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| UNITED                  STATESSECURITIES                  AND EXCHANGE COMMISSION**Washington,                  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 December 31,                    2005 |
|------------|----------------------------------------------------------------------------------------|

| **[   ]** | **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) |
|-----------------------------------------------------------------------------------------------------------|

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| **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 February 17, 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 December 31,                2005                                    |         | 3 |   |
|                                                                                                                                                                                                  |    |   |   |
|             Consolidated                Statements of Income for the Three and Six Months                Ended December 31, 2005 and 2004 |         | 4 |   |
|                                                                                                                                                                                                  |    |   |   |
|             Consolidated                Statements of Cash Flows for the Six Months Ended                December 31, 2005 and 2004       |         | 5 |   |
|                                                                                                                                                                                                  |    |   |   |
|             Notes                to Consolidated Financial Statements                                                                     |         | 6-11 |   |
|                                                                                                                                                                                                  |    |   |   |
| Item                2  Management’s Discussion and                Analysis                                                                                                            |         | 11-14 |   |
|                                                                                                                                                                                                  |    |   |   |
| Item                3  Controls and Procedures                                                                                                                                              |         | 14 |   |
|                                                                                                                                                                                                  |    |   |   |
| **PART                II - OTHER INFORMATION**                                                                                                                                                        |         |   |   |
|                                                                                                                                                                                                  |    |   |   |
| Item                6  Exhibits and Reports on Form                8-K                                                                                                                      |         | 14 |   |
|                                                                                                                                                                                                  |    |   |   |
| Signatures                                                                                                                                                                                            |         | 15 |   |
|                                                                                                                                                                                                  |    |   |   |
| Index                to Exhibits                                                                                                                                                                      |         | 16 |   |

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*Table          of Contents*

ments

|                                                                                                                   |
|------------------------------------------------------------------------------------------------------------------------|
| **METWOOD,INC.                  AND SUBSIDIARY**                                                                       |
| **Consolidated                  Condensed Balance Sheet**                                                              |
| **December                  31, 2005**                                                                                 |
|  ***(unaudited)***                                                                                                |
|                                                                                                                   |   |   |   |   |   |
| ASSETS                                                                                                                 |   |   |   |   |   |
|                                                                                                                   |   |   |   |   |   |
| CURRENT                  ASSETS                                                                                        |   |   |   |   |   |
| Cash                  and Cash Equivalents                                                                             |   |   |   |   | $ | 187,902 |   |
| Accounts                  Receivable, net of allowance of $10,262                                                      |   |   |   |   |   | 359,562 |   |
| Inventory                                                                                                              |   |   |   |   |   | 844,215 |   |
| Recoverable                  Income Taxes                                                                              |   |   |   |   |   | 2,196 |   |
| Other                  Current Assets                                                                                  |   |   |   |   |   | 85,787 |   |
| TOTAL                  CURRENT ASSETS                                                                                  |   |   |   |   |   | 1,479,662 |   |
|                                                                                                                   |   |   |   |   |   |   |   |
| PROPERTY                  AND EQUIPMENT                                                                                |   |   |   |   |   |   |   |
| Furniture,                  fixtures and equipment                                                                     |   |   |   |   |   | 58,186 |   |
| Computer                  hardware, software and peripherals                                                           |   |   |   |   |   | 146,170 |   |
| Machinery                  and shop equipment                                                                          |   |   |   |   |   | 266,806 |   |
| Vehicles                                                                                                               |   |   |   |   |   | 316,488 |   |
|                                                                                                                   |   |   |   |   |   | 787,650 |   |
| Accumulated                  Depreciation                                                                              |   |   |   |   |   | (417,393 | ) |
| Net                  Property and Equipment                                                                            |   |   |   |   |   | 370,257 |   |
|                                                                                                                   |   |   |   |   |   |   |   |
| OTHER                  ASSETS                                                                                          |   |   |   |   |   |   |   |
| Goodwill                                                                                                               |   |   |   |   |   | 253,088 |   |
| Net                  Other Assets                                                                                      |   |   |   |   |   | 253,088 |   |
| TOTAL                  ASSETS                                                                                          |   |   |   |   | $ | 2,103,007 |   |
|                                                                                                                   |   |   |   |   |   |   |   |
| LIABILITIES                  AND STOCKHOLDERS' EQUITY                                                                  |   |   |   |   |   |   |   |
|                                                                                                                   |   |   |   |   |   |   |   |
| LIABILITIES                                                                                                            |   |   |   |   |   |   |   |
| Current                  Liabilities:                                                                                  |   |   |   |   |   |   |   |
| Accounts                  Payable                                                                                      |   |   |   |   | $ | 88,912 |   |
| Accrued                  Expenses                                                                                      |   |   |   |   |   | 3,835 |   |
| Customer                  Deposits                                                                                     |   |   |   |   |   | 5,000 |   |
| Income                  Taxes Payable                                                                                  |   |   |   |   |   | 36,309 |   |
| TOTAL                  CURRENT LIABILITIES                                                                             |   |   |   |   |   | 134,056 |   |
|                                                                                                                   |   |   |   |   |   |   |   |
| Deferred                  Income Taxes, net                                                                            |   |   |   |   |   | 96,937 |   |
| TOTAL                  LONG-TERM LIABILITIES                                                                           |   |   |   |   |   | 230,993 |   |
|                                                                                                                   |   |   |   |   |   |   |   |
| 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, 2950 shares)                                       |   |   |   |   |   | 3 |   |
| Additional                  Paid-in-Capital                                                                            |   |   |   |   |   | 1,307,933 |   |
| Retained                  Earnings                                                                                     |   |   |   |   |   | 552,173 |   |
| TOTAL                  STOCKHOLDERS' EQUITY                                                                            |   |   |   |   |   | 1,872,014 |   |
|                                                                                                                   |   |   |   |   |   |   |   |
| TOTAL                  LIABILITIES AND STOCKHOLDERS' EQUITY                                                            |   |   |   |   | $ | 2,103,007 |   |
|                                                                                                                   |   |   |   |   |   |   |   |
|                                                                                                                   |   |   |   |   |   |   |   |
| 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 six months ended December 31, 2005 and                    2004**                    |
| **(unaudited)**                                                                                                            |
|                                                                                                                       |   |   |   |   |   |   |   |   |   |
|                                                                                                                       |   | Three                    Months Ended December 31, |   | Six                    Months Ended December 31, |   |
|                                                                                                                       |   | 2005 |   | 2004 |   | 2005 |   | 2004 |   |
| REVENUES                                                                                                                   |   |   |   |   |   |   |   |   |   |
| Construction                    Sales                                                                                      |   | $ | 824,759 |   | $ | 811,189 |   | $ | 2,026,353 |   | $ | 1,830,090 |   |
| Engineering                    sales                                                                                       |   |   | 78,838 |   |   | 86,186 |   |   | 133,042 |   |   | 182,105 |   |
| Gross                    Sales                                                                                             |   |   | 903,597 |   |   | 897,375 |   |   | 2,159,395 |   |   | 2,012,195 |   |
|                                                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cost                    of construction sales                                                                              |   |   | 511,457 |   |   | 350,344 |   |   | 1,198,802 |   |   | 907,427 |   |
| Cost                    of engineering sales                                                                               |   |   | 37,293 |   |   | 75,509 |   |   | 74,949 |   |   | 124,448 |   |
| Gross                    cost of sales                                                                                     |   |   | 548,750 |   |   | 425,853 |   |   | 1,273,751 |   |   | 1,031,875 |   |
|                                                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Gross                    Profit                                                                                            |   |   | 354,847 |   |   | 471,522 |   |   | 885,644 |   |   | 980,320 |   |
|                                                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| ADMINISTRATIVE                    EXPENSES:                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Advertising                                                                                                                |   |   | 54,368 |   |   | 41,804 |   |   | 123,441 |   |   | 88,533 |   |
| Construction/bidding                    data                                                                               |   |   | 3,327 |   |   | 6,558 |   |   | 6,837 |   |   | 11,340 |   |
| Depreciation                                                                                                               |   |   | 13,158 |   |   | 15,517 |   |   | 25,829 |   |   | 31,052 |   |
| Dues                    and publications                                                                                   |   |   | 3,847 |   |   | 4,554 |   |   | 7,247 |   |   | 10,942 |   |
| Insurance                                                                                                                  |   |   | 16,967 |   |   | 20,895 |   |   | 32,953 |   |   | 33,997 |   |
| Office                    expenses                                                                                         |   |   | 14,163 |   |   | 12,616 |   |   | 32,577 |   |   | 18,790 |   |
| Payroll                    expenses                                                                                        |   |   | 172,422 |   |   | 148,568 |   |   | 336,788 |   |   | 270,980 |   |
| Professional                    fees                                                                                       |   |   | 6,262 |   |   | 7,973 |   |   | 27,232 |   |   | 36,515 |   |
| Rent                                                                                                                       |   |   | 18,600 |   |   | - |   |   | 37,200 |   |   | - |   |
| Repairs                    and maintenance                                                                                 |   |   | 1,390 |   |   | - |   |   | 3,153 |   |   | - |   |
| Telephone                                                                                                                  |   |   | 9,749 |   |   | 6,670 |   |   | 15,838 |   |   | 13,281 |   |
| Travel                                                                                                                     |   |   | 12,289 |   |   | 6,351 |   |   | 18,027 |   |   | 9,776 |   |
| Vehicle                                                                                                                    |   |   | 11,339 |   |   | 6,866 |   |   | 14,422 |   |   | 16,440 |   |
| Other                                                                                                                      |   |   | 42,828 |   |   | 19,233 |   |   | 52,712 |   |   | 40,945 |   |
| Total                    administrative expenses                                                                           |   |   | 380,709 |   |   | 297,605 |   |   | 734,256 |   |   | 582,591 |   |
|                                                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| OPERATING                    INCOME (LOSS)                                                                                 |   |   | (25,862 | ) |   | 173,917 |   |   | 151,388 |   |   | 397,729 |   |
|                                                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| OTHER                    INCOME (EXPENSE)                                                                                  |   |   | 10,737 |   |   | 8,875 |   |   | 9,428 |   |   | 5,511 |   |
|                                                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| INCOME                    (LOSS) BEFORE INCOME TAXES                                                                       |   |   | (15,125 | ) |   | 182,792 |   |   | 160,816 |   |   | 403,240 |   |
|                                                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| INCOME                    TAXES                                                                                            |   |   | (3,009 | ) |   | (55,000 | ) |   | (57,455 | ) |   | (137,000 | ) |
|                                                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| NET                    INCOME (LOSS)                                                                                       |   | $ | (18,134 | ) | $ | 127,792 |   | $ | 103,361 |   | $ | 266,240 |   |
|                                                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic                    and diluted earnings per share                                                                    |   | $ | ** |   | $ | 0.01 |   | $ | 0.01 |   | $ | 0.02 |   |
|                                                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Weighted                    Average Common                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares                    Outstanding                                                                                      |   |   | 11,885,717 |   |   | 11,877,499 |   |   | 11,883,832 |   |   | 11,874,874 |   |
|                                                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **                    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 six months ended December 31, 2005 and                    2004**                    |
|   **(unaudited)**                                                                                                |
|                                                                                                                       |   |    |   |   |   |   |   |
|                                                                                                                       |   |    |   | 2005 |   | 2004 |   |
| CASH                    FLOWS FROM OPERATING ACTIVITIES:                                                                   |   |    |   |   |   |   |   |
| Net                    Income                                                                                              |   |   |   |   | $ | 103,361 |   | $ | 266,240 |   |
| Adjustments                    to reconcile net income to net cash provided by                                             |   |   |   |   |   |   |   |   |   |   |
| operating                    activities:                                                                                   |   |   |   |   |   |   |   |   |   |   |
| Depreciation                                                                                                               |   |   |   |   |   | 50,742 |   |   | 47,690 |   |
| Net                    loss on sale of property and equipment                                                              |   |   |   |   |   | - |   |   | 2,948 |   |
| Provision                    for deferred income taxes                                                                     |   |   |   |   |   | 7,976 |   |   | 7,000 |   |
| Common                    stock issued for services renderred                                                              |   |   |   |   |   | 3,135 |   |   | - |   |
| (Increase)                    decrease in operating assets:                                                                |   |   |   |   |   |   |   |   |   |   |
| Accounts                    receivable                                                                                |   |   |   |   |   | 124,472 |   |   | (100,511 | ) |
| Inventory                                                                                                             |   |   |   |   |   | (114,754 | ) |   | (46,582 | ) |
| Recoverable                    income taxes                                                                           |   |   |   |   |   | 28,470 |   |   | - |   |
| Other                    current assets                                                                               |   |   |   |   |   | (17,654 | ) |   | 21,964 |   |
| Increase                    (decrease) in operating liabilities:                                                           |   |   |   |   |   |   |   |   |   |   |
| Accounts                    payable, accrued expenses and customer deposits                                           |   |   |   |   |   | (174,889 | ) |   | (173,057 | ) |
| Current                    income taxes payable                                                                       |   |   |   |   |   | 14,991 |   |   | 76,000 |   |
| NET                    CASH PROVIDED BY OPERATING ACTIVITIES                                                          |   |   |   |   |   | 25,850 |   |   | 101,692 |   |
|                                                                                                                       |   |   |   |   |   |   |   |   |   |   |
| CASH                    FLOWS FROM INVESTING ACTIVITIES:                                                                   |   |   |   |   |   |   |   |   |   |   |
| Purchases                    of property and equipment                                                                     |   |   |   |   |   | (75,990 | ) |   | (44,260 | ) |
| NET                    CASH (USED IN) INVESTING ACTIVITIES                                                            |   |   |   |   |   | (75,990 | ) |   | (44,260 | ) |
|                                                                                                                       |   |   |   |   |   |   |   |   |   |   |
| CASH                    FLOWS FROM FINANCING ACTIVITIES:                                                                   |   |   |   |   |   |   |   |   |   |   |
| Repayment                    of long term debt                                                                             |   |   |   |   |   | - |   |   | (9,220 | ) |
| Net                    borrowings from (repayment of ) related party                                                       |   |   |   |   |   | - |   |   | (56,976 | ) |
| Common                    stock issued for cash                                                                            |   |   |   |   |   | 3,435 |   |   | 7,875 |   |
| NET                    CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES                                                |   |   |   |   |   | 3,435 |   |   | (58,321 | ) |
|                                                                                                                       |   |   |   |   |   |   |   |   |   |   |
| NET                    INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                                               |   |   |   |   |   | (46,705 | ) |   | (889 | ) |
|                                                                                                                       |   |   |   |   |   |   |   |   |   |   |
| CASH                    AND CASH EQUIVALENTS:                                                                              |   |   |   |   |   |   |   |   |   |   |
| Beginning                    of period                                                                                |   |   |   |   |   | 234,607 |   |   | 37,736 |   |
|                                                                                                                       |   |   |   |   |   |   |   |   |   |   |
| End                    of period                                                                                      |   |   |   |   |   | 187,902 |   |   | 36,847 |   |
|                                                                                                                       |   |   |   |   |   |   |   |   |   |   |
| The                    accompanying notes are an integral part of the consolidated financial                    statements |

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*Table            of Contents*

| METWOOD,                INC. AND SUBSIDIARYNOTES                TO CONSOLIDATED FINANCIAL STATEMENTSDECEMBER                31, 2005(UNAUDITED)  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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*Table          of Contents*

| 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                December 31, 2005 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                December 31, 2005, 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 December 31, 2005 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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| Goodwill                — In June 2001 the Financial Accounting Standards Board (‘FASB”) issued                Statement of Financial Accounting Standards (“SFAS”) No. 142, “Goodwill                and Other Intangible Assets.” This statement requires that goodwill and                intangible assets deemed to have an indefinite life not be amortized.                Instead, such assets are to be tested for impairment annually or                immediately if conditions indicate that such an impairment could                exist.                The Company adopted the provisions of SFAS 142 beginning July 1,                2002 and                completed the transitional impairment test of goodwill as of July                1, 2002                and again as of December 31, 2005 and 2004 using discounted cash                flow                estimates and found no goodwill impairment.  Revenue                Recognition — Revenue is recognized when goods are shipped and earned or                when services are performed, provided collection of the resulting                receivable is probable. If any material contingencies are present,                revenue                recognition is delayed until all material contingencies are eliminated.                Further, no revenue is recognized unless collection of the applicable                consideration is probable.  Income                Taxes — Income taxes are accounted for in accordance with SFAS No. 109,                “Accounting for Income Taxes.” A deferred tax asset or liability is                recorded for all temporary differences between financial and tax                reporting                and for net operating loss carryforwards, where applicable. Deferred                tax                assets are reduced by a valuation allowance when, in the opinion                of                management, it is more likely than not that some portion or the entire                deferred tax asset will not be realized. Deferred tax assets and                liabilities are adjusted for the effect of changes in tax laws and                rates                on the date of enactment.  Earnings                Per Common Share —Basic earnings per share amounts are based on the                weighted average shares of common stock outstanding. If applicable,                diluted earnings per share would assume the conversion, exercise                or                issuance of all potential common stock instruments such as options,                warrants and convertible securities, unless the effect is to reduce                a loss                or increase earnings per share. This presentation has been adopted                for the                quarters presented. There were no adjustments required to net income                for                the years presented in the computation of diluted earnings per share.                 Reclassifications                — Certain items in the financial statements for the three and six months                ended December 31, 2004 have been reclassified to conform to the                December                31, 2005 consolidated financial statement presentation.  Recent                Accounting Pronouncements — In January 2003, the FASB issued FIN No. 46,                "Consolidation of Variable Interest Entities". FIN No. 46 requires                the                consolidation of entities that cannot finance their activities without                the                support of other parties and that lack certain characteristics of                a                controlling interest, such as the ability to make decisions about                the                entity's activities via voting rights or similar rights. The entity                that                consolidates the variable interest entity is the primary beneficiary                of                the entity's activities. FIN No. 46 applies immediately to variable                interest entities created after January 31, 2003, and must be applied                in                the first period beginning after June 15, 2003 for entities in which                an                enterprise holds a variable interest entity that it acquired before                February 1, 2003. The Company adopted this Interpretation in the                first                quarter of fiscal 2005. |
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| In                January 2003, the EITF released Issue No. 00-21, ("EITF 00-21"),                "Revenue                Arrangements with Multiple Deliveries", which addressed certain aspects                of                the accounting by a vendor for arrangement under which it will perform                multiple revenue-generating activities. Specifically, EITF 00-21                addresses                whether an arrangement contains more than one unit of accounting                and the                measurement and allocation to the separate units of accounting in                the                arrangement. EITF 00-21 is effective for revenue arrangements entered                into                in fiscal periods beginning after June 15, 2003. The adoption of                this                standard will not have an impact on the Company's consolidated financial                statements.  In** **May                2003, the FASB issued SFAS No. 149, "Amendment of Statement 133 on                Derivative Instruments and Hedging Activities." SFAS No. 149 amends                and                clarifies accounting for derivative instruments, including certain                derivative instruments embedded in other contracts, and for hedging                activities under SFAS No. 133. SFAS No. 149 is effective for contracts                entered into or modified after June 30, 2003 and for hedging relationships                designated after June 30, 2003. The Company does not believe that                there                will be any impact on its consolidated financial statements.  In                May 2003, the FASB issued SFAS No. 150, "Accounting for Certain Financial                Instruments with Characteristics of both Liabilities and Equity."                SFAS No.                150 establishes standards for how companies classify and measure                certain                financial instruments with characteristics of both liabilities and                equity.                It requires companies to classify a financial instrument that is                within                its scope as a liability (or an asset in some circumstances). SFAS                No. 150                is effective for financial instruments entered into or modified after                May                31, 2003. The standard will not impact the Company's consolidated                financial statements. 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 months ended December                31, 2005                and 2004 are as follows:   |
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|                                                      |   | **For                the Three Months Ended****December                31,** |       | **For                the Six Months Ended****December                31,** |   |
|-----------------------------------------------------------|--------|------------------------------------------------------------------------------|------------|----------------------------------------------------------------------------|--------|
|                                                      |   | **2005**                                                                     |       | **2004**                                                                   |   | **2005** |   | **2004** |   |
| Net                income (loss)                          |   | $                                                                            | (18,134    | )                                                                          | $      | 127,792 |   | $ | 103,361 |   | $ | 266,240 |   |
| Income                per share - basic and fully diluted |   |                                                                         | **         |                                                                       |   | 0.01 |   |   | .01 |   |   | .02 |   |
| Weighted                average number of shares          |   |                                                                         | 11,885,717 |                                                                       |   | 11,877,499 |   |   | 11,883,832 |   |   | 11,874,874 |   |

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|                                        |   |   | **For                  the Three Months Ended****December                  31,**** **  |   |   | **For                  the Six Months Ended****December                  31,**** **  |   |
|---------------------------------------------|--------|--------|--------------------------------------------------------------------------------------------------|--------|--------|------------------------------------------------------------------------------------------------|--------|
|                                        |   |   | **2005 **                                                                                   |   |   | **2004 **                                                                                 |   |   | **2005 ** |   |   | **2004**  |   |
|                                        |   |   |                                                                                             |   |   |                                                                                           |   |   |   |   |   |   |   |
| Cash                  paid for income taxes |   | $      | --                                                                                               |   | $      | --                                                                                             |   | $ | -- |   | $ | -- |   |
| Cash                  paid for interest     |   | $      | --                                                                                               |   | $      | 6,469                                                                                          |   | $ | -- |   | $ | -- |   |

| For                the three and six months ended December 31, 2005 and 2004, we had                sales of                $-0-, $-0-, $-0- and $50,288, respectively, to our shareholder and                CEO,                Robert Callahan. As of December 31, 2005, 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 December 31, 2005. 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 December 31, 2005 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 six months ended December                31,                2005 and 2004, as excerpted from internal management reports, is                as                follows: |
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|                                                                 |   |   | **For                  the Three Months Ended****December                  31, **  |   |   | **For                  the Six Months Ended****December                  31, **  |   |   |       |
|----------------------------------------------------------------------|--------|--------|----------------------------------------------------------------------------------------------|--------|--------|--------------------------------------------------------------------------------------------|--------|--------|------------|
|                                                                 |   |   | 2005                                                                                    |   |   | 2004                                                                                  |   |   | 2005  |   |   | 2004  |   |   |   |
|                                                                 |   |   |                                                                                         |   |   |                                                                                       |   |   |       |   |   |   |   |   |   |
| Construction:                                                   |   |   |                                                                                              |   |   |                                                                                       |   |   |            |   |   |   |   |   |   |
| Sales                                                                |   | $      | 824,759                                                                                      |   | $      | 811,189                                                                                    |   | $      | 2,026,353  |   | $ | 1,830,090 |   |   |   |
| Cost                  of sales                                       |   |   | (511,457                                                                                     | )      |   | (350,344                                                                                   | )      |   | (1,198,802 | ) |   | (907,427 | ) |   |   |
| Corporate                  and other expenses                        |   |   | (334,244                                                                                     | )      |   | (329,665                                                                                   | )      |   | (732,551   | ) |   | (687,767 |   |   |   |
|                                                                 |   |   |                                                                                         |   |   |                                                                                       |   |   |       |   |   |   |   |
|      Segment                  income (loss) |   | $      | (20,942                                                                                      | )      | $      | 131,180                                                                                    |   | $      | 95,000     |   | $ | 234,896 |   |   |   |
|                                                                 |   |   |                                                                                         |   |   |                                                                                       |   |   |       |   |   |   |   |   |   |
|  Engineering:                                              |   |   |                                                                                         |   |   |                                                                                       |   |   |       |   |   |   |   |   |   |
| Sales                                                                |   | $      | 78,838                                                                                       |   | $      | 86,185                                                                                     |   | $      | 133,042    |   |   | 182,105 |   |   |   |
| Cost                  of sales                                       |   |   | (37,293                                                                                      | )      |   | (75,509                                                                                    | )      |   | (74,949    | ) |   | (124,448 | ) |   |   |
| Corporate                  and other expenses                        |   |   | (38,737                                                                                      | )      |   | (17,965                                                                                    | )      |   | (49,732    | ) |   | (26,213 | ) |   |   |
|                                                                 |   |   |                                                                                         |   |   |                                                                                       |   |   |       |   |   |   |   |
|      Segment                  income (loss) |   | $      | 2,808                                                                                        |   | $      | (3,387                                                                                     | )      | $      | 8,361      |   | $ | 31,344 |   |   |   |

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|  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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| Expenses                 Total                administrative expenses were $380,709, $297,605, $734,256 and $592,591                for                the three and six months ended December 31, 2005, increases of $83,104                (28%) and $141,665 (24%), respectively. Areas of particular increase                for                the three and six months ended December 31, 2005 over 2004 were rental                expense due to the aforementioned lease back of our property (100%)                and                payroll expense due to increased sales volume (7%). We hired additional                employees to handle our increase in sales volume in 2005. We also                advertised more which generated the increase in sales above. Advertising                expense increased by 29% and 40% during the three and six months                ending                December 31, 2005 compared to the prior periods in 2004, respectively.                 Liquidity                and Capital Resources  On                December 31, 2005, we had cash of $187,902 and working capital of                $1,345,606. Net cash provided by operating activities was $25,850                for the                six months ended December 31, 2005 compared to net cash provided                by                operating activities of $101,692 for the six months ended December                31,                2004. The decreased provision of cash in the current 2005 period                resulted                primarily from an increase in inventory that used current cash. Our                net                income also increased during the 2005 period. Net                cash (used in) investing activities was $75,990 for the six months                ended                December 31, 2005 compared to net cash used of $44,260 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. Net                cash provided by financing activities totaled $3,435 for the six                months                ended December 31, 2005 as compared to $(58,321) (used in) financing                activities for the six months ended December 31, 2004. During the                six                month period ended December 31, 2004, 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 six month period                ended                December 31, 2005, we issued 10,300 shares of restricted common stock                for                cash of $3,435. 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 (a)  Exhibits                 are  incorporated  by reference.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |

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**SIGNATURES**

| Date:                February 17, 2006 |   | */s/                Robert M. Callahan*Robert                M. CallahanChief                Executive Officer |
|----------------------------------------|--------|----------------------------------------------------------------------------------------------------------------|

| Date:                February 17, 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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