UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                   FORM 10-QSB
(Mark One)
[X]       QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
          EXCHANGE ACT OF 1934

For the quarterly period ended:  September 30, 2004
                                 ------------------

OR

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

For the transition period from ____________ to _____________

Commission File Number:  000-32829

                            PALOMAR ENTERPRISES, INC.
                            -------------------------
             (Exact name of registrant as specified in its charter)

                 Nevada                               88-0470235
                 ------                               ----------
    (State or other jurisdiction of               (I.R.S. Employer
     incorporation or organization)               Identification No.)

      1802 N. Carson St. #212-2705
      ----------------------------
          Carson City, Nevada                         89701-1230
          -------------------                         ----------
(Address of principal executive offices)              (Zip Code)

                                 (775) 887-0670
                                 --------------
              (Registrant's telephone number, including area code)

    (Former name, former address and former fiscal year, if changed since last
                                     report)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
  the preceding 12 months (or for such shorter period that the registrant was
    required to file such reports), and (2) has been subject to such filing
                       requirements for the past 90 days.
                                 Yes [X] No [ ]

    APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE
                              PRECEDING FIVE YEARS:
    Indicate by check mark whether the registrant has filed all documents and
   reports required to be filed by Sections 12, 13 or 15(d) of the Securities
 Exchange Act of 1934 subsequent to the distribution of securities under a plan
                              confirmed by a court.
                                 Yes [ ] No [ ]

                      APPLICABLE ONLY TO CORPORATE ISSUERS:
The number of shares of the issuer's common equity outstanding as of October 7,
          2004 was 966,119 shares of common stock, par value $0.0001.


                                        1
<PAGE>
                            PALOMAR ENTERPRISES, INC.


                                TABLE OF CONTENTS
                                                                            Page

PART I - FINANCIAL INFORMATION

         Item 1.  Consolidated Financial Statements                           3

                  Balance Sheet                                               4

                  Statements of Operations                                    5

                  Statements of Cash Flows                                    6

                  Notes to Consolidated Financial Statements                  8

         Item 2.  Management's Discussion and Plan of Operation              14

         Item 3.  Controls and Procedures                                    17

PART II - OTHER INFORMATION

         Item 2.  Changes in Securities                                      18

         Item 4.  Submission of Matters to a Vote of Security Holders        19

         Item 6.  Exhibits                                                   19

SIGNATURES                                                                   19

CERTIFICATION


                                        2
<PAGE>
                         PART I - FINANCIAL INFORMATION

                     ITEM 1. UNAUDITED FINANCIAL STATEMENTS

     The  accompanying  unaudited  consolidated  financial  statements have been
prepared in accordance with generally accepted accounting principles for interim
financial  reporting and pursuant to the rules and regulations of the Securities
and  Exchange  Commission  ("Commission").  While  these  statements reflect all
normal  recurring adjustments which are, in the opinion of management, necessary
for  fair presentation of the results of the interim period, they do not include
all  of  the information and footnotes required by generally accepted accounting
principles for complete financial statements.  For further information, refer to
the  financial  statements  and  footnotes  thereto,  which  are included in the
Company's  Annual  Report on Form 10-KSB previously filed with the Commission on
April  13,  2004.


                                        3
<PAGE>
<TABLE>
<CAPTION>
PALOMAR ENTERPRISES, INC.
CONSOLIDATED BALANCE SHEET AS OF SEPTEMBER 30, 2004 (UNAUDITED)
<S>                                                                         <C>
ASSETS
   Cash                                                                     $   427,228
   Notes receivable                                                             189,437
   Prepaids and other current assets                                              5,000
                                                                            ------------
Total current assets                                                            621,665

Property, plant and equipment, net of accumulated depreciation of $10,058     1,397,127

Deposits and other assets                                                           875

                                                                            ------------
TOTAL ASSETS                                                                $ 2,019,667
                                                                            ============

LIABILITIES AND STOCKHOLDERS' EQUITY:

   Accounts Payable                                                         $    19,342
   Accrued Expenses                                                               3,949
   Current portion of notes payable                                             334,147
                                                                            ------------
Total current liabilities                                                       357,438

   Note payable, long term                                                      841,657
                                                                            ------------
TOTAL LIABILITIES                                                             1,199,095
                                                                            ------------

STOCKHOLDERS' EQUITY:
   Series A preferred stock, $0.0001 par value, 10,000,000 shares
      authorized, no shares issued or outstanding                                     -
   Series B preferred stock, $0.0001 par value, 50,000,000 shares
      authorized, no shares issued or outstanding                                     -
   Series C preferred stock, $0.0001 par value, 30,000,000 shares
      authorized, no shares issued or outstanding                                     -
   Common stock, $0.0001 par value, 14,000,000 shares
      authorized, 766,123 shares issued;
      766,120 outstanding                                                            77
   Additional paid-in capital                                                 9,461,407
   Accumulated deficit                                                       (8,613,494)
   Treasury stock - at cost (3 shares)                                          (27,418)
                                                                            ------------

      Total stockholders' equity                                                820,572
                                                                            ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                  $ 2,019,667
                                                                            ============
</TABLE>

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


                                        4
<PAGE>
<TABLE>
<CAPTION>
PALOMAR ENTERPRISES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

                                           Three months          Nine months           Three months          Nine months
                                              ended                 ended                 ended                 ended
                                        September 30, 2004    September 30, 2004    September 30, 2003    September 30, 2003
                                       --------------------  --------------------  --------------------  --------------------
<S>                                    <C>                   <C>                   <C>                   <C>
Revenues                               $           126,829   $           653,797   $             1,352   $             1,532
Cost of goods sold                                       -               401,975                     -                    39
                                       --------------------  --------------------  --------------------  --------------------

Gross profit                                       126,829               251,822                 1,352                 1,493

Operating expenses
   General and administrative                       77,990               183,907               121,912               276,747
   Facilities and rent                              12,492                41,370                 4,507                12,668
   Consulting, legal and professional              646,030             2,308,356             4,285,452             4,424,348
   Payroll and related costs                       279,745               614,059                48,200               176,737
                                       --------------------  --------------------  --------------------  --------------------
Total operating expenses                         1,016,257             3,147,692             4,460,071             4,890,500

Loss from operations                              (889,428)           (2,895,870)           (4,458,719)           (4,889,007)

Interest expense                                   (22,310)              (33,577)                    -                     -
                                       --------------------  --------------------  --------------------  --------------------
Loss from continuing operations        $          (911,738)  $        (2,929,447)  $        (4,458,719)  $        (4,889,007)

Discontinued operations:
Loss from operations of Prize Pizza                      -               (43,777)                    -                     -
Loss on disposal of Prize Pizza                   (166,223)             (166,223)                    -                     -
                                       --------------------  --------------------  --------------------  --------------------
Loss on discontinued operations        $          (166,223)  $          (210,000)  $                 -   $                 -
                                       --------------------  --------------------  --------------------  --------------------
Net loss                               $        (1,077,961)  $        (3,139,447)  $        (4,458,719)  $        (4,889,007)
                                       ====================  ====================  ====================  ====================

  Net loss per share of common stock
   outstanding before discontinued
   operations - basic and diluted      $             (5.88)  $            (50.82)  $         (5,665.46)  $        (13,321.54)

  Net loss per share of common stock
    outstanding from discontinued
   operations - basic and diluted      $             (1.07)  $             (3.64)  $                 -   $                 -
                                       --------------------  --------------------  --------------------  --------------------
  Net loss per share of common stock
   outstanding - basic and diluted     $             (6.95)  $            (54.46)  $         (5,665.46)  $        (13,321.54)
                                       ====================  ====================  ====================  ====================

Weighted average number of
   shares of common stock                          155,175                57,642                   787                   367
                                       ====================  ====================  ====================  ====================
   outstanding
</TABLE>

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


                                        5
<PAGE>
<TABLE>
<CAPTION>
PALOMAR ENTERPRISES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

                                                   Nine months           Nine months
                                                      ended                 ended
                                                September 30, 2004    September 30, 2003
                                               --------------------  --------------------
<S>                                            <C>                   <C>
Cash flows from operating activities:
Net loss for the period                        $        (3,139,447)  $        (4,889,007)
Adjustments to reconcile net loss to net cash
   used by operating activities:
   Depreciation                                             10,058                   550
   Loss from disposal of fixed assets                            -                 9,350
   Loss from discontinued operations                       210,000
   Common stock issued for services                      1,149,138             4,547,097
   Common stock issued to officers                         174,115                     -
Changes in assets and liabilities:
   Prepaid expenses                                         (4,108)                7,726
   Other assets                                                  -                 2,400
   Accounts payable and accrued liabilities                 20,789                65,581
                                               --------------------  --------------------
Net cash used in continuing operations                  (1,579,455)             (256,303)
Cash flows from discontinued operations                     (7,498)                    -
                                               --------------------  --------------------
Net cash used in operating activities                   (1,586,953)             (256,303)
                                               --------------------  --------------------

Cash flows from investing activities:
   Purchase of property and equipment                     (427,185)                    -
   Repayments of notes receivable                           49,274                     -
   Purchase of notes receivable                           (238,711)                    -
                                               --------------------  --------------------
Net cash used in investing activities                     (616,622)                    -
                                               --------------------  --------------------

Cash flows from financing activities:
   Proceeds from note payable                              625,000                     -
   Payments on note payable                               (429,196)                    -
   Stock subscription receivable                                 -               (35,000)
   Proceeds from sale of common stock                    2,419,590               303,836
   Acquisition of treasury stock                          (127,484)                    -
   Repayments of notes due to officers                           -               (52,000)
   Proceeds from notes due to officers                           -                52,000
                                               --------------------  --------------------
Net cash provided by investing activities                2,487,910               268,836
                                               --------------------  --------------------
Net increase in cash                                       284,335                12,533
Cash, beginning of period                                  142,893                10,547
                                               --------------------  --------------------
Cash, end of period                            $           427,228   $            23,080
                                               ====================  ====================
</TABLE>

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


                                        6
<PAGE>
PALOMAR ENTERPRISES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED), continued

SUPPLEMENTAL CASH FLOW INFORMATION:

                      Nine Months   Nine Months
                         Ended         Ended
                       September     September
                        30, 2004      30, 2003
                      ------------  ------------
  Interest Paid       $     29,628  $        -0-
                      ============  ============

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

                                                                       Nine Months     Nine Months
                                                                          Ended           Ended
                                                                      September 30,   September 30,
                                                                           2004            2003
<S>                                                                   <C>             <C>
Common stock issued for services                                      $    1,149,138  $    4,547,097
                                                                      ==============  ==============
Property acquired under note payable                                  $      980,000  $          -0-
                                                                      ==============  ==============
Common stock issued to officers                                       $      174,155  $          -0-
                                                                      ==============  ==============
Common stock issued to acquire sixty percent interest in Prize Pizza  $      200,000  $          -0-
                                                                      ==============  ==============
</TABLE>

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


                                        7
<PAGE>
PALOMAR ENTERPRISES, INC.
NOTES TO UNAUDITED FINANCIAL STATEMENTS
FOR THE PERIOD ENDED SEPTEMBER 30, 2004
---------------------------------------


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
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  September  30,  2004.

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 accompanying unaudited financial statements have been prepared in accordance
with  accounting  principles generally accepted in the United States for interim
financial  information  and the instructions for Form 10-QSB and Regulation S-B.
Accordingly,  they  do not include all of the information and footnotes required
by  accounting  principles  generally accepted in the United States for complete
financial  statements.  All  adjustments  that, in the opinion of management are
necessary  for  a fair presentation of the results of operations for the interim
periods  have been made and are of a recurring nature unless otherwise disclosed
herein.  The results of operations for the three and nine months ended September
30, 2004 are not necessarily indicative of the results that will be realized for
the  entire  fiscal  year.  These  financial  statements  should  be  read  in
conjunction  with  the Company's Annual Report on Form 10-KSB for the year ended
December  31,  2003.

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.


                                        8
<PAGE>
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
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.  All significant
     intercompany  accounts  and  transactions have been eliminated. The Company
     abandoned  its  interest  in Prize Pizza, LLC during the three months ended
     September  30,  2004.

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 three and nine
     months  ended  September  30,  2004.

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

     Advertising  and  marketing expenses are charged to operations as incurred.
     Advertising expenses for the three and nine months ended September 30, 2004
     were  $23,219  and  $25,563,  respectively.


                                        9
<PAGE>
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.

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  September 30, 2004, the deferred tax asset is related solely to the
     Company's  net  operating  loss  carry  forward  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  September 30, 2004, the Company's
     outstanding  warrants are considered anti-dilutive due to the Company's net
     operating  loss  position.

     Subsequent  to  September  30,  2004,  the  Company declared a 1,000 to one
     reverse  stock  split of its common stockAll stock numbers presented in the
     financial  statements  have  been  retroactively  restated  to reflect this
     reverse  split.

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.

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.

NOTE  F  -  RELATED  PARTY  TRANSACTIONS

The  Company  pays  consulting  fees  to  entities  owned  by  two  controlling
shareholders.  These  two  controlling  shareholders  are  also  the  two senior
officers  and directors of the Company.  During the three and nine month periods
ended  September  30,  2004,  the Company paid fees of approximately $70,000 and
$478,000  to  these  two  entities.


                                       10
<PAGE>
NOTE  G  -  STOCK  WARRANTS

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
$1.00  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 515,000 shares of common stock
to  purchase  up  to  an  additional  515,000 shares of restricted, unregistered
common  stock  at  a  price  of  $1.00  per  share.

                                   Warrants
                                outstanding at
                              September 30, 2004  Exercise price
                              ------------------  ---------------------
5/15/02 Warrants                               6    6   $1.00 per share
8/1/02 Warrants                                6    6   $1.00 per share
                              ------------------  ---------------------

Totals at September 30, 2004                  12   12
                              ==================  =====================

The warrants have no stated expiration date.


NOTE  H  -  CAPITAL  STOCK  TRANSACTIONS

The  Company  raises  capital through the issuance and exercise of options under
the  Company's  ESIP.  During the three and nine months ended September 30, 2004
the  Company  raised  $375,990  and  $2,260,990, respectively, through its ESIP.
During  the  three  and  nine months ended September 30, 2004 the Company issued
530,900  and 534,520 shares, respectively, at an average price of $0.0007 net of
the  15%  discount  offered  to  employees  under  the  ESIP  program.

The  Company  conducted a private placement of its common shares during the nine
months  ended  September  30, 2004.  The Company issued 353 shares of its common
stock and received cash proceeds of $158,600 under this private placement during
the  nine months ended September 30, 2004.   In the three months ended September
30,  2004, the Company rescinded 254 shares issued in this offering at a cost of
$127,484.  The  rescinded  shares  were  returned  and  cancelled.

The Company grants shares of its common stock from time to time as consideration
for  services  rendered by employees and consultants.  During the three and nine
months  ended  September 30, 2004 the Company granted 223,850 and 225,065 shares
of  common  stock  as  consideration  for services.  The shares were expensed at
their  trading  value  of  approximately  $0.008.

The  Company  also issued 497 shares to two of its officers as consideration for
services during the nine month period ended September 30, 2004.  The shares were
expensed  at  their  trading  value  of  approximately  $0.0035.

The Company also declared a reverse stock split of 100 shares to one in the nine
months  ended September 30, 2004.  Effective as of November 5, 2004, the Company
declared another reverse stock split of 1,000 shares to one, and has reduced its
par  value  from  $0.001  per  share  to  $0.0001  per share.  All stock numbers
presented  in  the  financial  statements  have  been  retroactively restated to
reflect  both  reverse  splits  and  the  change  in  par  value.


                                       11
<PAGE>
NOTE  I  -  PROPERTY

Property  and  equipment  consisted  of  the  following  at  September 30, 2004:

     Building                        $1,401,242
     Office equipment                     5,943
                                     -----------
              Total                   1,407,185
     Less: Accumulated depreciation     (10,058)
                                     -----------
     Property & equipment, net       $1,397,127
                                     ===========

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

NOTE  J  -  NOTES  PAYABLE  AND  BANK  LINE  OF  CREDIT

Notes payable and bank line of credit at September 30, 2004 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.                               $  850,804

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
                                                                               -----------
          Total                                                                 1,175,804

         Less current portion                                                    (334,147)
                                                                               -----------
          Total long-term portion                                              $  841,657
                                                                               ===========

     Future maturities of principal at September 30 are as follows:

          2005                                                                 $  334,147
          2006                                                                      9,858
          2007                                                                     10,623
          2008                                                                     10,848
          2009                                                                     11,448
          Thereafter                                                              464,733
                                                                               -----------
               Total                                                           $  841,657
                                                                               ===========
</TABLE>

NOTE  K  -  DISCONTINUED  OPERATIONS

As stated in Note A to the financial statements, the Company abandoned its pizza
restaurant  operations  during  the  three months ended September 30, 2004.  The
total  loss  incurred from operations was $43,777 on revenues of $17,656 and the
total  loss  from  disposal  of  the  business  was  $166,223.


                                       12
<PAGE>
NOTE  L  -  SUBSEQUENT  EVENTS

Subsequent  to  September 30, 2004, the Company authorized 100,000,000 shares of
preferred  stock.  The  preferred stock authorized is comprised of three series,
"A",  "B" and "C".  Series A preferred stock has 10,000,000 shares available and
are  convertible  to  shares  of common stock at a ratio of 1,000 to one.  These
shares  have  voting  rights attached.  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
Ciompany.  Series  "B"  preferred  stock has 50,000,000 shares available and are
convertible  to  shares of common stock at a ratio of 100 to one.  On August 29,
2004,  45,000,000  of  these  shares  were  subscribed by an outside entity.  On
August  25,  2004,  the  transaction  and the shares were cancelled.  Series "C"
preferred stock has 30,000,000 shares available and are convertible to shares of
common  stock  at  a ratio of 1,000 to one.  The remaining 10,000,000 authorized
preferred  shares  are  undesignated.

NOTE  M  -  REAL  ESTATE  PURCHASE  AND  SALE

During  the  nine months ended September 30, 2004, the Company acquired and sold
residential  real  estate  in  southern  California.  The  Company  acquired the
property  for  approximately  $378,000  and  sold  the  same  for  approximately
$407,000, net of transaction costs.  Those amounts are included in cost of sales
and  revenue  respectively  for  the nine month period ended September 30, 2004.
The  Company  intends  to  acquire  and  sell real estate as part of its ongoing
operations.

NOTE  N  -  NOTE  RECEIVABLE

During  the  three  and nine month periods ended September 30, 2004, the Company
advanced  cash of approximately $85,000 and $239,000, respectively, 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.


                         *    *    *    *    *    *    *


                                       13
<PAGE>
              ITEM 2. MANAGEMENT'S DISCUSSION AND PLAN OF OPERATION

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.

     The  following  are  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 our 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,  2003.

MANAGEMENT'S  DISCUSSION  AND  ANALYSIS  OF  FINANCIAL  CONDITION AND RESULTS OF
OPERATIONS

     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 with two operating
divisions:

     1.   Financial  Services,  which  focuses  upon:

          a.   Real  estate  sales  and  client  services,

          b.   Mortgage  and  home  loan  origination  and

          c.   Property  acquisition  and  development.

     2.   Corporate  Finance,  with  a  focus  on:

          a.   Developing  and/or  acquiring  cash  flow  positive  businesses;

          b.   Acquiring the real property and assets that are material to those
               businesses;  and

          c.   Offering  various  types of financial instruments, including, but
               limited  to  notes,  deeds of trust and other corporate financing
               mechanisms.

     During the third quarter of 2004, we have made significant progress in both
divisions.  In  the  quarter,  the  Financial Services Division accomplished the
following:

     1.   The  Palomar  Group  Real  Estate  Sales  and Client Services division
          currently  contracts  a  number of real estate agents and has seen the
          most  productive  quarter  in  the  Company's  history. We changed our


                                       14
<PAGE>
          business  in  July  of 2003, and as such, year-to-year comparisons are
          not  a  good  indication  of  our  performance.

     2.   The  Palomar Group Lending & Home Loans had another productive quarter
          in  its  mortgage  and home loan originations business. In combination
          with  our  real  estate  sales and client services division, aggregate
          real  estate  operations  provided the majority of our revenues in the
          three  months  ended  September  30,  2004.

     3.   The Palomar Group Property Acquisition and Development group is tasked
          with  locating  and acquiring revenue generating properties.

          a.   During  the  first  quarter of 2004, the first property, a single
               family  residence  in  Carlsbad,  California  was secured. In the
               second  quarter,  we sold this property. We intend to continue to
               acquire  and  sell real estate as part of our ongoing operations.

          b.   The  Property Acquisition and Development group also exercised an
               option  to  purchase, and subsequently completed the purchase, of
               an  office  facility  located at 2585 Pio Pico Drive in Carlsbad,
               California.  The  office was purchased for a price of $1,400,000.
               Renovation  was  conducted and completed on this building and the
               offices  are  fully  operational. Our entire real estate and home
               loan  divisions  occupy the lower section of the office building.
               The  office  provides  Palomar  with a full service real estate &
               home  loan  origination  facility that will continue to serve our
               company,  our  employees  and client base for many years to come.

     4.   We  have created and reworked our website at www.palomar-financial.com
          to  serve as the hub of our real estate efforts. We have also mirrored
          our  site  at  www.thepalomargroup.com.

     During the quarter ended September 30, 2004, the Corporate Finance Division
operated  as  follows:

     1.   In  May  2004,  we  completed  construction and opened the Prize Pizza
          location  in  Tempe, Arizona. Although limited revenues were generated
          from  this  location,  the  facility was not profitable. On August 20,
          2004,  we terminated all Prize Pizza operations and the Tempe, Arizona
          location  has  been  closed  permanently. The total loss incurred from
          operations  was $43,777 on revenues of $17,656 and the total loss from
          disposal  of  the business was $166,223. Prize Pizza's operations were
          terminated  because  our board of directors has mandated that we focus
          our  entire resources on our core business of real estate development,
          real  estate  acquisitions,  real estate sales, real estate home loans
          and  mortgages  and  other  related  financial  matters.

     2.   As a result of the winding up of all Prize Pizza operations, our Joint
          Venture  with  K  & S Family Entertainment to introduce Prize Pizza in
          New  Mexico  has  also  been  terminated.

     3.   During the prior quarter, we implemented a program to purchase secured
          auto  notes  with  Price  Right  Auto  Group in Fenton, Michigan. This
          agreement grants us the right to purchase, on a funds available basis,
          up to $1,000,000 worth of secured auto contracts from Price Right Auto
          Group.  During  the  three  and nine month periods ended September 30,
          2004,  we  advanced  cash  of  approximately  $85,000  and  $239,000,
          respectively, to Price Right Auto Group. Our 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.

     In  the three months ended September 30, 2004, we generated an aggregate of
$126,829  in revenues from our operations compared to limited revenues of $1,352
during  the three month period ended September 30, 2003.  During the nine months
ended  September  30,  2004,  we  generated  $653,797 in revenues as compared to
$1,532  during  the  year  ago  period.


                                       15
<PAGE>
     During the three months ended September 30, 2004 and 2003, we did not incur
any  cost  of  goods sold. This resulted in gross profits of $126,829 and $1,352
for  the  periods quarters ended September 30, 2004 and 2003, respectively. Cost
of  goods  sold  during  the  nine  month  period  ended  September 30, 2004 was
$401,975,  resulting in a gross profit of $251,822 for that period. For the nine
months ended September 30, 2003, we incurred cost of goods sold in the amount of
$39.  Resultantly,  gross profit during the nine months ended September 30, 2003
was  $1,493.

     The  total operating expenses for the three months ended September 30, 2004
were  approximately  $1,016,257  consisting  primarily  of consulting, legal and
professional  fees  aggregating  $646,030.  Payroll  expenses  were $279,745 and
general  and  administrative expenses totaled $77,990, while facilities and rent
contributed  $12,492  to  our expenses. Our management believes that these costs
will  be  recurring and there is nothing to suggest any substantial reduction or
increase  for  the  foreseeable future. In comparison, during the year ago three
month period ended September 30, 2003, total operating expenses were $4,460,071,
consisting  primarily  of  consulting,  legal  and professional fees aggregating
$4,285,452;  general  and  administrative costs of $121,912, payroll expenses of
$48,200  and  facilities  and  rent  of  $4,507.

     In  the  nine  months ended September 30, 2004, we incurred total operating
expenses  of  $3,147,692,  consisting  significantly  of  consulting,  legal and
professional  fees of $2,308,356. Payroll and related costs contributed $614,059
to  total  expenses,  while general and administrative expenses totaled $183,907
and $41,370 went toward facilities and rent expense. Our expenditures during the
nine  months  ended  September  30,  2003 were $4,890,500. Consulting, legal and
professional  fees  contributed  $4,424,348  to  our  operating  expenses, while
general  and  administrative  expenses added $276,747. Payroll and related costs
were  an  additional  $176,737  and  facilities  and rent expense added $12,668.

     In  the  three  months ended September 30, 2004, we experienced a loss from
operations  of  approximately  $889,428,  as  compared  to loss of approximately
$4,458,719  for  the  quarter ended September 30, 2003. In the nine months ended
September  30,  2004  our loss from operations was $2,895,870, while in the same
nine  month  period  during  2003  our  loss from operations totaled $4,889,007.

     During both the three months ended September 30, 2004 and nine months ended
September  30,  2004,  we  recorded  interest  expense  of  $22,310 and $33,577,
respectively.  We  did  not  incur  any  interest  expense  in  2003.

     Additionally, during the three months ended September 30, 2004, we recorded
a  one-time  loss  on  our  disposal of discontinued operations related to Prize
Pizza  in  the  amount of $166,223. During the nine month period ended September
30,  2004, we also recorded a loss from discontinued operations in the amount of
$43,777.

     Resultantly, our net loss aggregated to $1,077,961 during the third quarter
of  2004,  compared  to  a  net  loss of $4,458,719 during the year ago quarter.
Through  the  nine months ended September 30, 2004, we experienced a net loss of
$3,139,447. In contrast, our net loss during the nine months ended September 30,
2003  was  $4,889,007.  We  expect  to  continue  to experience net losses going
forward  in  the  foreseeable  future.

LIQUIDITY AND CAPITAL RESOURCES

     At  September  30,  2004,  our  current assets of $621,665 exceeded current
liabilities  in  the  amount of $357,438.  We generated a cash flow deficit from
continuing  operations  of  $1,579,455  for  the nine months ended September 30,
2004.  Cash  flow  deficits  from operating activities for the nine months ended
September  30, 2004 is primarily attributable to our net loss from operations of
$3,139,447  adjusted  primarily  for  common  stock  issued  to  consultants and
employees  for  services  of  $1,149,138.

     During  the nine months ended September 30, 2004, we had a net cash outflow
of  $616,622  for  investing  activities.  These  funds  were  used primarily to
purchase  property  and equipment aggregating $427,185 and the purchase of notes
receivable  in  the  amount  of  $238,711  during  that  nine  month  period.


                                       16
<PAGE>
     Cash  flows  provided from financing activities was $2,487,910 for the nine
months  ended  September  30,  2004. This was mainly from proceeds received from
officers  and  employees  for  stock options exercised during this period in the
amount  of  $2,419,590.  All  proceeds  were  used  for  working  capital.

     As  discussed  by  our  accountants  in  the  audited  financial statements
included in Item 7 of our Annual Report on Form 10-KSB, our revenue is currently
insufficient  to  cover  our  costs  and  expenses.  We  anticipate  raising any
necessary capital from outside investors coupled with bank or mezzanine lenders.
As  of  the  date of this report, we have not entered into any negotiations with
any  third  parties  to  provide  such  capital.

     While  we  have  raised  capital  to meet our working capital and financing
needs in the past, additional financing is required in order to meet our current
and  projected  cash  flow  deficits  from  operations  and  development.

     By adjusting our operations and development to the level of capitalization,
we  believe  we  have  sufficient  capital resources to meet projected cash flow
deficits  through  the  next  12  months.  However,  if  thereafter  we  are not
successful  in  generating  sufficient  liquidity  from operations or in raising
sufficient  capital  resources,  on  terms  acceptable  to  us, there could be a
material  adverse  effect  on our business, results of operations, liquidity and
financial  condition.

     We  will  continue  to  evaluate  opportunities  for corporate development.
Subject  to  our ability to obtain adequate financing at the applicable time, we
may  enter  into  definitive  agreements  on one or more of those opportunities.

     Our  independent  certified  public accountants have stated in their report
included  in  our December 31, 2003 Form 10-KSB, that we have incurred operating
losses  in  the  last  two  years, and that we are dependent upon our ability to
develop  profitable operations. These factors among others may raise substantial
doubt  about  our  ability  to  continue  as  a  going  concern.

OFF-BALANCE  SHEET  ARRANGEMENTS

     We  do  not  have  any  off-balance  sheet  arrangements.

PLAN  OF  OPERATION

     Our  plans  through  fiscal  year  2004  include:

     1.   Increase  revenues  and  market  share for our real estate & home loan
          groups.

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

     3.   Expand  our  corporate  finance  division.

     4.   Continue  to  purchase  secured  auto  contracts.


                         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.


                                       17
<PAGE>
     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.

     As  of  the  date  of  this  report,  we  are  not  involved  in  any legal
proceedings.


ITEM  2.  CHANGES  IN  SECURITIES

     We  declared  a reverse stock split of 100 shares to one in the nine months
ended September 30, 2004. Effective as of November 5, 2004, we declared a second
reverse  stock  split  of  1,000  shares  to one, and reduced our par value from
$0.001  per  share  to  $0.0001  per  share.  All stock numbers presented in the
financial  statements  have  been retroactively restated to reflect both reverse
splits  and  the  change  in  par  value.

     Subsequent  to  September  30,  2004,  we  authorized 100,000,000 shares of
preferred  stock.  The  preferred stock authorized is comprised of three series,
"A,"  "B"  and "C". 10,000,000 shares have been designated as Series A preferred
stock  Shares  of  the  Series  "A" preferred stock are convertible to shares of
common  stock  at  a  ratio  of  1,000  to  one. These shares have voting rights
attached.  On  October  25, 2004, 9,000,000 shares of Series "A" preferred stock
were  issued to two of our officers. As a result of the granting of their voting
preferred  shares,  the  two  officers effectively have approximately 90% of our
voting  control.  50,000,000 shares have been designated as Series "B" preferred
stock.  Shares  of  the  Series "B" preferred stock are convertible to shares of
common  stock  at a ratio of 100 to one. On August 29, 2004, 45,000,000 of these
shares were subscribed by an outside entity. On August 25, 2004, the transaction
and  the shares were cancelled. 30,000,000 shares have been designated as Series
"C"  preferred stock Shares of the Series "C" preferred stock are convertible to
shares  of  common  stock  at  a ratio of 1,000 to one. The remaining 10,000,000
authorized  preferred  shares  are  undesignated.


                                       18
<PAGE>
ITEM 3.  DEFAULTS  UPON  SENIOR  SECURITIES.

         None.

ITEM 4.  SUBMISSION  OF  MATTERS  TO  A  VOTE  OF  SECURITY  HOLDERS.

         None.

ITEM 5.  OTHER  INFORMATION

     On October 7, 2004, we entered into an asset purchase agreement with Market
Share Recovery, Inc., a Delaware corporation.  This transaction has subsequently
been  cancelled  at  the  request  of  Market  Share  Discovery.

     We engaged a new transfer agent. We now utilize the services of Continental
Stock  Transfer  &  Trust  Company, located in, New York, New York. We ended our
relationship  with  our former transfer agent, Signature Stock Transfer, located
in  Plano,  Texas. There are no outstanding obligations with our former transfer
agent.


ITEM 6.  EXHIBITS  AND  REPORTS  ON  FORM  8-K.

(a)    Exhibits.

   EXHIBIT NO.                  IDENTIFICATION OF EXHIBIT
   -----------                  -------------------------

      3.1**    Articles  of  Incorporation.
      3.2**    Certificate  of  Designation  for  the Series B Preferred Stock
               filed  with  Secretary  of  State  of  Nevada  on  April 2, 2004.
      3.3**    Certificate of Amendment to the Articles of Incorporation filed
               with  Secretary  of  State  of  Nevada  on  June  3,  2004.
      3.4**    Certificate of Amendment to the Articles of Incorporation filed
               with  Secretary  of  State  of  Nevada  on  June  15,  2004
      3.5*     Certificate  of  Amendment  to the Certificate of Designation for
               the  Series  B  Preferred  Stock filed with Secretary of State of
               Nevada  on  August  26,  2004
      3.6*     Certificate of Designation for the Series C Preferred Stock filed
               with  Secretary  of  State  of  Nevada  on  September  29,  2004,
      3.7*     Certificate of Designation for the Series A Preferred Stock filed
               with  Secretary  of  State  of  Nevada  on  September  29,  2004,
      3.8*     Certificate  of  Correction  to  the Articles of Amendment to the
               Articles of Incorporation filed with Secretary of State of Nevada
               on  September  29,  2004.
      3.9**    Bylaws.
      10.1*    Acquisition  Agreement  for  the  Carlsbad  property.  31.1*
               Certification  of  Steve  Bonenberger, 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, Chief Financial 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.
      32.1*    Certification  of Steve Bonenberger, 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, Chief Financial 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
__________
*   Filed herewith.
**  Previously filed.

(b)  Reports on Form 8-K.

     Form  8-K  filed  on  August  12,  2004  to report acquisition of an office
complex  located  in  Carlsbad,  California.

     Form  8-K  filed  on August 27, 2004 to report termination of operations of
Prize  Pizza.

                                   SIGNATURES

Pursuant  to  the  requirements  of the Exchange Act of 1934, the Registrant has
duly caused this report to be signed on its behalf by the undersigned, thereunto
duly  authorized.

                            PALOMAR ENTERPRISES, INC.
--------------------------------------------------------------------------------
                                  (Registrant)

                              By:   /s/Steve  Bonenberger
                                    ----------------------------
                                    Steve Bonenberger, President

                              Date: November15,  2004
                                    ----------------------------


                                       19
<PAGE>