                                 December 31, 2003
                                 ----------------------------------------       ----------------------------------------
                                      Gross     Accumulated   Intangible           Gross      Accumulated    Intangible
                                      asset    amortization   assets, net          asset      amortization   assets, net
                                 ------------  ------------  ------------       ------------  ------------  ------------
                                                                                          
    Customer lists acquired      $ 11,518,164  $  5,106,275  $  6,411,889       $ 10,760,307  $  3,840,679  $  6,919,628
    Technology and patents          1,318,865       384,669       934,196          1,318,865       219,811     1,099,054
                                 ------------  ------------  ------------       ------------  ------------  ------------
                                 $ 12,837,029  $  5,490,944  $  7,346,085       $ 12,079,172  $  4,060,490  $  8,018,682
                                 ============  ============  ============       ============  ============  ============


    Total amortization expense of intangible assets was $728,672 for the three
    months ended June 30, 2004, and $1,430,453 for the six months ended June 30,
    2004. Depending on the type of customers, the useful lives of customer lists
    acquired range from 36 to 48 months, and are evaluated for recoverability on
    an annual basis.


6.  Accrued liabilities

    Accrued liabilities consisted of the following:

                                          June 30,                December 31,
                                            2004                      2003
                                       ------------              ------------
         Accrued commissions           $    937,660              $    669,523
         Accrued dividends                  358,664                   478,599
         Other                            1,015,510                   680,742
                                       ------------              ------------
                                       $  2,311,895              $  1,828,864
                                       ============              ============

7.  Capital Transactions

    During the six months ended June 30, 2004, investors exercised warrants to
    purchase a total of 647,000 shares of common stock. Total proceeds received
    in these transactions was $1.3 million. Included in these amounts were
    warrants to purchase 297,500 shares exercised by one of the Company's
    directors, for which the Company received of $595,000.

    On March 15, 2004 the Company closed a private placement to institutional
    and accredited investors. The Company sold 3,782,000 shares of common stock
    at $2.30 per share, or a total of approximately $8.7 million. Net proceeds
    of the offering after placement fees and expenses were approximately $8.1
    million. A portion of the expenses associated with this transaction was the
    issuance to the investment banking firm of 164,125 warrants to purchase
    common shares at $2.76 per share that expire March 15, 2007. The fair market
    value of the warrants, using the Black-Scholes pricing model, was $189,336.

                                       12


    In connection with the placement, Acceris Communications Inc., formerly
    I-link Incorporated and the holder of 300,000 shares of Series B Convertible
    Preferred Stock, converted all of its preferred stock to 1.5 million common
    shares. Acceris subsequently sold 750,000 of those common shares to the
    investors in the private placement at $2.30 per share.

    In January and February 2004, three Directors exercised options to purchase
    a total of 255,000 shares of Common Stock. Total proceeds received by the
    Company in connection with these exercises was $555,000.

    In December 2003, a holder of 100,000 shares of Series B Convertible
    Preferred Stock converted all of those shares to 500,000 shares of common
    stock. In January 2004, the holder sold those common shares plus 14,560
    additional shares, or a total of 514,560 shares, to UCN for $500,000 in a
    privately negotiated transaction.

    In May 2004, a holder of Preferred Stock converted a $300,000 promissory
    note into 150,000 shares of common stock at a conversion price of $2.00 per
    share. In June 2004, the Company repaid two other promissory notes totaling
    $200,000 under prepayment terms that allowed UCN to repay the notes two
    years earlier than the stated maturity dates. All three of these promissory
    notes had been secured by equipment.


8.  Major suppliers

    For the three-month periods ended June 30, 2004 and 2003, approximately 55
    and 63 percent, respectively, of the Company's cost of revenue was generated
    from two telecommunication providers. For the six-month periods ended June
    30, 2004 and 2003, approximately 54 and 63 percent of cost of revenue was
    generated by the same two providers. As of June 30, 2004 and December 31,
    2003, respectively, the Company owed $3.4 million and $3.0 million to these
    providers.


9.  Related party transactions

    Related party transactions not previously disclosed include the following:

    During the six months ended June 30, 2004, the Company paid one of its
    directors $37,500 per month for consulting, marketing, and capital raising
    activities. At June 30, 2004, there was $6,250 owing to the director.

    During the six months ended June 30, 2004, there were several debt
    arrangements with directors more fully described in the Company's Form
    10-KSB filed with the Securities and Exchange Commission on March 30, 2004.
    Interest expense on obligations owed to related parties during the three and
    six months ended June 30, 2004 was $44,932 and $151,169, respectively.

    On April 12, 2004, UCN repaid $2.3 million in promissory notes to one of its
    directors. The director used $595,000 of the proceeds to exercise 297,500
    warrants.

    On April 26, 2004, the Company repaid a $50,000 note payable to another of
    its directors.

    Three of the Company's current and prior directors participated in the 1999
    Series A and 2000 Series B Preferred Stock issuances under the same terms as
    all other outside investors. In February 2004 dividends of Common Stock were
    paid to all holders of Preferred Stock. Of this amount, the three directors
    received 16,164 shares of Common Stock.


10. Contingencies and Commitments

    In May 2004, the Company entered into a one-year consulting agreement. As
    part of the consultant's compensation, UCN agreed to issue up to 140,000
    five-year warrants to purchase common stock at an exercise price of $4.00
    per share. The fair market value of the warrants were and will be calculated
    using the Black-Scholes method. Up to 90,000 warrants worth a total of
    $72,465 are to vest ratably over a period of one year, or until the
    consulting agreement is terminated, whichever comes sooner. 50,000 warrants
    will vest in January 2005 only upon the completion of certain performance
    measures.

                                       13


    In October 2003, UCN acquired the exclusive right to sell and manage the
    enhanced telecommunications functions of MyACD, Inc. ("MyACD"), with a
    one-year option to purchase it for approximately $6.8 million, paid over a
    three-year period beginning in January 2004. During the term of the
    agreement, UCN has the sole right to manage sales, service and billing of
    MyACD services. Under the agreement MyACD will continue to provide enhanced
    service development and configuration, and UCN will reimburse MyACD for
    actual costs related to these activities.


11. Subsequent events

    At the Annual Meeting of Shareholders held on June 29, 2004, the
    stockholders voted to change the name of the Company to UCN, Inc., which
    change became effective July 15, 2004. The stockholders also approved a new
    Employee Stock Purchase Plan that will commence January 1, 2005.

                                       14


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

Overview

UCN, Inc. (formerly Buyers United, Inc.) is a domestic telecommunications
company that offers and sells a wide range of long distance and related
communication services to business and residential customers. Historically we
functioned as an aggregator and reseller of telecommunications services provided
by others. We intend to continue to pursue and develop this type of business.

In 2003 UCN purchased assets and licensed in perpetuity software that enabled
UCN to establish and operate a Voice over Internet Protocol communications
network (VoIP Network). With the VoIP Network UCN now offers, as a provider,
enhanced services such as fax to email. Furthermore, UCN transmits data and
other communication services for a portion of the journey over the VoIP Network
rather than entirely through third party providers.

In October 2003, UCN acquired the exclusive right to sell and manage the
enhanced telecommunications functions of MyACD, Inc. with a one-year option to
purchase it at a price of approximately $6.8 million. With the MyACD technology
we are now offering a new product approach that combines our national VoIP
Network with on-demand proprietary telephony software for contact
handling/management applications. We are changing the way mission critical
applications are delivered and priced for the contact center marketplace, or for
any business or department seeking to improve how it manages the productivity
and quality of its customer contact opportunities.

UCN entered into an agreement to purchase 37 dedicated long distance customers
from Source Communications, LLC for $757,856 in February 2004. The transaction
was completed in March 2004.

We generate internal growth by pursuing multiple marketing avenues, including
using independent agents, value-added resellers, and selling through our direct
sales force. We intend to expand and develop our direct sales force and
value-added reseller programs during the remainder of 2004.

Results of Operations

Revenues

Total revenues increased 2.7 percent to $16.7 million for the three months ended
June 30, 2004 as compared to $16.3 million for the same period in 2003. For the
six months ended June 30, 2004, revenues increased 5.3 percent to $33.5 million
as compared to $31.8 million for the same period in 2003. The increase in
revenue is due to new customers purchased throughout 2003 and the acquisition of
customers from Source Communication, LLC, which closed in March 2004. We also
generated growth internally from ongoing promotional efforts, primarily
involving independent agents. The increase in revenue from new and existing
customers during the first six months of 2004 was offset by attrition of our
residential customer base. We acquired new business customers and a substantial
residential customer base during the first six months of 2003 from Touch
America. We expect the residential customer base will continue to decline in
subsequent periods because our marketing focus is on the business user of
telecommunication services and not the residential long distance user.
Consequently, we expect a gradual transition in our sales mix in future periods
as the number of business customers increases and residential customers
decreases.

Cost of revenues

Cost of revenues for the three month period ended June 30, 2004 were $9.0
million, a 4.5 percent increase, compared to $8.6 million for the comparable
period in 2003. For the six month period ended June 30, 2004, costs of revenue

                                       15


increased to $18.2 million, a 5.2 percent increase as compared to $17.3 million
for the six month period ended June 30, 2003. Cost of revenues as a percentage
of revenue for the three month period ended June 30, 2004 was 53.7 percent as
compared to 52.7 percent during 2003, and was 54.2 percent for the six months
ended June 30, 2004 compared to 54.3 percent for the same period in 2003.

The decrease in gross margin in the second quarter of 2004 compared to the
second quarter of 2003 is the result of lower, more competitive pricing we
adopted in some of the newer long-distance rate plans. Also affecting the
difference in gross margin rates for the second quarter was a one-time credit
recognized during 2003 from one of our long-distance service providers.

General and administrative expenses

General and administrative expenses in the second quarter of 2004 decreased 8.3
percent to $3.8 million compared to $4.1 million in the second quarter of 2003,
and for the six months ended June 30, 2004 decreased 0.6 percent to $7.8 million
as compared to $7.7 million for the six months ended June 30, 2003. A portion of
the difference is attributable to the higher costs we incurred in 2003 to
integrate and improve the VoIP Network acquired at the beginning of 2003
compared to the costs of maintaining and upgrading the Network during the first
six months of 2004.

Selling and promotion expenses

Selling and promotion expenses increased 34.6 percent to $3.6 million during the
three month period ended June 30, 2004 from $2.7 million for the same period in
2003. Such expenses increased 34.0 percent to $6.7 million for the six months
ended June 30, 2004 compared to $5.0 million during the six months ended June
30, 2003. The increases are the result of the transition in our sales mix over
the first six months of 2004 as higher commissioned business customers increased
in the first six months of 2004, and lower commissioned residential customers
decreased through attrition. In addition, during the second quarter of 2004 we
increased expenses related to our direct sales channel.

Other income (expense)

Interest expense for the three month period ended June 30, 2004 was $191,692,
compared to $506,166 in 2003, and for the six months ended June 30, 2004
interest expense was $549,117 compared to $992,095 in 2003. The decreases were
the result of a reduction in the outstanding debt throughout 2004 compared to
2003.

During the third quarter of 2003, UCN entered into a Purchase Agreement to
acquire approximately 12,000 long distance customers from Glyphics
Communications, Inc. Subsequently, the two parties agreed that UCN would
accelerate payments under the agreement in exchange for a discount on the
purchase price. The final payment under the agreement was made in February 2004,
and we recorded a $109,150 gain on the early extinguishment of the debt.

Liquidity and Capital Resources

UCN completed a private placement of common stock on March 15, 2004. UCN sold
3,782,000 shares of common stock at $2.30 per share, or a total of approximately
$8.7 million. Net proceeds of the offering after placement fees and expenses
were approximately $8.1 million. The net proceeds of the private placement have
been, and will be used for various purposes, including sales and marketing
related programs, funding further development of our VoIP Network, reducing
debt, and for working capital and other general corporate purposes.

UCN's current ratio as of June 30, 2004 increased to 0.86:1 from 0.52:1 at
December 31, 2003. The components of current assets and current liabilities that

                                       16


changed most significantly since the end of 2003 were the line of credit, the
current portion of long-term debt and capital lease obligations, and accounts
payable.

During the six months ended June 30, 2004 long-term debt and the related current
portion of long-term debt decreased by $5.8 million. Included therein was $2.3
million in note repayments to one of UCN's directors. The director subsequently
exercised warrants to purchase 297,500 shares of common stock. The proceeds
received by UCN totaled $595,000. UCN also repaid a $50,000 note payable to
another of its directors. Also included in the long-term debt decrease was the
conversion of a $300,000 promissory note into 150,000 shares of common stock.

UCN has a line of credit agreement with RFC Capital Corporation that expires in
January 2006. The available borrowing limit is $5 million. Interest accrues at
prime plus three percent. The facility allows UCN to obtain financing on its
eligible accounts receivable, including unbilled receivables and regular monthly
billings. The facility is collateralized by the underlying receivables. On June
30, 2004, the maximum amount available based on eligible accounts receivable at
that time was approximately $3.5 million. The amount outstanding on that date,
less applied draws by RFC, aggregated $754,559. The facility requires UCN to
maintain a restricted cash account for the collection of the receivables. As of
June 30, 2004, UCN had $1.5 million of restricted cash specifically associated
with the RFC arrangement.

On September 10, 2003, UCN filed a registration statement on Form SB-2 with the
Securities and Exchange Commission to register for resale up to approximately
8.8 million shares of common stock underlying outstanding warrants, options and
convertible debt. During 2003, investors exercised warrants to purchase 522,500
shares of common stock providing cash to UCN of approximately $1.0 million. As
of June 30, 2004, investors had exercised warrants for an additional 647,000
shares of common stock, providing cash of $1,294,500.

In October 2003, UCN acquired the exclusive right to sell and manage the
enhanced telecommunications functions of MyACD, Inc. ("MyACD"), with a one-year
option to purchase it for approximately $6.8 million, paid over a three-year
period beginning in January 2004. During the term of the agreement, UCN has the
sole right to manage sales, service and billing of MyACD services. Under the
agreement MyACD will continue to provide enhanced service development and
configuration, and UCN will reimburse MyACD for actual costs related to these
activities.

Capital Commitments The following table discloses aggregate information about
our contractual obligations including notes payable and lease obligations, and
the periods in which payments are due as of June 30, 2004:


                                              Less Than                                       After
Contractual Obligations          Total          1 Year        1-3 Years      4-5 Years       5 Years
---------------------------   ------------    -----------    ------------   ------------    -----------
                                                                             
Notes payable*                $ 2,582,637     $ 2,582,637    $        -     $        -      $        -
Capital lease
 obligations**                     75,162          34,690        40,472              -               -
Operating lease
 obligations                    1,489,245         465,761     1,023,484              -               -
                              -----------     -----------    ----------     ----------      ----------
Total contractual
 obligations                  $ 4,147,044     $ 3,083,088    $1,063,956     $        -      $        -
                              ===========     ===========    ==========     ==========      ==========


*    Before discount of $26,448
**  Not including interest of $6,755


Critical accounting policies and estimates

Revenue Recognition - UCN's revenue recognition policy with respect to reseller
agreements is to record gross revenues and receivables from customers when UCN
acts as principal in the transaction; takes title to the products or services;
and has risks and rewards of ownership, such as risk of loss for collection,
delivery, or returns. Revenues from sales of services are recognized upon
providing the services to the customers.

                                       17


Accounts Receivable and Allowance for Doubtful Accounts - Accounts receivable is
comprised of amounts billed and billable to customers, net of an allowance for
uncollectible amounts. The allowance for doubtful accounts is estimated by
management and is based on specific information about customer accounts, past
loss experience, and general economic conditions. An account is written off by
management when deemed uncollectible, although collections efforts may continue.

Property and Equipment - Property and equipment are stated at cost. Major
additions and improvements are capitalized, while minor repairs and maintenance
costs are expensed when incurred. In accordance with Statement of Position 98-1,
"Accounting for the Costs of Computer Software Developed or Obtained for
Internal Use," UCN capitalizes certain costs incurred for the development of
internal use software. These costs include the costs associated with coding,
software configuration, upgrades, and enhancements.

Long-Lived Assets - Our long-lived assets consist of acquired customer lists,
patents, and acquired technology. As June 30, 2004, the carrying value of these
assets was $7,346,085, or 31% of total assets. We evaluate the carrying value of
long-lived assets, including intangibles, when events or circumstances indicate
the existence of a possible impairment. In our evaluation, we estimate the net
undiscounted cash flows expected to be generated by the assets, and recognize
impairment when such cash flows will be less than carrying values. Events or
circumstances that could indicate the existence of a possible impairment include
obsolescence of the technology, an absence of market demand for the product,
and/or the partial or complete lapse of continuing technology rights protection.

Stock-Based Compensation - We have a stock option plan that provides for the
issuance of common stock options to employees and service providers. Although
SFAS No. 123, Accounting for Stock Based Compensation, encourages entities to
adopt a fair-value-based method of accounting for stock options and similar
equity instruments, it also allows an entity to continue measuring compensation
cost for stock-based compensation for employees and directors using the
intrinsic-value method of accounting prescribed by Accounting Principles Board
("APB") Opinion No 25, Accounting for Stock Issued to Employees. We have elected
to follow the accounting provisions of APB 25 and to furnish the pro forma
disclosures required under SFAS No. 123 for employees and directors, but we also
issue warrants to non-employees that are recognized as expense when issued in
accordance with the provisions of SFAS No. 123. We calculate compensation
expense under SFAS No. 123 using the Black-Scholes option pricing model. In so
doing, we estimate certain key variables used in the model. We believe the
estimates we use are appropriate and reasonable

Debt Issuance Costs - As an inducement to various investors, shareholders, and
board members to lend monies to UCN, shares of common stock and warrants to
purchase shares of common stock were issued to them. The fair market value of
those shares at the date of issuance has been capitalized as debt issuance costs
and is being amortized over the life of the loans.

Income Taxes - UCN recognizes a liability or asset for the deferred income tax
consequences of all temporary differences between the tax bases of assets and
liabilities and their reported amounts in the financial statements that will
result in taxable or deductible amounts in future years when the reported
amounts of the assets and liabilities are recovered or settled. These deferred
income tax assets or liabilities are measured using the enacted tax rates that
will be in effect when the differences are expected to reverse. Recognition of
deferred tax assets is limited to amounts considered by management to be more
likely than not of realization in future periods.

Forward-Looking Statements

The Private Securities Litigation Reform Act of 1985 provides a safe harbor for
forward-looking statements made by UCN, except where such statements are made in
connection with an initial public offering. All statements, other than
statements of historical fact, which address activities, actions, goals,

                                       18


prospects, or new developments that we expect or anticipate will or may occur in
the future, including such things as expansion and growth of our operations and
other such matters are forward-looking statements. Any one or a combination of
factors could materially affect our operations and financial condition. These
factors include competitive pressures, success or failure of marketing programs,
changes in pricing and availability of services and products offered to
customers, legal and regulatory initiatives affecting customer marketing and
rebate programs or long distance service, and conditions in the capital markets.
Forward-looking statements made by us are based on knowledge of our business and
the environment in which we operate as of the date of this report. Because of
the factors listed above, as well as other factors beyond its control, actual
results may differ from those in the forward-looking statements.


Item 4.  CONTROLS AND PROCEDURES

With the participation of management, UCN's chief executive officer and chief
financial officer evaluated its disclosure controls and procedures on August 05,
2004. Based on this evaluation, the chief executive officer and the chief
financial officer concluded that the disclosure controls and procedures are
effective in connection with UCN's filing of its interim report on Form 10-Q for
the quarterly period ended June 30, 2004.

Subsequent to August 05, 2004, through the date of this filing of Form 10-Q for
the quarterly period ended June 30, 2004, there have been no significant changes
in UCN's internal controls or in other factors that could significantly affect
these controls, including any significant deficiencies or material weaknesses of
internal controls that would require corrective action.


                           PART II. OTHER INFORMATION

Item 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS

In May 2004 a noteholder converted his $300,000 promissory note into 150,000
shares of common stock at a conversion price of $2.00 per share. The shares were
issued in reliance on the exemption from registration provided by Section 4(2)
of the Securities Act of 1933 or Regulation D promulgated there under. Based on
information provided by the investor, we believe the investor was an accredited
investor within the meaning of Rule 501 of Regulation D.


Item 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

At the Annual Meeting of Stockholders held on June 29, 2004, the stockholders
voted on the following matters:

         (1)      Election of Theodore Stern, Gary Smith, Edward Dallin Bagley,
                  Steve Barnett, and Paul Jarman as directors of UCN to serve
                  until their successors are duly elected and qualified;

         (2)      Approve an amendment to the certificate of incorporation to
                  effect a name change from "Buyers United, Inc." to "UCN,
                  Inc."; and

         (3)      Approve the Employee Stock Purchase Plan.

Each of the foregoing matters was approved by the stockholders. The number of
votes cast on the foregoing matters is as follows:

                                       19


                                         For          Against        Abstain
                                         ---          -------        -------
Election of Directors:
         Theodore Stern               9,517,445       451,958          N/A
         Gary Smith                   9,949,195        20,208          N/A
         Edward Dallin Bagley         9,949,196        20,207          N/A
         Steve Barnett                9,517,696       451,707          N/A
         Paul Jarman                  9,949,196        20,207          N/A

Name Change to UCN, Inc.              9,967,823         1,440           140

Employee Stock Purchase Plan          6,263,233       506,447        54,374


Item 5. OTHER INFORMATION

Change in Directors

On July 21, 2004, Edward Dallin Bagley and Gary Smith tendered their
resignations as directors of UCN. On July 22, 2004, the Board of Directors
accepted the resignations, adopted a resolution increasing the size of the Board
to six persons, and appointed Blake O. Fisher, Jr., Paul F. Koeppe, and James H.
Ozanne as directors of UCN. The following is biographical information on each of
the new directors.

Blake O. Fisher, Jr., age 60, has been providing management and financial
consulting to the telecommunications and utility industries since May 2002,
including financial consulting to the USDA on Rural Utilities Service's
broadband program. From May 2004 to the present he has served as chief financial
officer for Fiber Utilities of Iowa, an entity that provides operation and
construction services to municipal utilities. From May 2002 to May 2004 he was
retired from business activities. From February 1996 to May 2002, he held senior
management positions with McLeodUSA, a telecommunications provider, initially as
Chief Financial Officer, then President of the company's Western region and as
Chief Development Officer.

Paul F. Koeppe, age 54, is a director of Distributed Energy Systems Corp., a
company listed on the Nasdaq Stock Market engaged in the business of creating
and delivering innovative products and solutions to the energy marketplace, and
has served as a director since its acquisition of Northern Power Systems, Inc.
in December 2003. Mr. Koeppe became a director of Northern Power Systems in
1998. Prior to his retirement in 2001, Mr. Koeppe served as executive vice
president of American Superconductor, an electricity solutions company. Mr.
Koeppe joined American Superconductor in 1997, in connection with the
acquisition of Superconductivity, Inc., a manufacturer of superconducting
magnetic energy storage systems, which Mr. Koeppe founded and served as
president. From 1993 to 1995, Mr. Koeppe was acting CEO and chairman of the
executive committee of the board of directors of Best Power, Inc., a supplier of
uninterruptible power supply packages.

James H. Ozanne, age 60, is a director of Distributed Energy Systems Corp., and
has served in that position since May 2003. From September 2002 to May 2003 he
served as a director of Proton Energy Systems, Inc., one of the predecessors of
Distributed Energy Systems. Mr. Ozanne has served as chairman of Greenrange
Partners, a venture capital investment company since 1996. He is also Chairman
of the Board of PECO Pallet; a privately owned start up company in the grocery
pallet rental business. Since May 2003, he has served as Chief Restructuring
Officer of Select Portfolio Servicing Inc.; a mortgage servicing company owned
by PMI Group and Financial Security Assurance.

                                       20


Following the appointment of the new directors, the Board appointed:

                  To the Audit Committee
                           Steve Barnett, Chairman
                           Blake O. Fisher, Jr.
                           James H. Ozanne

                  To the Compensation Committee
                           Paul F. Koeppe, Chairman
                           Steve Barnett

The Board of Directors has determined that Steve Barnett, Blake O. Fisher, Jr.,
and James H. Ozanne are "audit committee financial experts" as defined in Item
401(h)(2) of Regulation S-K. Further, the Board has determined that each of the
members of the Audit Committee is "independent" under the standard set forth in
Rule 4350(d) of the Nasdaq Marketplace Rules.

Termination of Director Option Plan

On July 22, 2004, the Board of Directors terminated the Director Stock Option
Plan that was adopted in 2003.


Item 6. EXHIBITS AND REPORTS ON FORM 8-K

Exhibits: Copies of the following documents are included or furnished as
exhibits to this report pursuant to Item 601 of Regulation S-K.

       Exhibit
          No.             Title of Document
       -------            -----------------

         31.1     Certification of the Chief Executive Officer pursuant to
                  Section 302 of the Sarbanes-Oxley Act of 2002

         31.2     Certification of the Chief Financial Officer pursuant to
                  Section 302 of the Sarbanes-Oxley Act of 2002

         32.1     Certifications of the Chief Executive Officer and Chief
                  Financial Officer pursuant to Section 906 of the
                  Sarbanes-Oxley Act of 2002


Reports on Form 8-K:

UCN filed a current report on Form 8-K with the Securities and Exchange
Commission on May 14, 2004, disclosing under Item 5 a letter distributed to the
shareholders with UCN's 2003 Annual Report to Stockholders, and reporting under
Item 12 the issuance of a press release regarding operating results for the
three months ended March 31, 2004.

                                       21


                                   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.


                                UCN, INC.


Date:  August 13, 2004          By: /s/ Theodore Stern, Chief Executive Officer
                                   ---------------------------------------------


Date:  August 13, 2004          By: /s/ David R. Grow, Chief Financial Officer
                                   ---------------------------------------------

                                       22