**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**Washington,
      D.C. 20549**





**FORM
      10-KSB/A**


(Amendment
      No. 2)







**(Mark
                One)****x**
            **ANNUAL
                REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
                OF 1934****For
                the fiscal year ended December 31, 2007****OR****o**
            **TRANSITION
                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                SECURITIES EXCHANGE ACT OF
                1934**





**For
      the transition period from ____________ to
      ____________**





**Commission
      file number: 000-31585**





**DIAMOND
      DISCOVERIES INTERNATIONAL CORP.**


(Name
      of
      Small Business Issuer)





**Delaware**
            
            **06-1579927**(State
                or Other Jurisdiction
            
            (IRS
                Employer Identification No.)of
                Incorporation)**45
                Rockefeller Plaza, Suite 2000****New
                York, NY**
            
            **10111**(Address
                of Principal Executive Offices)
            
            (Zip
                Code)**(212)
                332-8016**(Issuer’s
                Telephone Number, Including Area
                Code)





Securities
      registered under Section 12(b) of the Exchange Act: **None**





Securities
      registered under Section 12(g) of the Exchange Act: **Common
      Stock**





**Title
                of Each Class**
            
            **Name
                of Each Exchange**
              **on
                Which Registered**Common
                Stock, par value $.001
            
            None





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 o





Check
      if
      there is no disclosure of delinquent filers in response to Item 405 of
      Regulation S-B is not contained in this form, and no disclosure will be
      contained, to the best of registrant’s knowledge, in definitive proxy or
      information statements incorporated by reference in Part III of this
      Form 10- KSB or any amendment to this Form 10-KSB. o





Issuer’s
      revenues for its most recent fiscal year were: $0.





The
      aggregate market value of the voting and non-voting common equity held by
      non-affiliates computed by reference to the price at which the common equity
      was
      sold as of April 11, 2008 is $2,489,965.





The
      number of shares outstanding of the Company’s common stock, as of April 11,
      2008 is 358,216,830.





Transitional
      Small Business Disclosure Format (check one): Yes o No x














**TABLE
      OF CONTENTS**


DESCRIPTION
                  OF BUSINESS
              
              3DESCRIPTION
                  OF PROPERTY
              
              8LEGAL
                  PROCEEDINGS
              
              10SUBMISSION
                  OF MATTERS TO A VOTE OF SECURITY HOLDERS
              
              10MARKET
                  FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
              
              10MANAGEMENT’S
                  DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
              
              13INDEX
                  TO FINANCIAL STATEMENTS
              
              17FINANCIAL
                  STATEMENTS
              
              17CHANGES
                  IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
                  DISCLOSURE
              
              31CONTROLS
                  AND PROCEDURES
              
              31DIRECTORS,
                  EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH
                  SECTION
                  16(A) OF THE EXCHANGE ACT
              
              32EXECUTIVE
                  COMPENSATION
              
              33SECURITY
                  OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
              
              34CERTAIN
                  RELATIONSHIPS AND RELATED TRANSACTIONS
              
              36EXHIBITS
                  AND REPORTS ON FORM 8-K
              
              37PRINCIPAL
                  ACCOUNTANT FEES AND SERVICES
              
              37SIGNATURES
              
              38APPENDIX
                  A
              
              39
  2


**Explanatory
        Note**
 
 This
        Annual Report on Form 10-KSB/A (“Amendment No. 2”)  is filed as an
        amendment to the Annual Report on Form 10-KSB for the year ended December
        31,
        2007 filed by Diamond Discoveries International Corp. (the “Company”) on April
        14, 2008 as subsequently amended on August 13, 2008 (the “Original
        10-KSB”). The Company is further amending Item 8A, Controls and Procedures, to
        disclose the Company's revised conclusion on the effectiveness of its
        disclosure controls and procedures, mainly that its disclosure controls and
        procedures were not effective as of December 31, 2007.
 
 This
        Amendment No. 2 to the Annual Report on Form 10-KSB of the Company has not
        been
        updated or modified in any other way and speaks only as of the date of the
        original filing, April 14, 2008.


**PART
      I**





This
      Annual Report on Form 10-KSB and the information incorporated by reference
      includes “forward-looking statements” within the meaning of Section 27A of
      the Securities Act of 1933, as amended, and Section 21E of the Securities
      and Exchange Act of 1934, as amended. Various statements, estimates,
      predictions, and projections stated under “Risk Factors,” “Management’s
      Discussion and Analysis or Plan of Operations” and “Business,” and elsewhere in
      this Annual Report are “forward-looking statements” within the meaning of
      Section 27A of the Securities Act and Section 21E of the Exchange Act.
      These statements appear in a number of places in this Annual Report and include
      statements regarding the intent, belief or current expectations of Diamond
      Discoveries International or our officers with respect to, among other things,
      the ability to successfully implement our acquisition and exploration
      strategies, including trends affecting our business, financial condition and
      results of operations. While these forward-looking statements and the related
      assumptions are made in good faith and reflect our current judgment regarding
      the direction of the related business, actual results will almost always vary,
      sometimes materially, from any estimates, predictions, projections, assumptions,
      or other future performance suggested herein. These statements are based upon
      a
      number of assumptions and estimates, which are inherently subject to significant
      uncertainties and contingencies, many of which are beyond our control and
      reflect future business decisions which are subject to change. Some of these
      assumptions inevitably will not materialize, and unanticipated events will
      occur
      which will affect our results. Some important factors (but not necessarily
      all
      factors) that could affect our revenues, growth strategies, future profitability
      and operating results, or that otherwise could cause actual results to differ
      materially from those expressed in or implied by any forward-looking statement,
      include the following:





·
            our
                ability to successfully implement our acquisition and exploration
                strategies;




·
            the
                success or failure of our exploration activities and other opportunities
                that we may pursue;




·
            changes
                in the availability of debt or equity capital and increases in borrowing
                costs or interest rates;




·
            changes
                in regional and national business and economic conditions, including
                the
                rate of inflation;




·
            changes
                in the laws and government regulations applicable to us; and




·
            increased
                competition.





Stockholders
      and other users of this Annual Report on Form 10-KSB are urged to carefully
      consider these factors in connection with the forward-looking statements. We
      do
      not intend to publicly release any revisions to any forward-looking statements
      contained herein to reflect events or circumstances occurring after the date
      hereof or to reflect the occurrence of unanticipated events.





**Item
      1. Description of Business**





We
      were
      incorporated in the State of Delaware on April 24, 2000. We are an
      exploration stage company that is engaged in the acquisition and exploration
      of
      mineral properties. Our initial focus is in the area of the Torngat fields
      located in the province of Quebec, Canada. Other than contracting with third
      parties to conduct exploration and gather data on our behalf, we have conducted
      no operations to date and do not expect to receive any revenues for at least
      the
      next two years. During the next two years we plan to continue to concentrate
      our
      efforts on exploration and data gathering. During the next two years we will
      be
      solely dependent on the availability of external financing to fund our
      operations. Our independent public accountants have expressed substantial doubt
      about our ability to continue as a going concern because such continuance is
      dependent upon our ability to raise capital. If we are unable to secure adequate
      financing we will be unable to continue our exploration and data gathering
      efforts. Because we are an exploration
      stage company, we do not know if a commercially viable mineral deposit exists
      on
      any of our properties. Further exploration will be required before the economic
      and legal feasibility of developing the properties can be determined.





*Acquisition
      Agreement*





On
      September 12, 2000, we entered into an Acquisition Agreement with
      Messrs. Peter Ferderber and Stanley G. Hawkins, and Tandem
      Resources Ltd., a Canadian mineral exploration company of which
      Mr. Hawkins is the President. Pursuant to such Agreement, we acquired
      certain mineral exploration permits covering an area of approximately 469.05
      square kilometers in the Torngat fields, which are located on the east coast
      of
      Ungava Bay, in the northwestern part of Quebec. The Torngat fields are one
      of
      four fields in Quebec that contain diamondiferous kimberlite formations. The
      Torngat fields
      are composed of a central plateau about 400 meters above sea level, and are
      broken by steep-sided gorges and fjords along the coast. The largest of these
      features, Alluviaq Fjord, bisects the property covered by the permits. Several
      dykes in the area are well exposed sub-vertical features in the Alluviaq Fjord,
      and display horizontal and vertical continuity. These traits result from rock
      being pushed up from below the surface, into a vertical position against other
      horizontal rocks. Geologists usually identify these rock formations as strong
      targets for the presence of diamonds.




3





The
      consideration paid under the Acquisition Agreement was 1,000,000 shares of
      our
      common stock to each of Messrs. Ferderber and Hawkins, and the payment of
      $35,000 Canadian to Mr. Hawkins and $25,000 Canadian to Mr. Ferderber.
      We also assigned to Messrs. Ferderber and Hawkins a one per cent (1%)
      interest in the “Net Smelter Returns” of the property, one half of which is
      payable over the first $50 million Canadian in revenues from the property.
      (Net Smelter Returns are determined by the net amount of money received from
      the
      sale of ore, or ore concentrates or other products from a property to a smelter
      or other ore buyer.) Once Messrs. Ferderber and Hawkins have received
      $10 million Canadian from these Net Smelter Returns, their interest
      terminates. Tandem Resources Ltd. received an option to purchase 40% of the
      mineral rights on the properties. This option is conditioned on a number of
      events occurring, which are:





(1)
      The
      expenditure by us of $5 million Canadian on exploration of the property;




(2)
      Tandem paying us $2 million Canadian; and




(3)
      Tandem and us entering into a joint venture agreement to operate the property,
      within 60 days of a demonstration by us of the expenditure of
      $5 million Canadian on exploration of the property.





In
      addition, we will have twenty-one (21) days from the date we notify Tandem
      that we have made the $Cdn5 million exploration expenditure, to negotiate a
      financing agreement with Tandem to provide Tandem with the $Cdn2 million
      required to exercise the option. Should no agreement be reached in such 21-day
      period, our right to provide this financing shall expire.





Based
      upon an analysis of samples taken from these properties, we believe that the
      properties for which we have exploration permits contain kimberlite. Kimberlite
      is a type of igneous rock that occasionally contains tiny to extremely tiny
      diamonds, and on very rare occasions contains gem quality diamonds. Certain
      samples taken from our properties have contained both macro diamonds and micro
      diamonds. Samples from most of the dykes contain diamond fragments as
      well.





Prospecting
      Geophysics Ltd., a Quebec-based firm of which Mr. Ferderber is
      President, has provided us with a Progress Report, dated August 29, 2000,
      which discusses these samples, which they had collected. Prospecting
      Geophysics Ltd. has been contracted to conduct further surveys and
      exploration on this property.





Mr. Ferderber
      is the record owner of the property covered by the permits, which he has
      transferred to us. He had originally executed an agreement, as of June 20,
      2000, transferring the right to explore the properties covered by the permits
      to
      us. This June 20, 2000 agreement was subsequently incorporated
      into the Acquisition Agreement discussed above. We have received an opinion
      of
      Lavery, de Billy, a firm of barristers and solicitors of Montreal, Canada,
      dated
      July 10, 2000, that Mr. Ferderber is the record owners of the permits
      under the Mining Act (Quebec), and that the permits are in good standing as
      of
      June 21, 2000. The opinion further states that at the date of examination,
      there were no liens, charges or encumbrances registered against any of the
      permits. The opinion disclaimed any physical verification of the location of
      the
      properties covered by the permits, and states that no survey of the area covered
      by the permits was conducted.





The
      permits, which were set to expire at dates ranging from October 17, 2004 to
      March 30, 2005, were renewed by the Company for an additional five years at
      an annual license fee of $75 Canadian per square kilometer.





*Our
      Exploration Program*





Prior
      to
      any decision to develop the properties, a diamond deposit must be assessed
      to
      determine the total tonnage of diamond bearing material, the average grade
      of
      the rock, the estimated size distribution of the diamonds in the deposit, and
      the average value, per carat, of the diamonds. Gathering this data usually
      takes, as noted above, at least two years. At that time, we will decide whether,
      and, if so, how, to proceed. We may seek either a joint venture partner or
      a
      senior partner that will undertake the exploration of the properties. It must
      be
      noted that there is a substantial risk that no commercially viable diamond
      deposit will be found, and if that is the case, we are likely to have difficulty
      finding any partners to undertake further exploration.





At
      the
      present time, we do not hold any interest in a mineral property that is in
      production. Our viability and potential success lie in our ability to
      successfully explore, exploit and generate revenue from our properties. There
      can be no assurance that such revenues will be obtained. The exploration of
      mineral deposits involves significant risks over a long period of time, which
      a
      combination of careful evaluations, experience and knowledge may not eliminate.
      It is impossible to ensure that the current or proposed exploration programs
      on
      the exploration permits will be profitable or successful. Our inability to
      locate a viable diamond deposit on our properties could result in a total loss
      of our business. We believe that the typical cost to locate a diamond deposit
      can range from $US 5-10 million.




4





We
      intend
      to continue to explore the properties through completion of the exploration
      phase. We contract with third parties to perform all exploration activities.
      Prior to the 2005 exploration season, the exploration activities were carried
      out exclusively by Prospecting Geophysics Ltd. (“PGL”). In July 2005, the
      Company engaged Watts, Griffis and McOuat (“WGM”), a geological and engineering
      consulting firm. WGM was retained to oversee and direct the continuing
      exploration of the Torngat property. During the 2005 exploration season, WGM
      and
      PGL commissioned crews of workers who gathered samples of rock from the
      properties, and transported the samples to a facility where they are being
      tested for properties which tend to indicate the presence of diamonds. Pursuant
      to an agreement with PGL, we pay an hourly rate to Mr. Ferderber and his
      staff for their services, as well as reimbursement for expenses, including
      equipment, transportation, lodging and meals. We have established camp sites
      for
      the workers at the location of the properties, in order to decrease the costs
      of
      lodging. In addition, we use commercial supply boats, rather than commissioning
      private boats, to transport the rock samples. Because the properties are only
      accessible by air, we rent helicopters as well as fixed wing aircraft known
      as
“beavers” to transport workers and samples to and from the properties.





Due
      to
      extremely cold temperatures and snow accumulation caused by the inclement
      weather in the region during the period from, approximately, November to
      March, there can be no exploration on the properties covered by the permits
      during these months.





Our
      exploration operations are subject to all of the hazards and risks normally
      incident to exploration of this type, any of which could result to damage to
      life or property, environmental damage, and possible legal liability for any
      or
      all damages. Our activities may be subject to prolonged disruptions due to
      weather conditions surrounding the location of properties over which we have
      permits. Difficulties, such as an unusual or unexpected rock formation
      encountered by workers but not indicated on a map, or other conditions may
      be
      encountered in the gathering of samples and data, and could delay our
      exploration program. While we may obtain insurance against certain risks in
      such
      amounts as we deem adequate, the nature of these risks are such that liabilities
      could exceed policy limits or be excluded from coverage. We do not currently
      carry insurance to protect against these risks and there is no assurance that
      we
      will obtain such insurance in the future. There are also risks against which
      we
      cannot, or may not elect to, insure. The potential costs which could be
      associated with any liabilities not covered by insurance or in excess of
      insurance coverage or compliance with applicable laws and regulations may cause
      substantial delays and require significant capital outlays, adversely affecting
      our final position, future earnings, and/or competitive position.





*FY
      2000 Activities*





During
      2000, we began early stage exploration activities, and gathered samples from
      one
      property for analysis. An exploration team of eight men gathered samples and
      data at this property. The samples are taken from dykes or “pipes” containing
      kimberlite. These samples were analyzed by Lakefield Research Limited, of
      Ontario, an independent laboratory, which uses caustic dissolution to extract
      the diamonds from the samples. This laboratory issued reports dated
      September 26 and September 27, 2000, on two samples, one of which
      indicates that out of a 24.65 kilogram sample, two diamonds were found weighing
      0.015 carats in the aggregate. The second sample of 30.22 kilograms yielded
      eight diamonds, with a total weight of 0.001 carats.





On
      March 27, 2001, the Gem Trade Laboratory of the Gemological Institute of
      America (“G.I.A.”), an independent laboratory, issued a report in which they
      analyzed “random samples” of numerous transparent pink crystal fragments that
      were obtained from the property covered by our permits known as D.D.I. #1 (See
      map at Appendix A on page 38 of this Annual Report) in
      October 2000, by our agent Prospecting Geophysics Ltd. These samples
      were taken from property located in the original 469.05 square kilometers in
      the
      Torngat mountain region. The conclusion of the report was that the samples
      that
      ranged in size from approximately 0.40 to 0.70 MM consisted of natural corundum.
      Corundum is the hardest mineral after diamond. The samples obtained from the
      property covered by our permit were transparent pink suggesting that they
      consist of the “ruby” gem. A ruby is a red variety of the mineral corundum.





*FY
      2001 Activities*





During
      April 2001, we began the second phase of our exploration, after the weather
      in
      northwestern Quebec allowed for exploration activities. We, through Prospecting
      Geophysics Ltd., began to determine the extent of the kimberlite dykes that
      were located in phase one, and gathered larger mini-bulk and bulk samples.
      These
      next samples are expected to be up to 7,000 pounds. This should enable the
      Company to test for larger, and potentially more marketable diamonds which
      may,
      or may not, exist in the kimberlite dykes. There is, of course, a substantial
      risk that we will not find such diamonds. Prospecting Geophysics Ltd. will,
      at the same time, be attempting to locate additional kimberlite dykes and pipes,
      and sample them as well.





*FY
      2002 Activities*





In
      2002,
      we acquired permits for an additional 50,000 acres adjacent to the property
      where we already have permits located in the Torngat mountain region of Quebec.
      We acquired the permits by staking the property and paying the requisite fees
      to
      the Quebec Department of Natural Resources. In addition to paying the fees,
      we
      must perform a certain amount of assessment work on each claim to keep them
      in
      good standing. We have successfully completed all assessment work related to
      this property.




5





We,
      through Prospecting Geophysics Ltd., continued exploration during the 2002
      season, taking large rock bulk samples from property included in the original
      469.05 square kilometers and commenced exploration in the newly acquired 50,000
      acres. We located four new kimberlite dyke systems that contain 27 new dykes,
      most of which have been sampled. Reduced samples from the original field samples
      were subject to micro-probed analysis and found to contain typical kimberlite
      minerals, phologopite and olivine and the important indicator minerals chrome
      diopside, pyrope garnet, picro-ilmenite and chromite. One 110 pound sample
      containing an olivine xenolith was found to contain a large population of
      indicator minerals including 243 G9 garnets, 65 chrome diopsides, and 143
      spinels. This mineral assemblage is similar to the Arx Dyke which is located
      on
      our permit property that contained the nine micro and one macro diamonds.





*FY
      2003 Activities*





The
      2003
      exploration program, managed by Prospecting Geophysics Ltd. of Val D'Or, Quebec
      consisted of geological mapping, rock sampling, stream geochemistry, ground
      magnetometer surveys and prospecting. Analytical results are still being
      received. The program defined and evaluated four loosely bounded belts
      containing more than 50 Kimberlite dykes, two kimberlite pipes and several
      suspected dykes. Besides the two macro diamonds and 13 micro diamonds previously
      discovered in the "A" dyke in 2000, and the rubies reported from the D, F and
      K
      dykes in 2001, SGS Lakefield Research discovered diamond fragments from
      kimberlite/aillikite samples taken from the F, E, B, G, Yvon #2, Champagne
      pipe,
      Peter Lake, P, U, Bella, at eight locations on the St. Pierre N. dyke and at
      five locations along the MJR kimberlite dyke in 2003. Subsequently in 2003,
      diamond fragments have been verified at Mount Jacques Rousseau.





Geologist,
      Robert Dillman, consultant to Diamond Discoveries, received results from C.F.
      Mineral Research Limited of microprobe analysis of several picked mineral
      samples from various dykes. The January 2004 results indicated forsterite
      olivines and clinopyroxenes with diamond inclusion compositions, some of which
      are associated with large diamonds were noted in the Yvon #2, K16 and St. Pierre
      Southdykes. The February 2004 results determined the presence of chrome diopside
      and forsterite olivine (Diamond Indicator Minerals) from seven dykes named:
      St.
      Pierre dyke, St. Pierre Extension, A Dyke, C Dyke Champagne, K dyke and K25
      dyke. Five of the dykes have an aillikite composition and the St. Pierre and
      St.
      Pierre extension have a kimberlite composition. Using the C.F. Minerals
      classification, 100% of the olivine grains analyzed from the St. Pierre, St.
      Pierre Extension and the K dyke are classified as having diamond inclusion
      compositions and there is potential for these dykes to host
      diamonds.





*FY
      2004 Activities*





During
      the 2004 exploration program, the Company was able to complete one hole for
      a
      total of 100 feet of the total 10,000 foot program prior to the onset of severe
      weather. The Company has received the caustic fusion analyses from the first
      hole in the scheduled 10,000 foot drill program on Diamond Discoveries’ Torngat
      Mountains diamond project in Northeastern Quebec. The 34.7 kilogram sample
      from
      22 feet of kimberlite core was sent to Saskatchewan Research Council Labs where
      it was analyzed for diamond content. No macro or microdiamonds were found in
      the
      core.





The
      Company purchased the drill and left it on the property and has the camp and
      fuel in place to get an early start on the following exploration season. The
      Company will resume the scheduled drill program in the spring of 2005 focusing
      on its main targets, the Round Lake Structure and Champagne Pipe. Earlier
      surface sampling located macrodiamonds and microdiamonds in dykes proximal
      to
      the Round Lake Structure.





The
      Company’s geologists have noted rubies and pink corundums in several places
      across the property. They also noted pink corundum in the broken core from
      the
      first drill hole. Along with the search for diamond bearing kimberlite pipes
      the
      geologists will begin evaluation the size and gem potential of the many ruby
      occurrences.




6


*FY
      2005, FY 2006 and FY 2007 Activities*





In
      June,
      2005, the Company engaged McPhar Geosurveys Ltd. (“McPhar”) to conduct an
      airborne magnetic survey of the Torngat property. In
      July
      2005, the Company engaged Watts, Griffis and McOuat (“WGM”), a geological and
      engineering consulting firm. WGM was retained to oversee and direct the
      continuing exploration of the Torngat property. The firm
      of Patterson, Grant and Watson Ltd. (“PGW”) reviewed the results of the airborne
      magnetic survey conducted by McPhar. PWG identified 40 targets, 10 first
      priority, 23 second priority targets and seven third priority targets. While
      some of the targets correlate to previously identified kimberlitic dykes,
      several targets are for new dykes not previously sampled. After their review
      of
      the report on the McPhar airborne magnetic survey, WGM outlined a program for
      exploration during the 2005 season. The primary objectives of the field program
      were:





1.
            independent
                replication of previously reported diamonds recovered from three
                of the
                known kimberlite dykes;


2.
            independent
                field sampling of drainages associated with airborne anomalies selected
                by
                PGW and sample sites selected by WGM to confirm prior
                results;


3.
            ground
                magnetic confirmation of all potential targets that were readily
                accessible;


4.
            rock
                chip sampling of newly discovered and previously untested dykes associated
                with airborne anomalies; and


5.
            to
                the extent possible, test by drilling selected airborne anomalies
                with the
                diamond drill already available on the
                property.





In
      August
      2005, the field exploration commenced with a crew of 12. The crew completed
      drilling of 2 of the targets identified by PGW. In addition, the crew collected
      38 alluvial and rock chip samples from prospective dykes and drainages adjacent
      to the airborne anomalies and completed ground magnetic surveys covering 20
      of
      the airborne anomalies. The alluvial and rock chip samples along with selected
      core samples were sent to Saskatchewan Research Council Geoanalytical Laboratory
      (“SRC”) for processing. The results of the sample processing will be available
      in a few months. Exploration of the Torngat property has been suspended for
      the
      winter months due to inclement weather. WGM continues to analyze and compile
      all
      the available geophysical, geological and geochemical data. On October
      18 th ,
      the
      Company was informed by WGM that all five objectives of the 2005 field program
      were achieved. Further field exploration of the Torngat property did not resume
      in 2007 while the Company evaluated a potential opportunity for a joint venture
      on property located in Quebec.





We
      estimate that it will require approximately $1,500,000 to conduct an exploration
      program on the Torngat property through September 30, 2008. This amount will
      be
      used to pay for continued drilling of identified targets, prospecting and
      geological mapping, helicopter and airplane support, lodging and food for
      workers, pick-up truck rentals, assays, property taxes to the Quebec Department
      of Natural Resources and supervision. If we continue with the exploration of
      the
      Torngat property, we plan to raise a minimum of $1,500,000 through one or more
      private offerings pursuant to Rule 506 or Regulation D or through an offshore
      offering pursuant to Regulation S; however, nothing in this annual report shall
      constitute an offer of any securities for sale. Such shares when sold will
      not
      have been registered under the Act and may not be offered or sold in the United
      States absent registration or an applicable exemption from registration
      requirements. If we are unable to raise this amount, we will most likely cease
      all activity related to our exploration program, or at the very least, proceed
      on a reduced scale. We have to date relied on a small number of investors to
      provide us with financing for the commencement of our exploration program,
      including TVP Capital Corp., a principal stockholder. Amounts owed to these
      individuals are payable upon demand.





*Government
      Regulation and Licensing*





Our
      operations require licenses and permits from various governmental authorities.
      We believe that we presently hold all necessary licenses and permits required
      for our intended activities under applicable laws and regulations, and we
      believe that we are complying at the present time in all material respects
      with
      the terms of such licenses and permits. However, our licenses and permits are
      subject to changes in regulations and in various operating circumstances. We
      may
      not be able to obtain all necessary licenses and permits required to carry
      out
      exploration activities.





We
      are
      currently subject to the environmental regulations set forth under the
      Environmental Act (Quebec), the Mining Act (Quebec) and the Forest Act (Quebec).
      We believe that we are in compliance with all of these acts, and moreover,
      we
      believe that the environmental impact of our exploration activities will be
      minimal. To the extent that we remove large amounts of rock or soil from the
      properties, we will likely have to remediate any environmental disruption caused
      by our activities. It is impossible to assess with any certainty the cost of
      such replacement or remediation activities, or the potential liability that
      we
      would face if we were to be found to have violated one, or more, of these Acts.





*Employees*





We
      do not
      have any full time employees at the present time. We have one part time
      employee, Mr. Edward C. Williams, who is an executive officer. We use third
      parties to oversee and conduct our exploration activities.




7


*Competition*





The
      mineral exploration business is competitive in all of its phases. We expect
      to
      compete with numerous other exploration companies and individuals, including
      competitors with greater financial, technical and other resources than us,
      for
      the resources required for exploration. The greater resources of other entities
      will likely position these competitors to conduct exploration within a shorter
      time frame than we can, giving them a market advantage.





*Currency
      Fluctuation*





We
      also
      have exposure to currency fluctuations, since our properties are located in
      Canada, and thus our transactions are largely in Canadian dollars. Such
      fluctuations can materially affect our financial position and other results
      of
      operations. References to the “dollar” or “$US” in this Form 10KSB are to United
      States Dollars, and “Canadian” or “$Cdn” refers to Canadian dollars. Unless
      otherwise stated, the translations of $US to $Cdn and vice versa have been
      made
      at the average rate for the year indicated. The following table sets forth
      the
      high and low exchange rate of the Canadian dollar per US dollar as of the latest
      practicable date and for each of the last six months:





**Period**
            
            **High**
            
            **Low**April 4,
                2008
            
            
            1.0328
            
            
            1.0020
            (1)March 2008
            
            
            1.0295
            
            
            0.9765February,
                2008
            
            
            1.0199
            
            
            0.9711January 2008
            
            
            1.0369
            
            
            0.9851December 2007
            
            
            1.0250
            
            
            0.9756November 2007
            
            
            1.0003
            
            
            0.9066October 2007
            
            
            1.0012
            
            
            0.9440


(1)
        Represents the low rate on April 4, 2008.





**Item
      2. Description of Property**





Please
      refer to Appendix A to this Annual Report at page 39, which contains a map
      of our permit locations.





We
      do not
      own real property, nor do we hold any other real property interest other than
      the exploration permits which we discuss above under the caption “Description of
      Business.” As noted above, we have engaged Prospecting Geophysics Ltd. as
      our on-site project manager for our exploration activities.





In
      compliance with Guide 7 of Industry Guides under the Securities Act of 1933
      and
      the Securities Exchange Act of 1934, the following information is provided,
      since we are engaged or plan to be engaged in significant mining operations:





(1)  The
      permits were acquired in the Acquisition Agreement cover 469.05 square
      kilometers of properties in northwest Quebec, Canada, on the eastern shore
      of
      Ungava Bay and by staking an additional 50,000 acres adjacent to such properties
      and paying the requisite fees to the Quebec Department of Natural Resources.
      With the exception of the five (5) month period from November to
      March in which there is inclement weather in the area surrounding the
      properties, there is nothing preventing access to the properties. However,
      hazardous weather conditions could prevent us from accessing the properties
      in
      other months as well. The properties are only accessible by air via a helicopter
      or by boat. There are no roads that permit direct access to the properties.





(2)  Pursuant
      to an agreement between us and Peter Ferderber, Peter Ferderber has transferred
      to us six (6) permits for the properties. The properties covered by the
      permits are indicated on the map presented in Appendix A by the areas
      marked D.D.I. Further, pursuant to the Acquisition Agreement, in consideration
      for the permits, we have issued 1,000,000 shares of our common stock to
      Mr. Ferderber and have paid him $25,000 Canadian, and at
      Mr. Ferderber’s request, $35,000 Canadian to Stanley G. Hawkins. We have
      obtained the opinion of Lavery, de Billy, Barristers and Solicitors of Montreal,
      Canada dated July 10, 2000, that Mr. Ferderber was the record owner of
      the permits under the Mining Act of Quebec and that the permits were in good
      standing as of June 21, 2000.


8


(3)  To
      our
      knowledge, Messrs. Ferderber and Hawkins staked the 469.05 square kilometer
      property in the Torngat fields in northwest Quebec, Canada, on the eastern
      shore
      of Ungava Bay in 1999, and there were no previous owners, operators, or
      operations on the property.





(4)  Although
      there can be no assurance of successful diamond development, initial progress
      reports of the property have indicated that there are micro diamonds on the
      property. A 24.65 kilogram sample taken from the property, has yielded two
      diamonds weighing 0.015 carats and a 30.22 kilogram sample has yielded eight
      diamonds weighing 0.001 carats.





*Geology*





The
      Torngat Property, where the properties for which we have mineral permits are
      located, lies within the Torngat mountain province. The crust in the province
      is
      thickened because two continental plates were pushed, more than a billion years
      ago, one on top of the other. The predominant rock type on the properties are
      the Tasiuyak Gneiss, a northwest trending belt of gneissic rock. The gneisses
      are considered to be altered sedimentary rocks.





The
      rocks
      of the Torngat mountain province strike northwest-southeast within the Torngat
      property. Cross-cutting the gneisses, there are a number of kimberlite dykes.
      The individual dykes are dark green and generally coarse grained across most
      of
      their width.





The
      properties are in a location over an early Precambrian bedrock segment which
      is
      bedrock dating back to the earliest era of geological history, called an
“Archon.” An Archon is an immobile segment of the earth’s crust exceeding
      1.5 billion years in age. Kimberlite, a form of igneous rock, is widely
      regarded as the main source for diamonds, and is reported from postulated Archon
      called the “Baltic Shield.” Only in the past decade have diamond explorers
      recognized that these Baltic Shield rocks are potentially viable for diamonds.





*The
      Property is Without Known Reserves and our Proposed Program is Exploratory
      in
      Nature.* Exploration
      for diamonds on the properties began because the formation and layout of the
      rocks on the properties indicated that some of the rocks had been pushed up
      through the earth’s crust. This is initially identified by geologists from the
      age and shape of the rocks. When these different or unexpected rock formations
      appear, geologist then consider the area surrounding these rocks as strong
      targets for exploration for diamonds. This is because, geologists believe,
      as
      the rocks are pushing up through the earth’s surface from great depths, the
      rocks travel through diamond fields located below the earth’s surface and
      therefore rocks containing diamonds are forced to the surface.





Rocks
      containing these characteristics were identified on the properties covered
      by
      our mineral permits. Once these rocks were identified, we then conducted a
      magnetometer survey. The magnetometer is a small electronic device used by
      geologists to survey the land for areas of high magnetism. This can be used
      in
      the air or on the ground. This test is conducted because, when the rocks are
      being pushed through the earth’s surface (as described above), in addition to
      bringing rocks containing diamonds, iron from below the Earth’s surface is also
      forced to the surface. The magnetometer reads the surface of the Earth for
      any
      magnetism created by the iron upon the belief that if a particular property
      contains a high concentration of iron that was forced up from below the earth’s
      surface; the property may also contain diamonds that have been similarly forced
      up to the surface.





An
      airborne magnetometer survey was conducted over the properties for which we
      have
      mineral permits, and six (6) magnetic dykes were discovered. This indicated
      to us that these properties were potentially a source for diamonds. In addition,
      samples of rock taken from the properties have yielded small diamonds.





Prior
      to
      2005, we hired Prospecting Geophysics Ltd. to conduct these exploration
      procedures. Mr. Peter Ferderber is the President of Prospecting
      Geophysics Ltd. Mr. Ferderber has over forty years of experience in
      mining exploration. In July 2005, the Company engaged Watts, Griffis and McOuat
      (“WGM”), a geological and engineering consulting firm. WGM was retained to
      oversee and direct the continuing exploration of the Torngat property. The
      first
      phase of exploration involved identifying areas on the property from which
      to
      take samples and gathering small samples from the properties for analysis.
      This
      analysis to date has demonstrated the presence of 10 micro diamonds in two
      samples taken. The second phase involves determining the extent of any
      kimberlite dykes that were located in phase one and to gather mini-bulk and
      bulk
      samples. This will enable us to determine if there are larger and more
      marketable diamonds on the properties. Phase two of our exploration began in
      April 2001 and was suspended in 2006 until further notice while the Company
      evaluates a potential opportunity for a joint venture on property located in
      Quebec. Operations are generally suspended from October to April because of
      inclement weather.




9


The
      following is a breakdown of the estimated budget for particular aspects of
      our
      exploration activities:





Helicopter
                and airplane support
            
            $
            250,000Crew,
                lodging and food
            
            
            200,000Drill
                program
            
            
            800,000Testing
                samples for Diamonds
            
            
            250,000Total
            
            $
            1,500,000





(5)  In
      the
      Quebec sector of the Torngat belt, roughly fifteen dykes have been mapped.
      These
      dykes occupy fractures oriented at an approximately right angle to the country
      rocks, suggesting tensions opened up by later scale folding. Two of these dykes
      on an adjacent property have been sampled, confirming the presence of diamonds.
      However, to date, no proven reserves have been established and there can be
      no
      assurance that any such reserves will ever exist.





**Item
      3. Legal Proceedings**





There
      are
      no legal proceedings pending or threatened against us.





**Item
      4. Submission of Matters to a Vote of Security Holders**




None.





**PART
      II.**





**Item
      5. Market for Common Equity and Related Stockholder Matters.**





As
      of
      July 18, 2002 prices for the Common Stock were quoted on the Over the
      Counter Bulletin Board operated by the National Association of Securities
      Dealers, Inc. under the symbol DMDD. The following table sets forth the
      high and low closing bid prices of the Company’s Common Stock for the periods
      indicated as reported by the NASD. These quotations reflect inter-dealer prices
      without retail markup, markdown or commissions and may not necessarily represent
      actual transactions.





**High**
            
            **Low****Fiscal
                Year 2006**First
                Quarter
            
            
            0.035
            
            
            0.020Second
                Quarter
            
            
            0.040
            
            
            0.015Third
                Quarter
            
            
            0.019
            
            
            0.007Fourth
                Quarter
            
            
            0.012
            
            
            0.005**Fiscal
                Year 2007**First
                Quarter
            
            
            0.008
            
            
            0.005Second
                Quarter
            
            
            0.019
            
            
            0.004Third
                Quarter
            
            
            0.014
            
            
            0.005Fourth
                Quarter
            
            
            0.010
            
            
            0.004**Fiscal
                Year 2008**First
                Quarter
            
            
            0.015
            
            
            0.004





Of
      the
      358,216,830 shares of our common stock issued and outstanding as of
      April 11, 2008,  131,164,763
      shares of our common stock are currently considered “restricted securities” and
      in the future, may be sold only in compliance with Rule 144 or in an exempt
      transaction under the Act unless registered under the Act.





As
      of
      April 11, 2008 the number of holders of record of our common stock was
      approximately 126.





We
      do not
      anticipate paying any cash dividends on our common stock in the foreseeable
      future because we intend to retain our earnings to finance the expansion of
      our
      business. Thereafter, the declaration of dividends will be determined by the
      Board of Directors in light of conditions then existing, including, without
      limitation, our financial condition, capital requirements and business
      condition. We are prohibited from paying cash dividends on the common stock
      until any issued and outstanding preferred stock is converted into common stock.
      However, there were no shares of preferred stock outstanding as of December
      31,
      2007.




10


**Equity
      Compensation Plan Information:**





**Number
                of securities to be issued upon exercise of outstanding options,
                warrants
                and rights**
            
            **Weighted-average
                exercise price of outstanding options, warrants and
                rights**
            
            **Number
                of securities available for future issuance under equity compensation
                plans (excluding securities reflected in column**
              **(a))**(a)
            
            (b)
            
            (c)Equity
                compensation plans approved by security holders
            
            
            0
            
            $
            0.00
            
            
            1,500,000Equity
                compensation plans not approved by security holders
            
            
            0
            
            $
            0.00
            
            
            2,200,000Total
            
            
            0
            
            $
            0.00
            
            
            3,700,000





Stock
      Option Plans





2005
      Plan





On
      November 14, 2005, the Company adopted the Diamond Discoveries International
      Corp. 2005 Stock Incentive Plan (the “2005 Plan”). Under the 2005 Plan,
      35,000,000 shares of common stock are reserved for issuance. The purpose of
      the
      2005 Plan is to provide incentives for officers, directors, consultants and
      key
      employees to promote the success of the Company, and to enhance the Company’s
      ability to attract and retain the services of such persons. Options granted
      under the 2005 Plan may be either: (i) options intended to qualify as “incentive
      stock options” under Section 422 of the Internal Revenue Code of 1986; or (ii)
      non-qualified stock options. Stock options may be granted under the 2005 Plan
      for all employees and consultants of the Company, or employees of any present
      or
      future subsidiary or parent of the Company. The 2005 Plan is administered by
      the
      Board of Directors. The Compensation Committee is empowered to interpret the
      2005 Plan and to prescribe, amend and rescind the rules and regulations
      pertaining to the 2005 Plan. Options granted under the 2005 Plan generally
      vest
      over three years. No option is transferable by the optionee other than by will
      or the laws of descent and distribution and each option is exercisable, during
      the lifetime of the optionee, only by the optionee. The Compensation Committee
      may not receive options.





Any
      incentive stock option that is granted under the 2005 Plan may not be granted
      at
      a price less than the fair market value of the Company’s Common Stock on the
      date of grant (or less than 110% of the fair market value in the case of holders
      of 10% or more of the total combined voting power through all classes of stock
      of the Company or a subsidiary or parent of the Company.) Non-qualified stock
      options may be granted at the exercise price established by the Compensation
      Committee, which may be less than the fair market value of the Company’s Common
      Stock on the date of grant.





Each
      option granted under the 2005 Plan is exercisable for a period not to exceed
      ten
      years from the date of grant (or five years in the case of a holder of more
      than
      10% of the total combined voting power of all classes of stock of the Company
      or
      a subsidiary or parent of the Company) and shall lapse upon expiration of such
      period, or earlier upon termination of the recipient’s employment with the
      Company, or as determined by the Compensation Committee.





2004
      Plan





On
      September 30, 2004, the Company adopted the Diamond Discoveries International
      Corp. 2004 Stock Incentive Plan (the “2004 Plan”). Under the 2004 Plan,
      35,000,000 shares of common stock are reserved for issuance. The purpose of
      the
      2004 Plan is to provide incentives for officers, directors, consultants and
      key
      employees to promote the success of the Company, and to enhance the Company’s
      ability to attract and retain the services of such persons. Options granted
      under the 2004 Plan may be either: (i) options intended to qualify as “incentive
      stock options” under Section 422 of the Internal Revenue Code of 1986; or (ii)
      non-qualified stock options. Stock options may be granted under the 2004 Plan
      for all employees and consultants of the Company, or employees of any present
      or
      future subsidiary or parent of the Company. The 2004 Plan is administered by
      the
      Board of Directors. The Compensation Committee is empowered to interpret the
      2004 Plan and to prescribe, amend and rescind the rules and regulations
      pertaining to the 2004 Plan. Options granted under the 2004 Plan generally
      vest
      over three years. No option is transferable by the optionee other than by will
      or the laws of descent and distribution and each option is exercisable, during
      the lifetime of the optionee, only by the optionee. The Compensation Committee
      may not receive options.





Any
      incentive stock option that is granted under the 2004 Plan may not be granted
      at
      a price less than the fair market value of the Company’s Common Stock on the
      date of grant (or less than 110% of the fair market value in the case of holders
      of 10% or more of the total combined voting power through all classes of stock
      of the Company or a subsidiary or parent of the Company.) Non-qualified stock
      options may be granted at the exercise price established by the Compensation
      Committee, which may be less than the fair market value of the Company’s Common
      Stock on the date of grant.




11





Each
      option granted under the 2004 Plan is exercisable for a period not to exceed
      ten
      years from the date of grant (or five years in the case of a holder of more
      than
      10% of the total combined voting power of all classes of stock of the Company
      or
      a subsidiary or parent of the Company) and shall lapse upon expiration of such
      period, or earlier upon termination of the recipient’s employment with the
      Company, or as determined by the Compensation Committee.




2003
      Plan





On
      May
      30, 2003, the Company adopted the Diamond Discoveries International Corp. 2003
      Stock Incentive Plan (the “Plan”). Under the Plan, 15,000,000 shares of common
      stock are reserved for issuance. The purpose of the Plan is to provide
      incentives for officers, directors, consultants and key employees to promote
      the
      success of the Company, and to enhance the Company’s ability to attract and
      retain the services of such persons. The Plan orivudes for the grant of
      incentive stock options and nonqualified stock options (“Options”) and
      restricted stock awards (“Restricted Stock Awards”) and Stock Appreciation
      Rights, Performance Shares, Dividend Equivalent Payments, and Other Stock Based
      Awards (“Options,”“Restricted Stock Awards,” and “Stock Appreciation Rights,”
are collectively referred to herein as “Awards”). Options granted under the Plan
      may be either: (i) options intended to qualify as “incentive stock options”
under Section 422 of the Internal Revenue Code of 1986; or (ii) non-qualified
      stock options. Stock options may be granted under the Plan for all employees
      and
      consultants of the Company, or employees of any present or future subsidiary
      or
      parent of the Company. The Plan is administered by the Board of Directors.
      The
      Compensation Committee is empowered to interpret the Plan and to prescribe,
      amend and rescind the rules and regulations pertaining to the Plan. Options
      granted under the Plan generally vest over three years. The Compensation
      Committee may not receive options.





Any
      incentive stock option that is granted under the Plan may not be granted at
      a
      price less than the fair market value of the Company’s Common Stock on the date
      of grant (or less than 110% of the fair market value in the case of holders
      of
      10% or more of the total combined voting power through all classes of stock
      of
      the Company or a subsidiary or parent of the Company.) Non-qualified stock
      options may be granted at the exercise price established by the Compensation
      Committee, which may be less than the fair market value of the Company’s Common
      Stock on the date of grant, but in no event shall such exercise price be less
      than 55% of such fair market value.





Each
      option granted under the Plan is exercisable for a period not to exceed ten
      years from the date of grant (or five years in the case of an incentive stock
      option granted to a holder of more than 10% of the total combined voting power
      of all classes of stock of the Company or a subsidiary or parent of the Company)
      and shall lapse upon expiration of such period, or earlier upon termination
      of
      the recipient’s employment with the Company, or as determined by the
      Compensation Committee.





Awards
      are generally non-transferable other than by will or the laws of descent and
      distribution or pursuant to a qualified domestic relations order.





The
      Company’s Board of Directors may at any time, and from time to time, amend,
      terminate, or suspend one or more of the Plan in any manner it deems
      appropriate, provided that such amendment, termination or suspension cannot
      adversely affect rights or obligations with respect to shares or options
      previously granted, unless the Award recipient consents to such changes in
      writing. The Board of Directors may not, without shareholder approval: make
      any
      amendment which would materially modify the participation eligibility
      requirements for the 2005 Plan and 2004 Plan, to the extent they require
      approval in order to satisfy the Internal Revenue Code requirements; make other
      modifications requiring stockholder approval to satisfy the Internal Revenue
      Code requirements, increase the total number of shares of common stock which
      may
      be issued pursuant to the 2005 Plan and 2004 Plan, except in the case of a
      reclassification of the Company’s capital stock or a consolidation or merger of
      the Company.





**Recent
      Sales of Unregistered Securities**





In
      January 2006, in connection with a private placement of its common stock, the
      Company issued 100,000 shares of its common stock for $3,500.





The
      sale
      and issuance of the aforementioned shares were exempt transactions under Section
      4(2) of the Securities Act of 1933 as a transaction by an issuer not involving
      a
      public offering. At the time of sale, the persons who acquired these securities
      were all full, informed and advised about matters concerning us, including
      our
      business, financial affairs and other matters. The shareholders acquired the
      securities for their own account or their designees.


12


**Item
      6. Management’s Discussion and Analysis or Plan of Operation**





*The
      following discussion and analysis should be read in conjunction with the
      financial statements and notes thereto included elsewhere in this Annual Report
      on Form 10-KSB.* The
      following discussion regarding us and our business and operations contains
      forward-looking statements. Such statements consist of any statement other
      than
      a recitation of historical fact, and can be identified by the use of such
      forward-looking terminology such as “may,” “expect,” “anticipate,” “estimate” or
“continue” or the negative thereof or other variations thereon, or comparable
      terminology. The reader is cautioned that all forward-looking statements are
      necessarily speculative, and there are certain risks and uncertainties that
      could cause actual events or results to differ materially from those referred
      to
      in such forward-looking statements.





*Operations
      to Date*





We
      were
      incorporated in the State of Delaware in April of 2000. We have not engaged
      in commercial operations since inception, and therefore have not realized any
      revenues from operations since inception. We do not expect to commence
      operations in the foreseeable future and do not expect to generate revenue
      in
      calendar year 2008.





For
      the
      fiscal years ended December 31, 2007 and 2006 and the period from April 24,
      2000 (date of inception) to December 31, 2007 we incurred $19,342, $61,746
      and
      $2,531,727 in exploration costs, net of reimbursements and $1,451,220,
      $2,788,949 and $15,269,149 in general and administrative expenses, respectively.
      General and administrative expenses consisted primarily of professional fees
      related to our corporate filings and consulting and other expenses incurred
      in
      operating our business. We incurred a net loss of $1,470,562 or $(.00) per
      share
      based on 320,318,200 weighted average shares outstanding for the fiscal year
      ended December 31, 2007 compared to a net loss of $3,053,173 or $(.01) per
      share
      based on 301,593,542 weighted average shares outstanding for the fiscal year
      ended December 31, 2006.





*Going
      Concern*





In
      connection with their audit report on our financial statements as of December
      31, 2007, Rodefer Moss & Co, our independent registered public accounting
      firm, expressed substantial doubt about our ability to continue as a going
      concern because such continuance is dependent upon our ability to raise
      sufficient capital.





We
      have
      explored, and continue to explore, all avenues possible to raise the funds
      required. Continuation of our exploration efforts is dependent upon our ability
      to raise capital.





Ultimately,
      we must achieve profitable operations if we are to be a viable entity. Although
      we believe that there is a reasonable basis to believe that we will successfully
      raise the needed funds to continue exploration, we cannot assure you that we
      will be able to raise sufficient capital to continue exploration, or that if
      such funds are raised, that exploration will result in a finding of commercially
      exploitable reserves, or that if exploitable reserves exist on our properties,
      that extraction activities can be conducted at a profit.





**Cash
      Flow and Capital Resources**





Through
      December 31, 2007 we have relied on advances of approximately $1,700,000 from
      our principal stockholders, trade payables of approximately $196,000, notes
      payable of approximately 1,194,000 and proceeds of approximately $5,015,000
      from
      the sale of common stock to support our limited operations. As of December
      31,
      2007, we had approximately $4,200 of cash.





We
      plan
      to seek additional equity or debt financing of up to $1,500,000 which we plan
      to
      use for the next phase of our exploration program to be conducted through
      December 31, 2008, as well as working capital purposes. We currently have
      limited sources of capital, including the public and private placement of equity
      securities and the possibility of issuance of debt securities to our
      stockholders. With virtually no assets, the availability of funds from
      traditional sources of debt will be limited, and will almost certainly involve
      pledges of assets or guarantees by officers, directors and stockholders.
      Stockholders have advanced funds to us in the past, but we cannot assure you
      that they will be a source of funds in the future. If we do not get sufficient
      financing, we may not be able to continue as a going concern and we may have
      to
      curtail or terminate our operations and liquidate our business (see Note 1
      to financial statements).


13


**Plan
      of Operation**





Our
      business plan for the next year will consist of further exploration on the
      properties over which we hold the mineral exploration permits as well as
      preliminary marketing efforts. In June, 2005, the Company engaged McPhar
      Geosurveys Ltd. (“McPhar”) to conduct an airborne magnetic survey of the Torngat
      property. In July 2005, the Company engaged Watts, Griffis and McOuat (“WGM”), a
      geological and engineering consulting firm. WGM was retained to oversee and
      direct the continuing exploration of the Torngat property. The firm of
      Patterson, Grant and Watson Ltd. (“PGW”) reviewed the results of the airborne
      magnetic survey conducted by McPhar. PWG identified 40 targets, 10 first
      priority, 23 second priority targets and seven third priority targets. While
      some of the targets correlate to previously identified kimberlitic dykes,
      several targets are for new dykes not previously sampled. After their review
      of
      the report on the McPhar airborne magnetic survey, WGM outlined a program for
      exploration during the 2005 season. The primary objectives of the field program
      were:





1.
            independent
                replication of previously reported diamonds recovered from three
                of the
                known kimberlite dykes;


2.
            independent
                field sampling of drainages associated with airborne anomalies selected
                by
                PGW and sample sites selected by WGM to confirm prior
                results;


3.
            ground
                magnetic confirmation of all potential targets that were readily
                accessible;


4.
            rock
                chip sampling of newly discovered and previously untested dykes associated
                with airborne anomalies; and


5.
            to
                the extent possible, test by drilling selected airborne anomalies
                with the
                diamond drill already available on the
                property.





In
      August
      2005, the field exploration commenced with a crew of 12. The crew completed
      drilling of 2 of the targets identified by PGW. In addition, the crew collected
      38 alluvial and rock chip samples from prospective dykes and drainages adjacent
      to the airborne anomalies and completed ground magnetic surveys covering 20
      of
      the airborne anomalies. The alluvial and rock chip samples along with selected
      core samples were sent to Saskatchewan Research Council Geoanalytical Laboratory
      (“SRC”) for processing. The results of the sample processing will be available
      in a few months. Exploration of the Torngat property has been suspended for
      the
      winter months due to inclement weather. WGM continues to analyze and compile
      all
      the available geophysical, geological and geochemical data. On October
      18 th ,
      the
      Company was informed by WGM that all five objectives of the 2005 field program
      were achieved. Further field exploration of the Torngat property did not resume
      in 2007 while the Company evaluated a potential opportunity for a joint venture
      on property located in Quebec.





We
      estimate that it will require approximately $1,500,000 to conduct an exploration
      program on the Torngat property through September 30, 2008. This amount will
      be
      used to pay for continued drilling of identified targets, prospecting and
      geological mapping, helicopter and airplane support, lodging and food for
      workers, pick-up truck rentals, assays, property taxes to the Quebec Department
      of Natural Resources and supervision. If we continue with the exploration of
      the
      Torngat property, we plan to raise a minimum of $1,500,000 through one or more
      private offerings pursuant to Rule 506 or Regulation D or through an offshore
      offering pursuant to Regulation S; however, nothing in this annual report shall
      constitute an offer of any securities for sale. Such shares when sold will
      not
      have been registered under the Act and may not be offered or sold in the United
      States absent registration or an applicable exemption from registration
      requirements. If we are unable to raise this amount, we will most likely cease
      all activity related to our exploration program, or at the very least, proceed
      on a reduced scale. We have to date relied on a small number of investors to
      provide us with financing for the commencement of our exploration program,
      including TVP Capital Corp., a principal stockholder. Amounts owed to these
      individuals are payable upon demand.





While
      we
      own drill equipment with a cost of approximately $236,000, we do not expect
      to
      make any other direct expenditure to purchase any equipment as all equipment
      necessary will continue to be provided by Prospecting Geophysics Ltd. pursuant
      to the Prospecting and Survey Agreement dated November 14, 2000. However, we
      will reimburse Prospecting Geophysics, Ltd. for all of it’s out of pocket
      expenses including equipment rental.




We
      employ
      one individual on a part time basis, who is an executive officer. We do not
      expect any significant changes in the number of employees within the next twelve
      months.





**Risk
      Factors**





**Operations—New
      Entity/Startup Entity**





**We
      have no history running our mineral exploration business.**





We
      are
      engaged in the exploration stage of our business. We have not engaged in any
      substantive business operations to date. More particularly, we have not engaged
      in any mining operations. We have only engaged in exploratory activities,
      feasibility studies and the establishment of initial exploration plans. Thus,
      we
      have no way to evaluate the likelihood that we will be able to operate our
      business successfully. You should consider our business future based on the
      risks associated with our early stage, and lack of experience.




14





**We
      expect to face many of the typical challenges of a startup business.**





A
      startup
      business like ours faces a number of challenges. For example, engaging the
      services of qualified support personnel and related consultants and other
      experts is very important in the mineral exploration business, and there is
      keen
      competition for the services of these experts, consultants, and support
      personnel. Equally important in the mineral exploration business is establishing
      initial exploration plans for mining prospects, and analyzing relevant
      information efficiently. Establishing and maintaining budgets and appropriate
      financial controls is also very important to a startup business. We expect
      to
      incur substantial operating losses for the foreseeable future, as well. The
      failure to address one or more of these activities, or curb operating losses,
      may impair our ability to carry out our business plan.





**Operations—Mineral
      Exploration Activities**





**Mineral
      exploration has many inherent risks of operations which may prevent ultimate
      success.**





Mineral
      exploration has significant risks. Mineral exploration companies (like us)
      are
      dependent on locating mineral reserves on the properties over which it has
      mineral permits, and are also dependent on the skillful management of minerals,
      when and if found or located on these properties. These minerals, when found
      in
      deposits and mineralizations, can vary substantially in a prospect, rendering
      what was initially believed to be a profitable deposit into one of little or
      no
      value. Unforeseen changes in regulations, the value of minerals, environmental
      regulations, mining technology, site conditions, and/or labor conditions can
      all
      have a negative impact on our operations, and each may impair our ability to
      carry out our business plan.





**Our
      business future is dependent on finding mineral deposits with sufficient
      mineralization and grade.**





Our
      business model depends on locating prospects with a sufficient amount of
      mineralization to justify surface and drilling sampling. No assurance can be
      given that our specific exploration target areas will be valuable in locating
      mineralizations. Even if initial mineralization reports are positive, subsequent
      activities may determine that deposits are not commercially viable. Thus, at
      any
      stage in the exploration process, we may determine that there is no business
      reason to continue and, at that time, our resources may not enable us to
      continue exploratory operations and will cause us to terminate our business.





**We
      have no known mineral reserves, and if we cannot find any, we will have to
      cease
      operations.**





We
      have
      no mineral reserves. If we do not find a mineral reserve containing diamonds,
      or
      if we cannot develop any diamond-bearing mineral reserve, either because we
      do
      not have the money to effect such a development, or because it will not be
      economically feasible to do it, we will have to cease operations, and you may
      lose your entire investment.





**We
      are relying on geological reports to locate potential mineral deposits, which
      may be inaccurate.**





We
      rely
      on geological reports to determine which of the properties, for which we have
      mineral permits, to explore. There is no sure method of verifying the care
      and
      manner used to prepare these reports without further verification on our part,
      or on our agents’ part. Verification of reports is expected to be costly, and
      may take a considerable period of time. Verification could result in our
      rejecting a potential mineral prospect; however, we will have borne the expense
      of this verification with no likelihood of recovering the amounts expended.
      Decisions made without adequately checking the mining prospects could result
      in
      significant unrecoverable expenses. Mineral deposits initially thought to be
      valuable may, in fact, turn out to be of little value. Therefore, it is possible
      that investment funds will have been used, with no value having been achieved
      from the operations based on the reports.





**Regulatory
      compliance in the mineral exploration business is complex, and the failure
      to
      meet all of the various requirements could result in fines, or other limitations
      on the proposed business.**





Our
      mineral exploration activities will be subject to regulation by numerous
      governmental authorities. We are subject to environmental regulations under
      the
      Environmental Act (Quebec), the Mining Act (Quebec), and the Forest Act
      (Quebec). The failure to comply fully with these or any other governmental
      regulations will adversely affect our ability to explore for economic
      mineralization, and our subsequent business stages. The failure to comply with
      any regulations or licenses may result in fines or other penalties. We expect
      compliance with these regulations to be substantial. Therefore, compliance
      with
      (or, conversely, the failure to so comply with) applicable regulations will
      affect our ability to succeed in our business plans and to generate revenues
      and
      profits.





**Mineral
      exploration is a hazardous business, which entails risks for liability and/or
      damages.**





The
      search for valuable minerals involves numerous hazards. As a result, we may
      become subject to liability for such hazards, including pollution, cave-ins
      and
      other hazards against which we cannot insure against, or against which we may
      not elect to insure. We do not currently carry any insurance to protect against
      the potential liability of such hazards. The payment of any liabilities
      attributed to us may have a material adverse effect on our financial position
      and may cause us to cease operations.




15





**We
      face intense competition, and our competitors may have greater resources that
      we
      do and be better able to locate and explore mineral resources in a quicker
      and
      more cost efficient manner than we can.**





It
      is our
      belief that there are a significant number of companies with greater resources
      than those available to us, to locate and explore mineral resources. These
      companies may be able to reach production stages sooner than we can, and obtain
      a share of the market for mineral products before we can.





**Because
      our management has only limited experience in mineral exploration, we have
      a
      higher risk of failure.**





Our
      management has only limited experience in mineral exploration. As a result
      of
      this limited experience, there is a higher risk of our being unable to complete
      our business plan in the exploration of our mineral property.





**Capital
      Issues**





**We
      do not currently have sufficient capital to engage in exploration
      activities.**





The
      cost
      of our planned exploration activities is approximately $1,500,000. As of the
      date of this filing, we do not have sufficient capital to engage in exploration
      activities, and no sources for financing. The extent to which we will be able
      to
      implement our exploration for minerals will be determined by our ability to
      engage in offerings of equity securities and/or debt securities. Without
      additional capital, we will have to either curtail our business plan, or abandon
      it altogether.





**We
      do not have any identified sources of additional capital, the absence of which
      may prevent us from continuing our operations.**





We
      do
      not, presently, have any arrangements with any investment banking firms or
      institutional lenders. Because we will need additional capital, we will have
      to
      expend significant effort to raise operating funds. These efforts may not be
      successful. If not, we will have to either curtail our business plan, or abandon
      it altogether.





**Corporate
      Governance Risks**





**Our
      officers and directors will devote approximately one-third of their time to
      our
      operations.**





Our
      officers and directors have other interests. Because of these other interests,
      each will be devoting only one-third of their time to our operations, which
      could have a negative impact on the efficiency of our operations.





**Critical
      Accounting Policies and Estimates**





Our
      financial statements have been prepared in accordance with accounting principles
      generally accepted in the United States of America. The preparation of these
      financial statements requires us to make estimates and judgments that affect
      the
      reported amounts of assets, liabilities, revenues and expenses, and related
      disclosure of contingent assets and liabilities. On an on-going basis, we
      evaluate our estimates. We base our estimates on historical experience and
      on
      other assumptions that are believed to be reasonable under the circumstances.
      Accordingly, actual results could differ from these estimates under different
      assumptions or conditions. This section summarizes the critical accounting
      policies and the related judgments involved in their application.





*Valuation
      of Deferred Tax Assets*





We
      regularly evaluate our ability to recover the reported amount of our deferred
      income taxes considering several factors, including our estimate of the
      likelihood that we will generate sufficient taxable income in future years
      in
      which temporary differences reverse. Due to the uncertainties related to, among
      other things, the extent and time of future taxable income and the potential
      changes in the ownership of the Company, which could subject our net operating
      loss carryforwards to substantial annual limitations, we offset our net deferred
      tax assets by an equivalent valuation allowance as of December 31, 2007.





*Valuation
      of Long-Lived Assets*





We
      assess
      the recoverability of long-lived assets, such as mining claims, whenever we
      determine that events or changes in circumstances indicate that their carrying
      amount may not be recoverable. Our assessment is primarily based upon our
      estimate of future cash flows associated with these assets. If at some point
      in
      the future, we estimate that the undiscounted cash flows is less than the
      carrying value of the assets, this determination could result in non-cash
      charges to income that could materially affect our financial position or results
      of operations for that period.




16





**Item
      7. Financial Statements**





**DIAMOND
      DISCOVERIES INTERNATIONAL CORP.**


**(An
      Exploration Stage Company)**





**INDEX
      TO FINANCIAL STATEMENTS**





Report
                of Independent Registered Public Accounting Firm
            
            18Balance
                Sheet December 31, 2007
            
            19Statements
                of Operations Years Ended December 31, 2007 and 2006 and Period from
                April 24, 2000 (Date of Inception) to December 31,
                2007
            
            20Statements
                of Changes in Stockholders’ Deficiency Years Ended December 31, 2007 and
                2006 and Period from April 24, 2000 (Date of Inception) to December
                31, 2007
            
            21Statements
                of Cash Flows Years Ended December 31, 2007 and 2006 and Period from
                April 24, 2000 (Date of Inception) to December 31,
                2007
            
            22Notes
                to Consolidated Financial Statements
            
            23




17





**REPORT
      OF INDEPENDENT REGISTERED PUBLIC ACCOUNT****ING
      FIRM**





To
      the
      Board of Directors and Stockholders


Diamond
      Discoveries International Corp.:





We
      have
      audited the accompanying balance sheet of DIAMOND DISCOVERIES INTERNATIONAL
      CORP. (An Exploration Stage Company) as of December 31, 2007, and the related
      statements of operations, changes in stockholders’ deficiency and cash flows for
      the two years then ended and from inception (April 24, 2000) through December
      31, 2007. These financial statements are the responsibility of the Company’s
      management. Our responsibility is to express an opinion on these financial
      statements based on our audit.





We
      conducted our audit in accordance with standards of the Public Company
      Accounting Oversight Board (United States). Those standards require that we
      plan
      and perform the audit to obtain reasonable assurance about whether the financial
      statements are free of material misstatement. The Company is not required to
      have, nor were we engaged to perform, an audit of its internal control over
      financial reporting. Our audit included consideration of internal control over
      financial reporting as a basis for designing audit procedures that are
      appropriate in the circumstances, but not for the purpose of expressing an
      opinion of the effectiveness of the Company’s internal control over financial
      reporting. Accordingly, we express no such opinion. An audit includes examining,
      on a test basis, evidence supporting the amounts and disclosures in the
      financial statements, assessing the accounting principles used and significant
      estimates made by management, as well as evaluating the overall financial
      statement presentation. We believe that our audit provides a reasonable basis
      for our opinion.





In
      our
      opinion, the financial statements referred to above present fairly, in all
      material respects, the financial position of Diamond Discoveries International
      Corp. as of December 31, 2007, and the results of its operations and cash flows
      for the two years then ended and from inception (April 24, 2000) through
      December 31, 2007 in conformity with accounting principles generally accepted
      in
      the United States of America.





The
      accompanying financial statements have been prepared assuming that the Company
      will continue as a going concern. As further discussed in Note 1 to the
      financial statements, the Company had not generated any revenues from its
      operations and it had working capital and stockholders’ deficiencies as of
      December 31, 2007. Such matters raise substantial doubt about the Company’s
      ability to continue as a going concern. Management’s plans concerning these
      matters are also described in Note 1. The accompanying financial statements
      do not include any adjustments that might result from the outcome of these
      uncertainties.








/s/
                Rodefer Moss & Co, PLLCKnoxville,
                TennesseeApril
                14, 2008




18





**DIAMOND
      DISCOVERIES INTERNATIONAL CORP.**


**(An
      Exploration Stage Company)**


**BALANCE
      SHEET**


**DECEMBER 31,
      2007**





**ASSETS**Current
                assetsCash
            
            $
            4,213Other
                current assets
            
            
            38,41842,631Property
                and equipment, net
            
            
            119,813Other
                assets
            
            
            38,334Total
            
            $
            200,778**LIABILITIES
                AND STOCKHOLDERS’ DEFICIENCY**Liabilities:Notes
                payable
            
            $
            1,596,822Accounts
                payable
            
            
            196,447Advances
                from stockholders
            
            
            241,9512,035,220Total
                liabilities
            
            
            2,035,220Commitments
                and contingenciesStockholders’
                deficiency:Preferred
                stock, par value $.001 per share; 20,000,000 shares authorized; none
                issued
            
            
            —Common
                stock, par value $.001 per share; 480,000,000 shares authorized;
                358,216,830 shares issued and outstanding
            
            
            358,217Additional
                paid-in capital
            
            
            16,684,041Deficit
                accumulated during the exploration stage
            
            
            (17,501,989
            )Accumulated
                other comprehensive income (loss)
            
            
            (936,572
            )Unearned
                compensation
            
            
            (438,139
            )Total
                stockholders’ deficiency
            
            
            (1,834,442
            )Total
            
            $
            200,778





See
      Notes
      to Consolidated Financial Statements.


19





**DIAMOND
      DISCOVERIES INTERNATIONAL CORP.**


**(An
      Exploration Stage Company)**


**STATEMENTS
      OF OPERATIONS**


**YEARS
      ENDED DECEMBER 31, 2007 AND 2006 AND PERIOD FROM**


**APRIL 24,
      2000 (DATE OF INCEPTION) TO DECEMBER 31, 2007**





**2007**
            
            **2006**
            
            **April 24,****2000
                to**
              **December 31,**
              **2007**Revenues
            
            $
            —
            
            $
            —
            
            $
            —Operating
                expenses:Exploration
                costs
            
            
            78,298
            
            
            61,746
            
            
            3,737,362Reimbursements
                of exploration costs
            
            
            (58,956
            )
            
            —
            
            
            (1,205,635
            )Exploration
                costs, net of reimbursements
            
            
            19,342
            
            
            61,746
            
            
            2,531,727General
                and administrative expenses
            
            
            1,451,220
            
            
            2,788,949
            
            
            15,269,149Total
                operating expenses
            
            
            1,470,562
            
            
            2,850,695
            
            
            17,800,876Operating
                loss
            
            
            (1,470,562
            )
            
            (2,850,695
            )
            
            (17,800,876
            )Other
                income (expenses)(Loss)
                gain on modification of debt
            
            
            —
            
            
            (155,713
            )
            
            1,193,910Interest
                expense
            
            
            —
            
            
            (46,765
            )
            
            (895,023
            )Net
                loss
            
            $
            (1,470,562
            )
            $
            (3,053,173
            )
            $
            (17,501,989
            )Basic
                net loss per common share
            
            $
            —
            
            $
            (.01
            )Basic
                weighted average common shares outstanding
            
            
            320,318,230
            
            
            301,593,542





See
      Notes
      to Consolidated Financial Statements.


20





**DIAMOND
      DISCOVERIES INTERNATIONAL CORP.**


**(An
      Exploration Stage Company)**


**STATEMENTS
      OF CHANGES IN STOCKHOLDERS’ DEFICIENCY**


**YEARS
      ENDED DECEMBER 31, 2007 AND 2006 AND PERIOD FROM APRIL 24,
      2000**


**(DATE
      OF INCEPTION) TO DECEMBER 31, 2007**





**Preferred
                  stock**
              
              **Common
                  stock**
              
              **Additional
                  paid-in**
              
              **Deficit
                  Accumulated during the exploration**
              
              **Accumulated
                  other comprehensive income**
              
              **Subscriptions
                  receivable**
              
              **Unearned****Shares**
              
              **Amount**
              
              **Shares**
              
              **Amount**
              
              **capital**
              
              **stage**
              
              **(loss)**
              
              **Shares**
              
              **Amount**
              
              **compensation**
              
              **Total**Issuance
                  of shares to founders effective as of April 24, 2000
              
              
              —
              
              $
              —
              
              
              4,850,000
              
              $
              4,850
              
              $
              —
              
              $
              —
              
              
              —
              
              
              —
              
              $
              —
              
              $
              —
              
              $
              4,850Issuance
                  of shares as payment for legal services
              
              
              —
              
              
              —
              
              
              150,000
              
              
              150
              
              
              3,600
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              3,750Issuance
                  of shares in connection with acquisition of mineral
                  permits
              
              
              —
              
              
              —
              
              
              2,000,000
              
              
              2,000
              
              
              48,000
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              50,000Subscription
                  for purchase of 10,000,000 shares
              
              
              —
              
              
              —
              
              
              10,000,000
              
              
              10,000
              
              
              240,000
              
              
              —
              
              
              —
              
              
              10,000,000
              
              
              (250,000
              )
              
              —
              
              
              —Proceeds
                  from issuance of common stock
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              (1,000,000
              )
              
              25,000
              
              
              —
              
              
              25,000Net
                  loss
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              (713,616
              )
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              (713,616
              )Balance,
                  December 31, 2000
              
              
              —
              
              
              —
              
              
              17,000,000
              
              
              17,000
              
              
              291,600
              
              
              (713,616
              )
              
              9,000,000
              
              
              (225,000
              )
              
              —
              
              
              (630,016
              )Proceeds
                  from issuance of common stock
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              (9,000000
              )
              
              225,000
              
              
              —
              
              
              225,000Net
                  loss
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              (1,021,190
              )
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              (1,021,190
              )Balance,
                  December 31, 2001
              
              
              —
              
              
              —
              
              
              17,000,000
              
              
              17,000
              
              
              291,600
              
              
              (1,734,806
              )
              
              —
              
              
              —
              
              
              —
              
              
              (1,426,206
              )Proceeds
                  from private placements of units of common stock and
                  warrants
              
              
              —
              
              
              —
              
              
              1,685,000
              
              
              1,685
              
              
              756,565
              
              
              —
              
              
              —
              
              
              51,758
              
              
              (23,291
              )
              
              —
              
              
              734,959Net
                  loss
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              (877,738
              )
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              (877,738
              )Balance,
                  December 31, 2002
              
              
              —
              
              
              —
              
              
              18,685,000
              
              
              18,685
              
              
              1,048,165
              
              
              (2,612,544
              )
              
              51,758
              
              
              (23,291
              )
              
              —
              
              
              (1,568,985
              )Issuance
                  of shares as payment for accounts payable
              
              
              —
              
              
              —
              
              
              3,000,000
              
              
              3,000
              
              
              295,423
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              298,423Issuance
                  of shares as payment for services
              
              
              —
              
              
              —
              
              
              6,715,000
              
              
              6,715
              
              
              1,368,235
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              1,374,950Issuance
                  of stock options
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              1,437,000
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              (1,437,000
              )
              
              —Issuance
                  of shares as payment for advances from stockholders
              
              
              —
              
              
              —
              
              
              7,500,000
              
              
              7,500
              
              
              767,500
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              775,000Issuance
                  of shares as payment for notes payable
              
              
              —
              
              
              —
              
              
              1,810,123
              
              
              1,810
              
              
              124,898
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              126,708Proceeds
                  from issuance of common stock
              
              
              —
              
              
              —
              
              
              6,000,000
              
              
              6,000
              
              
              444,000
              
              
              —
              
              
              —
              
              
              4,000,000
              
              
              (281,250
              )
              
              —
              
              
              168,750Proceeds
                  from issuance of common stock in connection with exercise of stock
                  options
              
              
              —
              
              
              —
              
              
              10,050,000
              
              
              10,050
              
              
              292,450
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              302,500Amortization
                  of unearned compensation
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              169,744
              
              
              169,744Net
                  loss
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              (3,222,057
              )
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              (3,222,057
              )Foreign
                  currency translation adjustment
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              (360,900
              )
              
              —
              
              
              —
              
              
              —
              
              
              (360,900
              )Total
                  comprehensive loss ($3,582,957)
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —Balance,
                  December 31, 2003
              
              
              —
              
              
              —
              
              
              53,760,123
              
              
              53,760
              
              
              5,777,671
              
              
              (5,834,601
              )
              
              (360,900
              )
              
              4,051,758
              
              
              (304,541
              )
              
              (1,267,256
              )
              
              (1,935,867
              )Issuance
                  of shares as payment for services
              
              
              —
              
              
              —
              
              
              16,842,000
              
              
              16,842
              
              
              1,614,858
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              1,631,700Proceeds
                  from issuance of common stock
              
              
              —
              
              
              —
              
              
              4,000,000
              
              
              4,000
              
              
              384,832
              
              
              —
              
              
              —
              
              
              524,207
              
              
              (56,754
              )
              
              —
              
              
              332,078Issuance
                  of shares as payment for accounts payable
              
              
              —
              
              
              —
              
              
              1,400,000
              
              
              1,400
              
              
              138,600
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              140,000Issuance
                  of stock options
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              1,139,000
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              (1,139,000
              )
              
              —Proceeds
                  from issuance of common stock in connection with exercise of stock
                  options
              
              
              —
              
              
              —
              
              
              31,125,000
              
              
              31,125
              
              
              395,125
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              426,250Forgiveness
                  of stock subscriptions
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              (4,575,965
              )
              
              361,295
              
              
              —
              
              
              361,295Amortization
                  of unearned compensation
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              529,423
              
              
              529,423Net
                  loss
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              (3,724,106
              )
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              (3,724,106
              )Foreign
                  currency translation adjustment
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              (131,269
              )
              
              —
              
              
              —
              
              
              —
              
              
              (131,269
              )Total
                  comprehensive loss ($3,855,375)
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —Balance,
                  December 31, 2004
              
              
              —
              
              
              —
              
              
              107,127,123
              
              
              107,127
              
              
              9,450,086
              
              
              (9,558,707
              )
              
              (492,169
              )
              
              —
              
              
              —
              
              
              (1,876,833
              )
              
              (2,370,496
              )Issuance
                  of shares as payment for services
              
              
              —
              
              
              —
              
              
              6,000,000
              
              
              6,000
              
              
              204,000
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              210,000Proceeds
                  from issuance of common stock
              
              
              —
              
              
              —
              
              
              69,883,657
              
              
              69,884
              
              
              2,376,044
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              2,445,928Issuance
                  of shares as payment for accounts payable
              
              
              —
              
              
              —
              
              
              36,481,050
              
              
              36,481
              
              
              1,156,386
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              1,192,867Issuance
                  of stock options
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              1,218,500
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              (1,218,500
              )
              
              —Proceeds
                  from issuance of common stock in connection with exercise of stock
                  options
              
              
              —
              
              
              —
              
              
              28,125,000
              
              
              28,125
              
              
              253,125
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              281,250Amortization
                  of unearned compensation
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              889,960
              
              
              889,960Net
                  loss
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              (3,419,547
              )
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              (3,419,547
              )Foreign
                  currency translation adjustment
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              (151,691
              )
              
              —
              
              
              —
              
              
              —
              
              
              (151,691
              )Total
                  comprehensive loss ($3,571,238)
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —Balance,
                  December 31, 2005
              
              
              —
              
              
              —
              
              
              247,616,830
              
              
              247,617
              
              
              14,658,141
              
              
              (12,978,254
              )
              
              (643,860
              )
              
              —
              
              
              —
              
              
              (2,205,373
              )
              
              (921,729
              )Issuance
                  of shares as payment for services
              
              
              —
              
              
              —
              
              
              46,000,000
              
              
              46,000
              
              
              1,334,000
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              1,380,000Proceeds
                  from issuance of common stock
              
              
              —
              
              
              —
              
              
              100,000
              
              
              100
              
              
              3,400
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              3,500Issuance
                  of stock options
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              150,000
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              (150,000
              )
              
              —Proceeds
                  from issuance of common stock in connection with exercise of stock
                  options
              
              
              —
              
              
              —
              
              
              11,500,000
              
              
              11,500
              
              
              103,500
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              115,000Amortization
                  of unearned compensation
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              1,142,674
              
              
              1,142,674Net
                  loss
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              (3,053,173
              )
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              (3,053,173
              )Foreign
                  currency translation adjustment
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              (48,535
              )
              
              —
              
              
              —
              
              
              —
              
              
              (48,535
              )Total
                  comprehensive loss ($3,101,708)
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —Balance,
                  December 31, 2006
              
              
              —
              
              
              —
              
              
              305,216,830
              
              
              305,217
              
              
              16,249,041
              
              
              (16,031,427
              )
              
              (692,395
              )
              
              —
              
              
              —
              
              
              (1,212,699
              )
              
              (1,382,263
              )Issuance
                  of shares as payment for services
              
              
              —
              
              
              —
              
              
              52,000,000
              
              
              52,000
              
              
              416,000
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              468,000Issuance
                  of stock options
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              10,000
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              (10,000
              )
              
              —Proceeds
                  from issuance of common stock in connection with exercise of stock
                  options
              
              
              —
              
              
              —
              
              
              1,000,000
              
              
              1,000
              
              
              9,000
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              10,000Amortization
                  of unearned compensation
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              784,560
              
              
              784,560Net
                  loss
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              (1,470,562
              )
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              (1,470,562
              )Foreign
                  currency translation adjustment
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              (244,177
              )
              
              —
              
              
              —
              
              
              —
              
              
              (244,177
              )Total
                  comprehensive loss ($1,714,739)
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —Balance,
                  December 31, 2007
              
              
              —
              
              $
              —
              
              
              358,216,830
              
              $
              358,217
              
              $
              16,684,041
              
              $
              (17,501,989
              )
              
              (936,572
              )
              
              —
              
              $
              —
              
              $
              (438,139
              )
              $
              (1,834,442
              )


See
      Notes
      to Consolidated Financial Statements.


21





**DIAMOND
      DISCOVERIES INTERNATIONAL CORP.**


**(An
      Exploration Stage Company)**


**STATEMENTS
      OF CASH FLOWS**


**YEARS
      ENDED DECEMBER 31, 2007 AND 2006 AND PERIOD FROM**


**APRIL 24,
      2000 (DATE OF INCEPTION) TO DECEMBER 31, 2007**





**2007**
            
            **2006**
            
            **April 24,**
              **2000
                to**
              **December 31,**
              **2007**Operating
                activities:Net
                loss
            
            $
            (1,470,562
            )
            $
            (3,053,173
            )
            $
            (17,501,989
            )Adjustments
                to reconcile net loss to net cash used in operating
                activities:Costs
                of services paid through issuance of common stock
            
            
            468,000
            
            
            1,380,000
            
            
            5,073,250Amortization
                of unearned compensation
            
            
            784,560
            
            
            1,142,674
            
            
            3,516,361Amortization
                of discount on note payable
            
            
            —
            
            
            45,107
            
            
            45,107Forgiveness
                of stock subscriptions
            
            
            —
            
            
            —
            
            
            361,295(Loss)
                gain on modification of debt
            
            
            —
            
            
            155,713
            
            
            (1,193,910
            )Cost
                of mineral permits paid through the issuance of common
                stock
            
            
            —
            
            
            —
            
            
            50,000Loss
                on disposal of property and equipment
            
            
            —
            
            
            4,147
            
            
            4,147Depreciation
            
            
            46,947
            
            
            47,908
            
            
            124,931Changes
                in operating assets and liabilities:Other
                assets
            
            
            —
            
            
            (13,787
            )
            
            (54,795
            )Accounts
                payable
            
            
            4,410
            
            
            47,606
            
            
            2,860,393Accrued
                expenses
            
            
            —
            
            
            —
            
            
            —Net
                cash used in operating activities
            
            
            (166,645
            )
            
            (243,805
            )
            
            (6,715,210
            )Investing
                activities:Purchases
                of property and equipment
            
            
            —
            
            
            —
            
            
            (252,733
            )Proceeds
                from sale of property and equipment
            
            
            —
            
            
            10,000
            
            
            10,000Net
                cash provided by (used in) investing
                activities
            
            
            —
            
            
            10,000
            
            
            (242,733
            )Financing
                activities:Advances
                from stockholders, net
            
            
            159,423
            
            
            15,028
            
            
            1,699,818Proceeds
                from issuance of notes payable, net
            
            
            —
            
            
            65,415
            
            
            247,123Proceeds
                from issuance of common stock and warrants
            
            
            10,000
            
            
            118,500
            
            
            5,015,215Net
                cash provided by financing activities
            
            
            169,423
            
            
            198,943
            
            
            6,962,156Net
                increase (decrease) in cash
            
            
            2,778
            
            
            (34,862
            )
            
            4,213Cash,
                beginning of period
            
            
            1,435
            
            
            36,297
            
            
            —Cash,
                end of period
            
            $
            4,213
            
            $
            1,435
            
            $
            4,213





See
      Notes
      to Consolidated Financial Statements.


22





**DIAMOND
      DISCOVERIES INTERNATIONAL CORP.**


**(An
      Exploration Stage Company)**





**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**





**Note 1—Business
      and basis of presentation:**





Diamond
      Discoveries International Corp. (the “Company”) was incorporated in the State of
      Delaware on April 24, 2000. The Company is engaged in activities related to
      the exploration for mineral resources in Canada. It conducts exploration and
      related activities through contracts with third parties.





As
      further explained in Note 3, the Company acquired its mineral permits for
      property in the “Torngat Fields” located in the Province of Quebec, Canada. The
      Company intends to develop the permits from early stage exploration through
      completion of the exploration phase. Prior to any further exploration decisions,
      a mineral deposit must be appropriately assessed. Gathering this data usually
      takes several years. Once the appropriate data has been gathered, management
      will determine whether and how to proceed. The Company has discovered tiny
      diamonds in samples taken from the property and is conducting surveys and
      exploration at the property to begin to enable it to determine whether it can
      extract and produce diamonds from this kimberlite (see Note 3).





Other
      than contracting with third parties to conduct exploration and gather data
      on
      its behalf, the Company had not conducted any operations or generated any
      revenues as of December 31, 2007. Accordingly, it is considered an “exploration
      stage company” for accounting purposes. In addition to exploration costs, the
      Company incurs general and administrative expense which consists primarily
      of
      professional fees relating to corporate filings and consulting and other
      expenses incurred in operating our business.





The
      accompanying financial statements have been prepared assuming the Company will
      continue as a going concern. However, in addition to not generating any
      revenues, the Company had a working capital deficiency of approximately
      $1,993,000 and a stockholders’ deficiency of approximately $1,834,000 as of
      December 31, 2007. Management believes that the Company will not generate any
      revenues during the twelve month period subsequent to December 31, 2007 in
      which
      it will be gathering and evaluating data related to the permits for the Torngat
      Fields. Since its inception, the Company has received total consideration of
      $6,962,156 as a result of proceeds of shareholder advances, the issuance of
      notes payable and the sales of common stock, management believes that the
      Company will still need total additional financing of approximately $1,500,000
      to continue to operate as planned during the twelve month period subsequent
      to
      December 31, 2007. These conditions raise substantial doubt about the Company’s
      ability to continue as a going concern.





Management
      plans to obtain such financing through private offerings of debt and equity
      securities. However management cannot assure that the Company will be able
      to
      obtain any or all of the additional financing it will need to continue to
      operate through at least December 31, 2008 or that, ultimately, it will be
      able to generate any profitable commercial mining operations. If the Company
      is
      unable to obtain the required financing, it may have to curtail or terminate
      its
      operations and liquidate its remaining assets and liabilities.





The
      accompanying financial statements do not include any adjustments related to
      the
      recoverability and classifications of assets or the amounts and classification
      of liabilities that might be necessary should the Company be unable to continue
      its operations as a going concern.





**Note 2—Summary
      of significant accounting policies:**





Use
      of
      estimates:





The
      preparation of financial statements in conformity with accounting principles
      generally accepted in the United States of America requires management to make
      estimates and assumptions that affect certain reported amounts and disclosures.
      Accordingly, actual results could differ from those estimates.





Mining
      costs:





Exploration
      and evaluation costs are expensed as incurred. Management’s decision to develop
      or mine a property will be based on an assessment of the viability of the
      property and the availability of financing. The Company will capitalize mining
      exploration and other related costs attributable to reserves in the event that
      a
      definitive feasibility study establishes proven and probable reserves.
      Capitalized mining costs will be expensed using the unit of production method
      and will also be subject to an impairment assessment.


23


Concentrations
      of credit risk:





The
      Company maintains its cash in bank deposit accounts, the balances of which,
      at
      times, may exceed Federal insurance limits. Exposure to credit risk is reduced
      by placing such deposits with major financial institutions and monitoring their
      credit ratings.





Impairment
      of long-lived assets:





Impairment
      losses on long-lived assets, such as mining claims, are recognized when events
      or changes in circumstances indicate that the undiscounted cash flows estimated
      to be generated by such assets are less than their carrying value and,
      accordingly, all or a portion of such carrying value may not be recoverable.
      Impairment losses are then measured by comparing the fair value of assets to
      their carrying amounts.





Income
      taxes:





The
      Company accounts for income taxes pursuant to the asset and liability method
      which requires deferred income tax assets and liabilities to be computed
      annually for temporary differences between the financial statement and tax
      bases
      of assets and liabilities that will result in taxable or deductible amounts
      in
      the future based on enacted tax laws and rates applicable to the periods in
      which the differences are expected to affect taxable income. Valuation
      allowances are established when necessary to reduce deferred tax assets to
      the
      amount expected to be realized. The income tax provision or credit is the tax
      payable or refundable for the period plus or minus the change during the period
      in deferred tax assets and liabilities.





Net
      earnings (loss) per share:





The
      Company presents “basic” earnings (loss) per share and, if applicable, “diluted”
earnings per share pursuant to the provisions of Statement of Financial
      Accounting Standards No. 128, “Earnings per Share”. Basic earnings (loss)
      per share is calculated by dividing net income or loss by the weighted average
      number of common shares outstanding during each period. The calculation of
      diluted earnings per share is similar to that of basic earnings per share,
      except that the denominator is increased to include the number of additional
      common shares that would have been outstanding if all potentially dilutive
      common shares, such as those issuable upon the exercise of stock options and
      warrants, were issued during the period.





Since
      the
      Company had a net loss for the years ended December 31, 2007 and 2006, the
      assumed effects of the exercise of the warrants to purchase 95,576,849 shares
      of
      common stock that were issued during 2005 and the application of the treasury
      stock method would have been anti-dilutive. Therefore, there is no diluted
      per
      share amounts in the 2007 and 2006 statements of operations.





Foreign
      currency translation and transactions:





The
      functional currency of the Company’s operations is Canadian dollars. The assets
      and liabilities arising from these operations are translated at current exchange
      rates and related revenues and expenses at average exchange rates in effect
      during the year. Resulting translation adjustments, if material, are recorded
      in
      the statement of changes in stockholders' deficiency while foreign currency
      transaction gains and losses are included in operations.





The
      Company recorded a loss of $1,470,562, $3,053,173 and $17,501,989 during the
      years ended December 31, 2007 and 2006 and the period from April 24, 2000
      (Date of Inception) to December 31, 2007, respectively. During the years ended
      December 31, 2007 and 2006, the Company recorded a net foreign currency
      translation adjustment of $244,177 and $48,535, respectively, in its interest
      in
      the Torngat Mountains operations reflecting a strengthening of the Canadian
      dollar against the U. S. dollar which is included in accumulated other
      comprehensive income (loss). Translation adjustments for prior periods have
      been
      immaterial.





Comprehensive
      loss





Comprehensive
      loss consists of net loss for the period, unrealized hedging transactions and
      foreign currency translation adjustments.





Recent
      accounting pronouncements:





In
      June
      2006, the Financial Accounting Standards Board (“ FASB”)
      issued Interpretation No. 48 (“FIN 48”), “Accounting for Uncertainty in Income
      Taxes, an Interpretation of FASB Statement No. 109,” which clarifies the
      accounting for uncertainty in income taxes in accordance with FASB Statement
      No.
      109, “Accounting for Income Taxes.”  FIN 48 prescribes a recognition
      threshold and measurement attribute for the measurement and financial statement
      recognition of a tax position taken or expected to be taken in a tax
      return.  The interpretation also provides guidance on derecognition,
      classification, interest and penalties, accounting in interim periods,
      disclosure and transition.  FIN 48 is effective for fiscal years beginning
      after December 15, 2006.  The adoption of FIN 48 did not have a material
      impact on the Company’s consolidated results of operations, financial position
      or liquidity.




24




In
      September 2006, the FASB issued Statement of Financial Standards No. 157 (“SFAS
      No. 157”), “Fair Value Measurements,” which clarifies the definition of fair
      value, establishes a framework for measuring fair value, and expands the
      disclosures of fair value measurements. SFAS No. 157 is effective for fiscal
      years beginning after November 15, 2007. The adoption of SFAS 157 is not
      expected to have a material impact on the Company’s consolidated financial
      statements.





In
      February 2007, the FASB issued Statement of Financial Standards No. 159 (“SFAS
      No. 159”), “The Fair Value Option for Financial Assets and Financial
      Liabilities,” which permits entities to choose to measure many financial
      instruments and certain other items at fair value. SFAS No. 159 is effective
      for
      fiscal years beginning after November 15, 2007. The adoption of SFAS 159 is
      not
      expected to have a material impact on the Company’s consolidated financial
      statements.





In
      December 2007, the FASB issued Statement of Financial Standards No. 141(R)
      (“SFAS No. 141(R)”), “Business Combinations,” which revises the previously
      issued SFAS 141. SFAS No. 141(R) establishes principles and requirements
      for how an acquirer recognizes and measures in its financial statements the
      identifiable assets acquired, the liabilities assumed, any noncontrolling
      interest in the acquiree and the goodwill acquired. SFAS No. 141(R) also
      establishes disclosure requirements to enable the evaluation of the nature
      and
      financial effects of the business combination. SFAS No. 141(R) is effective
      for financial statements issued for fiscal years beginning after
      December 15, 2008 and will be applied prospectively. The Company is
      currently evaluating the potential impact on its consolidated financial
      statements.





In
      December 2007, the FASB issued Statement of Financial Standards No. 160 (“SFAS
      No. 160”), “Noncontrolling Interests in Consolidated Financial Statements, an
      amendment of ARB No. 51.” SFAS No. 160 establishes accounting and
      reporting standards for ownership interests in subsidiaries held by parties
      other than the parent, the amount of consolidated net income attributable to
      the
      parent and to the noncontrolling interest, changes in a parent’s ownership
      interest, and the valuation of retained noncontrolling equity investments when
      a
      subsidiary is deconsolidated. SFAS No. 160 also establishes disclosure
      requirements that clearly identify and distinguish between the interests of
      the
      parent and the interests of the noncontrolling owners. SFAS No. 160 is
      effective for financial statements issued for fiscal years beginning after
      December 15, 2008. FAS 160 will be applied prospectively, with a disclosure
      requirement for existing minority interests to be applied retrospectively.
      The
      Company is currently evaluating the potential impact on its consolidated
      financial statements.





**Note 3—Permits:**





Pursuant
      to an agreement consummated on September 12, 2000, the Company acquired
      certain permits in the Torngat Fields from Peter Ferderber and S. G. Hawkins,
      who are key consultants and advisors to the Company, for total consideration
      of
      $90,540, of which $40,540 ($60,000 Canadian) represents the amount paid in
      cash
      and $50,000 represents the fair value of a total of 2,000,000 shares of the
      Company’s common stock issued to Messrs. Ferderber and Hawkins. The
      exchange of shares for the permits was a non-cash transaction that is not
      reflected in the accompanying statement of cash flows for the period from
      April 24, 2000 to December 31, 2007.





In
      connection with the acquisition of these permits, the Company assigned to the
      sellers a 1% interest in the “net smelter returns” of the property, one-half of
      which is payable over the first $50,000,000 (Canadian) of revenues produced
      from
      the property. Such interest would terminate once the sellers receive a total
      of
      $10,000,000 (Canadian) based on such interest. Net smelter returns are
      determined by the net amount received from the sale to a smelter or other buyer
      of ore, ore concentrates or other products produced from the property.





Mr. Hawkins
      owns Tandem Resources, Ltd. (“Tandem”). As part of the agreement for the
      purchase of the permits, the Company granted Tandem an option to purchase a
      40%
      interest in a joint venture that would be formed between the Company and Tandem
      to conduct operations related to the properties covered by the permits at such
      time as the Company has incurred expenditures related to such operations
      totaling $5,000,000 (Canadian). The exercise price for the option will be
      $2,000,000 (Canadian). Mr. Ferderber also is the president of PGL (see
      Note 1).





In
      2002,
      the Company acquired additional permits for 50,000 acres of adjacent property
      in
      the Torngat Fields by staking the property and paying the requisite fees to
      the
      Quebec Department of Natural Resources.


25


**Note 4—Property
      and equipment:**





Property
      and equipment is stated at cost. Depreciation is calculated using the
      straight-line method over the estimated useful lives of such assets.
      Expenditures for maintenance and repairs are charged to expense as
      incurred.





At
      December 31, 2007, major classes of property and equipment are as
      follows:


2007
              
              Estimated
                  Useful LivesDrilling
                  equipment
              
              $
              239,626
              
              
              5
                  yearsLess
                  accumulated depreciation
              
              
              (119,813
              )Property
                  and equipment, net
              
              $
              119,813




Depreciation
      expense for the year ended December 31, 2007 and 2006 was $46,947 and $47,908,
      respectively.





**Note 5—Notes
      payable:**





In
      November 2005, the Company and Prospecting Geophysics Ltd. (“PGL”) entered into
      an agreement whereby the amount due to PGL was converted to a non-interest
      bearing note payable totaling $1,500,000 (Canadian). The note is secured with
      the permits identified in Note 3. In connection with the agreement, the Company
      recorded a gain on the modification of debt of $1,349,623 during 2005. The
      Company recorded the note using a 12% discount rate. The Company was unable
      to make the scheduled payments ($600,000 Canadian) during 2006 under this
      note payable and therefore the note is effectively in default.  As such,
      the entire balance of the note payable is shown as being currently due in the
      accompanying consolidated balance sheet and the Company recorded a loss on
      the
      modification of debt of $155,713 during 2006.





The
      Company recorded a charge of $46,765 to interest expense to amortize the
      discount on the note payable for the year ended December 31, 2006.





**Note 6—Stockholders’
      equity:**





Preferred
      stock





As
      of
      December 31, 2007, the Company was authorized to issue up to 20,000,000 shares
      of preferred stock with a par value of $.001 per share. The preferred stock
      may
      be issued in one or more series with dividend rates, conversion rights, voting
      rights and other terms and preferences to be determined by the Company’s Board
      of Directors, subject to certain limitations set forth in the Company’s Articles
      of Incorporation. No shares of preferred stock had been issued by the Company
      as
      of December 31, 2007.





Common
      stock





During
      the period from April 24, 2000 to December 31, 2000, the Company
      issued 150,000 shares of common stock as payment for legal services.
      Accordingly, general and administrative expenses in the accompanying statement
      of operations, and common stock and additional paid-in capital in the
      accompanying statements of stockholders’ deficiency, for the period from
      April 24, 2000 to December 31, 2004 was increased to reflect the estimated
      fair value of the shares of $3,750.





On
      May 20, 2000, the Company completed the sale of 10,000,000 shares of common
      stock for $250,000, or $.025 per share, through a private placement intended
      to
      be exempt from registration under the Securities Act of 1933 (the “Act”).
      Initially, the buyer paid $25,000 in cash and $225,000 through the issuance
      of a
      10% promissory note. The exchange of shares for a note receivable was a noncash
      transaction that is not reflected in the accompanying statement of cash flows
      for the period from April 24, 2000 to December 31, 2004. The 10% promissory
      note was paid on various dates through May 20, 2001.





During
      the year ended December 31, 2002, the Company received total cash
      consideration of $734,959 as a result of the sale of 1,633,242 units of common
      stock and warrants to purchase common stock at $.45 per unit through private
      placements intended to be exempt from registration under the Act. Each unit
      consisted of one share of common stock and one warrant to purchase one share
      of
      common stock exercisable at $.75 per share for a two year period from the date
      of purchase. The Company had also received subscriptions through the private
      placements for the purchase of 51,758 units at $.45 per unit or a total of
      $23,291 as of December 31, 2002. The notes receivable from the subscribers
      are noninterest bearing and were due six months from the respective dates of
      sale, but remained outstanding at December 31, 2004. All the warrants remained
      outstanding as of December 31, 2004.





In
      2003,
      the Company issued 6,715,000 shares of its common stock in exchange for services
      performed by various consultants and recorded a charge to general and
      administrative expenses of $1,374,950, or $0.20 per share, for the fair value
      of
      the shares.




26





In
      May 2003, the Company issued 1,500,000 shares of its common stock in
      payment of accounts payable to Prospecting Geophysics, Ltd. of $148,423, or
      $0.10 per share, which approximated the fair value of the shares.





From
      July 2003 to September 2003, the Company issued 1,810,123 shares of
      its common stock in payment of 8% demand notes payable of $126,708, or $0.07
      per
      share, which approximated the fair value of the shares.





In
      August 2003, in connection with a private placement of its common stock,
      the Company issued 2,000,000 shares of its common stock for $150,000, or $0.08
      per share. In addition, the Company issued 6,500,000 shares of its common stock
      for $65,000, or $0.01 per share, in connection with the exercise of stock
      options.





In
      September 2003, the Company issued 5,000,000 shares of its common stock in
      payment of advances from stockholders of $525,000, or $0.11 per share, which
      approximated the fair value of the shares.





In
      October 2003, the Company issued 2,500,000 shares of its common stock in
      payment of advances from stockholders of $250,000, or $0.10 per share, which
      approximated the fair value of the shares. In addition, in connection with
      a
      private placement of its common stock, the Company issued 4,000,000 shares
      of
      its common stock for $300,000, or $0.08 per share, $281,250 of which represents
      a subscription receivable at December 31, 2004. Also, the Company issued 540,000
      shares of its common stock in payment for accounts payable of $54,000, or $0.10
      per share, which approximated the fair value of the shares. Further, the Company
      issued 2,350,000 shares of its common stock for $225,500, or $0.10 per share,
      in
      connection with the exercise of stock options.





In
      November 2003, the Company issued 1,200,000 shares of its common stock for
      $12,000, or $0.01 per share, in connection with the exercise of stock
      options.





In
      December 2003, the Company issued 960,000 shares of its common stock in
      payment for accounts payable of $96,000, or $0.10 per share, which approximated
      the fair value of the shares.





In
      2004,
      the Company issued 15,467,000 shares of its common stock in exchange for
      services performed by various consultants and recorded a charge to general
      and
      administrative expenses of $1,546,700 for the fair value of the
      shares.





In
      March
      2004, in connection with a private placement of its common stock, the Company
      issued 2,500,000 shares of its common stock for $238,832.





In
      March
      2004, the Company issued 450,000 shares of its common stock in payment of
      $45,000 of accounts payable, which approximated the fair value of the
      shares.





In
      May
      2004, in connection with a private placement of its common stock, the Company
      issued 125,000 shares of its common stock valued at $12,500 as payment for
      the
      commission associated with the private placement.





In
      May
      2004, the Company issued 950,000 shares of its common stock in payment of
      $95,000 of accounts payable, which approximated the fair value of the
      shares.





In
      July
      2004, in connection with a private placement of its common stock, the Company
      issued 1,500,000 shares of its common stock for $150,000. In addition, the
      Company issued 1,250,000 shares of its common stock in exchange for services
      performed by various consultants and recorded a charge to general and
      administrative expenses of $99,750 for the fair value of the shares. Further,
      the Company issued 1,250,000 shares of its common stock in connection with
      the
      exercise of stock options.





In
      December 2004, the Company issued 29,875,000 shares of its common stock in
      connection with the exercise of stock options.





In
      January 2005, the Company issued 2,600,000 shares of its common stock in
      connection with the exercise of stock options.





In
      July
      2005, in connection with a private placement of its common stock, the Company
      issued 27,750,000 shares of its common stock for $971,250. In addition, the
      Company issued 8,587,858 shares of its common stock in payment of $302,500
      of
      accounts payable, which approximated the fair value of the shares.





In
      August
      2005, the Company issued 1,100,000 shares of its common stock in connection
      with
      the exercise of stock options.




27





In
      September 2005, in connection with a private placement of its common stock,
      the
      Company issued 2,300,000 shares of its common stock for $80,500.





In
      October 2005, the Company issued 6,000,000 shares of its common stock in
      exchange for services performed by various consultants and recorded a charge
      to
      general and administrative expenses of $210,000 for the fair value of the
      shares.





In
      December 2005, in connection with a private placement of its common stock,
      the
      Company issued 39,833,657 shares of its common stock for $1,394,178. In
      addition, the Company issued 27,893,192 shares of its common stock in payment
      of
      $890,367 of accounts payable, which approximated the fair value of the shares.
      Further, the Company issued 24,425,000 shares of its common stock in connection
      with the exercise of stock options.





In
      January 2006, the Company issued 11,500,000 shares of its common stock in
      connection with the exercise of stock options. In addition, in connection with
      a
      private placement of its common stock, the Company issued 100,000 shares of
      its
      common stock for $3,500. Finally, the Company issued 46,000,000 shares of its
      common stock in exchange for services performed by various consultants and
      recorded a charge to general and administrative expenses of $1,380,000 which
      approximated the fair value of the shares.





In
      September 2007, the Company issued 52,000,000 shares of its common stock in
      exchange for services performed by various consultants and recorded a charge
      to
      general and administrative expenses of $468,000 which approximated the fair
      value of the shares. In October 2007, the Company issued 1,000,000 shares of
      its
      common stock in connection with the exercise of stock options.





The
      issuances of common stock for services and in payment of accounts payable,
      8%
      demand notes payable and advances to stockholders were non-cash transactions
      and, accordingly, they are not reflected in the accompanying statements of
      cash
      flows for the years ended December 31, 2007 and 2006 and the period from April
      24, 2000 (Date of Inception) to December 31, 2007.





Stock
      Option Plans





2005
      Plan





On
      November 14, 2005, the Company adopted the Diamond Discoveries International
      Corp. 2005 Stock Incentive Plan (the “2005 Plan”). Under the 2005 Plan,
      35,000,000 shares of common stock are reserved for issuance. The purpose of
      the
      2005 Plan is to provide incentives for officers, directors, consultants and
      key
      employees to promote the success of the Company, and to enhance the Company’s
      ability to attract and retain the services of such persons. Options granted
      under the 2005 Plan may be either: (i) options intended to qualify as “incentive
      stock options” under Section 422 of the Internal Revenue Code of 1986; or (ii)
      non-qualified stock options. Stock options may be granted under the 2005 Plan
      for all employees and consultants of the Company, or employees of any present
      or
      future subsidiary or parent of the Company. The 2005 Plan is administered by
      the
      Board of Directors. The Compensation Committee is empowered to interpret the
      2005 Plan and to prescribe, amend and rescind the rules and regulations
      pertaining to the 2005 Plan. Options granted under the 2005 Plan generally
      vest
      over three years. No option is transferable by the optionee other than by will
      or the laws of descent and distribution and each option is exercisable, during
      the lifetime of the optionee, only by the optionee. The Compensation Committee
      may not receive options.





Any
      incentive stock option that is granted under the 2005 Plan may not be granted
      at
      a price less than the fair market value of the Company’s Common Stock on the
      date of grant (or less than 110% of the fair market value in the case of holders
      of 10% or more of the total combined voting power through all classes of stock
      of the Company or a subsidiary or parent of the Company.) Non-qualified stock
      options may be granted at the exercise price established by the Compensation
      Committee, which may be less than the fair market value of the Company’s Common
      Stock on the date of grant.





Each
      option granted under the 2005 Plan is exercisable for a period not to exceed
      ten
      years from the date of grant (or five years in the case of a holder of more
      than
      10% of the total combined voting power of all classes of stock of the Company
      or
      a subsidiary or parent of the Company) and shall lapse upon expiration of such
      period, or earlier upon termination of the recipient’s employment with the
      Company, or as determined by the Compensation Committee.





2004
      Plan





On
      September 30, 2004, the Company adopted the Diamond Discoveries International
      Corp. 2004 Stock Incentive Plan (the “2004 Plan”). Under the 2004 Plan,
      35,000,000 shares of common stock are reserved for issuance. The purpose of
      the
      2004 Plan is to provide incentives for officers, directors, consultants and
      key
      employees to promote the success of the Company, and to enhance the Company’s
      ability to attract and retain the services of such persons. Options granted
      under the 2004 Plan may be either: (i) options intended to qualify as “incentive
      stock options” under Section 422 of the Internal Revenue Code of 1986; or (ii)
      non-qualified stock options. Stock options may be granted under the 2004 Plan
      for all employees and consultants of the Company, or employees of any present
      or
      future subsidiary or parent of the Company. The 2004 Plan is administered by
      the
      Board of Directors. The Compensation Committee is empowered to interpret the
      2004 Plan and to prescribe, amend and rescind the rules and regulations
      pertaining to the 2004 Plan. Options granted under the 2004 Plan generally
      vest
      over three years. No option is transferable by the optionee other than by will
      or the laws of descent and distribution and each option is exercisable, during
      the lifetime of the optionee, only by the optionee. The Compensation Committee
      may not receive options.




28





Any
      incentive stock option that is granted under the 2004 Plan may not be granted
      at
      a price less than the fair market value of the Company’s Common Stock on the
      date of grant (or less than 110% of the fair market value in the case of holders
      of 10% or more of the total combined voting power through all classes of stock
      of the Company or a subsidiary or parent of the Company.) Non-qualified stock
      options may be granted at the exercise price established by the Compensation
      Committee, which may be less than the fair market value of the Company’s Common
      Stock on the date of grant.





Each
      option granted under the 2004 Plan is exercisable for a period not to exceed
      ten
      years from the date of grant (or five years in the case of a holder of more
      than
      10% of the total combined voting power of all classes of stock of the Company
      or
      a subsidiary or parent of the Company) and shall lapse upon expiration of such
      period, or earlier upon termination of the recipient’s employment with the
      Company, or as determined by the Compensation Committee.





2003
      Plan





On
      May 30, 2003, the Company adopted the Diamond Discoveries International
      Corp. 2003 Stock Incentive Plan (the “Plan”). Under the Plan, 15,000,000 shares
      of common stock are reserved for issuance. The purpose of the Plan is to provide
      incentives for officers, directors, consultants and key employees to promote
      the
      success of the Company, and to enhance the Company’s ability to attract and
      retain the services of such persons. Options granted under the Plan may be
      either: (i) options intended to qualify as “incentive stock options” under
      Section 422 of the Internal Revenue Code of 1986; or (ii) non-qualified
      stock options. Stock options may be granted under the Plan to all employees
      and
      consultants of the Company, or employees of any present or future subsidiary
      or
      parent of the Company. The Plan is administered by the Board of Directors.
      The
      Compensation Committee is empowered to interpret the Plan and to prescribe,
      amend and rescind the rules and regulations pertaining to the Plan. Options
      granted under the Plan generally vest over three years. No option is
      transferable by the optionee other than by will or the laws of descent and
      distribution and each option is exercisable, during the lifetime of the
      optionee, only by the optionee. The Compensation Committee may not receive
      options.





Any
      incentive stock option that is granted under the Plan may not be granted at
      a
      price less than the fair market value of the Company’s Common Stock on the date
      of grant (or less than 110% of the fair market value in the case of holders
      of
      10% or more of the total combined voting power through all classes of stock
      of
      the Company or a subsidiary or parent of the Company.) Non-qualified stock
      options may be granted at the exercise price established by the Compensation
      Committee, which may be less than the fair market value of the Company’s Common
      Stock on the date of grant.





Each
      option granted under the Plan is exercisable for a period not to exceed ten
      years from the date of grant (or five years in the case of an incentive option
      granted to a holder of more than 10% of the total combined voting power of
      all
      classes of stock of the Company or a subsidiary or parent of the Company) and
      shall lapse upon expiration of such period, or earlier upon termination of
      the
      recipient’s employment with the Company, or as determined by the Compensation
      Committee.





In
      2003,
      the Company issued options to acquire 13,875,000 shares of its common stock
      at a
      weighted average exercise price of $.04 per share to consultants and other
      non-employees. The options had an aggregate fair market value of $1,437,000
      at
      the respective dates of issuance as determined based on the Black-Scholes
      options-pricing model. Accordingly, the Company initially increased unearned
      compensation and additional paid-in capital by $1,437,000 to record the fair
      value of the options.





In
      February 2004, the Company issued options to acquire 1,000,000 shares of its
      common stock at an exercise price of $.10 per share to consultants and other
      non-employees. The options had an aggregate fair market value of $90,000 at
      the
      date of issuance as determined based on the Black-Scholes options-pricing model.
      Accordingly, the Company initially increased unearned compensation and
      additional paid-in capital by $90,000 to record the fair value of the options.





In
      December 2004, the Company issued options to acquire 33,975,000 shares of its
      common stock at an exercise price of $.01 per share to consultants and other
      non-employees. The options had an aggregate fair market value of $1,049,000
      at
      the date of issuance as determined based on the Black-Scholes options-pricing
      model. Accordingly, the Company initially increased unearned compensation and
      additional paid-in capital by $1,049,000 to record the fair value of the
      options.





In
      July
      2005, the Company issued options to acquire 1,150,000 shares of its common
      stock
      at an exercise price of $.01 per share to consultants and other non-employees.
      The options had an aggregate fair market value of $34,500 at the date of
      issuance as determined based on the Black-Scholes options-pricing model.
      Accordingly, the Company initially increased unearned compensation and
      additional paid-in capital by $34,500 to record the fair value of the
      options.




29





In
      December 2005, the Company issued options to acquire 30,000,000 shares of its
      common stock at an exercise price of $.01 per share to consultants and other
      non-employees. The options had an aggregate fair market value of $1,184,000
      at
      the date of issuance as determined based on the Black-Scholes options-pricing
      model. Accordingly, the Company initially increased unearned compensation and
      additional paid-in capital by $1,184,000 to record the fair value of the
      options.





In
      January 2006, the Company issued options to acquire 5,000,000 shares of its
      common stock at an exercise price of $.01 per share to consultants and other
      non-employees. The options had an aggregate fair market value of $150,000 at
      the
      date of issuance as determined based on the Black-Scholes options-pricing model.
      Accordingly, the Company initially increased unearned compensation and
      additional paid-in capital by $150,000 to record the fair value of the
      options.





In
      October 2007, the Company issued options to acquire 1,000,000 shares of its
      common stock at an exercise price of $.01 per share to consultants and other
      non-employees. The options had an aggregate fair market value of $10,000 at
      the
      date of issuance as determined based on the Black-Scholes options-pricing model.
      Accordingly, the Company initially increased unearned compensation and
      additional paid-in capital by $10,000 to record the fair value of the
      options.





The
      Company recorded a charge of $784,560 and $1,142,674 to compensation expense
      to
      amortize unearned compensation for the years ended December 31, 2007 and 2006,
      respectively.





The
      following assumptions were used to price options granted during the years ended
      December 31, 2007 and 2006, all of whose exercise price was less than market
      at
      the date of grant: Risk free rate of return, 4%; expected life, 3 years;
      expected volatility, 300.59%; expected dividends, zero.




The
      following table summarizes information with respect to options granted under
      the
      2005 Plan, 2004 Plan and the 2003 Plan as of and for the years ended December
      31, 2007 and 2006.





**2007**
            
            **2006****Shares**
            
            **Weighed
                Average**
              **Exercise
                Price**
            
            **Shares**
            
            **Weighted**
              **Average**
              **Exercise****Price**Options
                outstanding beginning of year
            
            
            1,500,000
            
            $
            0.01
            
            
            11,200,000
            
            $
            0.04Options
                expired
            
            
            (1,500,000
            )
            $
            0.01
            
            
            (3,200,000
            )
            $
            0.11Options
                exercised
            
            
            (1,000,000
            )
            $
            0.01
            
            
            (11,500,000
            )
            $
            0.01Options
                granted
            
            
            1,000,000
            
            $
            0.01
            
            
            5,000,000
            
            $
            0.01Options
                outstanding end year
            
            
            —
            
            $
            —
            
            
            1,500,000
            
            $
            0.01Options
                exercisable end of year
            
            
            —
            
            $
            —
            
            
            1,500,000
            
            $
            0.01Options
                price range, end of year
            
            $
            —
            
            
            
            
            $
            0.01Options
                price range for exercised shares
            
            $
            —
            
            
            
            
            $
            0.01Options
                available for grant at end of year
            
            
            3,700,000
            
            
            
            
            
            3,200,000Weighted
                average fair value of options granted during the year
            
            $
            0.01
            
            
            
            
            $
            0.01Weighted
                average exercise price of options granted during the year
            
            $
            0.01
            
            
            
            
            $
            0.01





Warrants





In
      August
      2003, in connection with its private placement of common stock, the Company
      issued warrants to acquire 2,000,000 shares of its common stock at an exercise
      price of $.075 per share. The warrants expired in August 2006.





In
      January 2004, in connection with its private placement of common stock, the
      Company issued warrants to acquire 2,500,000 shares of its common stock at
      an
      exercise price of $0.10 per share. The warrants expired in January
      2007.





In
      2005,
      in connection with its private placement of common stock, the Company issued
      warrants to acquire 95,576,849 shares of its common stock at an exercise price
      of $.035 per share. The warrants expire on various dates during
      2008.





**Note 7—Income
      taxes:**





As
      of
      December 31, 2007, the Company had net operating loss carryforwards of
      approximately $18,439,000 available to reduce future Federal taxable income
      which will expire at various dates through 2022. The Company had no other
      material temporary differences as of that date. Due to the uncertainties related
      to, among other things, the changes in the ownership of the Company, which
      could
      subject those loss carryforwards to substantial annual limitations, and the
      extent and timing of its future taxable income, if any, the Company offset
      the
      deferred tax assets of approximately $7,375,000 attributable to the potential
      benefits from the utilization of those net operating loss carryforwards by
      an
      equivalent valuation allowance as of December 31, 2007.




30





The
      Company had also offset the potential benefits from net operating loss
      carryforwards of approximately $6,690,000 and $5,449,000 by equivalent valuation
      allowances as of December 31, 2006 and 2005. As a result of the increases
      in the valuation allowance of $685,000 for the year ended December 31, 2007,
      $1,241,000 for the year ended December 31, 2006 and $7,375,000 for the
      period from April 24, 2000 to December 31, 2007, the Company did not
      recognize any credits for income taxes in the accompanying statements of
      operations to offset its pre-tax losses in any of those periods.





**Note 8—Guarantee:**





On
      March 14, 2003, the Company became a guarantor of a promissory note issued
      by one of its stockholders with an outstanding balance of approximately $101,200
      that was originally scheduled to mature on July 31, 2003. The maturity
      dates of the promissory note and the guaranty have been extended to April 30,
      2008.




*        *        *





**Item
      8. Changes In and Disagreements With Accountants on Accounting and Financial
      Disclosure**





None





**Item
      8 A. Controls and Procedures**




(A)
      EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES




We
        carried out an evaluation of the effectiveness of the design and operation
        of
        our disclosure controls and procedures (as defined in Exchange Act Rules
        13a-15(e) and 15d-15(e)) as of December 31, 2007. This evaluation was carried
        out under the supervision and with the participation of our Chief Executive
        Officer, Mr. Antonio Sciacca and Chief Financial Officer, Mr. Edward Williams.
        Based upon that evaluation, our Chief Executive Officer and Chief Financial
        Officer concluded that, as of December 31, 2007, our disclosure controls
        and
        procedures were not effective. In making this evaluation, the Chief
 Executive Officer and Chief Financial Officer considered, among other
        things, the material weakness in our internal control over financial
        reporting described below.
 
 Disclosure
        controls and procedures are controls and other procedures that are designed
        to
        ensure that information required to be disclosed in our reports filed or
        submitted under the Exchange Act are recorded, processed, summarized and
        reported, within the time periods specified in the SEC's rules and forms.
        Disclosure controls and procedures include, without limitation, controls
        and
        procedures designed to ensure that information required to be disclosed in
        our
        reports filed under the Exchange Act is accumulated and communicated to
        management, including our Chief Executive Officer and Chief Financial Officer,
        to allow timely decisions regarding required disclosure.
 
 (B)
        MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
 
 Management
        of the Company is responsible for establishing and maintaining effective
        internal control over financial reporting as defined in Rule 13a-15(f) under
        the
        Exchange Act. The Company’s internal control over financial reporting is
        designed to provide reasonable assurance to the Company’s management and Board
        of Directors regarding the preparation and fair presentation of published
        financial statements in accordance with United States’ generally accepted
        accounting principles (US GAAP), including those policies and procedures
        that:
        (i) pertain to the maintenance of records that, in reasonable detail, accurately
        and fairly reflect the transactions and dispositions of the assets of the
        Company, (ii) provide reasonable assurance that transactions are recorded
        as
        necessary to permit preparation of financial statements in accordance with
        US
        GAAP and that receipts and expenditures are being made only in accordance
        with
        authorizations of management and directors of the Company, and (iii) provide
        reasonable assurance regarding prevention or timely detection of unauthorized
        acquisition, use, or disposition of the Company’s assets that could have a
        material effect on the financial statements.
 
 Management
        conducted an evaluation of the effectiveness of internal control over financial
        reporting based on the framework in Internal Control-Integrated Framework
        issued
        by the Committee of Sponsoring Organizations of the Treadway Commission.
        Management’s assessment included an evaluation of the design of our internal
        control over financial reporting and testing of the operational effectiveness
        of
        our internal control over financial reporting. Based on this evaluation,
        management concluded that, as of December 31, 2007, the Company did not
        maintain effective internal controls over financial reporting due to our
        limited
        number of employees which resulted in our inability to effectively
        segregate all conflicting duties.
 Currently
          we employ one individual who is in charge of our accounting and financial
          duties
          on a day-to-day basis and we also use one consultant to assist in the
          preparation of the financial statements and accompanying footnotes.
  To
          remedy
          this material weakness, we will, to the extent possible, implement procedures
          to
          assure the initiation of transactions, the custody of assets and the recording
          of transactions will be performed by separate individuals. Further, concurrent
          with having sufficient resources we will engage additional individuals
          to assist
          us in remedying this material weakness.
 
 Limitations
        on the Effectiveness of Internal Controls
 
 Our
        management does not expect that our disclosure controls and procedures or
        our
        internal control over financial reporting will necessarily prevent all fraud
        and
        material error. Our disclosure controls and procedures are designed to provide
        reasonable assurance of achieving our objectives and our Chief Executive
        Officer
        and Chief Financial Officer concluded that our disclosure controls and
        procedures are effective at that reasonable assurance level. Further, the
        design
        of a control system must reflect the fact that there are resource constraints,
        and the benefits of controls must be considered relative to their costs.
        Because
        of the inherent limitations in all control systems, no evaluation of controls
        can provide absolute assurance that all control issues and instances of fraud,
        if any, within the Company have been detected. These inherent limitations
        include the realities that judgments in decision-making can be faulty, and
        that
        breakdowns can occur because of simple error or mistake. Additionally, controls
        can be circumvented by the individual acts of some persons, by collusion
        of two
        or more people, or by management override of the internal control. The design
        of
        any system of controls also is based in part upon certain assumptions about
        the
        likelihood of future events, and there can be no assurance that any design
        will
        succeed in achieving its stated goals under all potential future conditions.
        Over time, control may become inadequate because of changes in conditions,
        or
        the degree of compliance with the policies or procedures may
        deteriorate.
 This
        annual report does not include an attestation report of the Company’s registered
        public accounting firm regarding internal control over financial reporting.
        Management’s report was not subject to attestation by our registered public
        accounting firm pursuant to temporary rules of the Securities and Exchange
        Commission that permit the Company to provide only management’s report in the
        Annual Report.
 
 (C)
CHANGES
        IN INTERNAL CONTROL
  There
        have been no significant changes in our internal controls over financial
        reporting during the quarter ended December 31, 2007 that have materially
        affected or are reasonably likely to materially affect such
        controls.


31





**PART
      III**





**Item
      9****.
      Directors, Executive Officers, Promoters and Control Persons; Compliance With
      Section 16(A) Of The Exchange Act**





The
      following Table sets forth certain information regarding the executive officers
      and directors of the Company as of April 11, 2008. All officers and
      directors are elected for a term of one year and until their successors are
      elected.





**Name**
            
            **Age**
            
            **Company
                Position**Edward
                C. Williams
            
            47
            
            Chairman,
                President, CEO, Secretary, Treasurer, Director and Principal Accounting
                OfficerAntonio
                Sciacca
            
            49
            
            Director





**Edward
      C. Williams**





Mr. Williams
      has been our chief executive officer, secretary, and a director since
      March 2004. Mr. Williams has served as President and Chief Executive
      Officer of Williams Financial Group, Inc., a financial and business consulting
      firm from December 1996 to present. In addition, from May 1999 to
      December 1999, he was a director of iCommerce Group, Inc. and was Chief
      Financial Officer, Treasurer and Assistant Secretary. From September 1997
      to February 1999, Mr. Williams was the Chief Financial Officer of Caribbean
      Cigar Company. He also served as Interim President from June 1998 to
      July 1998. He was a Director from November 1997 to February 1999.
      Mr. Williams was Vice President - Finance of DenAmerica Corp. from
      April 1996 to July 1996, and he was Chief Financial Officer of
      American Family Restaurants, Inc. from February 1993 to March 1996,
      when American Family Restaurants, Inc. merged with DenWest Restaurant Corp.
      Both
      of such corporations operated restaurants. From 1987 until January 1993,
      Mr. Williams was employed by KPMG, most recently as a senior
      manager.





**Antonio
      Sciacca**




Mr.
      Sciacca has been a director since March 2007. Since 1995 Mr. Sciacca has been
      the Director of Programs/Operations of North American Controls Inc a
      manufacturing company with facilities for the U.S. defense industry. Mr. Sciacca
      currently sits on the board of Immaculate Conception schools in Warren,
      Michigan.




*Conflicts
      of Interest*





Our
      management has other financial and business interests to which a significant
      amount of time is devoted which may pose conflicts of interest with regard
      to
      allocation of their time and efforts. Teodosio Pangia, our former president,
      director and CEO beneficially owns 1.3% of our common stock and is also the
      sole
      principal of Epwort Trading, Ltd., a holder of 20.7% of our common stock, and
      beneficially owns and/or controls, either directly or indirectly, seven
      companies, Altea Investments, Ltd., Gata Investments, Ltd., Baychester
      Investments, Ltd., TVP Capital Corp., Bekeman Investments, Ltd.,
      Aester Investment Holdings Limited and S D Investments, Ltd., which in the
      aggregate hold 8,243,000 shares or 2.3% of our shares of common stock. There
      can
      be no assurance that management will resolve all conflicts of interest in favor
      of Diamond Discoveries. Failure of management to conduct Diamond Discoveries’
business in its best interest may result in liability of the management to
      Diamond Discoveries.





**Committees**





The
      entire Board of Directors performs the functions of the audit committee and
      compensation committee. The Company does not have an audit committee financial
      expert serving on the audit committee. The Company intends to add such persons
      to the Board of Directors and the Audit Committee at such time as the Company
      has adequate funds to compensate such persons for their services.





**Section 16(a)
      Beneficial Ownership Reporting Compliance**





Section
      16(a) of the Security Exchange Act of 1934 requires directors, executive
      officers and 10% or greater shareholders of the Company to file with the
      Securities and Exchange Commission initial reports of ownership (Form 3) and
      reports of changes in ownership of equity securities of the Company (Form 4
      and
      Form 5) and to provide copies of all such Forms as filed to the Company. Based
      solely on our review of the copies of these forms received by us or
      representations from certain reporting persons, we believe that SEC beneficial
      ownership reporting requirements for fiscal 2007 were met with the following
      exceptions:





Our
      former CEO Teodosio V. Pangia failed to timely file Form 3 and a Form 4 to
      report transactions in March 2003 and has not yet filed these reports.




32





**Code
      of Ethics**





We
      have a
      code of ethics (the “Code”) that applies to members of our Board of Directors,
      our officers including our president (being our principal executive officer),
      and our chief financial officer (being our principal financial and accounting
      officer). The Code sets forth written standards that are designed to deter
      wrongdoing and to promote: honest and ethical conduct, full, fair, accurate,
      timely, and understandable disclosure in reports and documents that we file
      with, or submit to, the Securities and Exchange Commission and in other public
      communications made by us; compliance with applicable governmental laws, rules
      and regulations; prompt internal reporting of violations of the Code to an
      appropriate person or persons identified in the Code; and accountability for
      adherence to the Code.





A
      copy of
      the Code is attached as an exhibit to the Form 10-KSB filed on April 14,
      2004.





**Item
      10****.
      Executive Compensation**





The
      table
      below shows the annual, long-term and other compensation for services in all
      capacities to the Company and its subsidiaries paid during the years ended
      December 31, 2007 and 2006, to the Chief Executive Officer and the other four
      most highly compensated executive officers of the Company during the years
      ended
      December 31, 2007 and 2006 (our “named executive officers”):





**SUMMARY
      COMPENSATION TABLE**





**Annual
                Compensation**
            
            **Long
                Term Compensation****Name
                and Position**
            
            **Year**
            
            **Salary
                ($)**
            
            **Bonus
                ($)**
            
            **Other
                Annual Compen-sation ($)**
            
            **Restricted
                Stock Awards ($)**
            
            **Securities
                Under-lying Options/ SARS (#)**
            
            **All
                Other Compen-sation ($)**Edward
                C. Williams(1)
            
            
            2007
            
            $
            90,000Chief
                Executive and Chief Financial Officer
            
            
            2006
            
            
            90,000




(1)  During
      2007 and 2006, the salary for Mr. Williams was paid by the issuance of shares
      of
      common stock in the Company.





**Grants
      of Plan Based Awards**





There
      were no grants under plan based awards during fiscal 2007 or 2006.





**Outstanding
      Equity Awards at Fiscal Year-End**





There
      were no outstanding equity awards as of December 31, 2007 for the CEO.





**Long
      Term Incentive Plans - Awards in Last Fiscal Year**





None.





**Compensation
      of Directors**





Standard
      Arrangements.





At
      present, the Company does not pay its directors for attending meetings of the
      Board of Directors, although the Company may adopt a director compensation
      policy in the future. The Company has no standard arrangement pursuant to which
      directors of the Company are compensated for any services provided as a director
      or for committee participation or special assignments.





Other
      Arrangements.





During
      the years ended December 31, 2007 and 2006, and except as disclosed elsewhere
      in
      this report, no director of the Company received any form of compensation from
      the Company.





**Employment
      Contracts and Termination of Employment, and Change-in-Control
      Arrangements.**





We
      have
      not entered into employment agreements with any of our officers or directors.


33


**Item
      11. Security Ownership of Certain Beneficial Owners and Management**





The
      following table sets forth the name and address of each officer and director
      of
      the Company and each person who owns beneficially more than five percent of
      the
      Common Stock of the Company, and the number of shares owned by each such person
      and by all officers and directors as a group as of April 11, 2008:





**Name
                and Address of Beneficial Owner(1)**
            
            **Amount
                and Nature of Ownership**
            
            **Approximate**
              **%
                of Class(2)**Edward
                C. Williams
              Chairman,
                President, CEO, Secretary, CFO and Director
            
            
            875,000
            
            
            *Antonio
                Sciacca, Director
            
            
            14,114,286
            
            
            3.9
            %Directors
                and Officers as a Group
            
            
            14,989,286
            
            
            4.2
            %Teodosio
                V. Pangia
            
            
            92,386,526
            (3)(4)
            
            24.1
            %Epwort
                Trading Ltd.(5)
            
            
            75,643,526
            (4)
            
            19.7
            %







*
            Less
                than 1%




(1)
            Unless
                otherwise indicated, the beneficial owner’s address is the same as the
                Company’s principal office.




(2)
            Percentages
                calculated on the basis of the amount of outstanding shares plus,
                for each
                person, any shares that person has the right to acquire within
                60 days pursuant to options or other rights.




(3)
            Includes
                an aggregate of 8,243,000 shares held TVP Capital Corp., Altea
                Investments, Ltd., Gata Investments, Ltd., Bekeman
                Investments, Ltd., SD Investments, Ltd., Baychester
                Investments Ltd., and Aester Investments Holdings Limited, companies
                beneficially owned and/or controlled (directly or indirectly) by
                Mr. Pangia, 4,500,000 shares held by Mr. Pangia and 53,821,763 shares
                held by Epwort Trading, Ltd., see footnote (4) below.




(4)
            Includes
                25,821,763 shares of common stock that are issuable under
                warrants.




(5)
            Teodosio
                V. Pangia is the sole officer, director and shareholder of Epwort
                Trading,
                Ltd.





**Equity
      Compensation Plan Information:**





**Number
                of securities to be issued upon exercise of outstanding options,
                warrants
                and rights**
            
            **Weighted-average
                exercise price of outstanding options, warrants and
                rights**
            
            **Number
                of securities available for future issuance under equity compensation
                plans (excluding securities reflected in column**
              **(a))**(a)
            
            (b)
            
            (c)Equity
                compensation plans approved by security holders
            
            
            0
            
            $
            0.00
            
            
            1,500,000Equity
                compensation plans not approved by security holders
            
            
            0
            
            $
            0.00
            
            
            2,200,000Total
            
            
            0
            
            $
            0.00
            
            
            3,700,000




Stock
      Option Plans





2005
      Plan





On
      November 14, 2005, the Company adopted the Diamond Discoveries International
      Corp. 2005 Stock Incentive Plan (the “2005 Plan”). Under the 2005 Plan,
      35,000,000 shares of common stock are reserved for issuance. The purpose of
      the
      2005 Plan is to provide incentives for officers, directors, consultants and
      key
      employees to promote the success of the Company, and to enhance the Company’s
      ability to attract and retain the services of such persons. Options granted
      under the 2005 Plan may be either: (i) options intended to qualify as “incentive
      stock options” under Section 422 of the Internal Revenue Code of 1986; or (ii)
      non-qualified stock options. Stock options may be granted under the 2005 Plan
      for all employees and consultants of the Company, or employees of any present
      or
      future subsidiary or parent of the Company. The 2005 Plan is administered by
      the
      Board of Directors. The Compensation Committee is empowered to interpret the
      2005 Plan and to prescribe, amend and rescind the rules and regulations
      pertaining to the 2005 Plan. Options granted under the 2005 Plan generally
      vest
      over three years. No option is transferable by the optionee other than by will
      or the laws of descent and distribution and each option is exercisable, during
      the lifetime of the optionee, only by the optionee. The Compensation Committee
      may not receive options.




34





Any
      incentive stock option that is granted under the 2005 Plan may not be granted
      at
      a price less than the fair market value of the Company’s Common Stock on the
      date of grant (or less than 110% of the fair market value in the case of holders
      of 10% or more of the total combined voting power through all classes of stock
      of the Company or a subsidiary or parent of the Company.) Non-qualified stock
      options may be granted at the exercise price established by the Compensation
      Committee, which may be less than the fair market value of the Company’s Common
      Stock on the date of grant.





Each
      option granted under the 2005 Plan is exercisable for a period not to exceed
      ten
      years from the date of grant (or five years in the case of a holder of more
      than
      10% of the total combined voting power of all classes of stock of the Company
      or
      a subsidiary or parent of the Company) and shall lapse upon expiration of such
      period, or earlier upon termination of the recipient’s employment with the
      Company, or as determined by the Compensation Committee.





2004
      Plan





On
      September 30, 2004, the Company adopted the Diamond Discoveries International
      Corp. 2004 Stock Incentive Plan (the “2004 Plan”). Under the 2004 Plan,
      35,000,000 shares of common stock are reserved for issuance. The purpose of
      the
      2004 Plan is to provide incentives for officers, directors, consultants and
      key
      employees to promote the success of the Company, and to enhance the Company’s
      ability to attract and retain the services of such persons. Options granted
      under the 2004 Plan may be either: (i) options intended to qualify as “incentive
      stock options” under Section 422 of the Internal Revenue Code of 1986; or (ii)
      non-qualified stock options. Stock options may be granted under the 2004 Plan
      for all employees and consultants of the Company, or employees of any present
      or
      future subsidiary or parent of the Company. The 2004 Plan is administered by
      the
      Board of Directors. The Compensation Committee is empowered to interpret the
      2004 Plan and to prescribe, amend and rescind the rules and regulations
      pertaining to the 2004 Plan. Options granted under the 2004 Plan generally
      vest
      over three years. No option is transferable by the optionee other than by will
      or the laws of descent and distribution and each option is exercisable, during
      the lifetime of the optionee, only by the optionee. The Compensation Committee
      may not receive options.





Any
      incentive stock option that is granted under the 2004 Plan may not be granted
      at
      a price less than the fair market value of the Company’s Common Stock on the
      date of grant (or less than 110% of the fair market value in the case of holders
      of 10% or more of the total combined voting power through all classes of stock
      of the Company or a subsidiary or parent of the Company.) Non-qualified stock
      options may be granted at the exercise price established by the Compensation
      Committee, which may be less than the fair market value of the Company’s Common
      Stock on the date of grant.





Each
      option granted under the 2004 Plan is exercisable for a period not to exceed
      ten
      years from the date of grant (or five years in the case of a holder of more
      than
      10% of the total combined voting power of all classes of stock of the Company
      or
      a subsidiary or parent of the Company) and shall lapse upon expiration of such
      period, or earlier upon termination of the recipient’s employment with the
      Company, or as determined by the Compensation Committee.





2003
      Plan





On
      May
      30, 2003, the Company adopted the Diamond Discoveries International Corp. 2003
      Stock Incentive Plan (the “Plan”). Under the Plan, 15,000,000 shares of common
      stock are reserved for issuance. The purpose of the Plan is to provide
      incentives for officers, directors, consultants and key employees to promote
      the
      success of the Company, and to enhance the Company’s ability to attract and
      retain the services of such persons. The Plan orivudes for the grant of
      incentive stock options and nonqualified stock options (“Options”) and
      restricted stock awards (“Restricted Stock Awards”) and Stock Appreciation
      Rights, Performance Shares, Dividend Equivalent Payments, and Other Stock Based
      Awards (“Options,”“Restricted Stock Awards,” and “Stock Appreciation Rights,”
are collectively referred to herein as “Awards”). Options granted under the Plan
      may be either: (i) options intended to qualify as “incentive stock options”
under Section 422 of the Internal Revenue Code of 1986; or (ii) non-qualified
      stock options. Stock options may be granted under the Plan for all employees
      and
      consultants of the Company, or employees of any present or future subsidiary
      or
      parent of the Company. The Plan is administered by the Board of Directors.
      The
      Compensation Committee is empowered to interpret the Plan and to prescribe,
      amend and rescind the rules and regulations pertaining to the Plan. Options
      granted under the Plan generally vest over three years. The Compensation
      Committee may not receive options.





Any
      incentive stock option that is granted under the Plan may not be granted at
      a
      price less than the fair market value of the Company’s Common Stock on the date
      of grant (or less than 110% of the fair market value in the case of holders
      of
      10% or more of the total combined voting power through all classes of stock
      of
      the Company or a subsidiary or parent of the Company.) Non-qualified stock
      options may be granted at the exercise price established by the Compensation
      Committee, which may be less than the fair market value of the Company’s Common
      Stock on the date of grant, but in no event shall such exercise price be less
      than 55% of such fair market value.





Each
      option granted under the Plan is exercisable for a period not to exceed ten
      years from the date of grant (or five years in the case of an incentive stock
      option granted to a holder of more than 10% of the total combined voting power
      of all classes of stock of the Company or a subsidiary or parent of the Company)
      and shall lapse upon expiration of such period, or earlier upon termination
      of
      the recipient’s employment with the Company, or as determined by the
      Compensation Committee.




35





Awards
      are generally non-transferable other than by will or the laws of descent and
      distribution or pursuant to a qualified domestic relations order.





The
      Company’s Board of Directors may at any time, and from time to time, amend,
      terminate, or suspend one or more of the Plan in any manner it deems
      appropriate, provided that such amendment, termination or suspension cannot
      adversely affect rights or obligations with respect to shares or options
      previously granted, unless the Award recipient consents to such changes in
      writing. The Board of Directors may not, without shareholder approval: make
      any
      amendment which would materially modify the participation eligibility
      requirements for the 2005 Plan and 2004 Plan, to the extent they require
      approval in order to satisfy the Internal Revenue Code requirements; make other
      modifications requiring stockholder approval to satisfy the Internal Revenue
      Code requirements, increase the total number of shares of common stock which
      may
      be issued pursuant to the 2005 Plan and 2004 Plan, except in the case of a
      reclassification of the Company’s capital stock or a consolidation or merger of
      the Company.





**Item
      12. Certain Relationships and Related Transactions**.





Teodosio
      Pangia, our former president, director and CEO, beneficially owns 4,500,000
      shares or 1.3% of our shares or common stock and is the sole principal of Epwort
      Trading Ltd., which owns 79,643,526 shares, including 25,821,763 issuable upon
      the exercise of warrants, or 20.7% of our shares of common stock and
      beneficially owns and/or controls, either directly or indirectly, seven
      companies, TVP Capital Corp., Altea Investments, Ltd., Gata
      Investments, Ltd., Baychester Investments, Ltd., Bekeman
      Investments, Ltd., Aester Investments Holdings Limited and S D
      Investments, Ltd., which in the aggregate hold 8,243,000 shares or 2.3% of
      our shares of common stock.





We
      entered into an Acquisition Agreement dated September 12, 2000 with
      Mr. Ferderber, Mr. Hawkins and Tandem Resources Ltd. The
      Acquisition Agreement provides for us to purchase certain mineral exploration
      permits from Messrs. Ferderber and Hawkins. Such permits cover 469.05
      square kilometers in the Torngat fields in northwest Quebec, Canada, on the
      eastern shore of Ungava Bay. As consideration for the acquisition of these
      permits, we have issued 1,000,000 shares of our common stock to each of
      Messrs. Ferderber and Hawkins and have paid $35,000 Canadian to
      Mr. Hawkins and $25,000 Canadian to Mr. Ferderber.





In
      addition, the Acquisition Agreement further provides for an option to Tandem
      Resources Ltd., to purchase 40% of the properties covered by the permits
      conditioned on (i) the Company expending $5,000,000 Canadian on exploration
      of the properties; (ii) Tandem paying us $2,000,000 Canadian and
      (iii) Tandem entering into a joint venture agreement with us to operate the
      properties within 60 days of our demonstrating expenditure of $5,000,000
      Canadian on exploration of the properties. In addition, we will have twenty-one
      (21) days from the date we notify Tandem that we have expended $5,000,000
      Canadian on exploration of the properties, to negotiate a financing agreement
      with Tandem to provide Tandem with the $2,000,000 Canadian required to exercise
      the option. Should no agreement be reached in the twenty-one (21) day
      period, our right to provide this financing shall expire. Also, upon the closing
      of the acquisition, we assigned to Messrs. Ferderber and Hawkins a one (1%)
      percent interest in the Net Smelter Returns of the properties, half of which
      is
      payable over the first $50,000,000 Canadian in revenues from the properties.
      This interest in the Net Smelter Returns terminates once Ferderber and Hawkins
      have received, in the aggregate, $10,000,000 Canadian.





In
      connection with the Acquisition Agreement, Mr. Ferderber has executed an
      agreement with us as of June 20, 2000 which transfers mineral rights over
      all of the properties to us.





We
      entered into a Prospecting and Survey Agreement with Prospecting
      Geophysics Ltd. dated November 20, 2000, whereby Prospecting
      Geophysics Ltd. will act as the project manager for the Company’s mineral
      exploration operations. Peter Ferderber is the President of Prospecting
      Geophysics Ltd. Under the agreement, we are to pay for Mr. Ferderber’s
      services at a rate of $500 per day, on days that he personally attends the
      properties, in addition to reimbursing all expenses incurred by Prospecting
      Geophysics on behalf of the Company. Mr. Ferderber anticipates attending
      the properties approximately five to seven days every month. Prospecting
      Geophysics is required under the agreement to conduct prospecting and surveying
      activities on our behalf. The agreement has a term of eighteen (18) months
      with automatic renewal unless either party gives 30 days’ notice of its
      intent to terminate. During the years ended December 31, 2007 and 2006 and
      the periods from April 24, 2000 (date of inception) to December 31, 2007,
      we incurred exploration costs by Prospecting Geophysics Ltd. of $0
      Canadian, $0 Canadian and $3,992,022 Canadian, respectively. In addition, the
      Company owed Prospecting Geophysics Ltd. $1,500,000 Canadian at December
      31, 2007.


36


**Item
      13. Exhibits and Reports on Form 8-K.**





There
      were no Current Reports on Form 8-K filed by the Registrant during the
      fourth quarter of the calendar year ended December 31, 2007.





**Exhibit**
              **Number**
            
            **Description
                of Document**3.1
            
            Articles
                of Incorporation as filed on April 24, 2000(1)3.2
            
            Bylaws
                of Diamond Discoveries International Corp.(1)10.1
            
            Acquisition
                Agreement dated September 12, 2000 between the Company and Peter
                Ferderber, Stanley Hawkins and Tandem Resources Ltd.(2)10.2
            
            Prospecting
                and Survey Agreement between Prospecting Geophysics Ltd and the Company
                dated August 14, 2000.(1)10.3
            
            Transfer
                of Mining Rights between Peter Ferderber and the Company dated
                June 20, 2000.(1)10.4
            
            Option
                Agreement between Diamond Discoveries International Corp. and Tandem
                Resources Ltd. dated September 12, 2000.(2)10.5
            
            Revised
                Prospecting and Survey Agreement between Prospecting Geophysics Ltd.
                and
                the Company dated November 20, 2000.(2)10.6
            
            Investment
                Agreement, dated as of May 10, 2007 by and between Diamond Discoveries
                International Corp. and Dutchess Private Equities Fund,
                Ltd.(4)10.7
            
            Registration
                Rights Agreement, dated as of May 10, 2007, by and between Diamond
                Discoveries International Corp. and Dutchess Private Equities Fund,
                Ltd.(4)14
            
            Code
                of Ethics for the Chief Executive Officer and Chief Financial
                Officer(3)31.1
            
            Certification
                by the Chief Executive Officer and Chief Financial Officer pursuant
                to
                Section 302 of the Sarbanes Oxley Act of 2002.32.1
            
            Certification
                by the Chief Executive Officer and Chief Financial Officer pursuant
                to 18
                U.S.C. 1350, Section 906 of the Sarbanes Oxley Act of
                2002.99.1
            
            Title
                opinion of Lavery, de Billy on the Mining Exploration
                Permits.(1)





(1)
              Previously
                  filed on September 21, 2000 as part of the Company’s Registration
                  Statement on Form 10-SB, File No. 0-31585.




(2)
            Previously
                filed on December 1, 2000 as part of the Company’s Amended
                Registration Statement on
                Form 10-SB, File No. 0-31585.




(3)
            Previously
                filed on April 14, 2004 as an exhibit to Form
                10-KSB.




(4)
            Previously
                filed on May 14, 2007 as an exhibit to Form
                8-K.





**Item
      14. Principal Accountant Fees and Services**





During
      2007 and 2006, the Company incurred the following fees for professional services
      rendered by the principal accountant:





**2007**
            
            **2006**Fees
                for audit services
            
            $
            30,100
            
            $
            28,456Fees
                for audit-related services
            
            $
            0
            
            $
            0Tax
                fees
            
            $
            0
            
            $
            0All
                other fees
            
            $
            0
            
            $
            0





The
      Audit
      Committee pre-approves all audit and non-audit services to be performed by
      the
      Company’s independent auditors.


37





**SIGNATURES**





In
      accordance with Section 13 or 15(d) of the Exchange Act, the Registrant
      caused this report to be signed on its behalf by the undersigned, thereunto
      duly
      authorized.




DIAMOND
                DISCOVERIES INTERNATIONAL CORP.By:
            /s/
                  Antonio SciaccaAntonio
              Sciacca*Chief Executive
                Officer and**Director*Dated:
                September 30, 2008




In
        accordance with the Exchange Act, this report has been signed below by the
        following persons on behalf of the Registrant and in the capacities and on
        the
        dates indicated.


By:
            /s/
                    Antonio SciaccaAntonio
                  Sciacca*Chief Executive
                  Officer and**Director*Dated:
                September 30, 2008




By:
            /s/
                      Edward C. WilliamsEdward
                    C. Williams
                *Chief
                  Financial Officer and Director*Dated:
                September 30, 2008




38





**APPENDIX
      A**










39