UNITED
STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 FORM
10-QSB-A Amendment
No. 1 (Mark One) x
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
  SECURITIES EXCHANGE ACT OF 1934For the quarterly period ended June 30, 2006.o
TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
  EXCHANGE ACTFor the transition period from
  _______________________ to ______________________ Commission file
number: 0-26525 BREDA TELEPHONE
CORP.
(Exact name of small business issuer as specified in its charter) Iowa

42-0895882(State or other
  jurisdiction

(I.R.S. Employerof incorporation or
  organization)

Identification No.) 112 E. Main, P.O.
Box 190, Breda, Iowa 51436
(Address of principal executive offices) (712) 673-2311
(Issuers telephone number) Check
whether the issuer (1) filed all reports required to be filed by Section 13 or
15(d) of the Exchange Act during the past 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.Yes
x   No o Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act). Yes o   No x State
the number of shares outstanding of each of the issuers classes of common
equity, as of the latest practicable date: 31,023 shares of common stock, no
par value, at July 1, 2006. Transitional Small Business Disclosure Format (Check
one): Yes o   No x    Explanatory Note

Breda
Telephone Corp. (Breda) is filing this Amendment No. 1 to its Quarterly
Report on Form 10-QSB for the quarterly period ended June 30, 2006 which was
originally filed with the Securities and Exchange Commission on August 11, 2006
(the Original 10-QSB) to amend Part I Financial InformationItem 1 Financial
Statements and Part II Other InformationItem 6 Exhibits. In all other
respects, the Original 10-QSB remains unchanged and is not otherwise amended
hereby.

Bredas
Form 10-QSB for the period ended June 30, 2006 is amended to restate Bredas
year-to-date, six-months income from equity investments derived from an
investment in Iowa 8 Monona Limited Partnership(RSA #8).

Two
of Bredas subsidiaries each own an approximate 5.84% ownership interest in RSA
#8. Twelve-months income figures for RSA #8, instead of three-month income
figures, were inadvertently used to compute Bredas pro-rata share of the
income generated by RSA #8 for the three-month period ended March 31, 2006,
resulting in a $378,228 overstatement of income from equity investments in
Bredas Form 10-QSB for the period ended March 31, 2006. After adjustment for
that overstatement, net of income taxes, Bredas amended net income as of March
31, 2006, decreased $223,154, or $7.19/share.

Consequently,
Bredas income from equity investments for the six-months ended June 30, 2006
also decreased by $378,228. After adjustment for that overstatement, net of
income taxes, Bredas amended net income as of June 30, 2006, decreased
$223,154, from $1,889,447 to $1,666,293, and net income per common share
decreased $7.19, from $60.90/share to $53.71/share.

PART
I - FINANCIAL INFORMATION

Item 1. Financial
Statements.

Breda Telephone Corp.
And Subsidiaries
Breda, IA

Condensed Consolidated Financial
Statements
For the Periods
Ended June 30, 2006 and 2005
And the Year Ended December 31, 2005

2

BREDA
TELEPHONE CORP. AND SUBSIDIARIES 
BREDA, IOWA

CONDENSED
CONSOLIDATED BALANCE SHEETS (UNAUDITED) 
June 30, 2006 and December 31, 2005

June 30,

December
  31,2006

2005(As
  Restated)

(Unaudited)ASSETSCURRENT ASSETSCash and cash
  equivalents

$
1,523,605

$
739,741Marketable
  securities


649,076


635,409Accounts
  receivable


845,085


952,579Interest
  receivable


79,187


107,229Current portion
  of note receivable


144,000


144,000Inventory, at
  average cost


148,304


122,953Prepaid income
  taxes


13,480


Other


29,338


42,196Deferred income
  taxes


11,415


22,7943,443,490


2,766,901OTHER NONCURRENT ASSETSMarketable
  securities


6,176,296


5,463,298Investments in
  unconsolidated affiliates at equity


5,663,980


5,519,572Other
  investments at cost


618,430


790,066Goodwill


896,812


896,812Note
receivable,
  less allowance of $219,691 in each 2006 and 2005


76,283


75,46913,431,801


12,745,217PROPERTY, PLANT AND EQUIPMENT


4,673,613


5,215,291TOTAL ASSETS

$
21,548,904

$
20,727,409LIABILITIES AND
  STOCKHOLDERS EQUITYCURRENT LIABILITIESCurrent portion
  of long-term debt

$
170,029

$
164,513Accounts
payable


200,190


428,211Accrued
taxes





378,871Other


95,844


143,582466,063


1,115,177LONG-TERM DEBT, less current portion


1,228,519


1,314,935OTHER NONCURRENT LIABILITIES


963,435


855,542STOCKHOLDERS EQUITYCommon stock -
  no par value, 5,000,000 shares authorized, 31,023 shares issued and
  outstanding at $357


11,075,211


11,075,211Retained
  earnings


7,815,676


6,366,54418,890,887


17,441,755TOTAL LIABILITIES AND STOCKHOLDERS EQUITY

$
21,548,904

$
20,727,409The accompanying
notes are an integral part of these condensed consolidated financial
statements.

3

BREDA TELEPHONE CORP. AND SUBSIDIARIES
BREDA, IOWA

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)For the
Three and Six Months Ended June 30, 2006 and 2005

For the Three Months Ended

For the Six Months Ended2006

2005

2006

2005(As Restated)

(Unaudited)

(As
  Restated)

(Unaudited)OPERATING REVENUES

$
2,020,627

$
1,752,678

$
4,043,509

$
3,680,905OPERATING EXPENSESCost of
services


953,389


871,202


1,847,342


1,714,778Depreciation
and amortization


245,928


220,590


488,677


465,616Selling,
general, and administrative


588,756


500,923


1,101,523


990,6041,788,073


1,592,715


3,437,542


3,170,998OPERATING INCOME


232,554


159,963


605,967


509,907OTHER INCOME (EXPENSES)Interest and
dividend income


75,736


100,688


169,565


197,999Gain or (loss)
on sale of investments


1,163,437


(3,057
)

1,163,398


(3,057
)Loss on
disposal of assets


(21,714
)




(21,714
)

Interest
expense


(26,448
)

(29,325
)

(53,633
)

(59,340
)Income from
equity investments


393,218


263,855


676,069


510,243Other,
net


3,650


(6,792
)

3,311


(6,954
)1,587,879


325,369


1,936,996


638,891INCOME BEFORE
INCOME TAXES


1,820,433


485,332


2,542,963


1,148,798INCOME
TAXES


680,202


166,085


876,670


404,498NET
INCOME

$
1,140,231

$
319,247

$
1,666,293

$
744,300NET INCOME PER
COMMON SHARE

$
36.75

$
10.26

$
53.71

$
23.89The
accompanying notes are an integral part of these condensed consolidated
financial statements.

4

BREDA
TELEPHONE CORP. AND SUBSIDIARIES
BREDA, IOWA

CONDENSED
CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY

Common
  StockRetained
  EarningsShares

Amount


TotalBalance at December 31, 2004 (Audited)


31,170

$
10,161,420

$
5,736,268

$
15,897,688Comprehensive
  income:Net
Income








1,814,736


1,814,736Dividends
paid








(218,190
)

(218,190
)Common stock
  redeemed, net


(147
)

(52,479
)




(52,479
)Stated value
  stock adjustment





966,270


(966,270
)Balance at December 31, 2005 (Unaudited)


31,023


11,075,211


6,366,544


17,441,755Comprehensive
  income:Net Income (As
  Restated)








1,666,293


1,666,293Dividends
paid








(217,161
)

(217,161
)Balance at June 30, 2006 (As Restated)


31,023

$
11,075,211

$
7,815,676

$
18,890,887The accompanying notes
are an integral part of these condensed consolidated financial statements.

5

BREDA
TELEPHONE CORP. AND SUBSIDIARIES
BREDA, IOWA

CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) 
For the Six Months Ended June 30, 2006 and 2005

2006

2005(As
  Restated)

(Unaudited)CASH FLOWS FROM OPERATING ACTIVITIESNet
income

$
1,666,293

$
744,300Adjustments to
  reconcile net income to cash provided by operating activities:Depreciation
and
  amortization


488,677


465,616Deferred income
  taxes


119,272


(50,383
)Amortization of
  investment tax credits





(2,805
)Amortization of
  investment premium/discount - net


28,014


34,178Equity income
in
  unconsolidated affiliates, net of distributions received of $531,661 and
  $557,634 in 2006 and 2005, respectively


(144,408
)

47,391Note receivable
  discount


(814
)

(3,473
)Gain on sale of
  investments - at cost


(1,170,211
)

Changes in
  assets and liabilities:(Increase)
  Decrease in assets:


109,563


(24,614
)Increase
  (Decrease) in liabilities:


(669,050
)

201,674Net cash
  provided by operating activities


427,336


1,411,884CASH FLOWS FROM INVESTING ACTIVITIESCapital
  expenditures


(48,826
)

(384,632
)Proceeds from
  the sale of assets


116,247


Purchase of
  marketable securities


(1,307,553
)

(759,641
)Purchase of
  equity investments





(290,000
)Purchase of
  other investments - at cost


(1,854
)

Proceeds from
  the sale of marketable securities


552,874


340,409Proceeds from
  the sale of other investments - at cost


1,343,701


7,209Net cash
  provided by investing activities


654,589


(1,086,655
)CASH FLOWS FROM FINANCING ACTIVITIESRepayment of
  long term debt


(80,900
)

(75,737
)Common stock
  redeemed, net





(43,554
)Dividends
paid


(217,161
)

(218,190
)Net cash used
in
  financing activites

$
(298,061
)
$
(337,481
)Net Increase (Decrease) in Cash and Cash Equivalents

$
783,864

$
(12,252
)Cash and Cash Equivalents at Beginning of Period


739,741


1,036,804Cash and Cash Equivalents at End of Period

$
1,523,605

$
1,024,552Supplemental Disclosures of Cash Flow InformationCash paid
during
  the period for:Interest

$
53,633

$
59,340Income
taxes

$
1,148,298

$
355,000The accompanying notes
are an integral part of these condensed consolidated financial statements.

6

BREDA TELEPHONE CORP. AND SUBSIDIARIES 
BREDA, IOWA

NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS

NOTE 1.
CONDENSED CONSOLIDATED FINANCIAL STATEMENTSIn the
  opinion of management, the accompanying condensed consolidated financial
  statements as restated contain all adjustments (consisting of only normal
  recurring items) necessary to present fairly the financial position as of
  June 30, 2006 and December 31, 2005 and the results of operation and changes
  in cash flows for the three and six months ended June 30, 2006 and 2005.Certain
  information and footnote disclosures normally included in annual financial
  statements prepared in accordance with accounting principles generally
  accepted in the United States of America have been condensed or omitted.  It is suggested that these financial
  statements be read in conjunction with the financial statements and notes
  thereto included in the Companys December 31, 2005 10-KSB as filed on April
  17, 2006.  The results of operations
  for the three- and six-month period ended June 30, 2006 are not necessarily
  indicative of the operating results of the entire year. Bredas Form 10-QSB
  for the period ended June 30, 2006 is amended to restate Bredas
  year-to-date, six-months income from equity investments derived from its
  investment in RSA #8.Two of
  Bredas subsidiaries each own an approximate 5.84% ownership interest in RSA
  #8.  Twelve-months income figures for
  RSA #8, instead of three-month income figures, were inadvertently used to
  compute Bredas pro-rata share of the income generated by RSA #8 for the
  three-month period ended March 31, 2006 resulting in a $378,228 overstatement
  of income from equity investments on Bredas March 31, 2006 Form 10-QSB.  Net of income taxes,
Bredas amended net
  income as of March 31, 2006, decreased $223,154, or $7.19/share.Consequently,
  Bredas income from equity investments for the six-months ended June 30, 2006
  decreased by $378,228.  Net of income
  taxes, Bredas amended net income as of June 30, 2006, decreased $223,154,
  from $1,889,447 to $1,666,293.  Net
  income per common share decreased $7.19, from $60.90/share to $53.71/share.Certain
  reclassifications have been made to the 2005 financial statements to conform
  with the 2006 presentations.NOTE 2.
NONCASH INVESTING ACTIVITIESNoncash
  investing activities included $14,420 and $328,777 during the six months
  ended June 30, 2006 and June 30, 2005, respectively, relating to plant and
  equipment additions under construction during the period, which are reflected
  in accounts payable at June 30, 2006 and June 30, 2005.NOTE 3.
OPERATING SEGMENTSThe Company
  organizes its business into three reportable segments:  local exchange carrier (LEC) services,
  broadcast services and Internet service provider (ISP) services.  The LEC services segment provides
  telephone, data services and other services to customers in the local7

NOTE 3.
OPERATING SEGMENTS (Continued)exchanges.  The broadcast services segment provides
  cable television services to customers in Iowa and Nebraska.  The ISP services segment provides Internet
  access to customers within the local exchanges and the surrounding areas.The
  Companys reportable business segments are strategic business units that
  offer different products and services.
  Each reportable segment is managed separately primarily because of
  different products, services and regulatory environments.  LEC segments have been aggregated because
  of their similar characteristics.The
  segments accounting policies are the same as those described in the summary
  of significant accounting policies.Local



InternetSix Months
  Ended


Exchange



ServiceJune 30,
  2006


Carrier

Broadcast

Provider

TotalRevenuesExternal customers - as restated

$
3,357,218

$
368,650

$
317,641

$
4,043,509Segment profit (loss) - as restated


2,029,549


(109,720
)

(253,536
)

1,666,293Local



InternetSix Months Ended


Exchange



ServiceJune 30, 2005


Carrier

Broadcast

Provider

TotalRevenuesExternal customers

$
2,981,680

$
413,852

$
285,373

$
3,680,905Segment profit (loss)


970,126


(96,821
)

(129,005
)

744,300Local



InternetThree Months Ended


Exchange



ServiceJune 30, 2006


Carrier

Broadcast

Provider

TotalRevenuesExternal customers - as restated

$
1,680,336

$
182,649

$
157,642

$
2,020,627Segment profit (loss) - as restated


1,333,388


(67,896
)

(125,261
)

1,140,231Local



InternetThree Months Ended


Exchange



ServiceJune 30, 2005


Carrier

Broadcast

Provider

TotalRevenuesExternal customers

$
1,402,059

$
207,280

$
143,339

$
1,752,678Segment profit (loss)


445,449


(45,924
)

(80,278
)

319,247NOTE 4.
NET INCOME PER COMMON SHARENet income
  per common share for June 30, 2006 and 2005 was computed by dividing the
  weighted average number of shares of common stock outstanding into the net
  income.  The weighted average number
  of shares of common stock outstanding for the three and six months ended June
  30, 2006 and 2005 were 31,023 and 31,023 and 31,129 and 31,150, respectively.8

NOTE 5.
STOCK VALUE ADJUSTMENTDuring July
  2006 and subsequent to these financial statements, the board of directors
  authorized a $37 increase in the stated value of each share of common stock
  from $357 to $394.  There were 31,023
  shares outstanding at the time of the value adjustment, which will reduce
  retained earnings by $1,147,851.During May
  2005, the board of directors authorized a $31 increase in the stated value of
  each share of common stock from $326 to $357.  There were 31,170 shares outstanding at the time of the value
  adjustment, which reduced retained earnings by $966,270.PART II - OTHER INFORMATION

Item 6. Exhibits.

A list of
  the exhibits included as part of this quarterly report is set forth in the
  Exhibit Index which immediately precedes such exhibits and is incorporated
  herein by this reference.[THE REST OF THIS PAGE IS INTENTIONALLY LEFT
BLANK]

9

SIGNATURES

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

BREDA
  TELEPHONE CORP.Date:
  November 15, 2006.
By:
/s/ Steve
  FrickensteinSteve
  Frickenstein, Chief Executive OfficerDate:
  November 15, 2006.
By:
/s/ Jane
  MorlokJane Morlok,
  Chief Financial Officer10

EXHIBIT INDEX 
Exhibits to Form 10-QSB-A
Three Months Ended June 30, 2006
BREDA TELEPHONE CORP.

Description
  of Exhibit

Page3.
Articles of Incorporation and Bylaws3.1
Amended and Restated Articles of Incorporation of Breda Telephone
  Corp.  (Filed as Exhibit 3.1 to
  Bredas Registration Statement on Form 10-SB, and incorporated herein by this
  reference.)3.2
Amended and Restated Bylaws of Breda Telephone Corp. (Filed as
  Exhibit 3.2 to Bredas Form 10-QSB for the quarterly period ended March 31,
  2006 and filed May 12, 2006, and incorporated herein by this reference.)10.
Material Contracts10.1
Employment
  Agreement dated July 1, 2003 between Breda and Jane Morlok (Filed as Exhibit
  10.2 to Bredas Form 10-QSB for the quarterly period ended June 30, 2003 and
  filed August 12, 2003, and incorporated herein by this reference.)10.2
Employment
  Agreement dated June 14, 2006 between Breda and Steve Frickenstein.10.3
Employment
  Agreement dated June 14, 2006 between Breda and Charles Deisbeck.*31.
Rule 13a-14(a)/15d-14(a) Certifications31.1
Rule
  13a-14(a) Certification of Chief Executive Officer

E-131.2
Rule
  13a-14(a) Certification of Chief Financial Officer

E-2*32.
Section 1350 Certifications32.1
Section 1350
  Certification of Chief Executive Officer

E-332.2
Section 1350
  Certification of Chief Financial Officer

E-4*Included
  with this filing.