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                  December 31, 2003

    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            No   X

     As of December 31, 2003, 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)
                                                  December 31,   September 30,
               ASSETS                                 2003           2003
                                                   -----------    -----------
Current assets                                     $         -    $         -

Other assets
  Investment                                                 -              -
                                                   -----------    -----------

               TOTAL ASSETS                        $         -    $         -
                                                   ===========     ==========

               LIABILITIES and STOCKHOLDERS' EQUITY (DEFICIENCY)

Current liabilities
  Accounts payable                                 $     5,000     $   43,099
  Due to BICO                                        1,954,936      1,954,936
                                                   -----------    -----------
               Total current liabilities             1,954,936      1,959,936



Commitment and Contingencies

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 Dec. 31, 2003 and
   Sep. 30, 2003                                       229,801        229,801
  Additional paid-in capital                        35,373,206     33,327,775
  Warrants                                           9,963,771     12,009,202
  Deficit accumulated during the  development stage(47,526,714)   (47,526,714)
                                                    -----------    -----------
                                                    (1,959,936)    (1,959,936)
                                                    -----------    -----------
TOTAL LIABILITIES AND
  STOCKHOLDERS'EQUITY (DEFICIENCY)                 $         -    $         -
                                                    ===========    ===========
<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                 For the              From July 5, 1989
                                          three months ended      three months ended        (inception) thru
                                           December 31, 2003       December 31, 2002         December 31, 2003
                                          ------------------      ------------------        ------------------

<S>                                      <C>                     <C>                       <C>

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

General and administrative expenses            -                          94,025                 16,876,759

Warrant extensions                             -                            -                    17,890,676

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

Interest expense                               -                            -                        11,725

Loss on unconsolidated subsidiaries            -                            -                       575,412

Impairment Loss                                -                            -                       690,124

Amortization of Goodwill                       -                            -                       535,057

Other income                                   -                         (15,525)                (1,042,997)

Other expense                                  -                            -                        37,405

Gain from sale of MicroIslet Stock             -                        (530,880)                (1,283,852)
                                          ---------------         -----------------         ------------------
Net income (loss)                         $    -                  $      452,380               $(47,496,714)
                                          ===============         =================         ==================
Net income (loss) per common share        $   0.00                $         0.02               $      (2.36)
                                          ===============         =================         ==================

<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               For the               From July 5, 1989
                                            three months ended      three months ended       (inception) thru
                                            December 31, 2003       December 31, 2002        December 31, 2003
                                           -------------------     -------------------      -------------------
<S>                                          <C>                     <C>                      <C>

Cash flows from operating activities:
 Net income (loss)                             $    -                 $     452,380            $  (47,496,714)
 Adjustments to reconcile net loss to net
 cash used by operating activities:
  Depreciation                                      -                            41                    90,047
  Amortization                                      -                          -                      535,057
  Impairment loss                                   -                          -                      704,491
  Gain on sale of MicroIslet stock                  -                      (530,880)               (1,283,852)
  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                      -                          -                      513,915
  Warrant extensions                                -                          -                   17,890,676
  Inventory deposit - BICO                          -                          -                   (1,000,000)
  (Increase) decrease in prepaid expenses           -                          (392)                     -
  Increase in accounts payable                      -                        63,408                     5,000
  (Increase) decrease in other assets               -                           238                      -
                                           -------------------     -------------------      -------------------
Net cash used in operating activities               -                       (15,205)              (29,247,018)

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            -                       691,340                 2,070,726
  (Increase) in notes rec-related parties           -                          -                     (125,000)
  (Increase) in interest rec-related parties        -                          -                      (13,538)
                                           -------------------     -------------------      -------------------
Net cash used in investing activities               -                       691,340                  (759,693)

Cash flows from financing activities:
  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                   -                      (675,248)                (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 (used in)financing activities              -                      (675,248)                30,006,711
                                           -------------------     -------------------      -------------------
Net increase in cash and cash equiv.                -                           887                       -
Cash and cash equivalents at beg of period          -                          -                          -
                                           -------------------     -------------------      -------------------
Cash and cash equivalents at end
    of period                              $        -              $           -            $             -
                                           ===================     ===================      ===================

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
Article 10-01 of 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,
2002.

NOTE B - Organization

The  Company was incorporated on July 5, 1989 as  a  wholly-
owned   subsidiary  of  BICO,  Inc.  (parent).   BICO  owned
approximately  52  percent 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 electromagnetic technology to
measure glucose levels in blood without requiring the user to
take a blood   sample.  However,  all  of  these  activities
were curtailed when BICO ceased operations and filed for
Chapter 11 bankruptcy in March 2003.

NOTE C - Income - 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 December 31,
2003 and December 31, 2002, respectively. The loss per share
does not include common stock equivalents since the effect
would be anti-dilutive.

From July 5, 1989 (inception) to December 31, 2003, 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 20,680,858 for the period from July
5, 1989 (inception) to December 31, 2003.

NOTE D - Operations

Diasense has discontinued development of the Sensor and 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 restore and
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. The proceeds from the
sale of MicroIslet stock, during the three months ended
December 31, 2002, were used to reduce the amount payable to
BICO.

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 December 31,
2003 and has a significant accumulated deficit as of
December 31, 2003, raising substantial doubt about its
ability to continue as a going concern. Since 1997, Diasense
has 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. The Company plans to liquidate assets to the
extent necessary to continue operations.

NOTE E - Investments

In December 2002, Diasense sold its remaining 706,679 shares
of MicroIslet common stock for $691,340. A gain of $530,879
was recognized as a result of this sale. $561,340 of the
proceeds from the sale was used to reduce the amount owed by
Diasense to BICO.

NOTE F - Other Income

Other income for the three months ended December 31, 2003
includes $15,525 of rental income from BICO for office
space.

NOTE G - Subsequent Events

On July 23, 2004, BICO sold its entire ownership interest
(approximately 52%) to Dominion Assets, LLC.

In connection with this transaction, the intercompany
payable from Diasense to BICO was assigned to Dominion
Assets, LLC. This liability was documented by a note payable
on demand without interest.

After demand for payment was made by Dominion Assets, LLC
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 percent per annum. The indebtedness is collateralized
by all of Diasense s assets. Dominion Assets, LLC agreed to
the amendment.

On September 29, 2004, Diasense entered into a non-
circumvention and consulting fee agreement with Keith R.
Keeling, President of Dominion Assets, LLC (Diasense s
majority shareholder). Under the terms of the agreement Mr.
Keeling will assist in the sale of Diasense assets and will
receive upon funding of any such sale a fee equal to 5% of
the sale proceeds. Diasense agreed to work exclusively
through Mr. Keeling in connection with its sales of assets.


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

Liquidity and Capital Resources

     Our entire funding for the three months ended December
31, 2003 of $691,340 came from the sale of our remaining
shares of MicroIslet stock. We used $675,248 to repay
advances previously received from BICO. The remaining cash
was used to pay accounts payable.

     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. We ve had to stop all our activity, and
we won t be able to re-start it unless we can raise our own
money. If we are not able to obtain additional financing of
approximately $100,000 we will not be able to resume
operations.

Results of Operations

     We  did not have any operations during the three months
ended December 31, 2003.

     General  and  administrative expenses  totaled  $94,025
during  the  three  months  ended  December  31,  2002.  The
decrease  resulted  primarily  from  the  cessation  of  our
operations due to cash shortages.

     In  the  three  months  ended  December  31,  2002,  we
recognized  a  gain of $530,880 when we sold  our  remaining
MicroIslet stock. Those funds were used primarily to  offset
the amounts we owe BICO.

     Other  income  for the three months ended December  31,
2002 includes $15,225 of rental income from BICO.

Other Significant Events

     In connection with the purchase of the 52percent ownership of
Diasense on July 23, 2004 by Dominion Assets, LLC from BICO.
The intercompany payable from Diasense to BICO was assigned
to Dominion Assets, LLC. This liability was documented by a
note payable on demand without interest.

     After demand for payment was made by Dominion Assets,
LLC. 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 percent per annum. The indebtedness is
collateralized by all of Diasense s assets. Dominion Assets,
LLC agreed not to demand payment for a period of 180 days
following the effective date of the amendment.


                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 7th day of January 2005.


                              DIASENSE, INC.

                              By /s/ Anthony Paterra
                                     Anthony Paterra
                                     Chief Executive Officer
                                     and Director (principal
                                     executive officer,
                                     principal financial
                                     officer and principal
                                     accounting officer)