U.S. SECURITIES EXCHANGE COMMISSION
                             Washington, D.C. 20549



                                   FORM 10-QSB/A

(X)   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGE ACT OF 1934

( )   TRANSACTION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE   SECURITIES
      EXCHANGE ACT OF 1934

For Quarter Ended:               Commission File Number: 000-30105
September 30,2002


                     DEFENSE INDUSTRIES INTERNATIONAL, INC.
--------------------------------------------------------------------------------
            (Exact name of Registrant as specified in its charter)



     NEVADA                                                 84-1421481
-------------------------------                 ----------------------------
(State or other jurisdiction of                (IRS  Employer  Identification
incorporation or organization)                  Number)


                              Industrial Zone Erez
                                 P.O. Box 779
                             Ashkelon, Israel 78101
--------------------------------------------------------------------------------
(Address of Principal Executive Offices)                    (Zip Code)


                               011-972-8-689-1611
--------------------------------------------------------------------------------
             (Registrant's telephone number, including area code)


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 filing requirements
for the past 90 days.

                                   Yes X No___

The number of shares of Common Stock, no par value per share, outstanding as of
June 30, 2002 is 25,400,000.

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

<PAGE>


                         PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

                     DEFENSE INDUSTRIES INTERNATIONAL, INC.
                      (FORMERLY PAWNBROKERS EXCHANGE, INC.)
                                AND SUBSIDIARIES
                             CONDENSED CONSOLIDATED
                              FINANCIAL STATEMENTS
                            AS OF SEPTEMBER 30, 2002
<PAGE>


                     DEFENSE INDUSTRIES INTERNATIONAL, INC.
             (FORMERLY PAWNBROKERS EXCHANGE, INC.) AND SUBSIDIARIES



                                    CONTENTS


PAGES       1 - 2    CONDENSED  CONSOLIDATED  BALANCE  SHEETS AS OF  SEPTEMBER
                     30, 2002 (UNAUDITED) AND DECEMBER 31, 2001

PAGE          3      CONDENSED   CONSOLIDATED   STATEMENTS   OF   INCOME   AND
                     COMPREHENSIVE  INCOME  (LOSS)  FOR  THE  THREE  AND  NINE
                     MONTHS ENDED SEPTEMBER 30, 2002 AND 2001 (UNAUDITED)

PAGE          4      CONDENSED    CONSOLIDATED   STATEMENT   OF   CHANGES   IN
                     SHAREHOLDERS'  EQUITY FOR THE NINE MONTHS ENDED SEPTEMBER
                     30, 2002 (UNAUDITED)

PAGE          5      CONDENSED  CONSOLIDATED  STATEMENTS OF CASH FLOWS FOR THE
                     NINE MONTHS ENDED SEPTEMBER 30, 2002 AND 2001 (UNAUDITED)

PAGES       6 - 11   NOTES  TO  CONDENSED  CONSOLIDATED  FINANCIAL  STATEMENTS
                     (UNAUDITED)

<PAGE>


                     DEFENSE INDUSTRIES INTERNATIONAL, INC.
                   FORMERLY EXPORT EREZ LTD. AND SUBSIDIARY
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                  JUNE 30, 2002
<TABLE>
<CAPTION>


                                             ASSETS
                                                                 September 30,     December 31,
                                                                      2002             2001
                                                                  (Unaudited)
(As Restated)
                                                                 ---------------   --------------
<S>                                                            <C>              <C>
CURRENT ASSETS
 Cash and cash equivalents                                     $       611,060   $      781,996
 Trade accounts receivable, net                                      2,190,106        2,461,671
 Trade accounts receivable - related parties, net                      103,723          181,059
 Shareholder note receivable                                           400,000             -
 Other assets                                                          389,131          274,840
 Inventories                                                         1,483,840        1,956,072
 Deferred taxes                                                        101,925           97,761
                                                                 ---------------   --------------
     Total Current Assets                                            5,279,785        5,753,399
                                                                 ---------------   --------------

PROPERTY, PLANT AND EQUIPMENT, NET                                   1,800,513        1,951,147
                                                                 ---------------   --------------

OTHER ASSETS
 Investment in marketable securities                                   480,764          616,105
 Deposits for the severance of employer-employee relations             371,180          472,421
 Deferred taxes, long-term                                              35,902          400,689
 Intangible assets                                                      48,786           61,452
                                                                 ---------------   --------------
     Total Other Assets                                                936,632        1,550,667
                                                                 ---------------   --------------

TOTAL ASSETS                                                   $     8,016,930   $    9,255,213
                                                                 ===============   ==============

</TABLE>

   The accompanying notes are an integral part of the condensed consolidated
                             financial statements.

                                      -1-
<PAGE>


                     DEFENSE INDUSTRIES INTERNATIONAL, INC.
             (FORMERLY PAWNBROKERS EXCHANGE, INC.) AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>

                      LIABILITIES AND SHAREHOLDERS' EQUITY

                                                                 September 30,     December 31,
                                                                      2002             2001
                                                                  (Unaudited)
<S>                                                            <C>               <C>
(As Restated)                                                    ---------------   --------------
CURRENT LIABILITIES
 Short-term bank credit                                        $       693,698   $      894,981
 Trade accounts payable                                              1,227,336        1,551,470
 Current portion of long-term debt                                     340,710          371,344
 Other liabilities                                                     453,355        1,011,062
                                                                 ---------------   --------------
     Total Current Liabilities                                       2,715,099        3,828,857
                                                                 ---------------   --------------

LONG-TERM LIABILITIES
 Long-term loans                                                       570,298        1,295,440
 Long-term loan - related party                                           -              47,432
 Provision for the severance of employer-employee
 relations                                                             399,399          431,522
 Minority interest                                                     708,055          572,106
                                                                 ---------------   --------------
     Total Long-Term Liabilities                                     1,677,752        2,346,500
                                                                 ---------------   --------------

Total liabilities                                                    4,392,851        6,175,357
                                                                 ---------------   --------------

COMMITMENTS AND CONTINGENCIES

SHAREHOLDERS' EQUITY
 Preferred stock, $.0001 par value, 50,000,000 shares
  authorized, none issued and outstanding                                 -                -
 Common stock, $.0001 par value, 250,000,000 shares
  authorized, 25,400,000 and 21,000,000 issued and
  outstanding, respectively                                              2,540            2,100
 Additional paid-in capital                                          2,066,945        1,145,385
 Retained earnings                                                   3,161,365        2,396,616
 Accumulated other comprehensive loss                                 (770,771)        (464,245)
 Deferred consulting fees                                             (836,000)            -
                                                                 ---------------   --------------
     Total Shareholders' Equity                                      3,624,079        3,079,856
                                                                 ---------------   --------------


TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                     $     8,016,930   $    9,255,213
                                                                 ===============   ==============
</TABLE>

   The accompanying notes are an integral part of the condensed consolidated
                             financial statements.


                                      -2-
<PAGE>

                     DEFENSE INDUSTRIES INTERNATIONAL, INC.
            (FORMERLY PAWNBROKERS EXCHANGE, INC.) AND SUBSIDIARIES
               CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND
                           COMPREHENSIVE INCOME (LOSS)
                                   (UNAUDITED)

<TABLE>
<CAPTION>

                                             For the       For the       For the       For the
                                            Three            Three         Nine          Nine
                                            Months          Months        Months        Months
                                            Ended            Ended         Ended         Ended
                                            September      September     September     September
                                             30, 2002      30, 2001      30, 2002      30, 2001
                                            -----------   ------------  ------------  ------------
<S>                                       <C>           <C>           <C>           <C>
REVENUES                                  $ 2,586,107   $  3,599,774  $  7,899,742  $  5,639,032
 Cost of sales and processing               1,778,018      2,438,100     5,045,126     3,812,089
                                            -----------   ------------  ------------  ------------
 Gross profit                                 808,089      1,161,674     2,854,616     1,826,943
                                            -----------   ------------  ------------  ------------

OPERATING EXPENSES
 Selling                                      106,593        122,385       429,276       224,282
 General and administrative                   349,113        452,228       948,278       716,796
                                            -----------   ------------  ------------  ------------

TOTAL OPERATING EXPENSES                      455,706        574,613     1,377,554       941,078
                                            -----------   ------------  ------------  ------------

INCOME FROM OPERATIONS                        352,383        587,061     1,477,062       885,865
                                            -----------   ------------  ------------  ------------

OTHER INCOME (EXPENSE)
 Interest, dividends and gain (loss) on
  sales of securities, net                    (32,988)       (26,509)      (99,283)      (56,555)
 Other income - net                             1,077          4,878        13,997        53,906
                                            -----------   ------------  ------------  ------------
                                            -----------   ------------  ------------  ------------

TOTAL OTHER INCOME (EXPENSE)                  (31,911)       (21,631)      (85,286)       (2,649)
                                            -----------   ------------  ------------  ------------

INCOME BEFORE INCOME TAXES                    320,472        565,430     1,391,776       883,216
 Income tax expense                            64,679        268,619       472,760       366,362
                                            -----------   ------------  ------------  ------------

INCOME BEFORE MINORITY INTEREST               255,793        296,811       919,016       516,854
 Minority interest                            112,927         36,474       154,267        43,787
                                            -----------   ------------  ------------  ------------

NET INCOME                                $   142,866   $    260,337  $    764,749  $    473,067
                                            -----------   ------------  ------------  ------------

OTHER COMPREHENSIVE INCOME (LOSS)
 Foreign currency translation gain
  (loss), net of minority interest
  translation loss                            (40,498)       (98,235)     (203,626)     (156,377)
 Unrealized gain (loss) on
  available-for-sale securities               (36,682)       (72,453)      (89,572)     (166,435)
                                            -----------   ------------
                                                                        ------------  ------------
 Other comprehensive income (loss)            (77,180)      (170,688)     (293,198)     (322,812)
 before tax
 Income tax (expense) benefit related to
  items of other comprehensive income          27,785         61,447       105,551       116,212
                                            -----------   ------------  ------------  ------------

TOTAL OTHER COMPREHENSIVE INCOME (LOSS),
 NET OF TAX                                   (49,395)      (109,241)     (187,647)     (206,600)
                                            -----------   ------------  ------------  ------------

COMPREHENSIVE INCOME (LOSS)               $    93,471   $    151,096  $    577,102  $    266,467
                                            ===========   ============  ============  ============

 Net income per share - basic and diluted $      0.01   $       0.01  $       0.03  $       0.02
                                            ===========   ============  ============  ============

 Weighted average number of shares
  outstanding during the period - basic
  and diluted                               25,400,000    21,000,000    24,017,582    20,353,841
                                            ===========   ============  ============  ============

</TABLE>

   The accompanying notes are an integral part of the condensed consolidated
                             financial statements.

                                      -3-
<PAGE>

                     DEFENSE INDUSTRIES INTERNATIONAL, INC.
            (FORMERLY PAWNBROKERS EXCHANGE, INC.) AND SUBSIDIARIES
     CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
                 FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2002
                                   (UNAUDITED)
<TABLE>
<CAPTION>


                                        Common Stock         Additional    Retained     Deferred      Accumulated
                                                                                                         Other
                                                              Paid-In                   Consulting    Comprehensive
                                                                                                         Income
                                     Shares       Amount      Capital      Earnings        Fees          (Loss)         Total
                                    ----------   ---------   -----------   ----------   -----------   -------------   ----------
<S>                                 <C>        <C>         <C>           <C>          <C>             <C>           <C>
                                                                                                      $
Balance, January 1, 2002 (as
 previously reported)               21,000,000 $   2,100   $ 1,145,385   $ 2,468,669  $      -           (464,245)  $ 3,151,909

Prior period adjustment - error
 in depreciation expense                -           -             -         (72,053)         -               -         (72,053)
                                    ----------   ---------   -----------   ----------   -----------   -------------   ----------

Balance, January 1, 2002 (as
 restated)                          21,000,000     2,100     1,145,385     2,396,616         -           (464,245)    3,079,856

Common stock transferred in
 recapitalization                   4,000,000        400          (400)        -             -               -            -

Common stock issued for services     400,000          40       921,960         -         (836,000)           -          86,000

Foreign currency translation loss       -           -             -            -             -           (216,954)    (216,954)

Unrealized loss on available for
 sale securities                        -           -             -            -             -            (89,572)     (89,572)

Net income 2002                         -           -             -         764,749          -               -         764,749
                                    ----------   ---------   -----------   ----------   -----------   -------------   ----------
                                    ----------   ---------   -----------   ----------   -----------   -------------   ----------

BALANCE, SEPTEMBER 30, 2002         25,400,000 $   2,540   $ 2,066,945   $ 3,161,365  $  (836,000)       (770,771)  $ 3,624,079
                                    ==========   =========   ===========   ==========   ===========   =============   ==========

</TABLE>

   The accompanying notes are an integral part of the condensed consolidated
                             financial statements.

                                      -4-
<PAGE>


                     DEFENSE INDUSTRIES INTERNATIONAL, INC.
            (FORMERLY PAWNBROKERS EXCHANGE, INC.) AND SUBSIDIARIES
               CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)
<TABLE>
<CAPTION>


                                                                        For The        For The
                                                                         Nine           Nine
                                                                        Months         Months
                                                                         Ended          Ended
                                                                      September      September
                                                                      30, 2002       30, 2001
                                                                      ------------   ------------
<S>                                                                 <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
 Net Income                                                         $    764,749   $    473,067
 Adjustments to reconcile net income to net cash provided by
 operating activities:
  Depreciation and amortization                                          211,740        122,009
  Stock issued for services                                               86,000           -
  Minority interest in income of subsidiary                              154,267         43,786
  Gain from sale of fixed assets                                            -           (24,902)
 Changes in operating assets and liabilities:
  Decrease (increase) in deposits for employee severance                 101,241         31,090
  Decrease (increase) in deferred taxes                                  360,623        206,643
  Decrease (increase) in trade accounts receivable                       348,900       (140,338)
  Decrease (increase) in other assets                                   (114,290)      (195,261)
  Decrease (increase) in inventory                                       472,232        371,778
  Increase (decrease) in trade accounts payable                         (324,135)      (573,716)
  Increase (decrease) in other liabilities                              (557,707)       153,553
  Increase (decrease) in provision for employee severance                (32,123)       (11,862)
                                                                      ------------   ------------
      Net Cash Provided By Operating Activities                        1,471,497        455,847
                                                                      ------------   ------------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchase of property and equipment                                    (111,381)       (80,033)
  Proceeds from sale of property and equipment                             3,171         27,221
  Investment in marketable securities                                    (27,753)       (27,699)
  Cash acquired in acquisition of Achidatex                                 -            39,147
  Funds advanced on behalf of shareholder                               (400,000)          -
  Advances related to acquisition, net                                      -            56,820
  Loan to subsidiary                                                        -          (480,000)
                                                                      ------------   ------------
      Net Cash Used in Investing Activities                             (535,963)      (464,544)
                                                                      ------------   ------------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Short-term bank credit, net                                           (201,282)        13,116
  Payments on long term debt                                            (755,776)       (16,527)
  Loan payable - related party                                           (47,432)          -
                                                                      ------------   ------------
      Net Cash Used In Financing Activities                           (1,004,490)        (3,411)
                                                                      ------------   ------------

Effect of exchange rate changes on cash                                 (101,980)       (60,186)
                                                                      ------------   ------------

Net decrease in cash and cash equivalents                               (170,936)       (72,294)

Cash and cash equivalents - beginning of period                          781,996        663,295
                                                                      ------------   ------------

CASH AND CASH EQUIVALENTS - END OF PERIOD                           $    611,060   $    591,001
                                                                      ============   ============

INTEREST PAID                                                       $    103,691   $     45,886
                                                                      ============   ============

TAXES PAID                                                          $     94,008   $     67,419
                                                                      ============   ============

</TABLE>

   The accompanying notes are an integral part of the condensed consolidated
                             financial statements.

                                      -5-
<PAGE>

                     DEFENSE INDUSTRIES INTERNATIONAL, INC.
            (FORMERLY PAWNBROKERS EXCHANGE, INC.) AND SUBSIDIARIES
             NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)


NOTE 1      BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

     (A) BASIS OF PRESENTATION

     The accompanying condensed consolidated financial statements are presented
     in United States dollars under accounting principles generally accepted in
     the United States of America.

     (B) PRINCIPLES OF CONSOLIDATION

     The  condensed  consolidated  financial  statements  for 2002 include the
     accounts of Defense Industries International,  Inc. (formerly Pawnbrokers
     Exchange,  Inc.  (see below)) and its wholly owned  subsidiaries,  Export
     Erez, USA, Inc., Export Erez, Ltd., Mayotex,  Ltd. and Dragonwear Trading
     Ltd. and its 76% owned  subsidiary  Achidatex  Nazareth Elite (1977) Ltd.
     (collectively,  the  "Company").  The minority  interest  represents  the
     minority shareholders' proportionate share of Achidatex.

     The  condensed  consolidated  financial  statements  for 2001 include the
     accounts of Export Erez,  USA,  Inc.  and its wholly owned  subsidiaries,
     Export Erez,  Ltd.,  Mayotex,  Ltd. and  Dragonwear  Trading Ltd. for the
     periods ended September 30, 2001 and its 76% owned  subsidiary  Achidatex
     Nazareth  Elite (1977) Ltd. from June 18, 2001,  the date of  acquisition
     (See Note 5).

     On July 8, 2002, the Company changed its corporate domicile from the State
     of Utah to the State of Nevada (the "re-incorporation"). In order to
     accomplish the re-incorporation, the Company merged with and into its
     wholly owned inactive subsidiary, Defense Industries International, Inc., a
     Nevada corporation organized on July 1, 2002. As a result of the
     re-incorporation, the Company's name was effectively changed from
     Pawnbrokers Exchange, Inc. to Defense Industries International, Inc. Each
     share of Pawnbrokers capital stock issued and outstanding on the effective
     date was converted into and exchanged for one share of Defense Industries
     capital stock. Defense Industries is authorized to issue 250,000,000 shares
     of $.0001 par value common stock and 50,000,000 shares of $.0001 par value
     preferred stock. As a result, the Company's common stock changed from no
     par value to a par value of $.0001. Accordingly, the December 31, 2001
     condensed consolidated balance sheet and the condensed consolidated
     statement of changes in stockholders' equity have been retroactively
     restated to effectuate the change.

     All intercompany accounts and transactions have been eliminated in
     consolidation.

                                      -6-
<PAGE>

     (C) 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 effect the reported
     amounts of assets and liabilities and disclose the nature of contingent
     assets and liabilities at the date of the financial statements and the
     reported amounts of revenues and expenses during the reporting periods.
     Actual results could differ from those estimates.

     (D) PER SHARE DATA

     Basic net income per common share is computed based on the weighted average
     common shares outstanding during the year. Diluted net income per common
     share is computed based on the weighted average common shares and common
     stock equivalents outstanding during the year. The computation of weighted
     average common shares outstanding gives retroactive effect to the
     recapitalization discussed in Note 4. There were no common stock
     equivalents outstanding because the exercise price of the common stock
     equivalents exceeded the average market price of the stock. Accordingly, a
     reconciliation between basic and diluted earnings per share is not
     presented.

     (E) INTERIM CONSOLIDATED FINANCIAL STATEMENTS

     The condensed consolidated financial statements as of September 30, 2002
     and for the three and nine months ended September 30, 2002 and 2001 are
     unaudited. In the opinion of management, such condensed consolidated
     financial statements include all adjustments (consisting only of normal
     recurring accruals) necessary for the fair presentation of the consolidated
     financial position and the consolidated results of operations. The
     condensed consolidated results of operations for the three and nine months
     ended September 30, 2002 and 2001 are not necessarily indicative of the
     results to be expected for the full year. The condensed consolidated
     balance sheet information as of December 31, 2001 was derived from the
     audited consolidated financial statements included in the Company's annual
     report Form 10-KSB. The interim condensed consolidated financial statements
     should be read in conjunction with that report.

     (F) PRIOR PERIOD ADJUSTMENT

     The accompanying condensed consolidated balance sheet as of December 31,
     2001 has been restated to correct an error for the understatement of
     depreciation expense during 2001. The effect of the restatement was to
     decrease net income for 2001 by $72,053. Retained earnings and property,
     plant and equipment, net in the December 31, 2001 consolidated balance
     sheet and retained earnings in the condensed consolidated statement of
     changes in shareholders' equity have been restated for the effects of the
     prior period adjustment.

                                      -7-
<PAGE>

                     DEFENSE INDUSTRIES INTERNATIONAL, INC.
            (FORMERLY PAWNBROKERS EXCHANGE, INC.) AND SUBSIDIARIES
             NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)


     (G) NEW ACCOUNTING PRONOUNCEMENTS

     In April 2002, the FASB issued SFAS 145, Rescission of FASB Statements No.
     4, 44, and 64, Amendment of FASB Statement No. 13, and Technical
     Corrections. SFAS 145 rescinds the provisions of SFAS No. 4 that requires
     companies to classify certain gains and losses from debt extinguishments as
     extraordinary items, eliminates the provisions of SFAS No. 44 regarding
     transition to the Motor Carrier Act of 1980 and amends the provisions of
     SFAS No. 13 to require that certain lease modifications be treated as sale
     leaseback transactions. The provisions of SFAS 145 related to
     classification of debt extinguishments are effective for fiscal years
     beginning after May 15, 2002. Earlier application is encouraged. The
     Company does not believe the adoption of this standard will have a material
     impact the financial statements.

     In July 2002, the FASB issued SFAS No. 146, "Accounting for Restructuring
     Costs." SFAS 146 applies to costs associated with an exit activity
     (including restructuring) or with a disposal of long-lived assets. Those
     activities can include eliminating or reducing product lines, terminating
     employees and contracts and relocating plant facilities or personnel. Under
     SFAS 146, the Company will record a liability for a cost associated with an
     exit or disposal activity when that liability is incurred and can be
     measured at fair value. SFAS 146 will require the Company to disclose
     information about its exit and disposal activities, the related costs, and
     changes in those costs in the notes to the interim and annual financial
     statements that include the period in which an exit activity is initiated
     and in any subsequent period until the activity is completed. SFAS 146 is
     effective prospectively for exit or disposal activities initiated after
     December 31, 2002, with earlier adoption encouraged. Under SFAS 146, a
     company cannot restate its previously issued financial statements and the
     new statement grandfathers the accounting for liabilities that a company
     had previously recorded under Emerging Issues Task Force Issue 94-3. The
     Company does not believe the adoption of this standard will have a material
     impact the financial statements.

     (H) RECLASSIFICATIONS

     Certain prior period amounts have been reclassified to conform to the
     current period presentation.

NOTE 2      INVENTORY

     Inventory consisted of the following:

                                      -8-
<PAGE>

                     DEFENSE INDUSTRIES INTERNATIONAL, INC.
            (FORMERLY PAWNBROKERS EXCHANGE, INC.) AND SUBSIDIARIES
             NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)
<TABLE>
<CAPTION>



                                                    September        December
                                                    30, 2002         31, 2001
                                                  --------------   -------------
<S>                                             <C>              <C>
     Raw materials                              $    1,032,394   $   1,166,086
     Work in process                                   286,953         491,237
     Finished goods                                    164,493         298,749
                                                  --------------   -------------
                                                $    1,483,840   $   1,956,072
                                                  ==============   =============
</TABLE>

NOTE 3      SHAREHOLDER NOTE RECEIVABLE

     On January 15, 2002, the Company loaned $400,000 to the Company's
     controlling shareholder. The note is for a term of eleven months maturing
     December 15, 2002, bears interest of 8% and requires quarterly prepaid
     interest payments only. Interest paid on the note for the nine months ended
     September 30, 2002 amounted to $10,000. The remaining interest payable and
     princpal will be paid at maturity.

NOTE 4      SHAREHOLDERS' EQUITY

     (A) RECAPITALIZATION

     On March 25, 2002, Pawnbrokers Exchange, Inc. ("PEI"), a reporting public
     company with no assets, liabilities or operations at that time, consummated
     a share exchange agreement (the "Agreement") with Export Erez USA, Inc.,
     ("Export USA") a company incorporated in Delaware whereby all of the
     shareholders in Export USA had their shares converted into 21,000,000
     shares or 84% of the common stock of PEI.

     Under generally accepted accounting principles, a company whose
     stockholders receive over fifty percent of the stock of the surviving
     entity in a business combination is considered the acquirer for accounting
     purposes. Accordingly, the transaction was accounted for as an acquisition
     of PEI and a recapitalization of Export USA. The condensed consolidated
     financial statements subsequent to the acquisition include the following:
     (1) the balance sheet consists of the net assets of PEI at historical costs
     (zero at the acquisition date) and the net assets of Export USA and
     subsidiaries at historical cost. (2) the statement of operations consists
     of the operations of Export USA and subsidiaries for the period presented
     and the operations of PEI from the recapitalization date.

     (B) ISSUANCES OF COMMON STOCK

     On April 8, 2002, the Company entered into a one-year agreement with a
     consultant whereby the Company issued 100,000 shares of common stock in
     return for future consulting services. The 100,000 shares were valued at
     $172,000, the fair market value of the common stock on the grant date based
     on the prevailing market price. Consulting expense of $86,000 was
     recognized as of September 30, 2002 and $86,000 is reflected as a deferred
     consulting expense component of equity.

                                      -9-
<PAGE>

                     DEFENSE INDUSTRIES INTERNATIONAL, INC.
            (FORMERLY PAWNBROKERS EXCHANGE, INC.) AND SUBSIDIARIES
             NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)


     On April 30, 2002, the Company entered into a one-year agreement with a
     consultant whereby the Company issued 300,000 shares of common stock in
     return for future consulting services. The 300,000 shares were valued at
     $750,000 the fair market value of the common stock on the grant date based
     on the prevailing market price. The contract is in dispute and no services
     have been performed to date. Counsel for the Company is confident that the
     Company will prevail and receive its 300,000 shares back. Therefore, no
     consulting expense was recognized as of September 30, 2002 and $750,000 is
     reflected as a deferred consulting expense component of equity.

NOTE 5      BUSINESS COMBINATION

     Effective June 18, 2001, the Company acquired 76% of the total common stock
     of Achidatex Nazareth Elite (1977) Ltd. ("Achidatex"). Accordingly, the
     results of operations of Achidatex are included in the condensed
     consolidated financial statements for the nine months ended September 30,
     2002.

     For comparative purposes, following are the summarized unaudited pro forma
     condensed consolidated results of operations for the nine months ended
     September 30, 2001, assuming the acquisition had taken place at the
     beginning of 2001. The unaudited pro forma results are not necessarily
     indicative of future earnings or earnings that would have been reported had
     the acquisition been completed when assumed.
<TABLE>
<CAPTION>

<S>                                                              <C>
     Net revenues                                                $  8,678,481
     Income before income taxes                                  $  1,245,722
      Income tax expense (benefit)                               $   (333,068)
     Minority interest, net of tax                               $    298,651
     Net income                                                  $  1,280,139
     Net income per share                                        $       0.06
</TABLE>

NOTE 6      SEGMENT INFORMATION

     The Company has two strategic business units: the civilian market and the
     military market. The military market is further broken down between local
     and export sales in order to better analyze trends in sales and profit
     margins. The Company does not allocate assets between segments because
     several assets are used in more than one segment and any allocation would
     be impractical.

                                      -10-
<PAGE>

                     DEFENSE INDUSTRIES INTERNATIONAL, INC.
            (FORMERLY PAWNBROKERS EXCHANGE, INC.) AND SUBSIDIARIES
             NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)
<TABLE>
<CAPTION>


                             Civilian    Military     Military
                               Local       Local        Export     Consolidated
                             ----------  -----------  -----------  ------------
<S>                        <C>         <C>          <C>          <C>
     September 30, 2002
      Net Sales            $ 2,699,092 $ 3,272,312  $ 1,928,338  $  7,899,742
      Income from
       operations             660,149      514,804      302,109     1,477,062

     September 30, 2001
      Net Sales            $ 2,264,649 $ 2,514,289  $   860,094  $  5,639,032
      Income from
       operations             397,332      379,422      109,111       885,865
</TABLE>

NOTE 7      SUBSEQUENT EVENT

     On October 24, 2002, the Company entered into a consulting agreement with
     KPMG Corporate Finance, LLC ("KPMG") whereby KPMG shall act as the
     Company's exclusive financial advisor and private placement agent. KPMG is
     entitled to an engagement fee of $25,000 upon execution of the agreement
     and an additional $25,000 for a retainer fee upon completion of the
     Memorandum to be used in any private placement. KPMG will attempt to raise
     up to $10,000,000 in a private placement of the Company's securities in
     return for a success fee of 7.0% of the proceeds raised. KPMG will assist
     the Company in identifying possible acquisitions including and up to final
     negotiations in return for (1) 75% of KPMG's normal hourly fees and (2)
     2.0% of the aggregate consideration paid by the Company including any
     liabilities assumed.

                                      -11-
<PAGE>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.


OVERVIEW

     Cautionary Statement Pursuant to Safe Harbor Provisions of the Private
Securities Litigation Reform Act of 1995:

     This Quarterly Report on Form 10-QSB for the quarterly period ended
September 30, 2002 contains "forward-looking" statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, including statements that
include the words "believes", "expects", "anticipates", or similar expressions.
These forward-looking statements may include, among others, statements of
expectations, beliefs, future plans and strategies, anticipated events or
trends, and similar expressions concerning matters that are not historical
facts. The forward-looking statements in this Quarterly Report on Form 10-QSB
for the quarterly period ended September 30, 2002 involve known and unknown
risks, uncertainties and other factors that could the cause actual results,
performance or achievements of the Company to differ materially from those
expressed in or implied by the forward-looking statements contained herein.

     Defense Industries International, Inc. (the "Company") is a manufacturer
and global provider of personal military and civilian protective equipment and
supplies. The Company's products are used by military, law enforcement, border
patrol enforcement, and other special security forces, corporations,
non-governmental organizations and individuals throughout the world.

     The Company's main products include body armor, bomb disposal suits and
bullet proof vests and jackets; ballistic wall covers helmets, plates, and
one-way protective windows; personal military equipment, battle pouch units and
combat harness units; dry storage units, liquid logistics, tents and vehicle
covers; and winter suits, sleeping bags and backpacks.

     The strategic objective of the Company is to be the leading global provider
of personal military and civilian protective equipment and supplies. We intend
to realize our strategic objective through the following:

           -Pursue Strategic Acquisitions: We intend to selectively pursue
acquisitions that enhance our product lines and geographic presence in an effort
to consolidate our highly fragmented industry and to create a more diverse and
global reach for our company in our marketplace.

           -Focus on Internal Growth: We intend to focus on internal expansion
of our existing businesses, thereby placing our company in a position to offer
an even more comprehensive portfolio of products to satisfy all of our
customers' protective equipment needs.

            -Capitalize On Increased Demand For Company Products. As a result of
the terrorist attacks on September 11, 2001, and other recent world events, an
increased emphasis on safety and protection now exists worldwide. This has
translated into increased spending on personal military and civilian protective
equipment and supplies. We expect a continued increase in volume for our current
major government programs and expect to participate in other existing and future
government programs that require our products. We also expect a continued
increase in sales to the growing civilian market for our products.

          -Expand Marketing Efforts: In the wake of the terrorist attacks of
September 11, 2001, and other recent world events, a greater global recognition
regarding the need for our products has materialized. We intend to capitalize on
this increased interest in our products by broadening our marketing efforts in
an attempt to create better global brand and recognition awareness of our
company and our products.

          -Expand Distribution Network and Product Offerings: We intend to widen
our distribution network through strategic acquisitions and the development of
new products. We believe that a broader product line will enable us to
strengthen our relationship with existing customers and attract new customers at
the same time.

RESULTS OF OPERATIONS

THREE  MONTHS  ENDED  SEPTEMBER  30,  2002  COMPARED  TO THREE  MONTHS  ENDED
SEPTEMBER 30, 2001

SALES AND GROSS PROFIT MARGIN


     Sales in the three months ended September 30, 2002 were $2,586,107, as
compared to $3,599,774 for the same three months in 2001. Revenues for the
period ended September 30, 2001 included an extraordinary increase in sales. We
believe this extraordinary increase in sales resulted from the terrorist attacks
of September 11, 2001. Sales during the three months ended September 30, 2002
remained flat as compared to the second quarter of 2002. A temporary
reorganization of the local Defense Ministry has resulted in a delay of the
execution of certain orders issued by the local Defense Ministry during the
three months ended September 30, 2002. We expect that this reorganization will
be completed in the first quarter of 2003 and the delay on the orders will be
removed. The Company eliminated the manufacture and sale of certain unprofitable
products that were acquired by the company in connection with its acquisition of
Achidatex Ltd. Export sales in the three months ended September 30, 2002
increased substantially to $1,132,705 or 93.4% from $585,558. We attribute the
substantial increase in export sales to the successful implementation of our
growth plan. Specifically, we believe that the increase in export sales is the
result of the successful implementation of our marketing efforts to create a
better global brand and worldwide recognition and awareness of our company as
well as our products. The breakdown of sales for the three months ended
September 30, 2002 is as follows:

                                      -12-
<PAGE>

                                         2002 ($)            2001($)
                                         -------            -------

Sales to the local market-civilian      $687,434          $1,304,029
Sales to the local market-military       765,968           1,710,187
Export sales-military                  1,132,705             585,558
                                      ----------          ----------
      Totals                          $2,586,107          $3,599,774
                                      ==========          ==========

     Gross profit for the three months ended September 30, 2002 was $808,089, as
compared to $1,161,674 for the same three months in 2001. We attribute this
decrease in gross profit to the elimation of extraordinary sales described
above. Gross profit margin for the three months ended September 30, 2002 was 32%
as compared to 31% for the same three months in 2001. We believe that the
increase in the gross profit margin is partially attributable to the Company's
eliminating the manufacture and sale of certain unprofitable products that were
acquired by the Company in connection with its acquisition of Achidatex Ltd.

     The cost of production in the three months ended September 30, 2002 was
$1,778,018, as compared to $2,438,100 for the same three months in 2001. This
change in cost of production is partly explained by extraordinary sales
experienced during the three months ended September 30, 2001.

GENERAL AND ADMINISTRATIVE EXPENSES AND SELLING EXPENSES

General and administrative costs in the three months ended September 30, 2002
were $349,113 compared to $452,228 for the same three months in 2001. This
change is explained by cutting unnecessary cost. Selling expenses in the three
months ended September 30, 2002 were $106,593 compared to $122,385 for the same
three months in 2001.

INCOME TAX EXPENSES

     Income tax expense for the three months ended September 30, 2002 was
$64,679 or 20.2% of income before income taxes, as compared to $268,619 or 47.5%
of income before income taxes for the three months ended September 30, 2001. As
a result of rate of inflation in Israel in the last three months the Israeli
Government has reduced the tax rate or adjusted the tax rate to reflect the
increase in inflation. This, therefore, has caused there to be a decrease in the
effective tax rate for the three and nine months ended September 30, 2002.

FINANCIAL INCOME / (EXPENSES,) NET

      Financial income (expense), net in the three months ended September 30,
2002 were $(32,988) compared to $(26,509) for the same three months in 2001.

MINORITY INTEREST

     For the three months ended September 30, 2002 the Company recognized and
recorded $112,927 to the minority interest as compared to $36,474 for the same
three months in 2001.

NET INCOME

     Net income in the three months ended September 30, 2002 was $142,866
compared to $260,337 for the same three months in 2001. The change in net income
is partly explained by extraordinary sales experienced during the three months
ended September 30, 2001.

NINE MONTHS ENDED  SEPTEMBER 30, 2002 COMPARED TO NINE MONTHS ENDED SEPTEMBER
30, 2001

SALES AND GROSS PROFIT MARGIN

     Sales in the nine months ended September 30, 2002 increased to $7,899,742
or 40% from $5,639,032 for the same nine months in 2001. Sales to the local
market in the nine months ended September 30, 2002 increased to $5,971,404 or
25% from $4,778,938 for the same nine months in 2001. We attribute this increase
in sales to the local market to the acquisition of Achidatex, Ltd. Export sales
in the nine months ended September 30, 2002 increased to $1,928,338 or 124% from
$860,094. We attribute the increase in export sales to the successful
implementation of our growth plan. Specifically, we believe that the increase in
export sales is the result of the successful implementation of our marketing
efforts to create a better global brand and worldwide recognition awareness of
our company and our products. Sales for the nine months ended September 30, 2001
include revenues attributable to the operations of Achidatex Ltd. from June 18,
2001 (the effective date of the acquisition of Achidatex Ltd. by the Company) to
September 30, 2001, while sales for the nine months ended September 30, 2002
include revenues attributable to the operations of Achidatex Ltd. from January
1, 2002 to September 30, 2002. The breakdown of sales for the nine months ended
September 30, 2002 is as follows:

                                           2002 ($)          2001 ($)
                                           --------          --------
Sales to the local market-civilian        2,699,092         2,264,649
Sales to the local market-military        3,272,312         2,514,289
Export sales-military                     1,928,338           860,094
                                          ---------         ---------
      Totals                             $7,899,742        $5,639,032

                                      -13-
<PAGE>


     Gross profit for the nine months ended September 30, 2002 increased to
$2,854,616 or 56% from $1,826,946 for the same nine months in 2001. This
increase in gross profit is explained partly by the acquisition of Achidatex
Ltd. and increased demand for our products. The gross margin for the nine months
ended September 30, 2002 improved to 36.1% as compared to 32.4% for the same
three months in 2001. We attribute the increase gross margin to the elimination
of the manufacture and sale of unprofitable products acquired in the acquistion
of Achidatex Ltd. and to greater operating efficiency.

                                      -14-
<PAGE>

     The cost of production in the nine months ended September 30, 2002 was
$5,045,126 compared to $3,812,084 for the same nine months in 2001. This change
in cost of production is explained by the increase in sales.

GENERAL AND ADMINISTRATIVE EXPENSES

     General and administrative costs in the nine months ended September 30,
2002 were $948,278 compared to $716,792 for the same nine months in 2001. This
change is explained by the increase support staff and facilities as a result of
the acquisition of Achidatex Ltd. Selling expenses in the nine months ended
September 30, 2002 were $429,276 compared to $224,282 for the same nine months
in 2001.

UNFULFILLED OPEN ORDERS

     Unfulfilled open orders at September 30, 2002 totaled $2,500,000 and are
scheduled for filling within the next four months. A temporary reorganization of
the local Defense Ministry which has resulted in a delay in certain orders being
made by the local Defense Ministry during the three months ended September 30,
2002. We expect that this reorganization will be completed in the first quarter
of 2003 and the delay on the orders will be removed.

INCOME TAX EXPENSES

     Income tax expense for the nine months ended September 30, 2002 was
$472,760 or 34% of income before income taxes, as compared to $366,362 or 41.5%
of income before income taxes for the nine months ended September 30, 2001.

FINANCIAL INCOME / (EXPENSES,) NET

     Financial income (expense), net in the nine months ended September 30, 2002
were $(99,283) compared to $(56,555) for the same nine months in 2001.

MINORITY INTEREST

     For the nine months ended September 30, 2002 the Company recognized and
recorded $154,267 to the minority interest as compared to $43,787 for the same
nine months in 2001.

NET INCOME

     Net income in the nine months ended September 30, 2002 was $764,749
compared to $473,067 for the same nine months in 2001. We believe this
substantial increase in net income of 61.6% is attributable to increases in
sales and higher levels of operating efficiency.

LIQUIDITY AND CAPITAL RESOURCES

     Net cash provied by operating activities for the nine months ended
September 30, 2002 was $1,471,497 compared to $455,847 for the same nine months
in 2001. We believe this significant increase is attributable to increases in
sales of our products,tax savings resulting from the net operating loss carry
forwards of Achidatex Ltd.(further explained below)and reduction of other
liabilities.

     For the nine months ended September 30, 2002, the primary component of the
net cash used in investing activities is $400,000 advanced on behalf of a
shareholder and $111,381 used to purchase property and equipment.

     For the nine months ended September 30, 2002, the primary components of the
net cash used in financing activities was used to repay long term debt of
$755,776 and short term bank credit of $201,282.

     Our current activities are financed by short and long term bank loans
balanced by short term deposits. The decision regarding the amount of the short
term loans was derived from considerations of the yield on the deposit which is
generally in foreign currency (receipts from overseas sales), compared to the
cost of short term loans. We have positive working capital (current assets less
current liabilities). Long term loans derived from acquisition of Achidatex Ltd.
their due spread over five years.

     During this year and the year following, we anticipate increasing our
research and development of certain items, primarily, ballistic helmets,
stab-resistant fabric, ceramic ballistic plates, ballistic wall covering and
one-way protective windows. We anticipate total research and development
expenses for 2002 and 2003 to be approximately $60,000 and $750,000
respectively. We anticipate that in the year 2004 research and development
expenses will drop to approximately $350,000. The development of these products
will be with staff engineers. With respect to ballistic helmets, we anticipate
that these products will be approximately in 20% production by the end of this
year, increasing to full production by the year 2005. We anticipate that in
order to fund the research and development for these products, we may effect an
offering of our equity securities. If we are unable to effect an offering of our
securities, we may fund our research and development through our operating
funds. In such event, the timing of our anticipated research and development and
subsequent production schedule would be slowed.

     In conjunction with the acquisition of 76% of the outstanding common stock
of Achidatex effective June 18, 2001, the Company recorded long-term deferred
tax assets of approximately $666,000 relating to the expected utilization of the
net operating loss ("NOL") carryforwards of Achidatex aggregating approximately
$1,851,000. As of September 30, 2002 and December 31, 2001, the balance of
deferred tax assets with respect to the NOL carryforwards of Achidatex was
approximately $17,000 and $362,000, respectively.

     As a result of Achidatex having operated profitably since its acquisition
by the Company in June 2001, the Company has recognized a reduction in its
reported income of $112,927 and $36,474 for the three months ended September 30,
2002 and 2001, respectively, and $154,267 and $43,787 for the nine months ended
September 30, 2002 and 2001, respectively, to account for the 24% minority
interest liability. Although the Company has recorded a reduction in reported


                                      -15-
<PAGE>

income as a result of the recognition of the 24% minority interest liability of
Achidatex, the utilization of the NOL carryforwards of Achidatex has increased
the Company's consolidated cash flows by approximately $223,000 and $237,000 for
the three months ended September 30, 2002 and 2001, respectively, and by
approximately $345,000 and $237,000 for the nine months ended September 30, 2002
and 2001, respectively, since utilization of the NOL carryforwards reduces cash
expended by the Company for income taxes. The Company has access to the cash
generated by Achidatex.

     The Company expects that the NOL carryforwards of Achidatex will be fully
exhausted no later than March 2003. Accordingly, subsequent to such date, the
Company expects that the reduction in its reported income to account for the
minority interest liability will decrease, as will the Company's consolidated
cash flows, reflecting the absence of NOL carryforwards available to reduce cash
expended for income taxes.

RECENT ACCOUNTING PRONOUNCEMENTS AND CRITICAL ACCOUNTING POLICIES

     BASIS OF PRESENTATION

     The accompanying condensed consolidated financial statements are presented
in United States dollars under accounting principles generally accepted in the
United States of America.

     PRINCIPLES OF CONSOLIDATION

     The condensed consolidated financial statements for 2002 include the
accounts of Defense Industries International, Inc. (formerly Pawnbrokers
Exchange, Inc. (see below)) and its wholly owned subsidiaries, Export Erez, USA,
Inc., Export Erez, Ltd., Mayotex, Ltd. and Dragonwear Trading Ltd. and its 76%
owned subsidiary Achidatex Nazareth Elite (1977) Ltd. (collectively, the
"Company"). The minority interest represents the minority shareholders'
proportionate share of Achidatex.

     The  condensed  consolidated  financial  statements  for 2001 include the
accounts of Export Erez, USA, Inc. and its wholly owned  subsidiaries,  Export
Erez, Ltd.,  Mayotex,  Ltd. and Dragonwear  Trading Ltd. for the periods ended
September  30,  2001 and its 76% owned  subsidiary  Achidatex  Nazareth  Elite
(1977) Ltd. from June 18, 2001, the date of acquisition (See Note 5).

     On July 8, 2002, the Company changed its corporate domicile from the State
of Utah to the State of Nevada (the "re-incorporation"). In order to accomplish
the re-incorporation, the Company merged with and into its wholly owned inactive
subsidiary, Defense Industries International, Inc., a Nevada corporation
organized on July 1, 2002. As a result of the re-incorporation, the Company's
name was effectively changed from Pawnbrokers Exchange, Inc. to Defense
Industries International, Inc. Each share of Pawnbrokers capital stock issued
and outstanding on the effective date was converted into and exchanged for one
share of Defense Industries capital stock. Defense Industries is authorized to
issue 250,000,000 shares of $.0001 par value common stock and 50,000,000 shares
of $.0001 par value preferred stock. As a result, the Company's common stock
changed from no par value to a par value of $.0001. Accordingly, the December
31, 2001 condensed consolidated balance sheet and the condensed consolidated
statement of changes in stockholders' equity have been retroactively restated to
effectuate the change.

     All intercompany accounts and transactions have been eliminated in
consolidation.


     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 effect the reported amounts of
assets and liabilities and disclose the nature of contingent assets and
liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting periods. Actual results could differ
from those estimates.

                                      -16-
<PAGE>

     PER SHARE DATA

     Basic net income per common share is computed based on the weighted average
common shares outstanding during the year. Diluted net income per common share
is computed based on the weighted average common shares and common stock
equivalents outstanding during the year. The computation of weighted average
common shares outstanding gives retroactive effect to the recapitalization
discussed in Note 4. There were no common stock equivalents outstanding because
the exercise price of the common stock equivalents exceeded the average market
price of the stock. Accordingly, a reconciliation between basic and diluted
earnings per share is not presented.

     INTERIM CONSOLIDATED FINANCIAL STATEMENTS

     The condensed consolidated financial statements as of September 30, 2002
and for the three and nine months ended September 30, 2002 and 2001 are
unaudited. In the opinion of management, such condensed consolidated financial
statements include all adjustments (consisting only of normal recurring
accruals) necessary for the fair presentation of the consolidated financial
position and the consolidated results of operations. The condensed consolidated
results of operations for the three and nine months ended September 30, 2002 and
2001 are not necessarily indicative of the results to be expected for the full
year. The condensed consolidated balance sheet information as of December 31,
2001 was derived from the audited consolidated financial statements included in
the Company's annual report Form 10-KSB. The interim condensed consolidated
financial statements should be read in conjunction with that report.

     PRIOR PERIOD ADJUSTMENT

     The accompanying condensed consolidated balance sheet as of December 31,
2001 has been restated to correct an error for the understatement of
depreciation expense during 2001. The effect of the restatement was to decrease
net income for 2001 by $72,053. Retained earnings and property, plant and
equipment, net in the December 31, 2001 consolidated balance sheet and retained
earnings in the condensed consolidated statement of changes in shareholders'
equity have been restated for the effects of the prior period adjustment.

     NEW ACCOUNTING PRONOUNCEMENTS

     In April 2002, the FASB issued SFAS 145, Rescission of FASB Statements No.
4, 44, and 64, Amendment of FASB Statement No. 13, and Technical Corrections.
SFAS 145 rescinds the provisions of SFAS No. 4 that requires companies to
classify certain gains and losses from debt extinguishments as extraordinary
items, eliminates the provisions of SFAS No. 44 regarding transition to the
Motor Carrier Act of 1980 and amends the provisions of SFAS No. 13 to require
that certain lease modifications be treated as sale leaseback transactions. The
provisions of SFAS 145 related to classification of debt extinguishments are
effective for fiscal years beginning after May 15, 2002. Earlier application is
encouraged. The Company does not believe the adoption of this standard will have
a material impact the financial statements.

     In July 2002, the FASB issued SFAS No. 146, "Accounting for Restructuring
Costs." SFAS 146 applies to costs associated with an exit activity (including
restructuring) or with a disposal of long-lived assets. Those activities can
include eliminating or reducing product lines, terminating employees and
contracts and relocating plant facilities or personnel. Under SFAS 146, the
Company will record a liability for a cost associated with an exit or disposal
activity when that liability is incurred and can be measured at fair value. SFAS
146 will require the Company to disclose information about its exit and disposal
activities, the related costs, and changes in those costs in the notes to the
interim and annual financial statements that include the period in which an exit
activity is initiated and in any subsequent period until the activity is
completed. SFAS 146 is effective prospectively for exit or disposal activities
initiated after December 31, 2002, with earlier adoption encouraged. Under SFAS
146, a company cannot restate its previously issued financial statements and the
new statement grandfathers the accounting for liabilities that a company had
previously recorded under Emerging Issues Task Force Issue 94-3. The Company
does not believe the adoption of this standard will have a material impact the
financial statements.

                                      -17-
<PAGE>

     RECLASSIFICATIONS

     Certain prior period amounts have been reclassified to conform to the
current period presentation.

ITEM 3.  CONTROLS AND PROCEDURES

     (a) Evaluation of Disclosure Controls and Procedures

     Disclosure controls and procedures are designed to ensure that information
required to be disclosed in the reports filed or submitted under the Exchange
Act of 1934 is recorded, processed, summarized and reported, within the time
periods specified in the rules and forms of the Securities and Exchange
Commission. Disclosure controls and procedures include, without limitation,
controls and procedures designed to ensure that information required to be
disclosed in the reports filed under the Exchange Act of 1934 is accumulated and
communicated to management, including the Chief Executive Officer/Chief
Financial Officer, as appropriate, to allow timely decisions regarding required
disclosure.

     Within the 90 days prior to the filing of this report, the Company carried
out an evaluation, under the supervision and with the participation of the
Company's management, including the Company's Chief Executive Officer/Chief
Financial Officer, of the effectiveness of the design and operation of the
Company's disclosure controls and procedures. Based upon and as of the date of
that evaluation, the Chief Executive Officer/Chief Financial Officer concluded
that the Company's disclosure controls and procedures are effective to ensure
that information required to be disclosed in the reports the Company files and
submits under the Exchange Act of 1934 is recorded, processed, summarized and
reported as and when required.

(b) Changes in Internal Controls

     There were no changes in the Company's internal controls or in other
factors that could have significantly affected those controls subsequent to the
date of the Company's most recent evaluation.


                          PART II. OTHER INFORMATION

Item 1.     Legal Proceedings

      None.

Item 2.     Changes in Securities and Use of Proceeds.

      None.

Item 3.     Defaults Upon Senior Securities

      None.

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

      None.

Item 5.     Other Information

      None.

Item 6.     Exhibits and Reports on Form 8-K

      (a)   Exhibits:

         Certification  Pursuant To Section 906 Of The  Sarbanes-Oxley  Act of
2002

      (b) Reports on Form 8-K:

         None.

                                      -18-
<PAGE>

                                   SIGNATURES

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


Dated:  November 14, 2002

                                          DEFENSE INDUSTRIES INTERNATIONAL,
                                          INC.


                                          By: /s/ JOSEPH FOSTBINDER
                                             -------------------------------
                                          Name:    Joseph Fostbinder
                                          Title:   President


Dated:  November 14, 2002


                                          By: /s/ TSIPI MULDOVAN
                                             -------------------------------
                                          Name:    Tsipi Muldovan
                                          Title:   Chief Financial Officer






                                      -19-
<PAGE>



                                 CERTIFICATIONS

I, Joseph Fostbinder, certify that:

1.   I have reviewed this quarterly report on Form 10-QSB/A of Defense
     Industries International,Inc.;

2.   Based on my knowledge, this quarterly report does not contain any untrue
     statement of a material fact or omit to state a material fact necessary to
     make the statements made, in light of the circumstances under which such
     statements were made, not misleading with respect to the period covered by
     this quarterly report;

3.   Based on my knowledge, the financial statements, and other financial
     information included in this quarterly report, fairly present in all
     material respects the financial condition, results of operations and cash
     flows of the registrant as of, and for, the periods presented in this
     quarterly report.

4.   The registrant's other certifying officer and I are responsible for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

     a.   designed such disclosure controls and procedures to ensure that
          material information relating to the registrant, including its
          consolidated subsidiaries, is made known to us by others within those
          entities, particularly during the period in which this quarterly
          report is being prepared;

     b.   evaluated the effectiveness of the registrant's disclosure controls
          and procedures as of a date within 90 days prior to the filing date of
          this quarterly report (the "Evaluation Date"); and

     c.   presented in this quarterly report our conclusions about the
          effectiveness of the disclosure controls and procedures based on our
          evaluation as of the Evaluation Date;

5.   The registrant's other certifying officer and I have disclosed, based on
     our most recent evaluation, to the registrant's auditors and the audit
     committee of registrant's board of directors (or persons performing the
     equivalent function):

     a.   all significant deficiencies in the design or operation of internal
          controls which could adversely affect the registrant's ability to
          record, process, summarize and report financial data and have
          identified for the registrant's auditors any material weaknesses in
          internal controls; and

     b.   any fraud, whether or not material, that involves management or other
          employees who have a significant role in the registrant's internal
          controls; and

6.   The registrant's other certifying officer and I have indicated in this
     quarterly report whether or not there were significant changes in internal
     controls or in other factors that could significantly affect internal
     controls subsequent to the date of our most recent evaluation, including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.




November  14,  2002                         By:  /s/  JOSEPH FOSTBINDER
                                                 ----------------------------
                                                 Joseph Fostbinder
                                                 President



                                      -20-
<PAGE>

                                 CERTIFICATIONS


     I, Tsipi Muldovan,  certify  that:

1.   I have reviewed this quarterly report on Form 10-QSB/A of Defense
     Industries International, Inc.;

2.   Based on my knowledge, this quarterly report does not contain any untrue
     statement of a material fact or omit to state a material fact necessary to
     make the statements made, in light of the circumstances under which such
     statements were made, not misleading with respect to the period covered by
     this quarterly report;

3.   Based on my knowledge, the financial statements, and other financial
     information included in this quarterly report, fairly present in all
     material respects the financial condition, results of operations and cash
     flows of the registrant as of, and for, the periods presented in this
     quarterly report.

4.   The registrant's other certifying officer and I are responsible for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

     a.   designed such disclosure controls and procedures to ensure that
          material information relating to the registrant, including its
          consolidated subsidiaries, is made known to us by others within those
          entities, particularly during the period in which this quarterly
          report is being prepared;

     b.   evaluated the effectiveness of the registrant's disclosure controls
          and procedures as of a date within 90 days prior to the filing date of
          this quarterly report (the "Evaluation Date"); and

     c.   presented in this quarterly report our conclusions about the
          effectiveness of the disclosure controls and procedures based on our
          evaluation as of the Evaluation Date;

5.   The registrant's other certifying officer and I have disclosed, based on
     our most recent evaluation, to the registrant's auditors and the audit
     committee of registrant's board of directors (or persons performing the
     equivalent function):

     a.   all significant deficiencies in the design or operation of internal
          controls which could adversely affect the registrant's ability to
          record, process, summarize and report financial data and have
          identified for the registrant's auditors any material weaknesses in
          internal controls; and

     b.   any fraud, whether or not material, that involves management or other
          employees who have a significant role in the registrant's internal
          controls; and

6.   The registrant's other certifying officer and I have indicated in this
     quarterly report whether or not there were significant changes in internal
     controls or in other factors that could significantly affect internal
     controls subsequent to the date of our most recent evaluation, including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.




November  14  2002                         By:  /s/  TSIPI MULDOVAN
                                                 ----------------------------
                                                 Tsipi Muldovan
                                                 Chief Financial Officer




                                      -21-
<PAGE>

                                INDEX TO EXHIBITS



Exhibit
Number           Description of Document
- ------           -----------------------

99.1             Certification Pursuant to Section 906 of the Sarbanes-Oxley
                 Act of 2002


                                      -22-