UNITED STATES
                 SECURITIES AND EXCHANGE COMMISSION
                      Washington, D.C. 20549


                            FORM 10-QSB

[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
    EXCHANGE ACT OF 1934

         For the quarterly period ended July 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 __________________


            DEMCO INDUSTRIES, INC. n/k/a BIOKEY ID, INC.
-----------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)


          FLORIDA                             98-0159665
---------------------------------------------------------------------
(State or other jurisdiction of  (I.R.S. Employer Identification No.)
incorporation or organization)


      Arcade at Royal Palm 1, 950 South Pine Island Road,
            Suite 150A-106, Plantation, FL  33324
__________________________________________________________________
           (Address of principal executive offices)


                      (954) 727-8393
                ----------------------------
                (Issuer's telephone number:)

__________________________________________________________________
     (Former name, former address, and former fiscal year,
                 if changed since last report)



                APPLICABLE ONLY TO CORPORATE ISSUERS

    State the number of shares outstanding of each of the issuer's
classes of common equity, as of the latest practicable date: As of
July 31, 2004, there were approximately 5,000,000 shares of
common stock, $.0001 par value, issued and outstanding.

    Transitional small Business Disclosure Format (check one);

Yes [ ]   No [X]



<PAGE>



                      DEMCO INDUSTRIES, INC.
                        Form 10-QSB Index
                         July 31,2004


                                                                       PAGE

PART I:  Financial Information. . . . . . . . . . . . . . . . . . . . . 3

Item 1. Financial Statements

    Balance Sheet at July 31, 2004 (Unaudited)
    and January 31, 2004. . . . . . . . . . . . . . . . . . . . . . . . 3

    Statements of Changes in Stockholders' Deficit for
    the Six Months Ended July 31, 2004 and 2003 and for the
    Period from Date of Inception (March 29, 1996) through
    July 31, 2004 (Unaudited) . . . . . . . . . . . . . . . . . . . . . 4

    Statements of Operations for the Three and Six Months
    Ended July 31, 2004 and 2003 and for the Period from
    Date of Inception (March 29, 1996) through
    July 31, 2004 (Unaudited) . . . . . . . . . . . . . . . . . . . . . 5

    Statements of Cash Flows for the Six Months Ended
    July 31, 2004 and 2003 and for the Period from
    Date of Inception (March 29, 1996) through
    July 31, 2004 (Unaudited) . . . . . . . . . . . . . . . . . . . . . 6

Notes to Financial Statements . . . . . . . . . . . . . . . . . . . . . 7

Item 2.	Management's Discussion and Analysis or Plan of
        Operation. .. . . . . . . . . . . . . . . . . . . . . . . . . . 9

Item 3. Controls and Procedures . . . . . . . . . . . . . . . . . . . . 11

PART II: Other Information. . . . . . . . . . . . . . . . . . . . . . . 11

Item 1. Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . 11

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds . . 11

Item 3. Defaults upon Senior Securities . . . . . . . . . . . . . . . . 11

Item 4. Submission of Matters to a Vote of Security Holders . . . . . . 11

Item 5. Other Information . . . . . . . . . . . . . . . . . . . . . . . 11

Item 6. Exhibits . .  . . . . . . . . . . . . . . . . . . . . . . . . . 11

Signatures  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12


                                  2
<PAGE>



                               PART I
                      FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS


DEMCO INDUSTRIES, INC.
(A DEVELOPMENT STAGE COMPANY)
(A FLORIDA CORPORATION)
Plantation, Florida


<TABLE>
<CAPTION>


BALANCE SHEETS
===========================================================================================

                                                                (Unaudited)
                                                                 July 31,       January 31,
                                                                   2004            2004
                                                                -----------     -----------
<S>                                                             <C>             <C>
ASSETS


Cash and Cash Equivalents                                       $      --       $      --
-------------------------------------------------------------------------------------------
Total Assets                                                    $      --       $      --

===========================================================================================

LIABILITIES AND STOCKHOLDERS' DEFICIT

Liabilities
Accrued Expenses                                                $  11,125       $   3,325
-------------------------------------------------------------------------------------------
Total Liabilities                                                  11,125           3,325

Stockholders' Deficit
Common Stock:     $.0001 Par; 50,000,000 Shares Authorized;
                  5,000,000 Issued and Outstanding                    500             500
Preferred Stock:  $.0001 Par; 50,000,000 Shares Authorized;
                  12,950,000 Issued and Outstanding                 1,295           1,295
Additional Paid-In Capital                                         22,055          22,055
Deficit Accumulated During Development Stage                      (34,975)        (27,175)
-------------------------------------------------------------------------------------------

Total Liabilities and Stockholders' Deficit                       (11,125)         (3,325)
-------------------------------------------------------------------------------------------

Total Liabilities and Stockholders' Deficit                     $      --       $      --
===========================================================================================
</TABLE>


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

                                  3
<PAGE>



DEMCO INDUSTRIES, INC.
(A DEVELOPMENT STAGE COMPANY)
(A FLORIDA CORPORATION)
Plantation, Florida


<TABLE>
<CAPTION>



STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT
===============================================================================================================================

                                                                                                  Deficit
                                        Common Stock          Preferred Stock                   Accumulated
                                       (Par $0.0001)          (Par $0.0001)       Additional       During
                                     Number                Number                  Paid-In      Development     Stockholders'
                                   of Shares     Value    of Shares      Value     Capital         Stage       Equity (Deficit)
                                   --------------------------------------------------------------------------------------------
<S>                                <C>          <C>       <C>          <C>        <C>           <C>             <C>

Balance - March 29, 1996                  --    $   --            --   $    --    $      --     $       --      $      --

Shares Issued in Exchange for
  Expenses Paid by Stockholders    5,000,000       500    12,950,000     1,295           --             --          1,795

Expenses Paid by Stockholder              --        --            --        --       19,805             --         19,805

Net Loss for the Period                   --        --            --        --           --        (22,340)       (22,340)
                                   --------------------------------------------------------------------------------------------

Balance - January 31, 2003         5,000,000       500    12,950,000     1,295       19,805        (22,340)          (740)

Expenses Paid by Stockholder              --        --            --        --        1,500             --          1,500

Net Loss for the Period                   --        --            --        --           --         (2,435)        (2,435)
  (Unaudited)
                                   --------------------------------------------------------------------------------------------

Balance - July 31, 2003            5,000,000       500    12,950,000     1,295       21,305        (24,775)        (1,675)
  (Unaudited)

Expenses Paid by Stockholder              --        --            --        --          750             --            750

Net Loss for the Period                   --        --            --        --           --         (2,400)        (2,400)
  (Unaudited)
                                   --------------------------------------------------------------------------------------------

Balance - January 31, 2004         5,000,000       500    12,950,000     1,295       22,055        (27,175)        (3,325)

Net Loss for the Period                   --        --            --        --           --         (7,800)        (7,800)
  (Unaudited)
                                   --------------------------------------------------------------------------------------------

Balance - July 31, 2004
  (Unaudited)                      5,000,000    $  500    12,950,000   $ 1,295    $  22,055     $  (34,975)     $ (11,125)
                                   ============================================================================================

</TABLE>


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

                                  4
<PAGE>



DEMCO INDUSTRIES, INC.
(A DEVELOPMENT STAGE COMPANY)
(A FLORIDA CORPORATION)
Plantation, Florida


<TABLE>
<CAPTION>


STATEMENTS OF OPERATIONS (UNAUDITED)
===================================================================================================

                                                   Period from
                                                Date of Inception
                                                 (March 29, 1996)      Six Months Ended July 31,     Three Months ended July 31,
                                                    through          ----------------------------    ----------------------------
                                                 July 31, 2004           2004             2003           2004             2003
                                                ----------------     ------------    ------------    ------------    ------------
<S>                                             <C>                  <C>             <C>             <C>             <C>

Revenues                                        $         --         $         --    $         --    $         --    $         --

Expenses
Legal and Professional                                19,925                6,000             935           3,000             750
Transfer Agent                                        15,050                1,800           1,500             900             750

Total Expenses                                       (34,975)               7,800           2,435           3,900           1,500

Net Loss for the Period                         $    (34,975)        $     (7,800)   $     (2,435)   $     (3,900)   $     (1,500)
                                                =================================================================================

Weighted Average Number of
  Common Shares Outstanding
  - Basic and Diluted                              5,000,000            5,000,000       5,000,000       5,000,000       5,000,000

Net Loss per Common Share
  - Basic and Diluted                           $      (0.01)        $      (0.00)   $      (0.00)   $      (0.00)   $      (0.00)
                                                =================================================================================

</TABLE>


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

                                  5
<PAGE>



DEMCO INDUSTRIES, INC.
(A DEVELOPMENT STAGE COMPANY)
(A FLORIDA CORPORATION)
Plantation, Florida


<TABLE>
<CAPTION>


STATEMENTS OF CASH FLOWS (UNAUDITED)
======================================================================================================

                                                      Period from
                                                   Date of Inception
                                                    (March 29, 1996)        Six Months Ended July 31,
                                                       through            ----------------------------
                                                    July 31, 2004             2004            2003
                                                   ----------------       ------------    ------------
<S>                                                <C>                    <C>             <C>
Cash Flows from Operating Activities

Net Loss for the Period                              $   (34,975)         $    (7,800)     $  (2,435)

Non-Cash Adjustments:
  Expenses Paid by Stockholders                           23,850                 --            1,500

Changes in Assets and Liabilities:
  Accrued Expenses                                       (11,125)               7,800            935

Net Cash Flows from Operating Activities                    --                   --              --

Net Cash Flows from Investing Activities                    --                   --              --

Net Cash Flows from Financing Activities                    --                   --              --

Net Change in Cash and Cash Equivalents                     --                   --              --

Cash and Cash Equivalents - Beginning of Period             --                   --              --

Cash and Cash Equivalents - End of Period            $      --            $      --       $      --
                                                     ------------------------------------------------
NON-CASH INVESTING AND FINANCING ACTIVITIES

Expenses Paid by Stockholders in
  Exchange for Common and Preferred Stock            $   1,795            $      --       $      --

Expenses Paid by Stockholders                        $  22,055            $      --       $   1,500
                                                     ================================================

</TABLE>


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

                                  6
<PAGE>



DEMCO INDUSTRIES, INC.
(A DEVELOPMENT STAGE COMPANY)
(A FLORIDA CORPORATION)
Plantation, Florida


NOTES TO FINANCIAL STATEMENTS
---------------------------------------------------------------------------

Note A - Basis of Presentation

      The  condensed  financial statements of  Demco  Industries,
      Inc. (the "Company") included herein have been prepared  by
      the  Company,  without audit, pursuant  to  the  rules  and
      regulations of the Securities and Exchange Commission  (the
      "SEC").    Certain  information  and  footnote  disclosures
      normally  included  in  financial  statements  prepared  in
      conjunction  with generally accepted accounting  principles
      have  been condensed or omitted pursuant to such rules  and
      regulations,  although  the  Company  believes   that   the
      disclosures are adequate to make the information  presented
      not   misleading.   These  condensed  financial  statements
      should  be  read  in  conjunction with the  annual  audited
      financial statements and the notes thereto included in  the
      Company's  registration statement on Form 10-SB, and  other
      reports filed with the SEC.

      The  accompanying  unaudited interim  financial  statements
      reflect  all  adjustments of a normal and recurring  nature
      which  are,  in  the  opinion of management,  necessary  to
      present   fairly   the  financial  position,   results   of
      operations,  and cash flows of the Company for the  interim
      periods  presented.   The results of operations  for  these
      periods  are  not necessarily comparable to, or  indicative
      of,  results of any other interim period or for the  fiscal
      year   taken   as  a  whole.   Factors  that   affect   the
      comparability of financial data from year to year  and  for
      comparable  interim periods include non-recurring  expenses
      associated  with the Company's registration with  the  SEC,
      costs incurred to raise capital, and stock awards.

Note B - Subsequent Events

      Name and Business Intent
      ------------------------
      The  Articles  of Incorporation were amended on  August  5,
      2004  in order to change the name of the Company to  BioKey
      Identification Inc.

      In  connection  with the change in the  Company's  name  on
      August  5,  2004, the Company has abandoned the  intent  to
      conduct  business in the demolition industry and  presently
      intends  to  develop  and disseminate proprietary  software
      for document security.

      Preferred Stock
      ---------------
      In  August 2004, the 12,950,000 previously issued preferred
      shares were cancelled.

      Employee Stock Option Plan
      --------------------------
      In  August  2004  the Company established  a  Stock  Option
      Plan,  under  which  100,000 shares  of  common  stock  are
      reserved   for   issuance  to  officers,   key   employees,
      consultants, advisors and directors of the Company  or  any
      of  its subsidiaries or affiliates at the discretion of the
      Board  of  Directors.   The  option  price  per  share  and
      vesting  time is to be determined by the Board of Directors
      when  the  option is granted.  Any outstanding  options  at
      that  time  will  remain outstanding until they  have  been
      exercised or terminated.

                                                    - continued -


                                  7
<PAGE>


DEMCO INDUSTRIES, INC.
(A DEVELOPMENT STAGE COMPANY)
(A FLORIDA CORPORATION)
Plantation, Florida


NOTES TO FINANCIAL STATEMENTS
---------------------------------------------------------------------------

Note B -  Subsequent Events - continued

      Technology Acquisition
      ----------------------
      On  August  10,  2004  the Company  obtained  software  and
      hardware  ("Technology") from 008bksign Inc. that  performs
      pre-processing variable security design to data in  such  a
      way  that  the  data  are defined in vector  format,  which
      allows  for  more  efficient and  enhanced  printing.   The
      Technology, valued at $3,650,000, was obtained  by  issuing
      15,000,000   shares   of  non-participating,   performance,
      voting  preferred  stock which can be converted  to  common
      stock.  The value of the Technology is an approximate  cost
      associated   with   the  Company's   development   of   the
      Technology based on management estimates.

      Licenses
      --------
      On  August  11,  2004, the Company entered into  a  license
      agreement   with  Secugraphics,  Inc.  The  term   of   the
      agreement  is  for  a  period of 5  years  and  allows  the
      licensee  the  right to use and disseminate  the  Company's
      "Security  Document Issuing System" technology  (SDIS)  and
      develop   market  applications  for  the  Technology.    In
      consideration  of  granting the license, the  Company  will
      receive  a  one-time  fixed  royalty  of  $15,000,000.   In
      addition,  the Company will receive variable  royalties  of
      5%  of  all revenue arising from the licensee's application
      of  the  Technology.  The royalty fees will be received  as
      follows:

         Fixed Royalty Fees:

         *  A minimum of $5,000,000 due in 2005 with $2,000,000 due
            each year thereafter.

         Variable Royalty Fees:

         *  A minimum of $25,000 due in 2005 with a minimum of
            $100,000 due each year thereafter.

      As  a condition of the agreement, the Company has agreed to
      continue  to  invest  in research and  development  of  its
      Technology  and  to  make available  those  innovations  to
      Secugraphics, Inc.

      On  August  11,  2004, the Company entered into  a  license
      agreement   with  Varigraphics,  Inc.  The  term   of   the
      agreement  is  for  a  period of 5  years  and  allows  the
      licensee  the  right to use and disseminate  the  Company's
      "Security  Document Issuing System" technology  (SDIS)  and
      to  process the Technology to integrate complex images into
      variably  printed materials.   In consideration of granting
      the  license,  the  Company will receive a  one-time  fixed
      royalty  of  $10,000,000.  In addition,  the  Company  will
      receive  variable  royalties of 5% of all  revenue  arising
      from  the  licensee's application of the  Technology.   The
      royalty fees will be received as follows:

         Fixed Royalty Fees:

         *  A minimum of $5,000,000 due in 2005 with $1,250,000
            due each year thereafter.

         Variable Royalty Fees:

         *  A minimum of $20,000 due in 2005 with a minimum of
            $50,000 due each year thereafter.


                                  8
<PAGE>



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

Overview

The following discussion "Management's Discussion and Analysis or
Plan of Operation" contains forward-looking statements.  The words
"anticipate", "believe", "expect", "plan", "intend", "estimates",
"project", "will", "could", "may", and similar expressions are
intended to identify forward-looking statements.  Such statements
reflect our current views with respect to future events and
financial performance and involve risks and uncertainties.  Should
one or more risks or uncertainties occur, or should underlying
assumptions prove incorrect, actual results may vary materially and
adversely from those anticipated, believed, expected, planned,
intended, estimated, projected or otherwise indicated.  We caution
you not to place undue reliance on these forward-looking
statements, which have been made as of the date of this Quarterly
Report on Form 10-QSB.

The following is qualified by reference to, and should be read in
conjunction with our financial statements ("Financial Statements"),
and the notes thereto, included elsewhere in this Form 10-QSB, as
well as the discussion hereunder "Management's Discussion and
Analysis or Plan of Operation".

Demco Industries Inc., a Florida corporation (hereafter referred to
as Demco Industries or the "Company") was incorporated on March 29,
1996, as Power Market Inc.  Power Market Inc. was originally formed
for the purpose of marketing and manufacturing a patented infinite
ratio bicycle gear.  The project was discontinued and the Company
remained dormant until September 18, 2001, when the Articles of
Incorporation were amended to change the name to Demco Industries,
Inc.

under its predecessor, Power Market Inc., the Company had no
business activity or operating history other than organizational
matters.  Demco Industries, a wholly-owned subsidiary, became
publicly owned on June 19, 1996, with the "spin-off" of 2,000,000
of its common stock to the parent company NatQuote Financial Inc.
Shares were pro-rated one (1) common share of Demco Industries for
each thirty (30) common shares of NatQuote Financial Inc.  The
distribution was organized under its predecessor, Power Market
Inc., which became dormant following termination of the original
intended business.  At the same time, our management obtained
control of the Company by the issuance of 3,000,000 common shares
to Paul Hines, President and CEO, in consideration for business
development services. Power Market Inc. was intended as its own
independent business.

NatQuote Financial Inc., formerly National Quotes Inc. a publicly
traded company in Toronto, Canada, traded OTC Bulletin Board in
1995.  National Quotes Inc. became NatQuote Financial Inc. on April
22, 1996 and is now a Florida corporation.  With reference to
NatQuote Financial Inc., the parent company, the aggregate
5,000,000 shares of common stock issued were held for a period
greater than two years.  No market for our stock had been developed
and no application for trading in our Company's securities was ever
initiated.

Additionally, 12,950,000 shares of non-participating, voting
preference stock were issued to Ship Island Investments to be
converted to common stock at the direction of the Board of


                                 9
<PAGE>



Directors.  The formula for conversion was determined by the Board
of Directors based upon specific performance of the Company's
operations.

Business Activity

Demco Industries filed a registration statement on Form 10-SB on
June 17, 2003.  At the time, the Company was in the development
stage of the environmental management business.  Activities were
limited to matters related to corporate structure, filing of the
Company's securities and organizing to bid on demolition contracts.
This environmental management business, however, was discontinued
shortly thereafter and the Company became dormant.

We did not file in a timely manner our required reports with the
Securities and Exchange Commission (SEC) for the dormant period from
April 30, 2004 to July 31, 2004.  No provision has been recorded
in the accompanying financial statements for the cost of actions, if
any, that may be taken by the SEC against the Company for
non-compliance during this period.

During the dormant period from April 30, 2004 to July 31, 2004,
expenses accrued for transfer agent and professional fees and the
Company incurred an accumulated deficit.  Management and
stockholders maintained the Company during this period.

ITEM 3. CONTROLS AND PROCEDURES

As of the end of the period covered by this report, an evaluation
was performed under the supervision and with the participation of
the Company's principal executive officers and financial officers
of the effectiveness of the design and operation of the Company's
disclosure controls and procedures (as such term is defined in
Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as at the end
of the period covered by this report.  The evaluation revealed to
the Company's principal executive officers and financial officers,
that the design and operation of the Company's disclosure controls
and procedures were effective as of the end of the period covered
by this report.

There have been no significant changes in the Company's internal
controls and in other factors that could significantly affect
internal controls subsequent to the date of the above-described
evaluation period.


                                 10
<PAGE>



                               PART II
                          OTHER INFORMATION


ITEM 1.  LEGAL PROCEEDINGS

None


















ITEM 2.  UNREGISTERED SALES OF EQUITY AND USE OF PROCEEDS

None

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

None

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None

ITEM 5.  OTHER INFORMATION

None

ITEM 6.  EXHIBITS

Exhibit No.     Description of Exhibit
-----------     ----------------------

(31)
                31.1    Certification of the Chief Executive Officer of
                        Demco Industries, Inc. pursuant to Section 302
			Of the Sarbanes Oxley Act of 2002.

		31.2	Certification of the Chief Financial Officer of
                        Demco Industries, Inc. pursuant to Section 302
			Of the Sarbanes Oxley Act of 2002.

(32)
                32.1    Certification of the Chief Executive Officer of
                        Demco Industries, Inc. pursuant to Section 906
			Of the Sarbanes Oxley Act of 2002.

		32.2	Certification of the Chief Financial Officer of
                        Demco Industries, Inc. pursuant to Section 906
			Of the Sarbanes Oxley Act of 2002.


                                  11
<PAGE>




SIGNATURES

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

DEMCO INDUSTRIES, INC.


Registrant

By:/s/Paul Hines
   -----------------------------------
   Paul Hines, Chief Executive Officer

Dated: April 12, 2005

By:/s/Paul Hines
   -----------------------------------
   Paul Hines, Chief Financial Officer

Dated: April 12, 2005

























                                  12
<PAGE>