U.S. SECURITIES AND EXCHANGE COMMISSION
                                 Washington, D.C. 20549
                                       FORM 10-QSB

X   QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
    OF 1934 - For the quarterly period ended March 31, 2007.

--  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
    ACT OF 1934

                            Commission file number: 000-32829

                                PALOMAR ENTERPRISES, INC.
                     (Name of small business issuer in its charter)

                  Nevada                         06-1588136
       -------------------------------   -----------------------------
       (State or other jurisdiction of   (Employer Identification No.)
        incorporation or organization)

        1802 N. Carson Street, Suite 212-3018
            Carson City, Nevada                               89701
      -----------------------------------------            -----------
       (Address of principal executive offices)             (Zip Code)

                                      (775) 887-0670
                                (Issuer's telephone number)

Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. X Yes -- No

Indicate by check mark whether the registrant is a shell company (as defined
in Rule 12b-2 of the Exchange Act). Yes No X

State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date: As of April 19, 2007, the
issuer had 557,241,643 shares of its common stock issued and outstanding.
Transitional Small Business Disclosure Format (check one): Yes No X



                                      1

<PAGE>

<TABLE><CAPTION>
                              TABLE OF CONTENTS
                              -----------------
<S>                                                                   <C>
                                                                   PAGE NO.
                                                                   --------
PART I - FINANCIAL INFORMATION                                           3

Item 1.  Financial Statements                                            3

Item 2.  Management's Discussion and Analysis or Plan of Operation      11

Item 3.  Controls and Procedures                                        13


PART II - OTHER INFORMATION                                             13

Item 1.  Legal Proceedings                                              13

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds    13

Item 3.  Defaults Upon Senior Securities                                13

Item 4.  Submission of Matters to a Vote of Security Holders            13

Item 5.  Other Information                                              13

Item 6.  Exhibits                                                       14

SIGNATURES                                                              14
</TABLE>
                                           2

<PAGE>


PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

 The accompanying unaudited interim financial statements of Palomar Enterprises
("Palomar") have been prepared in accordance with accounting principles
generally accepted in the United States of America and the rules of the
Securities and Exchange Commission ("SEC"), and should be read in conjunction
with the audited financial statements and notes thereto contained in Palomar's
Annual Report filed with the SEC on Form 10-KSB. In the opinion of management,
all adjustments, consisting of normal recurring adjustments, necessary for a
fair presentation of financial position and the results of operations for the
interim periods presented have been reflected herein. The results of operations
for interim periods are not necessarily indicative of the results to be
expected for the full year. Notes to the financial statements which would
substantially duplicate the disclosure contained in the audited financial
statements for 2006 as reported in the 10-KSB have been omitted.

<TABLE><CAPTION>
                                  PALOMAR ENTERPRISES, INC.
                      CONSOLIDATED BALANCE SHEET AS OF MARCH 31, 2007
                                       (UNAUDITED)
<S>                                                                              <C>
ASSETS
   Cash                                                                     $     45,231
   Prepaids and other current assets                                              22,000
                                                                            -------------
Total current assets                                                              67,231

Property, plant and equipment, net of
  accumulated depreciation of $91,057                                          3,106,535
Other Assets                                                                      72,384
Goodwill                                                                         377,249
                                                                            -------------
TOTAL ASSETS                                                                $  3,623,399
                                                                            =============

LIABILITIES AND STOCKHOLDERS' EQUITY:

   Accounts Payable                                                         $     36,885
   Accrued Expenses                                                              176,330
   Current portion of notes payable                                            2,103,273
                                                                            -------------
Total current liabilities                                                      2,316,488

   Note payable, long term                                                     2,211,469
   Accrued Derivative Liability                                                   26,000
                                                                            -------------
TOTAL LIABILITIES                                                              4,553,957
                                                                            -------------
MINORITY INTEREST                                                                  9,353

STOCKHOLDERS' EQUITY:
   Series A preferred stock, $0.00001 par value, 10,000,000 shares
      authorized, 8,600,000 shares issued or outstanding                              86
   Series B preferred stock, $0.00001 par value, 50,000,000 shares
      authorized, 30,000,000 shares issued or outstanding                            300
   Series C preferred stock, $0.00001 par value, 30,000,000 shares
      authorized, No shares issued and outstanding                                     -
   Common stock, $0.00001 par value, 25,000,000,000 shares
      authorized, 538,741,643 shares issued;
      and outstanding                                                              5,387
   Shares not yet earned                                                        (112,687)
   Shares Paid not yet issued                                                      9,000
   Additional paid-in capital                                                 15,941,466
   Accumulated deficit                                                       (16,783,463)
                                                                            -------------
      Total stockholders' equity                                                (939,911)
                                                                            -------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                  $  3,623,399
                                                                            =============
The accompanying notes are an integral part of these financial statements.

</TABLE>
                                              3
<TABLE><CAPTION>

                             PALOMAR ENTERPRISES, INC.
                       CONSOLIDATED STATEMENTS OF OPERATIONS
                FOR THE THREE MONTHS ENDED MARCH 31, 2007 AND 2006
                                  (UNAUDITED)



                                       Three Months Ended    Three Months Ended
                                          March 31, 2007        March 31, 2006
                                       -------------------  --------------------
<S>                                             <C>                  <C>
Revenues                               $          323,346  $             174,704
Cost of goods sold                                212,469                 98,239
                                       -------------------  --------------------
Gross profit                                      110,877                 76,465

Operating expenses
   General and administrative                      162,854               169,663
   Facilities and rent                              16,388                18,868
   Consulting, legal and professional            1,806,155                75,694
   Payroll and related costs                       122,483               169,121
                                       -------------------  --------------------
Total operating expenses                         2,107,880               533,346
                                       -------------------  --------------------
Loss from operations                            (1,997,003)             (456,881)
                                       -------------------  --------------------
Interest expense                                   (98,783)              (28,450)
Minority interest                                   25,494                 3,626
Income other venturer                                5,775
Loss on Derivitve liability                        (26,000)
                                       -------------------  --------------------

Net loss                               $       (2,102,067) $           (481,705)
                                       ===================  ===================
  Net loss per share of common stock
  - basic and diluted                  $            (0.01)  $              (0.02)
                                       ===================  ====================
  Weighted average number of shares
  of common stock outstanding                 306,390,643             27,373,869
                                       ===================  ====================

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

</TABLE>

                                           4
<PAGE>

<TABLE><CAPTION>
                              PALOMAR ENTERPRISES, INC.
                         CONSOLIDATED STATEMENTS OF CASH FLOWS
                FOR THE THREE MONTHS ENDED MARCH 31, 2007 AND 2006
                                    (UNAUDITED)



                                               Three Months Ended    Three Months Ended
                                                 March 31, 2007        March 31, 2006
                                               -------------------  -------------------
<S>                                                    <C>                    <C>
Cash flows from operating activities:
Net loss for the period                           $    (2,102,067)      $    (481,705)
Minority Interest in Net Loss                               9,353            (  3,626)

Adjustments to reconcile net loss to net cash
   used by operating activities:
   Depreciation                                             8,165               8,089
   Common stock issued for services                     1,709,600              16,750
Changes in assets and liabilities:
   Prepaid Expenses                                       ( 1,000)             64,845
   Other assets                                           ( 3,303)            (73,046)
   Accounts payable and accrued liabilities                58,580              16,445
                                               -------------------  -------------------
Net cash used in operating activities                    (320,672)           (452,248)
                                               -------------------  -------------------

Cash flows from investing activities:
   Purchase of property and equipment                    ( 82,300)           (625,083)
   Sale of Property                                       115,000
                                               -------------------  -------------------
Net cash used in investing activities                      32,700            (625,083)
                                               -------------------  -------------------
Cash flows from financing activities:
   Proceeds from notes payable/net of
     repayments                                           157,593            1,173,920
   Proceeds from subscribed stock                          94,946              210,104
   Proceeds from sale of common stock                      77,000                    2
   Increase in Derivative liability                        26,000
   Increase in shares not yet issued                        9,000                  -
   Shares issued for reduction of debt                    (30,993)
                                               -------------------  -------------------
Net cash flow from financing activities                   297,146            1,384,026
                                               -------------------  -------------------
Net Increase (decrease) in cash                            10,044              306,695
Cash at beginning of period                                35,187               15,857
                                               -------------------  -------------------
Cash at end of period                            $         44,361   $          351,056
                                               ===================  ===================

SUPPLEMENTAL CASH FLOW INFORMATION:

       Interest Paid                           $           67,423   $           21,175
                                               ===================  ===================
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING
AND FINANCING ACTIVITIES:

Common stock issued to satisfy liabilities     $           30,993  $            27,221
                                               ===================  ===================
The accompanying notes are an integral part of these financial statements.

</TABLE>

                                                5
<PAGE>

                                   PALOMAR ENTERPRISES, INC.
                           NOTES TO UNAUDITED FINANCIAL STATEMENTS
                              FOR THE PERIOD ENDED March 31, 2007

NOTE A - ORGANIZATION AND DESCRIPTION OF BUSINESS

Palomar Enterprises, Inc. (Company) was incorporated on March 10, 1999 in
accordance with the laws of the State of Nevada.

NOTE B - PREPARATION OF FINANCIAL STATEMENTS

The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Actual
results could differ from those estimates.

Management further acknowledges that it is solely responsible for
adopting sound accounting practices, establishing and maintaining a
system of internal accounting control and preventing and detecting
fraud. The Company's system of internal accounting control is designed
to assure, among other items, that 1) recorded transactions are valid;
2) valid transactions are recorded; and 3) transactions are recorded in
the proper period in a timely manner to produce financial statements
which present fairly the financial condition, results of operations and
cash flows of the Company for the respective periods being presented
The Company is in the real estate development and mortgage business
employing 13 real estate brokers.

NOTE C - GOING CONCERN UNCERTAINTY

The Company has been unable to generate sufficient operating revenues
and has incurred operating losses .

The Company is operating as a mortgage broker and real estate developer.
However, the Company is dependent upon the available cash on hand and
either future sales of securities or upon its current management and/or
advances or loans from controlling shareholders or corporate officers to
provide sufficient working capital.

There is no assurance that the Company will be able to obtain additional
funding through the sales of additional securities or, that such funding,
if available, will be obtained on terms favorable to or affordable by
the Company. It is the intent of management and controlling shareholders
to provide sufficient working capital necessary to support and preserve
the integrity of the corporate entity.

However, there is no legal obligation for either management and/or
controlling shareholders to provide such additional funding.

The accompanying financial statements have been prepared assuming that
the Company will continue as a going concern.

The financial statements do not include any adjustments that might
result from this uncertainty.

                                 6
<PAGE>


NOTE D - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

1. Cash and cash equivalents

The Company considers all cash on hand and in banks, including accounts
in book overdraft positions, certificates of deposit and other highly-
liquid investments with maturities of three months or less, when
purchased, to be cash and cash equivalents.

2. Principles of consolidation

The consolidated financial statements include the accounts of the Company
and its ninety eight percent interest in Blackhawk. All significant inter-
company accounts and transactions have been eliminated.

The Blackhawk fund is publicly traded on the OTC B.B. (BHWK). The financials
of Palomar are inclusive of all activity of The BlackHawk Fund, as well as
Palomar Enterprises, on a consolidated basis. This includes all revenue,
expenses, losses and operations.

3. Research and development expenses

 Research and development expenses are charged to operations as incurred.
There were no research and development costs incurred in the period
ending March 31, 2007.

4. Advertising expenses

Advertising and marketing expenses are charged to operations as incurred.
Advertising expenses for the period ending March 31, 2007 was $12,556 and
in 2006 $74,121.

5. Revenue recognition

The Company generates revenue from the sale of real estate, brokerage
commissions, rental properties and mortgage loan originations. Revenues
from real estate sales and commissions are recognized on execution of the
sales contract.The Company records gross commissions on the sales of properties
closed. The Company pays the broker of record five percent of all
transactions and 100 percent of personal sales. This is in accordance
with standard procedures. The Company compensates its independent agents
on a sliding scale between 70 and 80 percent based on productivity.
The Company also recognizes sales when it sells properties that  have
been held for sale when their renovation is complete. Revenue is
recognized at "closing".
\
The Company also realizes revenue from its subsidiary, The Blackhawk
Fund, from its media production business for sale of media "spots" and
infomercials.

6. Income Taxes

The Company utilizes the asset and liability method of accounting for
income taxes. Temporary differences represent differences in the
recognition of assets and liabilities for tax and financial reporting
purposes, primarily accumulated depreciation and amortization.

As of March 31, 2007, the deferred tax asset is related solely to the
Company's net operating loss carryforward and is fully reserved.

7. Earnings (loss) per share

Basic earnings (loss) per share are computed by dividing the net income
(loss) by the weighted-average number of shares of common stock and
common stock equivalents (primarily outstanding options and warrants).
Common stock equivalents represent the dilutive effect of the assumed
exercise of the outstanding stock options and warrants, using the
treasury stock method. The calculation of fully diluted earnings (loss)
per share assumes the dilutive effect of the exercise of outstanding
options and warrants at either the beginning of the respective period
presented or the date of issuance, whichever is later. As of March 31,
2007, the Company's outstanding warrants are considered anti-dilutive.

                                  7

<PAGE>

8. Use of Estimates

The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the accounting period.
Actual results could differ from those estimates.

RECENT ACCOUNTING PRONOUNCEMENTS

 The Company adopted SFAS No. 142. Under the new rules, the Company
will no longer amortize goodwill and other intangible assets with
indefinite lives, but such assets will be subject to periodic testing
for impairment. On an annual basis, and when there is reason to
suspect that their values have been diminished or impaired, these
assets must be tested for impairment, and write-downs to be included
in results from operations may be necessary. SFAS No. 142 also
requires the Company to complete a transitional goodwill impairment
test six months from the date of adoption.

Any goodwill impairment loss recognized as a result of the transitional
goodwill impairment test will be recorded as a cumulative effect of a
change in accounting principle no later than the end of fiscal year 2002.
The adoption of SFAS No. 142 had no material impact on the Company's
consolidated financial statements SFAS No. 143 establishes accounting
standards for the recognition and measurement of an asset retirement
obligation and its associated asset retirement cost. It also provides
accounting guidance for legal obligations associated with the retirement
of tangible long-lived assets. SFAS No. 143 is effective in fiscal years
beginning after June 15, 2002, with early adoption permitted. The
Company expects that the provisions of SFAS No. 143 will not have a
material impact on its consolidated results of operations and financial
position upon adoption.

SFAS No. 144 establishes a single accounting model for the impairment
or disposal of long-lived assets, including discontinued operations.
SFAS No. 144 superseded Statement of Financial Accounting Standards
No. 121, "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to Be Disposed Of" (SFAS No. 121), and APB Opinion
No. 30, "Reporting the Results of Operations - Reporting the Effects
of Disposal of a Segment of a Business, and Extraordinary, Unusual
and Infrequently Occurring Events and Transactions". The Company
adopted SFAS No. 144 effective January 1, 2002. The adoption of SFAS
No. 144 had no material impact on Company's consolidated financial
statements.

In April 2002, the FASB issued Statement No. 145, "Rescission of
FASB Statements No. 4, 44, and 64, Amendment of FASB Statement No.
13, and Technical Corrections." This Statement rescinds FASB
Statement No. 4, "Reporting Gains and Losses from Extinguishment
of Debt", and an amendment of that Statement, FASB Statement No. 64,
"Extinguishments of Debt Made to Satisfy Sinking-Fund Requirements"
and FASB Statement No. 44, "Accounting for Intangible Assets of
Motor Carriers". This Statement amends FASB Statement No. 13,
"Accounting for Leases," to eliminate an inconsistency between the
required accounting for sale-leaseback transactions and the required
accounting for certain lease modifications that have economic effects
that are similar to sale- leaseback transactions. We do not expect
the adoption to have a material impact to our financial position or
results of operations.

In June 2002, the FASB issued Statement No. 146, "Accounting for
Costs Associated with Exit or Disposal Activities." This Statement
addresses financial accounting and reporting for costs associated
with exit or disposal activities and nullifies Emerging Issues Task
Force (EITF) Issue No. 94-3, "Liability Recognition for Certain
Employee Termination Benefits and Other Costs to Exit an Activity
(including Certain Costs Incurred in a Restructuring)." The
provisions of this statement are effective for exit or disposal
activities that are initiated after December 31, 2002, with early
application encouraged. We do not expect the adoption to have a
material impact to our financial position or results of operations.

In October 2002, the FASB issued Statement No. 147, "Acquisitions
of Certain Financial Institutions-an amendment of FASB Statements
No. 72 and 144 and FASB Interpretation No. 9," which removes
acquisitions of financial institutions from the scope of both
Statement 72 and Interpretation 9 and requires that those
transactions be accounted for in accordance with Statements No.
141, Business Combinations, and No. 142, Goodwill and Other
Intangible Assets. In addition, this Statement amends SFAS No.
144, Accounting for the Impairment or Disposal of Long-Lived
Assets, to include in its scope long-term customer-relationship
intangible assets of financial institutions such as depositor-
and borrower-relationship intangible assets and credit cardholder
intangible assets. The requirements relating to acquisitions of
financial institutions are effective for acquisitions for which
the date of acquisition is on or after October 1, 2002. The
provisions related to accounting for the impairment or disposal
of certain long-term customer-relationship intangible assets
are effective on October 1, 2002. The adoption of this statement
did not have a material impact to our financial position or
results of operations as we have not engaged in either of these
activities.

                                8

<PAGE>

In December 2002, the FASB issued Statement No. 148, "Accounting
for Stock-Based Compensation-Transition and Disclosure," which
amends FASB Statement No. 123, Accounting for Stock-Based
Compensation, to provide alternative methodsof transition for a
voluntary change to the fair value based method of accounting
for stock-based employee compensation. In addition, this statement
amends the disclosure requirements of Statement 123 to require
prominent disclosures in both annual and interim financial
 statements about the method of accounting for stock-based
employee compensation and the effect of the method used on
reported results. The transition guidance and annual disclosure
provisions of Statement 148 are effective for fiscal years ending
after December 15, 2002, with earlier application permitted in
certain circumstances. The interim disclosure provisions are
effective for financial reports containing financial statements
for interim periods beginning after December 15, 2002. The
adoption of this statement did not have a material impact on our
financial position or results of operations as we have not
elected to change to the fair value based method of accounting
for stock- based employee compensation.

In January 2003, the FASB issued Interpretation No. 46,
"Consolidation of Variable Interest Entities." Interpretation 46
changes the criteria by which one company includes another entity
in its consolidated financial statements. Previously, the criteria
were based on control through voting interest. Interpretation 46
requires a variable interest entity to be consolidated by a company
if that company is subject to a majority of the risk of loss from
the variable interest entity's activities or entitled to receive
a majority of the entity's residual returns or both. A company
that consolidates a variable interest entity is called the primary
beneficiary of that entity. The consolidation requirements of
Interpretation 46 apply immediately to variable interest entities
created after January 31, 2003. The consolidation requirements
apply to older entities in the first fiscal year or interim
period beginning after June 15, 2003. Certain of the disclosure
requirements apply in all financial statements issued after
January 31, 2003, regardless of when the variable interest
entity was established. We do not expect the adoption to have
a material impact to our financial position or results of
operations.

In April 2003, the FASB issued Statement of Financial Accounting
Standards (SFAS) No. 149, Amendment of Statement No. 133 on
Derivative Instruments and Hedging Activities. SFAS 149 amends
SFAS No. 133 to provide clarification on the financial accounting
and reporting of derivative instruments and hedging activities and
requires that contracts with similar characteristics be accounted
for on a comparable basis. The provisions of SFAS 149 are
effective for contracts entered into or modified after June 30,
2003, and for hedging relationships designated after June 30,
2003. The adoption of SFAS 149 did not have a material impact
on our results of operations or financial position.
In May 2003, the FASB issued SFAS No. 150, Accounting for
Certain Financial Instruments with Characteristics of Both
Liabilities and Equity. SFAS 150 establishes standards on the
classification and measurement of certain financial instruments
with characteristics of both liabilities and equity. The
provisions of SFAS 150 are effective for financial instruments
entered into or modified after May 31, 2003 and to all other
instruments that exist as of the beginning of the first interim
financial reporting period beginning after June 15, 2003. The
adoption of SFAS 150 did not have a material impact on our
results of operations or financial position.

NOTE E - FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying amount of cash, notes receivable, accounts payable,
accrued liabilities and notes payable, as applicable, approximates
fair value due to the short-term nature of these items. The fair
value of the related party notes payable cannot be determined
because of the Company's affiliation with the parties with whom
the agreements exist. The use of different assumptions or
methodologies may have a material effect on the estimates of
fair values.


                                   9

<PAGE>

NOTE F - RELATED PARTY TRANSACTIONS

Company pays consulting fees to the two officer's companies for
management services. The consulting fees totaled 150,000 as of
March 31, 20067 The Company is also a 50% joint venture partner
with one of its shareholders in a property. All expenses are
divided equally.

The Company advances funds periodically to its subsidiary. The
total advanced to date, which is eliminated in consolidation,
is $707,496.

In the first quarter 2007 400,000 shares of preferred stock series
A were converted into 400,000,000 common shares by the officers.
NOTE G - PROPERTY
Property and equipment consisted of the following at March 31, 2007:

<TABLE><CAPTION>
<S>                                        <C>
Building                              $1,395,612
Office equipment                          27,080
Buildings held for sale                1,774,900
                                      -----------
         Total                         3,197,592
Less: Accumulated depreciation           (91,057)
                                      -----------
Property & equipment, net             $3,106,535
                                      ==========
</TABLE>

Assets are being depreciated from five to forty years using the
straight line method.

NOTE H - NOTES PAYABLE

Notes payable at March 31, 2007 are comprised of the following:

<TABLE><CAPTION>
<S>                                                       <C>
Note payable to lending institution, original
balance of $980,000,interest at 7.5% per annum.
Requires monthly principal and interest payments
of 6,852 through 2034. Collateralized by building.     $803,167

Convertible debentures payable to investor group,
original balance of 325,000, interest at 8% per
annum, interest payable quarterly. Principal and
accrued interest are convertible at any time at
the rate of 80% of the average three lowest closing
bid prices of the twenty trading days immediately
preceding the conversion, limited to a maximum of
4.99% of the total outstanding common stock on the
date of conversion. Principal was due July and
August 2005.

Convertible debentures payable to an investor        $1,259,900
group, interest at 8% due March 2009.

Mortgage Payable secured by property Interest at      1,000,000
one over prime interest only for the first ten
years then amortized over 360 months.

Credit line from a bank up to 500,000 interest only     496,000
at one percent over prime.
Credit line from a bank up to $500,000 interest only
At one percent over prime                               430,675
Convertible debenture, interest 8%, past due            325,000

                                             Total   $4,314,742

                              Less current portion    1,778,273
                                                    -----------
                           Total long-term portion  $ 2,211,469
                                                     ===========
</TABLE>

                                     10
<PAGE>

NOTE I - LEASES

Our lease at 120 Birmingham Dr. # 110-G Cardiff, CA. 92007
costs $975 per month. We are also a party to a lease agreement
with Ikon Financial Services. We lease a copier from Ikon
Financial Services for a price of $445 per month.

Note 7- Subsequent Event

Note J-SUBSEQUENT EVENT

In May 2007, the Company's attorneys, were in receipt of a notification
from the SEC, alleging a potential violation of The Company's employee
stock incentive program dating back to 2004. The Company denies any
violations occurred and is in the process of replying to the letter,
but does not feel the event will have a material impact on its business.


Note K-SEGMENT INFORMATION

The Company adopted SFAS No. 131, Disclosures About Segments of an
Enterprise and Related Information, in respect of its operating
segments. The Company?s reportable segment is Blackhawk Media a media
and production enterprise, part of the 98% subsidiary.

The segment is managed separately because each business requires
different technology and marketing strategies. The Company evaluates
performance based upon operating earnings of the unit. The accounting
policy of the segment are the same as those described in the summary
of significant accounting policies. The corporate assets include cash.
There were no significant intercompany transactions. In determining
operating income (loss) by segment, general corporate expenses and
other income ad expense items of a non operating nature are not
considered, as such items are not allocated to the Company's segments.
Segment information for the first quarter 2007 is as follows.
<TABLE><CAPTION>
          <S>                                             <c>

       Sales from Media                                 $101,778

       Cost of Sales                                     53,900

       Gross Profit                                      47,878

       Media Expenses                                    80,121

       Loss from Media Segment                          (32,243)

</TABLE>













                                     11
<PAGE>


Item 2. Management's Discussion and Analysis or Plan of Operations.

Forward-Looking Information

 Much of the discussion in this Item is "forward looking" as that term
is used in Section 27A of the Securities Act and Section 21E of the
Securities Exchange Act of 1934. Actual operations and results may
materially differ from present plans and projections due to changes in
economic conditions, new business opportunities, changed business
conditions, and other developments. Other factors that could cause
results to differ materially are described in our filings with the
Securities and Exchange Commission.

There are several factors that could cause actual results or events to
differ materially from those anticipated, and include, but are not
limited to general economic, financial and business conditions, changes
in and compliance with governmental laws and regulations, including
various state and federal environmental regulations, our ability to
obtain additional financing from outside investors and/or bank and
mezzanine lenders and our ability to generate sufficient revenues to
cover operating losses and position us to achieve positive cash flow.
Readers are cautioned not to place undue reliance on the forward-
looking statements contained herein, which speak only as of the date
hereof. We believe the information contained in this Form 10-QSB to
be accurate as of the date hereof. Changes may occur after that date.
We will not update that information except as required by law in the
normal course of its public disclosure practices. Additionally, the
following discussion regarding our financial condition and results
of operations should be read in conjunction with the financial
statements and related notes contained in Item 1 of Part I of this
Form 10-QSB, as well as the financial statements in Item 7 of Part
II of our Form 10-KSB for the fiscal year ended, December 31, 2006.

Management's Plan of Operations.

Current Business Plan

 Overview

We provide brokerage services in the real estate market, as well as
purchase, renovate, develop and sell residential properties. We also
through our subsidiary produce infomercials and media stream
advertising.

Results of Operations

 Continuing operations

 Revenue

 Three months ended March 31, 2007 compared to the three months ended
March 31, 2006. Total revenues were at $323,346 for the three months
ended March 31, 2007 compared to $174,704 for the prior period, an
increase of 66% percent. Our gross profit for the three months ended
March 31, 2007 compared to 2006 increased to $110,877 from $76,465.
Gross margin as a percentage of sales decreased to 34% percent in 2007
from 44% in 2006. Sales increase as a result of a sale of renovated
property and the advent of our media business.

Total operating expenses for the three months ended March 31, 2007
compared to 2006 increased  to $2,107,880 from $533,346 in the prior
period. This increase was largely due to stock for services incurred
in 2007, which were paid to consultants for investor relations and
developing our media business. Operating loss of $1,987,003 were
incurred in 2007 compared to $456,881 for the prior period. Interest
expense for the three months ended March 31, 2007 was $98,783 as
compared to the same period of $28,450. The increase is attributable
to more debt associated with buildings held for resale.

Net loss for the three months ended March 31, 2007 was $2,102,067
compared to a net loss of $481,705 for the same period in 2005. Again,
the increase in loss attributable to stock for services.

                                   12
<PAGE>

Liquidity and Capital Resources

 As of March 31, 2007, we had a deficiency in working capital of
$2,249,257.

Cash provided by investing activities totaled $32,700 mainly due to
sale of a building net of new additions. Cash used by operations
equaled $320,672 with cash provided by operations of$287,146 mainly

from funding of stock subscriptions and new borrowings.

Critical Accounting Policies

 The preparation of our consolidated financial statements in
conformity with accounting principles generally accepted in the
United States requires us to make estimates and judgments that affect
our reported assets, liabilities, revenues, and expenses, and the
disclosure of contingent assets and liabilities. We base our estimates
and judgments on historical experience and on various other assumptions
we believe to be reasonable under the circumstances. Future events,
however, may differ markedly from our current expectations and
assumptions. While there are a number of significant accounting
policies affecting our consolidated financial statements, we believe
the following critical accounting policy involve the most complex,
difficult and subjective estimates and judgments.

Stock-Based Compensation

 In December 2002, the FASB issued SFAS No. 148 - Accounting for
Stock-Based Compensation - Transition and Disclosure. This statement
amends SFAS No. 123- Accounting for Stock-Based Compensation,
providing alternative methods of voluntarily transitioning to the
fair market value based method of accounting for stock based employee
compensation. FAS 148 also requires disclosure of the method used to
account for stock-based employee compensation and the effect of the
method in both the annual and interim financial statements. The
provisions of this statement related to transition methods are
effective for fiscal years ending after December 15, 2002, while
provisions related to disclosure requirements are effective in
financial reports for interim periods beginning after December 31,
2002. We elected to continue to account for stock-based compensation
plans using the intrinsic value-based method of accounting prescribed
by APB No. 25, "Accounting for Stock Issued to Employees," and
related interpretations. Under the provisions of APB No. 25,
compensation expense is measured at the grant date for the difference
between the fair value of the stock and the exercise price.

Recent Accounting Pronouncements

 In November 2004, the Financial Accounting Standards Board (FASB)
issued SFAS 151, Inventory Costs- an amendment of ARB No. 43, Chapter
4. This Statement amends the guidance in ARB No. 43, Chapter 4,
"Inventory Pricing," to clarify the accounting for abnormal amounts
of idle facility expense, freight, handling costs, and wasted material
(spoilage). Paragraph 5 of ARB 43, Chapter 4, previously stated that
"under some circumstances, items such as idle facility expense,
excessive spoilage, double freight, and rehandling costs may be so
abnormal as to require treatment as current period charges." This
Statement requires that those items be recognized as current-period
charges regardless of whether they meet the criterion of "so
abnormal." In addition, this Statement requires that allocation of
fixed production overheads to the costs of conversion be based on
the normal capacity of the production facilities. This Statement is
effective for inventory costs incurred during fiscal years beginning
after June 15, 2005. Management does not believe the adoption of this
Statement will have any immediate material impact on the
Company.
In December 2004, the FASB issued SFAS No.152, "Accounting for Real
Estate Time-Sharing Transactions-an amendment of FASB Statements No.
66 and 67" ("SFAS 152). The amendments made by Statement 152 This
 Statement amends FASB Statement No. 66, Accounting for Sales of Real
Estate, to reference the financial accounting and reporting guidance
for real estate time-sharing transactions that is provided in AICPA
Statement of Position (SOP) 04-2, Accounting for Real Estate Time-
Sharing Transactions. This Statement also amends FASB Statement No.
67, Accounting for Costs and Initial Rental Operations of Real Estate
Projects, to state that the guidance for

(a) incidental operations and (b) costs incurred to sell real estate
projects does not apply to real estate time-sharing transactions.
The accounting for those operations and costs is subject to the
guidance in SOP 04-2. This Statement is effective for financial
statements for fiscal years beginning after June 15, 2005 with
earlier application encouraged. We do not anticipate that the
implementation of this standard will have a material impact on its
financial position, results of operations or cash flows.

On December 16, 2004, the Financial Accounting Standards Board
("FASB") published Statement of Financial Accounting Standards No.
123 (Revised 2004), Share-Based Payment ("SFAS 123R"). SFAS 123R
requires that compensation cost related to share-based payment
transactions be recognized in the financial statements. Share-based
payment transactions within the scope of SFAS 123R include stock
options, restricted stock plans, performance-based awards, stock
appreciation rights, and employee share purchase plans. The
provisions of SFAS 123R are effective as of the first interim
period that begins after June 15, 2005. Accordingly, the Company
will implement the revised standard in the third quarter of fiscal
year 2005. Currently, the Company accounts for its share-based
payment transactions under the provisions of APB 25, which does
not necessarily require the recognition of compensation cost in
the financial statements. Management is assessing the implications
of this revised standard, which may materially impact the Company's
results of operations in the third quarter of fiscal year 2005 and
thereafter.

                               13
<PAGE>

On December 16, 2004, FASB issued Statement of Financial Accounting
Standards No. 153, Exchanges of Nonmonetary Assets, an amendment of
APB Opinion No. 29, Accounting for Nonmonetary Transactions
("SFAS 153"). This statement amends APB Opinion 29 to eliminate
the exception for nonmonetary exchanges of similar productive assets
and replaces it with a general exception for exchanges of nonmonetary
assets that do not have commercial substance. Under SFAS 153, if a
nonmonetary exchange of similar productive assets meets a commercial-
substance criterion and fair value is determinable, the transaction
must be accounted for at fair value resulting in recognition of any
gain or loss. SFAS 153 is effective for nonmonetary transactions in
fiscal periods that begin after June 15, 2005. We do not anticipate
that the implementation of this standard will have a material impact
on its financial position, results of operations or cash flows.

Off-Balance Sheet Arrangements.

 We do not have any off-balance sheet arrangements.

Item 3. Controls and Procedures.

 Disclosure controls and procedures are controls and other procedures
that are designed to ensure that information required to be disclosed
by us in the reports that we file or submit under the Exchange Act is
recorded, processed, summarized and reported, within the time periods
specified in the Securities and Exchange Commission's rules and forms.
Disclosure controls and procedures include, without limitation,
controls and procedures designed to ensure that information required
to be disclosed by us in the reports that we file under the Exchange
Act is accumulated and communicated to our management, including our
principal executive and financial officers, as appropriate to allow
timely decisions regarding required disclosure.

Evaluation of Disclosure and Controls and Procedures. As of the end
of the period covered by this Quarterly Report, we conducted an
evaluation, under the supervision and with the participation of our
chief executive officer and chief financial officer, of our
disclosure controls and procedures (as defined in Rules 13a-15(e)
of the Exchange Act). Based on this evaluation, our chief executive
officer and chief financial officer concluded that our disclosure
controls and procedures are effective to ensure that information
required to be disclosed by us in reports that we file or submit
under the Exchange Act is recorded, processed, summarized and
reported within the time periods specified in Securities and
Exchange Commission rules and forms.

Changes in Internal Controls Over Financial Reporting. There was
no change in our internal controls, which are included within
disclosure controls and procedures, during our most recently
completed fiscal quarter that has materially affected, or is
reasonably likely to materially affect, our internal controls.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

 None

Item 2. Unregistered Sales of Equity Securities and Use of
Proceeds.

 None.

Item 3. Defaults Upon Senior Securities.

 None.

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

 None.

                                   14

<PAGE>

Item 6. Exhibits.
<TABLE><CAPTION>

Exhibit No.     Identification of Exhibit
-----------     -------------------------
<S>                 <C>
3.1**           Articles of Incorporation.
3.2**           Articles of Amendment to Articles of Incorporation.
3.3**           Articles of Amendment to Articles of Incorporation
3.4**           Certificate of Change.
3.5**           Certificate of Correction to the Certificate of Change.
3.6**           Certificate of Amendment to the Certificate of Designation
                for the Series B Preferred Stock.
3.7**           Certificate of Designation for the Series A Preferred Stock.
3.8**           Certificate of Designation for the Series C Preferred Stock.
3.9**           Bylaws.
10.1**          Steven Bonenberger Employment and Stock Purchase Agreement.
10.2**          Brent Fouch Employment and Stock Purchase Agreement.
10.3**          Joint Venture Agreement with Prize Pizza, LLC
10.4**          Joint Venture Agreement with K&S Family Entertainment.
10.5**          Purchase Agreement dated November 9, 2004, between Robert C.
                Simpson and Palomar Enterprises, Inc.
14**            Code of Ethics
21**             Subsidiaries.
31.1*           Certification of Steven Bonenberger, President, Director and
                Chief Executive Officer of Palomar Enterprises, Inc., pursuant to
                18 U.S.C. 1350, as adopted pursuant to 302 of the Sarbanes-Oxley
                Act of 2002.
31.2*           Certification of Brent Fouch, Treasurer, Chief Financial Officer
                and Director of Palomar Enterprises, Inc., pursuant to 18 U.S.C.
                Sec. 1350, as adopted pursuant to Sec. 302 of the Sarbanes-Oxley
                Act of 2002.
32.1*           Certification of Steven Bonenberger, President, Director and
                Chief Executive Officer of Palomar Enterprises, Inc., pursuant to
                18 U.S.C. Sec. 1350, as adopted pursuant to Sec. 906 of the
                Sarbanes-Oxley Act of 2002.
32.2*           Certification of Brent Fouch, Treasurer, Chief Financial Officer
                and Director of Palomar Enterprises, Inc., pursuant to 18 U.S.C.
                Sec. 1350, as adopted pursuant to Sec. 906 of the Sarbanes-Oxley
                Act of 2002.

</TABLE>

* Filed herewith. ** Previously Filed

                                        SIGNATURES

In accordance with the requirements of the Exchange Act, the Registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.



                                        Palomar Enterprises, Inc.

Dated: May 10,2006                      By /s/ Steve Bonenberger
                                        ------------------------------------
                                        Steve Bonenberger, President,
                                        Chief Executive Officer and Director


                                      15
<PAGE>