| U.S. SECURITIES AND EXCHANGE      COMMISSIONWashington,D.C. |
|-------------------------------------------------------------|

| Form 10-Q |
|-----------|

| (Mark one) |
|------------|

| [ X ] | Quarterly Report Pursuant to Section 13 or 15(d) of the Securities      Exchange Act of 1934 for the quarterly period ended June 30,  2008 |
|-------|--------------------------------------------------------------------------------------------------------------------------------------------|

| OR |
|----|

| [ ] | Transition Report Pursuant to Section 13 or 15(d) of the Securities      Exchange Act of 1934 |
|-----|-----------------------------------------------------------------------------------------------|

| Commission File No.  0-29417 |
|------------------------------|

|   |
|--------|

|   | ALL Fuels & Energy Company                              |   |
|--------|-------------------------------------------------------------|--------|
|   | (Exact name of registrant as specified in      its charter) |   |

|   |
|--------|

|   | DELAWARE |   | 62-1581902 |   |
|--------|----------|--------|------------|--------|

|   | (State or Other Jurisdiction ofincorporation or organization) |   | (I.R.S. EmployerIdentification Number) |   |
|--------|---------------------------------------------------------------|--------|----------------------------------------|--------|

|   |
|--------|

|   | 6165 N.W. 86th Street, Johnston, Iowa      50131 |   |
|--------|--------------------------------------------------|--------|

|   | (Address of principal executive offices,      including zip code) |   |
|--------|-------------------------------------------------------------------|--------|

|   | (515) 331-6509 |   |
|--------|----------------|--------|

|   | (Issuer’s telephone number, including area      code) |   |
|--------|-------------------------------------------------------------|--------|

|   |
|--------|

| 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 a large accelerated      filer, an accelerated filer, a non-accelerated filer, or a smaller      reporting company. See the definitions of "large accelerated filer,"      "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the      Exchange Act. (Check one): |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Large accelerated filer [ ] |   | Accelerated filer [ ] |
|-----------------------------|--------|-----------------------|

| Non-accelerated filer [ ] (Do not check if a smaller reporting      company) |   | Smaller reporting company [ X ] |
|------------------------------------------------------------------------------|--------|---------------------------------|

| Indicate by check mark whether the registrant is a shell company (as      defined in Rule 12b-2 of the Exchange Act).Yes [ ] No [ X ] |
|---------------------------------------------------------------------------------------------------------------------------------------|

| As of August 13, 2008, there were 51,692,703 shares of the issuer’s      common stock outstanding. |
|----------------------------------------------------------------------------------------------------------|

|         |
|--------------|
| <PAGE> |
|         |

| PART I - FINANCIAL  INFORMATION |
|---------------------------------|

| Item 1. Financial Statements |
|------------------------------|

| INDEX TO FINANCIAL  STATEMENTS |
|--------------------------------|

|   | Page |
|--------|------|

| ALL Fuels & Energy Company |
|--------------------------------|

| Condensed Consolidated Balance Sheets as of June 30, 2008      (unaudited), and December 31, 2007 (audited) | 3 |
|-------------------------------------------------------------------------------------------------------------|---|

| Condensed Consolidated Statements of Operations for the Three Months      and Six Months Ended June 30, 2008 (unaudited) and 2007 (unaudited), and      the Period from Commencement of Development Stage (June 7, 2004) to June      30, 2008 (unaudited) | 5 |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---|

| Condensed Consolidated Statements of Cash Flows for the Six Months      Ended June 30, 2008 (unaudited) and 2007 (unaudited), and the Period from      Commencement of Development Stage (June 7, 2004) to June 30, 2008      (unaudited) | 6 |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---|

| Notes to Condensed Consolidated Financial Statements | 8 |
|------------------------------------------------------|---|

|         |
|--------------|
| <PAGE> |
|         |

|   | ALL FUELS & ENERGY COMPANY |   |
|--------|--------------------------------|--------|

|   | (a development stage company) |   |
|--------|-------------------------------|--------|

|   | CONDENSED CONSOLIDATED BALANCE    SHEETS |   |
|--------|------------------------------------------|--------|

|   | June 30, 2008, and December 31,    2007 |   |
|--------|-----------------------------------------|--------|

|   | 6/30/08(unaudited) |   | 12/31/07 |
|--------|--------------------|--------|----------|

| ASSETS |
|--------|

| Current assets |
|----------------|

|   | Cash and cash equivalents | $292,270 |   | $612,888 |
|--------|---------------------------|----------|--------|----------|

|   | Prepaid expenses | 39,862 |   | 52,637 |
|--------|------------------|--------|--------|--------|

|   | Total current assets | 332,132 |   | 665,525 |
|--------|----------------------|---------|--------|---------|

| Property and equipment - at cost |
|----------------------------------|

|   | Land | 951,238 |   | 951,238 |
|--------|------|---------|--------|---------|

|   | Equipment | 1,729 |   | 1,093 |
|--------|-----------|-------|--------|-------|

|   | Construction in progress | 193,720 |   | 187,024 |
|--------|--------------------------|---------|--------|---------|

|   |   | 1,146,687 |   | 1,139,355 |
|--------|--------|-----------|--------|-----------|

|   | Less accumulated depreciation | (525) |   | (275) |
|--------|-------------------------------|-------|--------|-------|

|   | Total property and equipment - net | 1,146,162 |   | 1,139,080 |
|--------|------------------------------------|-----------|--------|-----------|

| Other assets |
|--------------|

|   | Deferred borrowing costs | 2,863 |   | 3,672 |
|--------|--------------------------|-------|--------|-------|

|   | Investment in AFSE Enzyme, LLC | 4,591 |   | --- |
|--------|--------------------------------|-------|--------|-----|

|   | Total other assets | 7,454 |   | 3,672 |
|--------|--------------------|-------|--------|-------|

|   | Total assets | $1,485,748 |   | $1,808,277 |
|--------|--------------|------------|--------|------------|

| The accompanying notes are an integral      part of these statements. |
|-----------------------------------------------------------------------|

|         |
|--------------|
| <PAGE> |
|         |

|   | ALL FUELS & ENERGY COMPANY |   |
|--------|--------------------------------|--------|

|   | (a development stage company) |   |
|--------|-------------------------------|--------|

|   | CONDENSED CONSOLIDATED BALANCE    SHEETS |   |
|--------|------------------------------------------|--------|

|   | June 30, 2008, and December 31,    2007 |   |
|--------|-----------------------------------------|--------|

|   | 6/30/08(unaudited) |   | 12/31/07 |
|--------|--------------------|--------|----------|

| LIABILITIES AND STOCKHOLDERS’ EQUITY      (DEFICIT) |
|-----------------------------------------------------------|

| Current liabilities |
|---------------------|

|   | Accounts payable and accrued expenses | $116,547 |   | $83,992 |
|--------|---------------------------------------|----------|--------|---------|

|   | Unearned rental income | 20,000 |   | --- |
|--------|------------------------|--------|--------|-----|

|   | Total current liabilities | 136,547 |   | 83,992 |
|--------|---------------------------|---------|--------|--------|

| Long term debt | 488,000 |   | 488,000 |
|----------------|---------|--------|---------|

|   | Total liabilities | 624,547 |   | 571,992 |
|--------|-------------------|---------|--------|---------|

| Stockholders’ equity (deficit) |
|--------------------------------------|

|   | Common stock, $.01 par value; 80,000,000 shares authorized,      51,607,719 and 51,365,719 shares issued and outstanding | 516,078 |   | 513,658 |
|--------|--------------------------------------------------------------------------------------------------------------------------|---------|--------|---------|

|   | Additional paid-in capital | 15,913,682 |   | 14,981,840 |
|--------|----------------------------|------------|--------|------------|

|   | Treasury stock, at cost | (150,000) |   | (150,000) |
|--------|-------------------------|-----------|--------|-----------|

|   | Receivable from shareholder | (50,000) |   | (50,000) |
|--------|-----------------------------|----------|--------|----------|

|   | Accumulated deficit | (6,423,944) |   | (6,423,944) |
|--------|---------------------|-------------|--------|-------------|

|   | Deficit accumulated during the development stage | (8,944,615) |   | (7,635,269) |
|--------|--------------------------------------------------|-------------|--------|-------------|

|   | Total stockholders’ equity (deficit) | 861,201 |   | 1,236,285 |
|--------|--------------------------------------------|---------|--------|-----------|

|   | Total liabilities and stockholders’ equity (deficit) | $1,485,748 |   | $1,808,277 |
|--------|------------------------------------------------------------|------------|--------|------------|

|   |
|--------|

| The accompanying notes are an integral      part of these statements. |
|-----------------------------------------------------------------------|

|         |
|--------------|
| <PAGE> |
|         |

|   | ALL FUELS & ENERGY COMPANY |   |
|--------|--------------------------------|--------|

|   | (a development stage company) |   |
|--------|-------------------------------|--------|

|   | CONDENSED CONSOLIDATED STATEMENTS OF      OPERATIONS |   |
|--------|------------------------------------------------------|--------|

|   | For the Three Months and Six Months Ended      June 30, 2008 and 2007, and the Period from Commencement of Development      Stage (June 7, 2004) to June 30, 2008 |   |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|

|   | Three Months Ended June 30, |   | Six Months Ended June 30, |   |
|--------|-----------------------------|--------|---------------------------|--------|

|   | (2008)(unaudited) |   | 2007(unaudited) |   | 2008(unaudited) |   | 2007(unaudited) |   | Period fromCommence-ment of DevelopmentStage (June 7,2004) to 6/30/08(unaudited) |
|--------|-------------------|--------|-----------------|--------|-----------------|--------|-----------------|--------|----------------------------------------------------------------------------------|

| Revenues | $--- |   | $--- |   | $--- |   | $--- |   | $--- |
|----------|------|--------|------|--------|------|--------|------|--------|------|

| Operating Costs and Expenses |   |   |   |   |   |   |   |   |   |
|------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|

|   | Consulting | 74,271 |   | 374,700 |   | 788,015 |   | 374,700 |   | 7,497,928 |
|--------|------------|--------|--------|---------|--------|---------|--------|---------|--------|-----------|

|   | Legal and professional | 144,459 |   | 104,232 |   | 206,215 |   | 452,278 |   | 1,015,709 |
|--------|------------------------|---------|--------|---------|--------|---------|--------|---------|--------|-----------|

|   | Impairment charge | --- |   | --- |   | --- |   | --- |   | 139,820 |
|--------|-------------------|-----|--------|-----|--------|-----|--------|-----|--------|---------|

|   | General and administrative | 174,852 |   | 120,497 |   | 322,361 |   | 380,819 |   | 1,048,321 |
|--------|----------------------------|---------|--------|---------|--------|---------|--------|---------|--------|-----------|

|   | Total operating expenses | 393,582 |   | 599,429 |   | 1,316,591 |   | 1,207,797 |   | 9,701,778 |
|--------|--------------------------|---------|--------|---------|--------|-----------|--------|-----------|--------|-----------|

| Other income (expense) |   |   |   |   |   |   |   |   |   |
|------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|

|   | Interest expense | (5,890) |   | (9,803) |   | (13,627) |   | (9,803) |   | (46,899) |
|--------|------------------|---------|--------|---------|--------|----------|--------|---------|--------|----------|

|   | Interest income | 2,607 |   | 5,882 |   | 5,463 |   | 15,103 |   | 49,634 |
|--------|-----------------|-------|--------|-------|--------|-------|--------|--------|--------|--------|

|   | Rental income | 10,000 |   | 13,125 |   | 20,000 |   | 13,125 |   | 46,250 |
|--------|---------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|

|   | Equity loss in subsidiary | (4,591) |   | --- |   | (4,591) |   | --- |   | (4,591) |
|--------|---------------------------|---------|--------|-----|--------|---------|--------|-----|--------|---------|

|   | Total other income (expense) | 2,126 |   | 9,204 |   | 7,245 |   | 18,425 |   | 44,394 |
|--------|------------------------------|-------|--------|-------|--------|-------|--------|--------|--------|--------|

| Net loss | $(391,456) |   | $(590,225) |   | $(1,309,346) |   | $(1,189,372) |   | $(9,657,384) |
|----------|------------|--------|------------|--------|--------------|--------|--------------|--------|--------------|

| Income (loss) per share | $(0.01) |   | $(0.01) |   | $(0.02) |   | $(0.04) |   |   |
|-------------------------|---------|--------|---------|--------|---------|--------|---------|--------|--------|

| Weighted average number of shares outstanding (basic and      diluted) | 51,373,995 |   | 46,812,186 |   | 51,161,635 |   | 29,497,492 |   |   |
|------------------------------------------------------------------------|------------|--------|------------|--------|------------|--------|------------|--------|--------|

|   |
|--------|

| The accompanying notes are an integral part of these    statements. |
|---------------------------------------------------------------------|

|         |
|--------------|
| <PAGE> |
|         |

|   | ALL FUELS & ENERGY COMPANY |   |
|--------|--------------------------------|--------|

|   | (a development stage company) |   |
|--------|-------------------------------|--------|

|   | CONDENSED CONSOLIDATED STATEMENTS OF CASH      FLOWS |   |
|--------|------------------------------------------------------|--------|

|   | For the Six Months Ended June 30, 2008 and      2007, and the Period from Commencement of Development Stage (June 7, 2004)      to June 30, 2008 |   |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------|--------|

|   | Six Months Ended June 30, |   |
|--------|---------------------------|--------|

|   | (2008)(unaudited) |   | 2007(unaudited) |   | Period fromCommencement of DevelopmentStage (June 7,2004) to 6/30/08(unaudited) |
|--------|-------------------|--------|-----------------|--------|---------------------------------------------------------------------------------|

| CASH FLOWS FROM OPERATING ACTIVITIES |   |   |   |   |   |
|--------------------------------------|--------|--------|--------|--------|--------|

| Net loss | $(1,309,346) |   | $(1,189,372) |   | $(9,657,384) |
|----------|--------------|--------|--------------|--------|--------------|

|   | Adjustments to reconcile net loss to cash used foroperating activities: |   |   |   |   |   |
|--------|-------------------------------------------------------------------------|--------|--------|--------|--------|--------|

|   | Depreciation and amortization | 1,059 |   | 216 |   | 3,185 |
|--------|-------------------------------|-------|--------|-----|--------|-------|

|   | Equity loss in subsidiary | 4,591 |   | --- |   | 4,591 |
|--------|---------------------------|-------|--------|-----|--------|-------|

|   | Options issued for compensation | 209,593 |   | --- |   | 6,284,806 |
|--------|---------------------------------|---------|--------|-----|--------|-----------|

|   | Stock issued for services and compensation | 581,400 |   | 750,515 |   | 1,747,745 |
|--------|--------------------------------------------|---------|--------|---------|--------|-----------|

|   | Impairment charge | --- |   | --- |   | 139,820 |
|--------|-------------------|-----|--------|-----|--------|---------|

|   | Decrease in deposits | --- |   | 10,000 |   | --- |
|--------|----------------------|-----|--------|--------|--------|-----|

|   | Decrease in accrued expenses | --- |   | (40,056) |   | --- |
|--------|------------------------------|-----|--------|----------|--------|-----|

|   | Increase (decrease) in prepaids | 12,775 |   | (99,678) |   | (127,682) |
|--------|---------------------------------|--------|--------|----------|--------|-----------|

|   | Increase in unearned rental income | 20,000 |   | --- |   | 20,000 |
|--------|------------------------------------|--------|--------|-----|--------|--------|

|   | Increase in accounts payable | 32,555 |   | 21,010 |   | 58,916 |
|--------|------------------------------|--------|--------|--------|--------|--------|

| Net cash used for operating activities | (447,373) |   | (547,365) |   | (1,526,003) |
|----------------------------------------|-----------|--------|-----------|--------|-------------|

| CASH FLOWS FROM INVESTING ACTIVITIES |   |   |   |   |   |
|--------------------------------------|--------|--------|--------|--------|--------|

|   | Purchase of land | --- |   | (951,238) |   | (951,238) |
|--------|------------------|-----|--------|-----------|--------|-----------|

|   | Investment in AFSE Enzyme, LLC | (9,182) |   | --- |   | (9,182) |
|--------|--------------------------------|---------|--------|-----|--------|---------|

|   | Increase in accrued liabilities - related party | --- |   | --- |   | 40,056 |
|--------|-------------------------------------------------|-----|--------|-----|--------|--------|

|   | Collections from receivable - related party | --- |   | 22,500 |   | --- |
|--------|---------------------------------------------|-----|--------|--------|--------|-----|

|   | Purchase of office equipment | (636) |   | --- |   | (1,966) |
|--------|------------------------------|-------|--------|-----|--------|---------|

|   | Payments on construction-in-progress | (6,696) |   | (47,394) |   | (193,720) |
|--------|--------------------------------------|---------|--------|----------|--------|-----------|

| Net cash used in investing activities | (16,514) |   | (976,132) |   | (1,116,050) |
|---------------------------------------|----------|--------|-----------|--------|-------------|

| The accompanying notes are an integral      part of these statements. |
|-----------------------------------------------------------------------|

|         |
|--------------|
| <PAGE> |
|         |

|   | ALL FUELS & ENERGY COMPANY |   |
|--------|--------------------------------|--------|

|   | (a development stage company) |   |
|--------|-------------------------------|--------|

|   | CONDENSED CONSOLIDATED STATEMENTS OF CASH      FLOWS |   |
|--------|------------------------------------------------------|--------|

|   | For the Six Months Ended June 30, 2008 and      2007, and the Period from Commencement of Development Stage (June 7, 2004)      to June 30, 2008 |   |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------|--------|

|   | Six Months Ended June 30, |   |
|--------|---------------------------|--------|

|   | (2008)(unaudited) |   | 2007(unaudited) |   | Period fromCommencement of DevelopmentStage (June 7,2004) to 6/30/08(unaudited) |
|--------|-------------------|--------|-----------------|--------|---------------------------------------------------------------------------------|

| CASH FLOWS FROM FINANCING ACTIVITIES |   |   |   |   |   |
|--------------------------------------|--------|--------|--------|--------|--------|

|   | Proceeds from sale of common stock for cash | 143,269 |   | 75,000 |   | 2,600,253 |
|--------|---------------------------------------------|---------|--------|--------|--------|-----------|

|   | Principal payments on related party advances | --- |   | --- |   | (3,988) |
|--------|----------------------------------------------|-----|--------|-----|--------|---------|

|   | Proceeds from long-term debt, net of deferred borrowingcosts | --- |   | 483,507 |   | 483,120 |
|--------|--------------------------------------------------------------|-----|--------|---------|--------|---------|

|   | Purchase of treasury stock | --- |   | (150,000) |   | (150,000) |
|--------|----------------------------|-----|--------|-----------|--------|-----------|

|   | Contributions from shareholders | --- |   | --- |   | 950 |
|--------|---------------------------------|-----|--------|-----|--------|-----|

| Net cash provided by financing activities | 143,269 |   | 408,507 |   | 2,930,335 |
|-------------------------------------------|---------|--------|---------|--------|-----------|

|   |
|--------|

| NET CHANGE IN CASH | (320,618) |   | (1,114,990) |   | 288,282 |
|--------------------|-----------|--------|-------------|--------|---------|

| Cash, beginning of period | 612,888 |   | 1,772,495 |   | 3,988 |
|---------------------------|---------|--------|-----------|--------|-------|

| Cash, end of period | $292,270 |   | $657,505 |   | $292,270 |
|---------------------|----------|--------|----------|--------|----------|

|   |
|--------|

| The accompanying notes are an integral      part of these statements. |
|-----------------------------------------------------------------------|

|         |
|--------------|
| <PAGE> |
|         |

|   | ALL FUELS & ENERGY COMPANY |   |
|--------|--------------------------------|--------|

|   | (a development stage company) |   |
|--------|-------------------------------|--------|

|   | NOTES TO CONDENSED CONSOLIDATED FINANCIAL      STATEMENTS |   |
|--------|-----------------------------------------------------------|--------|

|   | June 30, 2008(unaudited) |   |
|--------|--------------------------|--------|

|   |
|--------|

| Note 1. Summary of Significant AccountingPolicies |
|---------------------------------------------------|

| Basis of Presentation |
|-----------------------|

| The accompanying unaudited interim financial statements of ALL Fuels      & Energy Company (the “Company”) have been prepared by the Company in      accordance with accounting principles generally accepted in the United      States of America, pursuant to the Securities and Exchange Commission      rules and regulations. In management’s opinion all adjustments necessary      for a fair presentation of the results for interim periods have been      reflected in the interim financial statements. The results of operations      for any interim period are not necessarily indicative of the results for a      full year. All adjustments to the financial statements are of a normal      recurring nature. |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Certain information and footnote disclosures normally included in      financial statements prepared in accordance with generally accepted      accounting principles have been condensed or omitted. Such disclosures are      those that would substantially duplicate information contained in the most      recent audited financial statements of the Company, such as significant      accounting policies and stock options. Management presumes that users of      the interim statements have read or have access to the audited financial      statements and notes thereto included in the Company’s annual report on      Form 10-KSB for the year ended December 31,2007. |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Note 2. Management’s Plans forLiquidity |
|-----------------------------------------------|

| The Company possesses a level of capital sufficient to sustain our      current operations for the remainder of 2008 and the first three months of      2009. However, the Company will require substantial additional capital to      purchase one or more existing ethanol production facilities or to      construct a new ethanol production facility. The Company believes it will      be able to secure the financing, in the form of debt, equity or a      combination thereof, necessary to complete these opportunities. To this      end, the Company has retained Trinity Capital, Los Angeles, California, as      its investment banker. To date, the Company has not received a commitment      for an equity investment or a loan in anyamount. |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| During the remainder of 2008, the Company intends to commit a small      portion of its capital to its recently announced AFSE Enzyme, LLC venture.      It is likely that this venture will require approximately $1.5 million      over the next 24 months to complete the development of up to ten      market-ready enzymes. The needed funding will be sought from third      parties. See Note 6 below for additional information concerning AFSE      Enzyme, LLC. |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Note 3. Prepaid Expenses |
|--------------------------|

| At June 30, 2008, the Company had prepaid expenses of $39,862, of      which $29,807 relates to expenses incurred in connection with its efforts      in acquiring certain ethanol-related businesses. In future periods,      prepaid expenses associated with successful acquisitions will be      capitalized, while those associated with unsuccessful acquisition efforts      will be expensed. The remaining $10,055 represents prepaid    insurance. |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Note 4. Land, Equipment and Construction in  Progress |
|-------------------------------------------------------|

| The Company owns 152.5 acres near Manchester, Iowa, which is carried      at its cost of $951,238. The Company also acquired approximately $1,700 of      office equipment. Through June 30, 2008, the Company has paid $193,720 in      construction-related expenses associated with the Company’s proposed      ethanol production facility to be constructed on the Manchester, Iowa,      land. |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Note 5. Capital Stock |
|-----------------------|

| Stock for Services |
|--------------------|

| During the first six months of 2008, the Company issued a total of      1,000,000 shares of common stock to third-party consultants for services,      resulting in $540,000 in non-cash compensation expense included in      professional and legal expenses and consulting fees in the accompanying      statements of operations. There are no performance commitments or      penalties for non-performance, therefore the Company recorded the expense      at the date of issuance. |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| During the first six months of 2008, the Company issued a total of      75,000 shares of common stock to three of its directors as bonuses. The      issuance of these shares resulted in $41,400 in legal expenses and      consulting fees in the accompanying statement of operations. There are no      performance commitments or penalties for non-performance, therefore the      Company recorded the expense at the date ofissuance. |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Stock Issued on Exercise of Options |
|-------------------------------------|

| During the first six months of 2008, the Company issued a total of      405,000 shares of common stock on the exercise of options. These shares      were issued for a total of $143,269 incash. |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Cancellation of Common Stock |
|------------------------------|

| In January 2008, a total of 1,238,100 shares of Company common stock      were cancelled, pursuant a settlementagreement. |
|---------------------------------------------------------------------------------------------------------------------------|

| Note 6. AFSE Enzyme, LLC |
|--------------------------|

| The Company has recorded its investment in AFSE Enzyme, LLC on the      equity method. Under this method, the Company records its initial      investment at its cost and increases the investment by any additional      funds invested. It then adjusts the amount of the investment by its share      of the investee’s earnings or losses. To date, the Company has invested      $9,182 and booked a loss of $4,591, leaving its investment at $4,591, at      June 30, 2008. |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| AFSE Enzyme, LLC is a Florida limited liability company 50% owned by      the Company. AFSE Enzyme was formed for the stated purpose of      participating in the development and subsequent commercialization of      certain enzyme-related technologies. AFSE Enzyme’s development activities      are to produce one or more “super” enzymes that would serve to produce      ethanol from cellulosic plant material. The Company believes such an      enzyme product would, in theory, reduce ethanol productions costs by up to      50% compared to traditional corn-based production. In addition, these      enzyme development activities are to produce one or more additive enzyme      products that would serve to enhance corn ethanol production by 5% to 10%.      It is likely that AFSE Enzyme will require approximately $1.5 million over      the next 24 months to complete the development of up to ten market-ready      enzymes. The needed funding will be sought from third  parties. |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|         |
|--------------|
| <PAGE> |
|         |

| Item 2. Management’s Discussion and Analysis of Financial Condition      and Results of Operations. |
|-----------------------------------------------------------------------------------------------------------|

| General |
|---------|

| In January 2007, there occurred a change in control with respect to      our company and new management was installed. Our new management has      determined that we will pursue a plan of business whereby we would become      a producer of ethanol and its co-products. To that end, in April 2007, we      consummated a plan and agreement of reorganization with ALL Energy      Company, a development-stage ethanol company, whereby ALL Energy Company      became our wholly-owned subsidiary. Our management and that of ALL Energy      Company was and is the same. |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Currently, we are actively pursuing the acquisition of one or more      operating ethanol production facilities. Also, we have recently formed a      new subsidiary that is to pursue the development and commercial      exploitation of one or more enzymes intended to boost ethanol production      rates. Further, we own approximately 150 acres of real property in      Manchester, Iowa, on which we intend to construct a 100 million gallon      (per year) ethanol production facility. |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| References to “us”, “we” and “our” include our subsidiary, ALL Energy      Company, and its subsidiary, ALL Energy Manchester, LLC, and our 50%-owned      subsidiary, AFSE Enzyme, LLC, unless otherwise  indicated. |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Certain statements contained herein are not based on historical facts      and are "forward-looking statements" within the meaning of Section 21A of      the Securities Exchange Act of 1934. Forward-looking statements which are      based on various assumptions (some of which are beyond the Company's      control), may be identified by reference to a future period or periods, or      by the use of forward-looking terminology, such as "may", "will",      "believe", "expect", "estimate", "anticipate", "continue" or similar terms      or variations on those terms, or the negative of these terms. Actual      results could differ materially from those set forth in forward-looking      statements, due to a variety of factors, including, but not limited to,      events that deprive us of the services of our president, Dean Sukowatey,      whether we are able to obtain adequate capital with which to construct      and/or purchase one or more ethanol production facilities and other      uncertainties, all of which are difficult to predict and many of which are      beyond our control. |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| We do not undertake, and specifically disclaim any obligation, to      publicly release the result of any revisions which may be made to any      forward-looking statements to reflect the occurrence of anticipated or      unanticipated events or circumstances after the date of such      statements. |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Critical Accounting Policies |
|------------------------------|

| While we believe that the factors considered provide a meaningful      basis for the accounting policies applied in the preparation of the      condensed consolidated financial statements, we cannot guarantee that our      estimates and assumptions will be accurate. If such estimates and      assumptions prove to be inaccurate, we may be required to make adjustments      to these estimates in future periods. |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Litigation and Tax Assessments. Should we become involved in      lawsuits, we intend to assess the likelihood of any adverse judgments or      outcomes of any of these matters as well as the potential range of      probable losses. A determination of the amount of accrual required, if      any, for these contingencies will be made after careful analysis of each      matter. The required accrual may change from time to time, due to new      developments in any matter or changes in approach (such as a change in      settlement strategy) in dealing with thesematters. |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Additionally, in the future, we may become engaged in various tax      audits by federal and state governmental authorities incidental to our      business activities. We anticipate that we will record reserves for any      estimated probable losses for any suchproceeding. |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Stock-Based Compensation. We account for stock-based compensation      based on the provisions of Statement of Financial Accounting Standards No.      123. In December 2004, the Financial Accounting Standards Board issued      Statement of Financial Accounting Standards No. 123 (Revised 2004),      Share-Based Payment, (FAS-123R). This statement replaces FAS-123,      Accounting for Stock-Based Compensation, supercedes APB Opinion No. 25,      Accounting for Stock Issued to Employees, and amends FAS-95, Statement of      Cash Flows. FAS-123R requires companies to apply a fair-value-based      measurement method in accounting for share-based payment transactions with      employees and to record compensation cost for all stock awards granted      after the required effective date and for awards modified, repurchased or      cancelled after that date. The scope of FAS-123R encompasses a wide range      of share-based compensation arrangements, including share options,      restricted share plans, performance-based awards, share appreciation      rights and employee share purchase plans. |
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| New Accounting Pronouncements. In September 2006, the Financial      Accounting Standards Board (“FASB”) issued Statement of Financial      Accounting Standards (“SFAS”) No. 157, “Fair Value Measurements” (“SFAS      157”). SFAS 157 defines fair value, establishes a framework for measuring      fair value in accordance with generally accepted accounting principles,      and expands disclosures about fair value measurements. SFAS 157 is      effective January 1, 2008. We do not believe this statement will adversely      impact our financial statements. |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| In February 2007, the FASB issued SFAS No. 159, The Fair Value Option      for Financial Assets and Financial Liabilities, which permits entities to      choose to measure many financial instruments and certain other items at      fair value. The objective is to improve financial reporting by providing      entities with the opportunity to mitigate volatility in reported earnings      caused by measuring related assets and liabilities differently without      having to apply complex hedge accounting provisions. SFAS No. 159 applies      to all entities and is effective for fiscal years beginning after November      15, 2007. |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| In December 2007, the FASB issued SFAS No. 141 (revised 2007),      “Business Combinations” (“SFAS No. 141R”), which establishes principles      and requirements for how the acquirer shall recognize and measure in its      financial statements the identifiable assets acquired, liabilities      assumed, any noncontrolling interest in the acquiree and goodwill acquired      in a business combination. SFAS No. 141(R) is effective for business      combinations for which the acquisition date is on or after the beginning      of the first annual reporting period beginning on or after December 15,      2008. The Company is currently assessing the potential impact that the      adoption of SFAS No. 141(R) will have on its financial position and      results of operations. |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Results of Operations |
|-----------------------|

| Our monthly operating expenses, which include salary and professional      fees and acquisition-related activities, currently are approximately      $50,000. The level of such operating expenses are expected to remain at      such levels for the foreseeable future, unless we are able complete the      acquisition of an existing ethanol production facility, of which there is      no assurance. Should we successful in so acquiring an existing facility,      our operating expenses will significantly increase, although we are unable      to predict the amount of such increase. |
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| Three Months Ended June 30, 2008, vs. Three Months Ended June 30,      2007. |
|------------------------------------------------------------------------------|

| Revenues. We did not generate any revenues during either the 2008 or      the 2007 three month period ended June 30. During each period, we actively      pursued the acquisition of an existing ethanol production facility. In      addition, during the 2008 period, we began to pursue the development of      our enzyme business. We cannot predict whether we will be successful in      these efforts. |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Expenses. Our cash outlays for operating expenses during the three      months ended June 30, 2008, were $312,742, up from $269,500 for the prior      year’s three month period. Our non-cash operating expenses, which include      stock issued for services and options issued for services, totalled      $58,770 and $374,700, for the three month periods,  respectively. |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| First Six Months 2008 vs. First Six Months2007. |
|-------------------------------------------------|

| Revenues. We did not generate any revenues during either the First      Six Months 2008 or the First Six Months 2007. We do not expect to generate      revenues during the remainder of 2008, unless and until we acquire an      existing ethanol production facility. Although we are actively pursuing      the acquisition of one or more operating ethanol production facilities, we      cannot predict whether we will be successful in these  efforts. |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Expenses. Our cash outlays for operating expenses during the First      Six Months 2008 were $447,373, down from $547,365 for the First Six Months      2007. Our non-cash operating expenses, which include stock issued for      services and options issued for services, totalled $790,993 for the First      Six Months 2008 compared to $750,515 for the First Six Months    2007. |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Financial Condition |
|---------------------|

| At June 30, 2008, we had $292,270 in cash and working capital of      $195,585. These positions are down from $612,888 and $581,533 at December      31, 2007, respectively. Our current cash position is adequate to sustain      our current level of operations for the remainder of 2008 and the first      three months of 2009. However, as discussed below, we will be required to      obtain additional capital to pursue current business opportunities and      otherwise to pursue our complete plan ofbusiness. |
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| Management’s Plans Relating to FutureLiquidity |
|------------------------------------------------------|

| We currently possess approximately $292,000 in cash, a level of      capital sufficient to sustain our current operations for the remainder of      2008 and the first three months of 2009. However, we will require      substantial additional capital to purchase one or more existing ethanol      production facilities or to construct the Manchester facility. Our      management believes it will be able to secure the financing, in the form      of debt, equity or a combination thereof, necessary to complete these      opportunities. To this end, we have retained Trinity Capital, Los Angeles,      California, as our investment banker. In addition, we are seeking an      investment partner for our enzyme venture. To date, we have not received a      commitment for an equity investment or a loan in any amount. Should we      fail to obtain such financing, our plan of business would likely be      unsuccessful and we may be forced to ceaseoperations. |
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| During the remainder of 2008, we intend to commit a small portion of      our current capital to our recently announced alliance with a cellulosic      biotech company. It is likely that this venture will require approximately      $1.5 million over the next 24 months to complete the development of up to      ten market-ready enzymes. The needed funding will be sought from third      parties. Currently, there is no arrangement with any person for the needed      funding. There is no assurance that we will be successful in developing      and commercializing any enzyme products. |
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| Capital Expenditures |
|----------------------|

| During the First Six Months 2008, our capital expenditures were      $7,332. During the First Six Months 2007, we purchased approximately 150      acres of real property located in Manchester, Iowa, for approximately      $951,000 in cash. We intend to construct an ethanol production facility on      this site. Should we obtain the capital required to build the Manchester      facility or to purchase an existing ethanol production facility, our      capital expenditures will be significant. However, we cannot predict the      exact amount of these potentialexpenditures. |
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| Item 3. Quantitative and Qualitative Disclosures About Market      Risk. |
|--------------------------------------------------------------------------|

| Not applicable. |
|-----------------|

| Item 4T. Controls and Procedures. |
|-----------------------------------|

| During the first three months of 2008, our Chief Executive Officer      and Acting Chief Financial Officer reviewed and evaluated the      effectiveness of our disclosure controls and procedures (as defined in the      Securities Exchange Act of 1934 Rules 240.13a-14(c) and 15d-14(c)). Based      on his review and evaluation, our Chief Executive Officer and Acting Chief      Financial Officer determined that our disclosure controls and procedures      (as defined in the Securities Exchange Act of 1934 Rules 240.13a-14(c) and      15d-14(c)) were not, at that time, effective in timely alerting him and      other members of management to material information about our company      required to be disclosed by us in our periodic reports that we file or      submit under the Securities Exchange Act of 1934. To assure proper      financial controls and procedures in the future, we have recently      implemented certain changes to our financial reporting procedures,      including, a weekly review by our management of all financial transactions      and the general ledger entries associatedtherewith. |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Except as set forth in the foregoing paragraphs, there have not been      any significant changes in our internal controls over financial reporting      (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the      Securities Exchange Act of 1934) during the fiscal quarter to which this      report relates that have materially affected, or are reasonably likely to      materially affect, our internal control over financial  reporting. |
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|   |
|--------|

| PART II - OTHER  INFORMATION |
|------------------------------|

| Item 1. Legal Proceedings. |
|----------------------------|

| We are not currently involved in any legal  proceedings. |
|----------------------------------------------------------|

| Item 2. Unregistered Sales of Equity Securities and Use of      Proceeds. |
|---------------------------------------------------------------------------|

| None which have not been previouslyreported. |
|----------------------------------------------|

| Item 3. Defaults upon SeniorSecurities. |
|-----------------------------------------|

| None. |
|-------|

| Item 4. Submission of Matters to a Vote of Security  Holders. |
|---------------------------------------------------------------|

| No matter was submitted to our shareholders, during the three months      ended June 30, 2008. In April 2007, holders of approximately 60% of our      common stock, acting by written consent in lieu of a meeting, approved an      amendment to our amended and restated certificate of incorporation,      whereby our authorized capital shares would be increased to 700,000,000      shares of common stock and 50,000,000 shares of preferred stock. This      amendment to our amended and restated certificate of incorporation will be      effected in the near future. |
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| Item 5. Other Information. |
|----------------------------|

| None. |
|-------|

| Item 6. Exhibits. |
|-------------------|

|   | Exhibit No. |   | Description |
|--------|-------------|--------|-------------|

|   | 31.1 * |   | Certification of Chief Executive Officer required by Rule 13a-14(a)      or Rule 15d-14(b) |
|--------|--------|--------|--------------------------------------------------------------------------------------------|

|   | 31.2 * |   | Certification of Chief Accounting Officer required by Rule 13a-14(a)      or Rule 15d-14(b) |
|--------|--------|--------|---------------------------------------------------------------------------------------------|

|   | 32.1 * |   | Certification of Chief Executive Officer Pursuant to 18 U.S.C.      Section 1350 |
|--------|--------|--------|----------------------------------------------------------------------------------|

|   | 32.1 * |   | Certification of Chief Accounting Officer Pursuant to 18 U.S.C.      Section 1350 |
|--------|--------|--------|-----------------------------------------------------------------------------------|

|   | * filed herewith. |
|--------|-------------------|

|   |
|--------|

| SIGNATURES |
|------------|

| In accordance with the requirements of the Securities Exchange Act of      1934, Registrant has duly caused this report to be signed on its behalf by      the undersigned, hereunto duly authorized. |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |
|--------|

| Date: August 19, 2008. | ALL FUELS & ENERGY COMPANY |
|------------------------|--------------------------------|

|   |
|--------|

|   | By: | /s/ DEAN E. SUKOWATEY |   |
|--------|-----|-----------------------|--------|

|   | Dean E. Sukowatey |   |
|--------|-------------------|--------|

|   | President and Acting Chief FinancialOfficer |
|--------|---------------------------------------------|