UNITED STATES
                  SECURITIES AND EXCHANGE COMMISSION
                        Washington, DC   20549

                              FORM 10-QSB


(Mark One)

XX  QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
--- ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED DECEMBER 31, 2006

    TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
---  ACT OF 1934 FOR THE TRANSITION PERIOD FROM _______ TO ______.

    Commission file number        000-27503
                             ____________________


                      DYNASIL CORPORATION OF AMERICA

-------------------------------------------------------------------
  (Exact name of small business issuer as specified in its charter)


          New Jersey                            22-1734088
        --------------             -------------------------------
  (State or other jurisdiction        (IRS Employer Identification No.)
     of incorporation)


               385 Cooper Road, West Berlin, New Jersey, 08091

        ----------------------------------------------------------
                 (Address of principal executive offices)

                             (856) 767-4600
            --------------------------------------------------
            (Registrant's telephone number, including area code)

Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 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  XX      No
    ----         ----

The Company had 4,557,483 shares of common stock, par value
$.0005 per share, outstanding as of February 9, 2007.


                                  1
<PAGE>
            DYNASIL CORPORATION OF AMERICA AND SUBSIDIARIES
                                INDEX




PART 1.   FINANCIAL INFORMATION                                       PAGE
                                                                      ----

  ITEM 1.   FINANCIAL STATEMENTS

            DYNASIL CORPORATION OF AMERICA AND SUBSIDIARIES
            -----------------------------------------------

             CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 31,2006
             AND SEPTEMBER 30, 2006                                     3

             CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE
             MONTHS ENDED DECEMBER 31,2006 AND 2005                     4

             CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THREE
             MONTHS ENDED DECEMBER 31, 2006 AND 2005                    5

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                 6


   ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS                       9

   ITEM 3.   CONTROLS AND PROCEDURES                                   13


PART II.  OTHER INFORMATION                                            13

   ITEM 1.   LEGAL PROCEEDINGS                                         13

   ITEM 2.   CHANGES IN SECURITIES                                     13

   ITEM 3.   DEFAULTS ON SENIOR SECURITIES                             13

   ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS       13

   ITEM 5.   OTHER INFORMATION                                         13

   ITEM 6    EXHIBITS AND REPORTS ON FORM 8-K                          13

      SIGNATURES                                                       14

                                     2
<PAGE>
DYNASIL CORPORATION OF AMERICA AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
                                     ASSETS
<TABLE>
<S>                                                      <C>              <C>
                                                          December 31       September 30
                                                              2006             2006
                                                          (Unaudited)
                                                          ----------          ----------
Current assets
   Cash and cash equivalents                                $ 442,081         $ 352,139
   Accounts receivable, net of allowance for doubtful
         accounts of $29,761 and $12,530 for December 31,
         2006 and September 30, 2006, respectively          1,210,334         1,086,394
   Inventory                                                1,479,335         1,131,648
   Deferred tax asset                                         151,300            61,500
   Prepaid expenses and other assets                          141,998           128,957
                                                           ----------        ----------
        Total current assets                                3,425,048         2,760,638

Property, Plant and Equipment, net                          2,380,440           626,790

Other Assets                                                   91,761            78,812
                                                           ----------        ----------
        Total Assets                                       $5,897,249        $3,466,240
                                                           ==========        ==========

                 LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities
        Note payable to bank- Line of credit                 $297,766          $190,000
   Current portion - long term debt                            92,422            72,482
   Accounts payable                                           718,347           390,110
   Accrued expenses                                           435,800           368,977
                                                           ----------        ----------
        Total current liabilities                           1,544,335         1,021,569

Long-term Debt, net                                         1,618,297           593,889

Deferred Income Taxes                                          63,900               -0-

Stockholders' Equity
   Common Stock, $.0005 par value, 25,000,000 shares
    authorized, 5,285,112 and 4,698,453 shares issued,
    4,474,952 and 3,888,293 shares outstanding                  2,643            2,350

   Preferred Stock, $.001 par value, 10,000,000 Shares          1,410              700
    authorized, 700,000 and 700,000 Series A shares and
    710,000 and 0 shares Series B shares issued and
    outstanding for 2006 and 2005 respectively, 10%
    cumulative, convertible

   Additional paid in capital                               2,931,379         2,100,098
   Retained earnings                                          721,627           733,976
                                                           ----------        ----------
                                                            3,657,059         2,837,124

   Less 810,160 shares in treasury - at cost                 (986,342)         (986,342)
                                                           ----------        ----------
        Total stockholders' equity                          2,670,717         1,850,782
                                                           ----------        ----------
        Total Liabilities and Stockholders' Equity         $5,897,249        $3,466,240
                                                           ==========        ==========
</TABLE>
                                       3
<PAGE>

DYNASIL CORPORATION OF AMERICA AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)


                                          Three Months Ended
                                               December 31
                                            2006        2005
                                       (Unaudited)    (Unaudited)
                                        ----------    ----------
Sales                                   $2,536,297    $1,548,040
Cost of Sales                            1,883,862     1,069,896
                                        ----------    ----------
Gross profit                               652,435       478,144
Selling, general and administrative        605,466       426,659
                                        ----------    ----------
Income from Operations                      46,969        51,485

Interest expense - net                     (14,997)      (20,535)
                                        ----------    ----------
Income before Income Taxes                  31,972        30,950

Income Tax                                  (9,070)       (5,525)
                                        ----------    ----------
Net income                                $ 22,902     $  25,425
                                        ==========    ==========

Net income per share
  Basic                                     $0.00        $0.00
  Diluted                                   $0.00        $0.00

Weighted average shares outstanding     4,255,041    3,768,777



                                     4
<PAGE>

DYNASIL CORPORATION OF AMERICA AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)

<TABLE>
<S>                                                          <C>         <C>
                                                            Three months Ended
                                                               December 31,
                                                               2006        2005
                                                            -----------  -----------
Cash flows from operating activities:
    Net income                                              $   22,902   $   25,425
    Adjustments to reconcile net income
     to net cash provided by (used in)operating activities:
       Depreciation                                             75,363       51,000
       Amortization expense                                      4,803        6,390
       Gain on disposal of assets                                   -        (2,000)
       Allowance for doubtful accounts                          17,231       (7,982)
 (Increase) decrease in:
         Accounts receivable                                   141,404      151,494
         Inventories                                          (272,476)     (37,770)
         Prepaid expenses and other current assets              26,116      (43,227)
         Accounts payable and accrued expenses                (140,074)     (63,289)
                                                            -----------  -----------
Net cash provided by (used in) operating activities           (124,731)      80,041
                                                            -----------  -----------
Cash flows from investing activities:
     Acquisition of property, plant and equipment              (40,293)     (38,941)
Proceeds from sale of assets                                      -0-         2,000
Cash paid for acquisition of EMF                              (674,890)         -0-
                                                            -----------  -----------
Net cash used in investing activities                         (715,183)     (36,941)
                                                            -----------  -----------
Cash flows from financing activities:
Issuance of common stock                                        132,285      34,140
Issuance of preferred stock                                     700,000        -0-
Preferred stock dividends paid                                  (17,500)    (17,500)
Proceeds from (payments on) long-term debt                      220,396     (43,242)
Payments on short-term debt                                     (88,473)    (38,099)
Deferred financing costs incurred                               (16,852)        -0-
                                                            -----------  -----------
Net cash provided by (used in) financing activities             929,856     (64,701)
                                                            -----------  -----------
Net increase (decrease) in cash                                  89,942     (21,601)

Cash - beginning of period                                      352,139     308,210
                                                            -----------  -----------
Cash - end of period                                          $ 442,081   $ 286,609
                                                            ===========  ===========

</TABLE>
  Supplemental Disclosure of cash flow information:
  Non-cash investing and financing activities:
    Acquisition of EMF Corporation
       Fair market value of current assets acquired            $ 468,300
       Property, plant and equipment                           1,789,621
       Fair market value of liabilities assumed               (1,063,031)
       Cash paid to seller through proceeds from EMF debt       (520,000)
                                                               ---------
       Net Cash paid for EMF Corporation                      $  674,890


                                               5
<PAGE>

 DYNASIL CORPORATION OF AMERICA AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)(Continued)

   Preferred stock dividends declared              $35,250
     Less dividends payable at December 31, 2006   (17,750)
                                                    ------
     Net cash paid for dividends                   $17,500
                                                    ======

The  Company issued 710,000 shares of Series B Preferred  Stock,
valued  at $1.00 per share, and received cash of $700,000.   The
Company  incurred  stock  issuance  costs  of  $10,000  for  net
proceeds  of  $700,000  which was used  primarily  to  fund  the
acquisition of EMF.

In   connection  with  the  acquisition  of  EMF,  EMF  borrowed
$1,050,000  of  which $497,937 was used to retire  existing  EMF
debt,  $520,000 was paid to the seller, $17,023 was used to  pay
transaction costs and the remaining funds were used for  working
capital.



DYNASIL CORPORATION OF AMERICA
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

Note 1 - Basis of Presentation

     The consolidated balance sheet as of September 30, 2006 was
audited and appears in the Form 10-KSB previously filed by the
Company.  The consolidated balance sheet as of December 31, 2006
and the consolidated statements of operations and cash flows for
the three months ended December 31, 2006 and 2005, and the
related information contained in these notes have been prepared
by management without audit.  In the opinion of management, all
adjustments (which include only normal recurring items)
necessary to present fairly the financial position, results of
operations and cash flows in conformity with generally accepted
accounting principles as of December 31, 2006 and for all
periods presented have been made.  Interim operating results are
not necessarily indicative of operating results for a full year.

     On March 8, 2005, Dynasil acquired the operating assets and
assumed certain liabilities of Optometrics LLC, a worldwide
supplier of optical components.  The assets acquired from
Optometrics LLC are operated under the Optometrics Corporation
name.  Dynasil financial statements include the Optometrics
Corporation results of operations since March 9, 2005.

     On October 2, 2006, Dynasil acquired 100% of the stock of
Evaporated Metal Films Corporation ("EMF") of Ithaca, NY.  EMF
provides optical thin-film coatings for a broad range of
application markets including display systems, optical
instruments, satellite communications and lighting.  EMF
provides products and services to optics markets which are
related to those served by Dynasil. The Dynasil financial
statements at December 31, 2006 include the EMF results of
operations since October 2, 2006.

     Certain information and note disclosures normally included
in the Company's annual financial statements prepared in
accordance with generally accepted accounting principles have
been condensed or omitted.  It is suggested that these condensed
consolidated financial statements be read in conjunction with
the financial statements and notes thereto included in the
Company's September 30, 2006 Annual Report on Form 10-KSB
previously filed by the Company with the Securities and Exchange
Commission.


                                    6
<PAGE>


DYNASIL CORPORATION OF AMERICA
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

Note 2 - Business Acquisition

     On  October  2, 2006, the Company completed its acquisition
of all of the outstanding capital stock of EMF Corporation in  a
transaction accounted for as a purchase. Total cash compensation
to  the  seller  was  $1.1 million. From  the  proceeds  of  the
issuance of 710,000 shares of Series B Preferred Stock,  Dynasil
paid  $580,000  in  cash to the seller and incurred  acquisition
related  costs  of approximately $104,890. In a  contemporaneous
bank transaction, EMF borrowed $1,050,000 of which $497,937  was
used  to  retire  existing EMF debt, $520,000 was  paid  to  the
seller,  $17,023  was  used  to pay transaction  costs  and  the
remaining funds were used for working capital.  The net purchase
price  of  approximately  $674,890 has  been  allocated  to  the
tangible   and  identifiable  intangible  assets  acquired   and
liabilities assumed on the basis of their estimated fair values.
The  results  of  operations of EMF have been  included  in  the
consolidated  financial statements from  October  2,  2006,  the
effective date of acquisition.  The allocation of purchase price
is summarized below:

Purchase price:

     Cash consideration at closing           $1,100,000
     Reimbursed through bank financing         (520,000)
     Estimated costs and expenses                94,890
                                              ---------
     Total cash paid                           $674,890
                                              =========

Purchase price allocation:

     Cash and cash equivalents               $   45,457
     Accounts receivable                        282,575
     Inventories                                 75,211
     Prepaid expenses and other current assets   39,157
     Deferred taxes, net                         25,900
     Property and equipment                   1,789,621
     Current Liabilities assumed             (1,063,031)
                                              ---------
     Net fair value of assets acquired       $1,194,890
                                              =========


Note 3 - Debt

On October 2, 2006, in conjunction with the EMF acquisition, EMF
entered into Mortgage Note and Line of Credit Note borrowing
transactions with Tompkins Trust Company ("TTC") which were
guaranteed by Dynasil.  The guaranteed loans include (a) a
$1,050,000 principal amount commercial mortgage (the "mortgage")
and (b) a $215,000 principal amount line of credit facility (the
"line of credit"). Proceeds of the mortgage were used to repay
certain EMF debts, to pay for part of the acquisition of EMF and
for working capital purposes. Proceeds of the line of credit
will be used for general corporate purposes. The applicable
borrowing documents were entered into at arms-length between EMF
and Dynasil, on the one hand, and TTC, on the other hand, on
commercial lending terms and conditions, including acceleration
rights, events of default, TTC's rights and remedies and similar
provisions that Dynasil believes are customary for commercial
loans of this sort. In connection with the loan transactions,
EMF and Dynasil executed and delivered to TTC customary forms of
notes, mortgage, security agreement, assignment of leases and
rents, and similar documents.  The mortgage provides for
repayment over a 20 year period at a fixed annual interest rate
of 7.80% for the first 5 years, reset to a fixed annual interest
rate of 2.80 percentage points over

                                    7
<PAGE>

DYNASIL CORPORATION OF AMERICA
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

the Federal Home Loan Bank of New York Advance Rate for five-
year maturities at five year intervals.  The term loan is
secured by a first mortgage on EMF's real estate, equipment, and
fixtures, as well as Dynasil's guarantee.  The line of credit
has a term running until December 22, 2010 and carries an annual
interest rate of one-half percent over The Wall Street Journal
Prime Rate of interest, which is adjusted monthly. It is secured
by EMF's real estate, equipment and fixtures, as well as
Dynasil's guarantee.


Note 4 - Convertible Preferred Stock

On October 2, 2006, the Company sold 710,000 shares of a Series
B 10% Cumulative Convertible Preferred Stock in a private
placement. The stock was sold at a price of $1.00 per share.
Total expenses for the stock placement were $10,000.  No
underwriting discounts or commissions were paid in connection
with the sale.  Each share of preferred stock carries a 10% per
annum dividend and is convertible to 1.33 shares of common stock
at any time by the holders and is callable after two years by
Dynasil at a redemption price of $1.00 per share. Proceeds of
the preferred stock sale were primarily used to acquire the
capital stock of EMF and for related acquisition costs.


Note 5 - Inventories

     Inventories are stated at the lower of average cost or
market.  Cost is determined using the first-in, first-out (FIFO)
method.  Inventories consist primarily of raw materials, work-in-
process and finished goods.  The Company evaluates inventory
levels and expected usage on a periodic basis and records
adjustments for impairments as required.

Inventories consisted of the following:

                           December 31, 2006       September 30, 2006
                           -----------------       ------------------
   Raw Materials                 $866,565            $600,451
   Work-in-Process                312,815             259,425
   Finished Goods                 299,955             271,772
                                  -------             -------
                               $1,479,335          $1,131,648
                                  =======             =======
Note 6 - Net Income Per Share

     Basic net income per share is computed using the weighted
average number of common shares outstanding. The dilutive
effects of potential common shares outstanding are included in
diluted net earnings per share.

Note 7 - Stock Based Compensation

     Effective in fiscal year 2007, stock-based employee
compensation expenses will be included in reported income. Until
fiscal year 2007, the Company had adopted the disclosure
provisions of SFAS No. 148 and accounted for stock-based
compensation using the intrinsic value method. Accordingly, no
compensation cost was recognized in the financial statements for
stock options issued to employees since the options were granted
at the most recent market price or higher on the date of grant.
Stock options granted to consultants and other non-employees are
reported at fair value in accordance

                                    8
<PAGE>



DYNASIL CORPORATION OF AMERICA
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

with SFAS No. 123. The pro forma disclosures of net loss and net
loss per common share required by SFAS No. 123 are shown below.

                                         Three months ended
                                   December 31,2006    December 31,2005
                                      -----------          -----------
     Net income, as reported             $22,902           $25,425

     Add: Stock-based employee
     compensation expense included
     in reported net income                  -0-               -0-

     Less: Total stock-based employee
     compensation expense determined
     under fair value based method
     for all options                         -0-            (4,636)
                                      -----------          -----------
     Pro forma net profit (loss)        $  22,902           $20,789
                                      ===========          ===========

     Actual net profit (loss)
     per common share                   $    0.00           $0.00

     Pro forma net profit (loss)
     per common share                   $    0.00           $0.00


     During the three months ended December 31, 2006, no options
were granted and 40,000 options were exercised.  The 40,000
options had an exercise price of $0.40 per share with $16,000
paid in cash.  During the three months ended December 31, 2005,
130,000 stock options were granted at prices ranging from $0.85
to $1.50 per share and 80,000 options were exercised. The 80,000
options had an exercise price of $0.40 per share with $23,857
paid in cash and $8,143 relating to Mr. Dunham's 2005 fiscal
year bonus.  The Company cancelled 0 and 90,000 options during
the three months ended December 31, 2006 and 2005, respectively.
Compensation expenses relating to non-employee stock options
granted during the three months ended December 31, 2006 and 2005
were $-0-.  On February 1, 2007, 80,000 options were granted to
a newly elected board member at a price of $2.00 per share.
Accordingly, compensation expense will be recognized for the
quarter ending March 31, 2007.

ITEM 2.     MANAGEMENT DISCUSSION AND ANALYSIS OR PLAN OF
OPERATION

Overview

     This   is  the  first  quarter  of  results  after  Dynasil
Corporation  of  America ("Dynasil" or the  "Company"  or  "we")
acquired 100% of the stock of Evaporated Metal Films Corporation
("EMF")  in Ithaca, NY on October 2, 2006.  EMF provides optical
thin-film  coatings  for  a broad range of  application  markets
including   display  systems,  optical  instruments,   satellite
communications and lighting.  EMF provides products and services
to optics markets which are related to those served by Dynasil's
historical operations. The Dynasil financial statements  include
the  EMF results from October 2, 2006 through December 31, 2006.
The
results  from time periods previous to October 2,  2006  do  not
include EMF.

     Revenues  for the first quarter of fiscal year  2007  which
ended  December 31, 2006 were $2,536,297, an increase  of  63.8%
over  revenues of $1,548,040 for the quarter ended December  31,
2005.   Net income for the quarter ended December 31,  2006  was
$22,902  or  $0.00  per share, compared with  a  net  income  of
$25,425,
                                   9
<PAGE>

or  $0.00  per share, for the quarter ended December  31,  2005.
Excluding  the impact of the EMF acquisition, revenues  for  our
historical  businesses were up 22% and net income was  up  411%,
from  $25,425  to $130,000, compared to the three  months  ended
December   31,  2005.   Strong  revenue  growth  combined   with
continued process improvements drove those significant gains. As
anticipated, transitional and process improvement costs resulted
in  a  loss at EMF for its first quarter with Dynasil.  The  EMF
loss  offset  the  outstanding improvements  in  our  historical
businesses.    Management anticipates a  reduced  level  of  EMF
losses in Quarter 2 and is targeting profitable results for  the
second  half of fiscal year 2007.  During quarter 1,  we  filled
key leadership positions, developed clear goals and initiated  a
strong  focus to develop the disciplined processes required  for
EMF to consistently execute with excellent quality, service, and
cost performance.

Results of Operations

      Revenues for the three months ended December 31, 2006 were
$2,536,297, an increase of 63.8% over revenues of $1,548,040 for
the  quarter ended December 31, 2005.  The revenue increase came
from 22% organic growth in our historical businesses as well  as
the addition of EMF.


      Cost of sales for the three months ended December 31, 2006
was  $1,883,862 or 74.3% of sales, an increase of 5.2 percentage
points  from  the  three  months  ended  December  31,  2005  of
$1,069,896,  or  69.1%  of  sales.  The  higher  cost  of  sales
resulted primarily from the EMF costs. The cost of sales for our
historical   businesses  actually  improved  by  1.3  percentage
points.  The Company continues to implement cost reductions such
as manufacturing yield improvements.


      Gross profit for the three months ended December 31,  2006
was  $652,435,  or 25.7% of sales, an increase of $174,291  over
the  three months ended December 31, 2005 of $478,144, or  30.9%
of  sales. Operational improvements at EMF are key to increasing
our gross profit in the future.

      Selling, general and administrative ("SG&A") expenses  for
the  three months ended December 31, 2006 were $605,466 or 23.9%
of  sales,  a decrease of 3.7 percentage points  from the  three
months  ended December 31, 2005 of $426,659 or 27.6%  of  sales.
The  changes in SG&A expenses and percentage resulted  primarily
from the impact of adding EMF SG&A expenses.

      Net  interest expense for the three months ended  December
31, 2006 was $14,997, a decrease of $5,538 from the three months
ended December 31, 2005 of $20,535.

     There  is additional EMF interest expense  of $20,665  that
is allocated to cost of goods sold and SG&A expense so in total,
net  interest  expense  was $35,662. The  increase  in  combined
interest expense is primarily related to the additional interest
payments  resulting from the indebtedness incurred in connection
with the EMF acquisition.

     Net income for the three months ended December 31, 2006 was
$22,902,  or $.00 in basic earnings per share, which is  similar
to  net  income for the three months ended December 31, 2005  of
$25,425  or  $.00  in basic profit per share.   Organic  revenue
growth  of 22% in our historical businesses along with continued
process  improvements drove a 411% net income increase  for  our
historical businesses. Losses at EMF offset this improvement and
are related to transition activities.  We have a strong focus at
EMF to improve our processes and deliver profitability.

     The Company had a $9,070 provision for Massachusetts income
taxes  for  the  quarter ended December 31, 2006  and  a  $5,525
provision for the quarter ended

                               10
<PAGE>

December  31, 2005.  As of September 30, 2006, the  Company  had
approximately $900,000 of net operating loss carry  forwards  to
offset  future  income  for  federal tax  purposes  expiring  in
various  years  through  2021.  In  addition,  the  Company  had
approximately  $550,000 of net operating loss  carryforwards  to
offset  certain  future New Jersey taxable income,  expiring  in
various years through 2013.



Liquidity and Capital Resources

      Cash  increased  by  $89,942 for the  three  months  ended
December  31, 2006. The primary sources of cash were net  income
of   $22,902,   depreciation  and  amortization  expenses   that
aggregated   $80,166,  net  borrowings  of  $131,924,   accounts
receivable collections of $141,404, the issuance of common stock
of  $132,285 and preferred stock of $700,000.  The primary  uses
of  cash  were  acquisition of property, plant and equipment  of
$40,293,  an  inventory  increase  of  $272,476,  reductions  in
accounts  payable  and  accrued expenses of  $140,074,  dividend
payments  of  $17,500 on Preferred Stock and the acquisition  of
EMF  of  $674,890.  The increase in inventory was  a  result  of
purchasing   fused  silica  raw  material  that  was  previously
provided as consignment inventory by our supplier as well as the
addition of EMF inventory.

      The  Company  believes  that its  current  cash  and  cash
equivalent  balances,  along with  the  net  cash  generated  by
operations,  are sufficient to meet its anticipated  cash  needs
for  working capital for at least the next 12 months. There  are
currently  no  plans for any major capital expenditures  in  the
next  six  to  nine  months.  Any major  business  expansion  or
acquisition  likely will require the Company to seek  additional
debt or equity financing.

Critical Accounting Policies and Estimates

      There  have  been  no  material changes  in  our  critical
accounting  policies  or  critical  accounting  estimates  since
September  30,  2006, nor have we adopted an  accounting  policy
that  has  or  will  have a material impact on our  consolidated
financial  statements.  For further discussion of our accounting
policies  see  Footnote  1  "Summary of  Significant  Accounting
Policies"  in the Notes to Consolidated Financial Statements  in
our  Annual  Report  on Form 10-KSB for the  fiscal  year  ended
September 30, 2006.

      The  accounting policies that reflect our more significant
estimates,  judgments and assumptions and which we  believe  are
the  most  critical to aid in fully understanding and evaluating
our reported financial results include the following:

Revenue Recognition

      Revenue  from sales of products is recognized at the  time
title and the risks and rewards of ownership pass. This is  when
the  products are shipped per customers' instructions, the sales
price  is fixed and determinable, and collections are reasonably
assured.

Valuation of Long-Lived Assets

      We assess the recoverability of long-lived assets whenever
we  determine  that events or changes in circumstances  indicate
that   their  carrying  amount  may  not  be  recoverable.   Our
assessment  is primarily based upon our estimate of future  cash
flows  associated  with these assets. These  valuations  contain
certain  assumptions  concerning estimated future  revenues  and
future  expenses. We have determined that there is no indication
of  impairment  of  any  of  our assets.   However,  should  our
operating  results deteriorate, we may determine that a  portion
of our long-lived assets is impaired. Such a determination could
result  in non-cash charges to income that could materially  and
adversely affect the Company's financial position or results  of
operations for that period.
                               11
<PAGE>

Estimating Allowances for Doubtful Accounts Receivable

      We perform ongoing credit evaluations of our customers and
adjust  credit  limits  based  upon  payment  history  and   the
customer's  current  credit worthiness,  as  determined  by  our
review  of  their  current credit information.  We  continuously
monitor collections and payments from our customers and maintain
a   provision  for  estimated  credit  losses  based  upon   our
historical  experience  and  any  specific  customer  collection
issues  that  we have identified. While such credit losses  have
historically  been  minimal, within  our  expectations  and  the
provisions  established,  we  cannot  guarantee  that  we   will
continue to experience the same credit loss rates that  we  have
in  the past. A significant change in the liquidity or financial
position  of  any  of  our significant customers  could  have  a
material  adverse effect on the collectibility of  our  accounts
receivable and our future operating results.

Valuation of Deferred Tax Assets

      We  regularly evaluate our ability to recover the reported
amount of our deferred income taxes considering several factors,
including  our  estimate  of  the  likelihood  of  the   Company
generating sufficient taxable income in future years during  the
period  over which temporary differences reverse. Based  on  the
Company's  history of significant fluctuations in net  earnings,
the  Company  established  a  full  valuation  allowance  as  of
September  30, 2004 and prior due to the uncertainty as  to  the
realization  of certain net operating loss carryforwards.   With
the  asset  acquisition from Optometrics LLC in March 2005,  the
Company  now believes that some of these carryforwards  will  be
realized,  and has adjusted the valuation allowance  accordingly
as  outlined in the Company's Annual Report on Form  10-KSB  for
the fiscal year ended September 30, 2006.

Recent Accounting Pronouncements

     There  were no accounting pronouncements issued  since  the
date  of the Company's most recent Form 10-KSB filing that would
require disclosure in the current Form 10-QSB filing.


Forward-Looking Statements

      The  statements contained in this Quarterly Report on Form
10-QSB which
are not historical facts, including, but not limited to, certain
statements  found  under  the captions "Overview",  "Results  of
Operations"  and  "Liquidity and Capital Resources"  above,  are
forward-looking statements that involve a number  of  risks  and
uncertainties. The actual results of the future events described
in  such forward-looking statements could differ materially from
those  stated  in  such  forward-looking statements.  Among  the
factors that could cause actual results to differ materially are
the  risks and uncertainties discussed in this Quarterly  Report
on  Form 10-QSB, including, without limitation, the portions  of
such  reports  under  the  captions referenced  above,  and  the
uncertainties set forth from time to time described in this  and
the  Company's  other filings with the Securities  and  Exchange
Commission,  and  other  public  statements.   Such  risks   and
uncertainties include, without limitation, seasonality, interest
in  the Company's products, customer acceptance of new products,
general   economic   conditions,  market   trends,   costs   and
availability   of  raw  materials  and  management   information
systems, competition, litigation, need for additional financing,
the  effect  of governmental regulation and other  matters.  The
Company  disclaims  any intention or obligation  to  update  any
forward-looking  statements,  whether  as  a   result   of   new
information, future events or otherwise.


                               12
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ITEM 3    CONTROLS AND PROCEDURES

      Based on their most recent informal evaluation, which  was
completed during the period covered within this Form 10-QSB, the
Company's  President/Chief Executive Officer and Chief Financial
Officer  believe  that  the Company's  disclosure  controls  and
procedures  (as defined in Exchange Act Rule 13a-14 and  15d-14)
are  effective.  There were not any significant changes  in  the
Company's   internal  controls  nor  other  facts   that   could
significantly affect these controls subsequent to  the  date  of
this evaluation, including any corrective actions with regard to
significant  deficiencies and material weaknesses.  The  Company
is  presently unable to provide adequate segregation  of  duties
within itself as a means of internal control.  As a result,  the
Company  is presently relying on overriding management  reviews,
and  assistance from its board of directors and Audit  Committee
in  providing  short-term review procedures until such  time  as
additional funding is provided to hire additional executives  to
adequately segregate duties within the Company.

PART II

OTHER INFORMATION
------------------

ITEM 1    LEGAL PROCEEDINGS

    NONE

ITEM 2    CHANGES IN SECURITIES

    NONE

ITEM 3    DEFAULTS ON SENIOR SECURITIES

    NONE

ITEM 4    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

    NONE



ITEM 5    OTHER INFORMATION

The  information presented in Items 1 and 2 of Part  I  of  this
Report  is  incorporated herein by reference.  On  February  14,
2007,  the  Company  issued  a  press  release  announcing   its
financial  results  for its first quarter  ending  December  31,
2006. A copy of this press release is attached as Exhibit 99  to
this  Report on Form 10-QSB. This information is being furnished
pursuant  to Item 5 of Part II of Form 10-QSB and shall  not  be
deemed  to  be  "filed" for the purposes of Section  18  of  the
Securities  Exchange  Act  of 1934, as  amended  (the  "Exchange
Act"),  or otherwise subject to the liabilities of that Section,
nor  shall it be deemed incorporated by reference in any  filing
under  the  Securities Act of 1933, as amended, or the  Exchange
Act,  except  as  shall  be  expressly  set  forth  by  specific
reference in such a filing.


ITEM 6    EXHIBITS AND REPORTS ON FORM 8-K


    (a)  Exhibits and index of Exhibits

     10.1 Indemnification agreement with new Dynasil Director,
          Cecil Ursprung, dated 2/1/07.

                                      13
<PAGE>

     31.1(a)  and  (b)  Rule 13a-14(a)/15d-14(a)  Certifications
     pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

     32.1 Section 1350 Certification pursuant to Section 906  of
     the Sarbanes-Oxley Act of 2002 (furnished but not filed for
     purposes of the Securities Exchange Act of 1934).

     99.1  Press  release, dated February 14,  2007,  issued  by
     Dynasil  Corporation  of America announcing  its  financial
     results for the second quarter ending DECEMBER 31, 2006.



     (b) Reports on Form 8-K

     -    On 10/6/06, a current report on Form 8-K Items 1, 2, 3 and
       9  for the completion of the EMF acquisition and sale  of
       Preferred Stock.
     -    On 12/15/06, an amendment of the current report on Form 8-K
       dated 10/6/06 for Items 1, 2, 3 and 9 for the completion of the
       EMF acquisition and sale of Preferred Stock which includes EMF
       financial statements.



SIGNATURES

In  accordance  with the requirements of the Exchange  Act,  the
registrant caused this report to be signed on its behalf by  the
undersigned, thereunto duly authorized.


DYNASIL CORPORATION OF AMERICA


BY:   /s/ Craig T. Dunham            DATED: February 14, 2007
  ---------------------------------   --------------------
          Craig T. Dunham,
          President and CEO


     /s/ Laura Lunardo               DATED: February 14, 2007
  ---------------------------------   --------------------
         Laura Lunardo
         Chief Financial Officer

                                     14
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