UNITED
      STATES


**SECURITIES
      AND EXCHANGE COMMISSION**


**WASHINGTON,
      D.C. 20549**











[X]
      Quarterly Report under Section 13 or 15(d) of the Securities Exchange Act of
      1934.


For
      the
      quarterly period ended: September
      30, 2006






[
      ]
      Transition Report under Section 13 or 15(d) of the Securities Exchange Act
      of
      1934.


For
      the
      transition period from: _______ to _______






Commission
      file number: 2-76219-NY




**VICTORY
      ENERGY CORPORATION**


(Exact
      name of small business issuer as specified in its charter)




**NEVADA**
            **87-0564472**(State
                or other jurisdiction of incorporation or organization)
            (I.R.S.
                Employer I.D. Number)




**27762
      Antonio Parkway, Suite L1-497, Ladera Ranch, CA 92694**


(Address
      of principal executive offices)




**(866)
      279-9265**


(Issuer’s
      telephone number)




**Victory
      Capital Holdings Corporation**


(Former
      name if changed since last report)






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 [ ]




Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2 of the Exchange Act). YES [_] NO [X]




State
      the
      number of shares outstanding of each of the issuer’s classes of common equity,
      as of the latest practicable date: As of November 14, 2006, there were
      4,352,411 shares of our common stock outstanding.




Transitional
      Small Business Disclosure Format. YES [ ] NO [X]






-1-
 *Table
          Of Contents*


Table
      Of Contents


**Page
                No.****PART
                1. FINANCIAL INFORMATION**Item
                1.Financial
                StatementsConsolidated
                Balance Sheet, September 30, 2006
                (unaudited) andDecember
                31, 2005 (audited)
            3Consolidated
                Statement of Operations, for the three months
                ended September 30, 2006and
                2005, for the six months ended September 30, 2006 and
                2005, and cumulativefrom
                inception to September 30, 2006
                (unaudited)
            4Consolidated
                Statements of Cash Flows, for the three
                months endedJune
                30, 2006 and 2005, for the six months
                ended September 30, 2006 and 2005,and
                cumulative from inception (Jan. 7, 1982)
                to September 30, 2006 (unaudited)
            5Notes
                to Condensed Financial Statements
                (unaudited)
            6Item
                2.Management’s
                Discussion and Analysis or Plan of
                Operation
            10Item
                3.Controls
                and Procedures
            11**PART
                II. OTHER INFORMATION**Item
                1.Legal
                Proceedings
            12Item
                2.Unregistered
                Sales of Equity Securities and Use of Proceeds
            12Item
                3.Defaults
                Upon Senior Securities
            12Item
                4.Submission
                of Matters to a Vote of Security Holders
            12Item
                5.Other
                Information
            12Item
                6.Exhibits
                and Reports on Form 8-K
            13






-2-
 *Table
          Of Contents*
  VICTORY
          ENERGY CORPORATION AND SUBSIDIARIES
 (A
          Development Stage Company)
 Consolidated
          Balance Sheets
  **ASSETS**September
                    30,
                
                
                December
                    31,2006
                
                
                2005(Unaudited)CURRENT
                    ASSETSCash
                    and Cash Equivalents
                
                $
                19,847
                
                $
                4,074Note
                    Receivable
                
                
                210,984
                
                
                88,300Total
                    Curent Assets
                
                
                230,831
                
                
                92,374FIXED
                    ASSETS, NET
                
                
                198
                
                
                1,096OTHER
                    ASSETSInvestment
                    in
                    Joint Venture
                
                
                50,000
                
                
                -TOTAL
                    ASSETS
                
                $
                281,029
                
                $
                93,470**LIABILITIES
                    & STOCKHOLDERS' DEFICIT**CURRENT
                    LIABILITESAccounts
                    Payable
                
                $
                9,176
                
                $
                330,970Accrued
                    Liabilities
                
                
                16,006
                
                
                11,416Accrued
                    Payroll
                
                
                750,970
                
                
                240,000Credit
                    Line - WFB Business Line
                
                
                61,128Prepaid
                    Subscriptions
                
                
                246,950Total
                    Curent Liabilities
                
                
                1,084,230
                
                
                582,386LONG
                    TERM LIABILITIESNotes
                    Payable
                
                
                149,458
                
                
                146,431OTHER
                    LIABILITIESLoan
                    from Officer
                
                
                125,031
                
                
                83,367Account
                    Payable - Related Party
                
                
                169,679
                
                
                172,179Accrued
                    Liabilities - Related
                
                
                125,500
                
                
                121,000Other
                    Loans Payable
                
                
                19,000Total
                    Other Liabilities
                
                
                439,210
                
                
                376,546Total
                    Liabilities
                
                
                1,672,898
                
                
                1,105,363Commitments
                    and contingencies (Note 6)STOCKHOLDERS'
                    DEFICITCommon
                    Stock, $0.001 par value, 200,000,000 sharesauthorized,
                    98,143,592issued
                    and outstanding
                
                
                98,144
                
                
                41,960Additional
                    paid-in capital
                
                
                3,758,220
                
                
                2,692,104Deficit
                    accumulated in the development stage
                
                
                (5,248,233
                )
                
                (3,745,957
                )Total
                    Stockholders' Deficit
                
                
                (1,391,869
                )
                
                (1,011,893
                )TOTAL
                    LIABILITIES AND STOCKHOLDERS' DEFICIT
                
                $
                281,029
                
                $
                93,470The
                    accompanying notes are an integral part of these consolidated
                    financial
                    statements








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VICTORY
        ENERGY CORPORATION AND SUBSIDIARIES
 (A
        Development Stage Company)
 Consolidated
        Statement of Operations
 (Unaudited)
  For
                  the periodof
                  Inception,For
                  the
              
              
              For
                    the
              
              
              from
                  January 2,Three
                  Months Ended
              
              
              Nine
                    Months Ended
              
              
              1982
                  throughSeptember
                  30,
              
              
              September
                  30,
              
              
              September
                  30,2006
              
              
              2005
              
              
              2006
              
              
              2005
              
              
              2006Revenues
              
              $
              -
              
              $
              32,207
              
              $
              -
              
              $
              32,207
              
              $
              20,207Costs
                  and ExpensesConsulting
                  Expense
              
              
              254,350
              
              
              310,136
              
              
              997,165
              
              
              310,136
              
              
              3,736,756Land
                  Leases
              
              
              
              
              
              
              
              
              24,040
              
              
              -
              
              
              24,040Wages
                  and Salaries
              
              
              80,000
              
              
              
              
              
              102,500
              
              
              -
              
              
              350,500General
                  & Administrative
              
              
              11,074
              
              
              71,249
              
              
              378,571
              
              
              71,249
              
              
              1,059,977Total
                  Expenses
              
              
              345,424
              
              
              381,385
              
              
              1,502,276
              
              
              381,385
              
              
              5,171,273Operating
                  Loss
              
              
              (345,424
              )
              
              (349,178
              )
              
              (1,502,276
              )
              
              (349,178
              )
              
              (5,151,066
              )Other
                  Income and (expenses)Loss
                  on abandonment of subsidiary
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              (50,900
              )Loss
                  from reduction in debt
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              (48,363
              )Interest
                  Expense
              
              
              
              
              
              (625
              )
              
              
              
              
              (625
              )
              
              0Other
                  Income
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              2,096Total
                  Other Income and (expenses)
              
              
              0
              
              
              (625
              )
              
              0
              
              
              
              
              
              (97,167
              )Net
                  Loss
              
              $
              (345,424
              )
              $
              (349,803
              )
              $
              (1,502,276
              )
              $
              (349,803
              )
              $
              (5,248,233
              )Basic
                  and Dilutive net loss per share
              
              $
              ($0.004
              )
              $
              ($0.016
              )
              $
              ($0.022
              )
              $
              ($0.016
              )
              $Weighted
                  average numberof
                  shares outstanding
              
              
              79,485,983
              
              
              22,100,258
              
              
              67,286,083
              
              
              22,100,258


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






-4-
 *Table
          Of Contents*






VICTORY
        ENERGY CORPORATION AND SUBSIDIARIES
 (A
        Development Stage Company)
 Consolidated
        Statements of Cash Flows
  FromFor
                  the
              For
                  the
              
              Inception
                  onThree
                  Months Ended
              NineMonths Ended
              
              Jan.
                  7, 1982September
                  30,
              September
                  30,
              
              Through2006
              
              
              2005
              
              
              2006
              
              
              2005
              
              
              Sep.
                  30, 2006CASH
                  FLOWS FROM OPERATING ACTIVITIES:Net
                  Loss
              
              $
              (345,424
              )
              
              (398,635
              )
              
              (1,502,276
              )
              
              (747,812
              )
              
              (5,248,233
              )Adjustments
                  to reconcile net loss to net cashused
                  by operating activities:Depreciation
              
              
              299
              
              
              
              
              
              898
              
              
              229
              
              
              2,096Loss
                  on extinguishment of debt
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              48,363Issuance
                  of common stock for services
              
              
              244,800
              
              
              139,327
              
              
              1,122,300
              
              
              
              
              
              3,296,143Increase
                  in Short Term ReceivablesDecrease
                  (Increase) in Prepaid Expenses
              
              
              
              
              
              
              
              
              
              
              
              246Increase
                  in Deposits
              
              
              
              
              
              
              
              
              
              
              
              (2,020
              )Incrrease
                  (Decrease) in Prepaid Subscriptions
              
              
              43,450
              
              
              
              
              
              246,950
              
              
              
              
              
              246,950Increase
                  (Decrease) in accounts payable
              
              
              9,176
              
              
              
              
              
              (321,794
              )
              
              312,900
              
              
              9,176Increase
                  (Decrease) in accounts payable -related
              
              
              
              
              
              
              
              
              4,500
              
              
              24,253
              
              
              169,679Increase
                  (Decrease) in accrued liabilities
              
              
              16,006
              
              
              
              
              
              4,590
              
              
              232,000
              
              
              16,006Increase
                  in Accrued Payroll and Payroll Taxes
              
              
              43,994
              
              
              232,000
              
              
              510,970
              
              
              
              
              
              750,970Repayment
                  of long term debt
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              (13,569
              )Increase
                  in Accrued Liabilities - Related
              
              
              4,500
              
              
              
              
              
              
              
              
              
              
              
              125,500Non-cash
                  contributed capital
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              (524
              )Net
                  Cash provided by (used by)Operating
                  Activities
              
              $
              16,801
              
              $
              (27,308
              )
              $
              66,138
              
              $
              (180,204
              )
              $
              (597,443
              )CASH
                  FLOWS FROM INVESTING ACTIVITIESPurchase
                  of Fixed Assets
              
              
              
              
              
              
              
              
              
              
              
              (14,941
              )
              
              (2,294
              )Purchase
                  and Sale of Marketable Securities
              
              
              
              
              
              
              
              
              88,300
              
              
              (88,300
              )Investment
                  in Joint Venture
              
              
              
              
              
              
              
              
              (50,000
              )
              
              
              
              
              (50,000
              )Net
                  Cash (used by) Investing Activities
              
              $
              0
              
              $
              0
              
              $
              38,300
              
              $
              (103,241
              )
              $
              (52,294
              )CASH
                  FLOWS FROM FINANCING ACTIVITIESProceeds
                  of Note Payable
              
              
              
              
              
              (2,950
              )
              
              3,027
              
              
              157,531
              
              
              149,458Proceeds
                  (Repayment) of Loans
              
              
              
              
              
              
              
              
              (210,984
              )
              
              
              
              
              (245,778
              )Increase
                  in Credit Line
              
              
              61,128
              
              
              
              
              
              61,128
              
              
              
              
              
              61,128Proceeds
                  (Repayment) of Loan from Officer
              
              
              (75,000
              )
              
              
              
              
              41,664
              
              
              
              
              
              125,031Proceeds
                  (Repayment) of Note Payable-Related Party
              
              
              
              
              
              
              
              
              (2,500
              )Increase
                  (Decrease) in Other Loans Payable
              
              
              19,000
              
              
              
              
              
              19,000
              
              
              
              
              
              19,000Contributed
                  capital for rent and officers' compensation
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              2,438Issuance
                  of Common Stock for Cash
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              41,960Proceeds
                  from the sale of Common Stock
              
              
              
              
              
              
              
              
              
              
              
              138,700
              
              
              300,231Contributed
                  Capital by shareholders
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              216,116Net
                  Cash provided by Financing Activities
              
              $
              5,128
              
              $
              (2,950
              )
              $
              (88,665
              )
              $
              296,231
              
              $
              669,584NET
                  INCREASE IN CASH
              
              
              21,929
              
              
              (30,258
              )
              
              15,773
              
              
              12,786
              
              
              19,847CASH
                  AT BEGINNING OF PERIOD
              
              
              (2,082
              )
              
              43,044
              
              
              4,074
              
              
              -
              
              
              -CASH
                  AT END OF PERIOD
              
              $
              19,847
              
              $
              12,786
              
              $
              19,847
              
              $
              12,786
              
              $
              19,847CASH
                  PAID FOR:Interest
              
              $
              -
              
              $
              -
              
              $
              -
              
              $
              -
              
              $
              -Income
                  Taxes
              
              $
              -
              
              $
              -
              
              $
              -
              
              $
              -
              
              $
              -SUPPLEMENTAL
                  DISCLOSURE OF CASH FLOW INFORMATIONProceeds
                  from the sale of Common Stock
              
              $
              -
              
              $
              -
              
              $
              -
              
              $
              -
              
              $
              342,191Contributed
                  Capital by shareholders
              
              
              -
              
              $
              -
              
              $
              -
              
              $
              138,701
              
              $
              216,116Stock
                  issued for services
              
              $
              334,350
              
              $
              310,136
              
              $
              1,099,665
              
              $
              310,136
              
              $
              3,296,143Contributed
                  capital for rent, officer compensation
              
              $
              -
              
              $
              -
              
              $
              -
              
              $
              -
              
              $
              2,438Non
                  cash contributed capital
              
              $
              -
              
              $
              -
              
              $
              -
              
              $
              -
              
              $
              (524
              )


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






-5-
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          Of Contents*








**NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS**
  NOTE
        1 -
        BASIS OF PRESENTATION ****
  The
        accompanying interim unaudited consolidated financial statements have been
        prepared by Victory Energy Corporation “the Company”, without audit. Certain
        information and footnote disclosures normally included in financial statements
        prepared in accordance with generally accepted accounting principles in the
        United States of America have been condensed or omitted pursuant to the rules
        and regulations of the Securities and Exchange Commission. The consolidated
        financial statements include our accounts and those of our subsidiaries,
        Global
        Card Services, Inc. and On Demand Communications. All inter-company balances
        have been eliminated in consolidation.
  During
        2005 the Company changed its focus to the oil and gas industry, specifically
        oil
        and gas drilling projects on oil field leases. The first oil field leases
        were
        identified during 2005 but rejected. In the first three months of 2006, the
        company entered into a farm-out agreement with the owner of certain oil and
        gas
        leases for a 100% working interest in an oil field in Montana, subject to
        overriding royalties. The Company also identified an additional prospect
        in
        Oklahoma and continues to search for new prospects. In May of 2006 the company
        entered into a joint venture with Geo Surveys for exploration in the Mesa
        Gas
        Prospect located in New Mexico.
  On
        May 3,
        2006 the name of the company was changed to Victory Energy
        Corporation.
  In
        the
        opinion of our management, the unaudited financial information for the interim
        periods presented reflects all adjustments necessary for a fair presentation
        of
        our financial position, results of operations and cash flows. The results
        reported in these condensed consolidated financial statements are not
        necessarily indicative of results that may be expected for the entire year.
  NOTE
        2 -
        SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
  Going
        Concern
  The
        Company’s financial statements are prepared using accounting principles
        generally accepted in the United States of America applicable to a going
        concern
        which contemplates the realization of assets and liquidation of liabilities
        in
        the normal course of business. The Company has not yet established an ongoing
        source of revenues sufficient to cover its operating costs and to allow it
        to
        continue as a going concern. In addition, the Company has a working capital
        deficit of $853,399 and a stockholders’ deficit of $5,248,233 at September 30,
        2006. The ability of the Company to continue as a going concern is dependent
        on
        the Company obtaining adequate capital to fund operating losses until it
        becomes
        profitable. If the Company is unable to obtain adequate capital, it could
        be
        forced to cease development of operations.
  In
        order
        to continue as a going concern, develop a reliable source of revenues, and
        achieve a profitable level of operations the Company will need, among other
        things, additional capital resources. Management’s plans to continue as a going
        concern include raising additional capital through sales of common stock.
        In the
        interim, shareholders of the Company are committed to meeting its minimal
        operating expenses. However, management cannot provide any assurances that
        the
        Company will be successful in accomplishing any of its plans.
  The
        ability of the Company to continue as a going concern is dependent upon its
        ability to successfully accomplish the plans described in the preceding
        paragraph and eventually secure other sources of financing and attain profitable
        operations. The accompanying financial statements do not include any adjustments
        that might be necessary if the Company is unable to continue as a going
        concern.
  Development-Stage
        Company
  The
        Company is considered a development-stage company, with de minimus operating
        revenues during the periods presented, as defined by Statement of Financial
        Accounting Standards (“SFAS”) No. 7. SFAS No. 7 requires companies to report
        their operations, shareholders deficit and cash flows since inception through
        the date that revenues are generated from management’s intended operations,
        among other things. Management has defined inception as January 7, 1982.
        Since
        inception, the Company has incurred operating losses totaling $5.2 million,
        much
        of which relates to stock-based compensation to officers, directors and
        consultants as a means to preserve working capital. The Company’s working
        capital has been generated through the sales of common stock, loans made
        by
        officers of the Company and a third party loan. Management has provided
        financial data since January 7, 1982 “Inception” in the financial statements, as
        a means to provide readers of the Company’s financial information to make
        informed investment decisions.
  Use
        of
        Estimates
  The
        preparation of the financial statements in conformity with accounting principles
        generally accepted in the United States requires management to make estimates
        and assumptions that affect the reported amounts of assets and liabilities,
        and
        disclosure of contingent liabilities at the date of the financial statements
        and
        the reported amounts of expenses during the reporting period. Actual results
        could differ from those estimates.
   -6-
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            Of Contents*
 
  Loss
        Per Share
  Basic
        earnings per share (“Basic EPS”) is computed by dividing net loss available to
        common stockholders by the weighted average number of common shares outstanding
        during the period. Diluted earnings per share (“Diluted EPS”) gives effect to
        all dilutive potential common shares outstanding during a period. In computing
        Diluted EPS, the treasury stock method is used in determining the number
        of
        shares assumed to be purchased from the conversion of common stock equivalents.
        Securities that could potentially dilute Basic EPS in the future, that were
        not
        included in the computation of Diluted EPS because to do so would have been
        anti-dilutive for the periods presented, consist of options, warrants,
        convertible notes and debentures.
  The
        following is a reconciliation of the numerators and denominators of the basic
        and diluted earnings per share computations for the six months ended September
        30, 2006 and 2005:
  **2006**
              
              
              **2005**Numerator:Basic
                  and diluted net loss per share:Net
                  Loss
              
              $
              (1,502,276
              )
              $
              (
                  381,385
              )DenominatorBasic
                  and diluted weighted averagenumber
                  of shares outstanding
              
              
              67,286,083
              
              
              22,100,258Basic
                  and Diluted Net Loss Per Share
              
              $
              (0.022
              )
              $
              (0.016
              )
  Equipment
        and Fixtures
  Equipment
        and fixtures are recorded at cost. Depreciation is provided using accelerated
        and straight-line methods over the estimated useful lives of the related
        assets
        as follows:
  **Description**
              **Years**Furniture
                  and fixtures
              7Computer
                  hardware and software
              3-5
  Recent
        Accounting Pronouncements
  In
        March
        2004, the Emerging Issues Task Force (“EITF”) reached a consensus on Issue No.
        03-1, “The Meaning of Other-Than-Temporary Impairment and its Application to
        Certain Investments.” The EITF reached a consensus about the criteria that
        should be used to determine when an investment is considered impaired, whether
        that impairment is other-than-temporary, and the measurement of an impairment
        loss and how that criteria should be applied to investments accounted for
        under
        SFAS No. 115, “ACCOUNTING IN CERTAIN INVESTMENTS IN DEBT AND EQUITY SECURITIES.”
EITF 03-01 also included accounting considerations subsequent to the recognition
        of other-than-temporary impairment and requires certain disclosures about
        unrealized losses that have not been recognized as other-than-temporary
        impairments. Additionally, EITF 03-01 includes new disclosure requirements
        for
        investments that are deemed to be temporarily impaired. In September 2004,
        the
        Financial Accounting Standards Board (FASB) delayed the accounting provisions
        of
        EITF 03-01; however, the disclosure requirements remain effective for annual
        reports ending after June 15, 2004. The Company will evaluate the impact
        of EITF
        03-01 once final guidance is issued.
  In
        December 2004, the FASB issued FASB Statement No. 123R, "Share-Based Payment,
        an
        Amendment of FASB Statement No. 123" ("FAS No. 123R"). FAS No. 123R requires
        companies to recognize in the statement of operations the grant- date fair
        value
        of stock options and other equity-based compensation issued to employees.
        FAS
        No. 123R is effective beginning in the Company's second quarter of fiscal
        2006.
        The Company is evaluating the effects adoption of SFAS 123R will have on
        its
        financial statements.
  In
        December 2004, the FASB issued SFAS No.123 (revised 2004), "Share-Based
        Payment". Statement 123(R) will provide investors and other users of financial
        statements with more complete and neutral financial information by requiring
        that the compensation cost relating to share-based payment transactions be
        recognized in financial statements. That cost will be measured based on the
        fair
        value of the equity or liability instruments issued. Statement 123(R) covers
        a
        wide range of share-based compensation arrangements including share options,
        restricted share plans, performance-based awards, share appreciation rights,
        and
        employee share purchase plans. Statement 123(R) replaces FASB Statement No.
        123,
        Accounting for Stock-Based Compensation, and supersedes APB Opinion No. 25,
        Accounting for Stock Issued to Employees. Statement 123, as originally issued
        in
        1995, established as preferable a fair-value-based method of accounting for
        share-based payment transactions with employees. However, that Statement
        permitted entities the option of continuing to apply the guidance in Opinion
        25,
        as long as the footnotes to financial statements disclosed what net income
        would
        have been had the preferable fair-value-based method been used. Public entities
        (other than those filing as small business issuers) will be required to apply
        Statement 123(R) as of the first interim or annual reporting period that
        begins
        after June 15, 2005. The Company adopted Statement 123(R) in December of
        2005.
  In
        March
        2005, the SEC released Staff Accounting Bulletin No. 107, “Share-Based Payment”
(“SAB 107”), which provides interpretive guidance related to the interaction
        between SFAS 123(R) and certain SEC rules and regulations. It also provides
        the
        SEC staff’s views regarding valuation of share-based payment arrangements. In
        April 2005, the SEC amended the compliance dates for SFAS 123(R), to allow
        companies to implement the standard at the beginning of their next fiscal
        year,
        instead of the next reporting period beginning after June 15, 2005. Management
        is currently evaluating the impact SAB 107 will have on our consolidated
        financial statements.
  In
        February of 2006, the FASB issued SFAS No. 155, “Accounting for Certain Hybrid
        Financial Instruments”, which is intended to simplify the accounting and improve
        the financial reporting of certain hybrid financial instruments (i.e.,
        derivatives embedded in other financial instruments). The statement amends
        SFAS
        No. 133, “Accounting for Derivative Instruments and Hedging Activities”, and
        SFAS No. 140, “Accounting for Transfers and Servicing of Financial Assets and
        Extinguishments of Liabilities—a replacement of FASB Statement No. 125.” SFAS
        No. 155 is effective for all financial instruments issued or acquired after
        the
        beginning of an entity's first fiscal year that begins after September 15,
        2006.
        The Company is currently evaluating the impact SFAS No. 155 will have on
        its
        consolidated financial statements, if any.
   -7-
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  Stock
        Based Compensation
  The
        Company has elected to follow Accounting Principles Board Opinion No. 25,
        Accounting for Stock Issued to Employees (“APB 25”), and related interpretations
        in accounting for its employee stock options because the alternative fair
        value
        accounting provided under FASB Statement No. 123, Accounting for Stock-Based
        Compensation, (“SFAS 123”) requires the use of option valuation models that were
        not developed for use in valuing employee stock options. As permitted, the
        Company adopted the disclosure alternative of SFAS 123 and SFAS 148, which
        require pro forma disclosure of net income and earnings per share as if the
        fair
        value method of accounting had been applied. Since the Company has no
        significant stock options outstanding, the pro forma financial data is not
        meaningful.
  Under
        APB
        25, when the exercise price of the Company’s stock options equals or exceeds the
        fair value of the underlying stock on the date of grant, no compensation
        expense
        is recorded.
  There
        were no options granted during the fiscal years ended December 31, 2005 and
        2004
        nor in the nine months ended September 30, 2006.
  NOTE
        3 -
        RELATED PARTY TRANSACTIONS
  In
        2005
        officer loans to the company totaling $83,367 were made due on demand which
        does
        not accrue any interest. In the first quarter of 2006 loans to the company
        totaling an additional $58,354 were made to the company, the total of which
        is
        $141,721. Further loans of $58,310 and repayments of $75,000 were made in
        the
        second and third quarters of fiscal year 2006, and the Balance at September
        30,
        2006 was $125,031.
  In
        March
        2006 the company issued a promissory note to a group of stockholders for
        consideration of $141,458 in cash. The terms are repayable in one year at
        an
        interest rate of 10%, payable quarterly. Interest was deferred for six months.
        In September 2006 the deferral was extended a further six months.
  NOTE
        4 -
        COMMITMENTS AND CONTINGENCIES
   Note
        Receivable
  The
        company borrowed $160,000 from Treetop Investments Inc. in July, 2005 at
        an
        interest rate of 10% payable upon demand. A moratorium on interest was
        negotiated with the lender. Repayments of $13,569 were made in 2005. In June
        of
        2006 an accommodation was made wherein 5,000,000 shares were issued to Treetop
        Investments at a price of 6 cents per share, having a value of $300,000.
        The
        stock issue combined the retirement of the loan with a stock purchase. The
        stock
        purchase was paid for partially in cash. The balance of the purchase price,
        $210,984.00 is recorded as a demand Note Receivable with no fixed interest.
        Even
        though this settlement was reached with the issuance of 5,000,000 shares
        of
        stock, continued demands for additional stock and or cash has been requested
        of
        the company by Treetop and its various creditors. The company has made multiple
        attempts to satisfy these requests while keeping the initial terms
        intact.
   -8-
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  NOTE
        5 -
        COMMON STOCK TRANSACTIONS
   Common
        Stock Transactions During the Year Ended December 31, 2005
  On
        January 5, 2005, the Company authorized the issuance of shares of the Company’s
        common stock owed under an employment agreement to the current president
        and
        CEO.
  Common
        Stock Transactions During the Six Months Ended June 30, 2006
  During
        the three months ended March 31, 2006 the company issued 17,583,334 shares
        of common stock, of which 2,583,334 were restricted under Rule 4 (2), to
        company
        officers and consultants for services. Under FASB SFAS No.123 (revised 2004),
        the value of the services is measured by the fair value of the stock. The
        fair
        value of the stock was established by the trading price at closing on the
        date
        of issue January 6, 2006, $0.03 per share. The value of services rendered
        was
        therefore recorded as $527,500.
  On
        May
        10, 5,000,000 shares were issued to Treetop Investments, Inc. at a price
        of
        $0.06 per share in a transaction that combined retiring a loan with sale
        of
        stock.
  On
        May
        15, 2,500,000 shares were issued for services. The fair value of the stock
        was
        established by the market price on that day of $0.03 per share. The value
        of the
        services was recorded as $75,000.
  On
        June
        1, 500,000 shares were issued for consulting services. The fair value of
        the
        stock was established by the market price on that day of $0.05 per share.
        The
        value of the services was recorded as $75,000.
  On
        March
        12, 2006, the Board of Directors effected a change to the articles of the
        corporation, increasing the number of shares authorized to be issued from
        100,000,000 to 200,000,000.
  Additional
        Common Stock
  As
        of
        December 31, 2005, there were 10,666,667 shares of common stock that had
        been
        issued in a prior period in anticipation of a proposed transaction which
        was
        never consummated. The shares are being held in the Company’s name. Since the
        shares were issued without consideration nor as a result of an economic
        transaction, they have no basis in value and are not being shown as issued
        and
        outstanding or treasury shares in the accompanying financial statements.
  Additional
        shares of common stock, restricted under Rule 4(2), were issued in the quarter
        ended September30, 2006, as follows: The fair value of these shares was
        established by the trading price during the quarter, one cent, discounted
        20% to
        $0.008 to allow for limited trading.
 
 On
        August
        3, 2006, 10,000,000 common shares were issued for services at $0.008 per
        share.
        The value of services was recorded as $80,000.
 On
        August
        8, 2006, 4,500,000 common shares were issued at $0.008 per share. The value
        of
        consulting was recorded as $36,000.
 On
        August
        8, 2006, 500,000 common shares were issued for consulting at $0.008 per share.
        The value of consulting was recorded as $4,000.
 On
        August
        9, 2006, 4,000,000 common shares were issued for consulting at $0.008 per
        share.
        The value of consulting was recorded as $32,000.
 On
        August
        18, 2006, 700,000 common shares were issued for consulting at $0.008 per
        share.
        The value of consulting was recorded as $5,600.
 On
        August
        31, 2006, 300,000 common shares were issued for consulting at $0.008 per
        share.
        The value of consulting was recorded as $2,400.
 On
        September 29, 2006, 3,000,000 common shares were issued for consulting at
        $0.008
        per share. The value of consulting was recorded as $24,000.
 On
        September 30, 2006, 4,000,000 common shares were issued for consulting at
        $0.008
        per share. The value of consulting was recorded as $32,000.
 
 The
        common stock outstanding at November 14, 2006, was 4,352,411. This was following
        a 25 to 1 reverse stock split.
  NOTE
        6 -
        LITIGATION
  
 Neither
        the Company nor any of our officers or directors is involved in any other
        litigation either as plaintiffs or defendants and we have no knowledge of
        any
        threatened or pending litigation against us or any of our officers or
        directors.
 
  -9-
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   **Item
        2.**  **Management's Discussion and Analysis or Plan of Operation**
  The
        following discussion includes certain forward-looking statements within the
        meaning of the safe harbor protections of Section 27A of the Securities Act
        of
        1933, as amended, and Section 21E of the Securities Exchange Act of 1934,
        as
        amended. Statements that include words such as “believe,” “expect,” “should,”
“intend,” “may,” “anticipate,” “likely,” “contingent,” “could,” “may,” or other
        future-oriented statements, are forward-looking statements. Such forward-looking
        statements include, but are not limited to, statements regarding our business
        plans, strategies and objectives, and, in particular, statements referring
        to
        our expectations regarding our ability to continue as a going concern, generate
        increased market awareness of, and demand for, our current products, realize
        profitability and positive cash flow, and timely obtain required financing.
        These forward-looking statements involve risks and uncertainties that could
        cause actual results to differ from anticipated results. The forward-looking
        statements are based on our current expectations and what we believe are
        reasonable assumptions given our knowledge of the markets; however, our actual
        performance, results and achievements could differ materially from those
        expressed in, or implied by, these forward-looking statements. Factors within
        and beyond our control that could cause or contribute to such differences
        include, among others, the following: those associated with drilling and
        subsequent sale of oil and gas, our critical capital raising efforts in an
        uncertain and volatile economical environment, our ability to maintain
        relationship with strategic companies, our cash preservation and cost
        containment efforts, our ability to retain key management personnel, our
        relative inexperience with advertising, our competition and the potential
        impact
        of technological advancements thereon, the impact of changing economic,
        political, and geo-political environments on our business, as well as those
        factors discussed elsewhere in this Form 10-QSB and in “Item 1 - Our Business,”
“Item 6 - Management’s Discussion and Analysis,” and elsewhere in our most
        recent Form 10-KSB, filed with the United States Securities and Exchange
        Commission.
  Readers
        are urged to carefully review and consider the various disclosures made by
        us in
        this report and those detailed from time to time in our reports and filings
        with
        the United States Securities and Exchange Commission that attempt to advise
        interested parties of the risks and factors that are likely to affect our
        business.
  Our
        fiscal year ends on December 31. References to a fiscal year refer to the
        calendar year in which such fiscal year ends.
  **Our
        Business**
  Victory
        Energy Corporation (OTC symbol VYEY), formerly known as Victory Capital Holdings
        Corporation (our “Company”) was organized under the laws of the State of Nevada
        on January 7, 1982, under the name All Things, Inc. On March 21, 1985, our
        Company’s name was changed to New Environmental Technologies Corporation; on
        April 28, 2003, our name was changed to Victory Capital Holdings Corporation
        and
        on May 3, 2006, it was changed to Victory Energy Corporation. Our Company
        was
        formed for the purpose of engaging in all lawful businesses. Our Company’s
        initial authorized capital consisted of 100,000,000 shares of $0.001 par
        value
        common voting stock and as of the date of this filing our authorized capital
        is
        200,000,000 shares of $.001 par value common stock.
  Our
        Company has had no material business operations since 1989. In 2004, we began
        the search for the acquisition of assets, property or businesses that may
        benefit our Company and our shareholders. Our goal has been to bring value
        to
        the Company and to our shareholders through such acquisitions. Each merger
        and
        acquisition we approach is done with the intention to position us in markets
        and
        sectors where excellent growth is anticipated. We plan to retain a percentage
        of
        stock ownership in each subsidiary while spinning them out as their own new
        public company if such transaction is economically feasible. The balance
        of the
        stock will be distributed to the Company’s shareholders at the time of spin out
        of the new public company. This is a non-dilutive method to increase shareholder
        value as we grow and maintain a position in the market segments
        selected.
  **Current
        Business of the Company**
  Management
        has determined that the Company will focus on projects in the oil and gas
        industry. This is based upon a belief that this industry is becoming an
        economically viable sector in which to conduct business operations. We have
        targeted specific prospects and intend to engage in the drilling for oil
        and
        gas. Jon Fullenkamp, our President, has a great deal of experience in the
        oil
        and gas industry and has already recruited additional experience with the
        addition of a new director and advisory board member.
  We
        have
        no other employees at this time and will seek to retain independent contractors
        to assist in operating and managing the prospects as well as to carry out
        the
        principal and necessary functions incidental to the oil and gas business.
        With
        the intended acquisition of oil and natural gas, we intend to establish
        ourselves as an industry partner within the industry. Once we can establish
        a
        revenue base with cash flow, we will seek opportunities more aggressive in
        nature.
  During
        the fourth quarter of 2005, we evaluated two opportunities in Scott Oil &
Gas and Thunder Oil & Gas. As we progressed into the due diligence of these
        prospects and the potential production, management determined that the
        development of the prospect was not worth the required investment capital.
        Even
        with the potential reduction in investment dollars, the prospects had an
        unacceptable pay back time for the initial investment. At that point, management
        felt the shareholders would be better served by seeking other
        prospects.
  In
        the
        second quarter of 2006, we have continued with the two prospects previously
        reported and have taking a minority ownership position in a joint venture
        participation in the New Mexico based Glasgow gas project consisting of
        approximately 11,000 acres. In the event any of these prospects do not go
        forward for any reason, a replacement prospect will immediately be sought.
        The
        initial two prospects are described below.
  The
        first
        prospect is a prospective oil field known as N.E. Glasgow Prospect located
        in
        Montana. We have entered into a Farmout Agreement with Laser Exploration,
        Inc.
        (“Laser”) whereby Laser has farmed out certain leases through Rocky Mountain
        Exploration for drilling an exploratory well to a depth of an estimated 6,500
        feet to test the various formations for potential commercial development.
        Rocky
        Mountain Exploration has assigned approximately 1,960 acres to the Company
        for
        100% working interest reserving on to Rocky Mountain Exploration a 5% overriding
        royalty and a 12% total overriding royalty depending on specific retained
        landowner royalties. The second known prospect is the Mesa Prospect located
        in
        New Mexico:
  1.
              A
                  percentage of the Company’s ownership interest may be sold off until we
                  own a percentage of the prospect with no out-of-pocket expenses
                  required
                  from us; or
  2.
              We
                  may seek to raise between $1 million and $4 million to finance
                  each
                  respected prospect in its entirety.
  In
        the
        second and third quarters of 2006, we continued to investigate potential
        projects in the oil and gas industry.
   -10-
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   **Plan
        of Operation**
  Our
        plan
        of operation for the next 12 months will be the continued acquisition of
        economically viable oil and gas prospects. Once acquired, we intend to develop
        and produce the prospects assuming they are commercially economical to produce
        based on a complete due diligence process. In that case, we can expect to
        derive
        revenues from operations. We intend to diversify our holdings in both oil
        and
        gas producing wells to take advantage of what we believe is a potentially
        strong
        window of opportunity that currently exists in the oil and gas industry for
        the
        next several years.
  Our
        first
        project is an oil field known as the N.E. Glasgow Prospect in Montana. We
        have
        the opportunity to develop Federal and State leases consisting of 1,960 acres
        where we initially intend to drill an exploratory well to an estimated depth
        of
        6,500 feet for the purpose of testing various formations for production.
        The
        most recent project is our joint venture, minority ownership participation
        in
        the New Mexico Mesa prospect which is a gas prospect on approximately
        11,000 acres.
  We
        completed due diligence on other projects which ultimately proved to be too
        expensive to pursue. We have continued to seek out other viable
        opportunities.
  **Results
        of Operations for Period Ended June 30, 2006**
  As
        of
        September 30, 2006, the Company has not earned any revenues and has incurred
        a
        net loss to date of $5,248,233. Operations have been primarily seeking potential
        opportunities in the oil and gas industry through the location of commercially
        economical prospects, and raising capital and developing revenue generating
        opportunities and strategic relationships.
  During
        the three month period ended September 30, 2006, we incurred operating expenses
        in the amount of $345,424. These operating expenses included due diligence
        expenses, consulting fees, professional fees, and office and general
        expenses.
  **Liquidity
        and Capital Resources**
  To
        date,
        we have financed our operations from funds put into the Company by our CEO.
        We
        intend to raise future capital from the sale of a percentage of our prospects
        to
        fund development and production or through the sale of our common stock to
        raise
        from $1 million to $4 million to finance the prospects in their
        entirety.
  **Item
        3. Controls and Procedures**
  Our
        management is responsible for establishing and maintaining adequate internal
        control over financial reporting for the Company. Under the supervision and
        with
        the participation of our management, including the Principal Executive Officer
        and Principal Financial Officer, we have evaluated the effectiveness of the
        design and operation of our disclosure controls and procedures pursuant to
        Exchange Act Rules 13a-15 and 15d-15 as of the end of the period covered
        by this
        report. Based on that evaluation, the Principal Executive Officer and Principal
        Financial Officer have concluded that these disclosure controls and procedures
        were effective such that the material information required to be filed in
        our
        SEC reports is recorded, processed, summarized and reported within the required
        time periods specified in the SEC rules and forms. There were no changes
        in our
        internal control over financial reporting during the quarter ended June 30,
        2006
        that have materially affected, or are reasonably likely to materially affect,
        our internal controls over financial reporting. Potential investors should
        be
        aware that the design of any system of controls and procedures is based in
        part
        upon certain assumptions about the likelihood of future events.  There can
        be no assurance that any system of controls and procedures will succeed in
        achieving its stated goals under all potential future conditions, regardless
        of
        how remote.
   -11-
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  **PART
        II - OTHER INFORMATION**
  **Item
        1. Legal Proceedings**
  On
        July
        24, 2006, all litigation was settled between the Company and the former CEO.
        The
        Company settled the case for an estimated value of $280,000 to be realized
        over
        a 10-month period ending in May of 2007. The Company is unable to disclose
        the
        actual terms of this settlement as the court has sealed the settlement
        agreement.
  In
        May
        2006, we settled a past debt with Treetop Investments for 5,000,000 shares
        of
        our restricted common stock in a transaction combining settlement of debt
        and
        purchase of stock. . Even though this settlement was reached with the issuance
        of 5,000,000 shares of stock, continued demands for additional stock and
        or cash
        has been requested of the company by Treetop and its various creditors. The
        company has made multiple attempts to satisfy these requests while keeping
        the
        initial terms intact.
 Neither
        the Company nor any of our officers or directors is involved in any other
        litigation either as plaintiffs or defendants and we have no knowledge of
        any
        threatened or pending litigation against us or any of our officers or
        directors.
 
 **Item** **2.
        Preferred Stock**
 
 On
        August
        22, 2006 the Board of Directors authorized the creation of a class of 10,000,000
        preferred shares. The par value was set at $0.001 per share, with a cumulative
        5% per annum dividend rate. The preferred shares carry the right to be converted
        at will to 100 shares of common stock.
 
 **Item
        3. Subscriptions for Preferred Stock**
 
 During
        the three months ended September 30, 2006, the company received subscriptions
        for 149,827.58 convertible preferred shares, at the subscriptions price of
        $0.29
        per share, pursuant to a regulation "S"
 offshore
        offering, raising a total of $43,450. Proceeds were used for working capital
        and
        general administrations expenses.
 
 The
        $43,450 raised in the third quarter augmented prepaid subscriptions of $203,500
        raised in the second quarter, and totaled $246,950. The company subsequently
        issued 715,517.23 preferred shares pursuant to
 Regulation
        "S" on October 22, 2006 in settlement of $246,950 prepaid subscriptions.
 
 **Item
        4.** **Submission of Matters to a Vote of Security Holders**
  On
        October 26, 2006 the majority of the shares entitled to vote elected to complete
        a reverse split of our common stock on a 25 to 1 basis. This restructuring
        is to
        allow the company to facilitate its financing plans, which will enable the
        development of the existing oil and gas properties the company currently
        has
        underway.
 
 
 **Item** **5.
        Defaults Upon Senior Securities**
  During
        the nine months ended September 30, 2006, we were not in default on any of
        our
        indebtedness.
   -12-
 *Table
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 **Item
        6.** **Exhibits and Reports on Form 8-K**
  (a)
        Index
        to Exhibits
  **Exhibit
        No.**   **Description
        of Exhibit**
  31
              
              Certification
                  of Chief Executive/Financial Officer
                  pursuant to Section 302 of the Sarbanes-Oxley Act of
                  200232
              
              Certification
                of Chief Executive/Financial Officer
                pursuant to Section 906
  
 (b)
        A
        report on Form 8-K was filed May 8, 2006
   -13-
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 **SIGNATURE**
   In
        accordance with the requirements of the Exchange Act, the registrant caused
        this
        report to be signed on its behalf by the undersigned, hereunto duly
        authorized.
  ****Victory
                Energy Corporation****Date: November
                13, 2006
              By:
              /s/ Jon
                FullenkampPrincipal
                Executive OfficerPrincipal
                Financial OfficerPrincipal
                Accounting Officer and Director


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