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                  March 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   X        No

     As  of  March 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)
                                                    March 31,   September 30,
               ASSETS                                 2003           2002
                                                   -----------    -----------
Current assets
  Prepaid expenses                                 $         -    $       868
                                                   -----------    -----------
         Total current assets                                -            868

Property and equipment - at cost
  Furniture and fixtures                                     -         42,750
                                                  ------------    -----------
                                                             -         42,750
  Less accumulated depreciation                              -         42,709
                                                  ------------    -----------
                                                             -             41
                                                   -----------    -----------

Other Assets
  Investment in unconsolidated subsidiaries                  -        160,461
  Security Deposit                                           -            238
                                                   -----------     ----------
                                                             -        160,699
                                                   -----------     ----------
               TOTAL ASSETS                        $         -    $   161,608
                                                   ===========     ==========

               LIABILITIES and STOCKHOLDERS' EQUITY (DEFICIENCY)

Current liabilities
  Accounts payable                                 $     5,000     $   43,099
  Due to BICO                                        1,954,936      2,630,184
  Accrued payroll and withholdings                           -        167,942
                                                   -----------    -----------
               Total current liabilities             1,959,936      2,841,225

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 March 31, 2003 and
   Sep. 30, 2002                                       229,801        229,801
  Additional paid-in capital                        32,144,821     30,018,353
  Warrants                                          13,192,156     15,318,624
  Deficit accumulated during the  development stage(47,526,714)   (48,246,395)
                                                    -----------    -----------
                                                    (1,959,936)    (2,679,617)
                                                    -----------    -----------
TOTAL LIABILITIES AND
  STOCKHOLDERS'EQUITY (DEFICIENCY)                 $         -    $   161,608
                                                    ===========    ===========
<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 six months ended    For the three months ended         From July 5, 1989
                                              March 31,                    March 31,                     (inception) thru
                                         2003        2002            2003             2002               March 31, 2003
                                      ---------    ---------      ----------       -----------         ----------------

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

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

General and administrative expenses      96,173       269,445           2,147            52,371            16,876,759

Warrant extensions                         -             -               -                 -               17,890,676

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

Interest expense                           -             -               -                 -                   11,725

Loss on unconsolidated subsidiaries        -          212,769            -              138,786               575,412

Impairment Loss                            -             -               -                 -                  690,124

Amortization of Goodwill                   -             -               -                 -                  535,057

Other income                           (284,974)      (31,050)       (269,449)          (15,525)           (1,042,997)

Other expense                              -             -               -                 -                   37,405

Gain from sale of MicroIslet Stock     (530,880)         -               -                 -               (1,283,852)
                                       ----------   ---------     -----------       --------------      ---------------
Net income (loss)                     $ 719,682    $ (451,164)    $   267,302       $  (175,632)         $(47,496,714)
                                       ==========   =========     ===========       =============       ===============
Net income (loss) per common share    $    0.03    $    (0.02)    $      0.01       $      (.01)         $      (2.32)
                                       ==========   =========     ===========       =============       ===============

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

Cash flows from operating activities:
 Net income (loss)                       $ 719,681    $  (451,164)   $ 267,302       $ (175,632)    $  (47,496,714)
 Adjustments to reconcile net loss to net
 cash used by operating activities:
  Depreciation                                  41          2,579            -            1,003             90,047
  Amortization                                   -              -            -                -            535,057
  Impairment loss                                -              -            -                -            704,491
  Gain on sale of MicroIslet stock        (530,880)             -            -                -         (1,283,852)
  Loss on unconsolidated subsidiaries            -        212,769            -          138,786            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      868         (8,299)       1,260            4,341                  -
  Decrease (increase) in rec. due from
    BICO subsidiaries                            -              -            -                -                  -
  Increase (decrease)in accounts payable   (38,099)        39,595     (101,507)          37,864              5,000
  Increase (decrease) in accrued payroll
    and withholdings                      (167,942)       122,171     (167,942)            (188)                 -
  Increase in other assets                     239              -            -                -                  -
                                          ----------     ---------     ---------      -----------  ----------------
Net cash provided for (used in)
    operating activities                   (16,092)       (82,512)        (887)           6,174        (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
  Increasein notes rec-related parties           -              -            -                -           (125,000)
  Increasein 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                        -         82,512            -           (6,174)        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 provided by (used in)financing
    activities                            (675,248)        82,512            -           (6,174)        30,006,711
                                          ----------     ---------     ---------      -----------  ----------------
Net decrease in cash and cash equiv.             -              -         (887)               -                  -
Cash and cash equivalents at beg of period       -              -          887                -                  -
                                          ----------     ---------     ------------   -----------   ---------------
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 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,
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% 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 - Net Income (Loss) Per Common Share

Net  income  (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
March  31, 2003 and March 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  March 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 20,487,627 for the period from July
5, 1989 (inception) to March 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 six months ended March
31, 2003, 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 March 31, 2003
and has a significant accumulated deficit as of March 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.

Effective January 1, 2002, Fred E. Cooper, former CEO and
Anthony J. Feola, Diasense's former Chief Operating Officer,
agreed to waive any rights to compensation through December
31, 2002. In July 2002, both Mssrs. Cooper and Feola
resigned as both officers and directors of BICO and all of
BICO's affiliates including Diasense.

NOTE E - Investments

In December 2002, Diasense sold its remaining 706,679 shares
of  MicroIslet common stock for $691,340. Again 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 - Lease

In December 1998 Diasense sold its building and leased it
back under an agreement which required monthly rent of
$5,750 for five years beginning on January 1, 1999.
Minimum rental payments under this lease are $69,000 for
each of the fiscal years ending on September 30, 2002 and
2003 and $17,250 for the final three months of the lease
concluding December 31, 2003. Diasense paid a security
deposit of $17,250 upon entering into this lease
agreement. At March 31, 2003 the security deposit had
been used to partially offset the amount due on this
lease. Subsequent to March 31, 2003 Diasense and the
landlord agreed to settle all obligations under this
lease for a total payment of $5,000.

NOTE G - Other Income

Other income for the six months ended March 31, 2003
includes $269,449 in forgiveness of debt and $15,525 of
rental income from BICO for office space.

NOTE H - 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 BI"CO 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% 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 six months ended March 31,
2003 of $691,340 came from the sale of our remaining shares
of MicroIslet stock in the three months ended December 31,
2003. We used $675,248 to repay advances previously received
from BICO. The remaining cash was used to pay accounts
payable.

     During the six months ended March 31, 2002, funds were
transferred to Diasense from BICO to provide working
capital. Theses funds were used in operating activities.

     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

      General  and  administrative expenses totaled  $96,173
during  the  six months ended March 31, 2003 as compared  to
$269,445  during the six months ended March  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 March 31,  2003
includes  $269,449  in forgiveness of debt  and  $15,225  of
rental  income.  Other income for the three and  six  months
ended  March  31, 2002 consists of $15,525  and  $31,050  of
rental  income  respectively.  The  rental  income  for  all
periods was from BICO and its subsidiaries for office space.

     We  had  losses  from our unconsolidated  subsidiaries,
Diabecore Medical and MicroIslet, during the three  and  six
month periods ended March 31, 2002.

Other Significant Events

     In connection with the purchase of the 52% 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% 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
                                   CEO and Director(principal
                                   executive officer,principal
				   financial officer and
                                   principal accounting
                                   officer)