UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                    FORM 10-Q

(Mark One)

 ( X )    Quarterly  Report  pursuant  to Section 13 or 15(d) of the  Securities
          Exchange Act of 1934

For the quarterly period ended       March 31, 2005
                               ------------------------------

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

For the transition period from                 to
                               ---------------    ----------------

Commission File Number                   1-11048
                       -------------------------------------------

                              DGSE Companies, Inc.
                              ---------------------
             (Exact name of registrant as specified in its charter)


        Nevada                                              88-0097334
---------------------------------                -------------------------------
  (State or other jurisdiction                   (I.R.S. Employer Identification
of incorporation or organization)                            Number)



     2817 Forest Lane, Dallas, Texas                             75234
----------------------------------------                    ----------------
(Address of principal executive offices)                      (Zip Code)

(Registrant's telephone number, including area code) (972) 484-3662
                                                     --------------


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

Indicate  by check mark  whether  the  registrant  is an  accelerated  filer (as
defined in Rule 12b-2 of the Exchange Act). Yes    No X
                                               ---   ---

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock, as of the latest practicable date.

           Class                                      Outstanding at May 6, 2005
----------------------------                          --------------------------
Common Stock, $.01 per value                                   4,913,290






<PAGE>
<TABLE>
<CAPTION>

PART I.   FINANCIAL INFORMATION
          Item 1. Financial Statements

                           Consolidated Balance Sheets
                                                            (Unaudited)

ASSETS                                                        Mar. 31,        Dec. 31,
                                                                2004            2005
                                                            ------------    ------------
<S>                                                         <C>             <C>
CURRENT ASSETS
    Cash and cash equivalents                               $    127,741         314,897
    Trade receivables                                            735,119         907,238
    Other receivables                                               --              --
    Inventories                                                7,235,112       6,791,383
    Prepaid expenses                                             203,488         161,985
                                                            ------------    ------------

             Total current assets                              8,301,460       8,175,503


MARKETABLE SECURITIES - AVAILABLE FOR SALE                        77,062          77,062

PROPERTY AND EQUIPMENT - AT COST, NET                            860,316         885,301

DEFERRED INCOME TAXES                                             15,994          15,994

GOODWILL                                                         837,117         837,117

OTHER ASSETS                                                     300,236         290,722
                                                            ------------    ------------

                                                            $ 10,392,185    $ 10,281,699
                                                            ============    ============

LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
    Notes payable                                           $  2,566,758         548,093
    Current maturities of long-term debt                         160,903          76,172
    Accounts payable - trade                                     366,530         590,412
    Accrued expenses                                             163,724         513,775
    Customer deposits                                            195,492          67,173
    Federal income taxes payable                                 148,773         146,210
                                                            ------------    ------------

             Total current liabilities                         3,602,180       1,941,835

Long-term debt, less current maturities                        1,048,855       2,749,278

Deferred income taxes                                               --              --
                                                            ------------    ------------
             Total liabilities                                 4,651,035       4,691,113


SHAREHOLDERS' EQUITY
    Common stock, $.01 par value; authorized 10,000,000
       shares; issued and outstanding 4,913,290 shares at
       The end of each period                                     49,133          49,133
    Additional paid-in capital                                 5,708,760       5,708,760
    Accumulated other comprehensive  (loss)                     (122,582)       (122,582)
    Retained earnings (deficit)                                  105,839         (44,725)
                                                            ------------    ------------
             Total shareholders' equity                        5,741,150       5,590,586


                                                            $ 10,392,185    $ 10,281,699
                                                            ============    ============
</TABLE>

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


                                       2
<PAGE>
<TABLE>
<CAPTION>

DGSE Companies, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF OPERATIONS
Three months ended
(Unaudited)


                                                         March 31, 2005    March 31, 2004
                                                         --------------    --------------
<S>                                                      <C>               <C>
Revenue
    Sales                                                $    6,637,914    $    6,751,452
    Pawn services charges                                        79,898            47,630
                                                         --------------    --------------
                                                              6,717,812         6,799,082
Costs and expenses
    Cost of goods sold                                        5,316,873         5,452,922
    Selling, general and administrative expenses              1,058,884           908,982
    Depreciation and amortization                                42,803            35,285
                                                         --------------    --------------
                                                              6,418,560         5,397,189
                                                         --------------    --------------

Operating income                                                299,252           401,893
                                                         --------------    --------------
Other income (expense)
   Interest expense                                             (71,124)          (72,053)
                                                         --------------    --------------
             Total other income (expense)                       (71,124)          (72,053)

             Income before income taxes                         228,128           329,840

Income tax expense                                               77,563           112,146
                                                         --------------    --------------

             Net income from continuing operations              150,565           217,694

Loss from discontinued operations, net of income taxes             --             (31,995)
                                                         --------------    --------------

             Net income (loss)                           $      150,565    $      185,699
                                                         ==============    ==============
Earnings per common share
     Basic and diluted
       From continuing operations                        $          .03    $          .04
       From discontinued operations                                --                --
                                                         --------------    --------------
                                                         $          .03    $          .04
                                                         ==============    ==============

     Weighted average number of common shares:
       Basic                                                  4,913,290         4,913,290
       Diluted                                                5,089,162         5,137,431
</TABLE>



The  accompanying  notes are an integral  part of these  consolidated  financial
statements
                                       3
<PAGE>
<TABLE>
<CAPTION>

DGSE COMPANIES, Inc. and Subsidiaries

CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

                                                                      Three Months Ended
                                                                           March 31,
                                                                     2005           2004
                                                                  -----------    -----------
<S>                                                               <C>            <C>
Cash Flows From Operations
Reconciliation of net income to net cash
  used in  operating activities
    Net income                                                    $   150,565    $   185,699
    Depreciation and amortization                                      42,803         35,285
      (Increase) decrease in operating assets and liabilities
      Trade receivables                                               172,119         59,331
      Inventories                                                    (443,729)      (213,794)
      Prepaid expenses and other current assets                       (41,503)         6,204
      Accounts payable and accrued expenses                          (573,933)      (837,959)
      Change  in customer deposits                                    128,319        (58,589)
      Federal income taxes payable                                      2,563       (204,337)
      Other assets                                                     (9,565)          (951)
                                                                  -----------    -----------
             Total net cash used in operating activities             (572,361)    (1,029,111)

Cash flows from investing activities
      Purchase of property and equipment                              (17,768)        (4,164)
                                                                  -----------    -----------
               Net cash (used) provided by investing activities       (17,768)        (4,164)

Cash flows from financing activities
      Proceeds from notes issued                                      700,000        625,000
      Payments on notes payable                                      (297,027)      (272,580)
                                                                  -----------    -----------
        Net cash provided by financing activities                     402,973        352,420
                                                                  -----------    -----------

Net decrease in cash and cash equivalents                            (187,156)      (680,855)

Cash and cash equivalents at beginning of year                        314,897        735,293
                                                                  -----------    -----------

Cash and cash equivalents at end of period                        $   127,741    $    54,438
                                                                  ===========    ===========
</TABLE>


Supplemental schedule of non-cash, investing and financing activities:

Interest  paid for the three  months  ended March 31, 2005 and 2004 was $ 77,563
and $ 72,053, respectively.

Income taxes paid for the three months ended March 31, 2005 and 2004 was $75,000
and $300,000, respectively.


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


                                       4
<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(1)  Basis of Presentation:

The accompanying  consolidated  financial statements for the three month periods
ended  March  31,  2005 and 2004  have  been  prepared  in  accordance  with the
generally accepted accounting principles in the United States of America by DGSE
Companies,  Inc.  without  audit,  pursuant to the rules and  regulations of the
Securities and Exchange Commission.

The accompanying  unaudited condensed  consolidated financial statements of DGSE
Companies,  Inc.  and  Subsidiaries  include the  financial  statements  of DGSE
Companies, Inc. and its wholly-owned  subsidiaries,  DGSE Corporation,  National
Jewelry Exchange,  Inc., American Pay Day Centers,  Inc. and Charleston Gold And
Diamond Exchange, Inc. In the opinion of management, all adjustments (consisting
of normal recurring accruals)  considered necessary for a fair presentation have
been included.

The Company's  operating  results for the three months ended March 31, 2005, are
not  necessarily  indicative  of the results  that may be expected  for the year
ended  December 31, 2005.  For further  information,  refer to the  consolidated
financial  statements  and footnotes  thereto  included in the Company's  annual
report  on  Form  10-K  for  the  year  ended   December   31,   2004.   Certain
reclassifications   were  made  to  the  prior  year's  consolidated   financial
statements to conform to the current year presentation.


(2)  - Earnings per share

Earnings Per Common Share

A reconciliation of the income and shares of the basic earnings per common share
and diluted earnings per common share for the three months ended March 31, 2005,
and 2004 is as follows:

                                                        March 31, 2005
                                               ---------------------------------
                                                                       Per-Share
                                                 Income      Shares      Amount
                                               ---------   ---------   ---------
     Basic earnings per common share
         Income from operations allocable
           to common shareholders              $ 150,565   4,913,920   $     .03
                                                                       =========

     Effect of dilutive securities
         Stock options                              --       175,872
                                               ---------   ---------

     Diluted earnings per common share
         Income from operations available
           to common shareholders plus
                assumed conversions            $ 150,565   5,089,162   $     .03
                                               =========   =========   =========



                                                          March 31, 2004
                                               ---------------------------------

                                                                       Per-Share
                                                 Income      Shares      Amount
                                               ---------   ---------   ---------
     Basic earnings per common share
         Income from operations allocable
           to common shareholders              $ 185,699   4,913,920   $     .04
                                                                       =========

     Effect of dilutive securities
         Stock options                              --       224,141
                                               ---------   ---------

     Diluted earnings per common share
         Income from operations available
           to common shareholders plus
             assumed conversions               $ 185,699   5,137,431   $     .04
                                               =========   =========   =========



                                       5
<PAGE>

(3)  - Business segment information

The Company's  operations  by business  segment for the three months ended March
31, were as follows:

                                                    Discontinued      Corporate
                       Jewelry       Operations       & Other       Consolidated
                     ------------   ------------    ------------    ------------
Revenues
  2005               $  6,717,914   $       --      $       --      $  6,717,914
  2004               $  6,799,082   $       --      $       --      $  6,799,082

Net income (loss)
  2005               $    176,056   $       --      $    (25,491)   $    150,565
  2004               $    237,729   $    (31,995)   $    (20,035)   $    185,699

Identifiable assets
  2005               $ 10,080,433   $       --      $    311,752    $ 10,392,185
  2004               $  9,673,272   $    331,678    $    609,236    $ 10,164,186

Capital expenditures
  2005               $     17,768   $       --      $       --      $     17,768
  2004               $      4,393   $       --      $       --      $      4,393

Depreciation and
amortization
  2005               $     41,536   $       --      $      1,267    $     42,803
  2004               $     33,410   $       --      $      1,875    $     35,285



(4) Other Comprehensive income:

Other comprehensive income is as follows:                                Tax
                                            Before Tax   (Expense)    Net-of-Tax
                                              Amount      Benefit       Amount
                                            -----------------------------------
Other comprehensive income at
   December 31, 2003                        $    --      $    --      $    --
Unrealized holding gains arising during the
    Three months ended March 31, 2004         106,373      (36,167)      70,206
                                            ---------    ---------    ---------
Other comprehensive income  at
   March 31, 2004                           $ 106,373    $ (36,167)   $  70,206
                                            =========    =========    =========

Other comprehensive loss at
   December 31, 2004  and March 31,2005     $(150,784)   $  28,202    $(122,582)
                                            =========    =========    =========


                                       6
<PAGE>

(5) Stock-based Compensation:

The  Company  accounts  for  stock-based  compensation  to  employees  using the
intrinsic  value  method.  Accordingly,  compensation  cost for stock options to
employees is measured as the excess,  if any , of the quoted market price of the
Company's common stock at the date of the grant over the amount an employee must
pay to acquire the stock.

The following table  illustrates the effect on net income and earnings per share
if the  Company  had  applied  the fair  value  recognition  provisions  of FASB
Statement No. 123,  Accounting  for  Stock-Based  Compensation,  to  stock-based
employee compensation.

                                                    Three Months Ended March 31,
                                                    ----------------------------
                                                       2005             2004
                                                    -----------      -----------

Net income as reported                              $   150,565      $   185,699
Deduct:  Total stock-based employee compensation
Expense determined under fair value based method
For all awards, net of related tax effects                 --               --
                                                    -----------      -----------
Pro forma net loss                                  $   150,565      $   185,699

Earnings per share:
     Basic - as reported                                   $.03             $.04
     Basic - pro forma                                     $.03             $.04
     Diluted - as reported                                 $.03             $.04
     Diluted pro forma                                     $.03             $.04


(6) Financing

The  Company  entered  into a  financing  agreement  on March  31,  2005  with a
commercial  bank that allows the Company to borrow at any time through March 31,
2006  up to $  3,500,000  at the  bank's  prime  Rate  of  interest  plus  1/4%.
Borrowings  under the financing  agreement mature on March 31, 2006. The Company
borrowed $ 2,699,699  under this new credit  facility in order to liquidate  its
previous  bank debt.  The remaining  portion of the new  financing  agreement is
available to the Company for working capital requirements.









                                       7
<PAGE>
<TABLE>
<CAPTION>

Item 2. Management's  Discussion and Analysis of Financial Condition and Results
of Operations Results of Operations

Quarter ended March 31, 2005 vs 2004:
-------------------------------------
Revenue  for the  first  quarter  of 2005  decreased  by $ 81,270  or 1.1%  when
compared to the  corresponding  quarter of 2004.  This  decrease  was due to a $
285,394 decrease in the sale of precious metal products,  a $ 32,268 increase in
pawn service charges and a $ 171,856  increase in the sale of jewelry  products.
The increase in jewelry sales was due to a nation wide improvement in the retail
environment.  The decrease in precious metal sales was due to price stability in
the precious metal markets during the 2005 quarter.  Pawn service fees increased
due to an increase in loan volume.  Cost of sales decreased primarily due to the
decrease in sales.  Gross margins  increased from 19.8% in 2004 to 20.9% in 2005
due to the increase in sales of jewelry products.

Selling,  general  and  administration  expenses  increased  by $ 149,902 due an
increase in sales staff.  Income taxes are provided at the corporate rate of 34%
for both 2005 and 2004

Loss from  discontinued  operations during 2004 in the amount of $ 31,995 net of
income  taxes  is the  operating  results  of  Silverman  Consultants,  Inc.,  a
wholly-owned subsidiary of the Company which was sold in August 2004.

Liquidity and Capital Resources
-------------------------------

The Company's  short-term debt,  including current  maturities of long-term debt
totaled  $2,727,661 as of March 31, 2005.  The ability of the Company to finance
its operations and working capital needs are dependent upon management's ability
to negotiate  extended terms or refinance its  short-term  debt. The Company has
historically  renewed,  extended or replaced  short-term  debt as it matures and
management  believes  that it will be able to do so in the future as  short-term
debt matures.

Management of the Company  expects capital  expenditures to total  approximately
$75,000  during the balance of 2005. It is anticipated  that these  expenditures
will be funded from working capital.

The  Company  entered  into a  financing  agreement  on March  31,  2005  with a
commercial  bank that allows the Company to borrow at any time through March 31,
2006  up to $  3,500,000  at the  bank's  prime  Rate  of  interest  plus  1/4%.
Borrowings  under the financing  agreement mature on March 31, 2006. The Company
borrowed $ 2,699,699  under this new credit  facility in order to liquidate  its
previous  bank debt.  The remaining  portion of the new  financing  agreement is
available to the Company for working capital requirements.

From time to time,  management  has adjusted the Company's  inventory  levels to
meet  seasonal  demand  or  in  order  to  meet  working  capital  requirements.
Management  is of the opinion that if  additional  working  capital is required,
additional loans can be obtained from  individuals or from commercial  banks. If
necessary,  inventory  levels  may be  adjusted  or a portion  of the  Company's
investments in marketable  securities may be liquidated in order to meet working
capital requirements.

Contractual Cash Obligations                                        Payments due by year end
----------------------------                                  ------------------------------------
                                      Total         2005         2006         2007         2008         2009     Thereafter
                                    ----------   ---------------------------------------------------------------------------
<S>                                 <C>          <C>          <C>          <C>          <C>          <C>          <C>
Notes payable                       $2,566,758   $  266,758   $2,300,000         --           --           --           --
Long-term debt and capital leases    1,209,758      120,667      183,281   $  143,936   $  147,262   $  369,728   $  244,884
Federal income taxes                   148,773      148,773         --           --           --           --           --
Operating leases                       558,649      170,591      118,447      108,018       88,394       73,199         --
                                    ----------   ----------   ----------   ----------   ----------   ----------   ----------

                                    $4,483,938   $  706,789   $2,601,728   $  251,954   $  235,656   $  442,927   $  244,884
                                    ==========   ==========   ==========   ==========   ==========   ==========   ==========
</TABLE>

                                       8
<PAGE>

This  report  contains  forward-looking  statements  which  reflect  the view of
Company's management with respect to future events. Although management believes
that  the  expectations   reflected  in  such  forward-looking   statements  are
reasonable,  it can give no assurance that such  expectations will prove to have
been  correct.  Important  factors  that could  cause  actual  results to differ
materially from such  expectations  are a down turn in the current strong retail
climate and the  potential  for  fluctuations  in precious  metals  prices.  The
forward-looking  statements  contained  herein  reflect the current views of the
Company's  management  and the  Company  assumes  no  obligation  to update  the
forward-looking  statements or to update the reasons actual results could differ
from those contemplated by such forward-looking statements.

ITEM 3. Quantitative and Qualitative Disclosures About Market Risk.

The following  discussion about the Company's  market risk disclosures  involves
forward-looking  statements.  Actual results could differ  materially from those
projected in the  forward-looking  statements.  The Company is exposed to market
risk related to changes in interest  rates and gold values.  The Company also is
exposed to regulatory risk in relation to its payday loans. The Company does not
use derivative financial instruments.

The Company's earnings and financial position may be affected by changes in gold
values and the resulting  impact on pawn lending and jewelry sales. The proceeds
of scrap sales and the Company's  ability to liquidate excess jewelry  inventory
at an  acceptable  margin  are  dependent  upon gold  values.  The impact on the
Company's  financial position and results of operations of a hypothetical change
in gold values cannot be reasonably estimated.

ITEM 4. Controls and Procedures.

Under the supervision and with the  participation  of our management,  including
our  principal  executive  officer  and  principal  financial  officer,  we have
evaluated  the  effectiveness  of the design  and  operation  of our  disclosure
controls  and  procedures  within 90 days of the filing  date of this  quarterly
report,  and, based on their  evaluation,  our principal  executive  officer and
principal  financial  officer have  concluded that these controls and procedures
are  effective.  There are no  significant  changes in our internal  controls or
other factors that could  significantly  affect these controls subsequent to the
date of their  evaluation.  Disclosure  controls and procedures are our controls
and other procedures that are designed to ensure that information required to be
disclosed  by us in the reports that we file or submit under the Exchange Act is
recorded,  processed,  summarized and reported, within the time period specified
in the Securities and Exchange Commission's rules and forms. Disclosure controls
and procedures include, without limitation,  controls and procedures designed to
ensure that  information  required to be  disclosed by us in the reports that we
file under the Exchange Act is accumulated  and  communicated to our management,
including our principal  executive officer and principal  financial officer,  as
appropriate to allow timely decisions regarding required disclosure.

PART II.   OTHER INFORMATION
----------------------------

ITEM 6.  Exhibits

         31.1     Certificate  of L.S.  Smith  pursuant  to Section  3026 of the
                  Sarbanes-Oxley Act of 2002, Chief Executive Officer.

         31.2     Certificate  of John  Benson  pursuant  to Section  302 of the
                  Sarbanes-Oxley Act of 2002, Chief Financial Officer .

         32.1     Certificate  of L.S.  Smith  pursuant  to  Section  906 of the
                  Sarbanes-Oxley Act of 2002, Chief Executive Officer.

         32.2     Certificate  of John  Benson  pursuant  to Section  906 of the
                  Sarbanes-Oxley Act of 2002, Chief Financial Officer.





                                       9
<PAGE>

                                   SIGNATURES


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



DGSE Companies, Inc.

By: /s/ L. S. Smith                    Dated: May 13, 2005
   -------------------------
   L. S. Smith
   Chairman of the Board,
   Chief Executive Officer and
   Secretary



By: /s/ W. H. Oyster                   Dated: May 13, 2005
   -------------------------
   W. H. Oyster
   Director, President and
   Chief Operating Officer


By: /s/ John Benson                    Dated: May 13, 2005
   -------------------------
   John Benson
   Chief Financial Officer
   (Principal Accounting Officer)