This paper presents a modeling and simulation tool for the design and development of a Quad-Rotor UAV, which is capable of indoor flight with the aid of MEMS-based sensors and ultrasonic rangefinders. The vehicle requires an attitude stabilizing controller to allow it to be flown indoors without a high degree of operating skill. Attitude estimations are difficult without GPS aiding and expensive inertial sensors. An Extended Kalman Filter (EKF) is proposed to estimate the attitude states with the aid of rangefinders, but the system must be thoroughly tested in simulation. The paper presents a dynamics model and simulation tool for design and validation of the controller and state estimator prior to flight test. The simulation is performed under Mathworks' Matlab/Simulink environment. A method for real-time simulation and visualization is also developed.