UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                   FORM 10-QSB

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

                For the Quarterly Period ended September 30, 2004

                        Commission File Number 333-69414


                          SOURCE DIRECT HOLDINGS, INC.
               --------------------------------------------------
               (Exact name of registrant as specified in charter)


                          Nevada                    98-0191489
             -------------------------------    -------------------
             (State or other jurisdiction of     (I.R.S. Employer
              incorporation or organization)    Identification No.)


             4323 Commerce Circle, Idaho Falls, Idaho      83401
             ----------------------------------------    ----------
             (Address of principal executive offices)    (Zip Code)


     Registrant's telephone number, including area code   (877) 529-4114


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 November 17, 2004, the Company
had outstanding 69,031,400 shares of its common stock, no par value.




<PAGE>


                                TABLE OF CONTENTS

ITEM NUMBER AND CAPTION                                              PAGE

PART I

  ITEM 1.   FINANCIAL STATEMENTS                                       3
  ITEM 2.   MANAGEMENT'S DISCUSSION AND PLAN OF OPERATIONS             7
  ITEM 3.   CONTROLS AND PROCEDURES                                   11

PART II

  ITEM 2.   CHANGES IN SECURITIES                                     13
  ITEM 6.   EXHIBITS                                                  14







                                       2
<PAGE>

                                     PART I

ITEM 1. FINANCIAL STATEMENTS


                          SOURCE DIRECT HOLDINGS, INC.
                          [A Development Stage Company]
                                  Balance Sheet
                               September 30, 2004


                                     ASSETS
                                                                  Unaudited
                                                                September 30,
                                                                    2004
                                                                -------------
Current Assets:
  Cash                                                          $      38,000
  Trade Receivables                                                    38,887
  Inventory                                                           167,440
  Employee Advance                                                      5,437
                                                                -------------
Total Current Assets                                                  249,764

Property and Equipment :
  Property and Equipment                                               64,598
  Less: Accumulated Depreciation                                       (6,035)
                                                                -------------
Net Property and Equipment                                             58,563

Other Assets:
  Formula, Trademark, Trade Name                                      115,000
  Accumulated Amortization                                             (6,389)
                                                                -------------
Net Other Assets                                                      108,611

                                                                -------------
TOTAL ASSETS                                                    $     416,938
                                                                =============

                       LIABILITIES & STOCKHOLDERS' DEFICIT

Current Liabilities:
  Accounts Payable                                              $      28,098
  Equipment Loans (current)                                             7,000
  Payroll Liabilities                                                  18,044
  Taxes Payable                                                            60
                                                                -------------
Total Current Liabilities                                              53,202

Total Liabilities                                                      53,202
                                                                -------------

Stockholders' Deficit
  Common Stock -- $.001 par value; 200,000,000
    shares authorized; 67,781,700 issued and
    outstanding at September 30, 2004                                  67,781
  Additional Paid-in Capital                                        1,020,719
  Accumulated Deficit during the Development Stage                   (724,764)
                                                                -------------
Total Stockholders' Deficit                                           363,736
                                                                -------------
TOTAL LIABILITIES & STOCKHOLDERS' DEFICIT                       $     416,938
                                                                =============



                                       3
<PAGE>
<TABLE>
<CAPTION>
                          SOURCE DIRECT HOLDINGS, INC.
                          [A Development Stage Company]
                            Statements of Operations
                               September 30, 2004


                                           For the three     For the three       Inception
                                           Months Ended      Months Ended         Through
                                           September 30,     September 30,     September 30,
                                               2004              2003              2004
                                           -------------     -------------     -------------
<S>                                        <C>               <C>               <C>
Revenues                                   $      33,498     $        --       $      55,232
Cost of Goods Sold                                18,119              --              29,319
                                           -------------     -------------     -------------
  Gross Profit                                    15,379              --              25,913

General and Administrative Expense               178,248           168,828           750,587
                                           -------------     -------------     -------------

Operating Loss                                  (162,869)         (168,828)         (724,674)

Interest income                                     --                --                --
Interest expense                                    --                --                --
Gain/(loss) on asset sales                          --                --                --
Income taxes                                        --                --                 (90)
                                           -------------     -------------     -------------

Net Loss before extraordinary                   (162,869)         (168,828)         (724,764)
Extraordinary gain, net                             --                --                --

                                           -------------     -------------     -------------
Net Loss                                   $    (162,869)    $    (168,828)    $    (724,764)
                                           =============     =============     =============

Net Loss per share                         $       (0.01)    $       (0.01)    $       (0.01)

Weighted Average Number of Shares
  Outstanding - Basic and Diluted             64,759,661        12,151,400        41,649,672

</TABLE>



                                       4
<PAGE>
<TABLE>
<CAPTION>
                          SOURCE DIRECT HOLDINGS, INC.
                          [A Development Stage Company]
                       Condensed Statements of Cash Flows
                                   (Unaudited)

                                                       For the Three     For the Three       Inception
                                                       Months Ended      Months Ended         Through
                                                       September 30,     September 30,     September 30,
                                                           2004              2003              2004
                                                       -------------     -------------     -------------
<S>                                                    <C>               <C>               <C>
Cash Flow Used for Operating Activities
     Net Loss                                          $    (162,869)    $    (168,828)    $    (724,764)
  Adjustments to Reconcile net losst to
  to net cash used for operating activites:
     Depreciation                                              2,501              --              10,507
     Amortization Expense                                      1,917              --               1,917
     Increase in Trade Receivables                           (18,642)             --             (38,888)
     Increase in Inventory                                   (94,594)          (12,702)         (167,441)
     Increase in employee advance                             (5,437)             --              (5,437)
     Increase in accounts payable                             28,098              --              28,098
     Decrease in equipment loans                              (8,602)             --               6,999
     Increase/(Decrease) in payroll Liabilities               (5,197)             --              18,045
     Increase in income taxes payable                           --                --                  60
                                                       -------------     -------------     -------------
Net Cash Flows Used for Operating Activities                (262,825)         (181,530)         (870,904)

Cash Flows used for Investing Activities
     Purchase equipment                                      (13,567)             (250)          (64,596)
     Acquisition of Intangible Assets                           --                --            (115,000)
                                                       -------------     -------------     -------------
Net Cash Flows Used for Investing Activities                 (13,567)             (250)         (179,596)

Cash Flows used for Financing Activities
     Decrease in Shareholder Loans                           (36,563)           (1,318)             --
     Decrease in Note Payable                                   --             (20,000)             --
     Issued stock for cash                                   350,000           202,000         1,088,500
                                                       -------------     -------------     -------------
Net Cash Flows Used for Financing Activities                 313,437           180,682         1,088,500

Net Increase / (Decrease) in Cash                             37,045            (1,097)           38,000
Beginning Cash Balance                                           955                83              --

Ending Cash Balance                                    $      38,000     $      (1,015)    $      38,000
                                                       =============     =============     =============

</TABLE>


                                       5
<PAGE>

                          SOURCE DIRECT HOLDINGS, INC.
                   Notes to Consolidated Financial Statements


NOTE 1 - BASIS OF PRESENTATION

The  accompanying  unaudited  interim  financial  statements  of  Source  Direct
Holdings,  Inc.  ("Source  Direct"  or the  "Company")  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 Source  Direct's Annual Report for the year ended June 30,
2004,  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 June
30, 2004 as reported in the form 10-KSB have been omitted.


NOTE 2 - COMMON STOCK

During the quarter ended  September 30, 2004,  the Company  issued the following
shares of its common stock:

In August 2004 the Company  sold  500,000  shares of common stock for a purchase
price of $50,000.  The sell  included  warrants to purchase up to an  additional
500,000 shares of common stock at an exercise price of $0.125 per share.

In July  2004 the  Company  sold  1,500,000  shares  of  common  stock for gross
proceeds of  $150,000.  The sell  included  warrants to purchase up to 1,500,000
additional shares of common stock at an exercise price of $0.125 per share.

In August  2004,  the Company  sold  1,500,000  shares and  warrants to purchase
another  1,500,000  shares,  at an  exercise  price of $0.125 per share,  to two
accredited investors for a purchase price of $150,000.

In August 2004, the Company  issued an aggregate of 5,000,000  shares to outside
consultants  in  exchange  for  consulting  services  provided  to the  Company.
Additionally,  the Company  issued  warrants  to  purchase  up to an  additional
4,000,000 shares to the consultants.



                                       6
<PAGE>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

Forward Looking Statements

         This Quarterly  Report contains  forward-looking  statements  about our
business,  financial  condition and prospects that reflect our  assumptions  and
beliefs based on information  currently  available.  Additionally,  from time to
time,  we  or  our  representatives   have  made  or  may  make  forward-looking
statements,  orally  or in  writing.  Such  forward-looking  statements  may  be
included in, but not limited to, press  releases,  oral statements made with the
approval of an  authorized  executive  officer or in various  filings made by us
with the Securities and Exchange  Commission.  Words or phrases  including "will
likely   result,"  "are  expected  to,"  "will   continue,"  "is   anticipated,"
"estimate,"  "project or  projected,"  or similar  expressions  are  intended to
identify  "forward-looking  statements."  Such statements are qualified in their
entirety by reference to and are accompanied by the discussion  below of certain
important factors that could cause actual results to differ materially from such
forward-looking statements.

         Management is currently  unaware of any trends or conditions other than
those mentioned in this  management's  discussion and analysis that could have a
material adverse effect on the Company's consolidated financial position, future
results of operations, or liquidity.  However, investors should also be aware of
factors that could have a negative  impact on the  Company's  prospects  and the
consistency  of  progress  in the areas of revenue  generation,  liquidity,  and
generation of capital resources.  These include: (i) variations in revenue, (ii)
possible  inability to attract  investors for its equity securities or otherwise
raise  adequate  funds from any source  should the Company  seek to do so, (iii)
increased governmental regulation,  (iv) increased competition,  (v) unfavorable
outcomes to litigation  involving the Company or to which the Company may become
a party in the future,  (vi) a very competitive and rapidly  changing  operating
environment, (vii) changes in business strategy, (viii) market acceptance of our
products, and (ix) a failure to successfully market our products.

         The  risks  identified  here are not all  inclusive.  New risk  factors
emerge from time to time,  and it is not possible for  management to predict all
of such risk  factors,  nor can it assess the impact of all such risk factors on
the  Company's  business  or the  extent to which any factor or  combination  of
factors may cause actual results to differ  materially  from those  contained in
any forward-looking statements.  Accordingly,  forward-looking statements should
not be relied upon as a prediction of actual results.

         All  forward-looking  statements are intended to be covered by the safe
harbor created by Section 21E of the Securities Exchange Act of 1934.

BUSINESS

         Source Direct Holdings, Inc., is a development-stage company, which has
acquired  the  formulas for two  cleaning  products.  These  products are Simply
Wow(R) and Stain Pen(TM).  In addition to these two products we have developed a
new product called Prompt(TM) that was introduced in August 2004.

         We own the  trademarks  to all three of our  products but have not made
application for any patents.  Management believes it would be difficult,  if not
impossible,  to duplicate the formulas for the Company's  products.  We maintain
confidentiality  agreements  with all parties  who have access to the  formulas.
Nevertheless,  there is no  assurance  that  someone  could  not  duplicate  the
formulas and directly compete with the Company. The cost of litigating the issue
of illegal competition may preclude us from being able to protect the secrecy of
the formulas.


                                       7
<PAGE>

PRODUCTS

Simply Wow(R)

         Simply  Wow(R) is an  all-purpose  cleaner that safely and  effectively
cleans  any  washable   surface.   Simply  Wow(R)  is  developed  with  nonionic
surfactants  that contain  penetrating  and suspending  agents that dissolve the
toughest grease,  protein,  dirt, and oil stains.  The product is a water-based,
multipurpose,  biodegradable, nontoxic degreaser with a pleasant lemon fragrance
that effectively replaces flammable or combustible solvent cleaners. It contains
no hazardous  solvents or  acidic-type  chemicals,  and its  formulation  safely
accomplishes  the cleaning that  previously  required  solvent or acid cleaners,
which  exposed  the user and the  environment  to the  inherent  hazards of such
chemicals.

Stain Pen(TM)

         Stain Pen(TM) is an  on-the-spot  stain remover.  The  convenient  size
makes it easy to keep at home, in the car, or at the office.  This product has a
proprietary  formula that safely  removes  food stains,  oil paint (wet or dry),
makeup,  wine,  blood,  grass  stains,  grease,  coffee and tea stains, and copy
machine  stains with no harmful  fumes or large  quantities  of liquid to spill.
Stain  Pen(TM)  works simply by applying a small amount of stain pen solution to
the stain and applying a damp cloth.

Prompt(TM)

         Prompt(TM) is a multi-purpose,  low foaming,  non-toxic,  biodegradable
industrial  strength  cleaner for multiple  commercial and  industrial  cleaning
applications.  It  is  non-hazardous,   user  friendly,  VOC  (Volatile  Organic
Compounds)  compliant  and is  highly  effective  in  many  commercial  cleaning
applications. Prompt's proprietary formulation encapsulates dirt and oil in many
industrial   applications  that  include:   floors,   walls,  metal  fabricating
equipment, smoke and fire damage as well as equipment restoration.

Future Products

         We have also completed  development  of formulas for other  proprietary
cleaning  products,  which we intend to  introduce  to the  market in the future
under private label.  These products  include an automotive  vinyl protector and
cleaner, an all-purpose  automotive wheel cleaner, an automotive engine cleaner,
and a liquid laundry product.

         We are  subject  to risks  that  existing  or new  manufacturers  could
develop new or better  products  than the ones  offered by us. While we devote a
portion of our funds to on-going  research  and  development,  the amount of our
funding in this area is extremely  limited when compared to the manufacturers of
products  which compete with ours.  We believe that most other  companies in the
household  cleaning  industry are  significantly  better  funded than are we and
devote  significantly  more funds to  developing  new,  or  improving  existing,
products which compete with ours.

PRODUCT PRODUCTION

         We do not  currently  produce our  products  in-house  except for Stain
Pen(TM),  which is  produced in our  facility.  We believe  that the  production
facility,  which has agreed to manufacture our other products, would be adequate
to produce our products in sufficient  quantities to meet any anticipated future
needs. We have not secured any form of financing for  significant  production of
our products.  We will attempt to secure funding either from private  sources or
through a bank loan or factoring arrangement. There is no assurance that we will
be able to obtain any of these sources of financing,  or that if we could obtain
it that the financing terms would be favorable to the company.

PRODUCT DISTRIBUTION

         The most  critical  phase of our  operations  is the  marketing  of our
products.  We market our products  using both current  management  personnel and
outside  independent  marketing  companies.  We currently have outside marketing
arrangements,  which we consider significant. They are with Marden Distribution,
Inc., Integritas,  Inc., Media Corp Worldwide, Fusion Packaging Solutions, Inc.,
Impact Sales, Inc., and Morgan & Sampson SCA.


                                       8
<PAGE>

         The Marden Agreement grants Marden  Distribution,  Inc. exclusive right
to distribute our products to Wal-Mart(R),  Sam's Club(R),  and ACE Hardware(R).
Marden is an approved  vendor with these retail  organizations.  We believe that
the ability of Marden to present  our  products  to these  national  chains will
reduce the cost to the company.

         Our  agreement  with Marden is  exclusive in the sense that no one else
can market Simply Wow(R),  Stain Pen(TM), and derivatives of these products such
as our engine cleaner,  upholstery  cleaner,  and wheel cleaner, to Wal-Mart(R),
Sam's  Club(R),  and  ACE  Hardware(R).  We have  agreed  to pay  Marden  a flat
percentage fee based on the gross  "sell-in" price to each retailer based on the
wholesale  cost of the  goods  sold to the  retailer  plus the  flat  percentage
amount.  Marden has agreed to pay all of the costs and expenses  associated with
the marketing and distribution of the products to the retailers.  We have agreed
to maintain product liability  insurance,  which we currently have in place, and
to hold  Marden  harmless  from  any  liability  associated  with the use of our
products.

         The Integritas  agreement  provides that Integritas,  Inc. will provide
product distribution, customer relations and investor relations services.

         The Media Corp agreement  grants Media Corp Worldwide  exclusive direct
response "As Seen on TV" commercial marketing.  Media Corp Worldwide will create
infomercial  advertising Source Direct's proprietary cleaning products, and will
further market our proprietary  product lines Simply Wow(R) and Stain Pen(TM) on
television only.

         In September  2004, we signed 2 additional  agreements  with Media Corp
Worldwide.  The  first,  designated  as the "QVC  Agreement,"  and  extends  the
marketing  relationship  between the Company and Media Corp.  The QVC  Agreement
grants to Media Corp the exclusive  right to sell the Company's  products to the
QVC Home  Shopping  Network.  The  second,  designated  the Mail  Order  Catalog
Agreement (the "Catalog Agreement") granted to Media Corp the exclusive right to
sell the Products to mail order catalog companies within the United States.

         The  Fusion  Packaging   Solutions   agreement  is  an  exclusive  mass
merchandising   and  co-branding   distribution   agreement.   Fusion  Packaging
Solutions,  Inc., has a proprietary solution called Pig Spit(R). Pig Spit(R) was
introduced  at the Sturgis  Motorcycle  Rally in 1994 and has won the respect of
motorcycle  enthusiast  around the world.  Pig Spit(R)  makes black  wrinkle and
powder coat finishes look like new. It wicks into hard-to-reach areas like motor
fins and  transmissions  and eliminates wax stains.  Pig Spit(R) is available at
most  Harley  Davidson(R)  motorcycle  shops  in the  U.S.  and will now be made
available  exclusively  for  distribution to mass  merchandisers  through Source
Direct  Holdings,  Inc., and marketed under the co-branded name of Simply Wow(R)
Pig Spit(R).

         The Impact Sales  agreement  grants Impact Sales,  Inc.,  the exclusive
distribution rights for all Source Direct proprietary  cleaning products to more
than 6,800  grocery  retailers in the United  States that  include:  Albertsons,
Inc.(R),  Kroger  Co.(R)  and  Safeway,  Inc.(R).  Impact  Sales,  Inc has  been
servicing  large  national  retail  grocery  accounts for more than 20 years and
employs more 200 sales associates from their 13 offices in California, Colorado,
Florida, Idaho, Illinois, Oregon, Utah, and Washington.

         The  Morgan  &  Sampson  agreement  grants  Morgan  &  Sampson  SCA the
exclusive marketing and distribution rights to Source Direct's proprietary Stain
Pen(R) Twin Pack to more than 5,000  grocery  retailers  in the  Western  United
States and Hawaii.

         In addition to the above agreements, we also utilize internal marketing
efforts to advertise and  distribute  our products.  We recently  became a title
sponsor on a NASCAR  sponsorship  agreement  with Erik Darnell and Darnell Motor
Sports for the 2004 and 2005 NASCAR racing seasons.

DESCRIPTION OF PROPERTY

         The offices of Source Direct recently relocated to a new production and
office facility.  This facility is located at 4323 Commerce Circle, Idaho Falls,
Idaho.  The new location has over 14,000 square feet which includes 3,780 square
feet of office space and 10,530 square feet of warehouse  space. We believe that
this facility provides an excellent opportunity for expansion.  Our intention is
to  produce,  package  and house  our  inventory  for all of the  Stain  Pen(TM)
products in this facility.


                                       9
<PAGE>

Risk Factors

         There are various  risks  involved in any  investment  in the  Company,
including those described  below.  Any shareholder or potential  investor in the
Company should consider carefully these risk factors.

     o   The  financial  statements  of the  Company  include a "Going  Concern"
         Limitation.
     o   The Company is a development  stage company and may require  additional
         funding.
     o   The Company has not applied for a patent on its products.
     o   The loss of the  services of current  management  would have a material
         negative impact on the operations of the Company.
     o   The Company will be in  competition  with a number of other  companies,
         which may be better financed than the Company.
     o   There is no active public market for the common stock of the Company.
     o   The Company's shares are designated as penny stock.
     o   The market for the Company's shares is volatile.
     o   Future  issuances  of  stock  could  adversely  affect  holders  of the
         Company's common stock.

Financial Condition and Changes in Financial Condition

         We generated  revenues  from sales of our cleaning  products of $33,498
during the quarter ended  September 30, 2004. A majority of these  revenues were
generated from purchase orders from various  Albertsons(R) stores. We anticipate
receiving  additional  orders  from  this  source  as  well as  from  the  other
distribution  agreements  that are in place,  but we can give no assurance  that
such sales will occur.  Our cost of goods sold for these sales totaled  $18,120,
which resulted in a gross profit margin of $15,379 or 45.9% of sales.

         Operating  expenses for the current  quarter  ended  September 30, 2004
totaled $162,869.  Compensation  related expenses were $91,349.  Travel expenses
incurred for product promotion and general business  activities totaled $10,146.
We incurred  $27,135 in legal and  accounting  related  expenses  primarily as a
result of the various marketing agreement preparations. Research and development
expenses  totaled $6,001 for the quarter.  The remaining  expenses were incurred
for general business purposes.  We believe we will continue to incur substantial
expenses for the near term as we increase our marketing efforts to introduce our
products to the market.

         Operating expenses for the prior year quarter ended September 30, 2003,
totaled  $168,828.  All of the  expenses  relate  to the  business  of the prior
operations  before the October 2003 merger,  and we do not believe they have any
significance on our current business operations or our future plans.

Liquidity and Capital Resources:

         Since  inception to September 30, 2004,  we have funded our  operations
from the sale of securities and loans from shareholders.

         During the quarter ended September 30, 2004 we sold 3,500,000 shares of
our common stock for total  proceeds of $350,000.  We have utilized  these funds
for our various marketing and promotion efforts and general business activities.

         At September 30, 2004, we had cash balances of $38,000, and net working
capital of $195,562.  In addition, we had current account receivables of $38,887
which  were  generated  from  the  various  purchase  orders  for our  products.
Inventory of cleaning products  amounted to $167,440.  Our cash requirements for
the next  twelve  months  will  depend  significantly  on the number of purchase
orders we receive for our products and our ability to secure financing for these
orders. We anticipate that we will be able to secure either a business loan or a
factoring arrangement for any purchase order that exceeds our current ability to
fund internally.  However,  we have no current  agreements or arrangements which
would  provide  such  funding.  We have  also not  negotiated  the terms of such
funding and cannot  provide any  assurance  that the terms will be favorable for
the  company.  We are also  unable to  predict  the  number  of  orders  for our
products,  or to  determine  if we  receive  additional  orders,  the  amount of
operating profit such orders would generate. Therefore, we are unable to predict
our future cash requirements until we secure additional purchase orders.


                                       10
<PAGE>

         We continue to perform research and development to improve our existing
cleaning  products and to provide new cleaning  products.  We anticipate that we
will continue to spend funds for research and development during the next twelve
months,  but we are unable to predict or  anticipate  the total  amount of these
future research and development  expenses.  In many instances,  new products are
developed  as a result of interest  expressed  by a potential  retail  client in
products  similar or ancillary to the ones initially  presented.  This may occur
especially in our private label  products.  Many retail outlets require a set of
related private label cleaning  products before ordering any cleaning  products.
Such was the case in our automotive  cleaning  products.  Our wheel cleaning and
tire cleaning  products were  developed as a result of responses  from potential
clients  for  our  automotive  vinyl-cleaning  product,  who  required  a set of
automotive cleaning products rather than the single vinyl-cleaning product.

         We  believe  we will need  additional  funding.  We are  assessing  the
possibilities  for  financing  our business  plan and trying to  determine  what
sources of financing we might  explore to raise the needed  capital.  We have no
outside  sources for funding our business plan at this time other than the sales
of our common stock. We will need  additional  capital for any current or future
expansion of our operations we might undertake.

Plan of Operation

         The operating  subsidiary  has embarked on a two-fold  growth  program,
which includes the following strategies and plans:

         Our plan of operation  includes the  implementation  of a multi-pronged
marketing strategy to distributors,  retail stores, and cleaning  professionals,
and direct to consumers  to position  the Company to become a major  supplier in
the U.S. all-purpose cleaning solution market. Management's business model is to
position the Company as an authority in this area, based on (i) its potential as
a market innovator and future leader, (ii) careful attention to product quality,
(iii) the  Company's  tested  and proven  products,  (iv) its  ethical  business
practices, and (v) the confidence of a large number of loyal consumers.

         We also intend to seek  acquisitions or co-branding  arrangements  with
small,  under-capitalized  suppliers of cleaning  products  whose products would
compliment  or extend our product line,  and which could be acquired  readily to
support the  corporate  objectives.  We intend to acquire only  companies  whose
market  presence,  product  mix,  and  profitability  meet  certain  acquisition
criteria,  and to incorporate  their products into the existing  product line or
into lines of supporting or related products.

         In order to  achieve  the  planned  level of growth  in both  sales and
profitability,  we  anticipate  the need for a  substantial  amount of  external
capital,  either from the sale of  securities or incurring of debt, to permit us
to execute the next stages of our business plan. We have no firm  commitments or
arrangements  for this funding and there is no assurance that we will be able to
secure the funding necessary to implement the business plan.

New Accounting Pronouncements

         Source  Direct  does  not  expect  the  adoption  of  recently   issued
accounting  pronouncements  to have a  significant  impact  on  Source  Direct's
results of operations, financial position, or cash flow.


ITEM 3.  CONROLS AND PROCEDURES

         Disclosure  controls and procedures  are controls and other  procedures
that are designed to ensure that information required to be disclosed in company
reports  filed or  submitted  under  the  Securities  Exchange  Act of 1934 (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  in
company reports filed under the Exchange Act is accumulated and  communicated to
management,  including the Company's Chief Executive Officer and Chief Financial
Officer (the  "Certifying  Officers"),  as appropriate to allow timely decisions
regarding required disclosure.


                                       11
<PAGE>

         As required by Rules  13a-15 and 15d-15  under the  Exchange  Act,  the
Certifying Officers carried out an evaluation of the effectiveness of the design
and  operation  of  the  Company's  disclosure  controls  and  procedures  as of
September 30, 2004. Their  evaluation was carried out with the  participation of
other  members of the Company's  management.  Based upon their  evaluation,  the
Certifying  Officers  concluded  that  the  Company's  disclosure  controls  and
procedures were effective.

         The Company's  internal  control over financial  reporting is a process
designed by, or under the supervision  of, the Certifying  Officers and effected
by the Company's Board of Directors,  management and other personnel, to provide
reasonable  assurance  regarding  the  reliability  of the  Company's  financial
reporting and the preparation of the Company's financial statements for external
purposes in accordance with generally accepted accounting  principles.  Internal
control over financial  reporting  includes policies and procedures that pertain
to the  maintenance of records that in reasonable  detail  accurately and fairly
reflect the  transactions  and  dispositions  of the Company's  assets;  provide
reasonable  assurance  that  transactions  are  recorded as  necessary to permit
preparation of the Company's  financial  statements in accordance with generally
accepted accounting principles, and that the Company's receipts and expenditures
are being made only in accordance with the  authorization of the Company's Board
of  Directors  and  management;   and  provide  reasonable  assurance  regarding
prevention or timely detection of unauthorized  acquisition,  use or disposition
of the  Company's  assets  that could have a  material  effect on its  financial
statements.  There has been no change in the  Company's  internal  control  over
financial  reporting that occurred in the quarter ended September 30, 2004, that
has  materially  affected,  or is  reasonably  likely to affect,  the  Company's
internal control over financial reporting.




                                       12
<PAGE>

                            PART II OTHER INFORMATION


ITEM 2.  CHANGES IN SECURITIES

         In our Annual  Report on Form 10-KSB for the year ended June 30,  2004,
we erroneously  disclosed the March 2004 sale of 1,600,000  shares of our common
stock to Mark Miller in two  separate  paragraphs.  Mr.  Miller  purchased  only
1,600,000 shares.

         In August 2004,  Mr. Miller  purchased an additional  500,000 shares of
our common  stock for a purchase  price of  $50,000,  and  received  warrants to
purchase up to an additional  500,000  shares of our common stock at an exercise
price of $0.125 per share.  These  securities  were issued without  registration
under the Securities Act by reason of the exemption from  registration  afforded
by the provisions of Section 4 (2) thereof, and Rule 506 promulgated thereunder,
as a transaction by an issuer not involving a public offering.

         Additionally,  as we previously  disclosed in our Annual Report for the
year ended June 30, 2004, in July 2004, we issued 1,500,000 shares of our common
stock to NCP Enterprises,  for gross proceeds of $150,000.  NCP Enterprises also
received  warrants to purchase up to 1,500,000  additional  shares of our common
stock at an exercise  price of $0.125 per share.  These  securities  were issued
without  registration  under the  Securities Act by reason of the exemption from
registration  afforded by the provisions of Section 4 (2) thereof,  and Rule 506
promulgated  thereunder,  as a  transaction  by an issuer not involving a public
offering.

         In August 2004,  we also issued an  aggregate  of 1,500,000  shares and
warrants to purchase another  1,500,000  shares,  at an exercise price of $0.125
per share, to two accredited  investors for a purchase price of $150,000.  These
securities were issued without  registration  under the Securities Act by reason
of the exemption from  registration  afforded by the provisions of Section 4 (2)
thereof, and Rule 506 promulgated thereunder,  as a transaction by an issuer not
involving a public offering.

         Further,  as we disclosed in our Annual  Report for the year ended June
30,  2004,  in August 2004,  we issued an  aggregate of 5,000,000  shares to six
outside consultants in exchange for consulting services provided to the Company.
Additionally,  we issued  warrants  to purchase  up to an  additional  4,000,000
shares to four of the  consultants.  The shares and warrants were issued without
registration   under  the  Securities  Act  by  reason  of  the  exemption  from
registration  afforded by the provisions of Section 4 (2) thereof,  and Rule 504
promulgated  thereunder,  as a  transaction  by an issuer not involving a public
offering.

         We have  utilized  the  funds  received  from the  stock  sales for our
various marketing and promotion efforts and general business activities.




                                       13
<PAGE>

ITEM 6.  EXHIBITS

         3.1    Certificate of Amendment to Certificate of Incorporation (4)

         3.2    Articles of Merger, without attachment (2)

         10.1   Agreement and Plan of Merger Dated  September 29, 2003,  without
                Attachments (2)

         10.2   Distribution   Agreement  dated  March  17,  2004,  with  Marden
                Distribution, Inc. (3)

         10.3   Consulting Agreement dated July 2, 2003 with Ageless Enterprises
                LLC (4)

         10.4   Agreement between Source Direct Holdings,  Inc., and Integritas,
                Inc., dated as of July 25, 2004. (4)

         10.5   Television  Marketing  Agreement between Source Direct Holdings,
                Inc.,  and MediaCorp  Worldwide,  LLC,  dated as of September 8,
                2004. (4)

         10.6   QVC  Agreement   between  Source  Direct  Holdings,   Inc.,  and
                MediaCorp Worldwide, LLC, dated as of September 17, 2004. (5)

         10.7   Mail Order Catalog  Agreement  between  Source Direct  Holdings,
                Inc.,  and MediaCorp  Worldwide,  LLC, dated as of September 17,
                2004. (5)

         31.1   Certification  of  Chief  Executive  Officer,  pursuant  to Rule
                13a-14(a) of the Exchange  Act, as enacted by Section 302 of the
                Sarbanes-Oxley Act of 2002. (1)

         31.2   Certification  of  Chief  Financial  Officer,  pursuant  to Rule
                13a-14(a) of the Exchange  Act, as enacted by Section 302 of the
                Sarbanes-Oxley Act of 2002. (1)

         32.1   Certification  of Chief  Executive  Officer and Chief  Financial
                Officer,  pursuant to 18 United  States Code  Section  1350,  as
                enacted by Section 906 of the Sarbanes-Oxley Act of 2002. (1)


         (1)    Filed herewith
         (2)    Incorporated by reference from Form 8-K (dated October 16, 2003)
         (3)    Incorporated by reference from Form 10-QSB (dated May 14, 2004)
         (4)    Incorporated  by reference from Form 10-KSB (filed  September 9,
                2004)
         (5)    Incorporated  by reference  from Form 8-5 (filed  September  30,
                2004)



                                       14
<PAGE>

                                   Signatures

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

                                     (Registrant)  Source Direct Holdings, Inc.

Date:  November 18, 2004                      By: /s/ Deren Z. Smith
                                                  ----------------------------
                                                  Deren Z. Smith, President
                                                 (Principal Executive Officer)


Date:  November 18, 2004                      By: /s/ Kevin Arave
                                                  -----------------------------
                                                  Kevin Arave, Treasurer
                                                  (Principal Financial Officer
                                                  and Chief Accounting Officer)





                                       15
<PAGE>