U.S. Securities and Exchange
                        Commission Washington, D.C. 20549

                                  Form 10-QSB/A
                                 Amendment No. 1

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

                For the quarterly period ended June 30, 2004

                                       OR

         [  ]   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                SECURITIES ACT OF 1934

                For the transition period from _____ to _____


                         Commission file number 0-27937

                           DRAGON PHARMACEUTICAL INC.
        (Exact name of small business issuer as specified in its charter)



             Florida                                        65-0142474
(State or other jurisdiction of                (IRS Employer Identification No.)
 incorporation or organization)



                      1055 West Hastings Street, Suite 1900
                           Vancouver, British Columbia
                                 Canada V6E 2E9
                    (Address of principal executive offices)

                                 (604) 669-8817
                          (Issuer's telephone number)

                  (Former address if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required
to be  filed by  Section  13 or 15(d) of the  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 [ ]


Number of shares of common stock outstanding as of June 30, 2004: 20,582,000


<PAGE>

                          PART I. FINANCIAL INFORMATION

Item 1.   Financial Statements




          DRAGON PHARMACEUTICAL INC.
          & SUBSIDIARIES


          Consolidated Financial Statements
          (Unaudited - Prepared by Management)
          (Expressed in U.S. Dollars)
          June 30, 2004

          Index

          Consolidated Balance Sheets

          Consolidated Statements of Stockholders' Equity

          Consolidated Statements of Operations

          Consolidated Statements of Cash Flows

          Notes to Consolidated Financial Statements


                                       2
<PAGE>

DRAGON PHARMACEUTICAL INC. & SUBSIDIARIES
Consolidated Balance Sheets
June 30, 2004 and December 31, 2003
(Expressed in U.S. Dollars)
(Unaudited - Prepared by Management)
<TABLE>
<CAPTION>
<S>                  <C>                                                                        <C>                    <C>
----------------------------------------------------------------------------------------------------------------------------------
                                                                                           As Restated
                                                                                        (see notes 1, 17)
                                                                                          June 30, 2004         December 31, 2003
----------------------------------------------------------------------------------------------------------------------------------
ASSETS

Current
  Cash and short term securities                                                    $          2,608,594      $         3,126,667
  Accounts receivable                                                                          1,407,671                1,265,676
  Inventories                                                                                  1,130,847                1,090,464
  Due from director                                                                              500,100                        -
  Prepaid and deposits                                                                            92,670                  139,595
----------------------------------------------------------------------------------------------------------------------------------

Total current assets                                                                           5,739,882                5,622,402

Fixed assets                                                                                   1,912,249                2,089,352

Due from related party - Hepatitis B vaccine project                                                   -                      100

Patent rights - related party                                                                          -                  500,000

Licence and permit and other assets                                                            2,803,178                2,924,198
----------------------------------------------------------------------------------------------------------------------------------

Total assets                                                                        $         10,455,309      $        11,136,052
==================================================================================================================================

LIABILITIES AND STOCKHOLDERS' EQUITY

Liabilities

Current
  Accounts payable and accrued liabilities                                                     1,325,780                1,428,257
----------------------------------------------------------------------------------------------------------------------------------

Commitments (Note 12)

Stockholders' Equity

Share capital
  Authorized:  50,000,000 common shares at
    par value of $0.001 each
  Issued and outstanding:  20,582,000 common shares                                               20,582                   20,462

Additional paid in capital                                                                    26,768,750               26,708,870

Accumulated other comprehensive (loss)                                                          (32,845)                 (32,007)

Accumulated deficit                                                                         (17,626,958)             (16,989,530)
----------------------------------------------------------------------------------------------------------------------------------

Total stockholders' equity                                                                     9,129,529                9,707,795
----------------------------------------------------------------------------------------------------------------------------------

Total liabilities and stockholders' equity                                          $         10,455,309      $        11,136,052
==================================================================================================================================
</TABLE>
The accompanying notes are an integral part of these financial statements.

                                       3

<PAGE>

<TABLE>
<CAPTION>
<S>     <C>                                  <C>       <C>           <C>            <C>          <C>            <C>            <C>
DRAGON PHARMACEUTICAL INC. & SUBSIDIARIES
Consolidated Statements of Stockholders' Equity
(Expressed in U.S. Dollars)
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                         Accumulated
                                                                                   Compre-                     other           Total
                                              Common stock         Additional      hensive                    compre-         Stock-
                                         --------------------         paid-in       income        Deficit     hensive       holders'
                                             Shares    Amount         capital       (loss)    accumulated      income         equity
------------------------------------------------------------------------------------------------------------------------------------

Balance, December 31, 2002               20,334,000    $20,334    $26,644,998            -   $(14,994,795)   $(35,011)   $11,635,526

Exercise of stock options for cash          128,000        128         63,872            -              -            -        64,000

Components of comprehensive income (loss)
 - foreign currency translation                   -          -              -        3,004              -       3,004          3,004

- net (loss) for the year                         -          -              -   (1,994,735)    (1,994,735)          -    (1,994,735)
------------------------------------------------------------------------------------------------------------------------------------
Comprehensive (loss)                                                             $(1,991,731)
                                                                                 ============
Balance, December 31, 2003               20,462,000     $20,462    $26,708,870                $(16,989,530)   $(32,007)   $9,707,795
================================================================================              ======================================
The accompanying notes are an integral part of these financial statements.
</TABLE>
                                       4


<PAGE>



<TABLE>
<CAPTION>
<S>     <C>                                  <C>       <C>           <C>            <C>          <C>            <C>            <C>
DRAGON PHARMACEUTICAL INC. & SUBSIDIARIES
Consolidated Statements of Stockholders' Equity
(Expressed in U.S. Dollars)
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                         Accumulated
                                                                                   Compre-                     other           Total
                                              Common stock         Additional      hensive                    compre-         Stock-
                                         --------------------         paid-in       income        Deficit     hensive       holders'
                                             Shares    Amount         capital       (loss)    accumulated      income         equity
------------------------------------------------------------------------------------------------------------------------------------

Balance, December 31, 2003               20,462,000   $20,462     $26,708,870            -   $(16,989,530)  $(32,007)     $9,707,795

Exercise of stock options for cash          120,000       120          59,880                                                 60,000

Components of comprehensive income (loss)
 - foreign currency translation                   -         -               -         (838)             -      (838)           (838)

- net (loss) for the period                       -         -               -     (637,428)      (637,428)        -        (637,428)
------------------------------------------------------------------------------------------------------------------------------------
Comprehensive (loss)                                                             $(638,266)
                                                                                 ===========
Balance, June 30, 2004                    20,582,000  $20,582     $26,768,750                 $(17,626,958)  $(32,845)    $9,129,529
==============================================================================                ======================================
The accompanying notes are an integral part of these financial statements.
</TABLE>

                                       5

<PAGE>


DRAGON PHARMACEUTICAL INC. & SUBSIDIARIES
Consolidated Statement of Operations
(Expressed in U.S. Dollars)
(Unaudited - Prepared by Management)
<TABLE>
<CAPTION>
<S>          <C>                                                   <C>              <C>               <C>
------------------------------------------------------------------------------------------------------------------------------------
                                                             Three Months      Three Months       Six Months         Six Months
                                                                 Ended             Ended             Ended             Ended
                                                               June 30,          June 30,          June 30,           June 30,
                                                                 2004              2003              2004               2003
------------------------------------------------------------------------------------------------------------------------------------

Sales                                                               $908,145        $1,007,686        $1,786,415         $1,672,009

Cost of sales                                                        194,755           326,988           441,497            528,269
------------------------------------------------------------------------------------------------------------------------------------

Gross profit                                                         713,390           680,698         1,344,918          1,143,740

Selling, general and
  administrative expenses                                          (784,051)         (723,743)       (1,462,937)        (1,692,302)

Depreciation of fixed assets and
  amortization of licence and
  permit and land-use right                                        (179,412)         (183,896)         (358,854)          (369,195)

Net write off of land-use right and fixed assets                           -                 -                 -                  -

Research and development expenses                                  (151,472)                 -         (152,007)                  -

New market development                                              (12,404)           (8,234)          (12,404)           (23,713)

Provision for doubtful debts                                           6,257          (10,701)          (20,816)           (41,412)

Interest expense                                                       (747)             (929)           (1,516)            (4,389)

Stock-based compensation                                                   -                 -                 -                  -
------------------------------------------------------------------------------------------------------------------------------------

Operating loss                                                     (408,439)         (246,805)         (663,616)          (987,271)

Interest income                                                       20,435            10,381            26,189             16,819
------------------------------------------------------------------------------------------------------------------------------------

Net (loss) for the period                                         $(388,004)        $(236,424)        $(637,427)         $(970,452)
====================================================================================================================================

(Loss) per share
      Basic and diluted                                           $   (0.02)        $   (0.01)        $   (0.03)         $   (0.05)
====================================================================================================================================

Weighted average number of
  common shares outstanding
      Basic and diluted                                           20,560,022        20,334,000        20,511,011         20,334,000
====================================================================================================================================
</TABLE>
The accompanying notes are an integral part of these financial statements.

                                       6
<PAGE>
DRAGON PHARMACEUTICAL INC. & SUBSIDIARIES
Consolidated Statements of Cash Flows
Six Months Ended June 30, 2004 and 2003
(Expressed in U.S. Dollars)
(Unaudited - Prepared by Management)
<TABLE>
<CAPTION>
<S>                                                                                             <C>                     <C>
-----------------------------------------------------------------------------------------------------------------------------
                                                                                                 2004                   2003
-----------------------------------------------------------------------------------------------------------------------------

Cash flows from (used in) operating activities
   Net (loss) for the period                                                       $        (637,428)     $        (970,452)
   Adjustments to reconcile net loss to
     net cash used in operating activities:
     - depreciation of property and equipment and amortization
          of licence and permit                                                               473,564                477,415
     - provision for doubtful debts                                                            20,816                 41,412
  Changes in non-cash working capital items:
     - accounts receivable                                                                  (162,811)               (29,098)
     - inventories                                                                           (40,383)                 21,337
     - prepaid expenses and deposits                                                           46,925                (3,405)
     - accounts payable and accrued liabilities                                             (102,477)               (84,860)
-----------------------------------------------------------------------------------------------------------------------------

                                                                                            (401,794)              (547,651)
-----------------------------------------------------------------------------------------------------------------------------

Cash flows used in investing activities
  Purchase of property and equipment                                                         (20,486)               (38,559)
  (Increase) in other assets                                                                (155,000)                      -
  (Increase) decrease in restricted funds                                                           -                510,000
-----------------------------------------------------------------------------------------------------------------------------

                                                                                            (175,486)                471,441
-----------------------------------------------------------------------------------------------------------------------------

Cash flows from financing activities
  Issuance of common shares                                                                    60,000                      -
  Loan proceeds                                                                                     -              (483,162)
-----------------------------------------------------------------------------------------------------------------------------

                                                                                               60,000              (483,162)
-----------------------------------------------------------------------------------------------------------------------------

Foreign exchange (gain) loss on cash
  held in foreign currency                                                                      (793)                  3,879
-----------------------------------------------------------------------------------------------------------------------------

 Decrease in cash and cash equivalents                                                      (518,073)              (555,493)

Cash and cash equivalents, beginning of period                                              3,126,667              4,425,766
-----------------------------------------------------------------------------------------------------------------------------

Cash and cash equivalents, end of period                                           $        2,608,594     $        3,870,273
=============================================================================================================================
The accompanying notes are an integral part of these financial statements.
</TABLE>

                                       7
<PAGE>
DRAGON PHARMACEUTICAL INC. & SUBSIDIARIES
Notes to Consolidated Financial Statements
June 30, 2004
(Expressed in U.S. Dollars)
(Unaudited - Prepared by Management)
--------------------------------------------------------------------------------

1.   Significant Accounting Development

     As disclosed in Note 17, the Company is restating its Consolidated  Balance
     Sheet as at June 30,  2004 to  reinstate  an  allotment  of 250,000  common
     shares.  The shares were allotted  fulfil the  Company's  obligation to its
     Sanhe Kailong  Bio-pharmaceutical Limited Joint Venture partner as a result
     of the Company  decision to pursue the  development  of  manufacturing  and
     selling EPO through Nanjing Huaxin  Bio-phamacuetical  Co. Ltd.  instead of
     Sanhe Kailong Bio-pharmaceutical.

     For purposes of the Form 10-QSB/A, and in accordance with Rule 12b-15 under
     the  Securities  Exchange Act of 1934, the Company has amended and restated
     in its  entirety  each item of the Form  10-QSB  that was  affected  by the
     restatement.  In  order  to  preserve  the  nature  and  character  of  the
     disclosures  provide in the Form 10-QSB as they were originally,  filed, no
     attempt was made to modify or update any disclosures  except those required
     to reflect the effects of the restatement.

2.   Basis of Presentation

     The accompanying unaudited interim consolidated balance sheets,  statements
     of  operations  and cash flows  reflected  all  adjustments,  consisting of
     normal  recurring  adjustments  and other  adjustments,  that  are,  in the
     opinion of management,  necessary for a fair  presentation of the financial
     position of the Company,  at June 30, 2004,  and the results of  operations
     and cash flows for the interim periods ended June 30, 2004 and 2003.

     The  accompanying  unaudited  consolidated  financial  statements have been
     prepared in accordance with the instruction for Form 10-QSB pursuant to the
     rules and regulations of Securities and Exchange Commission and, therefore,
     do not  include  all  information  and notes  normally  provided in audited
     financial  statements and should be read in conjunction  with the Company's
     consolidated  financial  statements  for the year ended  December  31, 2003
     included in the annual report previously filed on Form 10-KSB.

     The  results  of  operations  for the  interim  periods  presented  are not
     necessarily indicative of the results to be expected for the full year.

3.   Proposed Business Combination

     The Company has entered into a definitive  Share  Purchase  Agreement  with
     Oriental Wave Holding Ltd. ("Oriental") whereby the Company would issue its
     common  shares in  exchange  for all the issued and  outstanding  shares of
     Oriental.   The  transaction  is  subject  to  approval  by  the  Company's
     shareholders and the regulatory authorities.

     If the acquisition is consummated, the former shareholders of Oriental will
     own 68.35% of the issued and  outstanding  shares of the  combined  Company
     resulting in accounting  principles applicable to reverse acquisition being
     applied to record the transaction. Under this basis of accounting, Oriental
     would be the acquirer and,  accordingly,  the consolidated  entity would be
     considered  to be a  continuation  of  Oriental  with the net assets of the
     Company deemed to have been acquired and recorded at fair market value.

                                       8
<PAGE>
DRAGON PHARMACEUTICAL INC. & SUBSIDIARIES
Notes to Consolidated Financial Statements
June 30, 2004
(Expressed in U.S. Dollars)
(Unaudited - Prepared by Management)
--------------------------------------------------------------------------------

4.   Accounts Receivable

     ---------------------------------------------------------------------------
                                             June 30,         December 31,
                                                2004                 2003
     ---------------------------------------------------------------------------

     Trade receivables                   $ 1,683,549          $ 1,524,465
     Allowance for doubtful accounts        (326,967)            (298,284)
     ----------------------------------------------------------------- ---------
                                           1,356,582            1,226,181
     Other receivables                        51,088               39,495
     ----------------------------------------------------------------- ---------
                                         $ 1,407,670          $ 1,265,676
     ===========================================================================

5.   Inventories

     ---------------------------------------------------------------------------
                                             June 30,         December 31,
                                                2004                 2003
     ---------------------------------------------------------------------------

     Raw materials                         $ 112,109           $ 129,650
     Finished goods                          106,160             107,833

     Work in progress                        912,578             852,981

     ---------------------------------------------------------------------------
                                         $ 1,130,847         $ 1,090,464
     ===========================================================================

6.   Due from director

     The Company  entered into an agreement  with Dr. Longbin Liu, a director of
     the Company, to settle the amount owing to the Company from his acquisition
     of the  Hepatitis B Project  (note 7) as well as cancel the Patent (note 8)
     and Project Development (note 12) agreements between the parties. Under the
     terms of the  settlement  agreement,  the G-CSF,  Insulin  and  Hepatitis B
     Projects,  including  the rights of ownership and  development  obligations
     would revert to Dr. Liu.

     In exchange, Dr Liu will pay to the Company the $3,710,000 in principal and
     interest  owing  under the  Hepatitis  B Project as well as  reimburse  the
     Company  $1,330,000  that had been paid  previously  under the  Patent  and
     Project Development  agreements.  All amounts are due December 31, 2004 and
     Dr. Liu has agreed to provide 2,600,000 common shares of the Company, to be
     held in escrow,  as security  for the  amounts  owing,  of which  2,200,000
     common shares have been placed in escrow as of June 30, 2004.  The warrants
     granted  to Dr.  Liu under the  Patent  Development  agreement  havel  been
     cancelled.

     The  carrying  value of the amount due from Dr.  Liu is  equivalent  to the
     previous  carrying  value of the Patent  Rights and the Hepatitis B Project
     amount owing.
                                       9
<PAGE>
DRAGON PHARMACEUTICAL INC. & SUBSIDIARIES
Notes to Consolidated Financial Statements
June 30, 2004
(Expressed in U.S. Dollars)
(Unaudited - Prepared by Management)
--------------------------------------------------------------------------------

7.   Property and equipment
<TABLE>
<CAPTION>
<S>                     <C>                                 <C>                   <C>                    <C>
     ------------------------------------------- --------------------------------------------------------------
                                                                              June 30, 2004
                                                      ---------------------------------------------------------
                                                                               Accumulated            Net book
                                                             Cost             depreciation             value
    -------------------------------------------- ------------------- ---------------------- -------------------
    Motor vehicles                                        $ 126,444               $ 77,731            $ 48,713
    Office equipment and furniture                          412,688                256,629             156,059
    Leasehold improvements                                1,088,528                479,646             608,882
    Production and lab equipment                          1,630,604                794,094             836,510
    Idle equipment                                          555,339                293,254             262,085
    -------------------------------------------- ------------------- ---------------------- -------------------
                                                         $3,813,603             $1,901,354          $1,912,249
    ============================================ =================== ====================== ===================

    -------------------------------------------- --------------------------------------------------------------
                                                                            December 31, 2003
                                                 --------------------------------------------------------------
                                                                               Accumulated            Net book
                                                             Cost             depreciation             value
    -------------------------------------------- ------------------- ---------------------- -------------------
    Motor vehicles                                         $140,423               $ 75,996            $ 64,427
    Office equipment and furniture                          414,759                221,076             193,683
    Leasehold improvements                                1,089,006                418,888             670,118
    Production and lab equipment                          1,595,450                708,841             886,609
    Idle equipment                                          555,339                280,824             274,515
    -------------------------------------------- ------------------- ---------------------- -------------------
                                                        $ 3,794,977            $ 1,705,625         $ 2,089,352
    ============================================ =================== ====================== ===================
</TABLE>
     For the  six-months  ended June 30, 2004,  depreciation  expenses  totalled
     $197,589  (2003 -  $201,374).  The  majority of fixed assets are located in
     China.

8.   Due from Related Party - Hepatitis B Vaccine Project

     ---------------------------------------------------------------------------
                                                   June 30,         December 31,
                                                       2004                 2003
     ---------------------------------------------------------------------------
     Hepatitis B Vaccine Project                       $ -           $4,000,000

     Less : Repayment                                    -             (500,000)
            Valuation allowance                          -           (3,499,900)
     ---------------------------------------------------------------------------
                                                      $  -                $  100
     ===========================================================================

     (a)  Pursuant to an  agreement  dated  October 6, 2000,  the  Company  paid
          $4,000,000  for the  acquisition  of  certain  assets  and  technology
          relating to the  production of Hepatitis B vaccine.  The vendor of the
          transaction  was a company  named  Alphatech  Bioengineering  Limited,
          incorporated  in  Hong  Kong,  with  two  shareholders  who  are  both
          directors of the Company.

     (b)  Pursuant to an amended agreement dated June 5, 2001, in the event that
          the  Company  failed  to find a joint  venture  partner,  establish  a
          production  facility for the vaccine  project or sell the project to a
          third party within nine months from the date of the amended agreement,
          Dr.  Longbin Liu, a director of the Company (and  President and CEO of
          the  Company  at  the  time  of  the   transaction)  and  one  of  the
          shareholders of Alphatech, demanded to repurchase the project from the
          Company. The repurchase price of $4.0 million is payable as follows:

                                       10
<PAGE>
DRAGON PHARMACEUTICAL INC. & SUBSIDIARIES
Notes to Consolidated Financial Statements
June 30, 2004
(Expressed in U.S. Dollars)
(Unaudited - Prepared by Management)
--------------------------------------------------------------------------------

8.   Due from Related Party - Hepatitis B Vaccine Project (Continued)

          (i)  $500,000 at the date of repurchase; and

          (ii) the balance to be paid within eighteen (18) months of the date of
               repurchase  with  interest at 6% per annum.  The interest will be
               accrued from six months after the date of repurchase.

     In April 2002,  the  Company  decided not to pursue the project and Dr. Liu
     has repurchased the project on the agreed terms.

     The amount  owing by Dr. Liu to the  Company  was  unsecured.  The  Company
     chose, given the significant  amount involved and the lack of security,  to
     conservatively value the amount owing and set up a provision in fiscal 2002
     for the full amount,  less a nominal  amount of $100.  Dr. Liu defaulted on
     repayment in September 2003 but subsequently  renegotiated  repayment terms
     with the Company (see note 5).

9.   Patent Rights - Related Party

     Pursuant to an agreement dated January 14, 2002, the Company entered into a
     Patent  Development  Agreement  with the Dr. Longbin Liu, a director of the
     Company  (and  President  and  CEO  of  the  Company  at  the  time  of the
     transaction) and a company  controlled by the Dr. Liu entitling the Company
     to acquire one patent filed in the United  States  related to the discovery
     of a new gene or protein. Consideration for the right to acquire the patent
     was  payment of  $500,000  (paid) and the  issuance  of warrants to acquire
     1,000,000  common shares of the Company at a price of $2.50 per share for a
     period of five years.  The patent may be acquired prior to January 14, 2005
     at no additional  cost other than the  reasonable  legal costs of obtaining
     the patent.

     The issuance and exercise of the warrants to acquire 1,000,000 common stock
     of the Company is contingent  upon the success of the patent  applications.
     The $500,000 will be refunded to the Company if no patent applications have
     been filed by January 14, 2005. The Company has reached settlement with Dr.
     Liu on this  and  other  projects  (note  5) and  the  warrants  have  been
     cancelled

10.  Licence and permit and other assets

     ---------------------------------------------------------------------------
                                                   June 30,         December 31,
                                                       2004                 2003
     ---------------------------------------------------------------------------

     Original cost                               $5,012,582           $5,012,582
     Accumulated amortization                    (2,364,404)         (2,088,384)
     ---------------------------------------------------------------------------

     Licence and permit                           2,648,178            2,924,198
     Other assets                                   155,000                    -
     ---------------------------------------------------------------------------

                                                 $2,803,178          $ 2,924,198
     ===========================================================================

     Amortization  expense for the licence and permit for the  six-months  ended
     June 30, 2004 was $275,975 (2003 - $275,956)

                                       11
<PAGE>
DRAGON PHARMACEUTICAL INC. & SUBSIDIARIES
Notes to Consolidated Financial Statements
June 30, 2004
(Expressed in U.S. Dollars)
(Unaudited - Prepared by Management)
--------------------------------------------------------------------------------

10.  Licence and permit and other assets (Continued)

     The estimated  amortization  expense for each of the five succeeding fiscal
     years is as follows:

         2004     (balance of the year)                       $276,000
         2005                                                 $552,000
         2006                                                 $552,000
         2007                                                 $552,000
         2008                                                 $552,000

     The above amortization  expense forecast is an estimate.  Actual amounts of
     amortization  expense may differ from  estimated  amounts due to additional
     intangible asset acquisitions,  changes in foreign currency exchange rates,
     impairment of intangible  assets,  accelerated  amortization of licence and
     permit, and other events.

11.  Income Taxes

     (a)  Kailong and Huaxin are subject to income taxes in China on its taxable
          income  as  reported  in  its  statutory  accounts  at a tax  rate  in
          accordance with the relevant income tax laws.

          Allwin and  Biotrade are not subject to income  taxes.  As at June 30,
          2004,   $3.9   million  of   unremitted   earnings   attributable   to
          international  companies were considered to be indefinitely  invested.
          No  provision  has been made for taxes  that might be payable if these
          earnings were remitted to the United States.  The Company's  intention
          is  to  reinvest  these  earnings  permanently  or to  repatriate  the
          earnings when it is tax effective to do so. It is not  practicable  to
          determine the amount of incremental  taxes that might arise were these
          earnings to be remitted.

          As at June  30,  2004,  the  Company  has  estimated  losses,  for tax
          purposes,  totalling approximately  $10,100,000,  which may be applied
          against future taxable income. The potential tax benefits arising from
          these losses have not been recorded in the financial  statements.  The
          Company  evaluates its valuation  allowance  requirements on an annual
          basis based on projected future operations.  When circumstances change
          and  this  causes  a  change  in  management's   judgement  about  the
          realizability of deferred tax assets,  the impact of the change on the
          valuation allowance is generally reflected in current income.

     (b)  The  tax  effect  of  temporary  differences  that  give  rise  to the
          Company's deferred tax asset (liability) are as follows:

          ----------------------------------------------------------------------
                                                   June 30,         December 31,
                                                       2004                 2003
          ----------------------------------------------------------------------

          Tax losses carried forward              $ 3,451,000        $ 3,237,000
          Stock-based compensation                      6,400              6,400
          Provision for amount owing from
             Hepatitis B Vaccine Project            1,118,000          1,118,000
          Less: valuation allowance                (4,575,400)       (4,361,400)
          ----------------------------------------------------------------------
                                                  $         -       $          -
          ======================================================================

                                       12
<PAGE>
DRAGON PHARMACEUTICAL INC. & SUBSIDIARIES
Notes to Consolidated Financial Statements
June 30, 2004
(Expressed in U.S. Dollars)
(Unaudited - Prepared by Management)
--------------------------------------------------------------------------------

11.  Income Taxes (Continued)

          A reconciliation  of the federal statutory income tax to the Company's
          effective  income tax rate,  for the three  months ended June 30, 2004
          and 2003 are as follows:

          ----------------------------------------------------------------------
                                                   2004                 2003
          ----------------------------------------------------------------------
          Federal statutory income tax rate         34%                  34%
          Benefit of loss carry forward           (34%)                (34%)
          ----------------------------------------------------------------------
          Effective income tax rate                   -                    -
          ======================================================================

12.  Stock Options and Warrants

     (c)  Stock Options Plans

          There were no  options  granted  during the six months  ended June 30,
          2004.

          The  following is a summary of the employee  stock option  information
          for the period ended June 30, 2004:
<TABLE>
<CAPTION>
<S>                  <C>                                                  <C>                    <C>
          ------------------------------------------------------ ------------------ ------------------------
                                                                                           Weighted Average
                                                                            Shares           Exercise Price
          ------------------------------------------------------ ------------------ ------------------------
          Options outstanding at December 31, 2002                       3,288,000            $   1.82
          Granted                                                          500,000            $   0.68
          Forfeited                                                     (1,061,000)           $   0.90
          Exercised                                                       (128,000)           $   0.50
          ------------------------------------------------------ ------------------ ------------------------

          Options outstanding at December 31, 2003                       2,599,000            $   2.04
          Forfeited                                                       (482,500)           $   1.96
          Exercised                                                       (120,000)           $   0.50
          ------------------------------------------------------ ------------------ ------------------------
          Options outstanding at June 30, 2004                           1,996,500            $   2.16
          ====================================================== ================== ========================
</TABLE>

<TABLE>
<CAPTION>
<S>                       <C>              <C>           <C>              <C>             <C>              <C>
                                 Options Outstanding                                Options Exercisable
          ---------------------------------------------------------  ----------------------------------------------
                                                       Weighted
                                                       Average          Weighted                          Weighted
                       Range of                       Remaining         Average                           Average
                       Exercise         Number       Contractual        Exercise           Number         Exercise
                        Prices       Outstanding         Life            Price          Exercisable         Price
          ---------------------------------------------------------  ----------------------------------------------
                    $0.01 - $1.00       588,500             2.39        $   0.61         563,500        $   0.60

                    $1.01 - $2.00       308,000             2.82        $   1.70         308,000        $   1.70

                    $2.01 - $3.00        25,000            0.361        $   2.50          25,000        $   2.50

                    $3.01 - $4.00     1,075,000            1.372        $   3.13       1,075,000        $   3.13
          -------------------------   -----------------------------  -------------    ------------     -----------
                                      1,996,500             1.88        $   2.16       1,971,500        $   2.17
                                      =========         =========    =============    ============     ===========
</TABLE>
                                       13
<PAGE>
DRAGON PHARMACEUTICAL INC. & SUBSIDIARIES
Notes to Consolidated Financial Statements
June 30, 2004
(Expressed in U.S. Dollars)
(Unaudited - Prepared by Management)
--------------------------------------------------------------------------------

12.  Stock Options and Warrants (Continued)

          The  Company  accounts  for  its  stock-based   compensation  plan  in
          accordance  with APB Opinion No. 25,  under which no  compensation  is
          recognized in connection with options  granted to employees  except if
          options  are  granted  with a strike  price  below  fair  value of the
          underlying stock. The Company adopted the disclosure requirements SFAS
          No. 123,  Accounting for Stock-Based  Compensation.  Accordingly,  the
          Company is required to  calculate  and present the pro forma effect of
          all awards granted.  For disclosure  purposes,  the fair value of each
          option  granted to an employee  has been  estimated  as of the date of
          grant using the Black-Scholes  option pricing model with the following
          assumptions:  risk-free  interest  rate of 5.5%,  dividend  yield  0%,
          volatility of 90%, and expected lives of  approximately  0 to 5 years.
          Based on the  computed  option  values and the  number of the  options
          issued, had the Company recognized compensation expense, the following
          would have been its effect on the Company's net loss:

          ----------------------------------------------------------------------
                                                   June 30,             June 30,
                                                       2004                 2003
          ----------------------------------------------------------------------

          Net (loss) for the period:
          - as reported                           $(663,616)         $ (970,452)
          - pro-forma                             $(663,616)         $ (970,452)
          ------------------------------------------------------------ ---------

          Basic and diluted (loss) per share:
          - as reported                              $(0.03)             $(0.05)
          - pro-forma                                $(0.03)             $(0.05)
          ----------------------------------------------------------------------

     (b)  Warrants

          Share purchase warrants outstanding as at June 30, 2004:

             Number         Underlying       Exercise Price
          of Warrants         Shares           Per Share       Expiry Date
          -----------       ----------       --------------    -----------
            50,000            50,000             $1.70         November 15, 2004

13.  Related Party Transactions

     (a)  The  Company  incurred  the  following  expenses  to a director of the
          Company:

          ----------------------------------------------------------------------
                                              June 30, 2004        June 30, 2003
          ----------------------------------------------------------------------

          Management fees                             $-              $40,000
          ======================================================================

     (b)  Pursuant to an agreement  dated January 14, 2002, the Company  entered
          into a Project Development Agreement with Dr. Longbin Liu ("Dr. Liu"),
          a director of the Company (and President and CEO of the Company at the
          time of the  transaction)  to continue the research and development of
          G-CSF and Insulin for the  Company.  The Company will make payment for
          the development of G-CSF as follows:

                                       14

<PAGE>
DRAGON PHARMACEUTICAL INC. & SUBSIDIARIES
Notes to Consolidated Financial Statements
June 30, 2004
(Expressed in U.S. Dollars)
(Unaudited - Prepared by Management)
--------------------------------------------------------------------------------

13.  Related Party Transactions (Continued)

          (i)  $500,000 to be provided at the  commencement  of the  research in
               the G-CSF Project (paid);

          (ii) $500,000 to be provided when cell-line and related  technology is
               established  and animal  experimentation  commences  in the G-CSF
               Project;

          (iii)$300,000 to be  provided  when a permit for  clinical  trials for
               G-CSF has been issued by the State Drug  Administration  of China
               ("SDA");

          (iv) $200,000  to be  provided  when a new drug  license  for G-CSF is
               issued to Dragon by the SDA; and

          (v)  $500,000  to be paid as a bonus  if the SDA  issues  the new drug
               license for Insulin to Dragon before January 14, 2005.

          The  Company  will make  payment  for the  development  of  Insulin as
          follows:

          (i)  $750,000 to be provided by at the commencement of the research in
               the Insulin Project (paid);

          (ii) $750,000 to be provided when cell-line and related  technology is
               established and animal  experimentation  commences in the Insulin
               Project (paid);

          (iii)$300,000 to be  provided  when a permit for  clinical  trials for
               Insulin has been issued by the SDA;

          (iv) $200,000  to be provided  when a new drug  license for Insulin is
               issued to Dragon by the SDA; and

          (v)  $500,000  to be paid as a bonus  if the SDA  issues  the new drug
               license for Insulin to Dragon before January 14, 2005.

          For both the G-CSF and Insulin Projects:

          (i)  If the Company elects to cease development of the project it will
               forfeit any payments made and lose ownership of the Project,  but
               it will not be obligated to make any further  payments toward the
               Project;

          (ii) if an application for permit for clinical trials is not submitted
               within  three  years with  respect  to the G-CSF  Project or four
               years with  respect to the Insulin  Project or if the SDA rejects
               the  Projects  for   technical  or   scientific   reasons  or  If
               development of the Project is terminated by Dr. Liu, then Dr. Liu
               will refund to the Company all amounts paid,  without interest or
               deduction, with respect to the Project within six months.

          As at June 30, 2004,  the Company has paid a total of  $1,500,000  and
          $500,000  towards the Insulin and G-CSF  Projects,  respectively.  The
          Company has paid an additional $100,000 to a company controlled by Dr.
          Liu to produce Insulin  samples for drug  registration  purposes.  The
          Company has reached settlement with Dr. Liu on this and other projects
          (note 5).

     (b)  see Notes 5, 6, and 7 also.
                                       15
<PAGE>
DRAGON PHARMACEUTICAL INC. & SUBSIDIARIES
Notes to Consolidated Financial Statements
June 30, 2004
(Expressed in U.S. Dollars)
(Unaudited - Prepared by Management)
--------------------------------------------------------------------------------

14.  Commitments

     (a)The Company has entered into operating lease  agreements with respect to
     Huaxin's production plant in Nanjing,  China for an amount of $326,200 (RMB
     2,700,000) per annum until June 11, 2009, and the Company's  administrative
     offices in Vancouver  for an amount  escalating  from  $136,000 to $157,000
     (CDN$200,000  to  CDN$230,000)  per annum  until  March 31,  2007.  Minimum
     payments required under the agreements are as follows:

        2004                                       $ 246,782
        2005                                         494,835
        2006                                         498,684
        2007                                         369,646
        2008                                         326,205
        2009                                         144,738
        -----------------------------------------------------
        Total                                    $ 2,080,889
        =====================================================

     (b) The Company has contracted with a European  Institute of Biotechnology,
     which may develop a high yield proprietary cell line and production process
     technology for the Company. Product from this most advanced technology will
     be  used  by the  Company  to  enter  the  European  market,  once  certain
     competitor's patents expire. The total cost of development will be $609,000
     (EUROS 500,000) of which $365,000  (EUROS  300,000)  remains unpaid at June
     30, 2004.

15.  Segmented Information

     The Company  operates  exclusively  in the biotech  sector.  The  Company's
     assets and revenues are distributed as follows:

                                     June 30, 2004        December 31,2003
     ---------------------------------------------------------------------------
     ASSETS
     North America                    $ 2,932,489              $3,156,953
     China                            6,696,907                 7,079,241
     Other                            525,913                     899,858
     ---------------------------------------------------------------------------
     Total                            $ 10,455,309            $11,136,052
     ===========================================================================

     ---------------------------------------------------------------------------
                                   Six months ended         Six months ended
                                    June 30, 2004            June 30, 2003
     ---------------------------------------------------------------------------
     REVENUE
     North America                     $     -                 $     -
     China                              1,359,515                1,031,242
     Other                                429,490                  640,767
     ---------------------------------------------------------------------------
     Total                             $1,786,415              $ 1,672,009
     ===========================================================================

16.  Comparative Figures

     Certain 2003 comparative  figures have been  reclassified to conform to the
     financial statement presentation adopted for 2004.

                                       16
<PAGE>
DRAGON PHARMACEUTICAL INC. & SUBSIDIARIES
Notes to Consolidated Financial Statements
June 30, 2004
(Expressed in U.S. Dollars)
(Unaudited - Prepared by Management)
--------------------------------------------------------------------------------

17.  Restatement

     These  financial  statements  have been  restated to reinstate  the 250,000
     common shares that were previously  allotted to the Company's Sanhe Kailong
     Bio-pharmaceutical Limited.("Kailong") Joint Venture partner.

     Kailong was a Joint Venture through which the Company would manufacture and
     sell its EPO in China.  Kailong  was created to grant the  Company's  Joint
     Venture partner a 25% interest in the Company's EPO business in China.  The
     Company then  determined  that it would take too long to bring Kailong into
     production and instead, acquired Nanjing Huaxin Bio-pharmaceutical Co. Ltd.
     ("Huaxin")  which had an  existing  production  facility  and the  required
     manufacturing licenses and sales permits.

     In March 2000, the Company entered into an agreement with its Kailong Joint
     Venture  partner to fulfil the  Company's  obligation  to allow the Kailong
     Joint Venture  partner to  participate in the Company's EPO business and to
     eliminate  the Joint Venture  partner's  claim to a 25% interest in Huaxin.
     Under the  agreement,  the Company agreed to pay $250,000 and issue 250,000
     common shares of the Company.  The Company accounted for the transaction at
     the time by recording  the shares  allotted at the share price in effect at
     the time.  The cash was paid in the year 2000,  but the shares have not yet
     been issued.

     In the  second  quarter  of 2004,  the  Company  was  finalizing  the share
     exchange  agreement with Oriental Wave Holding Limited ("Oriental Wave") in
     which the Company  would be required to issue shares to Oriental Wave based
     on the current shares outstanding and on obligations to issue shares in the
     future.  At that time, the Company  reversed the original  allotment of the
     250,000  shares on the basis that Kailong was going to be dissolved and the
     shares were not going to be issued.

     It has  subsequently  been determined that the Company is still required to
     issue the  250,000  shares to its  Kailong  Joint  Venture  partner and the
     financial  statements  have been  amended to reinstate  the 250,000  common
     shares that were previously allotted.

                                       17
<PAGE>
DRAGON PHARMACEUTICAL INC. & SUBSIDIARIES
Notes to Consolidated Financial Statements
June 30, 2004
(Expressed in U.S. Dollars)
(Unaudited - Prepared by Management)
--------------------------------------------------------------------------------

17.  Restatement (Continued)

     As a result of the foregoing the Consolidated  Balance Sheet of the Company
     has been restated as follows:

<TABLE>
<CAPTION>
<S>                   <C>                                     <C>                       <C>
                                                                    As of June 30, 2004
                                                       ---------------------------------------------
                                                                                     Previously
                                                            Restated                   Reported
                                                       --------------------    ---------------------

        Total current assets                               $ 5,739,882              $ 5,739,882
        Fixed assets                                         1,912,249                1,912,249
        Licence and permit and other assets                  2,803,178                1,240,678
                                                       --------------------    ---------------------
        Total assets                                      $ 10,455,309              $ 8,892,809
                                                       ====================    =====================

        LIABILITIES AND STOCKHOLDERS' EQUITY
          Accounts payable and accrued liabilities         $ 1,325,780              $ 1,325,780
                                                       --------------------    ---------------------

        Share capital                                           20,582                   20,582
        Additional paid in capital                          26,768,750               25,206,250
        Accumulated other comprehensive (loss)                 (32,845)                 (32,845)
        Accumulated deficit                                (17,626,958)             (17,626,958)
                                                       --------------------    ---------------------
        Total stockholders' equity                           9,129,529                7,567,029
                                                       --------------------    ---------------------
        Total liabilities and stockholders' equity        $ 10,455,309              $ 8,892,809
                                                       ====================    =====================
</TABLE>

     The  correction  of the above did not have any  effect on the  Consolidated
     Balance  Sheet as of December 31, 2003 or the  Consolidated  Statements  of
     Operations  or Cash Flows for either the six months  ended June 30, 2004 or
     2003.

                                       18

<PAGE>
                           PART II. OTHER INFORMATION

Item 6.   Exhibits.

          (a)  Exhibits.

               Exhibit No.
               -----------

               31.1 Certification by the Principal Executive Officer Pursuant to
                    Section 302 of the Sarbanes-Oxley Act.

               31.2 Certification by the Principal  Accounting  Officer Pursuant
                    to Section 302 of the Sarbanes-Oxley Act.

               32   Certification  by  the  Principal  Executive  and  Financial
                    Officers Pursuant to Section 906 of the Sarbanes-Oxley Act.


                                   Signatures

In accordance with the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this Amendment Number 1 to Form 10-QSB for the
quarterly period ended June 30, 2004 to be signed on its behalf by the
undersigned, thereunto duly authorized.

                                           DRAGON PHARMACEUTICAL INC.
                                          (registrant)


Dated:   November 22, 2004                /s/ Matthew Kavanagh
                                          --------------------------------------
                                          Matthew Kavanagh
                                          Director of Finance and Corporate
                                          Compliance and Corporate Secretary
                                          (Duly authorized Officer and
                                          Principal Financial Officer)

                                       19
<PAGE>
                                                        EXHIBIT 31.1


            Section 302 Certification of Principal Executive Officer

I, Alexander Wick, certify that:

1.   I  have   reviewed  this   quarterly   report  on  Form  10-QSB  of  Dragon
Pharmaceutical Inc.;

2.   Based on my knowledge, this report does not contain any untrue statement of
a  material  fact  or omit  to  state a  material  fact  necessary  to make  the
statements made, in light of the circumstances  under which such statements were
made, not misleading with respect to the period covered by this report;


3.   Based on my  knowledge,  the  financial  statements,  and  other  financial
information  included in this quarterly  report,  fairly present in all material
respects the financial  condition,  results of operations  and cash flows of the
registrant  as of,  and  for,  the  periods  presented  in this  report;

4.   The  registrant's  other  certifying  officer  and  I are  responsible  for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules  13a-15(e) and  15d-15(e))  for the  registrant  and have:

     a)  Designed  such  disclosure  controls  and  procedures,  or caused  such
     disclosure controls and procedures to be designed under our supervision, to
     ensure that material information relating to the registrant,  including its
     consolidated  subsidiaries,  is made  known to us by  others  within  those
     entities,  particularly during the period in which this quarterly report is
     being  prepared;

     b) Omitted

     c) Evaluated the effectiveness of the registrant's  disclosure controls and
     procedures  and  presented  in  this  report  our  conclusions   about  the
     effectiveness of the disclosure  controls and procedures,  as of the end of
     the  period  covered  by  this  report  based  on such  evaluation;  and

     d) Disclosed in this report any change in the registrant's internal control
     over financial  reporting that occurred during the registrant's most recent
     fiscal quarter that has  materially  affected,  or is reasonable  likely to
     materially  affect,  the  registrant's   internal  control  over  financial
     reporting; and


5.   The registrant's  other certifying  officer and I have disclosed,  based on
our most recent evaluation of internal control over financial reporting,  to the
registrant's auditors and the audit committee of registrant's board of directors
(or  persons   performing  the  equivalent   functions):

     a) All significant  deficiencies  and material  weaknesses in the design or
     operation  of  internal   controls  over  financial   reporting  which  are
     reasonably  likely to adversely affect the registrant's  ability to record,
     process,  summarize  and report  financial  information;  and

     b) Any fraud,  whether or not material,  that involves  management or other
     employees who have a significant role in the registrant's internal controls
     over financial reporting.


Date: November 22, 2004                    /s/ Alexander Wick
                                           ------------------------------------
                                           Alexander Wick, President and
                                           Chief Executive Officer
                                           (Principal Executive Officer)


<PAGE>


                                                                EXHIBIT 31.2

            Section 302 Certification of Principal Financial Officer

I, Matthew Kavanagh, certify that:

1.   I  have   reviewed  this   quarterly   report  on  Form  10-QSB  of  Dragon
Pharmaceutical Inc.;

2.   Based on my knowledge, this report does not contain any untrue statement of
a  material  fact  or omit  to  state a  material  fact  necessary  to make  the
statements made, in light of the circumstances  under which such statements were
made, not misleading with respect to the period covered by this report;

3.   Based on my  knowledge,  the  financial  statements,  and  other  financial
information  included in this quarterly  report,  fairly present in all material
respects the financial  condition,  results of operations  and cash flows of the
registrant as of, and for, the periods presented in this report;

4.   The  registrant's  other  certifying  officer  and  I are  responsible  for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

     a)  Designed  such  disclosure  controls  and  procedures,  or caused  such
     disclosure controls and procedures to be designed under our supervision, to
     ensure that material information relating to the registrant,  including its
     consolidated  subsidiaries,  is made  known to us by  others  within  those
     entities,  particularly during the period in which this quarterly report is
     being prepared;

     b) Omitted

     c) Evaluated the effectiveness of the registrant's  disclosure controls and
     procedures  and  presented  in  this  report  our  conclusions   about  the
     effectiveness of the disclosure  controls and procedures,  as of the end of
     the  period  covered  by  this  report  based  on such  evaluation;  and

     d) Disclosed in this report any change in the registrant's internal control
     over financial  reporting that occurred during the registrant's most recent
     fiscal quarter that has  materially  affected,  or is reasonable  likely to
     materially  affect,  the  registrant's   internal  control  over  financial
     reporting; and


5.   The registrant's  other certifying  officer and I have disclosed,  based on
our most recent evaluation of internal control over financial reporting,  to the
registrant's auditors and the audit committee of registrant's board of directors
(or  persons   performing  the  equivalent   functions):


     a) All significant  deficiencies  and material  weaknesses in the design or
     operation  of  internal   controls  over  financial   reporting  which  are
     reasonably  likely to adversely affect the registrant's  ability to record,
     process,  summarize  and report  financial  information;  and

     b) Any fraud,  whether or not material,  that involves  management or other
     employees who have a significant role in the registrant's internal controls
     over financial reporting.


Date:  November 22, 2004                /s/ Matthew Kavanagh
                                        -------------------------------
                                        Matthew Kavanagh,
                                        Principal Financial Officer


<PAGE>

                                                                EXHIBIT 32


                                  CERTIFICATION
            PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
             (SUBSECTIONS (a) AND (b) OF SECTION 1350, CHAPTER 63 OF
                          TITLE 18, UNITED STATES CODE)

Pursuant to section 906 of the  Sarbanes-Oxley  Act of 2002 (subsections (a) and
(b) of section 1350,  chapter 63 of Title 18,  United States Code),  each of the
undersigned  officers of Dragon  Pharmaceutical Inc., a Florida corporation (the
"Company"),  does hereby  certify  with respect to the  Quarterly  Report of the
Company on Form  10-QSB for the  quarter  ended June 30,  2004 as filed with the
Securities  and Exchange  Commission  (the "Form  10-QSB")  that, to the best of
their knowledge:

     (1) the Form 10-QSB fully complies with the  requirements  of section 13(a)
     or 15(d) of the Securities Exchange Act of 1934; and

     (2) the information  contained in the Form 10-QSB fairly  presents,  in all
     material respects, the financial condition and results of operations of the
     Company.


Dated: November 22, 2004                  /s/ Alexander Wick
                                          -------------------------------------
                                          Alexander Wick
                                          President and Chief Executive Officer




Dated: November 22, 2004                  /s/ Matthew Kavanagh
                                          -------------------------------------
                                          Matthew Kavanagh
                                          Principal Financial Officer