**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**Washington,
      DC 20549**





**FORM
      10-Q**





x
            **QUARTERLY
                REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
                ACT OF
                1934**





For
      the
      quarterly period ended March 31, 2008





o
            **TRANSITION
                REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
                ACT OF
                1934**





For
      the
      transition period from _______________ to ________________





Commissions
      file number 000-31143





**DCI
      USA, INC.**


(Exact
      name of registrant as specified in its charter)





Delaware
            
            22-3742159(State
                or other jurisdiction of incorporation or organization)
            
            (IRS
                Employer Identification Number)





8
      Bond
      Street


Great
      Neck, New York 11021


(Address
      of principal executive offices)





(212)
      994-9594


(Registrant’s
      telephone number, including area code)





Indicate
      by check mark whether the issuer (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 o




Indicate
      by check mark whether the registrant is a large accelerated filer, an
      accelerated filer, a non-accelerated filer, or a smaller reporting company.
      See
      the definitions of “large accelerated filer,” “accelerated filer” and “smaller
      reporting company” in Rule 12b-2 of the Exchange Act.




Large
                  accelerated filer
              o
              Accelerated
                  filer
              oNon-accelerated
                  filer
              o
              Smaller
                  reporting company
              x(Do
                  not check if a smaller reporting
                  company)


Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2 of the Exchange Act). Yes o No x





The
      number of shares of common stock outstanding as of May 19, 2008 was
      53,464,557.





**TABLE
      OF CONTENTS**





**Page****PART
                  I**
              **FINANCIAL
                  INFORMATION**Item
                  1.
              Financial
                  Statements
              3Item
                  2.
              Management’s
                  Discussion and Analysis of Financial Condition and Results of
                  Operations
              20Item
                  3.
              Quantitative
                  and Qualitative Disclosure About Market Risk
              23Item
                  4.
              Controls
                  and Procedures
              23**PART
                  II**
              **OTHER
                  INFORMATION**Item
                  1.
              Legal
                  Proceedings
              23Item
                  1A.
              Risk
                  Factors
              23Item
                  2.
              Unregistered
                  Sales of Equity Securities and Use of Proceeds
              24Item
                  3.
              Defaults
                  Upon Senior Securities
              24Item
                  4.
              Submission
                  of Matters to a Vote of Security Holders
              24Item
                  5.
              Other
                  Information
              24Item
                  6.
              Exhibits
              24SIGNATURES
              25CERTIFICATIONS




2


**DCI
      USA, INC.**





**MARCH
      31, 2008**




**PART
        1**
 **FINANCIAL
        INFORMATION**
 
 **Item
        1.**  **Financial
        Statements.**




**DCI
      USA, INC. AND SUBSIDIARIES**





**INDEX
      TO CONSOLIDATED FINANCIAL STATEMENTS**




**Page(s)**Consolidated
                Balance Sheets as of March 31, 2008 (unaudited) and December 31,
                2007
            4-5Consolidated
                Statements of Operations for the three months ended March 31, 2008
                and
                2007 (unaudited)
            6Consolidated
                Statements of Changes in Stockholders’ Equity (Deficit)
                (unaudited)
            7Consolidated
                Statements of Cash Flows for the three months ended March 31, 2008
                and
                2007 (unaudited)
            8Notes
                to Consolidated Financial Statements
            9-20







3





**DCI
      USA, INC. AND SUBSIDIARIES**


**CONSOLIDATED
      BALANCE SHEETS**








**March
                31,**
            
            **December
                31,****2008**
            
            **2007**(Unaudited)ASSETSCurrent
                Assets:Cash
            
            $
            11,623
            
            $
            21,565Interest
                receivable-related party
            
            
            21,729
            
            
            5,474Interest
                receivable
            
            
            6,970
            
            
            14,812Loan
                receivable- related party
            
            
            306,670
            
            
            217,270Loan
                receivable - Senergy
            
            
            100,000
            
            
            100,000Deferred
                tax asset, current portion
            
            
            158,516
            
            
            173,693Total
                current assets
            
            
            605,508
            
            
            532,814Fixed
                assets, net
            
            
            2,410
            
            
            2,559Investments
                in equity interest
            
            
            3,934,652
            
            
            3,872,513Goodwill
            
            
            195,706
            
            
            195,706Deferred
                tax asset, less current portion
            
            
            48,444
            
            
            18,328Total
                assets
            
            $
            4,786,720
            
            $
            4,621,920





See
        accompanying notes to consolidated financial statements.





4




**DCI
      USA, INC. AND SUBSIDIARIES**


**CONSOLIDATED
      BALANCE SHEETS - (CONTINUED)**





**March
                31,**
            
            **December
                31,****2008**
            
            **2007**(Unaudited)LIABILITIES
                AND STOCKHOLDERS' EQUITY (DEFICIT)Current
                Liabilities:Accounts
                payable and accrued expenses
            
            $
            132,938
            
            $
            108,239Accrued
                interest
            
            
            59,664
            
            
            26,554Accrued
                interest - related parties
            
            
            67,132
            
            
            37,367Loan
                payable - WGS
            
            
            399,970
            
            
            399,970Advance
                on account of dividend from related party
            
            
            300,000
            
            
            225,000Convertible
                notes
            
            
            465,000
            
            
            465,000Convertible
                debentures
            
            
            200,000
            
            
            200,000Convertible
                debentures - related parties
            
            
            400,000
            
            
            400,000Current
                maturities of long term bank loan
            
            
            183,000
            
            
            165,000Total
                current liabilities
            
            
            2,207,704
            
            
            2,027,130Commitments
                and contingenciesLong
                term bank loan
            
            
            1,436,000
            
            
            1,371,000Loan
                     payable - related party
            
            
            1,469,731
            
            
            1,335,761Total
                liabilities
            
            
            5,113,435
            
            
            4,733,891Stockholders'
                equityPreferred
                Stock, par value $.001, 1,000,000 sharesSeries
                A Preferred authorized, none issuedand
                outstanding
            
            
            -
            
            
            -Common
                stock, par value $.001,100,000,000 sharesauthorized
                , 54,917,681 shares issued, and 53,464,557 shares outstanding
                asof
                March 31, 2008 and December 31, 2007
            
            
            54,917
            
            
            54,917Additional
                paid-in-capital
            
            
            2,898,802
            
            
            2,898,802Accumulated
                deficit
            
            
            (3,198,786
            )
            
            (2,984,042
            )(245,067
            )
            
            (30,323
            )Treasury
                stock, at cost - 1,453,124 common stock shares
            
            
            (81,648
            )
            
            (81,648
            )Total
                stockholders' equity (deficit)
            
            
            (326,715
            )
            
            (111,971
            )Total
                liabilities and stockholders' equity (deficit)
            
            $
            4,786,720
            
            $
            4,621,920





See
        accompanying notes to consolidated financial statements.





5





**DCI
      USA, INC. AND SUBSIDIARIES**


**CONSOLIDATED
      STATEMENTS OF OPERATIONS**





**Three
                Months Ended March 31,****2008**
            
            **2007**(Unaudited)Operating
                Income:Revenue
            
            $
            -
            
            $
            -Interest
                income
            
            
            8,413
            
            
            6,252Total
                income
            
            
            8,413
            
            
            6,252Expenses:General
                and administrative expense
            
            
            30,760
            
            
            80,405Interest
                expense
            
            
            227,875
            
            
            63,816Professional
                fees
            
            
            41,600
            
            
            54,624Consulting
                fees
            
            
            -
            
            
            89,256Total
                expenses
            
            
            300,235
            
            
            288,101Loss
                from operations
            
            
            (291,822
            )
            
            (281,849
            )Net
                income (loss) on investments
            
            
            62,139
            
            
            (30,811
            )Net
                loss before income taxes
            
            
            (229,683
            )
            
            (312,660
            )Provision
                for income taxes
            
            
            14,939
            
            
            -Net
                loss
            
            $
            (214,744
            )
            $
            (312,660
            )Basic
                and DilutedLoss
                per share
            
            
            ($0.00
            )
            
            ($0.01
            )Weighted
                average number ofCommon
                Stock outstanding
            
            
            53,464,557
            
            
            53,292,681








See
        accompanying notes to consolidated financial statements.





6








**DCI
      USA, INC. AND SUBSIDIARIES**


**CONSOLIDATED
      STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)**





**Common
                  Stock**
              
              **Treasury
                  Stock**
              
              **Additional
                  Paid-in**
              
              **Accumulated****Shares**
              
              **Amount**
              
              **Shares**
              
              **Amount**
              
              **Capital**
              
              **Deficit**
              
              **Total**Balance,
                  December 31, 2007
              
              
              54,917,681
              
              $
              54,917
              
              
              (1,453,124
              )
              $
              (81,648
              )
              $
              2,898,802
              
              $
              (2,984,042
              )
              $
              (111,971
              )Net
                  loss
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              (214,744
              )
              $
              (214,744
              )Balance,
                  March 31, 2008
              
              
              54,917,681
              
              $
              54,917
              
              
              (1,453,124
              )
              $
              (81,648
              )
              $
              2,898,802
              
              $
              (3,198,786
              )
              $
              (326,715
              )




See
      accompanying notes to consolidated financial statements.





7


**DCI
      USA, INC. AND SUBSIDIARIES**


**CONSOLIDATED
      STATEMENTS OF CASH FLOWS**





**Three
                Months Ended March 31,****2008**
            
            **2007**(Unaudited)**Cash
                flows from operating Activities**Net
                loss
            
            $
            (214,744
            )
            $
            (312,660
            )Adjustments
                required to reflect cash flows fromOperating
                ActivitiesCost
                of stock option
            
            
            -
            
            
            89,256Net
                loss (income) on equity investments
            
            
            (62,139
            )
            
            30,811Depreciation
            
            
            149
            
            
            223Amortization
                of note receivable discount
            
            
            -
            
            
            (7,515
            )Long
                term bank loan - currency fluctuations
            
            
            128,143
            
            
            -Changes
                in operating liabilities and assetsPrepaid
                expanse
            
            
            -
            
            
            (2,732
            )Interest
                receivable
            
            
            (8,413
            )
            
            (4,047
            )Deferred
                tax asset
            
            
            (14,939
            )
            
            -Accounts
                payable and accrued expenses
            
            
            87,574
            
            
            (9,702
            )Net
                cash used in operating activities
            
            
            (84,369
            )
            
            (216,366
            )**Cash
                flows from investing activities**Proceeds
                from loan receivable
            
            
            -
            
            
            150,000Loans
                to third parties
            
            
            -
            
            
            (211,000
            )Loans
                to related parties
            
            
            (89,400
            )
            
            -Net
                cash used in investing activities
            
            
            (89,400
            )
            
            (61,000
            )**Cash
                flows from financing activities**Proceeds
                from loans
            
            
            133,970
            
            
            270,000Payment
                of loan payable
            
            
            -
            
            
            (65,126
            )Advance
                on account of dividend
            
            
            75,000
            
            
            -Payment
                of long term bank loan
            
            
            (45,143
            )
            
            -Net
                cash provided by financing activities
            
            
            163,827
            
            
            204,874Decrease
                in cash
            
            
            (9,942
            )
            
            (72,492
            )**Cash
                at the beginning of the period**
            
            
            21,565
            
            
            74,755**Cash
                at the end of the period**
            
            $
            11,623
            
            $
            2,263




**Three
                Months Ended March 31,****2008**
            
            
            **2007****Supplemental
                disclosures:**Interest
                paid
            
            $
            45,143
            
            $
            27,764Cash
                paid for income taxes
            
            $
            325
            
            $
            91





See
      accompanying notes to consolidated financial statements.




8


**DCI
        USA, INC. AND SUBSIDIARIES**
 **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS**
 
 **NOTE
        1 - DESCRIPTION OF THE COMPANY**
 
 The
        accompanying unaudited interim consolidated financial statements of DCI USA,
        INC. (“the Company”) have been prepared in accordance with accounting principles
        generally accepted in the United States of America and the rules of the
        Securities and Exchange Commission (“SEC”), and should be read in conjunction
        with the audited consolidated financial statements and notes thereto contained
        in the Company’s Annual Report filed with the SEC on Form 10-K. In the opinion
        of management, all adjustments, consisting of normal recurring adjustments,
        necessary for a fair presentation of financial position and the results of
        operations for the interim periods presented have been reflected herein.
        The
        results of operations for interim periods are not necessarily indicative
        of the
        results to be expected for the full year. Notes to the consolidated financial
        statements that would substantially duplicate the disclosures contained in
        the
        audited financial statements for 2007 as reported in the 10-K have been
        omitted.
  The
        unaudited consolidated financial statements include the accounts of the Company
        and the Company’s wholly-owned subsidiaries. All inter-company accounts and
        transactions have been eliminated. The Company operates in one business segment,
        which is the development of clean energy technologies and the renovation
        and
        conversion of buildings to commercial condominiums.
 
 As
        of
        March 31, 2008, the Company had $11,623 in cash. In April 2008, the Company
        received gross proceeds from the sale of Gunther Wind Energy, Ltd. (“Gunther”)
        in the amount of $1,250,350, and partial return on the loan to Gunther in
        the
        amount of $684,650. Accordingly, the Company currently has sufficient funds
        to
        fund its operation over the next twelve months.
 
 **NOTE
        2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**
 
 *Principles
        of Consolidation and Basis of Presentation.* **** The
        consolidated financial statements include the accounts of the Company and
        it’s
        wholly- owned subsidiaries, Norman LLC and Gunther.  . All material
        intercompany transactions have been eliminated in consolidation. Investments
        in
        entities in which the Company can exercise significant influence, but does
        not
        own a majority equity interest or otherwise control, are accounted for using
        the
        equity method and are included as investments in equity interests on the
        consolidated balance sheets. The Company has included the results of operations
        of acquired companies from the date of acquisition. Certain prior year amounts
        have been reclassified to conform to the current year presentation.
 
 *Use
        of Estimates.* **** In
        preparing consolidated financial statements in accordance with accounting
        principles generally accepted in the United States of America, management
        makes
        certain estimates and assumptions, where applicable, that affect the reported
        amounts of assets and liabilities and disclosures of contingent assets and
        liabilities at the date of the financial statements, as well as the reported
        amounts of revenues and expenses during the reporting period. While actual
        results could differ from those estimates, management does not expect such
        variances, if any, to have a material effect on the consolidated financial
        statements.
 
 *Revenue
        Recognition.* **** Revenues
        have been derived primarily from the lending of funds and consist primarily
        of
        investment income. Revenues are reported as the investment income is
        earned.
 
 *Concentration
        of Credit Risk.* **** Financial
        instruments that potentially subject the Company to significant concentration
        of
        credit risk consist primarily of cash and loans receivables. As of March
        31,
        2008, substantially all of the Company’s cash was managed by two financial
        institutions. Loan receivables are typically unsecured and are derived from
        short-term related parties loans. On an ongoing basis, the Company evaluates
        its
        estimates, including those related to the fair values of our loans receivables.
        We base our estimates on historical experience and on various other assumptions
        that are believed to be reasonable, the results of which form the basis for
        making judgments about the carrying values of assets and
        liabilities.
 
 9
 
 **DCI
        USA, INC. AND SUBSIDIARIES**
 **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS**
 
 **NOTE
        2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -
        (CONTINUED)**
 
 *Deferred
        Income Taxes.* ****** Deferred
        tax assets and liabilities are determined based on temporary differences
        between
        financial reporting and the tax bases of assets and liabilities. Deferred
        tax
        assets are also recognized for tax net operating loss carryforwards. These
        deferred tax assets and liabilities are measured using the enacted tax rates
        and
        laws that are expected to be in effect when such amounts are expected to
        reverse
        or be utilized. The realization of total deferred tax assets is contingent
        upon
        the generation of future taxable income. Valuation allowances are provided
        to
        reduce such deferred tax assets to amounts more likely than not to be ultimately
        realized. See Note 9 “Income Taxes” for additional
        information.
  
 *Cash
        and Cash Equivalents.* **** For
        purposes of reporting cash flows, the Company considers all highly liquid
        investments purchased with an original maturity of three months or less to
        be
        cash equivalents.
 
 *Notes
        Receivable.* **** The
        allowance for loan losses on notes receivable is determined primarily on
        the
        basis of management's best estimate of probable losses, including specific
        allowance for troubled accounts. All accounts or portions thereof deemed
        to be
        uncollectible or to require excessive collection costs are written off to
        the
        allowance for loan losses. There were no allowances for loan losses at March
        31,
        2008 and December 31, 2007.
  *Fixed
        Assets.* **** The
        value
        of fixed assets is at historical cost as required by generally accepted
        accounting principles. Depreciation is calculated on a straight-line over
        the
        expected useful life of the asset as follows:
 
 Leasehold improvements
                Equipment
                Furniture and fixtures
              Remaining
                lease term or useful life
                5
                  to 7 years
                5
                  to 7 years
 
 *Goodwill.* **** Goodwill
        is carried at cost. Goodwill is not amortized but is subject to an annual
        test
        for impairment and between annual tests in certain circumstances.
 
 *Investments
        in Equity Interests.* **** Investments
        in entities in which the Company can exercise significant influence but does
        not
        own a majority equity interest or otherwise control, are accounted for using
        the
        equity method and included as investments in equity interests on the
        consolidated balance sheets. The Company monitors its investments for
        other-than-temporary impairment by considering factors including the current
        economic and market conditions and the operating performance of the companies
        and records reductions in carrying values when necessary. The fair value
        of
        privately held investments is estimated using the best available information
        as
        of the valuation date, including current earnings trends, undiscounted cash
        flows, quoted stock prices of comparable public companies, and other company
        specific information, including recent financing rounds.
 
 *Net
        Loss Per Share.* **** Basic
        net
        loss per share is computed on the basis of the weighted average number of
        shares
        outstanding each period and excludes any dilutive effects of options, warrants,
        and convertible securities. Dilutive earnings per share is computed giving
        effects to dilutive stock equivalents. There were 27,300,000 and 27,600,000
        potentially dilutive common shares outstanding on March 31, 2008 and 2007,
        respectively, which were excluded from the calculation of diluted earnings
        per
        share, consisting primarily of shares issuable upon the conversion of debt
        and
        equity and the exercise of stock options.
 
 *Fair
        Value.* The
        Company's financial instruments consist primarily of cash, notes receivable,
        accounts payable, accrued expenses and debt. The carrying amounts of the
        Company's financial instruments, excluding debt, approximate fair value due
        to
        the short maturity of these instruments. The Company's debt approximates
        fair
        value based on borrowing rates currently available to the Company.
 
 10
 **DCI
        USA, INC. AND SUBSIDIARIES**
 **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS**
 
 **NOTE
        2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -
        (CONTINUED)**
 
 *Recently
        Issued Accounting Pronouncements.*
 
 In
        March,
        2008 the Financial Accounting Standards Board (“FASB”) issued SFAS No. 161,
        Disclosures about Derivative Instruments and Hedging Activities. SFAS No.
        161
        requires enhanced disclosures about an entity’s derivative and hedging
        activities and is effective for financial statements issued for fiscal years
        and
        interim periods beginning after November 15, 2008. Early application is
        encouraged. The Company is currently evaluating the impact of SFAS No. 161
        on
        its consolidated financial statements.
 
 **** In
        December 2007, FASB issued SFAS No. 141 (R) (revised 2007), “Business
        Combinations,” which establishes principles and requirements for how the
        acquirer recognizes, measures, and discloses the identifiable assets acquired,
        the liabilities assumed, and any noncontrolling interest in the acquiree;
        and
        the goodwill acquired or a gain from a bargain purchase. SFAS No. 141(R)
        (revised 2007) is effective for business combinations for which the acquisition
        date is on or after the beginning of the first annual reporting period beginning
        on or after December 15, 2008.
  In
        December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in
        Consolidated Financial Statements - An amendment of ARB No. 51,” which
        establishes accounting and reporting standards for the noncontrolling interest
        in a subsidiary and for the deconsolidation of a subsidiary. SFAS No. 160
        is
        effective for fiscal years, and the interim periods within those fiscal years,
        beginning on or after December 15, 2008.
  In
        February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for
        Financial Assets and Financial Liabilities - Including an amendment to FASB
        Statement No. 115,” which permits entities to choose to measure many financial
        instruments and certain other items at fair value. SFAS No. 159 is effective
        as
        of the beginning of an entity’s first fiscal year that begins after November 15,
        2007.
  Management
        believes the adoption of the preceding pronouncements will have no significant
        impact on the Company’s financial condition or results of
        operations.
 
 **NOTE
        3 - AQUISITIONS**
 
 *GUNTHER
        WIND ENERGY, LTD.* **
 On
        August
        1, 2006, the Company entered into a loan, pledge and option agreement with
        Gunther Wind Energy, Ltd. (“Gunther”) in Israel to invest in the upgrade of an
        existing wind farm at Tel Assaniya and in the development of a new site,
        Nimrod.
        On June 20, 2007, the Company exercised its option to purchase all the
        outstanding shares of Gunther pursuant to and in accordance with the loan,
        pledge and option agreement. The aggregate exercise price of the option was
        $23,883 of which was paid through the cancellation of outstanding loans
        previously made by the Company to Gunther.
 
 Gunther
        owns 25% of the outstanding share capital of ARI, Ltd., an Israeli based
        corporation formerly known as Green Wind Energy Ltd. (“ARI”), as a result of its
        acquisition, on March 5, 2006, of 334 shares of ARI’s preferred stock in
        consideration of $3,000,000. As of April 8, 2008, Gunther had paid an aggregate
        of $2,655,000 of the purchase price to ARI using funds previously loaned
        to
        Gunther by the Company and the proceeds from a $1,500,000 bank loan obtained
        by
        Gunther. The remaining portion of the $3,000,000 purchase price was paid
        by
        Gunther to ARI on or about April 28, 2008.
 
 11
 
 **DCI
        USA, INC. AND SUBSIDIARIES**
 **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS**
 
 **NOTE
        3 - ACQUISITIONS - (CONTINUED)**
 
 On
        December 2006 Gunther signed agreement with Nimrod Wind Energy, Ltd (“Nimrod”)
        in which Gunther received an irrevocable option to purchase 25% of Nimrod’s
        issued and fully paid for share capital. The aggregate purchase price to
        be paid
        by Gunther to the Nimrod upon exercise of such option shall be
        an amount equal to $2,750,000. As of March 31, 2008 Gunther did not
        exercise its option.
 
 On
        September 13, 2006, ARI signed an agreement to purchase a wind farm known
        as Tel
        Assaniya Windfarm, which is located in Northern Israel. The completion of
        the
        purchase agreement is expected by December 31, 2007 upon payment of the
        outstanding balance. The Tel Assaniya Windfarm is planned to be upgraded
        from
        the current capacity of 6MW to seven wind turbines with a capacity of 2.3MW
        each. The Company expect this upgrade to be completed between April and June
        2008. Until such upgrade is completed, Gunther will receive a minimum of
        a 10%
        preferred return on its investment on quarterly installments in anticipation
        of
        the payment of future dividend. After the upgrade is completed, Gunther will
        receive a minimum of a 12.5% preferred return. As of November 14, 2007, Gunther
        has appointed one director and has not yet exercised its right to appoint
        a
        second director. As of March 31, 2008 Gunther was paid $300,000 advance on
        account of dividend.
 
 The
        investment in Gunther is recorded in the financial statements included herein
        at
        the aggregate purchase price and its results of operations from the date
        of
        acquisition are reflected in the statement of operations for the periods
        ended
        March 31, 2008.
 
 *231
        NORMAN AVE, LLC*
 The
        Company lent $1,370,000 to Norman LLC in part pursuant to an agreement which
        provided the Company the option of supplanting the 100% membership interest
        holder in Norman LLC. The Company exercised this option as of November 2006
        and
        now owns 100% interest in Norman LLC. As a result of the Company acquiring
        Norman LLC, the Company controls 30% of the membership interests of 231 NAPD.
        See not 4 for the investment in equity interest at 231 NAPD.
 
 **NOTE
        4 - INVESTMENTS IN EQUITY INTEREST**
 
 **March
                  31,**
              
              **December
                  31,****2008**
              
              **2007**Investment
                  in 231 NAPD
              
              $
              1,227,652
              
              $
              1,198,513Investment
                  in ARI
              
              
              2,707,000
              
              
              2,674,000$
              3,934,652
              
              $
              3,872,513
 
 The
        Company’s share of income (loss) in its equity interest, net of tax:
 
 **Three
                  Months Ended March 31,****2008**
              
              **2007**Net
                  income (loss) on investment - 231 NAPD
              
              $
              29,139
              
              $
              (30,811
              )Net
                  income on investment - ARI
              
              
              33,000
              
              
              —$
              62,139
              
              $
              (30,811
              )
 
 12
  **DCI
        USA, INC. AND SUBSIDIARIES**
 **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS**
 
 **NOTE
        4 - INVESTMENTS IN EQUITY INTEREST - (CONTINUED)**
 
 *231
        NAPD*
 231
        NAPD
        is a New York limited liability company engaged in owning, developing and
        operating income producing real property. 231 NAPD owns fee simple title
        to the
        real property located at 231 Norman Avenue, Brooklyn, New York. In March
        2005,
        231 NAPD consummated a $10,000,000 refinancing and construction loan with
        Washington Mutual with respect to the property at 231 Norman Avenue and received
        capital contributions from investors of $1,750,000.
 
 As
        a
        result of the Company acquiring Norman LLC, the Company controls 30% of the
        membership interests of 231 NAPD. In November 2006, the Company purchased
        an
        option to acquire an additional 20% interest in 231 NAPD for $100,000. The
        option price was required to be paid by December 31, 2006. The option, which
        if
        exercised prior to March 30, 2007, gives the Company the right to purchase
        the
        20% interest in exchange for 18,000,000 shares of the Company’s common stock and
        a promissory note in the amount of $1,400,000. The promissory note would
        bear
        interest at the rate of 8% and would mature in November 2011. The payment
        of the
        option price has been extended to June 30, 2007 and the exercise of the option
        has been extended to July 31, 2007. The Company did not exercise the option
        prior to its expiration on July 31, 2007.
 
 The
        Company and Jonathan Ilan Ofir, a former officer, director and majority
        shareholder of the Company, guaranteed to North Fork Bank the obligations
        of 231
        NAPD. On September 5, 2007, 231 NAPD entered into a Consolidated Mortgage
        Extension and Security Agreement (the “Agreement”) with North Fork Bank pursuant
        to which 231 NAPD borrowed the principal sum of $2,426,497 from said bank
        and
        consolidated a previous loan of $11,411,003, for an aggregate consolidated
        principal loan amount of $13,837,500 (the “North Fork Loan”).
 
 On
        September 5, 2007, and simultaneous with the execution of the Agreement,
        231
        NAPD issued a Restated Promissory Note to North Fork Bank in the aggregate
        principal amount of $13,837,500 (the “Note”). Pursuant to the Note, principal
        plus all accrued and unpaid interest thereon shall be paid on March 5, 2009.
        Interest accrues on the principal amount at a daily rate of interest equal
        to
        7.25% to be computed on 360-day basis, and is to be paid on a monthly basis.
        Under specified conditions, 231 NAPD may, at its option, extend the loan
        for an
        additional six months in which case the rate of interest shall be 2% above
        the
        one year Treasury Index as of the three days prior to the Maturity Date.
        Upon
        providing 10 days prior written notice, 231 NAPD has the right to prepay
        the
        North Form Bank Loan, in multiples of $25,000 or more, at any time, without
        penalty. The obligations to North Fork Bank are secured by a lien on the
        property owned by 231 NAPD.
 
 In
        connection with the consolidation of the loan with North Fork, the Company,
        Mr.
        Ofir, Amir Yerushalmi, Vision Real Estates Group, LLC and YIZ Oxford Capital,
        LLC, collectively, executed a Guaranty in favor of North Fork Bank (the
“Guaranty”). In accordance with the Guaranty, the Guarantors guaranteed full
        performance of 231 NAPD’s obligations to North Fork Bank. In the event 231 NAPD
        defaults under the terms and provisions of the Agreement, upon written demand,
        the Guarantors, jointly and severally, shall pay to North Fork Bank all amounts
        remaining unpaid under the Agreement. As added security for the North Fork
        Loan,
        and in accordance with the Guaranty, all property of the Guarantors held
        by
        North Fork Bank shall be subject to a lien as security for the liabilities
        of
        the Guarantors. In the event the Guarantors fail to make payment to North
        Fork
        Bank when due, any such payment shall bear interest at the rate of 24% per
        annum.
 
 On
        November 28, 2007, the Company and Norman LLC, entered into a share acquisition
        option agreement with World Group Capital (58) Ltd., formally known as World
        Group Shipping Ltd., a public company in Israel ("WGS"). See Note 5 (a).
   13
 
 **DCI
        USA, INC. AND SUBSIDIARIES**
 **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS**
 
 **NOTE
        4 - INVESTMENTS IN EQUITY INTEREST - (CONTINUED)**
 
 The
        Company involved in the renovation and conversion of certain buildings to
        commercial condominiums. The Company’s development at 231 Norman Avenue, in
        Brooklyn, New York is the underlying asset comprising the collateral on the
        loan
        discussed below. The construction ended at the end of 2007, and the company
        received Certificate of Occupancy on January 10, 2008. Approvals needed for
        the
        commercial condominium plan offering have been obtained and the 44 commercial
        condos are currently on the market for sale. As of the date of filing, 24
        contracts to purchase condominium units have been signed and deposits received,
        9 units of which were closed and were occupied. The Company is actively involved
        in managing the construction, financing, and sales of the 231 Norman Avenue
        Project.
 
 *ARI*
 Gunther
        owns 25% of the outstanding shares of capital stock of ARI. See note 3 for
        additional information.
 
 **NOTE
        5 - NOTES PAYABLE**
 **Annual**
              
              **March
                  31,**
              
              **December
                  31,****interest
                  rate**
              
              **2008**
              
              **2007**Short-term
              
              **%**Loan
                  payable - WGS (a)
              
              18%
              
              
              399,970
              
              
              399,970Long-termLoan
                  payable - related party (b)
              
              6%
              
              
              1,469,731
              
              
              1,335,761$
              1,869,701
              
              $
              1,735,731
 
 (a) **** *WGS* *.* On
        December 5, 2007, the Company and 231 Norman entered into a share acquisition
        option agreement with WGS, a public company in Israel in which Mr. Ofir is
        a
        director. Pursuant to the agreement, WGS agreed to loan $1,000,000 to the
        Company and 231 Norman. The aggregate principal amount, plus interest accruing
        at a rate of 1.5% per month, shall be due and payable six months from the
        closing of the agreement. As of December 31, 2007 and February 28, 2008,
        WGS had
        transferred $399,970 of the $1,000,000 loan to the Company. While the Company
        expected the balance of the loan to be transferred by December 31, 2007,
        no such
        transfer occurred, and no additional funds are expected.
 
 Pursuant
        to this agreement, the Company granted WGS with the following:
 i.
              An
                  irrevocable option to purchase 100% of the Company’s issued and fully paid
                  for share capital in Gunther. The aggregate purchase price to be
                  paid by
                  WGS to the Company upon exercise of such option shall be
                  an amount equal to $2,450,000. The option is exercisable by WGS, in
                  its sole and absolute discretion, for a period ending February
                  28, 2008.
 ii.
              On
                  December 12, 2007, Norman LLC gave WGS a promissory note evidencing
                  the
                  loan, as well as an option to purchase units in the Company’s 231 Norman
                  Avenue project at a price equal to 20% less than the then current
                  market
                  price for such units. The promissory note may be repaid, in whole
                  or in
                  part, at any time or from time to time upon ten days prior written
                  notice
                  to WSG. This option expired on December 5, 2007, as a result of
                  WGS’s
                  failure to advance the full principal amount of the
                  loan.
 iii.
              The
                  Company gave WGS an option, at WGS’s discretion, to either purchase the
                  30% membership interests the Company owns, through Norman LLC,
                  in 231 NAPD
                  for the sum of $2,000,000, or to purchase the 100% ownership interest
                  the
                  Company has in Norman LLC, for the sum of $2,000,000. Each of these
                  options expires on the later of either six months from November
                  28, 2007,
                  or the date on which the loan and any accrued interest is repaid.
                  In
                  connection with the sale of Gunther on April 23, 2008, WGS forfeited
                  this
                  option without payment from the
                  Company.
 
 14
 
 **DCI
        USA, INC. AND SUBSIDIARIES**
 **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS**
 
 **NOTE
        5 - NOTES PAYABLE - (CONTINUED)**
 
 As
        of
        December 31, 2007 WGS only transferred $399,970 of the $1,000,000, as such
        WGS
        is not eligible for any one of the above options.
 
 (b) *RUSSULL
        BROTHERS.* **** In
        March
        2005, the Company issued a promissory note totaling $100,000 to NY2K, Inc.
        The
        note was assigned by NY2K, Inc. to Russull Brothers. Such note was cancelled
        as
        of June 8, 2005 in consideration for the Company's issuance of 2,000,000
        shares
        of its Common Stock to Russull Brothers, which issuance was made pursuant
        to the
        exemption from registration provided by Regulation E under the Securities
        Act of
        1933, as amended. Subsequent to the receipt by the Company of a letter from
        the
        Staff of the Securities and Exchange Commission ("SEC") in which the Staff
        raised questions with respect to the Company's compliance with the provisions
        of
        the Investment Company Act of 1940 applicable to business development companies,
        the Company and Russull Brothers rescinded the cancellation of the Company's
        $100,000 Note and issuance of 2,000,000 shares of Common Stock. In July 2006,
        the Company and Russull Brothers entered into an agreement whereby the note
        owed
        to Russull Brothers was cancelled in consideration for the Company’s issuance of
        2,000,000 shares of its restricted common stock to Russull Brothers.
 
 On
        November 14, 2007, Mr. Ofir assigned to Russull Brothers an aggregate principal
        amount of $1,078,317 plus accrued interest of $19,868 relating to a series
        of
        loans Mr. Ofir made to the Company. In addition, Russull Brothers assumed
        the
        Company's obligation to Hypothecators in the amount of $249,203. On April
        20,
        2008 the Company and Russull Brothers executed a loan agreement. Pursuant
        to the
        loan agreement the Company’s debt to Russull Brothers, is payable upon demand
        and will accrue interest at an annual rate of 6%. Interest may, at the Company’s
        option, be paid, no later than the tenth business day of January, or added
        to
        the principal outstanding amount of the Company’s debt to Russull
        Brothers.
 
 As
        of
        March 31, 2008 and December 31, 2007, the Company owes $1,469,731 and
        $1,335,761, respectively, in principal; $21,784 and $418, respectively, in
        accrued interest relating to the loans.
 
 **NOTE
        6 - CONVERTIBLE NOTES AND CONVERTIBLE DEBENTURES**
 
 **Annual**
              
              **March
                  31,**
              
              **December
                  31,****interest
                  rate**
              
              **2008**
              
              **2007****%**Convertible
                  notes (a)
              
              10%
              
              $
              465,000
              
              $
              465,000Convertible
                  debentures (b)
              
              8%
              
              
              200,000
              
              
              200,000Convertible
                  debentures - related parties (b)
              
              8%
              
              
              400,000
              
              
              400,000$
              1,065,000
              
              $
              1,065,000
 
 *(a)
        CONVERTIBLE NOTES.* In
        October 2006, the Company initiated a convertible note offering whereby the
        Company would issue up to $1,300,000 of convertible notes. The notes incur
        interest at the rate of 10% per annum, payable quarterly, and are due November
        25, 2007. The notes can be converted at anytime at the option of the note
        holder
        at a conversion price of $.05 per share, plus an adjustment based upon the
        profitability of 231NAPD. The Company can force conversion of the notes anytime
        the shares are registered and the average computed market price is greater
        than
        250% of the conversion price. The Company measured for a beneficial conversion
        feature on the date of issuance and on December 31, 2006 and determined there
        to
        be no beneficial conversion feature on those dates. Since the conversion
        price
        can vary over time based on the profitability of Norman Property LLC, the
        Company is required to determine whether a beneficial conversion feature
        exists
        for each reporting period the notes are outstanding. The Company did not
        make
        the quarterly payments of December 31, 2006 and of March 31, 2007 of interest
 
 15
 **DCI
        USA, INC. AND SUBSIDIARIES**
 **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS**
 
 **NOTE
        6 - CONVERTIBLE NOTES AND CONVERTIBLE DEBENTURES -
        (CONTINUED)**
 
 ‘timely,
        causing a default on the notes. However, such interest payments were made
        during
        January and May, 2007, respectively.
 
 None
        of
        the note holders has notified the Company of their intention to exert any
        of
        their rights regarding this default. Interest payments for June, September
        and
        December 2007 were made in a timely manner. Accordingly, the Company is current
        on its payments.
 
 On
        November 25, 2007, an aggregate of $465,000 in principal and $725 in accrued
        interest became due and payable on the convertible notes. As of the date
        of this
        report, none of the noteholders has notified the Company of their intention
        to
        enforce any of their rights regarding this default. Notwithstanding, the
        failure
        by the Company to make such payments constitutes an event of default pursuant
        to
        the terms of the 10% Convertible Notes. As an event of default has occurred,
        the
        interest rate increases to 12% per annum on the outstanding principal and
        any
        overdue interest payment on each of the 10% Convertible Notes. In addition,
        any
        noteholder representing 25% or more of the aggregate principal amount of
        the
        note, may at their option and upon written notice, declare the principal
        and any
        accrued interest thereon be due and payable immediately.
 
 On
        April
        29, 2008 the Company made payments of the principal to three of the noteholders
        of $135,000 plus interest of $4,438. The Company is negotiating with the
        remainder noteholders to extend the terms of the notes. The company is current
        with the interest payments to regular to all the noteholders. As of the date
        of
        this Report, none of the debentures holders and none of the noteholders has
        notified the Company of their intention to enforce any of their rights in
        connection with this default.
 
 The
        Company is currently negotiating with the noteholders to extend the maturity
        date of the 10% Convertible Notes, and it is expected to be paid in full
        shortly.
 
 
 (b) *CONVERTIBLE
        DEBENTURES* .
        On
        December 6, 2004, the Company entered into a Securities Purchase Agreement
        whereby the Company issued a $250,000 principal amount convertible debenture
        to
        Cornell Capital Partners, L.P. and the Company agreed to issue a second $250,000
        principal amount convertible debenture to Cornell Capital Partners, L.P.
        within
        five business days of filing a registration statement with the Securities
        and
        Exchange Commission. The outstanding $250,000 principal amount convertible
        debenture bears interest at 8%, matures two years from the date of issuance,
        and
        is convertible into our common stock, at the holder's option, at the lower
        of:
        (a) $.074 or (b) 77% of the lowest daily volume weighted average price for
        the
        five days immediately prior to conversion. The Company has the right to redeem
        a
        portion or the entire outstanding debenture at a price equal to $0.072. The
        Company granted Cornell Capital Partners, L.P. a security interest in all
        our
        assets. In addition, Apros and Chay, Ltd. pledged to Cornell Capital Partners
        all of its shares (a total of 48,500,000 shares) in Technoprises Ltd., an
        Israeli company. The Company has recorded a cost for the beneficial conversion
        feature granted to Cornell totaling $74,675. The beneficial conversion feature
        is reflected as a discount on the debentures and is being amortized as
        additional interest expense over the term of the debenture.
 
 As
        of
        April 20, 2006, Cornell had elected to convert $13,500 principal amount of
        the
        $250,000 Debenture which the Company issued to Cornell in December 2004.
        As a
        result, on or about June 2, 2006, the Company issued to Cornell 350,649
        restricted shares of Common Stock. The Company believes such issuance was
        exempt
        from registration under Section 4(2) of the Securities Act of 1933, as
        amended.
 
 On
        March
        1, 2005, the Company issued a second 8% Secured Convertible Debenture in
        the
        original principal amount of $250,000 to Cornell. The debenture has a term
        of
        two years, accrues interest at 8% and is convertible into common stock at
        a
        price per share equal to the lesser of (a) $0.36 per share, or (b)
        77%
   16
 **DCI
        USA, INC. AND SUBSIDIARIES**
 **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS**
 
 **NOTE
        6 - CONVERTIBLE NOTES AND CONVERTIBLE DEBENTURES -
        (CONTINUED)**
 
 of
        the
        lowest daily volume weighted average price for the five days immediately
        prior
        to conversion. The Company has the right to redeem a portion or the entire
        outstanding debenture at a price equal to $0.35 per share. The Company has
        recorded a cost for the beneficial conversion feature granted to Cornell
        totaling $74,675. The beneficial conversion feature is reflected as a discount
        on the debentures and is being amortized as additional interest expense over
        the
        term of the debenture.
 
 On
        November 1, 2006, four parties acquired the debentures in the principal amount
        of $250,000 and $236,500, with interest accrued to that date, (the “Debentures”)
        previously held by Cornell Capital Partners LP (“Cornell”). Concurrently with
        such acquisitions the Company and such individuals entered into a Debenture
        Modification Agreement wherein the parties modified certain terms of the
        Debentures. Specifically, the parties agreed that the Debentures will no
        longer
        be secured by a lien on any of the Company’s assets, that the due date of the
        Debentures shall be June 4, 2007, and that the interest rate on the Debentures
        shall be eight percent (8%) per annum until the due date, and paid at the
        due
        date, increasing to fourteen (14%) per annum until such time as the Debentures
        are paid in full. At September 30, 2007, there was $600,000 outstanding on
        the
        Debentures. The agreement was amended to extend the due date to December
        31,
        2007.
 
 As
        of
        March 31, 2008, four outstanding convertible debentures, amounting in the
        aggregate to $600,000, plus accrued interest of approximately $64,734 thereon,
        became due and payable. As of December 31, 2007, two of the Debentures,
        amounting in the aggregate to $200,000, were amended to extend the maturity
        date
        to April 15, 2008, of which on April 29, 2008 the two individual were paid
        the
        aggregate principal amount of $100,000 plus the accrued interest thru April
        30,
        2008 of $29,934.. These Debentures are currently in default, but it is expected
        that they will be paid in full shortly. The other two Debentures, amounting
        in
        the aggregate to $400,000, which were assigned to Russull Brothers, the majority
        shareholder of the Company as of March 31, 2008, were extended to April 30,
        2008, and are currently in default. The Company currently negotiates the
        extension of the Debentures maturity date with Russull Brothers.
 
 **NOTE
        7 - LONG-TERM BANK LOAN**
 
 On
        March
        5, 2007, Gunther obtained a $1,500,000 bank loan from Bank Hapoalim, Ltd.,
        which
        matured on January 3, 2015. The bank loan bears interest at the Israeli prime
        rate plus 2% per annum. Principal and interest payments on the bank loan
        are due
        quarterly. Classified by linkage terms and interest rates, the total amount
        of
        the loan is as follows:
  **Annual**
                
                **March
                    31,**
                
                **December
                    31,****interest
                    rate**
                
                **2008**
                
                **2007****%
                      (*)**Bank
                    Loan
                
                Israeli
                    Prime + 2%
                
                $
                1,619,000
                
                $
                1,536,000Less-
                    current maturities
                
                
                
                
                (183,000
                )
                
                (165,000
                )Long-Term
                    portion
                
                
                
                $
                1,436,000
                
                $
                1,371,000
 
  17
 **DCI
        USA, INC. AND SUBSIDIARIES**
 **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS**
 
 **NOTE
        8 - RELATED PARTY TRANSACTIONS**
 
 Interest
        income for the three months ended March 31, 2008 and 2007 in amounts of
        approximately $8,000 and $0, respectively, earned from notes receivable from
        related parties. Interest expenses for the three months ended March 31, 2008
        and
        2007 in amounts of approximately $29,000 and $6,000, respectively. The Company
        believes that the transactions set forth above were made on terms no less
        favorable to us than could have been obtained from unaffiliated third parties.
        In addition, we intend that all such transactions be on terms no less favorable
        to us than could be obtained from unaffiliated third parties.
 
 **NOTE
        9 - INCOME TAXES**
 
 *Domestic
        (US):*
 Based
        on
        the Company's history of recurring losses, there is uncertainty as to the
        realization of the net operating loss carryforwards. Accordingly, a valuation
        allowance has been provided for those deferred tax assets which management
        believes it is more likely than not that the tax benefit will not be realized.
        At March 31, 2008, the Company had approximately $2,211,000 of net operating
        loss carryforwards to offset future taxable income for both federal and state
        income tax purposes, expiring in various years through 2028 for federal purposes
        and 2013 for state purposes. The Company has reported a valuation allowance
        of
        approximately $744,000. The valuation allowance account increased during
        the
        three months ended March 31, 2008 by $27,000.
  Deferred
        income taxes (benefit) reflect the tax effects of temporary differences between
        the carrying amounts of assets and liabilities for financial reporting purposes
        and the amounts used for income tax purposes, and the tax effects of net
        operating losses that are available to offset future taxable
        income.
 
 A
        reconciliation of the difference between the expected income tax rate using
        the
        statutory federal tax rate and the Company’s effective rate is as
        follows:
 Three
                  Months Ended March 31,2008
              
              2007U.S.
                  Statutory Rate
              
              
              34
              %
              
              34
              %State
                  income taxes
              
              
              9
              %
              
              9
              %Valuation
                  allowance
              
              
              -43
              %
              
              -43
              %0
              %
              
              0
              %
 
 
 18
 
 **DCI
        USA, INC. AND SUBSIDIARIES**
 **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS**
 
 **NOTE
        9 - INCOME TAXES - (CONTINUED)**
 
 Significant
        components of the Company’s net deferred tax assets are as follows:
 
 **March
                  31,**
              
              **December
                  31,****2008**
              
              **2007**Deferred
                  tax assets:Net
                  operating loss carryforwards
              
              $
              950,788
              
              $
              908,985Total
                  deferred tax assets
              
              
              950,788
              
              $
              908,985Deferred
                  liabilities
              
              
              -Total
                  deferred tax liabilities
              
              
              -
              
              
              -Valuation
                  allowance for net deferred tax assets
              
              
              (743,828
              )
              
              (716,964
              )Net
                  deferred tax assets
              
              $
              206,960
              
              $
              192,021Current
                  asset
              
              
              158,516
              
              
              173693Long
                  term asset
              
              
              48,444
              
              
              18,328Net
                  deferred tax assets
              
              $
              206,960
              
              $
              192,021
 
 *Foreign
        (Israel):*
 The
        Company and its Israeli subsidiary have accumulated losses for Israel income
        tax
        purposes as of March 31, 2008, in the amount of approximately $93,000. These
        losses may be carryforward (linked to the Israeli Consumer Price Index (“CPI”))
        and offset against taxable income in the future for an indefinite
        period.
 
 Reduction
        in corporate tax rate: In June 2004, an amendment to the Income Tax Ordinance
        (No. 140 and Temporary Provision), 2004 was passed by the “Knesset” (Israeli
        parliament) and on July 25, 2005, another law was passed, the amendment to
        the
        Income Tax Ordinance (No. 147) 2005, according to which the corporate tax
        rate
        is to be progressively reduced to the following tax rates: 2004 - 35%, 2005
        -
        34%, 2006 - 31%, 2007 - 29%, 2008 - 27%, 2009 - 26%, 2010 and thereafter
        -
        25%.
 
 **NOTE
        10 - SUBSEQUENT EVENTS**
 
 On
        February 27, 2008, Russull Brothers purchased all 3,150,000 shares of the
        Company’s common stock owned by Direct Capital, for an aggregate purchase price
        of $130,000. The transaction was effected pursuant to a verbal agreement
        between
        Direct Capital and Russull Brothers. As of April 8, 2008, Russull Brothers
        owned
        an aggregate of 40,687,997 shares representing 76.10% of the Company’s issued
        and outstanding common stock.
  19
 **DCI
        USA, INC. AND SUBSIDIARIES**
 **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS**
 
 **NOTE
        10 - SUBSEQUENT EVENTS - (CONTINUED)**
 
 On
          April
          23, 2008, the Company, Gunther, and Tobias Jewelry Ltd., an Israeli corporation
          (“Tobias”), executed a share sale agreement, pursuant to which Tobias agreed to
          purchase all of the share capital of Gunther. In consideration therefore,
          Tobias
          agreed to pay the Company $2,607,000, of which (i) $1,250,350 plus applicable
          value added taxes Tobias agreed to pay to the Company at closing (the “Cash
          Consideration”), and (ii) $1,356,650, the amount of Gunther’s pre-existing debt
          to the Company, Tobias agreed to lend to Gunther at closing. Tobias also
          agreed
          to make two additional loans to Gunther, one in the amount of $355,000,
          and a
          second loan in the amount of $30,000. The transactions contemplated by
          the
          agreement were consummated on April 28, 2008. Pursuant to the Agreement,
          Tobias
          paid $777,549 to the Company,
          on behalf of the Company, Tobias paid $472,801 WGS in full satisfaction
          of the
          Company’s pre-existing debt to WGS. Tobias also loaned $684,650 to Gunther,
          which funds were paid directly to the Company in partial satisfaction of
          Gunther’s pre-existing debts to the Company. Tobias also agreed to lend Gunther
          $672,000, the remaining outstanding balance of Gunther’s debts to the Company,
          on or before April 21, 2009, at which time Gunther is obligated, pursuant
          to the
          agreement, to repay the entire remaining outstanding balance of its debt
          to the
          Company. Twenty-five percent of Gunther’s outstanding share capital will be held
          in escrow in order to secure repayment of the balance of Gunther’s debt to the
          Company. The remaining seventy-five percent of Gunther’s share capital was
          transferred to Tobias on or about April 28, 2008. Pursuant to the agreement,
          Tobias also loaned Gunther $355,000, an amount equal to the outstanding
          portion
          of Gunther’s pre-existing commitment to invest in Green Wind Energy Ltd., and
          $30,000, an amount equal to Gunther’s outstanding obligations to its suppliers.
 
 The
        Consideration amount that was paid by Tobias to WGS was in amount of $472,801
        however the Company’s liability to WGS as of the payment day was $435,584, as
        such WGS committed to transfer $37,217 to the Company.
 
  20




**Item
        2.****Management’s
        Discussion and Analysis of Financial Condition and Results of
        Operations.**
 
 As
        used
        throughout this report, the terms "DCI," the "Company," "we," "us," and "our"
        refer to DCI USA, Inc., and unless indicated otherwise, include our
        subsidiaries.
 
 This
        Management’s Discussion and Analysis or Financial Condition and Results of
        Operations should be read in conjunction with the financial statements and
        the
        notes thereto.
 
 **Forward
        Looking Statements**
 
 This
        report on Form 10-Q (the “Report”) contains a number of forward-looking
        statements that reflect management's current views and expectations with
        respect
        to our business, strategies, future results and events and financial
        performance. All statements made in this Report other than statements of
        historical fact, including statements that address operating performance,
        events
        or developments that management expects or anticipates will or may occur
        in the
        future, including statements related to distributor channels, volume growth,
        revenues, profitability, adequacy of funds from operations, statements
        expressing general optimism about future operating results and non-historical
        information, are forward looking statements. In particular, the words "believe,"
        "expect," "intend," " anticipate," "estimate," "may," "will," variations
        of such
        words, and similar expressions identify forward-looking statements, but are
        not
        the exclusive means of identifying such statements and their absence does
        not
        mean that the statement is not forward-looking. These forward-looking statements
        are subject to certain risks and uncertainties, including those discussed
        below.
        Our actual results, performance or achievements could differ materially from
        historical results as well as those expressed in, anticipated or implied
        by
        these forward-looking statements. We do not undertake any obligation to revise
        these forward-looking statements to reflect any future events or
        circumstances.
 
 Readers
        should not place undue reliance on these forward-looking statements, which
        are
        based on management's current expectations and projections about future events,
        are not guarantees of future performance, are subject to risks, uncertainties
        and assumptions (including those described below) and apply only as of the
        date
        of this Report. Our actual results, performance or achievements could differ
        materially from the results expressed in, or implied by, these forward-looking
        statements. Factors that could cause or contribute to such differences include,
        but are not limited to, those discussed in "Risk Factors" on the Company’s
        Annual Report of Form 10-K filed with the Securities and Exchange Commission
        (the “SEC”) on May 12, 2008, as well as those discussed elsewhere in this
        Report, and the risks discussed in our press releases and other communications
        to shareholders issued by us from time to time which attempt to advise
        interested parties of the risks and factors that may affect our business.
        We
        undertake no obligation to publicly update or revise any forward-looking
        statements, whether as a result of new information, future events or
        otherwise.
 
 **Overview**
 
 We
        are
        presently engaged in the renovation and conversion of buildings to commercial
        condominiums. We had considered expanding our business focus to include the
        field of alternative energy, with our acquisition on August 1, 2006 of an
        interest in Gunther
        Wind Energy, Ltd., a corporation that invests in wind farms in Israel, and
        our
        January 2007 loan to Senergy, Ltd., an Israeli limited liability company
        that
        operates in the areas of solar heating and cooling and solar-based energy
        generation. However, our agreement with Senergy was terminated on February
        28,
        2008 and, as disclosed in our Current Report on Form 8-K filed May 1, 2008
        and
        amended on May 2, 2008, on April 3, 2008 we executed a share sale agreement
        with
        Tobias Jewelry Ltd., an Israeli corporation, pursuant to which Tobias Jewelry
        acquired all of the share capital of Gunther.
  21
 **231
        Norman Avenue**
 
 The
        Company remains involved in the renovation and conversion of certain buildings,
        located at 231 Norman Avenue, Brooklyn, New York, to commercial condominiums.
        Construction has been completed and a Certificate of Occupancy was obtained
        on
        January 10, 2008. Approvals needed for the commercial condominium plan offering
        have been obtained and 44 commercial condos are currently on the market for
        sale. The Company is actively involved in managing the construction, financing,
        and sales of the 231 Norman Avenue project. As of the date of filing, 24
        contracts to purchase condominium units have been signed and deposits received,
        9 units of which were closed and occupied.
 
 **Material
        Changes in Financial Condition**
 
 As
        a
        result of the termination, on February 28, 2008, of our agreement to extend
        a
        loan to Senergy,
        Ltd., we expect repayment of $100,000 previously loaned to Senergy by the
        Company.
 
 Under
        the
        terms of the April 23, 2008 share sale agreement, pursuant to which we sold
        Gunther Wind Energy to Tobias Jewelry, $684,650 of the Company’s loans to
        Gunther Wind Energy has been repaid to the Company and the balance of $672,000
        will be repaid in April 2009. Accordingly, we expect that our June 30, 2008
        balance sheet will reflect repayment of $684,650 of our loans to Gunther
        Wind
        Energy, and we expect that our June 30, 2009 balance sheet will reflect
        repayment of the remaining outstanding balance of $672,000. As a result and
        assuming no unforeseen developments, we anticipate revenues of approximately
        $840,000 in the quarter ended June 30, 2008 and approximately $386,000 in
        the
        second quarter of 2009. However, there can be no assurance that we will realize
        these revenues.
  **Material
        Changes in Results of Operations**
 
 **Comparison
        of the results of operations: three months ended March 31, 2008 to three
        months
        ended March 31, 2007** .
 
 Our
        total
        income for the three months ended March 31, 2008 was $8,413, as compared
        to
        $6,252 of total income for the three months ended March 31, 2007. The income
        for
        the quarters ended March 31, 2008 and March 31, 2007 both consisted of interest
        income generated from the loans the Company made to 321 Norman Avenue Property
        Development LLC and Senergy.
 
 Our
        general and administrative expenses decreased to $30,760 for the three months
        ended March 31, 2008, from $80,405 for the three months ended March 31, 2007.
        The decrease was a result of decreased travel expenses and the completion,
        in
        June 2007, of our acquisition of Gunther Wind Energy. Interest expense increased
        to $227,875 for the quarter ended March 31, 2008, from $63,816 for the quarter
        ended March 31, 2007.The increase was a result of interest payments on our
        outstanding 10% Convertible Notes and our outstanding debentures in the
        principal amount of $600,000 , and other payables needed to finance an
        investment in ARI Ltd., an Israeli company in which Gunther Wind Energy had
        invested and in which the Company indirectly held a 25% interest as a result
        of
        the Company’s ownership of Gunther Wind Energy.
 
 Professional
        fees decreased from $54,624 for the quarter ended March 31, 2007 to $41,600
        for
        the quarter ended March 31, 2008.
 
 Our
        net
        income on investments increased, from a loss of $30,811 in the three months
        ended March 31, 2007 to income of $62,139 in the three months ended March
        31, 2008. This is attributed mainly to the earnings of 231 Norman Avenue
        Property Development, LLC in 2008, as a result of the completion of sales
        of
        seven commercial condominium units in 2008, and investments in Ari Ltd. which
        contributed income of $33,000 to the Company in first quarter of
        2008.
 
 22
 Total
        loss from operations during the quarter ended March 31, 2008 was $291,822.
        The
        loss is attributed mainly to interest expense.
 
 **Liquidity
        and Capital Resources**
 
 Our
        cash
        as of March 31, 2008 was $11,623. On April 28, 2008, the Company received
        gross
        proceeds from the sale of Gunther Wind Energy in the amount of $1,250,350
        and
        partial return on the loan to Gunther in the amount of $684,650. Accordingly,
        the Company currently has sufficient funds to fund its expenses over the
        next
        twelve months.
  **Item****3.****Quantitative
        and Qualitative Disclosures About Market Risk**
 
 Smaller
        reporting companies are not required to provide the information required
        by this
        Item 3.
 
 **Item
        4.**  **Controls
        and Procedures.**
 
 **Evaluation
        of Disclosure Controls and Procedures**
  Our
        disclosure controls and procedures are designed to ensure that information
        required to be disclosed in reports that we file or submit under the Securities
        Exchange Act of 1934 is recorded, processed, summarized and reported within
        the
        time periods specified in the rules and forms of the United States Securities
        and Exchange Commission. Our principal executive and financial officers have
        reviewed the effectiveness of our “disclosure controls and procedures” (as
        defined in the Securities Exchange Act of 1934 Rules 13a-15(e) and 15d-15(e))
        as
        of the end of the period covered by this report and have concluded that our
        disclosure controls and procedures are effective to ensure that material
        information relating to the Company is recorded, processed, summarized, and
        reported in a timely manner. There were no significant changes in our internal
        controls or in other factors that could significantly affect these controls
        subsequent to the last day they were evaluated by our principal executive
        and
        financial officers.
 
 **Changes
        in Internal Controls**
 
 There
        have been no changes in the Company’s internal control over financial reporting
        during the last quarterly period covered by this report that have materially
        affected, or are reasonably likely to materially affect, the Company’s internal
        control over financial reporting.
 
 **PART
        II**
 **OTHER
        INFORMATION**
 
 **Item
        1.**  **Legal
        Proceedings.**
 
 There
        are
        no pending legal proceedings to which the Company is a party or in which
        any
        director, officer or affiliate of the Company, any owner of record or
        beneficially of more than 5% of any class of voting securities of the Company,
        or security holder is a party adverse to the Company or has a material interest
        adverse to the Company. The Company’s property is not the subject of any pending
        legal proceedings.
 
 **Item
        1A. Risk Factors.**
 
 There
        have been no material changes to the risks to our business described in our
        Annual Report on Form 10-K for the year ended December 31, 2007 filed
        with the SEC on May 12, 2008.
 
 23
 
 **Item
        2.**  **Unregistered
        Sales of Equity Securities and Use of Proceeds.**
 
 None.
 
 **Item
        3.**  **Defaults
        Upon Senior Securities.**
 
 As
        of the
        date of this report, the following outstanding notes and debentures are in
        default. Neither
        the debentures holders nor any of the note holders has notified the Company
        of
        their intention to enforce any of their rights in connection with this
        default.
 
 Debentures - As of
        March 31, 2008, three outstanding convertible debentures, amounting in the
        aggregate to $600,000, plus accrued interest of approximately $71,934. $200,000
        of which held by two individuals became due and payable on April 15, 2008
        and
        $400,000 held by Russull Brothers, Inc, the Company's major shareholder,
        became
        due and payable on April 30, 2008. On April 29, 2008 the two individual were
        paid the aggregate principal amount of $100,000 plus the accrued interest
        thru
        April 30, 2008 of $29,934.
 The
        balance of the principal owed to the two debenture holders and the principal
        balance of owed to Russull Brothers are being negotiated to extend the maturity
        date.
 
 10%
        Convertible Notes - On
        November 25, 2007, an aggregate of $465,000 in principal and $725 in accrued
        interest became due and payable on the convertible notes, which were issued
        by
        the Company in October 2006. The note holders have agreed verbally, but not
        in a
        signed agreement, to extend the maturity date of the notes to April 30, 2008.
        On
        April 29, 2008 the Company made payments of the principal to three of the
        note
        holders of $135,000 plus interest of $4,438. The Company is negotiating with
        the
        remainder note holders to extend the terms of the notes. The company is current
        with the interest payments to regular to all the note holders.
 
 **Item
        4.**  **Submission
        of Matters to a Vote of Security Holders.**
 
 None.
 
 **Item
        5.**  **Other
        Information.**
 
 On
        May
        19, 2008 Greg Bitterman informed the Company that he resigned as a member
        of the
        Board of Directors of the Company for personal reasons..
 
 **Item
        6.**  **Exhibits.**
  The
        following exhibits are filed as part of this report:
  Exhibit
                  No.
              
              Description
                  of Exhibit31.1
              
              Section
                  302(a) Certifications32.1
              
              Section
                  906 Certifications
 
 24
 **SIGNATURES**
 
 In
        accordance with the requirements of the Securities Exchange Act of 1934,
        the
        Registrant has caused this report to be signed on its behalf by the undersigned,
        thereunto duly authorized.
 
  Dated:
                  May 20, 2008
              
              By:
              /s/
                  Ofer ArbibOfer
                  Arbib
                Chief
                  Executive Officer
                (Principal
                  Executive Officer)
  Dated:
                  May 20, 2008
              
              By:
              /s/
                  Jonathan RigbiJonathan
                  Rigbi
                Chief
                  Financial Officer
                (Principal
                  Financial and Accounting Officer)
 
 
 25