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**UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549**___________________**FORM 10-Q**___________________

**ý                                QUARTERLY REPORT PURSUANTTO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

  

For the quarterly period endedMarch 31, 2009

  

OR

  

** ̈                                TRANSITION REPORTPURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

 

For the transition period from         to

  

Commissionfile number 333-131948  

**DATA CALLTECHNOLOGIES, INC.**(Exact Name Of RegistrantAs Specified In Its Charter)
| Nevada                                   | 30-0062823                           |
|------------------------------------------|--------------------------------------|
| (State of Incorporation)                 | (I.R.S. Employer Identification No.) |
|                                     |                                 |
| 600    Kenrick, Suite B-12, Houston, TX  | 77060                                |
| (Address of Principal Executive Offices) | (ZIP Code)                           |

 Registrant'sTelephone Number, Including Area Code: (832) 230-2376

Indicate by checkmark whether the registrant (1) has filed all reports required to be filed by Section 13or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or forsuch shorter period that the registrant was required to file such reports), and (2) hasbeen subject to such filing requirements for the past 90 days. Yes x No  ̈Indicate by check mark whether the registrant is a shell company (asdefined in Rule 12b-2 of the Exchange Act). Yes  ̈ No x

Indicate by checkmark whether the registrant is a large accelerated filer, an accelerated filer, or anon-accelerated filer.
| Large accelerated    filer  ̈ | Accelerated filer  ̈  | Non-Accelerated    filer  ̈  | Smaller reporting    company x |
|----------------------------------|-------------------------------|--------------------------------------|------------------------------------|

On March 31, 2009,the Registrant had 83,213,100 shares of common stock outstanding.

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**TABLE OF CONTENTS**
| Item                                  |                          | Description                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                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| **PART I - FINANCIAL    INFORMATION** |
|                                  |
| ITEM 1.                               |      |    FINANCIAL STATEMENTS.
    3  
ITEM 2.
    
   MANAGEMENT'S    DISCUSSION AND ANALYSIS AND RESULTS OF OPERATION.
    3   ITEM 3.   QUANTITATIVE    AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK6
ITEM 4.
    
   CONTROLS AND PROCEDURES.
    6     
**PART II - OTHER    INFORMATION**
  
ITEM 1.
    
   LEGAL    PROCEEDINGS.
    6  ITEM 1A.   RISK FACTORS6
ITEM 2.
    
   UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF    PROCEEDS
    6   
ITEM 3.
    
   DEFAULT UPON SENIOR    SECURITIES.
    6   
ITEM 4.
    
   SUBMISSION    OF MATERS TO A VOTE OF SECURITY HOLDERS.
    7   
ITEM 5.
    
   OTHER INFORMATION.
    7   ITEM 6.   EXHIBITS.7
 
****
**PART I - FINANCIAL INFORMATION**

ITEM1. FINANCIAL STATEMENTS****Back to Table of Contents

The Registrant's unaudited interim financial statementsare attached hereto. UnauditedInterim Financial Statements

ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS AND RESULTS OF OPERATIONBack to Table of Contents

Some of the statements contained in this quarterlyreport of Data Call Technologies, Inc., Nevada corporation (hereinafter referred to as"we", "us", "our", "Company" and the"Registrant") discuss future expectations, contain projections of our plan ofoperation or financial condition or state other forward-looking information.Forward-looking statements give our current expectations or forecasts of future events.You can identify these statements by the fact that they do not relate strictly tohistorical or current facts. They use of words such as "anticipate,""estimate," "expect," "project," "intend,""plan," "believe," and other words and terms of similar meaning inconnection with any discussion of future operating or financial performance. From time totime, we also may provide forward-looking statements in other materials we release to thepublic.

The Company was incorporated under the laws of the State of Nevada asData Call Wireless on April 4, 2002. On March 1, 2006, we changed our name to Data CallTechnologies, Inc. 

Our mission is to integrate cutting-edge information/content deliverysolutions currently deployed by the media and make this content rapidly available to andwithin the control of our retail and commercial clients.  The Company's softwareand services put its clients in control of real-time advertising, news, and other content,including emergency alerts, within one building as well as to thousands of local, regionaland national clients.

**OVERVIEW**
***WhatIs Digital Signage?

Plasma and LCD displays arerapidly replacing printed marketing materials such as signs and placards, as well as theold fashioned whiteboard, for product and corporate branding, marketing and assistedselling. The appeal of instantly updating product videos and promotional messages on oneor a thousand remotely located displays is driving the adoption of this exciting marketingtool. James Bickers, senior editor of Digital Signage Today magazine recently describeddigital signage as “any form of business communication where a dynamic messagingdevice is used to take the place of, or supplement, other forms of messaging.” Thekey word in this definition of digital signage is “dynamic.” Digital signagepresentations are typically comprised of repeating loops of information used to brand,market or sell the owner’s products and services. But once seen, this informationbecomes repetitive and the viewer tunes it out, resulting in low retention of theclient’s message. As digital signage comes of age, the “dynamic”characteristic of the presentation has taken center stage.**DigitalSignage Comes of Age

Digital signage is coming of ageand DataCall Technologies has been there from the start. Four years ago, a company wantingto take the digital signage plunge was faced with a myriad of hardware and softwarecompanies, all offering their own “vision” of what digital signage should be.They were given the tools of digital signage, but were left pretty much left to their owndevices as to what to build. Those companies that took the early plunge where then facedwith the fact that no one had come before them to show the rights and wrongs, the dos anddon’ts of content development. But, even at this early stage of the game, DataCallrecognized that these pioneers of digital signage lacked a key component that would becomean integral part of any successful implementation—active content.
In the years since those early days of digital signage, the market hastaken care of weeding out the weaker providers of hardware and software. Companies nowhave a clearer understanding of what digital signage is, what is needed for a successfulimplementation and the best use of content space given their more-defined and attainablegoals. In the past two years, as the cost of platforms, supporting infrastructure anddisplays has fallen dramatically; digital signage has become more accessible to a widerrange of companies. And those companies are realizing that the initial, one-time cost ofgetting into the game is far outweighed by the cost of staying in the game, in the form ofongoing content development. As the cost of deployment decreased, companies began focusingon attention-grabbing content. Whether the goal of the presentation was product branding,marketing or assisted selling, content became king. Active content is on everyone’s“needs” list because it is proven to draw customers to the core message and keepcustomers engaged throughout the presentation, And DataCall stands ready to serve thisexploding market.
**The Needfor Speed--Active Content

Active content is that part of adigital signage presentation that is constantly updated with timely and relevantinformation. For instance, a typical presentation may contain ten 15-second loops thatprovide the primary message of the presentation, but the active content, such as thatprovided by DataCall, is updated with new information throughout the day. Those seeking toadd active content to their digital signage presentations are advised to employDataCall’s integrated content rather than shoehorning broadcast content into theirdigital signage presentation. 
However, by integrating DataCall’s active content alongside theirpresentations, companies can provide the entertainment content so necessary in dwell-timeretention without disrupting the core message of the presentation. Information categoriesprovided by DataCall include news, weather, sports, financial data and the latest trafficalerts. With such a broad range of offerings, companies have access to the active contentthey need, regardless of the market they are addressing. 
**DataCallOpportunities

The opportunities for DataCall inthe digital signage industry are countless. Many companies nowadays would outsource all orpart of their content creation. DataCall stands ready as their outsourced provider ofactive content data. Whether it’s general entertainment information (news, sports,stocks, etc.) or location-targeted active content (weather, traffic, etc), research isvalidating the long-held assumption--it is active content that draws viewers to digitalsignage and keeps them engaged throughout the presentation.
Over the past four years, DataCall has worked with the industry leadersin digital signage to develop the data formats and communication methods to allowDataCall’s active content to be easily integrated into their hardware and softwareproducts.
**The Stageis Set

The stage is set and the playersare on their marks. The experience and lessons learned by both providers and implementersof digital signage are converging at that point where explosive growth in the industry canbe realistically anticipated. DataCall is excited to be in the position they are, poisedto leverage their expertise and relationships in the digital signage industry to bring itsofferings to the next level.
Already, DataCall is actively developing the next generation in digitalsignage content. Delivering active content video is an opportunity that is in theimmediate future, as well as implementation of interactive digital signage. Whether it isthe use of radio frequency identification (RFID) to delivery active content directly tocustomers via their cell phone or engaging the customer to create their own digitalsignage experience via text messaging, DataCall will be at the forefront of the evolutionof digital signage--just as DataCall was at the forefront of the revolution of digitalsignage. DataCall is poised to ride this explosive growth in digital signage not just as aservice provider, but as a partner providing a key component to the most successfulimplementations of digital signage,
**Partners,Not Customers

DataCall’s approach tocustomer relations is to not accumulate customers, but to build partnerships. EachDataCall partner is as unique as the digital signage market they service—and each hastheir own requirements for active content. In developing active content for digitalsignage, DataCall identified three factors that had to be addressed—reliability,objectivity and ease of implementation. To address the reliability requirement, DataCallopted to license information from the leaders news, weather, sports and financial datarather than “scrapping” information from the Internet (which can be illegal) orpulling RSS feeds (which may come and go at the provider’s whim). Licensing data fromthese providers also satisfied the second requirement—objectivity. The Internet is aslittered of slanted opinions and hidden agendas as there are users of the Internet, Soarbitrarily allowing these “news” sources to go unchecked into DataCall’sactive content was completely unacceptable. Finally, the third requirement—ease ofimplementation—was address by both DataCall’s licensing of data and the methodby which it was disseminated to their partners.
DataCall understood that digital signage implementers had larger issuesto tackle than the multitude of licenses that would need to be managed and the varyingformats of the source data to be dealt with if active content was obtained from multiplevendors. DataCall offers a “one stop shop” for all of their active contentrequirements covered by a single license. Ease of implementation also would require thatthe multiple formats of all DataCall’s data providers be distilled into a singleformat. Because active content may be displayed in a multitude of ways (banners, tickers,scrolls or artistically integrated with the overall presentation), DataCall produced a setof common data layouts in the industry-standard XML (extensible markup language) format.Many partners find these formats to be easily integrated into their products, but inseveral cases, DataCall has produced customized data formats to the exact requirements oftheir partners. This customization ensures the highest level of reliable and ease ofintegration possible.
**Go ForLaunch

The stage is set and the playersare on their marks. Market demand, opportunity and technology converge at a single pointin time, and DataCall is there. Digital signage platforms are evolving to meet mass marketrequirements, costs for hardware and software are falling to the point of becomingcommodities and the markets for digital signage are clarifying through historical trialand error.**RESULTS OF OPERATIONS

The following discussion should be read in conjunction with ourfinancial statements.

During the last twelve months, the Companyhas implemented cost management measurements to reduce monthly expenditures. Our currentrate of monthly expenditures is approximately $45,000. We will continue these efforts tostreamline operations, as we focus on increasing sales and gross revenues over the nexttwelve months. We currently have no plans to increase the number of employees. However, asnew opportunities present themselves, we may find it necessary to bring human resources onstaff to accommodate the preparations for those opportunities. We do not currently haveany plans to increase our monthly expenditures or number of employees. We estimate theCompany will generate revenues in excess of $600,000 in 2009. 

We plan tocontinue to grow our business and market our Direct Lynk System to potential customersover the course of the next twelve months by marketing our technology to digital signagemanufacturers, trade magazines, trade shows and call centers. We will also continue on alimited basis our practice of providing potential customers free trials of the Direct LynkSystem, for which we will receive no revenue, in an attempt to build both productawareness for the Direct Lynk System and to potentially lead to sales down the road, whichin the opinion of our management has been successful both in building brand awareness forthe Direct Lynk System and in bringing in new clients for subscriptions. We continuallyadd subscribers for our technology throughout and intend to build and increase suchsubscribers moving forward.
We are planning and negotiating with current vendors and partners, toexpand our offering to other lateral markets. Hardware, software, and sales processes arecurrently being modified and/or developed. Additionally, we are negotiating with anational broadcast news group to provide localized and repurposed video clips, through aData Call Technologies licensing agreement, to the digital signage space.

Projected revenue for the second quarter ending June 30, 2009 is$110,000. The Company’s operations are expected to generate positive cash flow fromoperations in the second quarter of 2009. Effective July 1, 2008, executive salaries werereduced to $7,292 monthly, which represents a 32% reduction in monthly executive salaries.
**Three Months Ended March 31, 2009 Compared to Three Months Ended March 31, 2008**
Our revenues for the three months ended March 31, 2009 were $109,940,compared to $70,627 for the three-month period ended March 31, 2008 representing anincrease of 56% from the prior period. The increase in revenues was mainly due to anincrease subscriptions from current customers and new customer subscriptions.

Costs of sales for the three months ended March 31, 2009 were $20,708,compared to $13,917, for the three-month period ended March 31, 2008. Costs of sales donot increase in direct proportion to an increase in sales revenue because costs of salesare related to the amount bandwidth required to provide the subscription services.

Gross margins for the three months ended March 31, 2009 were 81%,compared to 80%, for the three-month period ended March 31, 2008.

Operating expenses for the three months ended March 31, 2009 were$155,424, compared to $284,706, for the three-month period ended March 31, 2008,representing a decrease of $129,282 or 45% decrease from the prior period. The significantdecrease in operating expenses is due to a decrease in compensation costs. 

Net losses for the three months ended March 31, 2009 were $66,192, compared to$227,996, for the three-month period ended March 31, 2009. The significant decrease in ournet losses are due to the increase in sale revenues and a decrease in operating expensesas noted above.
**Liquidity and Capital Resources**
We had total current assets of $26,040, consisting of $8,034 of cash and $18,006 inaccounts receivable. We had total current liabilities of $210,798 as of March 31, 2009,which represented $81,565 of accounts payable and $129,233 in accrued salaries and relatedliabilities.

We had total non-current liabilities of $204,400 as of March 31, 2009,consisting of redeemable common stock. Redeemable common stock consisted of shares ofcommon stock sold to certain investors from 2003-2006, which investors may have ongoingrescission rights, even though those investors previously rejected our rescission offer tothem to return their shares of our common stock for their original subscription cost plusstatutory interest. While we are obligated to carry the $204,400 in redeemable commonstock on our balance sheet as a liability, we believe that the likelihood of any of theshareholders who hold those shares exercising their remaining rescission rights, if any,is very small.

We had negative working capital of $184,758 and a deficit accumulated during thedevelopment stage of $8,451,701 as of March 31, 2009.

ITEM 3.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKBack to Table of Contents

We have not enteredinto, and do not expect to enter into, financial instruments for trading or hedgingpurposes.

ITEM 4.CONTROLS AND PROCEDURES****Back to Table of Contents

*Evaluation of disclosure controls andprocedures.* As of March 31, 2009, the Company's chief executive officer and chieffinancial officer conducted an evaluation regarding the effectiveness of the Company'sdisclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) underthe  Exchange Act. Based upon the evaluation of these controls and procedures, ourchief executive officer and chief financial officer concluded that our disclosure controlsand procedures were effective as of the end of the period covered by this report.

*Changes in internal controls.*During the quarterly period covered by this report, no changes occurred in our internalcontrol over financial reporting that materially affected, or is reasonably likely tomaterially affect, our internal control over financial reporting.

**PART II - OTHER INFORMATION**

ITEM 1. LEGALPROCEEDINGS**** Back to Table of Contents

None.

ITEM 1A.RISK FACTORSBackto Table of Contents

In addition to the otherinformation set forth in this report, you should carefully consider the factors discussedin Part I, “Item 1. Description of Business, subheading Risk Factors” inour Annual Report on Form 10-K for the year ended December 31, 2008, which couldmaterially affect our business, financial condition or future results. The risks describedin our Annual Report on Form 10-K are not the only risks facing our company.Additional risks and uncertainties not currently known to us or that we currently deem tobe immaterial also may materially adversely affect our business, financial conditionand/or operating results. 

ITEM 2.UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDSBack to Table of Contents

None.

ITEM3. DEFAULTS UPON SENIOR SECURITIES****Back to Table of Contents

None.

ITEM4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERSBack to Table of Contents

None.

ITEM5. OTHER INFORMATION****Back to Table of Contents

None.

ITEM6. EXHIBITS****Back to Table of Contents

(a) The following documentsare filed as exhibits to this report on Form 10-Q or incorporated by reference herein. Anydocument incorporated by reference is identified by a parenthetical reference to the SECfiling that included such document.

Exhibit    No.Description31.1Certification of CEO pursuant    to Rule 13a-14(a) or 15d-14(a) of the Exchange Act pursuant to Section 302 of the    Sarbanes-Oxley Act of 2002.31.2Certification of CFO pursuant    to Rule 13a-14(a) or 15d-14(a) of the Exchange Act pursuant to Section 302 of the    Sarbanes-Oxley Act of 2002.32.1Certification of CEO pursuant    to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of    2002.32.2Certification of CFO pursuant    to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of    2002.
SIGNATURES

Pursuant to therequirements of the Securities Exchange Act of 1934, this report has been signed below bythe following persons on behalf of the registrant and in the capacities and on the dateindicated.

/s/ Timothy E.VanceTimothy E. Vance   *CEO**   Dated: May 13, 2009*

/s/ Larry MosleyLarry Mosley   *CFO**   Dated: May 13, 2009*

**Unaudited Interim Financial    Statements**Back    to Table of Contents  **DATA CALL TECHNOLOGIES, INC.**(A Development Stage Company)**Balance Sheets**March 31, 2009 (Unaudited) and December 31, 2008 (Audited)  
Assets  **March    31, 2009**
**December    31, 2008**Current assets:      Cash$8,034$8,971      Accounts receivable18,00617,506     Total current    assets26,04026,477  Property    and equipment118,304118,304   Less accumulated    depreciation and amortization90,32485,624     Net property and    equipment27,98032,680  Other    assets5,2555,255       Total assets$59,275$64,412  
Liabilities    and Stockholders' Deficiency  Current    liabilities:      Accounts payable 81,56575,533  Accrued salaries    and related liabilities129,233112,708     Total current    liabilities210,798188,241Redeemable    common stock204,400204,400          Total liabilities415,198392,641  Stockholders'    equity:      Preferred stock, $.001 par value. Authorized 10,000,000 shares: None issued- -    Common stock, $.001    par value. Authorized 200,000,000 shares:     83,213,100 shares    issued and outstanding at March 31, 2009,     83,213,100    shares issued and outstanding at    December 31, 200883,21383,213      Additional paid-in capital8,140,3458,127,680      Deficit    accumulated during the development stage(8,451,701)(8,385,509)  (228,143)(174,616)      Deferred    stock compensation(127,780)(153,613)        Total stockholders' equity (deficit)(355,923)(328,229)          Total liabilities and stockholders' equity $59,275$64,412  The accompanying notes are an integral part of these    financial statements.**DATA    CALL TECHNOLOGIES, INC.**(A    Development Stage Company)**Statements of Operations**Three    Months Ended March 31, 2009 and 2008 (Unaudited)**Three Months****Three Months****Ended****Ended****March 31, 2009****March 31, 2008**  Revenues   Sales$109,940$70,627   Cost of sales20,70813,917     Gross margin89,23256,710  Operating    expenses:   Employee    compensation87,782150,049      Legal and accounting43,21136,215   Product development    costs5002,578   Travel1,9129,284   Office and    equipment rental3,49411,547   Office supplies and    expenses2,391700   Telephone and    utilities5,2505,626   Advertising4,35352,899   Other1,8319,457   Depreciation expense4,7006,351     Total operating    expenses155,424284,706         Net loss before    income taxes(66,192)(227,996)  Provision    for income taxes- -           Net loss$(66,192)$(227,966)  Net loss    per common share - basic and diluted: Net loss    applicable to common shareholders$(0.00)$(0.00)       Weighted    average common shares:       Basic and Diluted83,213,14074,639,850      The    accompanying notes are an integral part of these financial statements.**DATA    CALL TECHNOLOGIES INC.**(A    Development Stage Company)**Statements of Cash Flows**Three    Months Ended March 31, 2009 and 2008 (Unaudited)** ****Three Months****Three Months****Ended****Ended****March 31, 2009****March 31, 2008**Cash flows from operating activities:      Net loss$(66,192)$(227,996)      Adjustments to reconcile net loss to net cash used in operating activities:    Depreciation4,7006,351    Common stock issued    for services- 27,250    Amortization of    deferred compensation25,83341,833       Stock options and warrants issued for services12,66512,665      (Increase) decrease in operating assets:     Accounts    receivable(500)(21,488)    Other assets- -    Increase (decrease)    in operating liabilities:     Accounts payable6,032(17,443)    Accrued    salaries and related liabilities16,52529,121          Net cash used in operating activities (937)(149,707)  Cash flows    from investing activities      Purchase of property and equipment- -           Net cash used in investing activities- -   Cash flows    from financing activities:  Proceeds from    issuance of common shares under private placement- 140,000          Net cash provided by financing activities- 140,000            Net increase (decrease) in cash (937)(9,707)Cash at    beginning of period8,97130,413Cash at    end of period$8,034$20,706  The    accompanying notes are an integral part of these financial statements.
**DATA CALL TECHNOLOGIES, INC.**(A Development Stage Company)**Notes to Financial Statements**March 31, 2009

 
**(1) General**
Data Call Technologies, Inc. (the "Company") was incorporatedunder the laws of the State of Nevada in 2002. The Company's mission is to integratecutting-edge information delivery solutions that are currently deployed by the media, andput them within the control of retail and commercial enterprises. The Company's softwareand services put its clients in control of real-time advertising, news, and other content,including emergency alerts, within one building or 10,000, local or thousands of milesaway. The Company was a development stage company from inception through 2008.

The accompanying unaudited financial statements have been prepared inaccordance with U. S. generally accepted accounting principles (“GAAP”) forinterim financial information and with the instructions to Form 10-QSB. Accordingly, theydo not include all of the information and footnotes required by GAAP for completefinancial statements. In the opinion of management, all adjustments (consisting of normalrecurring adjustments) considered necessary for a fair presentation have been included.Operating results for the three-month period ended March 31, 2009 are not indicative ofthe results that may be expected for the year ending December 31, 2009.

As contemplated by the Securities and Exchange Commission (SEC) underRules of Regulation S-B, the accompanying financial statements and related footnotes havebeen condensed and do not contain certain information that will be included in theCompany's annual financial statements and footnotes thereto. For further information,refer to the Company's audited consolidated financial statements and related footnotesthereto included in the Company's annual report on Form 10-K for the year ended December31, 2008.
**(2) Use of Estimates**
The preparation of financial statements in conformity with U. S. GAAPrequires management to make estimates and assumptions that affect the reported amounts ofassets and liabilities and disclosure of contingent assets and liabilities at the date ofthe financial statements and the reported amounts of revenues and expenses during thereporting period. Actual results could vary from those estimates.
**(3) Recent Accounting Pronouncements**
In March 2008, the FASB issued SFAS No. 161, *Disclosures aboutDerivative Instruments and Hedging Activities, an amendment of FAS 133*, which requiresadditional disclosures about the objectives of derivative instruments and hedgingactivities, the method of accounting for those instruments under SFAS No. 133 and itsrelated interpretations, and a tabular disclosure of the effects of those instruments andrelated hedged items on our financial position, financial performance, and cash flows.SFAS No. 161 is effective for us beginning January 1, 2009. We are currently assessing thepotential impact that adoption of SFAS No. 161 may have on our financial statements.

In December 2007, the FASB issued SFAS No. 141R, *"BusinessCombinations"*. SFAS 141R requires the acquiring entity in a businesscombination to record all assets acquired and liabilities assumed at their respectiveacquisition-date fair values, changes the recognition of assets acquired and liabilitiesassumed arising from contingencies, changes the recognition and measurement of contingentconsideration, and requires the expensing of acquisition-related costs as incurred.SFAS 141R also requires additional disclosure of information surrounding a businesscombination, such that users of the entity's financial statements can fully understand thenature and financial impact of the business combination. SFAS 141R appliesprospectively to business combinations for which the acquisition date is on or after thebeginning of the first annual reporting period beginning on or after December 15, 2008. Anentity may not apply it before that date.

In December 2007, the FASB issued SFAS No. 160. *“NoncontrollingInterests in Consolidated Financial Statements-and Amendment of ARB No. 51.”* SFAS160 establishes accounting and reporting standards pertaining to ownership interests insubsidiaries held by parties other than the parent, the amount of net income attributableto the parent and to the noncontrolling interest, changes in a parent’s ownershipinterest, and the valuation of any retained noncontrolling equity investment when asubsidiary is deconsolidated. This statement also establishes disclosure requirements thatclearly identify and distinguish between the interests of the parent and the interests ofthe noncontrolling owners. SFAS 160 is effective for fiscal years beginning on or afterDecember 15, 2008.

Management has reviewed these new standards and believes that they haveno impact on the financial statements of the Company at this time; however, they may applyin the future.
**(4) Capital Stock, Options and Warrants**
The Company is authorized to issue up to 10,000,000 shares of PreferredStock, $.001 par value per share, of which none are presently outstanding. The PreferredStock may be issued in one or more series, the terms of which may be determined at thetime of issuance by the Board of Directors, without further action by stockholders, andmay include voting rights (including the right to vote as a series on particular matters),preferences as to dividends and liquidation, conversion, redemption rights and sinkingfund provisions.

The Company is authorized to issue up to 200,000,000 shares of CommonStock, of which 83,213,100 shares were issued and outstanding at March 31, 2009, and17,600,000 shares were reserved for issuance pursuant to the exercise of outstanding stockoptions and warrants as of March 31, 2009.

In addition to the amount of common shares issued and outstanding asnoted above, 2,044,000 shares were issued and are in the hands of shareholders at March31, 2009; however, these shares are not included in the Company’s permanent equity atMarch 31, 2009. These shares are considered “Redeemable Common Stock” and areincluded in the financial statements as a long-term liability.

The following table summarizes information about options and warrantsoutstanding at March 31, 2009 and 2008:

**Shares**
**Weighted Average Exercise Price March 31, 2009**
**Shares**
**Weighted Average Exercise Price March 31, 2008**
Outstanding at    beginning of period
17,600,000
$
.10
17,600,000
$
.10
Granted
-
-
-
-
Exercised
-
-
-
-
Canceled
-
-
-
-
Outstanding at    end of period
17,600,000
$
.10
17,600,000
$
.10  
Weighted average    fair value of options and warrants granted    during the period
N/A
N/A
N/A
$
N/AExercisable    at end of period
17,600,000
$
.10
17,600,000
.10
Stock-based compensation is composed of the following for thethree-months ended March 31, 2009 and 2008:

**2009**
**2008**
Stock-based    compensation at fair value
$
-
$
77,250
Options and    warrants
12,665
12,665
Amortization of    deferred stock    compensation
25,833
41,833Cancellation of previously issued    shares
-
(50,000)
Total    stock-based compensation expense
$
38,498
$
81,748***************** |