EFFECTIVE AUGUST 23RD, 2004
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C.  20549

                                    FORM 8-K

                                 CURRENT REPORT
                       PURSUANT TO SECTION 13 OR 15(D) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

       DATE OF REPORT  (DATE OF EARLIEST EVENT REPORTED):  AUGUST 25, 2004



                        N-VIRO INTERNATIONAL CORPORATION
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

     DELAWARE                         0-21802               34-1741211
     (STATE OR OTHER JURISDICTION OF (COMMISSION FILE NUMBER)
  INCORPORATION  OR  ORGANIZATION                        (IRS  EMPLOYER
                                                    IDENTIFICATION  NO.)


     3450  W.  CENTRAL  AVENUE,  SUITE  328
     TOLEDO,  OHIO                                        43606
     (ADDRESS  OF  PRINCIPAL  EXECUTIVE  OFFICES)
                                                        (ZIP  CODE)

      REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE:    (419) 535-6374

Check  the  appropriate  box  below  if  the  Form  8-K  filing  is  intended to
simultaneously  satisfy the filing obligation of the registrant under any of the
following  provisions  (see  General  Instruction  A.2.  below):
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
[  ]  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act  (17  CFR  240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act  (17  CFR  240.13e-4(c))

Item  8.01  -  Other  Events

N-Viro  International  Corporation  announced  on  August  27,  2004 it had been
notified  by the Delaware Chancery Court (the "Court") on August 25, 2004 that a
date  of  October  14,  2004  has  been  set  to hold a hearing on the Company's
proposed  settlement  of  a  derivative  action filed June 11, 2003 by Strategic
Asset  Management,  Inc.,  and  to  enter judgment on the settlement terms.  The
Scheduling  Order  and  Notice  of Settlement Hearing have also been attached to
this  filing  as  Exhibits  10.1  and  10.2,  respectively.



Item  9.01  -  Financial  Statements  and  Exhibits
(c)     Exhibits
     Exhibit  No.     Description
     10.1          Delaware  Chancery  Court  Scheduling  Order
     10.2          Delaware  Chancery  Court  Notice  of  Settlement  Hearing
     99.1          News  Release  Regarding  Settlement  Hearing



                                    SIGNATURE

     Pursuant  to  the  requirements of the Securities Exchange Act of 1934, the
Company  has  duly  caused  this  report  to  be  signed  on  its  behalf by the
undersigned  hereunto  duly  authorized.

                        N-VIRO INTERNATIONAL CORPORATION


Dated:          August  30,  2004       By:/s/  James  K. McHugh
                                        James  K.  McHugh
                                        Chief  Financial  Officer