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**U.S.      Securities and Exchange Commission**

**Washington,      D.C. 20549**

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**FORM      10-QSB**

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| **[X]** | **Quarterly                Report Under Section 13 or 15(d) of The Securities Exchange Act of                1934                for the Quarterly Period Ended March 31,                2007** |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **[                 ]** | **Transition                Report Under Section 13 or 15(d) of The Securities Exchange Act of                1934                for the Transition Period from _______ to                _______** |
|------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Commission      File Number: 000-50155 **

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**NF      Energy Saving Corporation of America**

**F/K/A      DIAGNOSTIC CORPORATION OF AMERICA**

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| **Delaware**                                                                                        | **02-0563302**                                                            |
|-----------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------|
| **(State                or Other Jurisdiction of****incorporation                or organization)** | **(I.R.S.                Employer****Identification                No.)** |

**21-Jia      Bei Si Dong Road, Tie Xi Qu**

**Shen      Yang, P. R. China **

**(Address      of Principal Executive Offices) **

**(8624)      2560-9750**

**(Issuer’s      Telephone Number) **

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|   | Yes                [x] |   | No                [  ] |
|--------|------------------------|--------|-----------------------------|

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*Table          of Contents*

**CAUTIONARY      STATEMENT REGARDING FORWARD LOOKING INFORMATION**

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|   **TABLE                OF CONTENTS**                                                |   |
|-------------------------------------------------------------------------------------------------|--------|
|                                                                                            |   |
| **PART                I. FINANCIAL INFORMATION**                                                |   |
|                                                                                            |   |
|                                                                                            |   |
|                                                                                            |   |
| ITEM                1. FINANCIAL                STATEMENTS                                      | 4      |
|                                                                                            |   |
| ITEM                2. MANAGEMENT'S                DISCUSSION AND ANALYSIS OR PLAN OF OPERATION | 17     |
|                                                                                            |   |
| ITEM                3 CONTROLS                AND PROCEDURES                                    | 21     |
|                                                                                            |   |
| **PART                II. OTHER INFORMATION**                                                   |   |
|                                                                                            |   |
| ITEM                1. LEGAL                PROCEEDINGS                                         | 22     |
|                                                                                            |   |
| ITEM                2. CHANGES                IN SECURITIES AND USE OF PROCEEDS                 | 22     |
|                                                                                            |   |
| ITEM                5. OTHER                INFORMATION                                         | 22     |
|                                                                                            |   |
| ITEM                6. EXHIBITS                AND REPORTS ON FORM 8-K                          | 22     |
|                                                                                            |   |
| SIGNATURES                                                                                      | 23     |
|                                                                                            |   |
| INDEX                TO EXHIBITS                                                                | 24     |

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*Table          of Contents*

**ITEM      1.**
**FINANCIAL      STATEMENTS**

**NF        ENERGY SAVING CORPORATION OF AMERICA**

**(FORMERLY        DIAGNOSTIC CORPORATION OF AMERICA)**

**INDEX        TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**(UNAUDITED)**

|                                                                                                                                                                                                            |   | **Page** |   |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------|--------|--------|
|                                                                                                                                                                                                            |   |     |   |   |
| Condensed                  Consolidated Balance                  Sheet as of March 31, 2007                                                                                                                     |   | 5        |   |   |
|                                                                                                                                                                                                            |   |     |   |   |
| Condensed                  Consolidated Statement                  of                  Operations And Comprehensive Income for the Three Months Ended                  March 31,                  2007 and 2006 |   | 6        |   |   |
|                                                                                                                                                                                                            |   |     |   |   |
| Condensed                  Consolidated Statement                  of Cash Flows for the Three Months Ended March 31, 2007 and 2006                                                                             |   | 7        |   |   |
|                                                                                                                                                                                                            |   |     |   |   |
| Notes                  to Condensed Consolidated Financial Statements                                                                                                                                           |   | 8-16     |   |   |

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*Table            of Contents*

| **NF                  ENERGY SAVING CORPORATION OF AMERICA****(FORMERLY                  DIAGNOSTIC CORPORATION OF AMERICA)****CONDENSED                  CONSOLIDATED BALANCE SHEET****AS                  OF MARCH 31, 2007****(Currency                  expressed in United States Dollars (“US$”), except for number of                  shares)****(Unaudited)** |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                               |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                               |   | **2006** |   | March                  31, 2007 |   |
| **ASSETS**                                                                                                                                                                                                                                                                                                                                                                         |   |   |   |    |   |
| Current                  assets:                                                                                                                                                                                                                                                                                                                                                   |   |   |   |    |   |
| Cash                  and cash equivalents                                                                                                                                                                                                                                                                                                                                         |   | $ | 796,944 |   | $ | 36,006 |   |
| Accounts                  receivable, trade                                                                                                                                                                                                                                                                                                                                        |   |   | 1,398,031 |   |   | 1,990,488 |   |
| Inventories                                                                                                                                                                                                                                                                                                                                                                        |   |   | 1,812,184 |   |   | 2,187,051 |   |
| Prepayments                  and deposits                                                                                                                                                                                                                                                                                                                                          |   |   | 276,864 |   |   | 232,717 |   |
|                                                                                                                                                                                                                                                                                                                                                                               |   |   |   |   |   |   |   |
| Total                  current assets                                                                                                                                                                                                                                                                                                                                              |   |   | 4,284,023 |   |   | 4,446,262 |   |
|                                                                                                                                                                                                                                                                                                                                                                               |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                               |   |   |   |   |   |   |   |
| Plant                  and equipment, net                                                                                                                                                                                                                                                                                                                                          |   |   | 2,195,512 |   |   | 2,128,473 |   |
|                                                                                                                                                                                                                                                                                                                                                                               |   |   |   |   |   |   |   |
| **TOTAL                  ASSETS**                                                                                                                                                                                                                                                                                                                                                  |   | $ | 6,479,535 |   | $ | 6,574,735 |   |
|                                                                                                                                                                                                                                                                                                                                                                               |   |   |   |   |   |   |   |
| **LIABILITIES                  AND STOCKHOLDERS’ EQUITY**                                                                                                                                                                                                                                                                                                                    |   |   |   |   |   |   |   |
| Current                  liabilities:                                                                                                                                                                                                                                                                                                                                              |   |   |   |   |   |   |   |
| Accounts                  payable                                                                                                                                                                                                                                                                                                                                                  |   | $ | 676,898 |   | $ | 841,756 |   |
| Customer                  deposits                                                                                                                                                                                                                                                                                                                                                 |   |   | 17,661 |   |   | 34,510 |   |
| Other                  payables and accrued liabilities                                                                                                                                                                                                                                                                                                                            |   |   | 153,256 |   |   | 225,512 |   |
| Value                  added tax payable                                                                                                                                                                                                                                                                                                                                           |   |   | 25,871 |   |   | 34,366 |   |
|                                                                                                                                                                                                                                                                                                                                                                               |   |   |   |   |   |   |   |
| **TOTAL                  LIABILITIES**                                                                                                                                                                                                                                                                                                                                             |   |   | 1,251,755 |   |   | 1,136,144 |   |
|                                                                                                                                                                                                                                                                                                                                                                               |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                               |   |   |   |   |   |   |   |
| Stockholders’                  equity:                                                                                                                                                                                                                                                                                                                                       |   |   |   |   |   |   |   |
| Common                  stock, $0.001 par value; 50,000,000 shares authorized; 31,527,328                  shares                  issued and outstanding                                                                                                                                                                                                                          |   |   | 30,527 |   |   | 31,527 |   |
| Additional                  paid-in capital                                                                                                                                                                                                                                                                                                                                        |   |   | 4,335,932 |   |   | 4,844,932 |   |
| Deferred                  compensation                                                                                                                                                                                                                                                                                                                                             |   |   |   |   |   | (255,000 | ) |
| Statutory                  reserve                                                                                                                                                                                                                                                                                                                                                 |   |   | 115,139 |   |   | 115,139 |   |
| Accumulated                  other comprehensive income                                                                                                                                                                                                                                                                                                                            |   |   | 70,360 |   |   | 106,958 |   |
| Retained                  earnings                                                                                                                                                                                                                                                                                                                                                 |   |   | 675,822 |   |   | 595,035 |   |
|                                                                                                                                                                                                                                                                                                                                                                               |   |   |   |   |   |   |   |
| Total                  stockholders’ equity                                                                                                                                                                                                                                                                                                                                  |   |   | 5,227,780 |   |   | 5,438,591 |   |
|                                                                                                                                                                                                                                                                                                                                                                               |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                               |   |   |   |   |   |   |   |
| **TOTAL                  LIABILITIES AND STOCKHOLDERS’ EQUITY**                                                                                                                                                                                                                                                                                                              |   | $ | 6,479,535 |   | $ | 6,574,735 |   |

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*Table            of Contents*

| **NF                  ENERGY SAVING CORPORATION OF AMERICA****(FORMERLY                  DIAGNOSTIC CORPORATION OF AMERICA)****CONDENSED                  CONSOLIDATED STATEMENT OF OPERATIONS****AND                  COMPREHENSIVE INCOME****FOR                  THE THREE MONTHS ENDED MARCH 31, 2007 AND 2006****(Currency                  expressed in United States Dollars (“US$”), except for number of                  shares)****(Unaudited)** |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   | Three                  Months Ended March 31, |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   | 2007 |   | 2006 |   |
| **OPERATING                  REVENUES:**                                                                                                                                                                                                                                                                                                                                                                                                                                |   |    |   |    |   |
| Products                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   | $ | 932,251 |   | $ | 24,960 |   |
| Service                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |   | 70,235 |   |   | - |   |
| Total                  operating revenues                                                                                                                                                                                                                                                                                                                                                                                                                               |   |   | 1,002,486 |   |   | 24,960 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |   |   |   |   |   |   |
| **COST                  OF REVENUES:**                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |   |   |   |   |   |   |
| Cost                  of products                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |   | 741,231 |   |   | 8,252 |   |
| Cost                  of service                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |   | 36,224 |   |   | - |   |
| Total                  cost of revenues                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |   | 777,455 |   |   | 8,252 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |   |   |   |   |   |   |
| **GROSS                  PROFIT**                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |   | 225,031 |   |   | 16,708 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |   |   |   |   |   |   |
| **OPERATING                  EXPENSES:**                                                                                                                                                                                                                                                                                                                                                                                                                                |   |   |   |   |   |   |   |
| Stock-based                  compensation                                                                                                                                                                                                                                                                                                                                                                                                                               |   |   | 255,000 |   |   | - |   |
| Consulting                  and professional fees                                                                                                                                                                                                                                                                                                                                                                                                                       |   |   | 5,900 |   |   | - |   |
| General                  and administrative                                                                                                                                                                                                                                                                                                                                                                                                                             |   |   | 51,570 |   |   | 4,674 |   |
| Total                  operating expenses                                                                                                                                                                                                                                                                                                                                                                                                                               |   |   | 312,470 |   |   | 4,674 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |   |   |   |   |   |   |
| **(LOSS)                  INCOME FROM OPERATION**                                                                                                                                                                                                                                                                                                                                                                                                                       |   |   | (87,439 | ) |   | 12,034 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |   |   |   |   |   |   |
| **OTHER                  INCOME:**                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |   |   |   |   |   |   |
| Other                  income                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |   | 6,652 |   |   | - |   |
| Interest                  income                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |   | - |   |   | 110 |   |
| Total                  other income                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |   | 6,652 |   |   | 110 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |   |   |   |   |   |   |
| **(LOSS)                  INCOME BEFORE INCOME TAXES**                                                                                                                                                                                                                                                                                                                                                                                                                  |   |   | (80,787 | ) |   | 12,144 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |   |   |   |   |   |   |
| Income                  tax expense                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |   | - |   |   | - |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |   |   |   |   |   |   |
| **NET                  (LOSS) INCOME**                                                                                                                                                                                                                                                                                                                                                                                                                                  |   | $ | (80,787 | ) | $ | 12,144 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |   |   |   |   |   |   |
| Other                  comprehensive income:                                                                                                                                                                                                                                                                                                                                                                                                                            |   |   |   |   |   |   |   |
| -                  Foreign currency translation gain                                                                                                                                                                                                                                                                                                                                                                                                                    |   |   | 36,598 |   |   | 19 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |   |   |   |   |   |   |
| **COMPREHENSIVE                  (LOSS) INCOME**                                                                                                                                                                                                                                                                                                                                                                                                                        |   | $ | (44,189 | ) | $ | 12,163 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |   |   |   |   |   |   |
| Net                  (loss) income per share - Basic and diluted                                                                                                                                                                                                                                                                                                                                                                                                        |   | $ | (0.00 | ) | $ | 0.00 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |   |   |   |   |   |   |
| Weighted                  average number of shares outstanding during the period - Basic                  and                  diluted                                                                                                                                                                                                                                                                                                                                  |   |   | 31,249,550 |   |   | 3,877,328 |   |

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*Table            of Contents*

| **NF                  ENERGY SAVING CORPORATION OF AMERICA****(FORMERLY                  DIAGNOSTIC CORPORATION OF AMERICA)****CONDENSED                  CONSOLIDATED STATEMENT OF CASH FLOWS****FOR                  THE THREE MONTHS ENDED MARCH 31, 2007 AND 2006****(Currency                  expressed in United States Dollars (“US$”))****(Unaudited)** |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                         |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                         |   | Three                  Months Ended March 31, |   |
|                                                                                                                                                                                                                                                                                                                                                                         |   |  2007 |   | 2006 |   |
| **Cash                  flows from operating activities:**                                                                                                                                                                                                                                                                                                                   |   |    |   |    |   |
| Net                  (loss) income                                                                                                                                                                                                                                                                                                                                           |   | $ | (80,787 | ) | $ | 12,144 |   |
| Adjustments                  to reconcile net (loss) income to net cash used in operating                  activities:                                                                                                                                                                                                                                                       |
| Depreciation                                                                                                                                                                                                                                                                                                                                                                 |   |   | 56,709 |   |   | 17,976 |   |
| Gain                  on disposal of plant and equipment                                                                                                                                                                                                                                                                                                                     |   |   | (6,203 | ) |   | - |   |
| Stock-based                  compensation                                                                                                                                                                                                                                                                                                                                    |   |   | 255,000 |   |   | - |   |
| Change                  in operating assets and liabilities:                                                                                                                                                                                                                                                                                                                 |   |   |   |   |   |   |   |
| Accounts                  receivable                                                                                                                                                                                                                                                                                                                                         |   |   | (592,457 | ) |   | (26,931 | ) |
| Inventories                                                                                                                                                                                                                                                                                                                                                                  |   |   | (374,867 | ) |   | (557,119 | ) |
| Prepayments                  and deposits                                                                                                                                                                                                                                                                                                                                    |   |   | 44,147 |   |   | (1,996,485 | ) |
| Accounts                  payable                                                                                                                                                                                                                                                                                                                                            |   |   | 164,858 |   |   | 479,565 |   |
| Customer                  deposits                                                                                                                                                                                                                                                                                                                                           |   |   | 16,849 |   |   | 546 |   |
| Other                  payables and accrued liabilities                                                                                                                                                                                                                                                                                                                      |   |   | 72,255 |   |   | 655,182 |   |
| Income                  tax payable                                                                                                                                                                                                                                                                                                                                          |   |   | (378,068 | ) |   | - |   |
| Value                  added tax payable                                                                                                                                                                                                                                                                                                                                     |   |   | 8,495 |   |   | - |   |
|  Net                  cash used in operating activities                                                                                                                                                                                                                                                                                                                 |   |   | (814,069 | ) |   | (1,415,122 | ) |
|                                                                                                                                                                                                                                                                                                                                                                         |   |   |   |   |   |   |   |
| **Cash                  flows from investing activities:**                                                                                                                                                                                                                                                                                                                   |   |   |   |   |   |   |   |
| Purchase                  of plant and equipment                                                                                                                                                                                                                                                                                                                             |   |   | - |   |   | (5,995 | ) |
| Proceeds                  from disposal of plant and equipment                                                                                                                                                                                                                                                                                                               |   |   | 16,533 |   |   | - |   |
|  Net                  cash provided by (used in) investing activities                                                                                                                                                                                                                                                                                                   |   |   | 16,533 |   |   | (5,995 | ) |
|                                                                                                                                                                                                                                                                                                                                                                         |   |   |   |   |   |   |   |
| **Cash                  flows from financing activities:**                                                                                                                                                                                                                                                                                                                   |   |   |   |   |   |   |   |
| Proceeds                  from and additions to shareholder loans                                                                                                                                                                                                                                                                                                            |   |   | - |   |   | 1,872,159 |   |
| Capital                  contribution to paid-in capital                                                                                                                                                                                                                                                                                                                     |   |   | - |   |   | 124,370 |   |
|  Net                  cash provided by financing activities                                                                                                                                                                                                                                                                                                             |   |   | - |   |   | 1,996,529 |   |
|                                                                                                                                                                                                                                                                                                                                                                         |   |   |   |   |   |   |   |
| **Foreign                  currency translation adjustment**                                                                                                                                                                                                                                                                                                                 |   |   | 36,598 |   |   | 19 |   |
|                                                                                                                                                                                                                                                                                                                                                                         |   |   |   |   |   |   |   |
| **NET                  CHANGE IN CASH AND CASH EQUIVALENTS**                                                                                                                                                                                                                                                                                                                 |   |   | (760,938 | ) |   | 575,431 |   |
|                                                                                                                                                                                                                                                                                                                                                                         |   |   |   |   |   |   |   |
| **CASH                  AND CASH EQUIVALENTS, BEGINNING OF PERIOD**                                                                                                                                                                                                                                                                                                          |   |   | 796,944 |   |   | - |   |
|                                                                                                                                                                                                                                                                                                                                                                         |   |   |   |   |   |   |   |
| **CASH                  AND CASH EQUIVALENTS, END OF PERIOD**                                                                                                                                                                                                                                                                                                                |   | $ | 36,006 |   | $ | 575,431 |   |
|                                                                                                                                                                                                                                                                                                                                                                         |   |   |   |   |   |   |   |
| **SUPPLEMENTAL                  DISCLOSURE OF CASH FLOW INFORMATION:**                                                                                                                                                                                                                                                                                                       |
| Cash                  paid for income taxes                                                                                                                                                                                                                                                                                                                                  |   | $ | 390,005 |   | $ | - |   |
| Cash                  paid for interest expenses                                                                                                                                                                                                                                                                                                                             |   | $ | - |   | $ | - |   |
|                                                                                                                                                                                                                                                                                                                                                                         |   |   |   |   |   |   |   |
| **SUPPLEMENTAL                  DISCLOSURE OF NON-CASH TRANSACTIONS:**                                                                                                                                                                                                                                                                                                       |
| Plant                  and equipment in exchange for loan due to owners                                                                                                                                                                                                                                                                                                      |   | $ | - |   | $ | 2,237,001 |   |

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*Table            of Contents*

**NF          ENERGY SAVING CORPORATION OF AMERICA**

**(FORMERLY          DIAGNOSTIC CORPORATION OF AMERICA)**

**NOTES          TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**FOR          THE THREE MONTHS ENDED MARCH 31, 2007**

**(Currency          expressed in United States Dollars (“US$”))**

**(Unaudited)**

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**NOTE        **
**1**
**BASIS        OF PRESENTATION**

**NOTE        **
**2        **
**ORGANIZATION        AND BUSINESS BACKGROUND**

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*Table            of Contents*

**NF          ENERGY SAVING CORPORATION OF AMERICA**

**(FORMERLY            DIAGNOSTIC CORPORATION OF AMERICA)**

**NOTES            TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**FOR            THE THREE MONTHS ENDED MARCH 31, 2007**

**(Currency            expressed in United States Dollars (“US$”))**

**(Unaudited)**

----

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**NOTE        **
**3**
**SUMMARY        OF SIGNIFICANT ACCOUNTING POLICIES**

| l   | Basis                of presentation |
|---------------|--------------------------------------|
| l   | Use                of estimates |
|---------------|---------------------------------|
| l   | Basis                of consolidation |
|---------------|---------------------------------------|
| l   | Accounts                receivable |
|---------------|------------------------------------|
| l   | Inventories |
|---------------|-------------|
| l   | Plant                and equipment, net |
|---------------|-----------------------------------------|

|                                              | Depreciable                  life              |   | Residual                  value |
|---------------------------------------------------|------------------------------------------------|--------|---------------------------------|
| Plant                  and machinery              | 3                  -                  20 years |   | 5%                              |
| Furniture,                  fixture and equipment | 5                  -                  8 years  |   | 5%                              |

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*Table            of Contents*

**NF          ENERGY SAVING CORPORATION OF AMERICA**

**(FORMERLY            DIAGNOSTIC CORPORATION OF AMERICA)**

**NOTES            TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**FOR            THE THREE MONTHS ENDED MARCH 31, 2007**

**(Currency            expressed in United States Dollars (“US$”))**

**(Unaudited)**

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| l   | Impairment                of long-lived assets |
|---------------|------------------------------------------------|

*“Accounting        for the impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed        of”*

| **l  ** | Revenue                recognition |
|-------------------|------------------------------------|

*“Revenue        Recognition”*

| l   | Cost                of revenues |
|---------------|---------------------------------|

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*Table            of Contents*

**NF          ENERGY SAVING CORPORATION OF AMERICA**

**(FORMERLY            DIAGNOSTIC CORPORATION OF AMERICA)**

**NOTES            TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**FOR            THE THREE MONTHS ENDED MARCH 31, 2007**

**(Currency            expressed in United States Dollars (“US$”))**

**(Unaudited)**

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| l   | Stock-based                compensation |
|---------------|-----------------------------------------|

*“Accounting        for Stock-Based Compensation”*

| l   | Income                taxes |
|---------------|-----------------------------|

*“Interim        Financial Reporting”*
*“Accounting        for Income Taxes in Interim Periods”*

| l   | Comprehensive                (loss) income |
|---------------|--------------------------------------------|

*“Reporting        Comprehensive Income”*

| l   | Product                warranty |
|---------------|---------------------------------|
| l   | Net                (loss) income per share |
|---------------|--------------------------------------------|

*“Earnings        per Share”*

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*Table            of Contents*

**NF          ENERGY SAVING CORPORATION OF AMERICA**

**(FORMERLY            DIAGNOSTIC CORPORATION OF AMERICA)**

**NOTES            TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**FOR            THE THREE MONTHS ENDED MARCH 31, 2007**

**(Currency            expressed in United States Dollars (“US$”))**

**(Unaudited)**

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| l   | Foreign                currencies translation |
|---------------|-----------------------------------------------|
| l   | Segment                reporting |
|---------------|----------------------------------|

*“Disclosures        about Segments of an Enterprise and Related Information”*

| l   | Fair                value of financial instruments |
|---------------|----------------------------------------------------|

*“Disclosures        about Fair Value of Financial Instruments”*

| l   | Recently                issued accounting standards |
|---------------|-----------------------------------------------------|

*“The        Fair Value Option for Financial Assets and Financial Liabilities — Including an        Amendment of FASB Statement No. 115”*
*“Accounting        for Certain Investments in Debt and Equity Securities,”*

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*Table            of Contents*

**NF          ENERGY SAVING CORPORATION OF AMERICA**

**(FORMERLY            DIAGNOSTIC CORPORATION OF AMERICA)**

**NOTES            TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**FOR            THE THREE MONTHS ENDED MARCH 31, 2007**

**(Currency            expressed in United States Dollars (“US$”))**

**(Unaudited)**

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**NOTE        **
**4**
**ACCOUNTS        RECEIVABLE, TRADE**

**NOTE        **
**5**
**INVENTORIES**

|                            |   |                            |      |
|---------------------------------|--------|---------------------------------|-----------|
|                            |   | March                  31, 2007 |      |
|                            |   |                            |      |
| Raw                  materials  |   | $                               | 293,332   |   |
| Work-in-progress                |   |                            | 791,186   |   |
| Finished                  goods |   |                            | 1,102,533 |   |
|                            |   | $                               | 2,187,051 |   |

**NOTE        **
**6**
**PREPAYMENTS        AND DEPOSITS**

|                               |   | March                  31, 2007 |    |
|------------------------------------|--------|---------------------------------|---------|
|                               |   |                            |    |
| Supplier                  deposits |   | $                               | 210,966 |   |
| Advances                  to staff |   |                            | 21,751  |   |
|                               |   | $                               | 232,717 |   |

**NOTE        **
**7**
**PLANT        AND EQUIPMENT, NET**

|                                              |   |                            |      |
|---------------------------------------------------|--------|---------------------------------|-----------|
|                                              |   | March                  31, 2007 |      |
|                                              |   |                            |      |
| Plant                  and machinery              |   | $                               | 2,339,811 |   |
| Furniture,                  fixture and equipment |   |                            | 32,885    |   |
|                                              |   |                            | 2,372,696 |   |
| Less:                  accumulated depreciation   |   |                            | (244,223  | ) |
| Plant                  and equipment, net         |   | $                               | 2,128,473 |   |

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*Table            of Contents*

**NF          ENERGY SAVING CORPORATION OF AMERICA**

**(FORMERLY            DIAGNOSTIC CORPORATION OF AMERICA)**

**NOTES            TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**FOR            THE THREE MONTHS ENDED MARCH 31, 2007**

**(Currency            expressed in United States Dollars (“US$”))**

**(Unaudited)**

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**NOTE        **
**8**
**OTHER        PAYABLES AND ACCRUED LIABILITIES**

|                                       |   | March                  31, 2007 |    |
|--------------------------------------------|--------|---------------------------------|---------|
|                                       |   |                            |    |
| Rental                  payable            |   | $                               | 45,472  |   |
| Government                  levies payable |   |                            | 5,452   |   |
| Construction                  payable      |   |                            | 4,294   |   |
| Welfare                  payable           |   |                            | 104,727 |   |
| Accrued                  expenses          |   |                            | 65,567  |   |
|                                       |   | $                               | 225,512 |   |

**NOTE        **
**9**
**INCOME        TAXES**

**NOTE        **
**10**
**STOCK-BASED        COMPENSATION **

**NOTE        **
**11**
**SEGMENT        INFORMATION**

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*Table            of Contents*

**NF          ENERGY SAVING CORPORATION OF AMERICA**

**(FORMERLY            DIAGNOSTIC CORPORATION OF AMERICA)**

**NOTES            TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**FOR            THE THREE MONTHS ENDED MARCH 31, 2007**

**(Currency            expressed in United States Dollars (“US$”))**

**(Unaudited)**

----

----

|                                |   | Production                  segment |      |  Servicesegment |   |  Total  |   |
|-------------------------------------|--------|-------------------------------------|-----------|----------------------|--------|--------------|--------|
|                                |   |                                |      |            |   |    |   |
| Operating                  revenues |   | $                                   | 932,251   |                 | $      | 70,235       |   | $ | 1,002,486 |   |
| Cost                  of revenues   |   |                                | 741,231   |                 |   | 36,224       |   |   | 777,455 |   |
| Gross                  profit       |   |                                | 191,020   |                 |   | 34,011       |   |   | 225,031 |   |
| Depreciation                        |   |                                | 53,306    |                 |   | 3,403        |   |   | 56,709 |   |
| Net                  loss           |   |                                | (71,900   | )                    |   | (8,887       | )      |   | (80,787 | ) |
| Total                  assets       |   |                                | 6,180,251 |                 |   | 394,484      |   |   | 6,574,735 |   |

**NOTE        **
**12**
**CONCENTRATION        AND RISK**

|  Customers             |   |  Revenues |      | Percentage                  of                  revenues |   |                                                      |   |  Accountsreceivable |   |
|-----------------------------|--------|----------------|-----------|----------------------------------------------------------|--------|-----------------------------------------------------------|--------|--------------------------|--------|
| Customer                  A |   | $              | 782,230   |                                                     |   | 78                                                        | %      |                     |   |   | $ | 865,396 |   |
| Customer                  B |   |           | 161,730   |                                                     |   | 16                                                        | %      |                     |   |   |   | 821,258 |   |
|                        |   |           |      |                                                     |   |                                                      |   |                     |   |   |   |   |   |
| Total:                      |   | $              | 943,960   |                                                     |   | 94                                                        | %      |                     | Total: |   | $ | 1,686,654 |   |
|   Vendors         |   |           | Purchases |                                                     |   | Percentage                  of                  purchases |   |                     |   |   |   | Accountspayable |   |
|                        |   |           |      |                                                     |   |                                                      |   |                     |   |   |   |   |   |
| Vendor                  A   |   | $              | 269,064   |                                                     |   | 35                                                        | %      |                     |   |   | $ | 72,413 |   |
| Vendor                  B   |   |           | 155,083   |                                                     |   | 20                                                        | %      |                     |   |   |   | - |   |
|                        |   |           |      |                                                     |   |                                                      |   |                     |   |   |   |   |   |
|                        |   | $              | 424,147   |                                                     |   | 55                                                        | %      |                     |   |   | $ | 72,413 |   |

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*Table            of Contents*

**NF          ENERGY SAVING CORPORATION OF AMERICA**

**(FORMERLY            DIAGNOSTIC CORPORATION OF AMERICA)**

**NOTES            TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**FOR            THE THREE MONTHS ENDED MARCH 31, 2007**

**(Currency            expressed in United States Dollars (“US$”))**

**(Unaudited)**

----

----

|  Customers             |   |  Revenues |      | Percentage                  of                  revenues |   |  Accountsreceivable                                  |   |
|-----------------------------|--------|----------------|-----------|----------------------------------------------------------|--------|-----------------------------------------------------------|--------|
| Customer                  A |   | $              | 24,960    |                                                     |   | 100                                                       | %      | $ | 24,960 |   |
|                        |   |           |      |                                                     |   |                                                      |   |   |   |   |
|   Vendors         |   |           | Purchases |                                                     |   | Percentage                  of                  purchases |   |   | Accountspayable |   |
|                        |   |           |      |                                                     |   |                                                      |   |   |   |   |
| Vendor                  A   |   | $              | 4,951     |                                                     |   | 60                                                        | %      | $ | 4,951 |   |

**NOTE        **
**13**
**COMMITMENT        AND CONTINGENCIES**

**NOTE        **
**14**
**SUBSEQUENT        EVENT**

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*Table          of Contents*

**ITEM      2.**
**MANAGEMENT'S      DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF      OPE**
**RATION**

**GENERAL      DESCRIPTION OF BUSINESS**

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*Table          of Contents*

**RESULTS      OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 2007**

*Revenue      recognition*

*“Revenue      Recognition”*

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*Table          of Contents*

*Inventories*

*Property,      Plant, and Equipment*

|                                            | Depreciable                life            |   | Residual                value |
|-------------------------------------------------|--------------------------------------------|--------|-------------------------------|
| Plant                and machinery              | 3                -                20 years |   | 5%                            |
| Furniture,                fixture and equipment | 5                -                8 years  |   | 5%                            |

**Revenues**

**Income      / Loss**

| -   | Advise                on matters relating to our structure, management, operation and                subsidiaries;                   |
|---------------|--------------------------------------------------------------------------------------------------------------------------------------|
| -   | The                preparation and implementation of a new business plan and a future                growth                strategy; |
| -   | Assistance                with preparation of applicable filings with the SEC;                                                       |
| -   | Assistance                with preparation of financial statements;                                                                  |
| -   | EDGAR                services                                                                                                        |
| -   | Advise                on procedures, regulations, and compliance of a public listed                company;                          |

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*Table          of Contents*

**Expenses**

**Cost      of Sales**

**Impact      of Inflation**

**Liquidity      and Capital Resources**

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*Table          of Contents*

| * | Curtail                new product launches |
|---|---------------------------------------------|

| * | Limit                our future marketing efforts to areas that we believe would be the                most                profitable. |
|---|----------------------------------------------------------------------------------------------------------------------------------------|

** **

**ITEM      3. CONTROLS AND PROCEDURES.**

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*Table          of Contents*

**PART      II. OTHER INFORMATION**

**ITEM      1.      LEGAL PROCEEDINGS**

**ITEM      2.      CHANGES IN SECU**
**RITIES**

**ITEM      3.      DEFAULTS UPON SENIOR SEC**
**URITIES**

**ITEM      4.      SUBMISSION OF MATTERS TO A VOTE OF SECURITY      H**
**OLDERS**

**ITEM      5.      OTHER INFOR**
**MATION**

**ITEM      6. EXHIBITS AND REPORTS **
**ON      FORM 8-K**

| (1) | Exhibits:                  Exhibits required to be attached by Item 601 of Regulation S-B                  are listed                  in the Index to Exhibits Beginning on page 8 of this Form 10-QSB,                  which is                  incorporated herein by                  reference. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (1)   | On                January 16, 2007, we filed an 8-K report under Item 4.01, Changes                in                Registrant’s Certifying Accountant reporting the changes in our certifying                accountant. |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2)   | On                January 18, 2007, we filed an 8-K report under Item 3.02,                Unregistered Sales of Equity Securities reporting stock issuance                for                convertible loan. |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3)   | On                January 25, 2007 and February 5, 2007, we filed two amendments to                an 8-K                report, dated January 16, 2007, regarding the changes in our certifying                accountant. |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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*Table          of Contents*

**SIG**
**NATURES**

|                                          | **NF                Energy Saving Corporation of America**                  |
|-----------------------------------------------|-----------------------------------------------------------------------------|
|                                     |                                                                   |    |
| Date:                May 15, 2007   | By:                                                               | /s/ Li,                Gang |
|                                          | Li,                GangPresident                and Chief Executive Officer |

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*Table          of Contents*

**INDEX      TO E**
**XHIBITS**

| **Exhibit                No.** | **Description**                                                                                                                                                        |
|--------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                           |                                                                                                                                                                   |
| 31.1                           | Certification                of Chief Executive                Officer                                                                                                 |
|                           |                                                                                                                                                                   |
| 31.2                           | Certification                of Chief Financial                Officer                                                                                                 |
|                           |                                                                                                                                                                   |
| 32.1                      | Statement                required by 18 U.S.C. Section 1350, as adopted                pursuant to section 906 of the Sarbanes-Oxley Act of                2002.  |
| 32.2                           | Statement                required by 18 U.S.C. Section 1350, as adopted pursuant to section                906 of                the Sarbanes-Oxley Act of 2002.       |

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