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| UNITED                STATESSECURITIES                AND EXCHANGE COMMISSIONWashington,                D.C. 20549                  FORM                10-QSB  |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **[X]** | **QUARTERLY                REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF                1934** |
|---------|---------------------------------------------------------------------------------------------------------------------|

| ** ** | **For                the quarterly period ended March 31,                2006** |
|------------|---------------------------------------------------------------------------------|

| **[   ]** | **TRANSITION                REPORT UNDER SECTION 12 OR 15(d) OF THE EXCHANGE                ACT** |
|--------------------------|---------------------------------------------------------------------------------------------------|

| ** ** | **For                the transition period from ________ to                ________** |
|------------|---------------------------------------------------------------------------------------|

**Commission      File Number 000-05391**

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| METWOOD,                INC.(Exact                name of registrant as specified in its charter)   |
|----------------------------------------------------------------------------------------------------------|

| **NEVADA**(State                or other jurisdictionof                incorporation) |   | **83-0210365**(IRS                EmployerIdentification                No.) |
|---------------------------------------------------------------------------------------|--------|------------------------------------------------------------------------------|

| **819                Naff Road, Boones Mill, VA 24065**(Address                of principal executive offices)  **(540)                334-4294**(Issuer’s                telephone number)    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 X   No                          Number                of shares of common stock outstanding as of May 5, 2006:                11,905,299 Transitional                Small Business Disclosure Format (Check one) Yes [   ] No                [X] |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|  **METWOOD,                INC. AND SUBSIDIARY** **TABLE                OF CONTENTS - FORM 10****-QSB** |
|-------------------------------------------------------------------------------------------------------------------|

|                                                                                                                                                                                                |         |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------|
| **PART                I - FINANCIAL INFORMATION**                                                                                                                                                   |         | *Page(s)*  |   |
|                                                                                                                                                                                                |    |   |   |
| Item                1  Financial Statements                                                                                                                                               |         |   |   |
|                                                                                                                                                                                                |    |   |   |
|             Consolidated                Balance Sheet As of March 31,                2006                                               |         | 3 |   |
|                                                                                                                                                                                                |    |   |   |
|             Consolidated                Statements of Income for the Three and Nine Months                Ended March 31, 2006 and 2005 |         | 4 |   |
|                                                                                                                                                                                                |    |   |   |
|             Consolidated                Statements of Cash Flows for the Nine Months Ended                March 31, 2006 and 2005       |         | 5 |   |
|                                                                                                                                                                                                |    |   |   |
|             Notes                to Consolidated Financial Statements                                                                   |         | 6-8 |   |
|                                                                                                                                                                                                |    |   |   |
| Item                2  Management’s Discussion and                Analysis                                                                                                          |         | 8-11 |   |
|                                                                                                                                                                                                |    |   |   |
| Item                3  Controls and Procedures                                                                                                                                            |         | 11 |   |
|                                                                                                                                                                                                |    |   |   |
| **PART                II - OTHER INFORMATION**                                                                                                                                                      |         |   |   |
|                                                                                                                                                                                                |    |   |   |
| Item                6  Exhibits and Reports on Form                8-K                                                                                                                    |         | 11 |   |
|                                                                                                                                                                                                |    |   |   |
| Signatures                                                                                                                                                                                          |         | 12 |   |
|                                                                                                                                                                                                |    |   |   |
| Index                to Exhibits                                                                                                                                                                    |         | 13 |   |

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*Table          of Contents*

ments

| **METWOOD,INC.                  AND SUBSIDIARY**                                                                       |
|------------------------------------------------------------------------------------------------------------------------|
| **Consolidated                  Condensed Balance Sheet**                                                              |
| **March                  31, 2006**                                                                                    |
|  ***(unaudited)***                                                                                                |
|                                                                                                                   |   |   |   |   |   |
| ASSETS                                                                                                                 |   |   |   |   |   |
|                                                                                                                   |   |   |   |   |   |
| CURRENT                  ASSETS                                                                                        |   |   |   |   |   |
| Cash                  and Cash Equivalents                                                                             |   |   |   |   | $ | 181,817 |   |
| Accounts                  Receivable, net of allowance of $10,262                                                      |   |   |   |   |   | 389,792 |   |
| Inventory                                                                                                              |   |   |   |   |   | 792,237 |   |
| Recoverable                  Income Taxes                                                                              |   |   |   |   |   | 5,127 |   |
| Other                  Current Assets                                                                                  |   |   |   |   |   | 90,999 |   |
| TOTAL                  CURRENT ASSETS                                                                                  |   |   |   |   |   | 1,459,972 |   |
|                                                                                                                   |   |   |   |   |   |   |   |
| PROPERTY                  AND EQUIPMENT                                                                                |   |   |   |   |   |   |   |
| Furniture,                  fixtures and equipment                                                                     |   |   |   |   |   | 75,851 |   |
| Computer                  hardware, software and peripherals                                                           |   |   |   |   |   | 147,558 |   |
| Machinery                  and shop equipment                                                                          |   |   |   |   |   | 266,806 |   |
| Leasehold                  improvements                                                                                |   |   |   |   |   | 117,957 |   |
| Vehicles                                                                                                               |   |   |   |   |   | 316,488 |   |
|                                                                                                                   |   |   |   |   |   | 924,660 |   |
| Accumulated                  Depreciation                                                                              |   |   |   |   |   | (447,026 | ) |
| Net                  Property and Equipment                                                                            |   |   |   |   |   | 477,634 |   |
|                                                                                                                   |   |   |   |   |   |   |   |
| OTHER                  ASSETS                                                                                          |   |   |   |   |   |   |   |
| Goodwill                                                                                                               |   |   |   |   |   | 253,088 |   |
| Net                  Other Assets                                                                                      |   |   |   |   |   | 253,088 |   |
| TOTAL                  ASSETS                                                                                          |   |   |   |   | $ | 2,190,694 |   |
|                                                                                                                   |   |   |   |   |   |   |   |
| LIABILITIES                  AND STOCKHOLDERS' EQUITY                                                                  |   |   |   |   |   |   |   |
|                                                                                                                   |   |   |   |   |   |   |   |
| LIABILITIES                                                                                                            |   |   |   |   |   |   |   |
| Current                  Liabilities:                                                                                  |   |   |   |   |   |   |   |
| Accounts                  Payable                                                                                      |   |   |   |   | $ | 168,910 |   |
| Accrued                  Expenses                                                                                      |   |   |   |   |   | 25,285 |   |
| Customer                  Deposits                                                                                     |   |   |   |   |   | 5,000 |   |
| Income                  Taxes Payable                                                                                  |   |   |   |   |   | 17,775 |   |
| TOTAL                  CURRENT LIABILITIES                                                                             |   |   |   |   |   | 216,970 |   |
|                                                                                                                   |   |   |   |   |   |   |   |
| Deferred                  Income Taxes, net                                                                            |   |   |   |   |   | 103,959 |   |
| TOTAL                  LONG-TERM LIABILITIES                                                                           |   |   |   |   |   | 320,929 |   |
|                                                                                                                   |   |   |   |   |   |   |   |
| STOCKHOLDERS'                  EQUITY                                                                                  |   |   |   |   |   |   |   |
| Common                  Stock ($.001par value, 100,000,000 shares authorized:                                          |   |   |   |   |   |   |   |
| 11,905,299                  shares issued and outstanding)                                                             |   |   |   |   |   | 11,905 |   |
| Common                  Stock Subscribed but not Issued ($.001 par, 2,950 shares)                                      |   |   |   |   |   | 3 |   |
| Additional                  Paid-in-Capital                                                                            |   |   |   |   |   | 1,307,933 |   |
| Retained                  Earnings                                                                                     |   |   |   |   |   | 549,924 |   |
| TOTAL                  STOCKHOLDERS' EQUITY                                                                            |   |   |   |   |   | 1,869,765 |   |
|                                                                                                                   |   |   |   |   |   |   |   |
| TOTAL                  LIABILITIES AND STOCKHOLDERS' EQUITY                                                            |   |   |   |   | $ | 2,190,694 |   |
|                                                                                                                   |   |   |   |   |   |   |   |
|                                                                                                                   |   |   |   |   |   |   |   |
| The                  accompanying notes are an integral part of the consolidated financial                  statements |

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*Table          of Contents*

| **METWOOD,                  INC. AND SUBSIDIARY**                                                                      |
|------------------------------------------------------------------------------------------------------------------------|
| **Consolidated                  Income Statements**                                                                    |
| **For                  the three and nine months ended March 31, 2006 and                  2005**                      |
| **(unaudited)**                                                                                                        |
|                                                                                                                   |   |   |   |   |   |   |   |   |   |
|                                                                                                                   |   | Three                  Months Ended March 31, |   | Nine                  Months Ended March 31, |
|                                                                                                                   |   | 2006 |   | 2005 |   | 2006 |   | 2005 |   |
| REVENUES                                                                                                               |   |   |   |   |   |   |   |   |   |
| Construction                  Sales                                                                                    |   | $ | 880,085 |   | $ | 985,773 |   | $ | 2,906,438 |   | $ | 2,817,162 |   |
| Engineering                  sales                                                                                     |   |   | 53,277 |   |   | 96,021 |   |   | 186,319 |   |   | 276,828 |   |
| Gross                  Sales                                                                                           |   |   | 933,362 |   |   | 1,081,794 |   |   | 3,092,757 |   |   | 3,093,990 |   |
|                                                                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cost                  of construction sales                                                                            |   |   | 523,106 |   |   | 560,395 |   |   | 1,721,908 |   |   | 1,467,463 |   |
| Cost                  of engineering sales                                                                             |   |   | 45,241 |   |   | 50,331 |   |   | 120,190 |   |   | 175,175 |   |
| Gross                  cost of sales                                                                                   |   |   | 568,347 |   |   | 610,726 |   |   | 1,842,098 |   |   | 1,642,638 |   |
|                                                                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Gross                  Profit                                                                                          |   |   | 365,015 |   |   | 471,068 |   |   | 1,250,659 |   |   | 1,451,352 |   |
|                                                                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| ADMINISTRATIVE                  EXPENSES:                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Advertising                                                                                                            |   |   | 64,811 |   |   | 13,087 |   |   | 188,252 |   |   | 101,620 |   |
| Construction/bidding                  data                                                                             |   |   | 375 |   |   | 3,148 |   |   | 7,212 |   |   | 14,547 |   |
| Depreciation                                                                                                           |   |   | 15,081 |   |   | 9,216 |   |   | 40,910 |   |   | 42,252 |   |
| Dues                  and publications                                                                                 |   |   | 2,186 |   |   | (3,437 | ) |   | 9,433 |   |   | 7,505 |   |
| Insurance                                                                                                              |   |   | 13,247 |   |   | 9,010 |   |   | 46,200 |   |   | 43,146 |   |
| Office                  expenses                                                                                       |   |   | 10,982 |   |   | 22,814 |   |   | 43,559 |   |   | 50,002 |   |
| Payroll                  expenses                                                                                      |   |   | 182,984 |   |   | 154,465 |   |   | 519,772 |   |   | 425,445 |   |
| Professional                  fees                                                                                     |   |   | 9,567 |   |   | 6,057 |   |   | 36,799 |   |   | 34,772 |   |
| Rent                                                                                                                   |   |   | 18,600 |   |   | 18,600 |   |   | 55,800 |   |   | 18,700 |   |
| Repairs                  and maintenance                                                                               |   |   | 3,367 |   |   | 600 |   |   | 6,520 |   |   | 600 |   |
| Telephone                                                                                                              |   |   | 8,683 |   |   | 7,577 |   |   | 24,521 |   |   | 20,858 |   |
| Travel                                                                                                                 |   |   | 12,609 |   |   | 9,897 |   |   | 30,636 |   |   | 19,673 |   |
| Vehicle                                                                                                                |   |   | 11,798 |   |   | 5,769 |   |   | 26,220 |   |   | 21,706 |   |
| Other                                                                                                                  |   |   | 25,083 |   |   | 16,965 |   |   | 77,795 |   |   | 53,280 |   |
| Total                  administrative expenses                                                                         |   |   | 379,373 |   |   | 273,768 |   |   | 1,113,629 |   |   | 854,106 |   |
|                                                                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| OPERATING                  INCOME (LOSS)                                                                               |   |   | (14,358 | ) |   | 197,300 |   |   | 137,030 |   |   | 597,246 |   |
|                                                                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| OTHER                  INCOME (EXPENSE)                                                                                |   |   | 1,916 |   |   | (372,689 | ) |   | 11,344 |   |   | (369,395 | ) |
|                                                                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| INCOME                  (LOSS) BEFORE INCOME TAXES                                                                     |   |   | (12,442 | ) |   | (175,389 | ) |   | 148,374 |   |   | 227,851 |   |
|                                                                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| INCOME                  TAXES                                                                                          |   |   | 10,193 |   |   | 53,500 |   |   | (47,262 | ) |   | (83,500 | ) |
|                                                                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| NET                  INCOME (LOSS)                                                                                     |   | $ | (2,249 | ) | $ | (121,889 | ) | $ | 101,112 |   | $ | 144,351 |   |
|                                                                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic                  and diluted earnings per share                                                                  |   | $ | ** |   | $ | (0.01 | ) | $ | 0.01 |   | $ | 0.01 |   |
|                                                                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Weighted                  Average Common                                                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares                  Outstanding                                                                                    |   |   | 11,905,299 |   |   | 11,877,499 |   |   | 11,891,054 |   |   | 11,875,749 |   |
|                                                                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **                  Less than .01                                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| The                  accompanying notes are an integral part of the consolidated financial                  statements |

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*Table          of Contents*

| **METWOOD,                  INC. AND SUBSIDIARY**                                                            |
|------------------------------------------------------------------------------------------------------------------------|
| **Consolidated                  Statements of Cash Flows**                                                   |
| **For                  the nine months ended March 31, 2006 and                  2005**                      |
|   **(unaudited)**                                                                                            |
|                                                                                                                   |   |    |   |   |   |   |   |
|                                                                                                                   |   |    |   | 2006 |   | 2005 |   |
| CASH                  FLOWS FROM OPERATING ACTIVITIES:                                                                 |   |    |   |   |   |   |   |
| Net                  Income                                                                                            |   |   |   |   | $ | 101,112 |   | $ | 144,351 |   |
| Adjustments                  to reconcile net income to net cash provided by                                           |   |   |   |   |   |   |   |   |   |   |
| operating                  activities:                                                                                 |   |   |   |   |   |   |   |   |   |   |
| Depreciation                                                                                                           |   |   |   |   |   | 80,375 |   |   | 42,252 |   |
| Net                  loss on sale of property and equipment                                                            |   |   |   |   |   | - |   |   | 368,813 |   |
| Provision                  for deferred income taxes                                                                   |   |   |   |   |   | 14,998 |   |   | - |   |
| Common                  stock issued for services renderred                                                            |   |   |   |   |   | 3,135 |   |   | - |   |
| (Increase)                  decrease in operating assets:                                                              |   |   |   |   |   |   |   |   |   |   |
| Accounts                  receivable                                                                              |   |   |   |   |   | 94,242 |   |   | (173,256 | ) |
| Inventory                                                                                                         |   |   |   |   |   | (62,776 | ) |   | (44,849 | ) |
| Recoverable                  income taxes                                                                         |   |   |   |   |   | 25,539 |   |   | - |   |
| Other                  current assets                                                                             |   |   |   |   |   | (22,776 | ) |   | (107,374 | ) |
| Increase                  (decrease) in operating liabilities:                                                         |   |   |   |   |   |   |   |   |   |   |
| Accounts                  payable, accrued expenses and customer deposits                                         |   |   |   |   |   | (70,096 | ) |   | (167,382 | ) |
| Current                  income taxes payable                                                                     |   |   |   |   |   | (3,543 | ) |   | (19,327 | ) |
| NET                  CASH PROVIDED BY OPERATING ACTIVITIES                                                        |   |   |   |   |   | 160,210 |   |   | 43,228 |   |
|                                                                                                                   |   |   |   |   |   |   |   |   |   |   |
| CASH                  FLOWS FROM INVESTING ACTIVITIES:                                                                 |   |   |   |   |   |   |   |   |   |   |
| Proceeds                  from sale of fixed assets                                                                    |   |   |   |   |   | - |   |   | 600,000 |   |
| Purchases                  of property and equipment                                                                   |   |   |   |   |   | (213,000 | ) |   | (35,312 | ) |
| NET                  CASH (USED IN) INVESTING ACTIVITIES                                                          |   |   |   |   |   | (213,000 | ) |   | 564,688 |   |
|                                                                                                                   |   |   |   |   |   |   |   |   |   |   |
| CASH                  FLOWS FROM FINANCING ACTIVITIES:                                                                 |   |   |   |   |   |   |   |   |   |   |
| Repayment                  of long term debt                                                                           |   |   |   |   |   | - |   |   | (125,020 | ) |
| Net                  borrowings from (repayment of ) related party                                                     |   |   |   |   |   | - |   |   | - |   |
| Repayment                  under line of credit arrangement                                                            |   |   |   |   |   | - |   |   | (422,000 | ) |
| Common                  stock issued for cash                                                                          |   |   |   |   |   | - |   |   | 7,875 |   |
| NET                  CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES                                              |   |   |   |   |   | - |   |   | (539,145 | ) |
|                                                                                                                   |   |   |   |   |   |   |   |   |   |   |
| NET                  INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                                             |   |   |   |   |   | (52,790 | ) |   | 68,771 |   |
|                                                                                                                   |   |   |   |   |   |   |   |   |   |   |
| CASH                  AND CASH EQUIVALENTS:                                                                            |   |   |   |   |   |   |   |   |   |   |
| Beginning                  of period                                                                              |   |   |   |   |   | 234,607 |   |   | 37,736 |   |
|                                                                                                                   |   |   |   |   |   |   |   |   |   |   |
| End                  of period                                                                                    |   |   |   |   |   | 181,817 |   |   | 106,507 |   |
|                                                                                                                   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                   |   |   |   |   |   |   |   |   |   |   |
| The                  accompanying notes are an integral part of the consolidated financial                  statements |

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*Table          of Contents*

METWOOD,        INC. AND SUBSIDIARY

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| NOTE                1 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES  Business                Activity —                Metwood, Inc. (“Metwood”) was organized under the laws of the Commonwealth                of Virginia on April 7, 1993. On June 30, 2000, Metwood entered into                an                Agreement and Plan of Reorganization in which the majority of its                outstanding common stock was acquired by a publicly held Nevada shell                corporation. The acquisition was a tax-free exchange for federal                and state                income tax purposes and was accounted for as a reverse merger in                accordance with Accounting Principles Board (“APB”) Opinion No. 16. Upon                acquisition, the name of the shell corporation was changed to Metwood,                Inc., and Metwood, Inc., the Virginia corporation, became a wholly                owned                subsidiary of Metwood, Inc., the Nevada corporation. The publicly                traded                shell corporation had not had a material operating history for several                years prior to the merger.  Effective                January 1, 2002, Metwood acquired certain assets of Providence                Engineering, PC (“Providence”), a professional engineering firm with                customers in the same proximity as Metwood. The total purchase price                of                $350,000 was paid with $60,000 in cash and with 290,000 shares of                the                Company’s common stock to the two Providence shareholders. These shares                were valued at the closing active quoted market price of the stock                at the                effective date of the purchase, which was $1.00 per share. One of                the                shareholders of Providence was also an officer and existing shareholder                of                Metwood prior to the acquisition. On January 15, 2004, Metwood purchased                from that shareholder and retired 137,500 of the originally issued                290,000                shares for $25,000. The initial purchase transaction was accounted                for                under the purchase method of accounting. The purchase price was allocated                as follows:   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |   |   |
| Accounts                receivable                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   | $ | 75,000 |   |
| Fixed                assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |   | 45,000 |   |
| Goodwill                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |   | 230,000 |   |
|    Total                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   | $ | 350,000 |   |

| The                consolidated company (“the Company”) provides construction-related                products and engineering services to residential customers and                contractors, commercial contractors, developers and retail enterprises,                primarily in southwestern Virginia.  Basis                of Presentation —                The financial statements include the accounts of Metwood, Inc. (a                Nevada                corporation) and its wholly owned subsidiary, Metwood Inc. (a Virginia                corporation) prepared in accordance with accounting principles generally                accepted in the United States of America and pursuant to the rules                and                regulations of the Securities and Exchange Commission. All significant                intercompany balances and transactions have been eliminated. |
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| In                the opinion of management, the unaudited condensed consolidated financial                statements contain all the adjustments necessary in order to make                the                financial statements not misleading. The results for the period ended                March 31, 2006 are not necessarily indicative of the results to be                expected for the entire fiscal year ending June 30, 2006.  Fair                Value of Financial Instruments —                For certain of the Company’s financial instruments, none of which are held                for trading, including cash, recoverable income taxes, accounts                receivable, accounts payable and accrued expenses, the carrying amounts                approximate fair value due to their short maturities.  Management’s                Use of Estimates —                The preparation of consolidated financial statements in conformity                with                accounting principles generally accepted in the United States of                America                requires management to make estimates and assumptions that affect                the                reported amounts of assets and liabilities, disclosures of contingent                assets and liabilities at the date of consolidated financial statements,                and the reported amounts of revenues and expenses during the reporting                period. Actual results could differ from those estimates.  Accounts                Receivable —                The Company grants credit in the form of unsecured accounts receivable                to                its customers based on an evaluation of their financial condition.                The                Company performs ongoing credit evaluations of its customers. The                estimate                of the allowance for doubtful accounts, which is charged off to bad                debt                expense, is based on management’s assessment of current economic                conditions and historical collection experience with each customer.                At                March 31, 2006, the allowance for doubtful accounts was $10,262.                Specific                customer receivables are considered past due when they are outstanding                beyond their contractual terms and are charged off to the allowance                for                doubtful accounts when determined uncollectible. For the three and                months                ended March 31, 2006 and 2004, the bad debt expense was $-0- for                all                periods. Inventory                —                Inventory, consisting of metal and wood raw materials, is located                on the                Company’s premises and is stated at the lower of cost or market using the                first-in, first-out method.  Property                and equipment —                Property and equipment are recorded at cost and include expenditures                for                improvements when they substantially increase the productive lives                of                existing assets. Maintenance and repair costs are expensed to operations                as incurred. Depreciation is computed using the straight-line method                over                the assets’ estimated useful lives, which range from three to forty years.                 When                a fixed asset is disposed of, its cost and related accumulated                depreciation are removed from the accounts. The difference between                undepreciated cost and the proceeds from disposition is recorded                as a gain                or loss.  Patents                —                The Company has been assigned several key product patents developed                by                certain Company officers. No value has been recorded in the Company’s                financial statements because the fair value of the patents was not                determinable within reasonable limits at the date of assignment. |
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| Recent                Accounting Pronouncements—                In December 2004, the FASB issued SFAS No. 123(R), "Accounting for                Stock-Based Compensation". SFAS 123(R) establishes standards for                the                accounting for transactions in which an entity exchanges its equity                instruments for goods or services. This Statement focuses primarily                on                accounting for transactions in which an entity obtains employee services                in share-based payment transactions. SFAS 123(R) requires that the                fair                value of such equity instruments be recognized as expense in the                historical financial statements as services are performed. Prior                to SFAS                123(R), only certain pro-forma disclosures of fair value were required.                SFAS 123(R) shall be effective for the Company as of the beginning                of the                first interim or annual reporting period that begins after December                15,                2005. The adoption of this new accounting pronouncement is expected                to                have a material impact on the financial statements of the Company                commencing with the third quarter of the year ending September 30,                2006.                Small business issuers need not comply with the new standard until                fiscal                periods beginning after December 15, 2005. We already disclose expense                of                employee stock options for annual and quarterly periods on fair value                calculation according to SFAS No.123. In                November 2004, the FASB issued SFAS No. 151, “Inventory Costs” (SFAS 151).                This Statement amends the guidance in ARB No. 43, Chapter 4, “Inventory                Pricing,” to clarify the accounting for abnormal amounts of idle facility                expense, freight, handling costs, and wasted material (spoilage).                SFAS 151                requires that those items be recognized as current-period charges.                In                addition, this Statement requires that allocation of fixed production                overheads to the costs of conversion be based on the normal capacity                of                the production facilities. The provisions of SFAS 151 are effective                for                inventory costs incurred in fiscal years beginning after June 15,                2005.                 NOTE                2 — EARNINGS PER SHARE  Net                income and earnings per share for the three and nine months ended                March                31, 2006 and 2005 are as follows: |
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|                                                      |   | **For                the Three Months Ended****December                31,** |       | **For                the Nine Months Ended****December                31,** |   |
|-----------------------------------------------------------|--------|------------------------------------------------------------------------------|------------|-----------------------------------------------------------------------------|--------|
|                                                      |   | **2006**                                                                     |       | **2005**                                                                    |   | **2006** |   | **2005** |   |
| Net                income (loss)                          |   | $                                                                            | (2,249     | )                                                                           | $      | (121,889 | ) | $ | 101,112 |   | $ | 144,351 |   |
| Income                per share - basic and fully diluted |   |                                                                         | **         |                                                                        |   | (0.01 | ) |   | .01 |   |   | .01 |   |
| Weighted                average number of shares          |   |                                                                         | 11,905,299 |                                                                        |   | 11,877,499 |   |   | 11,891,054 |   |   | 11,875,749 |   |

|                                        |   | **For                  the Three Months Ended****March                  31,**** ** |   | **For                  the Nine Months Ended****March                  31,**** ** |   |
|---------------------------------------------|--------|-----------------------------------------------------------------------------------------|--------|----------------------------------------------------------------------------------------|--------|
|                                        |   | **2006**                                                                                |   | **2005**                                                                               |   | **2006** |   | **2005** |   |
| Cash                  paid for income taxes |   |                                                                                    |        |                                                                                   |   |  |   | $ | -- |   |   |  |   | $ | -- |   |   |  |   | $ | -- |   |   |   |   | $ | -- |   |   |  |   |
| Cash                  paid for interest     |   |                                                                                    |        |                                                                                   |   |  |   | $ | -- |   |   |  |   | $ | 6,469 |   |   |  |   | $ | -- |   |   |   |   | $ | -- |   |   |  |   |

| For                the three and nine months ended March 31, 2006 and 2005, we had sales                of                $-0-, $-0-, $-0- and $50,288, respectively, to our shareholder and                CEO,                Robert Callahan. As of March 31, 2006, the related party receivable                was                $-0-. NOTE                5 — BANK CREDIT LINE  We                have available a $600,000 revolving line of credit with a local bank.                We                paid off this loan in full during the year ended June 30, 2005 from                some                of the proceeds from the sale of our land and building. Interest                was                payable monthly on the outstanding balance at the prime lending rate,                which was 6.25% as of March 31, 2006. The note was secured by accounts                receivable, equipment, general intangibles, inventory, and furniture                and                fixtures. The note was personally guaranteed by the Company’s CEO. The                balance outstanding as of March 31, 2006 was $-0-.  NOTE                6 — SEGMENT INFORMATION  The                Company operates in two principal business segments: (1)                construction-related products and (2) engineering services. Performance                of                each segment is evaluated based on profit or loss from operations                before                income taxes. These reportable segments are strategic business units                that                offer different products and services. Summarized revenue and expense                information by segment for the three and nine months ended March                31, 2006                and 2005, as excerpted from internal management reports, is as follows:                  |
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|                                                                 |   | **For                  the Three Months Ended****March                  31,** |     | **For                  the Nine Months Ended****March                  31,** |   |
|----------------------------------------------------------------------|--------|-------------------------------------------------------------------------------|----------|------------------------------------------------------------------------------|--------|
|                                                                 |   | ** 2006**                                                                |     | **2005 **                                                               |   | ** 2006** |   | **2005**  |   |
| Construction:                                                   |   |                                                                     |     |                                                                         |   |   |   |   |   |
| Sales                                                                |   | $                                                                             | 880,085  |                                                                         | $      | 985,773 |   | $ | 2,906,438 |   | $ | 2,817,162 |   |
| Cost                  of sales                                       |   |                                                                          | (523,106 | )                                                                            |   | (560,395 | ) |   | (1,721,908 | ) |   | (1,467,463 | ) |
| Corporate                  and other expenses                        |   |                                                                          | (362,725 | )                                                                            |   | (537,954 | ) |   | (1,095,457 | ) |   | (1,246,005 |   |
|                                                                 |   |                                                                          |     |                                                                         |   |   |   |   |
|      Segment                  income (loss) |   | $                                                                             | (5,746   | )                                                                            | $      | (112,576 | ) | $ | 89,073 |   | $ | 103,694 |   |
|                                                                 |   |                                                                          |     |                                                                         |   |   |   |   |   |   |   |   |   |
| Engineering:                                                    |   |                                                                          |     |                                                                         |   |   |   |   |   |   |   |   |   |
| Sales                                                                |   | $                                                                             | 53,277   |                                                                         | $      | 96,021 |   | $ | 186,319 |   | $ | 276,828 |   |
| Cost                  of sales                                       |   |                                                                          | (45,241  | )                                                                            |   | (50,331 | ) |   | (120,190 | ) |   | (175,175 | ) |
| Corporate                  and other expenses                        |   |                                                                          | (4,539   | )                                                                            |   | (36,377 | ) |   | (54,090 | ) |   | (60,996 | ) |
|                                                                 |   |                                                                          |     |                                                                         |   |   |   |   |
|      Segment                  income (loss) |   | $                                                                             | 3,497    |                                                                         | $      | (9,313 | ) | $ | 12,039 |   | $ | 40,657 |   |

| ITEM                2 — MANAGEMENT’S DISCUSSION AND ANALYSIS  *With                the exception of historical facts stated herein, the matters discussed                in                this report are “forward-looking” statements that involve risks and                uncertainties that could cause actual results to differ materially                from                projected results. Such “forward-looking” statements include, but are not                necessarily limited to, statements regarding anticipated levels of                future                revenues and earnings from operations of the Company. Readers of                this                report are cautioned not to put undue reliance on “forward-looking”                statements, which are by their nature, uncertain as reliable indicators                of                future performance.*  **Description                of Business** Background  As                discussed in detail in Note 1, the Company was incorporated under                the laws                of the Commonwealth of Virginia on April 7, 1993 and, on June 30,                2000,                entered into a reverse merger in which it became the wholly owned                subsidiary of a public Nevada shell corporation, renamed Metwood,                Inc.                Effective January 1, 2002, Metwood acquired certain assets of Providence                Engineering, PC in a transaction accounted for under the purchase                method                of accounting.  Principal                Products/Services and Markets  *Metwood*  Residential                builders are aware of the superiority of steel framing vs. wood framing,                insofar as steel framing is lighter; stronger; termite, pest, rot                and fire                resistant; and dimensionally more stable in withstanding induced                loads.                Although use of steel framing in residential construction has generally                increased each year since 1980, many residential builders have been                hesitant to utilize steel due to the need to retrain framers and                subcontractors who are accustomed to a “stick-built” construction method                where components are laid out and assembled with nails and screws.                The                Company’s founders, Robert Callahan and Ronald Shiflett, saw the need to                combine the strength and durability of steel with the convenience                and                familiarity of wood and wood fasteners.  Metwood’s                primary products and services are:   |
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|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | ·                Girders and headers·                Floor joists·                Floor joist reinforcers·                Roof and floor trusses | ·                Garage, deck and porch concrete pour-over systems ·                Garage and post-and-beam buildings ·                Engineering, design and custom building services |

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| Metwood                manufactures light-gage steel construction materials, usually combined                with wood or wood fasteners, for use in residential and commercial                applications in place of more conventional wood products, which are                inferior in terms of strength and durability. The steel and steel/wood                products allow structures to be built with increased load strength                and                structural integrity and fewer support beams or support configurations,                thereby allowing for structural designs that are not possible with                wood-only products.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
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| Status                of Publicly Announced New Products or Services  The                Company has acquired four new patents through assignment from Robert                Callahan and Ronald Shiflett, the patent holders. All four patents                reflect                various modifications to the Company’s Joist Reinforcing Bracket which                will make it even easier for tradesmen to insert utility conduits                through                wood joists.  Seasonality                of Market  The                Company’s sales are subject to seasonal impacts, as its products are used                in residential and commercial construction projects which tend to                be at                peak levels in Virginia and North Carolina between the months of                March and                October. Accordingly, the Company’s sales are greater in its fourth and                first fiscal quarters. The Company builds an inventory of its products                throughout the winter and spring to support its sales season. Competition  Nationally,                there are over one hundred manufacturers of the types of products                produced                by the Company. However, the majority of these manufacturers are                using                wood-only products or products without metal reinforcement. Metwood                has                identified only one other manufacturer in the United States that                manufactures a wood-metal floor truss similar to that of the Company.                However, Metwood has often found that its products are the only ones                that                will work within many customers’ design specs.  Sources                and Availability of Raw Materials and the Names of Principal                Suppliers  All                of the raw materials used by the Company are readily available on                the                market from numerous suppliers. The light-gage metal used by the                Company                is supplied primarily by Dietrich Industries, Marino-Ware, and                Consolidated Systems, Inc. The Company’s main sources of lumber are                Lowe’s, 84 Lumber Company and Smith Mountain Building Supply. Gerdau                Amersteel, Descosteel and Adelphia Metals provide the majority of                the                Company’s rebar. Because of the number of suppliers available to the                Company, its decisions in purchasing materials are dictated primarily                by                price and secondarily by availability. The Company does not anticipate                a                lack of supply to affect its production; however, a shortage might                cause                the Company to pass on higher materials prices to its buyers. Dependence                on One or a Few Major Customers  Presently                the Company does not have any one customer whose loss would have                a                substantial impact on the Company’s operations.  Patents  The                Company’s eight U.S. Patents are:  U.S.                Patent No. 5,519,977, “Joist Reinforcing Bracket,” a bracket that                reinforces wooden joists with a hole for the passage of a utility                conduit.                The Company refers to this as its Floor Joist Patch Kit. |

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| U.S.                Patent No. 5,625,997, “Composite Beam,” a composite beam that includes an                elongated metal shell and a pierceable insert for receiving nails,                screws                or other penetrating fasteners.  U.S.                Patent No. 5,832,691, “Composite Beam,” a composite beam that includes an                elongated metal shell and a pierceable insert for receiving nails,                screws                or other penetrating fasteners. This is a continuation-in-part of                U.S.                Patent No. 5,625,997.  U.S.                Patent No. 5,921,053, “Internally Reinforced Girder with Pierceable                Nonmetal Components,” a girder that includes a pair of c-shaped members                secured together so as to form a hollow box, which permits the girder                to                be secured within a building structure with conventional fasteners                such as                nails, screws and staples.  U.S.                Patent Nos. D472,791S; D472,792S; D472,793S; and D477,210S, all                modifications of Metwood’s Joist Reinforcing Bracket, which will be used                for repairs of wood I-joists.  Each                of these patents was originally issued to the inventors and Company                founders, Robert Callahan and Ronald Shiflett, who licensed these                patents                to the Company.  Need                for Government Approval of Principal Products  The                Company’s products must either be sold with an engineer’s seal or                applicable building code approval. Once that approval is obtained,                the                products can be used in all fifty states. The Company’s Floor Joist                Reinforcer received Bureau Officials Code Association (“BOCA”) approval in                April 2001. Currently, the Company’s chief engineer has obtained                professional licensure in several states which permit products not                building code approved to be sold and used with his seal. The Company                expects his licensure in a growing number of states to greatly assist                in                the uniform acceptability of its products as it expands to new markets.                 Time                Spent During the Last Two Fiscal Years on Research and Development                Activities  Approximately                fifteen percent of the Company’s time and resources have been spent during                the last two fiscal years researching and developing its metal/wood                products, new product lines, and new patents.  Costs                and Effects of Compliance with Environmental Laws  The                Company does not incur any costs to comply with environmental laws.                It is                an environmentally friendly business in that its products are fabricated                from recycled steel.  Number                of Total Employees and Number of Full-Time Employees  The                Company had thirty-six employees at March 31, 2006, thirty-five of                whom                were full time. |
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| Results                of Operations  Net                Income  We                had net income (loss) of $(2,249), $101,112, $(121,889) and $144,351                for                the three and nine months ended March 31, 2006 and 2005, respectively.                This represents an increase (decrease) in net income of $119,640                and                $(43,239) for the three and nine months ended March 31, 2006 and                2005                compared to prior period amounts. The decreases in net income for                the                three and nine months ended March 31, 2006 over 2005 resulted from                an                increase in administrative expenses in the amounts of $105,605 and                $259,523, respectively and a decrease in gross profit in the amounts                of                $106,053 and $200,693, respectively. We also experienced an increase                in                fuel costs in the 2005/2006 period compared to 2004/2005 which caused                deterioration in our gross margins for 2005. Revenues                 Gross                sales were $903,597, $897,375, $2,159,395 and $2,012,195, respectively                for                the three and nine month’s ended March 31, 2006, increases of $6,222 and                $147,200, or 2% and 11%, respectively for 2005 and 2004. This increase                resulted from a combination of greater sales volume, an average increase                in selling prices and materials costs decrease. The                Company’s significant growth in fiscal 2006 sales over fiscal 2005                resulted from several factors, all of which will continue to have                a                positive impact on sales into the future. Awareness of the Company’s                products has increased as a result of aggressive marketing campaigns,                and                its patented, innovative products are becoming known throughout the                country. The Company’s customer base continues to grow as a result.                Additionally, new products using the technology of the Company’s four                newly issued patents began production at the beginning of the current                fiscal year and contributed to the growth in revenues for the nine                months                ending March 31, 2006. |
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| Expenses                 Total                administrative expenses were $379,373, $276,768, $1,113,629 and $854,106                for the three and nine months ended March 31, 2006 and 2005 increases                of                $105,605 (39%) and $259,523 (30%), respectively. Areas of particular                increase for the three and nine months ended March 31, 2006 over                2005 were                rental expense due to the aforementioned lease back of our property                (100%)                and payroll expense due to increased sales volume (22%). We hired                additional employees to handle our increase in sales volume in fiscal                2006. We also advertised more which generated the increase in sales                above.                Advertising expense increased by over 100% and 86% during the three                and                nine months ending March 31, 2006 compared to the prior periods in                2005,                respectively.  Liquidity                and Capital Resources  On                March 31, 2006, we had cash of $181,817 and working capital of $1,243,002.                Net cash provided by operating activities was $160,210 for the nine                months                ended March 31, 2006 compared to net cash provided by operating activities                of $43,228 for the nine months ended March 31, 2005. The decreased                provision of cash in the current fiscal 2006 period resulted primarily                from an increase in inventory that used current cash. Our net income                decreased during the fiscal 2006 period. Net                cash (used in) investing activities was $213,000 for the nine months                ended                March 31, 2006 compared to net cash provided of $564,688 during the                same                period in the prior year. Cash flows used in investing activities                for the                current period were for shop equipment, office equipment, computers,                software and vehicles. Cash flows generated from investing activities                in                the prior period were the result of the sale of our building and                other                fixed assets and related leaseback. Net                cash provided by financing activities totaled $ -0- for the nine                months                ended March 31, 2006 as compared to $(539,145) (used in) financing                activities for the nine months ended March 31, 2005. During the nine                month                period ended March 31, 2005, we issued 15,750 shares of restricted                common                stock for cash of $7,875                and we repaid all of our long term debt. During the nine month period                ended March 31, 2006, we issued 10,300 shares of restricted common                stock                for cash of $3,435. During the prior period, we used the cash generated                from the sale of our building and other fixed assets to pay down                long term                debt and all of the remaining balance on our bank line of                credit. ITEM                3 — CONTROLS AND PROCEDURES  The                Company’s management has reviewed the systems of internal controls and                disclosures within the specified time frame of ninety days. Management                believes that the systems in place allow for proper controls and                disclosures of financial reporting information. There have been no                changes                in these controls since our last evaluation date.    |
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| PART                II — OTHER INFORMATION ITEM                1 — LEGAL PROCEEDINGS None ITEM                2 — CHANGES IN SECURITIES None ITEM                3 — DEFAULTS UPON SENIOR SECURITIES None ITEM                4 — SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS None ITEM                5 — OTHER INFORMATION None ITEM                6— EXHIBITS AND REPORTS ON FORM 8-K                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |

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**SIGNATURES**

| Date:                May 5, 2006 |   | */s/                Robert M. Callahan*Robert                M. CallahanChief                Executive Officer |
|----------------------------------|--------|----------------------------------------------------------------------------------------------------------------|

| Date:                May 5, 2006 |   | */s/                Shawn Callahan*Shawn                CallahanChief                Financial Officer |
|----------------------------------|--------|--------------------------------------------------------------------------------------------------------|

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| **INDEX                TO EXHIBITS** |
|--------------------------------------|

| **NUMBER**  |   | **DESCRIPTION                OF EXHIBIT**  |
|------------------|--------|-------------------------------------------------|

| 3(i)* |   | Articles                of Incorporation |
|-------|--------|------------------------------------------|

| 3(ii)* |   | By-Laws |
|--------|--------|---------|

| 31.1       |   | Certification                of Chief Executive Officer Pursuant to                Securities Exchange Act Rules 13a-14 and 15d-14 as Adopted Pursuant                to                Section 302 of the Sarbanes-Oxley Act of 2002       |
|------------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  31.2 |   |  Certification                of Chief Financial Officer Pursuant to                Securities Exchange Act Rules 13a-14 and 15d-14 as Adopted Pursuant                to                Section 302 of the Sarbanes-Oxley Act of 2002 |

| 32 |   | Certifications                Pursuant to Section 906 of the                Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350) |
|----|--------|-------------------------------------------------------------------------------------------------------------------------|

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