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, 2005.

[ ]  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      (I.R.S. Employer Identification No.)
      incorporation or organization)

  1802 N. CARSON STREET, SUITE 212-3018                  89701
           CARSON CITY, NEVADA                         (Zip Code)
 (Address of principal executive offices)

                                 (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.  Yes  [X]  No  [ ]

     State  the  number of shares outstanding of each of the issuer's classes of
common  equity,  as  of  the  latest practicable date:  As of June 17, 2005, the
issuer  had  956,911,121  shares  of  its  common  stock issued and outstanding.

     Transitional Small Business Disclosure Format (check one):  Yes [ ]  No [X]


<PAGE>
<TABLE>
<CAPTION>
                                TABLE OF CONTENTS


<S>                                                                       <C>
PART I - FINANCIAL INFORMATION . . . . . . . . . . . . . . . . . . . . . .  1
    Item 1.  Financial Statements. . . . . . . . . . . . . . . . . . . . .  1
    Item 2.  Management's Discussion and Analysis or Plan of Operation . .  2
    Item 3.  Controls and Procedures . . . . . . . . . . . . . . . . . . .  6
PART II - OTHER INFORMATION. . . . . . . . . . . . . . . . . . . . . . . .  7
    Item 1.  Legal Proceedings . . . . . . . . . . . . . . . . . . . . . .  7
    Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds .  7
    Item 3.  Defaults Upon Senior Securities . . . . . . . . . . . . . . .  7
    Item 4. Submission of Matters to a Vote of Security Holders. . . . . .  7
    Item 5.  Other Information . . . . . . . . . . . . . . . . . . . . . .  7
    Item 6.  Exhibits. . . . . . . . . . . . . . . . . . . . . . . . . . .  7
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  8
CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002. .
CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002. .
CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002. .
CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
</TABLE>


<PAGE>
                         PART I - FINANCIAL INFORMATION

ITEM  1.  FINANCIAL  STATEMENTS.

<TABLE>
<CAPTION>
PALOMAR ENTERPRISES, INC.
CONSOLIDATED BALANCE SHEET AS OF MARCH 31, 2005 (UNAUDITED)


ASSETS
<S>                                                                   <C>
  Cash                                                                $     23,409
  Prepaids and other current assets                                         25,734
                                                                      -------------
Total current assets                                                        49,143

Property, plant and equipment, net of accumulated depreciation of $      1,381,932

Goodwill                                                                   377,249
                                                                      -------------
TOTAL ASSETS                                                          $  1,808,324
                                                                      =============

LIABILITIES AND STOCKHOLDERS' EQUITY:

  Accounts Payable                                                    $     26,806
  Accrued Expenses                                                          23,299
  Current portion of notes payable                                         334,320
                                                                      -------------
Total current liabilities                                                  384,425

  Note payable, long term                                                  833,763
                                                                      -------------
TOTAL LIABILITIES                                                        1,218,188
                                                                      -------------

MINORITY INTEREST                                                            3,352

STOCKHOLDERS' EQUITY:
  Series A preferred stock, $0.00001 par value, 10,000,000 shares
    authorized, 9,000,000 shares issued or outstanding                          90
  Series B preferred stock, $0.00001 par value, 50,000,000 shares
    authorized, no shares issued or outstanding                                  -
  Series C preferred stock, $0.00001 par value, 30,000,000 shares
    authorized, no shares issued or outstanding                                  -
  Common stock, $0.00001 par value, 25,000,000,000 shares
    authorized, 932,261,123 shares issued;
    932,261,120 outstanding                                                  9,323
  Additional paid-in capital                                            11,502,576
  Accumulated deficit                                                  (10,897,787)
  Treasury stock - at cost (3 shares)                                      (27,418)
                                                                      -------------
    Total stockholders' equity                                             586,784
                                                                      -------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                            $  1,808,324
                                                                      =============
</TABLE>

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


<PAGE>
<TABLE>
<CAPTION>
PALOMAR ENTERPRISES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE MONTHS
ENDED MARCH 31, 2005 AND 2004 (UNAUDITED)

                                       Three Months Ended    Three Months Ended
                                         March 31, 2005        March 31, 2004
                                      --------------------  --------------------
<S>                                   <C>                   <C>
Revenues                              $            86,565   $            35,578
Cost of goods sold                                 60,389                     -
                                      --------------------  --------------------
Gross profit                                       26,176                35,578
Operating expenses
  General and administrative                      670,462                60,293
  Facilities and rent                              12,831                10,407
  Consulting, legal and professional              212,381               869,975
  Payroll and related costs                         9,682                28,405
                                      --------------------  --------------------
Total operating expenses                          905,356               969,080
                                      --------------------  --------------------
Loss from operations                             (879,180)             (933,502)
                                      --------------------  --------------------
Interest expense                                  (28,925)                    -
Minority interest in net loss                     150,130                     -
                                      --------------------  --------------------
Net loss                              $          (757,975)  $          (933,502)
                                      ====================  ====================

  Net loss per share of common stock
    operations - basic and diluted                      *   $           (111.64)
                                      ====================  ====================

Weighted average number of
  shares of common stock                      355,322,234                 8,362
  outstanding                         ====================  ====================

* - less than $0.01 per share
</TABLE>

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


                                        2
<PAGE>
<TABLE>
<CAPTION>
PALOMAR ENTERPRISES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 2005 AND 2004 (UNAUDITED)

                                                Three Months Ended    Three Months Ended
                                                  March 31, 2005        March 31, 2004
                                               --------------------  --------------------
<S>                                            <C>                   <C>
Cash flows from operating activities:
Net loss for the period                        $          (757,975)  $          (933,502)
Minority interest in net loss                             (150,130)
Adjustments to reconcile net loss to net cash
  used by operating activities:
  Depreciation                                               7,051                   300
  Common stock issued for services                         510,241               561,200
Changes in assets and liabilities:
  Prepaid expenses                                           1,592                (4,108)
  Accounts payable and accrued liabilities                   4,828                11,967
                                               --------------------  --------------------
Net cash used in operating activities                     (384,393)             (364,143)
                                               --------------------  --------------------
Cash flows from investing activities:
  Purchase of property and equipment                        (4,500)             (377,968)
                                               --------------------  --------------------
Net cash used in investing activities                       (4,500)             (377,968)
                                               --------------------  --------------------
Cash flows from financing activities:
  Payments on note payable                                  (6,235)                    -
  Proceeds from sale of common stock                       402,680               210,926
  Proceeds from exercise of stock options                        -               943,735
                                               --------------------  --------------------
Net cash provided by financing activities                  396,445             1,154,661
                                               --------------------  --------------------
Net (decrease)/increase in cash                              7,552               412,550
Cash, beginning of period                                   15,857               142,893
                                               --------------------  --------------------
Cash, end of period                            $            23,409   $           555,443
                                               ====================  ====================
</TABLE>

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

                                        3
<PAGE>
<TABLE>
<CAPTION>
PALOMAR ENTERPRISES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 2005 AND 2004 (UNAUDITED), continued

SUPPLEMENTAL CASH FLOW INFORMATION:

                      March 31, 2005   March 31, 2004
                      ---------------  ---------------
<S>                   <C>              <C>
    Interest Paid     $        21,175  $           -0-
                      ===============  ===============
</TABLE>


<TABLE>
<CAPTION>
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES:

                                             March 31,   March 31,
                                               2005        2004
<S>                                         <C>         <C>
Common stock issued to satisfy liabilities  $   27,221  $      -0-
                                            ==========  ==========
</TABLE>

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

PALOMAR ENTERPRISES, INC.
NOTES TO UNAUDITED FINANCIAL STATEMENTS
FOR THE PERIOD ENDED March 31, 2005
---------------------------------------------------------------

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 2004
as reported in the 10-KSB have been omitted.


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.  The Company was initially
formed for the purpose of developing an aircraft service company for private
aircraft owners that would offer on-site preventative maintenance and repair
services.  There were no material operating activities under this plan, and it
was abandoned in 2001.

In October 2001, the Company launched a new debt acquisition business whereby it
would acquire non-performing debt from financial institutions and use the
services of various debtor location services to attempt collection of these


                                        4
<PAGE>
purchased amounts.  There have been no revenues recorded from this line of
business, and it is no longer being pursued.

In February 2003, the Company entered the nutraceutical market.  Total revenues
to date recorded from this line of business is $180.  However, management
determined that this business line would be extremely difficult to implement and
discontinued all efforts in this field.  On July 11, 2003, the Company's
management was changed and the Company's future emphasis will be to develop a
business in the financial services sector.

On May 1, 2004 the Company entered into a joint venture agreement with Prize
Pizza LLC (Prize).  Under the terms of the agreement, the Company issued
25,000,000 shares of common stock in exchange for a sixty percent interest in
Prize.  The transaction was valued at $200,000, based on the stock's market
value on the date of acquisition.  Because the Company held a controlling
interest in Prize, the financial statements presented as of June 30, 2004 were
consolidated.  Effective as of August 20, 2004, the Company abandoned all
operations of Prize and has recorded all related activities as discontinued
operations in the three months ended March 31, 2005.

Prior to January 1, 2004, the Company was in the development stage.  Periods
presented prior to that date represent the operations of the Company while it
was in the development stage.  Operations from January 1, 2004, represent that
of the Company as no longer a development stage enterprise.

The Company faces many operating and industry challenges.  There is no
meaningful operating history to evaluate the Company's prospects for successful
operations.  Future losses for the Company are anticipated.  The proposed plan
of operations would include attracting investors to fund expansion and ongoing
operations.

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

NOTE C - GOING CONCERN UNCERTAINTY

The Company has been unable to generate sufficient operating revenues and has
incurred cumulative operating losses of $8,613,494.

The Company has implemented a business plan to operate as a mortgage broker and
a lender for sub-prime auto loans.  However, the Company is dependent upon the
available cash on hand and either future sales of securities or upon its current


                                        5
<PAGE>
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.  As mentioned above, the Company has
not obtained the capital needed to achieve management's plans and support its
operations, and there is no assurance that the Company will be able to raise
such financing. These factors raise considerable doubt about the Company's
ability to continue as a going concern.  The financial statements do not include
any adjustments that might result from this uncertainty.


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 sixty percent interest in Prize Pizza LLC prior to the abandonment
     of the investment. All significant inter-company accounts and transactions
     have been eliminated. The Company abandoned its interest in Prize Pizza,
     LLC during the three months ended December 31, 2004. On May 1, 2004, the
     Company issued 25,000,000 (250 post splits) shares of its common stock
     to acquire a 60% interest in Prize Pizza LLC ("Prize"). The transaction was
     valued at the trading price of the common stock of $0.008 per share
     (pre-split) plus the net liabilities assumed. Prize was newly formed to
     develop and operate a Pizza restaurant in Tempe, Arizona. The 60% interest
     was determined on the basis of profit and loss allocations as specified in
     the operating agreement. The investment was accounted for using the
     purchase method of accounting. The purchase price of Prize was allocated as
     follows:


                                        6
<PAGE>
<TABLE>
<CAPTION>
<S>                                                    <C>
     Leasehold improvements                            $ 159,216
     Equipment                                            94,728
     Current assets                                       13,858
     Excess of purchase price over net assets acquired   239,198
     Bank Debt                                           (80,000)
     Affiliate debt                                     (227,000)
                                                       ----------
                                                       $ 200,000
                                                       ==========
</TABLE>

     The above allocation excludes the minority interest of approximately,
$133.000.

     The Company had intended to perform a valuation of identifiable intangible
assets to allocate the excess of the purchase price over the net assets
acquired.  However, after numerous operational difficulties could not be
resolved, the Company determined that it would abandon its investment in Prize
effective on August 20, 2004.

     The Blackhawk Fund is a wholly-owned subsidiary of Palomar Enterprises.
Palomar is the majority owner of The BlackHawk Fund, which is publicly traded on
the OTC B.B. (BHWK). Palomar owns approximately 72% of BlackHawk on a
fully-diluted basis. 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, 2005.


4. Advertising expenses
   --------------------

     Advertising and marketing expenses are charged to operations as incurred.
     Advertising expenses for the period ending March 31, 2005 was $8,970.

5. Revenue recognition
   -------------------

     The Company generates revenue from the sale of real estate, brokerage
     commissions, rental properties and restaurant operations. Revenues from
     real estate sales and commissions are recognized on execution of the sales
     contract. Rental and restaurant income is recognized in the period earned.
     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 realizes revenue from it's subsidiary, The Blackhawk Fund,
     from existing consulting services.


                                        7
<PAGE>
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, 2005, 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 31,2005, the Company's
     outstanding warrants are considered anti-dilutive

     Subsequent to March 31, 2005, the Company declared a 1,000 to one
     reverse stock split of its common stock. All stock numbers presented in the
     financial statements have been retroactively restated to reflect this
     reverse split.

     In May and June 2002, in connection with the sale of Units pursuant to a
     Private Placement Memorandum, dated May 15, 2002, the Company issued stock
     warrants (5/15/02 Warrants) to the purchasers of 6 shares of common stock
     to purchase up to an additional 6 shares of restricted, unregistered common
     stock at a price of $100,000.00 per share.

     In August and September 2002, in connection with the sale of Units pursuant
     to a Private Placement Memorandum, dated August 1, 2002, the Company issued
     stock warrants (8/1/02 Warrants) to the purchasers of 5 shares of common
     stock to purchase up to an additional 5 shares of restricted, unregistered
     common stock at a price of $100,000.00 per share.

<TABLE>
<CAPTION>
                                 Warrants
                              outstanding at
                             December 31, 2004       Exercise price
                             -----------------  -------------------------

<S>                          <C>                <C>
5/15/02 Warrants                             6       6    $1.00 per share
8/1/02 Warrants                              6       6    $1.00 per share
                             -----------------  -------------------------

Totals at December 31, 2004                 12      12
                             =================  =========================
</TABLE>


                                        8
<PAGE>
     The warrants have no stated expiration date.


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.

9. Stock Based Compensation

     During the period ending March 31, 2005, the Company issued stock options
     from time-to-time to executives, key employees and members of the Board of
     Directors. The Company has adopted the disclosure-only provisions of
     Statement of Financial Accounting Standards No. 123, "Accounting for
     Stock-Based Compensation," and continues to account for stock based
     compensation using the intrinsic value method prescribed by Accounting
     Principles Board Opinion No. 25, "Accounting for Stock Issued to
     Employees". All stock options granted in the period ending March 31, 2005
     have exercise prices at 85% of the market price of the Company's common
     stock at the dates of the grants. Accordingly, no compensation cost has
     been recognized for the stock options granted to employees.

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. The Company plans to adopt SFAS No. 143 effective
January 1, 2003.


                                        9
<PAGE>
     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.

     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 methods
of 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


                                       10
<PAGE>
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.


                                       11
<PAGE>
NOTE F - RELATED PARTY TRANSACTIONS

Company pays consulting fees to the two officer's companies for management
services.  The consulting fees totaled 40,400 as of March 31, 2005.

NOTE G - CAPITAL STOCK TRANSACTIONS

We are currently authorized to issue 100,000,000 shares of preferred stock. We
have designated three series of preferred stock, Series, "A", "B" and "C".
Series A preferred stock is comprised of 10,000,000 shares.  Each share of the
Series A preferred stock is convertible into 1,000 shares of our common stock.

On all matters submitted to a vote of the holders of the Common Stock,
including, without limitation, the election of directors, a holder of shares of
the Series A Preferred Stock is entitled to the number of votes on such matters
equal to the number of shares of the Series A Preferred Stock held by such
holder multiplied by 1,000.  On October 25, 2004, 9,000,000 shares of Series "A"
preferred stock were issued to two officers of the Company. As a result of the
granting of their voting preferred shares, the two officers effectively have
approximately ninety nine percent voting control of the Company.

50,000,000 shares have been designates as the Series B Preferred Stock.  Each
share of the Series B preferred stock is convertible into 100 shares of our
common stock. On all matters submitted to a vote of the holders of the Common
Stock, including, without limitation, the election of directors, a holder of
shares of the Series B Preferred Stock is entitled to the number of votes on
such matters equal to the number of shares of the Series B Preferred Stock held
by such holder multiplied by 100.

30,000,000 shares have been designated as the Series C.   Each share of our
Series C Preferred Stock is convertible into 1,000 shares of our common stock.
The shares of our Series C Preferred Stock do not have voting rights.

During the quarter ended March 31, 2005, employees exercised options to acquire
792,100,000 shares of common stock on a cashless basis through an outside
broker.  The broker sold the shares on the open market and Palomar received
proceeds totaling $182,013.  Palomar issued 67,500,000 shares of common stock
for services during the same period.  Palomar recorded compensation expense of $
510,214 under the intrinsic value method during the three months ended March 31,
2005.

During the quarter ended March 31, 2005, Palomar initiated the cancellation of
52,000,000 Regulation S common shares, which were issued as collateral pursuant
to a Promissory Note with Pinnin Ben David.  Palomar has not received the
promised funds and therefore intends to have these shares returned to Treasury.


NOTE H - PROPERTY

Property and equipment consisted of the following at March 31, 2005:

<TABLE>
<CAPTION>
<S>                                   <C>
Building                              $1,395,612
Office equipment                           7,010
                                      -----------
         Total                         1,402,622
Less: Accumulated depreciation           (18,139)
                                      -----------
Property & equipment, net             $1,384,483
</TABLE>

Assets are being depreciated from five to forty years using the straight line
method.  Depreciation expense was $8,159 and $-0- for the years ended December
31, 2004 and 2003 respectively.

NOTE I - NOTES PAYABLE AND BANK LINE OF CREDIT

Notes payable and bank line of credit at March 31, 2005 are comprised of the
following:


                                       12
<PAGE>
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.
$849,318

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 conversion.  Principal
due July and August 2005.
325,000

NOTE J - DISCONTINUED OPERATIONS

As stated in Note A to the financial statements, the Company abandoned its pizza
restaurant operations during the year ended December 31, 2004. The total loss
incurred from these operations was $43,777 on revenues of $17,656 and the total
loss from disposal of the business was $166,223 during the year ended December
31, 2004.

NOTE K - SUBSEQUENT EVENT

The company received funds from its subsidiary company, BlackHawk Fund
          secured by a 'floating note'


                                       13
<PAGE>
       2. The company has had another record setting revenue producing quarter,
          the unaudited transactions to date exceed $ 150,000.00 for the second
          fiscal quarter of 2005. This represents an increase of over 100% from
          the first quarter of 2005 with a portion of the second quarter still
          in progress.

NOTE L - NOTE RECEIVABLE

During the year ended December 31, 2004, the Company advanced cash of
approximately $251,000, to an entity that provided financing for automobile
purchases. The Company's receivable is in the form of multiple notes due through
August 2005. The notes bear interest at 12% per annum and are payable in monthly
installments of principal and interest. The notes are collateralized by the
underlying automobile financing agreements of the third party. The Company has
committed up to $1,000,000 in financing to the third party if such funds are
available within the Company.

On November 29, 2004, we acquired series A, series B and series C preferred
stock of Zannwell, Inc., a Nevada corporation ("Zannwell"). Pursuant to that
certain Capital Stock Purchase Agreement dated November 29, 2004 between Robert
C. Simpson, Ph. D., as the stockholder of Zannwell, and Palomar Enterprises, a
copy of which is attached as an exhibit to this Current Report, on November 29,
2004, we acquired from Dr. Simpson 19,000,000 shares of Zannwell's series A
preferred stock which constitute 95 percent of Zannwell's issued and outstanding
shares of the series A preferred stock, 10,000,000 shares of Zannwell's series B
preferred stock, which constitute 100 percent of Zannwell's issued and
outstanding shares of the series B preferred stock, and 10,000,000 shares of
Zannwell's series C preferred stock, which constitute 100 percent of Zannwell's
issued and outstanding shares of the series C preferred stock. Each share of the
series A preferred stock is convertible into 10 shares of Zannwell's common
stock. The shares of the series A preferred stock do not have voting rights.
Each share of the Series B preferred Stock is convertible into 200 shares of
Zannwell's common stock. On all matters submitted to a vote of the holders of
the common stock, a holder of the Series B preferred Stock is entitled to one
vote per share of the Series B preferred stock held by such holder. The series C
preferred stock is nonconvertible. Each share of the series C preferred stock
entitles the holder to 100 votes of our common stock on all matters brought
before Zannwell's stockholders. Therefore, the voting power of all of the shares
of preferred stock of Zannwell sold pursuant to the Capital Stock Purchase
Agreement is equal to the vote of 1,010,000,000 shares of the Zannwell common
stock, which number exceeds the 167,750,000 issued and outstanding shares of
Zannwell's common stock. All of the preferred shares of Zannwell acquired by us
carried a legend restricting the transfer thereof under the Securities Act of
1933, as amended. The total consideration paid by us in connection with the
Capital Stock Purchase Agreement was $380,000. We used our working capital as
consideration for the preferred shares purchased by it pursuant to the Capital
Stock Purchase Agreement. As a result of the capital stock purchase transaction,
Zann well, Inc. became a wholly-owned subsidiary of Palomar Enterprises, Inc.
The purchase price for Zannwell, Inc.'s preferred shares was determined as a
result of comparison of values of companies similar to Zannwell, Inc.

Zanwell, Inc., had no operations at the time, no assets and no indebtedness. The
company was a fully reporting and trading OTC BB company and was current on all
of its filings. The market value of such companies is somewhere between $
250,000.00 and can range to $ 500,000.00. The purchase price for Zannwell,
Inc.'s preferred shares was determined as a result of comparison of values of
companies similar to Zannwell, Inc.


                                       14
<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,  2  December  31,  2004.

MANAGEMENT'S PLAN OF OPERATIONS.

CURRENT BUSINESS PLAN

     Our  current  purpose  is  to  seek, investigate and, if such investigation
warrants,  acquire  an  interest  in  business  opportunities presented to us by
persons  or  firms  who  or  which  desire to seek the perceived advantages of a
corporation  which  is  registered under the Securities Exchange Act of 1934, as
amended.  We  do  not  restrict our search to any specific business; industry or
geographical  location and we may participate in a business venture of virtually
any  kind  or  nature.

     We  may  seek  a  business  opportunity  with  entities which have recently
commenced  operations,  or which wish to utilize the public marketplace in order
to  raise additional capital in order to expand into new products or markets, to
develop  a  new  product  or  service  or  for other corporate purposes.  We may
acquire  assets and establish wholly owned subsidiaries in various businesses or
acquire  existing  businesses  as  subsidiaries.

     As  part  of our investigation of potential merger candidates, our officers
and  directors will meet personally with management and key personnel, may visit
and  inspect material facilities, obtain independent analysis or verification of
certain  information  provided, check references of management and key personnel
and take other reasonable investigative measures, to the extent of our financial
resources  and  management  expertise.  The manner in which we participate in an
opportunity  will  depend on the nature of the opportunity, the respective needs
and  desires  of  us  and  other parties, the management of the opportunity, our
relative  negotiation  strength  and  that  of  the  other  management.

     We  intend  to  concentrate on identifying preliminary prospective business
opportunities  that may be brought to our attention through present associations
of our officers and directors, or by our shareholders.  In analyzing prospective
business  opportunities,  we  will  consider  such  matters  as  the  available
technical,  financial  and  managerial  resources;  working  capital  and  other
financial requirements; history of operations, if any; prospects for the future;
nature  of  present  and  expected  competition;  the  quality and experience of
management services which may be available and the depth of that management; the
potential  for  further  research,  development  or  exploration;  specific risk
factors  not  now  foreseeable  but  which then may be anticipated to impact our
proposed  activities;  the  potential for growth or expansion; the potential for
profit;  the perceived public recognition or acceptance of products, services or
trades;  name  identification;  and  other  relevant  factors.


                                       15
<PAGE>
     Our  officers  and  directors  will meet personally with management and key
personnel  of  the business opportunity as part of their investigation.  We will
not  acquire  or  merge  with any company for which audited financial statements
cannot  be  obtained  within  a  reasonable  period of time after closing of the
proposed  transaction,  as  required  by  the  Exchange  Act.

     We  will  not  restrict  our  search to any specific kind of firms, but may
acquire  a  venture  which  is in its preliminary or development stage, which is
already  in  operation,  or  which  is in essentially any stage of its corporate
life.  It  is  impossible  to predict at this time the status of any business in
which  we  may become engaged, in that such business may need to seek additional
capital,  may  desire  to  have  its  shares  publicly  traded or may seek other
perceived  advantages  which  we  may  offer.

RESULTS OF OPERATIONS

CONTINUING OPERATIONS

REVENUE

THREE MONTHS ENDED MARCH 31, 2005 COMPARED TO THE THREE MONTHS ENDED MARCH 31,
2004.

     Total  net  sales  and  revenues were at $86,565 for the three months ended
March  31,  20045  compared  to $35,578 for the prior period, an increase of 127
percent.

     Our gross profit for the three months ended March 31, 2005 compared to 2004
decreased  to  $21,176  from  $35,578.  Gross  margin  as  a percentage of sales
decreased  to  27  percent  in  2005.

     Total  operating  expenses for the three months ended March 31, 2005 were $
905,356  compared  to  2004,  which  were  $969,080.

     Net  loss  was  $933,502  for  period ending March 31, 2004, compared to an
operating  loss  of  $757,975  for  the  same  period  in  2005.

     Interest  expense,  net  for  the  three  months  ended  March 31, 2005 was
$28,925.

LIQUIDITY AND CAPITAL RESOURCES

     As  of  March 31, 2005, we had a deficiency in working capital of $335,282.

     Cash used in investing activities totaled $4,500, used for property, plant,
and  equipment, and note payable reductions for the three months ended March 31,
2005.

     During  the  first  half  of 2003, we had no operations and limited current
assets  with  which  to  finance  our  ongoing operations.  On July 11, 2003, we
changed  our  business model to become a development company.  We currently have
the  following  operating  divisions:

     Financial  Services Division.  This division focuses upon mortgage and home
loan origination, real state sales and client services, and property acquisition
and  development.  This  division  is  operating  as  "The  Palomar  Group":
www.thepalomargroup.com.  The  division had the largest operating quarter in our
-----------------------
history  of company, posting revenue for the quarter ending of $ 73,927.50.  The
company  posted  revenue  for  the  same quarter ending of 2004 of $35,578.00 an
increase of over 100%.  The increase is a reflection of the company having fully
implemented  &  continuing  to  improve  upon & expand its business model.  This
division  operates  from facility owned by us and located at 2585 Pio Pico Drive
in Carlsbad, California.  We currently have four real estate agents and two loan
agents  in  our  Financial  Services  Division.

     The  Property  acquisition  &  development  group  realized revenue for the
period  ending  03/31/2005  of  $ 9,518.95.  There are no revenues from the same
period  ending  03/31/2004  to  make  comparison.


                                       16
<PAGE>
     We completed the installation of a wireless communication system in its Pio
Pico  facility.  This system allows our sales force "real time" access from most
areas in the San Diego region for data retrieval and sales information.  The Pio
Pico  office  complex  is a state-of-the-art real estate & home loan origination
facility  that serves the company, its employees and its respective client base.

     Corporate  Finance Division, which focuses upon developing and/or acquiring
cash  flow  positive  businesses and acquiring (when possible) the real property
and  assets  that  are  material  to  such  businesses;  offering other types of
financial  instruments,  including but not limited to, notes, deeds of trust and
other  types  of  corporate  financing  mechanisms:

     We  saw  our  subsidiary,  the  BlackHawk Fund become operational, with The
Blackhawk Fund originating its first revenue.  The revenue for the period ending
03/31/2005  is $  3,118.55.  There are no revenues from the corresponding period
ending  03/31/2004  to  make  comparison.

     BlackHawk Fund established a 'floating note'  with Palomar for a maximum of
$  50,000.00.  As  of  this  date,  BlackHawk  Fund  has  advanced  a total of $
47,500.00 to Palomar on this note.  The note pays a simple interest (only) of 8%
and  the  interest  (only)  payments  are  due  on  a  quarterly  basis.

          5.   Total  Revenue  for  the  period  ending  03/31/2005  are:

               (a).  $   73,927.50  combined  real  estate  groups

               (b).       9,518.94  Rent  income  (Pio  Pico  tenant)

               (c).       3,118.55  BlackHawk  Fund

               (d).  $   86,564.99  Total.

          C.   Plan  of  operations  for  the  remaining  portion  of  2005:

               1.   Continue  to  increase  the  revenue and market share of our
core  real  estate  &  home  loan  groups

               2.   Continue  to  improve  the  Pio  Pico  facility  in order to
increase  the  efficiency  of  our  sales  staff

               3.   Continue to acquire assets and revenue generating properties
and  to  secure  the  revenue  and  long-term  appreciation  from  these efforts

               4.   Maximize  the  potential  of  BlackHawk  Fund

               5.   Continue  to pursue the implementation and completion of our
Regulation  'S'  offering  via  its  established  European  network.

     Significant  Events  for  the  quarter  ending  03-31-2005:

               1.   Recorded another record setting revenue quarter for the real
estate  &  home  loan  origination  groups

               2.   Established  the  first  revenue  for  BlackHawk  Fund

               3.   Completed  the  installation  of a wireless network & access
system

                    enhancing the ease & efficiency of operation at the Pio Pico
facility.


                                       17
<PAGE>
     Subsequent  Events:

     We  received funds from its subsidiary company, BlackHawk Fund secured by a
'floating  note.'

     We  had  another  record  setting  revenue producing quarter, the unaudited
transactions to date exceed $ 150,000.00 for the second fiscal  quarter of 2005.
This  represents  an increase of over 100% from the first quarter of 2005 with a
portion  of  the  second  quarter  still  in  progress.

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


                                       18
<PAGE>
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.

     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.


                                       19
<PAGE>
                           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.

ITEM  6.  EXHIBITS.

<TABLE>
<CAPTION>
EXHIBIT
-------
  NO.                                             IDENTIFICATION OF EXHIBIT
-------  -----------------------------------------------------------------------------------------------------------
<C>      <S>
 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. Sec.1350, as adopted pursuant to Sec.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


                                       20
<PAGE>
                                   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 June 23, 2005.
                                     By /s/ Steve Bonenberger
                                       -----------------------------------------
                                       Steve Bonenberger, President, Chief
                                       Executive Officer and Director


                                       21
<PAGE>