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

(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, 2004
                               ------------------------------

(   )    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.
                         (Name of small business issuer)


        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)

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

           Class                                   Outstanding at April 14, 2004
----------------------------                       -----------------------------
Common Stock, $.01 per value                                 4,913,290




<PAGE>
<TABLE>
<CAPTION>

PART I.   FINANCIAL INFORMATION
          Item 1. Financial Statements

DGSE Companies, Inc. and Subsidiaries

CONSOLIDATED BALANCE SHEETS
                                                            (Unaudited)

                                                              March 31,     December 31,
                                                                2004            2003
                                                            ------------    ------------
<S>                                                         <C>             <C>
ASSETS

CURRENT ASSETS
    Cash and cash equivalents                               $     54,438    $    735,293
    Trade receivables                                            715,255         774,586
    Other receivables                                            204,430         204,430
    Inventories                                                6,887,659       6,673,865
    Prepaid expenses                                             143,073         149,277
                                                            ------------    ------------

                 Total current assets                          8,004,855       8,537,451

MARKETABLE SECURITIES - AVAILABLE FOR SALE                       349,818         243,446

PROPERTY AND EQUIPMENT - AT COST, NET                            957,896         989,966

GOODWILL                                                       1,151,120       1,151,120

OTHER ASSETS                                                     150,497         149,546
                                                            ------------    ------------

                                                            $ 10,614,186    $ 11,071,529
                                                            ============    ============
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
    Notes payable                                           $  2,403,059    $    541,546
    Current maturities of long-term debt                         197,315         197,315
    Accounts payable - trade                                     512,864         859,269
    Accrued expenses                                             214,202         705,756
    Customer deposits                                             91,499         150,088
    Federal income taxes payable                                 308,654         512,991
                                                            ------------    ------------

                 Total current liabilities                     3,727,593       2,966,965

Long-term debt, less current maturities                        1,209,438       2,719,482
Deferred income taxes                                             58,911          22,743
                                                            ------------    ------------

                 Total liabilities                             4,995,942       5,709,190

SHAREHOLDERS' EQUITY
    Common stock, $.01 par value; authorized 10,000,000
       shares; issued and outstanding 4,913,290 shares at
       March 31, 2004 and December 31, 2003                       49,133          49,133
    Additional paid-in capital                                 5,708,760       5,708,760
    Accumulated other comprehensive income                        70,206            --
    Retained earnings (deficit)                                 (209,855)       (395,554)
                                                            ------------    ------------
                 Total shareholders' equity                    5,618,244       5,362,339

                                                            $ 10,614,186    $ 11,071,529
                                                            ============    ============
</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, 2004    March 31, 2003
                                                                --------------    --------------
<S>                                                             <C>               <C>
Revenue
    Sales                                                       $    6,848,946    $    5,217,920
    Pawn services charges                                               47,630            41,882
                                                                --------------    --------------
                                                                     6,896,576         5,259,802

Costs and expenses
    Cost of goods sold                                               5,486,910         4,190,058
    Selling, general and administrative expenses                     1,020,966           976,462
    Depreciation and amortization                                       35,285            34,788
                                                                --------------    --------------
                                                                     6,543,161         5,201,308
                                                                --------------    --------------

Operating income                                                       353,415            58,494
                                                                --------------    --------------
Other income (expense)
   Interest expense                                                    (72,053)          (68,030)
                                                                --------------    --------------
                 Total other income (expense)                          (72,053)          (68,030)

                 Income (loss) before income taxes                     281,362            (9,536)

Income tax expense (benefit)                                            95,663            (3,242)
                                                                --------------    --------------

                 Net income (loss) from continuing operations          185,699            (6,294)

Loss from discontinued operations, net of income taxes                    --             (15,149)
                                                                --------------    --------------

                 Net income (loss)                              $      185,699    $      (21,443)
                                                                ==============    ==============

Earnings per common share
     Basic and diluted                                          $          .04              --
                                                                ==============    ==============


     Weighted average number of common shares:                       4,913,290         4,913,790
     Basic
     Diluted                                                         5,137,431         4,913,790
</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,
                                                                     2004         2003
                                                                  ---------    ---------
<S>                                                               <C>          <C>
Cash Flows From Operations
Reconciliation of net loss to net cash
    used in  operating activities
        Net income (loss)                                         $ 185,699    $ (21,443)
        Depreciation and amortization                                35,285       42,018
        Deferred taxes                                                 --        (11,046)
        (Increase) decrease in operating assets and liabilities
           Trade receivables                                         59,331      174,824
           Inventories                                             (213,794)    (236,911)
           Prepaid expenses and other current assets                  6,204       (3,488)
           Accounts payable and accrued expenses                   (837,959)    (620,937)
           Federal income taxes payable                            (204,337)    (150,000)
           Other assets                                                (951)     (18,044)
                                                                  ---------    ---------
               Total net cash used in operating activities         (970,522)    (845,027)

Cash flows from investing activities
           Purchase of property and equipment                        (4,164)      (2,393)
           Change  in deposits                                      (58,589)      69,964
                                                                  ---------    ---------
               Net cash (used) provided by investing activities     (62,753)      67,571

Cash flows from financing activities
           Proceeds from notes issued                               625,000      625,000
           Payments on notes payable                               (272,580)    (219,680)
                                                                  ---------    ---------
        Net cash provided by financing activities                   352,420      405,320
                                                                  ---------    ---------

Net decrease in cash and cash equivalents                          (680,855)    (372,136)

Cash and cash equivalents at beginning of year                      735,293      498,408
                                                                  ---------    ---------

Cash and cash equivalents at end of period                        $  54,438    $ 126,272
                                                                  =========    =========
</TABLE>

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

Interest  paid for the three  months  ended March 31, 2004 and 2003 was $ 72,053
and $ 68,030, respectively.

Income  taxes  paid for the  three  months  ended  March  31,  2004 and 2003 was
$300,000 and $150,000, respectively.


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

                                        4
<PAGE>
<TABLE>
<CAPTION>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(1) Basis of Presentation:

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.,  Silverman  Consultants,  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, 2004, are
not  necessarily  indicative  of the results  that may be expected  for the year
ended  December 31, 2004.  For further  information,  refer to the  consolidated
financial  statements  and footnotes  thereto  included in the Company's  annual
report  on  Form  10-KSB  for  the  year  ended   December  31,  2003.   Certain
reclassifications   were  made  to  the  prior  year's  consolidated   financial
statements to conform to the current year presentation.


(2) Earnings per share

No  reconciliation  is  provided  for the  periods  ended March 31 2004 and 2003
because the effect is not dilutive.


(3) Business segment information

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

                                                       Discontinued     Corporate
                          Jewelry      Liquidations     Operations       & Other       Consolidated
                        ------------   ------------    ------------    ------------    ------------
<S>                     <C>            <C>             <C>             <C>             <C>
Revenues
  2004                  $  6,799,082   $     97,494    $       --      $       --      $  6,896,576
  2003                  $  5,141,927   $    117,875    $       --      $       --      $  5,259,802

Net income (loss)
  2004                  $    237,729   $    (31,995)   $       --      $    (20,035)   $    185,699
  2003                  $     19,269   $     (9,722)   $    (15,149)   $    (15,841)   $    (21,443)

Identifiable assets
  2004                  $  9,673,272   $    331,678    $       --      $    609,236    $ 10,614,186
  2003                  $  9,499,275   $    775,700    $       --      $      3,002    $ 10,277,977

Capital expenditures
  2004                  $      4,164   $       --      $       --      $       --      $      4,164
  2003                  $      2,393   $       --      $       --      $       --      $      2,393
Depreciation and
amortization
  2004                  $     33,410   $       --      $       --      $      1,875    $     35,285
  2003                  $     40,143   $      1,875    $       --      $       --      $     42,018
</TABLE>











                                        5
<PAGE>
<TABLE>
<CAPTION>

(4) Other Comprehensive income:

Other comprehensive income is as follows:
                                                                 Tax
                                               Before Tax     (Expense)      Net-of-Tax
                                                 Amount        Benefit         Amount
                                              -----------    -----------    -----------
<S>                                           <C>            <C>            <C>
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 income loss at
   December 31, 2002                          $(1,728,130)   $   593,180    $(1,134,950)
Unrealized holding gains arising during the
    Three months ended March 31, 2003              75,278        (25,594)        49,684
                                              -----------    -----------    -----------
Other comprehensive income (loss) at
   March 31, 2003                             $(1,652,852)   $   567,586    $(1,085,266)
                                              ===========    ===========    ===========
</TABLE>


(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,
                                                   ----------------------------
                                                       2004            2003
                                                   ------------    ------------
Net income(loss) as reported                       $    185,699    $    (21,443)
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                                 $    185,699    $    (21,443)
                                                   ============    ============
Earnings per share:
     Basic - as reported                           $        .04            --
     Basic - pro forma                             $        .04            --
     Diluted - as reported                         $        .04            --
     Diluted pro forma                             $        .04            --

The fair value of these  options  was  estimated  at the date of grant using the
Black-Scholes   option-pricing   model  with  the  following   weighted  average
assumptions  used for grants  after  1998,  expected  volatility  of 70% to 96%,
risk-free  rate of 3.9% to 6.6%,  no dividend  yield and expected life of 5 to 8
years.





                                        6

<PAGE>
<TABLE>
<CAPTION>

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

Results of Operations
---------------------
Quarter ended March 31, 2004 vs 2003:
-------------------------------------

Revenue for the first  quarter of 2004  increased  by $ 1,636,774  or 31.1% when
compared to the corresponding  quarter of 2003. The increase was the result of a
$ 1,657,155 increase in sales from the jewelry segment.  The increase in jewelry
segment sales was the result of a $ 630,214 increase in precious metal sales and
a $  1,026,941  increase  in  jewelry  sales.  These  increases  were  due  to a
nation-wide   improvement  in  the  retail  environment  and  significant  price
increases in precious metal  products.  Pawn service fees increased by 13.7% due
to an increase in loan  volume.  Cost of sales  increased  primarily  due to the
increase in sales.  Gross margins  increased from 19.7% in 2003 to 19.9% in 2004
due to the increase in sales of jewelry products.

Selling,  general  and  administration  expenses  increased  by $ 44,504  due an
increase in sales staff.  Income taxes are provided at the corporate rate of 34%
for both 2004 and 2003

Loss from  discontinued  operations during 2003 in the amount of $ 15,149 net of
income taxes is the combined  results of two  subsidiaries  of the Company,  DLS
Financial  Services,  Inc.  and eye  media,  inc.  The  operations  of these two
companies were discontinued during 2003.

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

The Company's  short-term debt,  including current  maturities of long-term debt
totaled  $2,600,374 as of March 31, 2004.  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
$50,000  during the balance of 2004. It is anticipated  that these  expenditures
will be funded from working capital.

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         2004         2005         2006         2007         2008      Thereafter
                                    ----------   ----------   ----------   ----------   ----------   ----------   ----------
<S>                                 <C>          <C>          <C>          <C>          <C>          <C>          <C>
Notes payable                       $2,403,059   $  278,059   $2,125,000         --           --           --           --
Long-term debt and capital leases    1,406,753      185,224   $  484,737   $  137,906   $  135,330   $  135,606   $  327,950
Federal income taxes                   308,654      308,654         --           --           --           --           --
Operating leases                       354,027      175,570      148,205       18,886       11,366         --           --
                                    ----------   ----------   ----------   ----------   ----------   ----------   ----------
                                    $4,472,493   $  947,507   $2,757,942   $  156,792   $  146,696   $  135,606   $  327,950
                                    ==========   ==========   ==========   ==========   ==========   ==========   ==========
</TABLE>


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.


                                       7


<PAGE>

ITEM 3. 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 AND REPORTS ON FORM 8-K

         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.





                  Reports on Form 8-K - None











                                       8

<PAGE>

                                   SIGNATURES


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



DGSE Companies, Inc.



By: /s/ L. S. Smith                    Dated: April 26, 2004
   ----------------------------
   L. S. Smith
   Chairman of the Board,
   Chief Executive Officer and
   Secretary

         In accordance  with the Exchange Act, this report has been signed below
by the following  persons on behalf of the  Registrant and in the capacities and
on the date indicated.


By: /s/ L. S. Smith                    Dated: April 26, 2004
   -------------------------
   L. S. Smith
   Chairman of the Board,
   Chief Executive Officer and
   Secretary


By: /s/ W. H. Oyster                   Dated: April 26, 2004
   -------------------------
   W. H. Oyster
   Director, President and
   Chief Operating Officer


By: /s/ John Benson                    Dated: April 26, 2004
   -------------------------
   John Benson
   Chief Financial Officer
   (Principal Accounting Officer)















                                       9