UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549


                               -------------------


                                   FORM 10-QSB
                                   -----------

                                   (MARK ONE)

           _X_ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
                         SECURITIES EXCHANGE ACT OF 1934
                  FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2004

                                       OR

          ___ 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 000-32045


                              DIOMED HOLDINGS, INC.
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

<TABLE>
<CAPTION>
<S>                                                                   <C>
                           DELAWARE                                                84-1480636
(State or other jurisdiction of incorporation or organization)        (I.R.S. Employer Identification No.)

                         1 DUNDEE PARK
                          ANDOVER, MA                                                 01810
           (Address of principal executive offices)                                (Zip Code)

</TABLE>
                                 (978) 475-7771
                         (Registrant's telephone number)

         INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) HAS FILED ALL REPORTS
REQUIRED TO BE FILED BY SECTION 13 OR 15(D) OF THE  SECURITIES  EXCHANGE  ACT OF
1934  DURING  THE  PRECEDING  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 __

AS OF APRIL 30, 2004, THERE WERE  365,160,559  SHARES OF COMMON STOCK, PAR VALUE
$0.001, OUTSTANDING.



<PAGE>

                     DIOMED HOLDINGS, INC. AND SUBSIDIARIES

                         QUARTERLY REPORT ON FORM 10-QSB
                    FOR THE THREE MONTHS ENDED MARCH 31, 2004

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>

Item Number                                                               Page Number
<S>                                                                           <C>
             Part I - Financial Information

     1       Consolidated Balance Sheets -                                    F-1
             March 31, 2004 (unaudited) and December 31, 2003

             Unaudited Consolidated Statements of Operations -                F-3
             Three Months Ended March 31, 2004 and 2003

             Unaudited Consolidated Statements of Cash Flows -                F-4
             Three Months Ended March 31, 2004 and 2003


             Notes to Consolidated Financial Statements                       F-5


     2       Management's Discussion and Analysis or Plan of Operation         1

     3       Controls and Procedures                                           11

             Part II - Other Information                                       11
             ---------------------------

     1       Legal Proceedings                                                 11

     2       Changes in Securities                                             12

     6       Exhibits and Reports on Form 8-K                                  17

             Signatures                                                        18
</TABLE>

                                       (i)

<PAGE>

DIOMED HOLDINGS, INC.
CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                         March 31, 2004   December 31, 2003
                                                          (Unaudited)
                                                          -----------       -----------
                 ASSETS
Current Assets:
<S>                                                       <C>               <C>
      Cash and cash equivalents                           $ 8,314,720       $13,398,075
      Accounts receivable, net of
         allowance for doubtful accounts
         of $220,000 and $209,000 at March 31,
         2004 and December 31, 2003, respectively           2,048,349         1,437,238
      Inventories                                           2,264,365         1,892,241
      Prepaid expenses and other current assets               892,937           449,625
                                                          -----------       -----------
            Total current assets                           13,520,371        17,177,179
                                                          -----------       -----------
Property and Equipment:
      Office equipment, furniture and
         fixtures                                           1,547,654         1,429,409
      Manufacturing equipment                                 930,330           893,335
      Leasehold improvements                                  754,282           731,408
                                                          -----------       -----------
                                                            3,232,266         3,054,152
      Less--Accumulated depreciation and
         amortization                                       2,478,466         2,306,424
                                                          -----------       -----------
                                                              753,800           747,728

Intangible Manufacturing Asset, net of accumulated            318,922           367,991
   amortization of $662,000 and $613,000 at March 31,
   2004 and December 31, 2003, respectively

Intangible EVLT Technology Asset, net of accumulated        4,530,790         4,604,262
   amortization of $171,000 and $98,000 at March 31,
   2004 and December 31, 2003, respectively

                                                          -----------       -----------
   Total intangible assets, net                             4,849,712         4,972,253


Other Assets                                                  188,658           183,756

                                                          -----------       -----------
                                                          $19,312,541       $23,080,916
                                                          ===========       ===========
</TABLE>

              The accompanying notes are an integral part of these
                       consolidated financial statements.


                                      F-1
<PAGE>

LIABILITIES AND STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
                                                           March 31, 2003    December 31, 2003
                                                             (unaudited)
                                                           --------------    -----------------
Current Liabilities:
<S>                                                         <C>               <C>
      Bank loan                                             $         --      $    261,676
      Promissory notes                                                --           936,000
      Accounts payable                                         1,956,062         1,497,541
      Accrued expenses and other                               1,481,263         1,852,480
      Deferred revenue                                           109,383            56,802
      Current maturities of EVLT technology payable
         ($1,000,000 face value, net of $35,609 debt
          discount at March 31, 2004 and
          December 31, 2003                                      964,391           964,391
                                                            ------------      ------------
            Total current liabilities                          4,511,099         5,568,890
                                                            ------------      ------------

EVLT Technology Payable, less current maturities
         ($1,000,000 face value, net of $143,224 debt
          discount at March 31, 2004 and $1,250,000
          face value, net of $173,832 debt discount
          at December 31, 2003)                                  856,776         1,076,168

                                                            ------------      ------------
      Total liabilities                                        5,367,875         6,645,058
                                                            ------------      ------------

Stockholders' Equity:

  Preferred stock, $0.001 par value
    Authorized--20,000,000 shares
    Issued and outstanding - none

  Common stock, $0.001 par value
    Authorized--500,000,000 shares;
    Issued and outstanding--335,339,407 and 328,227,796
      shares at March 31, 2004 and December 31, 2003,            335,341           328,229
      respectively

  Additional paid-in capital                                  75,127,899        75,267,269
  Cumulative translation adjustment                              124,503           175,278
  Accumulated deficit                                        (61,643,077)      (59,334,918)
                                                            ------------      ------------
  Total stockholders' equity                                  13,944,666        16,435,858
                                                            ------------      ------------
                                                            $ 19,312,541      $ 23,080,916
                                                            ============      ============
</TABLE>

              The accompanying notes are an integral part of these
                       consolidated financial statements.


                                      F-2
<PAGE>

DIOMED HOLDINGS, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)

                                             Three Months Ended March 31,
                                           --------------------------------
                                                2004               2003
                                           -------------      -------------
Revenues                                   $   2,949,597      $   2,123,810
Cost of Revenues                               1,944,370          1,399,459
                                           -------------      -------------
Gross profit                                   1,005,227            724,351
                                           -------------      -------------
Operating Expenses:
   Research and development                      296,154            188,093

   Selling and marketing                       1,605,962          1,143,214

   General and administrative                  1,399,265            800,749
                                           -------------      -------------
Total operating expenses                       3,301,381          2,132,056

                                           -------------      -------------
Loss from operations                          (2,296,154)        (1,407,705)

Interest Expense, non-cash                            --            520,000

Interest Expense, cash-based                      12,005             69,373
                                           -------------      -------------
Total interest expense                            12,005            589,373

                                           -------------      -------------
Net loss                                   $  (2,308,159)     $  (1,997,078)
                                           =============      =============
Net loss per share:
  Basic and diluted net loss per share
  applicable to common stockholders                (0.01)     $       (0.13)

                                           =============      =============
  Basic and diluted weighted average
  common Shares outstanding                  328,869,238         15,959,381
                                           =============      =============

              The accompanying notes are an integral part of these
                       consolidated financial statements.


                                      F-3
<PAGE>

DIOMED HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)

<TABLE>
<CAPTION>
                                                     Three Months Ended March 31,
                                                    ------------------------------
                                                        2004              2003
                                                    ------------      ------------
Cash Flows from Operating Activities:
<S>                                                 <C>               <C>
      Net loss                                      $ (2,308,159)     $ (1,997,078)
      Adjustments to reconcile net loss
      to net cash used in operating activities:

         Depreciation and amortization                   204,290           143,496

         Non-cash interest expense on
            related party debt                                --           520,000
         Issuance of stock options
            to third party                                62,231             8,600
         Changes in operating assets
            and liabilities:
            Accounts receivable                         (611,111)          (20,453)
            Inventories                                 (372,124)          228,400
            Prepaid expenses
              and other current assets                  (443,312)         (577,563)
            Deposits                                          --           117,979
            Accounts payable                             458,522            16,785
            Accrued expenses                            (315,581)         (163,228)
                                                    ------------      ------------

Net cash used in operating activities                 (3,325,244)       (1,723,062)
                                                    ------------      ------------
Cash Flows from Investing Activities:
         Purchases of property and equipment            (116,884)          (69,859)
                                                    ------------      ------------
Net cash used in investing activities                   (116,884)          (69,859)
                                                    ------------      ------------
Cash Flows from Financing Activities:
         Payments on promissory notes                   (936,000)           (5,746)
         Net payments on bank borrowings                (261,676)          (66,707)
         Payment on EVLT(R)purchase obligation          (219,391)               --
         Costs of equity financing                      (194,489)               --
         Payments on capital lease obligations            (5,636)           (9,405)
                                                    ------------      ------------

Net cash used in financing activities                 (1,617,192)          (81,858)
                                                    ------------      ------------
Effect of Exchange Rate Changes                          (24,035)          157,326
                                                    ------------      ------------
Net Decrease in Cash and Cash Equivalents             (5,083,355)       (1,717,453)

Cash and Cash Equivalents, beginning of period        13,398,075         1,848,646
                                                    ------------      ------------
Cash and Cash Equivalents,
 end of period                                      $  8,314,720      $    131,193
                                                    ============      ============
Supplemental Disclosure of
   Cash Flow Information:
      Cash paid for interest                        $        148      $     25,438
                                                    ============      ============
</TABLE>

              The accompanying notes are an integral part of these
                       consolidated financial statements.


                                      F-4
<PAGE>

                              DIOMED HOLDINGS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 2004
                                   (UNAUDITED)

(1)   OPERATIONS

      Diomed   Holdings,   Inc.   ("Diomed"  or  "the  Company")   develops  and
commercializes  minimally  invasive  medical  procedures  that  employ its laser
technologies  and  associated   disposable   products.   Using  its  proprietary
technology,  including its exclusive  rights to U.S. Patent No.  6,398,777,  the
Company  currently  focuses on endovenous laser treatment  (EVLT(R)) of varicose
veins. The Company also develops and markets lasers and disposable  products for
photodynamic  therapy (PDT) cancer  procedures  and products for other  clinical
applications, including dental and general surgical procedures.

      In  developing  and  marketing  its clinical  solutions,  the Company uses
proprietary  technology  and aims to secure strong  commercial  advantages  over
competitors by gaining governmental approvals in advance of others and obtaining
exclusive  commercial  arrangements.  To optimize  revenues,  Diomed  focuses on
clinical  procedures  that  generate  revenues  from both capital  equipment and
disposable products, such as procedure kits and optical fibers.

      Diomed's high power  semiconductor diode lasers combine clinical efficacy,
operational   efficiency  and  cost  effectiveness  in  a  versatile,   compact,
lightweight,  easy-to-use  and  easy-to-maintain  system.  Along with lasers and
single-use  procedure kits for EVLT(R),  the Company provides its customers with
state of the art  physician  training  and  practice  development  support.  The
EVLT(R)  procedure and the Company's related products were cleared by the United
States FDA in January of 2002.

(2)   BASIS OF PRESENTATION

      In the  opinion of  management,  these  unaudited  consolidated  financial
statements contain all adjustments considered normal and recurring and necessary
for their fair presentation.  Interim results are not necessarily  indicative of
results to be expected for the year.  These interim  financial  statements  have
been  prepared  in  accordance  with  the  instructions  for  Form  10-QSB,  and
therefore, do not include all information and footnotes necessary for a complete
presentation of operations, financial position, and cash flows of the Company in
conformity with accounting  principles  generally accepted in the United States.
The Company filed with the Securities and Exchange Commission on March 30, 2004,
audited consolidated  financial statements for the year ended December 31, 2003,
and included  information and footnotes  necessary for such presentation.  These
unaudited  consolidated  financial statements should be read in conjunction with
the audited  consolidated  financial  statements for the year ended December 31,
2003.

(3)   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

      Our Annual  Report on Form  10-KSB for the year ended  December  31,  2003
includes a  comprehensive  summary of the  significant  accounting  policies and
methods used in the preparation of our consolidated  financial  statements.  The
application of these policies has a significant  impact on our reported results.
In addition,  the application of some of these policies  depends on management's
judgment,   with  financial   reporting   results  relying  on  estimations  and
assumptions about the effect of matters that are inherently  uncertain.  For all
of these policies, management cautions that future events rarely develop exactly
as forecast and the best estimates routinely require adjustment.


                                      F-5
<PAGE>

                              DIOMED HOLDINGS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 2004
                                   (UNAUDITED)
      (a)   INVENTORIES

      Inventories  are  valued at the  lower of cost  (first-in,  first-out)  or
market.  Work-in-progress  and finished  goods consist of  materials,  labor and
manufacturing overhead. Inventories consist of the following:

                            March 31, 2004      December 31, 2003

Raw materials                 $  921,629           $  856,886
Work-in-progress                 628,360              456,934
Finished goods                   714,376              578,421
                              ----------           ----------
                              $2,264,365           $1,892,241
                              ==========           ==========


      (b)   ACCOUNTING FOR STOCK-BASED COMPENSATION

      The Company accounts for its employee stock-based compensation plans under
Accounting  Principles  Board  Opinion No. 25,  Accounting  for Stock  Issued to
Employees utilizing the intrinsic value method.  Accordingly,  compensation cost
for stock options issued to employees is measured as the excess,  if any, of the
fair market price of the Company's stock at the date of the fixed grant over the
amount an employee must pay to acquire the stock.  SFAS No. 123,  Accounting for
Stock-Based  Compensation  as  amended  by  SFAS  No.  148,  establishes  a fair
value-based method of accounting for stock-based compensation plans. The Company
has adopted the disclosure only alternative  under SFAS No. 123, with respect to
its employee stock compensation plan, which requires disclosure of the pro forma
effects  on net loss and loss per share as if SFAS No.  123 had been  adopted as
well as certain other information.

<TABLE>
<CAPTION>
                                                               Three-Months Ended March 31,
                                                                   2004            2003
                                                               -----------      -----------
<S>                                                            <C>              <C>
Net (loss) as reported:                                        ($2,308,159)     ($1,997,078)
      Add : Stock-based employee compensation
       expense included in reported net (loss), net of tax           - 0 -            - 0 -
      Deduct : total stock-based employee compensation;
       expense determined under the fair value-based
       method for all awards, net of tax                          (247,125)         (69,609)
                                                               -----------      -----------
Pro forma net (loss)                                           ($2,555,284)     ($2,066,687)
                                                               ===========      ===========
Earnings per share:
      Basic and diluted - as reported                                (0.01)           (0.13)
                                                               ===========      ===========
      Basic and diluted - pro forma                                  (0.01)           (0.13)
                                                               ===========      ===========
</TABLE>

      (c)   COMPREHENSIVE INCOME

      SFAS No. 130, Reporting  Comprehensive Income,  requires disclosure of all
components of comprehensive  income (loss).  Comprehensive  income is defined as
the change in stockholders' equity of a business enterprise during a period from
transactions and other events and circumstances from non-owner sources. For all


                                      F-6
<PAGE>

                              DIOMED HOLDINGS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 2004
                                   (UNAUDITED)

periods  presented,  comprehensive  loss  consists of the Company's net loss and
changes in cumulative translation adjustment account. Comprehensive net loss for
all periods presented is as follows:

                                            Three Months Ended March 31,
                                                2004             2003
                                            -----------      -----------
Net loss                                    $(2,308,159)     $(1,997,078)
Foreign currency translation adjustment         (50,775)        (171,793)

                                            -----------      -----------

Comprehensive loss                          $(2,358,934)     $(2,168,871)
                                            ===========      ===========

      (d)   NET LOSS PER SHARE

      Net loss per share is  computed  based on the  guidance  of SFAS No.  128,
Earnings per Share.  SFAS No. 128  requires  companies to report both basic loss
per  share,  which is based on the  weighted  average  number of  common  shares
outstanding,  and diluted loss per share, which is based on the weighted average
number of common shares  outstanding and the weighted average dilutive potential
common shares  outstanding  using the treasury stock method.  As a result of the
losses incurred by the Company for the three-month  periods ended March 31, 2004
and 2003,  respectively,  all potential common shares were antidilutive and were
excluded from the diluted net loss per share  calculations.  The following table
summarizes securities  outstanding as of each of the three-month periods,  which
were not included in the  calculation  of diluted net loss per share since their
inclusion would be antidilutive.

                                            Three Months Ended March 31,
                                               2004            2003
                                            ----------      ---------

Common Stock Options                        24,989,758      2,321,478
                                            ==========     ==========

Common Stock Warrants                       22,195,895      8,445,257
                                            ==========     ==========

Convertible Debt                                 - 0 -     14,705,882
                                            ==========     ==========

(4)   LINE OF CREDIT ARRANGEMENT

      Diomed,  Ltd., the Company's United Kingdom-based  subsidiary,  utilizes a
line of credit  with  Barclays  Bank,  limited to the  lesser of  (pound)350,000
($644,000 at March 31, 2004) or 80% of eligible accounts receivable.  The credit
line bears interest at a rate of 3% above Barclays base rate (4.00% at March 31,
2004) and borrowings are due upon collection of receivables  from customers.  As
security  interest,  Barclay's  Bank has a lien on all of the  assets  of Diomed
Ltd., excluding certain intellectual property. As of March 31, 2004, the Company
is not currently utilizing this borrowing capacity.


                                      F-7
<PAGE>

                              DIOMED HOLDINGS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 2004
                                   (UNAUDITED)

(5)   STOCK OPTIONS

      (a) In November 2003, the Company's stockholders approved the 2003 Omnibus
Plan,  under which the Company  reserved  40,000,000  shares of common stock for
future  issuance.  The 2003 Omnibus Plan  provides for grants or awards of stock
options,  restricted stock awards,  restricted stock units,  performance grants,
stock awards, and stock appreciation  rights.  Only present and future employees
and outside  directors and consultants are eligible to receive  incentive awards
under the 2003 Omnibus Plan.

      The exercise price and vesting are determined by the Board of Directors at
the date of grant.  Options generally vest over two to four years, and expire 10
years  after  the date of grant.  Incentive  stock  options  under the Plans are
granted at not less than fair market value per share of Common Stock on the date
of grant or 110% of fair market  value for any  stockholder  who holds more than
10% of the total combined voting power of all classes of stock of the Company.

      As of March 31, 2004,  17,497,696 options and other incentive stock awards
were  available  for future  grants under the 2003 Omnibus  Plans.  In addition,
621,667  options  were  available  under the 1998 Plan and 247,258  options were
available  under the 2001 Plan as of March 31, 2004. We  anticipate  that future
stock options will only be granted under the 2003 Omnibus Plan.

A summary of stock option activity is as follows:

<TABLE>
<CAPTION>
                                   Range of        Number of    Weighted Average
                                Exercise Price      Shares       Exercise  Price
                                 -----------      -----------      -----------
<S>                              <C>               <C>             <C>
Outstanding, December 31,
  2003                           $ 0.08-8.23        5,558,575      $      0.97
      Granted                      0.20-0.27       19,688,970             0.20
      Forfeited                    0.20-5.52         (257,787)            0.74
                                 -----------      -----------      -----------
Outstanding, March 31, 2004      $ 0.08-8.23       24,989,758      $      0.37
                                 ===========      ===========      ===========

Exercisable, March 31, 2004      $ 0.08-8.23        3,356,905      $      1.30
                                 ===========      ===========      ===========
</TABLE>

The following table summarizes currently  outstanding and exercisable options as
of March 31, 2004.

                    OUTSTANDING                              EXERCISABLE
 ------------------------------------------------      -----------------------
                                         WEIGHTED                     WEIGHTED
                                         AVERAGE                      AVERAGE
 EXERCISE                     REMAINING  EXERCISE                     EXERCISE
  PRICE           SHARES        LIFE*     PRICE           SHARES        PRICE
$0.08-2.00      24,339,086       9.7     $   0.24       2,736,754     $   0.42
 2.25-3.54         239,472       3.3         2.89         221,451         2.94
 4.00-6.56         395,200       2.8         6.33         382,700         6.40
 8.05-8.23          16,000       1.9         8.23          16,000         8.23
                ----------               --------      ----------     --------
                24,989,758               $   0.37       3,356,905     $   1.30
               ===========               ========       =========     ========

* Weighted average remaining contractual life (in years)


                                      F-8
<PAGE>

                              DIOMED HOLDINGS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 2004
                                   (UNAUDITED)

      (b) In the first quarter of 2004, the Company  granted  501,470 options to
purchase  shares of Common  Stock at  exercise  prices in the range of $0.20 per
share to $0.27 per share to two consultants  and a third party service  provider
for services  performed.  The Company  recorded the fair value of such  options,
based on the  Black-Scholes  option pricing model,  as stock-based  compensation
expense  totaling  $62,200 in the  statement of operations  for the  three-month
period ended March 31, 2004.

      (c) A summary of warrant activity is as follows:

<TABLE>
<CAPTION>
                                                                   WEIGHTED        WEIGHTED
                                                                   AVERAGE     AVERAGE REMAINING
                                    RANGE OF        NUMBER OF      EXERCISE     CONTRACTUAL LIFE
                                 EXERCISE PRICE      SHARES          PRICE          (IN YEARS)
                                  ------------     -----------    ------------     -----------
<S>                               <C>               <C>             <C>               <C>
Outstanding,December 31, 2003     $0.001-$3.50      29,920,930      $   0.08          4.9

Exercised by Placement Agent              0.001     (7,715,035)           --           --

Forfeited                                 2.00         (10,000)         2.00           --
                                  ------------     -----------      --------          ----
Outstanding,March 31, 2004        $0.001-$3.50      22,195,895         $0.10          4.6
                                  ============     ===========      ========          ====


Exercisable, March 31, 2004       $0.001-3.50       22,195,895      $   0.10          4.6
                                  ============     ===========      ========          ====
</TABLE>

(6)   SEGMENT REPORTING

      The Company's  reportable  segments are determined by product type:  laser
systems and fibers,  accessories and service.  The Board of Directors  evaluates
segment performance based on revenue.  Accordingly,  all expenses are considered
corporate level activities and are not allocated to segments. Also, the Board of
Directors does not assign assets to its segments.  This table presents  revenues
by reportable segment:

                                              Three-Month Period Ended March 31,

                                                     2004            2003
                                                  ----------     ----------
      Laser systems                               $1,803,514     $1,405,744
      Fibers, accessories and service              1,146,083        718,066
                                                  ----------     ----------
      Total                                       $2,949,597     $2,123,810
                                                  ==========     ==========


                                      F-9
<PAGE>

                              DIOMED HOLDINGS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 2004
                                   (UNAUDITED)

The following table represents  percentage of revenues and long-lived  assets by
geographic destination:

<TABLE>
<CAPTION>
                             % of Revenue                          Long-lived Assets
                   ----------------------------------   ----------------------------------
                   Three-Month Period Ended March 31,         March 31,    December 31,
                         2004            2003                   2004          2003
                      ----------      ----------            ----------     ----------
<S>                          <C>             <C>            <C>            <C>
     North America            62%             61%           $5,151,989     $5,300,029

     Asia/Pacific             25%             26%                   --             --

     Europe                   10%             11%              640,181        603,708
     Other                     3%              2%                   --             --
                      ----------      ----------            ----------     ----------

     Total                   100%            100%           $5,792,170     $5,903,737
                      ==========      ==========            ==========     ==========
</TABLE>

(7)   SUBSEQUENT EVENT - COMPLETION OF TARGETED OFFERING TO STOCKHOLDERS

      On  April  20,  2004,  The  Company  announced  that  it had  successfully
completed  its offering to those  persons who held shares of its common stock on
August  29,  2003,  raising  approximately  $3.0  million in  additional  equity
financing.  The offering, for 29,711,749 shares of the Company's common stock at
$0.10 per share,  allowed  stockholders  as of August 29, 2003 to  purchase  one
share of the Company's  common stock for each share of common stock held at that
time.  The offering  also  included an  "over-subscription  right" which allowed
stockholders to purchase additional shares to the extent the "basic rights" were
not  fully  subscribed.  Because  the  offering  was  oversubscribed,  the  full
29,711,749 shares were issued.


                                      F-10
<PAGE>

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF OPERATIONS

      In this Quarterly  Report,  the terms "Company" and "Diomed Holdings" both
refer to  Diomed  Holdings,  Inc.  The term  "Diomed"  refers  to the  Company's
principal subsidiary, Diomed, Inc. and its consolidated subsidiaries. We use the
terms  "we,"  "our"  and "us"  when we do not need to  distinguish  among  these
entities  or their  predecessors,  or when  any  distinction  is clear  from the
context.

      This section contains forward-looking statements,  which involve known and
unknown risks and  uncertainties.  These statements  relate to our future plans,
objectives,  expectations and intentions.  These statements may be identified by
the use of  words  such as  "may,"  "will,"  "should,"  "potential,"  "expects,"
"anticipates,"  "intends,"  "plans," "believes" and similar  expressions.  These
statements are based on our current  beliefs,  expectations  and assumptions and
are subject to a number of risks and  uncertainties.  Our actual  results  could
differ materially from those discussed in these statements. Our Annual Report on
Form SEC 10-KSB/A (the "Annual Report")  contains a discussion of certain of the
risks and  uncertainties  that  affect our  business.  We refer you to the "Risk
Factors" on pages 19 through 32 of the Annual Report for a discussion of certain
risks,  including  those  relating to our business as a medical  device  company
without a significant  operating  record and with  operating  losses,  our risks
relating  to the  commercialization  of our  current  and  future  products  and
applications, and risks relating to our common stock and its market value.

      In view of our  relatively  limited  operating  history,  we have  limited
experience forecasting our revenues and operating costs.  Therefore,  we believe
that  period-to-period  comparisons  of  financial  results are not  necessarily
meaningful and should not be relied upon as an indication of future performance.
To date, the Company has incurred  substantial costs to create our products.  As
of March 31, 2004, we had an accumulated  deficit of approximately  $61,643,000,
including  $15,899,000 in non-cash  interest  expense.  We may continue to incur
operating losses due to spending on research and development programs,  clinical
trials,   regulatory   activities,   and  sales,  marketing  and  administrative
activities.  This spending may not correspond  with any meaningful  increases in
revenues in the near term, if at all. As such,  these costs may result in losses
until such time as the  Company  generates  sufficient  revenue  to offset  such
costs.

      The  following   discussion   should  be  read  in  conjunction  with  the
Consolidated  Financial  Statements  and Notes set forth above in this Quarterly
Report and the Annual Report.

(1)   OVERVIEW

      Diomed   Holdings,   Inc.   ("Diomed"  or  "the  Company")   develops  and
commercializes  minimally  invasive  medical  procedures  that  employ its laser
technologies  and  associated   disposable   products.   Using  its  proprietary
technology,  including its exclusive  rights to U.S. Patent No.  6,398,777,  the
Company  currently  focuses on endovenous laser treatment  (EVLT(R)) of varicose
veins. The Company also develops and markets lasers and disposable  products for
photodynamic  therapy (PDT) cancer  procedures  and products for other  clinical
applications, including dental and general surgical procedures.

      In  developing  and  marketing  its clinical  solutions,  the Company uses
proprietary  technology  and aims to secure strong  commercial  advantages  over
competitors by gaining governmental approvals in advance of others and obtaining
exclusive  commercial  arrangements.  To optimize  revenues,  Diomed  focuses on
clinical  procedures  that  generate  revenues  from both capital  equipment and
disposable products, such as procedure kits and optical fibers.

      Diomed's high power  semiconductor diode lasers combine clinical efficacy,
operational   efficiency  and  cost  effectiveness  in  a  versatile,   compact,
lightweight,  easy-to-use  and  easy-to-maintain  system.  Along with lasers and
single-use  procedure kits for EVLT(R),  the Company provides its customers with
state of the art  physician  training  and  practice  development  support.  The
EVLT(R)  procedure and the Company's related products were cleared by the United
States FDA in January of 2002.


                                       1
<PAGE>

In 2001,  we developed  endovenous  laser  treatment  (EVLT(R)),  an  innovative
minimally invasive laser procedure for the treatment of varicose veins caused by
greater  saphenous vein reflux.  In September 2001, we were the first company to
receive the CE mark of the European  Economic  Union for approval for endovenous
laser  treatment  with  respect to marketing  EVLT(R) in Europe.  On January 22,
2002, we were the first company to receive FDA  clearance for  endovenous  laser
treatment, with respect to marketing EVLT(R) in the US.

EVLT(R)  was a primary  source of revenue  in 2003,  and will  continue  to be a
primary  source of revenue in 2004.  We believe that EVLT(R) will achieve a high
level  of  commercial  acceptance  due to its  related  short  recovery  period,
immediate return to one's normal routine barring vigorous  physical  activities,
reduced  pain  and  minimal  scarring,  and  reduced  costs  compared  to  other
treatments  for  varicose  veins.  We  developed  our EVLT(R)  product line as a
complete  clinical solution and marketing model,  including a laser,  disposable
kit, clinical training and customized marketing programs, to assist office-based
and  hospital-based  physicians  in  responding  to the demand for  treatment of
varicose veins in a minimally  invasive manner.  We have also published a health
insurance   reimbursement  guide  to  assist  physicians  in  the  reimbursement
submission process.  We believe that these attributes,  in addition to EVLT(R)'s
superior  clinical trial  results,  favorable  peer reviews,  and  comparatively
larger and longer  follow-up  data reports  provide  EVLT(R) with a  competitive
advantage  over  competing  traditional  and  minimally  invasive  varicose vein
treatment products.

We expect that as the number of EVLT(R) procedures increases,  so will our sales
of associated  disposable items. We believe that the U.S.  represents the single
largest market for EVLT(R).  We are targeting our sales and marketing efforts at
hospitals,  private  physician  practices  and clinics.  We sell our products to
hospital and office-based  physicians in major population centers throughout the
U.S.,  focusing on  specialists in vascular  surgery,  interventional-radiology,
general surgery, phlebology, gynecology and dermatology.

We utilize a direct sales force to market our products in the United  States and
a network  of more  than 35  distributors  to market  our  products  abroad.  We
increased  the number of sales reps from 10 at December  31, 2003 to 17 by March
31, 2004.  By the end of the second  quarter we expect to reach our target of 20
sales representatives  across the U.S. This represents a significant  investment
in sales staff, as we estimate that it takes approximately two quarters before a
sales representative can deliver consistent targeted sales performance.  We also
added a clinical  specialist  to support  sales  efforts  during the quarter and
expect  to add a  second  by  the  end of the  second  quarter.  These  clinical
specialists  assist in physician  training and post-sales  support,  freeing the
sales representatives to focus on new sales opportunities.

We have  developed  and  maintain  a website  -  www.EVLT.com  - to assist  both
patients  and  physicians.  EVLT.com  provides  patients  with  education  about
treatment options and benefits of EVLT(R) and provides physicians with education
about the  EVLT(R)  procedure.  At  www.EVLT.com,  patients  can also locate the
nearest physician performing EVLT(R) by inputting their city and state.

Our  technology  and  manufacturing   capability  has  also  attracted  original
equipment  manufacturing  (OEM)  partners.  In a typical  OEM  relationship,  we
produce  the laser and other  products to the OEM's  specifications,  which will
then be marketed  under the OEM's label.  As a result,  sales of our products to
OEM partners may  fluctuate in relation to the  achievement  of their  strategic
initiatives. Our most prominent OEM relationship is with Olympus in Japan, which
uses our technology for surgical and dental applications and is currently in the
process  of  registering  EVLT(R)  in Japan.  In  addition  we have a  long-term
partnership with Dentek Lasersystems Vertriebs GmbH, which uses our laser module
for dental applications.

In 2004 we expect to continue to focus on the  development and growth of EVLT(R)
sales  in the  US  while  simultaneously  pursuing  channels  for  future  sales
worldwide,  to support the development and approval of new  applications for PDT
products,  and to continue the  development of  enhancements  to our products in
order to further improve their effectiveness and manufacturing efficiency.


                                       2
<PAGE>

(2)   RESULTS OF OPERATIONS

      THREE MONTHS ENDED MARCH 31, 2004 COMPARED TO THE THREE MONTHS ENDED MARCH
31, 2003

REVENUE

      Revenue  for the  three  months  ended  March  31,  2004  was  $2,950,000,
increasing  approximately  $826,000, or 39%, from $2,124,000 for the same period
in 2003. In the three months ended March 31, 2004, approximately  $1,803,000, or
61%,  of our total  revenue  was  derived  from  laser  sales,  as  compared  to
approximately  $1,406,000,  or 66%,  in the same  period  in 2003.  In the three
months  ended March 31,  2004,  approximately  $1,146,000,  or 39%, of our total
revenues were derived from sales of disposable fibers and kits,  accessories and
service,  as compared to approximately  $718,000,  or 34%, in the same period in
2003.  Revenue from the EVLT(R)  product line increased 53% over the same period
last year, including growth of more than 100% in disposable procedure products.

      The increase in revenue is attributable primarily to:

            o     increased penetration in the EVLT(R)market,

            o     the  compounding  impact of the recurring  revenue stream from
                  disposable sales to both new and existing customers, and

            o     the  impact of new sales  management,  and the  expansion  and
                  development of our sales team.

COST OF REVENUE AND GROSS PROFIT

Cost of  revenue  for the three  months  ended  March 31,  2004 was  $1,944,000,
increasing  approximately  $545,000, or 39%, from $1,399,000 for the same period
in 2003. Cost of revenue, as a percentage of sales,  remained stable at 66% on a
period-to-period basis.

The increase in cost of revenue in 2004 was driven by:

      -     the  corresponding  increase in the number of lasers and  disposable
            products  sold,  offset,  on a  percentage  of sales  basis,  by the
            leverage of fixed  manufacturing  costs  across a greater  number of
            units,

      -     new  royalties  and  amortization  of an  intangible  asset from the
            EVLT(R)patent acquisition, and

      -     the foreign exchange impact on materials.

Gross  profit  for the  three  months  ended  March  31,  2004  was  $1,005,000,
increasing  approximately  $281,000 from $724,000 for the same period last year.
On a  percent-of-sales-basis,  the gross  margin  remained  at 34%.  Our  prices
remained stable.

OPERATING EXPENSES

         RESEARCH AND DEVELOPMENT  EXPENSES for the three months ended March 31,
2004 were $296,000,  increasing $108,000,  or 57%, from the same period in 2003.
R&D expenditures are expected to remain at an elevated level through year-end as
we strive to improve the feature-function of our products and continue to reduce
product costs.

         SELLING AND  MARKETING  EXPENSES  for the three  months ended March 31,
2004 were $1,606,000,  increasing approximately $463,000, or 40%, over 2003. The
increase was driven by a  significant  expansion in the size of the sales force,
higher  sales  commissions  resulting  from  the  increased  sales  volume,  and
increased  marketing  expenditures in support of the sales efforts.  The Company
anticipates  increased spending in sales and marketing programs through year-end
to support the continued commercialization of EVLT(R).


                                       3
<PAGE>

      GENERAL AND  ADMINISTRATIVE  EXPENSES for the three months ended March 31,
2004 were $1,399,000,  increasing  approximately $598,000, or 75%, from the same
period in 2003.  The  increase  was  driven by  incremental  legal  fees,  sales
volume-based product liability insurance costs, infrastructure enhancements, and
a non-cash charge for stock options granted to a third-party  service  provider.
Legal  costs  included  the  initiation  of  patent   litigation   against  both
Angiodynamics and Vascular Solutions, and continuing costs of litigation against
Vascular  Solutions  in the  theft of trade  secrets  suit  filed in the  fourth
quarter of 2003.

LOSS FROM OPERATIONS

      Loss  from  operations  for the three  months  ended  March  31,  2004 was
$2,296,000,  increasing  approximately $888,000, or 63%, from $1,408,000 for the
same period in 2003.

INTEREST EXPENSE, NET

      Interest  expense for the three  months  ended March 31, 2004 was $12,000,
compared to $589,000 for the same period in 2003.  Interest expense in the three
months ended March 31, 2003 included  non-cash charges totaling $520,000 related
to the December 2002 debt financing for the  amortization  of the  corresponding
discount and beneficial conversion feature.

NET LOSS APPLICABLE TO COMMON STOCKHOLDERS

      Net loss  applicable  to common  stockholders  for the three  months ended
March 31, 2004 was $2,308,000,  or $0.01 per share,  compared to $1,997,000,  or
$0.13  per  share,  for the same  period  in 2003.  As a  result  of the  equity
financing,  basic weighted average common shares  outstanding  increased from 16
million  shares  to 329  million  shares  for the  corresponding  2003  and 2004
quarters.

(3)   LIQUIDITY, CAPITAL RESOURCES AND CAPITAL TRANSACTIONS

CASH POSITION AND CASH FLOW

      The  Company  has  financed  its  operations   primarily  through  private
placements  of common  stock and  preferred  stock,  and private  placements  of
convertible  notes and short-term  notes and credit  arrangements.  In September
2003,  we entered  into an equity  financing  transaction  pursuant  to which we
raised gross proceeds of $22,000,000 and satisfied  $1,200,000 in debt we issued
in the May 2003 bridge financing. Of the new cash proceeds, the Company utilized
approximately $8.6 million as follows: $2,250,000 in initial payments to acquire
the exclusive  rights to the EVLT(R)  patent,  $2,132,000 to retire the December
2002 notes, $438,000 to retire short-term notes,  $1,160,000 in equity financing
costs, $1,141,000 in the reduction of trade payables,  $150,000 in the Augenbaum
settlement, and $1,329,000 in working capital from September through December.

      The Company had cash balances of approximately  $8,315,000 and $13,398,000
at March 31, 2004 and December 31, 2003,  respectively.  At March 31, 2004,  the
ending  cash  balance  reflected  a $5.1  million  reduction  in cash during the
quarter and  included  $2.3  million in payments  not expected to recur in 2004;
specifically  $1.2 million in debt  repayments  (including  the  $936,000  Axcan
note),  $261,000 in costs related to the 2003 equity financing,  and $875,000 in
annual insurance premiums and other annual costs which benefit future quarters.

      Cash used in  operations  for the three  months  ended  March 31, 2004 was
approximately   $3,325,000.   This  principally  results  from  the  approximate
$2,300,000 loss from operations,  and $875,000 in annual insurance  premiums and
other annual costs (primarily sales  volume-based  product  liability  insurance
costs).  The cash used in operations also reflects the significant  expansion in
the size of the sales force and external marketing initiatives in support of the
commercialization of EVLT(R).


                                       4
<PAGE>

      Cash used in  investing  activities  for the three  months ended March 31,
2004 was approximately $117,000,  primarily demonstration equipment and customer
trial programs.

      Cash used in  financing  activities  for the three  months ended March 31,
2004 was approximately $1,617,000. This primarily includes the retirement of the
promissory note to Axcan Pharma in the aggregate principal amount of $936,000, a
reduction in the UK tradeline  facility with Barclay's Bank  ($262,000),  and in
legal  and other  fees  related  to the  recent  resale  and  targeted  offering
registration statements ($194,000). Financing activities also included a payment
of $219,000 related to current maturities of the EVLT(R) technology  acquisition
obligation.

FUTURE AVAILABILITY OF CREDIT

As of January 2, 2004,  after  repayment  of the  promissory  note held by Axcan
Pharma,  our assets are not subject to any liens or encumbrances  other than the
security under the Barclays Bank line of credit.  These unencumbered  assets are
available as security for credit facilities we may seek in the future.

OFFERING TO STOCKHOLDERS AS OF AUGUST 29, 2003

      The terms of the equity financing  contemplated  that we would commence an
offering of up to 29,711,749 shares of common stock to the holders of our common
stock as of August 29, 2003. We filed a  registration  statement to register the
shares to be  offered  to the  stockholders  as of  August  29,  2003,  and that
registration statement was declared effective by the SEC on February 13, 2003.

      On  April  20,  2004,  The  Company  announced  that  it had  successfully
completed  its offering to those  persons who held shares of its common stock on
August 29, 2003,  raising the  approximate  $3.0 million  maximum in  additional
equity  financing.  The offering,  for 29,711,749 shares of the Company's common
stock at $0.10 per share, allowed stockholders as of August 29, 2003 to purchase
one share of the  Company's  common stock for each share of common stock held on
August 29, 2003. The offering also included an  "over-subscription  right" which
allowed  stockholders  to  purchase  additional  shares to the extent the "basic
rights" were not fully  subscribed.  Proceeds from the offering will be included
in the  second quarter 2004 balances and used to support the Company's continued
growth and intellectual property strategies.

BANK LINE OF CREDIT

      Diomed,  Ltd., the Company's United Kingdom-based  subsidiary,  utilizes a
line of credit  with  Barclays  Bank,  limited to the  lesser of  (pound)350,000
($644,000 at March 31, 2004) or 80% of eligible accounts receivable.  The credit
line bears interest at a rate of 3% above Barclays base rate (4.00% at September
30, 2003) and borrowings are due upon collection of receivables  from customers.
As security interest,  Barclay's Bank has a lien on all of the assets of our U.K
subsidiary,  Diomed Ltd., excluding certain intellectual  property.  As of March
31, 2004, there were no amounts outstanding under this line and available future
borrowing  capacity of  approximately  $268,000.


                                       5
<PAGE>

(4)   CRITICAL ACCOUNTING POLICIES

      In the  opinion of  management,  these  unaudited  consolidated  financial
statements contain all adjustments considered normal and recurring and necessary
for their fair presentation.  Interim results are not necessarily  indicative of
results to be expected for the year.  These interim  financial  statements  have
been  prepared  in  accordance  with  the  instructions  for  Form  10-QSB,  and
therefore, do not include all information and footnotes necessary for a complete
presentation of operations, financial position, and cash flows of the Company in
conformity with accounting  principles  generally accepted in the United States.
The Company filed with the Securities and Exchange Commission on March 30, 2004,
audited consolidated  financial statements for the year ended December 31, 2003,
and included  information and footnotes  necessary for such presentation.  These
unaudited  consolidated  financial statements should be read in conjunction with
the audited  consolidated  financial  statements for the year ended December 31,
2003.

      Our discussion and analysis of the Company's financial condition,  results
of operations,  and cash flows are based on the Company's consolidated financial
statements.  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 these estimates,  including those
related to bad debts,  inventory valuation and obsolescence,  intangible assets,
income taxes,  warranty obligations,  contingencies and litigation.  We base our
estimates on  historical  experience  and on various other  assumptions  that we
believe to be reasonable under the circumstances,  the results of which form the
basis for making  judgments  about the carrying values of assets and liabilities
that are not readily apparent from other sources. Actual results may differ from
these estimates under different assumptions or conditions.

ITEM 3. CONTROLS AND PROCEDURES

      (a) Evaluation of disclosure controls and procedures.

      The Company's  principal  executive  officer and its  principal  financial
officer have carried out an evaluation of the  effectiveness  of our  disclosure
controls and  procedures  (as defined in Rules 13a -15e and 15d-15(e)  under the
Securities  Exchange Act of 1934) as of March 31, 2004 and have concluded  that,
as of such date, the Company's  disclosure  controls and procedures in place are
adequate  to  ensure  material  information  and  other  information   requiring
disclosure is identified and communicated on a timely basis.

      (b) Changes in internal control over financial reporting.

During the period covered by this report, there have been no significant changes
in our internal control over financial  reporting that have materially  affected
or are  reasonably  likely  to  materially  affect  our  internal  control  over
financial reporting.


PART II.  OTHER INFORMATION


ITEM 1. LEGAL PROCEEDINGS

On December 12, 2003, we filed a lawsuit in the United States  Federal  District
Court for the  District of  Massachusetts  seeking  injunctive  and other relief
against Vascular  Solutions,  Inc. and one of its executives.  We allege,  among
other things,  that Vascular  Solutions  and the executive  misappropriated  our
trade secrets and then  improperly  used that  information to develop and market
laser  accessory  products.  We also  seek to  redress  what we allege to be the
willful and deceptive manner in which Vascular  Solutions has been marketing its
laser accessory products by, among other things:


                                       6
<PAGE>

      -     infringing our registered EVLT(R)mark;

      -     marketing Vascular  Solutions' products in a way designed to confuse
            consumers as to the source and origin of its products;

      -     making false and defamatory statements about us and our products;

      -     tortiously  interfering  with our existing and prospective  customer
            relationships; and

      -     tortiously interfering  with agreements  previously  entered into by
            the executive and us that prohibit the executive from disclosing our
            confidential  information  to Vascular  Solutions or any other third
            party.

On March  4,  2004,  we filed a second  lawsuit  in the  United  States  Federal
District Court for the District of Massachusetts  seeking  injunctive relief and
damages  for  infringement  of our  US  Patent  Number  6,398,777  covering  the
endovascular  laser  treatment  of  varicose  veins  which we use in our EVLT(R)
product line, the exclusive rights to which we acquired on September 3, 2003.

As of  March  19,  2004,  Vascular  Solutions  has not  filed an  answer  to our
complaint.  In a press  release,  Vascular  Solutions has  generally  denied our
allegations.

On January 6, 2004,  we filed a lawsuit in the United  States  Federal  District
Court  for  the  District  of  Massachusetts  against  AngioDynamics,   Inc.,  a
subsidiary  of  E-Z-EM,   Inc.,   seeking  injunctive  relief  and  damages  for
infringement of our US Patent Number 6,398,777  covering the endovascular  laser
treatment  of  varicose  veins  which  we  use  in  our  EVLT(R)  product  line.
AngioDynamics  has generally denied our allegations and has sought a declaratory
judgment of invalidity of the EVLT(R) patent. We are proceeding to the discovery
phase of this litigation.

On April 5, 2004, we filed a lawsuit in the United States Federal District Court
for the District of  Massachusetts  against Total Vein Solutions,  LLC,  seeking
injunctive relief and damages for infringement of our US Patent Number 6,398,777
covering the endovascular  laser treatment of varicose veins which we use in our
EVLT(R) product line.

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

During the first quarter of 2004,  the Company  issued options to purchase up to
19,688,970 shares of its common stock as follows:

<TABLE>
<CAPTION>
                                            Options Granted
                                        (Expressed in Shares of
Optionee                                      Common Stock)        Exercise Price
---------------                         -----------------------    ------------------------
<S>                                         <C>                    <C>
Board of Directors                          4,500,000              $0.20
CEO (and a director)                        6,700,000              (2,700,000 at $0.18 and
                                                                   4,000,000 at $0.20)
CFO (and a director)                        1,500,000              $0.20
Other Executive Employees                   2,800,000              $0.20
Non-Executive Employees                     3,687,500              $0.20
Service Provider                              500,000              $0.20
Two consultants                                 1,470              $0.27
                                           ----------
                                           19,688,970
                                           ==========
</TABLE>

         The  Company  issued  securities  to the  above-referenced  persons  in
reliance upon the exemption  from  registration  set forth under Section 4(2) of
the Securities Act of 1933, as amended. Each such person agreed that neither the


                                       7
<PAGE>

options nor notes,  as the case may be, nor the underlying  securities  would be
resold without  registration  under the  Securities Act or exemption  therefrom.
Each such person also represented his or her intention to acquire the securities
for investment only, and not with a view to the distribution  thereof.  Prior to
making any offer or sale, Diomed had reasonable  grounds to believe and believed
that the  purchaser  was  capable  of  evaluating  the  merits  and risks of the
investment and was able to bear the economic risk of the investment  represented
by the options granted.

ITEM 5. OTHER

TARGETED OFFERING

      On  April  20,  2004,  The  Company  announced  that  it had  successfully
completed  its offering to those  persons who held shares of its common stock on
August 29, 2003,  raising the  approximate  $3.0 million  maximum in  additional
equity  financing.  The offering,  for 29,711,749 shares of the Company's common
stock at $0.10 per share, allowed stockholders as of August 29, 2003 to purchase
one share of the  Company's  common stock for each share of common stock held on
August 29, 2003. The offering also included an  "over-subscription  right" which
allowed  stockholders  to  purchase  additional  shares to the extent the "basic
rights" were not fully  subscribed.  Proceeds form the offering will be included
in the second quarter 2004 balances and used to support the company's  continued
growth and intellectual property strategies

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

      31.1  Certification by the Chief Executive Officer pursuant to Section 302
            of the Sarbanes-Oxley Act of 2002

      31.2  Certification by the Chief Financial Officer pursuant to Section 302
            of the Sarbanes-Oxley Act of 2002

      32.1  Certification of Principal Executive Officer pursuant to Section 906
            of the Sarbanes-Oxley Act of 2002

      32.2  Certification of Principal Financial Officer pursuant to Section 906
            of the Sarbanes-Oxley Act of 2002

      (b) Reports on Form 8-K.  State whether any reports on Form 8-K were filed
during the quarter for which this report is filed,  listing the items  reported,
any financial statements filed and the dates of such reports:

      On January 8, 2004,  the Company filed a Form 8-K in  connection  with its
litigation  against  AngioDynamics,  Inc., a  subsidiary  of E-Z-EM,  Inc.,  for
infringement of its US Patent Number 6,398,777  covering the endovascular  laser
treatment of varicose veins which we use in our EVLT(R) product line.

      On February 19, 2004, the Company filed a Form 8-K in connection  with its
announcement of the Company's  results of operations for the year ended December
31, 2003.

      On March 3, 2004,  the  Company  filed a Form 8-K in  connection  with the
resignation of Samuel  Belzberg from the board of directors on February 23, 2004
and the Company's  subsequent  election of Joseph Harris on February 24, 2004 to
fill  the   corresponding   vacancy  on  the  board  caused  by  Mr.  Belzberg's
resignation.


                                       8
<PAGE>

SIGNATURES

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


                                   DIOMED HOLDINGS, INC.
                                   (REGISTRANT)



                                   By:  /s/ JAMES A. WYLIE, JR.
                                   ---------------------------------------------
                                   Name:  James A. Wylie, Jr.
                                   Title: President and Chief Executive Officer,
                                   Director

                                   Date:  May 13, 2004




                                   By:  /s/ DAVID B. SWANK
                                   ---------------------------------------------
                                   Name:  David B. Swank
                                   Title: Chief Financial Officer

                                   Date:  May 13, 2004


                                       9