SECURITIES AND EXCHANGE COMMISSION

                   Washington, D.C.  20549


                          FORM 10-Q


     QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE
               SECURITIES EXCHANGE ACT OF 1934

      For Quarter Ended                  June 30, 2005

      Commission file number             33-56574


                       DIASENSE, INC.
   (Exact name of registrant as specified in its charter)



   Pennsylvania                                25-1605848
  (State or other jurisdiction               (IRS Employer
of incorporation or organization)        Identification no.)


  2275 Swallow Hill Road, Bldg. 2500; Pittsburgh, PA 15220
 (Address of principal executive offices)       ( Zip Code)

                       (412) 279-1059
     Registrant'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

     As  of  June  30, 2005, 22,980,051 shares of  Diasense,
Inc. common stock, par value $.01 were outstanding.






<PAGE>2


 					   DIASENSE,INC.
                         (A Development Stage Company)

                          Consolidated Balance Sheets


<TABLE>
<CAPTION>

                                                  (Unaudited)
                                                    June 30,     September 30,
               ASSETS                                 2005           2004
                                                   -----------    -----------
Current assets
   Cash							   $       817    $         -
   Due from Diabecore                                   14,118              -

Other Assets
  Investment                                                 -              -
                                                   -----------     ----------
               TOTAL ASSETS                        $    14,935    $         -
                                                   ===========     ==========

               LIABILITIES and STOCKHOLDERS' EQUITY (DEFICIENCY)

Current liabilities
  Accounts payable                                 $     1,000     $    5,000
  Accrued interest on demand notes                     114,957              0
  Demand notes payable to majority shareholder       1,972,936      1,954,936
                                                     -----------    -----------
               Total current liabilities             2,088,893      1,959,936


Stockholders' equity (deficiency)
  Preferred stock, 1,000,000 shares authorized,
   none issued.                                              -              -
  Common stock, 40,000,000 shares
   of $.01 par value authorized; issued and
   outstanding 22,980,051 at June 30, 2005 and
   September 30, 2004                                  229,801        229,801
  Additional paid-in capital                        43,837,034     41,509,499
  Warrants                                           1,501,543      3,827,478
  Deficit accumulated during the  development stage(47,642,336)   (47,526,714)
                                                    -----------    -----------
                                                    (2,073,958)    (1,959,936)
                                                    -----------    -----------
TOTAL LIABILITIES AND
  STOCKHOLDERS'EQUITY (DEFICIENCY)                 $    14,935    $         -
                                                    ===========    ===========
<FN>

The accompanying notes are an integral part of this statement.

<PAGE>3
                                 Diasense, Inc.
                         (A Development Stage Company)

                      CONSOLIDATED STATEMENTS OF OPERATIONS


<CAPTION>

                                         For the nine months ended   For the three months ended         From July 5, 1989
                                               June 30,                     June 30,                    (inception) thru
                                          2005        2004            2005             2004              June 30, 2005
                                       ---------    ---------     -----------       -----------         ----------------
<S>                                   <C>         <C>            <C>                <C>                <C>

Research and development expenses     $    -       $     -        $      -          $      -             $ 10,556,405

General and administrative expenses      57,138          -             27,885              -               16,933,897

Warrant extensions                         -             -               -                 -               17,890,676

Technology and patent rights acquired      -             -               -                 -                2,650,000

Interest expense                        114,957          -             39,861              -                  126,682

Loss on unconsolidated subsidiaries        -             -               -                 -                  575,412

Impairment Loss                            -             -               -                 -                  690,124

Amortization of Goodwill                   -             -               -                 -                  535,057

Other income                               -             -               -                 -               (1,042,997)

Other expense                              -             -               -                 -                   37,405

Gain from sale of Diabecore Stock       (56,473)         -            (56,473)             -                  (56,473)

Gain from sale of MicroIslet Stock         -             -               -                 -               (1,283,852)
                                       ----------   ---------     -----------       -----------         ---------------
Net loss                              $(115,622)   $     -        $   (11,273)      $      -             $(47,612,336)
                                       ==========   =========     ===========       ===========         ===============
Net loss per common share             $   (0.01)   $     -        $     (0.00)      $      -             $      (2.27)
                                       ==========   =========     ===========       ===========         ===============

<FN>
The accompanying notes are an integral part of this statement.

</TABLE>
<PAGE>4
<TABLE>

                                 Diasense, Inc.
                         (A Development Stage Company)

                      CONSOLIDATED STATEMENT OF CASH FLOWS

<CAPTION>

                                         For the nine months ended    For the three months ended   From July 5, 1989
                                         June 30,         June 30,    June 30,           June 30,  (inception) thru
                                          2005              2004        2005                2004      June 30, 2005
                                         -------------------------   ----------------------------  ------------------
<S>                                     <C>          <C>            <C>             <C>            <C>

Cash flows from operating activities:
 Net income (loss)                       $   (115,622)  $       -    $    (11,273)   $        -     $  (47,612,336)
 Adjustments to reconcile net loss to net
 cash used by operating activities:
  Depreciation                                   -              -            -                -             90,047
  Amortization                                   -              -            -                -            535,057
  Impairment loss                                -              -            -                -            704,491
  Gain on sale of MicroIslet stock               -              -            -                -         (1,283,852)
  Gain on sale of Diabecore stock             (56,473)          -         (56,473)            -            (56,473)
  Loss on unconsolidated subsidiaries            -              -            -                -            575,412
  Stock issued in exchange for services          -              -            -                -            138,950
  Stk issued for License & Marketing Agreement   -              -            -                -             80,000
  Warrants issued for services                  1,600           -           1,600             -            515,515
  Warrant extensions                             -              -            -                -         17,890,676
  Inventory deposit - BICO                       -              -            -                -         (1,000,000)
  Increase in accrued interest                114,957           -          39,861             -            114,957
  Increase (decrease)in accounts payable       (4,000)          -          (4,000)            -              1,000
                                            ----------     ---------     ---------      -----------  ---------------
Net cash used in operating activities         (59,538)          -         (30,285)            -        (29,306,556)

Cash flows from investing activities:
  Disposal of property and equipment             -              -            -                -            175,000
  Purchase of property and equipment             -              -            -                -           (279,413)
  Investment - MicroIslet                        -              -            -                -         (1,600,000)
  Investment - Diabecore                         -              -            -                -           (987,468)
  Proceeds from sale of MicroIslet stock         -              -            -                -          2,070,726
  Proceeds from sale of Diabecore stock        42,355           -          42,355             -             42,355
  Increasein notes rec-related parties           -              -            -                -           (125,000)
  Increasein interest rec-related parties        -              -            -                -            (13,538)
                                           ----------     ---------     ---------      -----------  ----------------
Net cash provided by (used in)
    investing activities                       42,355           -          42,355             -           (717,338)

Cash flows from financing activities:
  Proceeds from notes payable                  48,000           -          15,000             -             48,000
  Payments on note payable                    (30,000)          -         (30,000)            -            (30,000)
  Advances to BICO                               -              -            -                -         (7,498,369)
  Repayment of advances to BICO                  -              -            -                -          9,203,493
  Advances from BICO, net                        -              -            -                -         14,496,167
  Repayment of advances from BICO                -              -            -                -         (2,041,231)
  Proceeds from issuance of common stock         -              -            -                -         10,971,834
  Proceeds from issuance of common stk to BICO   -              -            -                -          4,200,000
  Proceeds from warrants exercised               -              -            -                -            118,066
  Purchase from treasury stock                   -              -            -                -            (35,000)
  Proceeds from Regulation S                     -              -            -                -            288,751
  Proceeds from issuance of notes payable        -              -            -                -            303,000
                                           ----------     ---------     ---------      -----------  ----------------
Net cash provided by financing activities      18,000           -          15,000             -         30,024,711
                                           ----------     ---------     ---------      -----------  ----------------
Net increase (decrease)in cash and
    cash equiv.                                   817           -          (2,930)            -                817
Cash and cash equivalents at beg of period       -              -           3,747             -                  -
                                           ----------     ---------     ---------      -----------  ----------------
Cash and cash equivalents at end
    of period                             $       817    $      -      $      817     $       -     $          817
                                           ==========     =========     =========      ===========   ===============

The accompanying notes are an integral part of this statement.

</TABLE>







                    DIASENSE, INC.

         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE A - Basis of Presentation

The accompanying financial statements of Diasense, Inc. (the
"Company")  have been prepared in accordance with  generally
accepted   accounting  principles  for   interim   financial
information, and with the instructions to Form 10-Q and Rule
10-01 Regulation S-X.  Accordingly, they do not include  all
of  the  information  and footnotes  required  by  generally
accepted   accounting  principles  for  complete   financial
statements.   In the opinion of management, all  adjustments
(consisting   of   normal  recurring  accruals)   considered
necessary  for a fair presentation have been included.   For
further  information, refer to the financial statements  and
footnotes included in the Company's annual report on Form 10-
K for the fiscal year ended September 30, 2004.

NOTE B - Organization

The  Company was incorporated on July 5, 1989 as  a  wholly-
owned   subsidiary  of  BICO,  Inc.  (parent).   BICO  owned
approximately 52% of the stock of the Company until July 23,
2004  when  BICO  sold  its  entire  ownership  interest  to
Dominion  Assets, LLC.  The Company's activities  have  been
focused on developing a noninvasive glucose sensor (Sensor).
The  sensor would use infrared technology to measure glucose
levels  in blood without requiring the user to take a  blood
sample.  All  of these activities were curtailed  when  BICO
ceased  operations and filed for Chapter  11  bankruptcy  in
March 2003 but were resumed in April 2005.

NOTE C - Net Loss Per Common Share

Net  loss per common share is based on the weighted  average
number  of  outstanding  common shares,  which  amounted  to
22,980,051  and  22,980,051 for the periods ended  June  30,
2005  and June, 2004, respectively. The loss per share  does
not  include common stock equivalents since the effect would
be anti-dilutive.

From July 5, 1989 (inception) to June 30, 2005, net loss per
common  share  is  based on the weighted average  number  of
common  shares  outstanding and the number of common  shares
issuable  on  the exercise of 1,708,000 warrants  issued  in
1992; reduced by 488,000 common shares that were assumed  to
have  been purchased with the proceeds from the exercise  of
the  warrants at an assumed price of $3.50 per  share.   The
inclusion  of the warrants in the loss per share calculation
is  required  by  the rules of the Securities  and  Exchange
Commission  relative to the initial registration  statement,
which  included  the Company's financial statements  through
the period ended March 31, 1993.  The registration statement
became effective July 19, 1993.  The weighted average number
of  common shares including the effect of the conversion  of
the warrants amounted to 21,012,690 for the period from July
5, 1989 (inception) to June 30, 2005.

NOTE D - Operations

In April 2005, Diasense resumed development of the Sensor
but has not, as yet, achieved a commercially marketable
product. The ability of Diasense to continue in existence is
dependent on its having sufficient financial resources to
maintain operations, to complete the research and
development necessary to successfully bring the Sensor to
market, and for marketplace acceptance. Diasense has no
other commercial products and is dependent on the successful
development of the Sensor technology. Diasense has had no
sales of its common stock over the last five fiscal years.
Until BICO's bankruptcy in March 2003, Diasense's operations
were funded by advances from BICO. Since the sale of BICO's
interest in Diasense to Dominion Assets, LLC (Dominion)
funding has been provided by $48,000 in demand loans from
Dominion and from $42,355 proceeds from the sale of
Diasense's interest in Diabecore.

Diasense is in the development stage, and accordingly, it
has presented cumulative information on results of
operations, cash flows, and changes in stockholders' equity
since inception.

Diasense has incurred significant losses and negative cash
flows from operations from inception through June 30, 2005
and has a significant accumulated deficit as of June 30,
2005, raising substantial doubt about its ability to
continue as a going concern. Since 1997, Diasense had been
financially dependent upon BICO and therefore BICO's ability
to raise money through its stock sales to support its
operations. With the curtailment of funding from BICO due to
BICO's bankruptcy in March 2003, Diasense will be required
to find other funding in order to continue as a going
concern. Limited funding has been provided by Dominion but
it is uncertain to what extent Dominion will be able and/or
willing to continue such funding.

NOTE E - Diabecore Sale

In May 2005 Diasense sold its entire interest in Diabecore
Medical Inc. (Diabecore) back to Diabecore for a total
purchase price of $56,473 ($73,500 Canadian). Diasense
received $42,355 in May 2005. The balance of $14,118 is
recorded as a receivable on the Balance Sheet as of June 30,
2005.

NOTE F - Note Payble to Majority Shareholder

In connection with the purchase of the 52% ownership of
Diasense by Dominion Assets, LLC. from BICO, an intercompany
payable of $1,954,936 from Diasense to BICO was assigned to
Dominion Assets, LLC. (Dominion). This liability was
documented by a note payable on demand without interest.
After demand for payment was made by Dominion, the demand
note was amended effective September 28, 2004. Under the
terms of the amended demand note Diasense now owes a
principle amount of $1,954,936 with interest calculated at a
rate of 8% per annum. The indebtedness is collateralized by
all of Diasense's assets. During the nine months ended June
30, 2005, Dominion loaned Diasense an additional $48,000 to
provide funding for general and administrative expenses and
to resume the development of the Sensor. This amount is also
payable on demand with interest accrued at a rate of 8%.
During quarter ended June 30, 2005 Diasense repaid $30,000
of the note payable to Dominion.

NOTE G - Warrants Issued to Consultants

In the quarter ended June 30, 2005 Diasense entered into two
Independent Consulting Agreements related to its efforts to
develop the Sensor. Upon execution of the agreements, each
of the independent consultants received warrants to purchase
up to 1,227,000 shares of the Company's common stock at an
exercise price of $.01 per share. Of each 1,227,000 warrant,
100,000 warrants were immediately exerciseable with the
remaining warrants vesting upon completion of various stages
of the Sensor development.


Management's Discussion and Analysis of Financial Condition
and Cash Flows

Liquidity and Capital Resources

Our funding for the nine months ended June 30, 2005 came
from $48,000 advances on a demand loan from our majority
shareholder, Dominion Assets, LLC (Dominion) and $42,355
received on the sale of our interest in Diabecore. We do not
know if Dominion will continue to be willing or able to
continue financing our operations.

Because we still don't have any revenue sources, we will
have to find additional financing that we'll use to finance
development of, and proceed to manufacture, our noninvasive
glucose sensor. In prior years, we were dependent upon BICO
to support all our sensor-related activity, but BICO
discontinued our funding in 2002, filed bankruptcy in March
2003 and sold its interest in our Company in May 2004. As a
result, we had to stop all our activity. However, in April
2005 we resumed development of the Sensor but we have not as
yet achieved a commercially marketable product. If we are
not able to obtain additional financing from Dominion or
other outside sources we will not be able to continue
operations.

Results of Operations

We  did  not have any operations during the first six months
of the nine month period ended June 30, 2005. In the quarter
ended June 30, 2005 we resumed development of the Sensor. In
June  2005  we  filed  a  provisional  patent  on  the  next
generation of the Diasensorr.

General  and  administrative expenses  totaled  $27,885  and
$57,138  during the three and nine month period  ended  June
30,  2005.  The increase resulted primarily from efforts  to
bring  our  financial reporting current, to restore  certain
patent rights and to restore development efforts related  to
the Sensor.

Interest  expense of $39,861 and $114,957 was recognized  in
the  three and nine month periods ended June 30, 2005  as  a
result  of  the  accrual  of interest  on  our  demand  note
obligations  to  our majority shareholder (Dominion  Assets,
LLC.)  We  had  no  interest  bearing  obligations  for  the
corresponding periods in our prior fiscal year.

In May 2005 we sold our entire interest in Diabecore Medical
Inc.  (Diabecore)  back to Diabecore for  a  total  purchase
price of $56,473 ($73,500 Canadian). We received
$42,355 in May 2005.

In April 2005 the Non Circumvention and Consulting Agreement
which  we  had with Keith R. Keeling, President of  Dominion
Assets,  LLC  (our majority shareholder) was  terminated  by
mutual agreement.



                PART II -- OTHER INFORMATION

Item 1.        Legal Proceedings
               None.

Item 2.        Changes in Securities
               None.

Item 3.        Defaults Upon Senior Securities
               None.

Item 4.        Submission of Matters to a Vote of Security
               Holders
               None.

Item 5.        Other Information
               None.

Item 6.        Reports on Form 8-K
               None.





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 on this 15th day of August 2005.


                              DIASENSE, INC.

                              By /s/ Anthony Paterra
                                   Anthony Paterra
                                   CEO and Director
                                   (principal
                                   executive officer,
                                   principal financial
                                   officer and principal
                                   accounting officer)