UNITED
      STATES


SECURITIES
      AND EXCHANGE COMMISSION


Washington,
      DC 20549





**FORM
      10-QSB**





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





For
      the
      quarterly period ended June 30, 2007





o
            Transition
                Report Pursuant to Section 13 or 15(d) of the Securities Exchange
                Act of
                1934





For
      the
      transition period from _______________ to ________________





Commission
      file number 000-31143





**DCI
      USA, INC.**


(Exact
      name of small business 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


(Issuer'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 shell company (as defined in Rule
      12b-2 of the Exchange Act).


Yes o No x




As
      of
      August 17, 2007, 53,917,681 shares of Common Stock, par value $0.001 per share,
      were outstanding.




Transitional
      Small Business Disclosure Format (check one): Yes o No x















**DCI
      USA, INC. AND SUBSIDIARY**





**TABLE
      OF CONTENTS**





PART
                I - Financial Information
            PageItem
                1. Financial Statements
            3Item
                2. Management’s Discussion and Analysis or Plan of
                Operation
            14Item
                3. Controls and Procedures
            18PART
                II - Other Information
            19Item
                1. Legal Proceedings
            19Item
                2. Unregistered Sales of Equity Securities and Use of
                Proceeds
            19Item
                3. Defaults Upon Senior Securities
            19Item
                4. Submission of Matters to a Vote of Security Holders
            19Item
                5. Other Information
            19Item
                6. Exhibits
            19SIGNATURES
            21







2


**Item
      1.**  **Financial
      Statements.**




**DCI
        USA, INC. AND SUBSIDIARIES**
 
 **INDEX
        TO CONSOLIDATED FINANCIAL STATEMENTS**
 
  
 **Page(s)**Consolidated
                  Balance Sheets as of June 30, 2007 (unaudited) and December 31,
                  2006
                  (audited)
              2-3Consolidated
                  Statements of Operations for the three and six months endedJune
                  30, 2007 (unaudited) and 2006 (unaudited)
              4Consolidated
                  Statements of Cash Flows for the six months ended June 30,
                  2007(unaudited)
                  and 2006 (unaudited)
              5Notes
                  to Consolidated Financial Statements
              6-11
 
  3
 
  
 **DCI
        USA, INC. AND SUBSIDIARIES**
 **CONSOLIDATED
        BALANCE SHEETS**
 
 **June
                  30,**
              
              **December
                  31,****2007**
              
              **2006****(unaudited)**
              
              **(audited)**ASSETSCurrent
                  Assets:Cash
              
              $
              9,258
              
              $
              74,755Account
                  receivables
              
              
              214,337
              
              
              -Prepaid
                  expense
              
              
              2,300
              
              
              8,002Interest
                  receivable-related party
              
              
              17,227
              
              
              8,798Interest
                  receivable
              
              
              2,449
              
              
              -Loan
                  receivable- related party
              
              
              100,450
              
              
              55,000Loan
                  receivable - Gunther
              
              
              -
              
              
              630,000Note
                  receivable - net of discount
              
              
              -
              
              
              142,485Note
                  receivable
              
              
              70,000Loan
                  receivable - Senergy
              
              
              100,000
              
              
              -Total
                  current assets
              
              
              516,021
              
              
              919,040Fixed
                  assets, net
              
              
              2,781
              
              
              3,225Investment
                  in 231 NAPD
              
              
              1,310,059
              
              
              1,355,998Investment
                  in ARI, Ltd.
              
              
              2,190,358
              
              
              -Goodwill
              
              
              219,589
              
              
              -Noncurrent
                  note receivable
              
              
              
              
              
              70,000Total
                  assets
              
              $
              4,238,808
              
              $
              2,348,263
  
 See
        accompanying notes to consolidated financial statements.
  4
 **DCI
        USA, INC. AND SUBSIDIARIES**
 **CONSOLIDATED
        BALANCE SHEETS - (CONTINUED)**
 
 **June
                  30,**
              
              **December
                  31,****2007**
              
              **2006****(unaudited)**
              
              
              **(audited)**LIABILITIES
                  AND STOCKHOLDERS' EQUITYCurrent
                  Liabilities:Loan
                  payable - Hypothicators
              
              $
              334,875
              
              $
              400,000Loan
                  payable - officer
              
              
              597,384
              
              
              -Accounts
                  payable and accrued expenses
              
              
              69,560
              
              
              63,200Accrued
                  interest
              
              
              74,982
              
              
              20,620Due
                  to ARI, Ltd.
              
              
              71,533
              
              
              -Amount
                  due on option to repurchase commonstock,
                  current
              
              
              -
              
              
              81,768Convertible
                  notes
              
              
              465,000
              
              
              465,000Convertible
                  debentures
              
              
              600,000
              
              
              600,000Current
                  maturities of long term bank loan
              
              
              152,242
              
              
              -Total
                  current liabilities
              
              
              2,365,576
              
              
              1,630,588Commitments
                  and contingenciesLong
                  term bank loan
              
              
              1,308,613
              
              
              -Amount
                  due on option to repurchase commonstock,
                  net of current
              
              
              -
              
              
              30,732Total
                  liabilities
              
              $
              3,674,189
              
              $
              1,661,320Stockholders'
                  equityPreferred
                  Stock, par value $.001, Authorized 1,000,000shares
                  Series A Preferred, 200,000 sharesauthorized
                  none issued and outstanding
              
              
              -
              
              
              -Common
                  stock, par value $.001,100,000,000 sharesauthorized
                  , 53,917,681 shares outstanding
              
              
              59,542
              
              
              53,292Additional
                  paid-in-capital
              
              
              2,847,177
              
              
              2,526,671Accumulated
                  deficit
              
              
              (2,342,100
              )
              
              (1,893,020
              )Total
                  stockholders' equity
              
              
              564,619
              
              
              686,943Total
                  liabilities and stockholders' equity
              
              $
              4,238,808
              
              $
              2,348,263
 
  See
        accompanying notes to consolidated financial statements.
  5
 **DCI
        USA, INC. AND SUBSIDIARIES**
 **CONSOLIDATED
        STATEMENTS OF OPERATIONS**
 
 **Six
                  Months ended June 30,**
              
              **Three
                  Months ended June 30,****2007**
              
              
              **2006**
              
              
              **2007**
              
              
              **2006****(unaudited)**
              **(unaudited)**Operating
                  Income:Revenue
              
              $
              -
              
              $
              -
              
              $
              -
              
              $
              -Interest
                  income
              
              
              13,083
              
              
              89,625
              
              
              6,831
              
              
              45,060Total
                  income
              
              
              13,083
              
              
              89,625
              
              
              6,831
              
              
              45,060Expenses:General
                  and administrative expense
              
              
              129,213
              
              
              106,080
              
              
              48,900
              
              
              66,379Interest
                  expense
              
              
              112,040
              
              
              114,327
              
              
              48,223
              
              
              73,039Professional
                  fees
              
              
              83,124
              
              
              36,859
              
              
              28,500
              
              
              18,134Consulting
                  fees
              
              
              91,256
              
              
              -
              
              
              2,000
              
              
              -Income
                  taxes
              
              
              592
              
              
              2,485
              
              
              501
              
              
              2,485Total
                  expenses
              
              
              416,225
              
              
              259,751
              
              
              128,124
              
              
              160,037Loss
                  from operations
              
              
              (403,142
              )
              
              (170,126
              )
              
              (121,293
              )
              
              (114,977
              )Other
                  expense:Net
                  loss on investment
              
              
              45,938
              
              
              -
              
              
              15,127
              
              
              -Total
                  other expense
              
              
              45,938
              
              
              -
              
              
              15,127
              
              
              -Net
                  loss
              
              $
              (449,080
              )
              $
              (170,126
              )
              $
              (136,420
              )
              $
              (114,977
              )Basic
                  and DilutedLoss
                  per share
              
              
              ($0.01
              )
              
              ($0.00
              )
              
              ($0.00
              )
              
              ($0.00
              )Weighted
                  average number ofCommon
                  Stock outstanding
              
              
              53,373,482
              
              
              36,494,626
              
              
              3,453,395
              
              
              36,860,156
 
  
 See
        accompanying notes to consolidated financial statements.
  6
 **DCI
        USA, INC. AND SUBSIDIARIES**
 **CONSOLIDATED
        STATEMENTS OF CASH FLOWS**
 
 **Six
                  Month ended June 30,****2007**
              
              
              
              **2006****(unaudited)****Cash
                  flows from operating Activities**Net
                  loss for the period
              
              
              
              $(449,080)
              
              
              
              $(170,126)Adjustments
                  required to reflect cash flows fromOperating
                  ActivitiesAmortization
                  of loan cost
              
              
              
              
              
              
              
              21,250Cost
                  of stock option
              
              
              
              89,256Net
                  loss on equity investment
              
              
              
              45,939
              
              
              
              -Amortization
                  of discounts
              
              
              
              
              
              
              
              28,750Depreciation
              
              
              
              444Amortization
                  of note receivable discount
              
              
              
              (7,515)Changes
                  in operating liabilities and assetsPrepaid
                  expanse
              
              
              
              5,702
              
              
              
              5,346Interest
                  receivable
              
              
              
              (10,878)
              
              
              
              (918)Accounts
                  payable and accrued expenses
              
              
              
              15,226
              
              
              
              (3,769)Net
                  cash used in operating activities
              
              
              
              (310,906)
              
              
              
              (119,467)**Cash
                  flows from investing activities**Proceeds
                  from loan receivable
              
              
              
              
              
              150,000
              
              
              
              
              
              -Loans
                  to third parties
              
              
              
              
              
              (145,450
              )Loans
                  to related parties
              
              
              
              
              
              (416,400
              )
              
              
              
              
              -Net
                  cash used in investing activities
              
              
              
              
              
              (411,850
              )
              
              
              
              
              -**Cash
                  flows from financing activities**Proceeds
                  from loans
              
              
              
              
              
              597,384
              
              
              
              
              
              160,000Payment
                  of loan payable
              
              
              
              
              
              (65,125
              )Issuance
                  of common stock
              
              
              
              
              
              125,000Net
                  cash used by financing activities
              
              
              
              
              
              657,259
              
              
              
              
              
              160,000Increase
                  (decrease) in cash
              
              
              
              
              
              (65,497
              )
              
              
              
              
              40,533**Cash
                  at the beginning of the period**
              
              
              
              
              
              74,755
              
              
              
              
              
              5,877**Supplemental
                  disclosures:**Cash
                  paid for income taxes
              
              
              
              
              $
              592
              
              
              
              
              $
              2,485**Non-cash
                  disclosures of investing and financing****activities:**Loans
                  to Gunther Wind Energy, Ltd. convertedto
                  investment
              
              
              
              
              $
              1,055,384
 
 See
        accompanying notes to consolidated financial statements.
  7
 **DCI
        USA, INC. AND SUBSIDIARIES**
 **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS**
 **(UNAUDITED)**
 
 **NOTE
        1 - DESCRIPTION OF THE COMPANY**
 
 The
        accompanying un-audited 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-KSB. 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 2006 as reported in the 10-KSB have been
        omitted.
  The
        unaudited consolidated financial statements include the accounts of the Company
        and our wholly-owned subsidiaries. All inter-company accounts and transactions
        have been eliminated. We operate in one business segment, which is the
        development of clean energy technologies and the renovation and conversion
        of
        buildings to commercial condominiums.
 
 Our
        cash
        as of June 30, 2007 was $9,258. We believe that we will be able to meet our
        cash
        requirements during 2007 principally through loans from our Chairman and
        additional third parties financings. Over the next twelve months, we will
        need
        additional financing to expand our business, to carry out our business plan
        and
        to reduce our debt. The Company estimates that such financing will enable
        it to
        meet its ongoing operating cash flow needs.  Management estimates that the
        Company will have sufficient resources to fund its planned operations beyond
        June 30, 2008.
 
 **NOTE
        2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**
 
 **USE
        OF ESTIMATES**
 In
        preparing 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 financial statements.
 
 **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 16,987,013
        potentially dilutive common shares outstanding on June 30, 2007 and 2006,
        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.
 .
 **NOTE
        3 - ASSIGNMENT OF SHARES OF MAJOR SHAREHOLDER**
 
 As
        of
        March 24, 2006, Mr. Ofir acquired 28,350,000 shares of our Common Stock from
        Uri
        Rosin and Gunther Frantz, Ltd. ("Gunther Frantz") pursuant to an Assignment
        and
        Assumption of contract ("Assignment and Assumption of Contract") whereby
        Mr.
        Ofir assumed the obligations of Mr. Rosin and Gunther Frantz under a Share
        Sale
        Agreement dated February 1, 2006 ("the Share Sale Agreement"). The purchase
        price of $1,170,004 (or $0.04127 per share) is required to be paid by Mr.
        Ofir
        by December 31, 2007. The right to purchase such 28,350,000 shares from Direct
        Capital Investments, Ltd. had been held by Mr. Rosin and Gunther Frantz,
        the
        former controlling shareholders of Direct Capital Investments, Ltd.,
  8
 **DCI
        USA, INC. AND SUBSIDIARIES**
 **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)**
 **(UNAUDITED)**
 
 **NOTE
        3 - ASSIGNMENT OF SHARES OF MAJOR SHAREHOLDER -
        (CONTINUED)**
 
 pursuant
        to the Share Sale Agreement. Mr. Rosin and Gunther Frantz, however, assigned
        all
        of the rights and obligations under the Share Sale Agreement to Mr. Ofir.
        Mr.
        Rosin is Mr. Ofir's father in-law. With respect to the 3,150,000 shares of
        our
        Common Stock still held by Direct Capital Investments, Ltd., (i) the holder
        has
        the right, from December 31, 2007 to June 30, 2008, to require Mr. Ofir to
        purchase such shares for the aggregate price of $130,000 (or $0.04127 per
        share); and (ii) Mr. Ofir has the right, from February 1, 2006 to June 30,
        2008,
        to require the holder to sell such shares to him for the aggregate price
        of
        $390,000 (or $0.1238 per share).
 
 **NOTE** **4** **- PURCHASE AND STRATEGIC RELATIONSHIP AGREEMENT**
 
 **GUNTHER
        WIND ENERGY, LTD.**
 In
        August
        2006 we 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. In consideration therefore, the Company cancelled the outstanding
        balance of certain loans previously made by the Company to Gunther in the
        amount
        of $1,055,384. An additional $444,616 of the balance of the $1,500,000 purchase
        price remains due from the Company to Gunther. These funds will be loaned
        to the
        Company by our Chairman, Jonathan Ilan Ofir, in accordance with his commitment
        to lend the Company of up to an aggregate of $1,000,000. Upon receipt of
        said
        funds from Mr. Ofir, the Company will pay to Gunther $444,616, representing
        the
        balance of the purchase price outstanding. As a result of the exercise of
        its
        option as described above, the Company acquired all the outstanding shares
        of
        Gunther, which thereby became a wholly-owned subsidiary of the Company
 
 Through
        its purchase of 334 shares of preferred stock of ARI, Ltd. (“ARI”), Gunther owns
        25% of the outstanding shares of capital stock of ARI. The purchase price
        for
        these shares is $3,000,000. As of June 30, 2007, Gunther had paid an aggregate
        of $2,200,000 of the purchase price to ARI using funds previously loaned
        to
        Gunther by the Company, together with a payment from Gunther using proceeds
        from
        a bank loan to Gunther of $1,500,000. Gunther owes an additional $800,000
        to ARI
        to complete the transaction which it expects to pay by August 31, 2007. ARI
        owns
        and operates a wind farm known as Tel Assaniya Windfarm, which is located
        in
        Northern Israel. 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.
        We
        expects 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.
 
 The
        investment in Gunther is recorded in our financial statements included herein
        at
        the aggregate purchase price and its results of operations from the date
        of
        acquisition are reflected in our statement of operations for the periods
        ended
        June 30, 2007.
  
 9
 
  **DCI
        USA, INC. AND SUBSIDIARIES**
 **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)**
 **(UNAUDITED)**
 
 **NOTE
        4 - PURCHASE AND STRATEGIC RELATIONSHIP AGREEMENT-
        (CONTINUED)**
 
 The
        following table summarized the estimated fair values of the assets acquired
        and
        liabilities assumed at the date of acquisition :
  Cash
              
              $
              8,984Account
                  receivables
              
              
              214,337Investment
                  in ARI Ltd.
              
              
              2,190,358Goodwill
              
              
              219,589Total
                  assets
              
              
              2,633,268Accounts
                  payable
              
              
              45,496Current
                  maturities of long term bank loan
              
              
              152,242Long
                  term bank loan
              
              
              1,308,613Due
                  to ARI, Ltd.
              
              
              71,533Total
                  liabilities
              
              
              1,577,884Net
                  assets acquired
              
              $
              1,055,384
 
 **SENERGY,
        LTD.**
 In
        January 2007, the Company entered into a Purchase and Strategic Relationship
        Agreement with Senergy, Ltd. (“Senergy”), an Israeli limited liability company
        that operates in the areas of solar heating and cooling and solar-based energy
        generation (the “Senergy Agreement”). Pursuant to the agreement, the Company,
        through a new, to-be-formed subsidiary, is to make investments in three
        installments totaling $500,000 in Senergy. In return for the investment,
        the
        Company receives promissory notes totaling $500,000 and a 60% equity interest
        in
        Senergy. The Promissory notes incur interest at the rate of 6% and are due
        18
        months after the date of the note. As of June 30, 2007, the Company made
        the
        first required installment of $100,000. The Company has requested that the
        terms
        of the Senergy Agreement be renegotiated and Synergy has agreed to such
        renegotiation. If we are able to successfully conclude our negotiations,
        we will
        be in charge of managing fund-raising activities at Senergy and establishing
        strategic partnerships for Senergy.
 
 **231
        NORMAN AVE, LLC**
 The
        Company remains involved in the renovation and conversion of buildings to
        commercial condominiums. Our development at 231 Norman Avenue, in Brooklyn,
        New
        York is the underlying asset comprising the collateral on the loan discussed
        below. Construction is being completed and inspections are currently being
        conducted. Approvals needed for the commercial condominium plan offering
        have
        been obtained and the 68 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.
 
 The
        Company lent $1,370,000 to 231 Norman Ave, LLC (“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 Norman Avenue Property Development, LLC (“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
  10
 **DCI
        USA, INC. AND SUBSIDIARIES**
 **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)**
 **(UNAUDITED)**
 
 **NOTE
        4 - PURCHASE AND STRATEGIC RELATIONSHIP AGREEMENT-
        (CONTINUED)**
 
 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 is due 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.
 
 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. The project at 231 Norman
        Avenue, the conversion of the existing building to condominiums, is anticipated
        to be completed by the end of the third quarter of 2007. As a result of the
        Company acquiring Norman LLC, the Company controls 30% of the membership
        interests of 231 NAPD.
 
 **NOTE
        5 - NOTES PAYABLE**
 
 In
        November 2004, the Company entered into an agreement with Norman Property
        LLC
        regarding the assignment to the Company of a promissory note payable to
        Hypothecators Mortgage Company (“Hypothecators”) totaling $400,000. Pursuant to
        the assignment agreement, the Company received $400,000 from Norman Property
        LLC. The promissory note accrues interest at the rate of 15% per annum and
        is
        due June 15, 2006. The note was extended to October 31, 2006. The Company
        entered into an arrangement with Hypothecators whereby the Company would
        make
        monthly payments of $50,000 of principal and interest though October 2007.
        The
        Company made the first two payments pursuant to the agreement in February
        and
        March 2007.
 
 **NOTE
        6 - CONVERTIBLE NOTE PAYABLE- OFFICER**
 
 The
        Company has a note payable to the Chairman, Jonathan Ilan Ofir, who has agreed
        to loan the Company between $300,000 and $500,000 for 15 months bearing interest
        at 6% per annum. Principal and interest will be paid at the loan maturity
        date.
        As of June 30, 2007, the Company had borrowed from Mr. Ofir an aggregate
        amount
        of $597,000.
 
 **NOTE
        7 - CONVERTIBLE NOTE**
 
 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. At June 30, 2007, there
        was
        $465,000 in convertible notes outstanding. The Company did not make the
        quarterly payments of December 31, 2006 and of March 31, 2007 of interest
        timely, causing a default on the notes.
 
 11
 **DCI
        USA, INC. AND SUBSIDIARIES**
 **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)**
 **(UNAUDITED)**
 
 **NOTE
        7 - CONVERTIBLE NOTE - (CONTINUED)**
 
 The
        interest payments were made during January, May, June, and July, 2007,
        respectively. None of the note holders has notified the Company of their
        intention to exert any of their rights regarding this default.
 
 **NOTE
        8 - DEBENTURES**
 
 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 June 30, 2007, there was $600,000 outstanding on the
        Debentures. The agreement was amended to extend the due date to December
        31,
        2007.
 
 **NOTE
        9 - 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.
 
 **NOTE
        10 - STOCKHOLDERS' EQUITY**
 
 **PREFERRED
        STOCK**
 On
        December 6, 2004, upon the execution of the Standby Equity Distribution
        agreement with Cornell the Company issued 200,000 shares of Series A Preferred
        Stock to Cornell as a commitment fee. Holders of the Series A Preferred Stock
        are entitled to receive an annual 5% dividend payable semi-annually. The
        5%
        dividend may be paid in either cash or shares of our common stock in the
        discretion of the Board of Directors. In the event of a dissolution or
        liquidation of the Company's business, the Series A Preferred Stock ranks
        senior
        to the Company's common stock and all other classes of equity securities
        that
        may be outstanding which by their terms do not rank senior to the Series
        A
        Preferred Stock, and the Series A Preferred Stock is subordinate and ranks
        junior to all debt. The Company has the right to redeem the Series A Preferred
        Stock at a price of $1 per share plus an annual premium of 5%. The Series
        A
        Preferred Stock is convertible into shares of our common stock at conversion
        ratios equal to the lesser of: (a) $1, or (b) $1 and all accrued but unpaid
        dividends divided by the average closing bid price of our common stock as
        quoted
        by Bloomberg L.P. for 20 trading days immediately preceding the conversion
        notice date.
  The
        Company issued these shares pursuant to an agreement (the "Waiver Agreement"),
        dated as of June 2, 2006, between the Company and Cornell, which provided
        for
        the waiver by Cornell of certain defaults under the $250,000 principal amount
        Debentures (each a "Debenture") which the Company had issued to Cornell in
        each
        of December 2004 and February 2005, and under the documents related to such
        Debentures. Pursuant to the Waiver Agreement, Cornell became obligated to
        cancel
        the 200,000 shares of the Company’s Series A Preferred Stock ("Preferred Stock")
        which the Company had issued to Cornell in December 2004 as a commitment
        fee
        under the Standby Equity Distribution Agreement, dated December 13, 2004,
        between the Company and Cornell. In return, the Company became obligated
        to
        issue to Cornell 1,500,000 shares of its Common Stock and grant to Cornell
        a put
        option to sell such 1,500,000 shares back to the Company at the price of
        seven
        and one-half cents ($0.075) per share. The put option has a duration of
  12
 **DCI
        USA, INC. AND SUBSIDIARIES**
 **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)**
 **(UNAUDITED)**
 
 **NOTE
        10 - STOCKHOLDERS' EQUITY (CONTINUED)**
 
 three
        years and may be exercisable by Cornell at any time. As a result of Cornell
        being able to require the Company to repurchase the shares, as of December
        31,
        2006 the Company has reflected the amount of the repurchase as a liability
        on
        the Company’s balance sheet as amount due on option to repurchase common stock.
        Under the Waiver Agreement, the Company also agreed that the interest rate
        under
        the Debentures would be raised from 8% to 12% per annum, retroactive to the
        original dates as of which the Debentures were issued. In addition, subject
        to
        the Company’s compliance with the terms of the Waiver Agreement, Cornell agreed
        that, until November 2, 2006, it would (i) not convert any additional amount
        of
        the Debentures into shares of our Common Stock, and (ii) forebear from
        exercising its rights and remedies under the Debentures and the related
        documents.
 
 On
        July
        28, 2006, the Company issued 1,350,000 restricted shares of its Common Stock
        to
        Cornell and 150,000 restricted shares of its Common Stock to an individual
        designee of Cornell. The certificates representing such shares were dated
        as of
        June 20, 2006. The Company believes such issuances were exempt from registration
        under Section 4(2) of the Securities Act of 1933, as amended. As of June
        30,
        2007 Cornell sold all of its shares to third parties has no outstanding put
        option.
 
 **ADDITIONAL
        ISSUANCES OF COMMON STOCK**
 In
        June
        2007, the Company issued 625,000 shares of its common stock for $.20 per
        share
        to two purchasers.
  **NOTE
        11 - OPTION GRANT**
 
 The
        Company granted an additional option to one of the principles of Senergy
        for the
        purchase of up to 6,000,000 shares of the Company common stock at exercise
        prices ranging from $10 to $20 per share. The Company valued the cost of
        these
        options at $89,256 based upon the Black Scholes options pricing model and
        has
        reflected these as consulting expenses during the quarter ended March 31,
        2007.
  **NOTE
        12 - RELATED PARTY TRANSACTIONS**
 
 Interest
        income for the three and six months ended June 30, 2007 in amounts of $6,831
        and
        $13,083, respectively, and for the three and six months ended June 30, 2006
        in
        amounts of $45,060 and $89,625, respectively, earned from notes receivable
        from
        related parties.
 
 We
        believe 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
        13 - SUBSEQUENT EVENTS**
 
 On
        August
        6, 2007 Bartram Holdings, Inc. ("Bartram") exercised its options to pay off
        the
        $70,000 principal amount promissory note the company holds by delivering
        362,880
        shares of the company, held by Bartram, by Henry Santorow, and Stehem Robinson.
        On August 15, 2007 the shares where surrendered.


13




**Item
      2. Management’s Discussion and Analysis or Plan of
      Operation.**





As
      used
      throughout this report, the terms "DCI," the "Company," "we," "us," and "our"
      refer to DCI USA, Inc., and unless indicated otherwise, includes our
      subsidiaries.





**Forward
      Looking Statements**





This
      report on Form 10-QSB (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-KSB filed with the Securities and Exchange Commission
      (the “SEC”) on April 17, 2007, as amended on May 4, 2007, 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 two lines of business: (i) the development of clean energy
      technologies; and (ii) the renovation and conversion of buildings to commercial
      condominiums.




On
      August
      1, 2006, we 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. In consideration therefor, the Company cancelled the outstanding
      balance of certain loans previously made by the Company to Gunther in the amount
      of $1,055,384. (The Company’s Current Report of Form 8-K filed with the SEC on
      June 28, 2007 misstated the amount of loan cancellations as $1,468,000). An
      additional $444,616 of the balance of the $1,500,000 purchase price remains
      due
      from the Company to Gunther. These funds will be loaned to the Company by our
      Chairman, Jonathan Ilan Ofir, in accordance with his commitment to lend the
      Company of up to an aggregate of $1,000,000. Upon receipt of said funds from
      Mr.
      Ofir, the Company will pay to Gunther the sum of $444,616, representing the
      balance of the purchase price outstanding. As a result of the exercise of its
      option as described above, the Company acquired all the outstanding shares
      of
      Gunther, which thereby became a wholly-owned subsidiary of the Company.


14


Through
      its purchase of 334 shares of preferred stock of ARI, Ltd., Gunther now owns
      25%
      of the outstanding shares of capital stock of ARI, Ltd. The purchase price
      for
      these shares was $3,000,000. As of June 30, 2007, Gunther had paid an aggregate
      of $2,200,000 of the purchase price to ARI, Ltd. using funds previously loaned
      to Gunther by the Company, together with a payment from Gunther using proceeds
      from a bank loan to Gunther of $1,500,000. Gunther owes an additional $800,000
      to ARI, Ltd. to complete the transaction, which it expects to pay by August
      31,
      2007.





Pursuant
      to the terms and provisions of the agreement, the Company’s purchase of the
      preferred shares of ARI, Ltd. provides Gunther with the right to appoint one
      board member for every 12.5% of ARI, Ltd.’s outstanding capital stock owned. As
      of August 20, 2007, Gunther has appointed one director and has not yet exercised
      its right to appoint a second director.





ARI
      Ltd.
      owns and operates a wind farm known as Tel Assaniya Windfarm, which is located
      in Northern Israel. ARI has no employees and operates the Tel Assaniya Windfarm
      through a subcontractor. The Tel Assaniya Windfarm is planned to be upgraded
      from the current total capacity of 6MW, to seven wind turbines with a capacity
      of 2.3MW each. We 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 $3,000,000 investment, which amounts to $75,000 each
      quarter, in anticipation of the payment of future dividends. After the upgrade
      is completed, Gunther will receive a minimum of a 12.5% preferred annual
      return.





**Purchase
      and Strategic Relationship Agreement**





We
      have
      also engaged in ongoing negotiations with Senergy Ltd, an Israeli firm through
      which DCI plans to engage in solar energy projects across Israel, Spain, and
      Greece through various partnerships entered into by Senergy Solar Systems.
      In
      January 2007, the Company entered into a Purchase and Strategic Relationship
      Agreement with Senergy, Ltd. (“Senergy”), an Israeli limited liability company
      (the “Senergy Agreement”). Pursuant to the agreement, the Company, through a
      new, to-be-formed subsidiary, is to make investments in three installments
      totaling $500,000 in Senergy. In return for the investment, the Company receives
      promissory notes totaling $500,000 and a 60% equity interest in Senergy. The
      Promissory notes incur interest at the rate of 6% and are due 18 months after
      the date of the note. The Company made the first required installment of
      $100,000. The Company has requested that the terms of the Senergy Agreement
      be
      renegotiatied and Synergy has agreed to such renegotiation. If we are able
      to
      successfully conclude our negotiations, we will be in charge of managing
      fund-raising activities at Senergy and establishing strategic partnerships
      for
      Senergy. Senergy operates in the areas of solar heating and cooling and
      solar-based energy generation. Until negotiations are finalized, the two current
      owners of Senergy have personally guaranteed the loan of $100,000.





**231
      Norman Avenue**





The
      Company remains involved in the renovation and conversion of buildings to
      commercial condominiums. Our development at 231 Norman Avenue, in Brooklyn,
      New
      York is the underlying asset comprising the collateral on the loan discussed
      below. Construction is being completed and inspections are currently being
      conducted. Approvals needed for the commercial condominium plan offering have
      been obtained and 68 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.





The
      Company lent $1.37 million dollars to 231 Norman Ave, LLC (“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’s acquisition of Norman LLC, the Company controls 30% of the
      membership interests of 231 Norman Avenue Property Development, LLC (“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 million
      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 is
      due
      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.




15


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 million refinancing and construction loan with
      Washington Mutual with respect to the property at 231 Norman Avenue and received
      capital contributions from investors of $1.75 million. The project at 231 Norman
      Avenue, including the conversion of the existing building to condominiums,
      is
      anticipated to be completed during the third quarter of 2007.





**Financial
      Condition and Results of Operations**





**Comparison
      of the results of operations: three and six months ended June 30, 2007 to three
      and six months ended June 30, 2006** .





Our
      total
      income for the three months ended June 30, 2007 was $6,831, compared
      with total income of $45,060 for the three months ended June 30, 2006.
      Income for the quarter ended June 30, 2007 primarily consisted of interest
      income from notes receivable from related parties.





Our
      total
      income for the six months ended June 30, 2007 was $13,083, compared
      with total income of $89,625 for the six months ended June 30, 2006. Our
      income for the six months ended June 30, 2007 primarily consisted of interest
      income from notes receivable from related parties.





Our
      general and administrative expenses decreased to $48,900 for the three months
      ended June 30, 2007, from $66,379 for the three months ended June 30, 2006.
      Interest expense decreased to $48,223 for the quarter ended June 30, 2007,
      from
      $73,039 for the quarter ended June 30, 2006.





Professional
      fees increased from $18,134 for the quarter ended June 30, 2006, to $128,500
      for
      the quarter ended June 30, 2007. Consulting fees were $2,000 and $91,256 for
      the
      three months and six months ended June 30, 2007.





Total
      loss from operations during the quarter ended June 30, 2006 was $114,977, which
      increased to $121,293 during the quarter ended June 30, 2007. The increase
      in
      loss is attributed mainly to the decrease in interest income due to the
      cancellation of loans made to 231 NAPD and the increase in legal fees incurred
      in connection with the Gunther and ARI transactions.





**Comparison
      of the results of operations: three and six months ended June 30, 2006 to three
      and six months ended June 30, 2005** .





Our
      total
      income for the quarter ended June 30, 2006 was $45,060, compared with total
      income of $52,936 for the quarter ended June 30, 2005. Income for the quarter
      ended June 30, 2006 consisted solely of interest income earned from our notes
      receivable from related parties.





Our
      total
      income for the six months ended June 30, 2006 was $89,625, compared
      with total income of $97,936 for the six months ended June 30, 2005. The
      majority of total income consisted of interest income earned from our notes
      receivable from related parties.





Our
      general and administrative expenses decreased to $66,379 for the quarter ended
      June 30, 2006, from $85,219 for the quarter ended June 30, 2005. The decrease
      was primarily due to having less consulting fees. Interest expense increased
      to
      $73,039 for the quarter ended June 30, 2006 from $42,670 for the quarter ended
      June 30, 2005. The increase is due primarily from the Company's agreement to
      raise the interest rate from 8% to 12% on the Debentures per annum, retroactive
      to the original dates as of which the Debentures were issued.


16


Our
      general and administrative expenses decreased significantly to $106,080 for
      the
      six months ended June 30, 2006 from $155,730 for the six months ended June
      30,
      2005. The decrease was due to the Company paying less consulting fees. Interest
      expense was $114,327 for the six months ended June 30, 2006 compared with
      $80,111 for the six months ended June 30, 2005. The increase is due primarily
      from the Company's agreement to raise the interest rate from 8% to 12% on the
      Debentures per annum, retroactive to the original dates as of which the
      Debentures were issued.





Professional
      fees decreased from $49,163 for the quarter ended June 30, 2005 to $18,134
      for
      the quarter ended June 30, 2006. We incurred significant legal and accounting
      fees during the quarter ended June 30, 2005, because we had begun to operate
      as
      a Business Development Company (“BDC”) in February 2005. During the quarter
      ended March 31, 2006, we withdrew as a BDC, thereby no longer having to incur
      legal and accounting expenses for complying with the rules and regulations
      applicable to BDCs.





Professional
      fees decreased from $120,083 for the six months ended June 30, 2005 to $36,859
      for the six months ended June 30, 2006. We incurred significant legal and
      accounting fees during the six months ended June 30, 2005 because we began
      to
      operate as a Business Development Company. During the


quarter
      ended March 31, 2006, we withdrew as a BDC, thereby no longer having to incur
      legal and accounting expenses for complying with the rules and regulations
      applicable to BDCs.





Management
      fees were $60,156 for the six months ended June 30, 2005, paid in shares of
      Common Stock valued at $0.05 per share, but we did not incur management fees
      for
      the six months ended June 30, 2006.





Total
      other income and expense was $38,923 during the quarter ended June 30, 2005,
      consisting of a net loss on the value of the Bartram Holdings, Inc. ("Bartram")
      investment (previously disclosed), and was zero during the quarter ended June
      30, 2006.





As
      a
      result primarily of the reductions in professional fees and general and
      administrative expenses and the increase in interest expense from the second
      quarter of 2005 to the second quarter of 2006, our total expenses were reduced
      and our net loss was reduced from $163,039 to $114,977 during such
      periods.





**Liquidity
      and Capital Resources**





Our
      cash
      as of June 30, 2007 was $9,258. We believe that we will be able to meet our
      cash
      requirements over the next twelve months principally through loans
      from our Chairman.





In
      June
      2007, the Company raised an aggregate of $125,000 from the sales of its common
      stock to two purchasers. The shares were sold pursuant to Section 4(2) of the
      Securities Act of 1933.





Over
      the
      next twelve months, we will need additional financing to expand our business,
      to
      carry out our business plan and to reduce our debt. There is no assurance that
      we will be able to obtain additional financing in sufficient amounts or on
      acceptable terms when needed, and our inability to obtain sufficient financing
      will adversely affect our operating results and prospects.





Notes
      Receivable





In
      exchange for the cancellation of $1,370,000 aggregate principal amount of note
      obligations owed to us, we have acquired an aggregate of 30% of the outstanding
      membership interests in 231 NAPD. We previously reported that 231 NAPD had
      received the necessary approval to convert the commercial use building at 231
      Norman Avenue, Brooklyn, New York, into 68 loft units to be sold as
      condominiums. We anticipate that the conversion will be completed this during
      the third quarter 2007. As soon as a Temporary Certificate of Occupancy is
      obtained, 231 NAPD will begin to close on the sale of units, approximately
      22 of
      which are under contract as of the date of this discussion.





231
      NAPD
      reports that it requires an additional $700,000 to complete renovations of
      the
      real property owned by 231 NAPD at 231 Norman Avenue, Brooklyn, New York, and
      to
      apply for the Temporary Certificate of Occupancy. The Company agreed that,
      until
      the closing of a bridge loan in the amount of $700,000, it would loan 231 NAPD
      up to $200,000, bearing 10% interest per annum, and lent a total of $194,000
      pursuant thereto. On May 31, 2007, 231 NAPD obtained a bridge loan in the amount
      of $700,000. All outstanding principal and interest due by 231 NAPD to the
      Company was paid on May 31, 2007 at the closing of the bridge loan. Interest
      receivable was booked for the first quarter 2007.


17


As
      of
      June 30, 2007, our notes payable consisted of the following:





The
      Company has a promissory note payable to Hypothecators Mortgage Company
      (“Hypothecators”) totaling $400,000. The promissory note accrues interest at the
      rate of 15% per annum and was due June 15, 2006. The note was extended to
      October 31, 2006. The Company entered into an arrangement with Hypothecators
      whereby the Company would make monthly payments of $50,000 of principal and
      interest though October 2007. The Company made payments pursuant to the
      agreement in February and March 2007.





In
      addition, 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. 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 June 30, 2007, there was $600,000 outstanding on the
      Debentures. The agreement was amended to extend the due date to December 31,
      2007,





In
      addition, 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 (at December 31, 2006 the exercise price
      would
      have been $.05). 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. At June 30, 2007, there
      was
      $465,000 in convertible notes outstanding. The Company did not make the
      quarterly payments of December 31, 2006 and of March 31, 2007 of interest
      timely, causing a default on the notes. The interest payments were made during
      January, May, June, and July, 2007, respectively, and is current on its
      payments. None of the note holders has notified the Company of their intention
      to exert any of their rights regarding this default.





The
      Company also has a balance payable to our Chairman, Jonathan Ilan Ofir, who
      has
      agreed to loan the Company between $300,000 and $500,000 for 15 months bearing
      interest at 6% per annum. Principal and interest will be paid at the loan
      maturity date. As of June 30, 2007 the Company had borrowed from Mr. Ofir an
      aggregate of $597,000. Included in this amount is $486,384 which Mr. Ofir loaned
      to the Company to acquire Gunther.





**Impact
      of Inflation**





Inflation
      has not had a material effect on our results of operation.




**Item
      3. Controls and Procedures.**





**Evaluation
      of Disclosure Controls and Procedures**


18


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 officer and principal financial
      officer have reviewed the effectiveness of our “disclosure controls and
      procedures” (as defined in the Securities Exchange Act of 1934 Rules 13a-14(c)
      and 15d-14(c)) as of the end of the period covered by this report and have
      concluded that the 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 officer and principal financial officer.





**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
      2.**  **Unregistered
      Sales of Equity Securities and Use of Proceeds.**





During
      the quarter ended June 30, 2007, we sold an aggregate of 625,000 shares of
      the
      Company’s common stock to two purchasers for an aggregate purchase price of
      $125,000. The shares were sold pursuant to Section 4(2) of the Securities Act
      of
      1933.





**Item
      3.**  **Defaults
      Upon Senior Securities.**





As
      discussed above, the Company issued a promissory note payable to Hypothecators
      in the principal amount of $400,000. The promissory note accrues interest at
      the
      rate of 15% per annum and was due June 15, 2006. The term of the note was
      subsequently extended to October 31, 2006. The Company entered into an
      arrangement with Hypothecators whereby the Company would make monthly payments
      of $50,000 of principal and interest though October 2007. The Company made
      payments pursuant to the agreement in February and March 2007, but has not
      made
      any payments thereafter. We have entered into negotiations with Hypothecators
      to
      extend the due date and/or modify the terms of the note.





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





None.





**Item
      5.**  **Other
      Information.**





On
      August
      6, 2007 Bartram exercised its option to pay off the $70,000 principal amount
      promissory note owed to the Company by delivering its 362,880 shares of the
      Company for cancellation.




**Item
      6.**  **Exhibits.**


19


The
      agreements to be filed as exhibits shall be filed as an amendment to this Report
      upon receipt of translated versions of said agreements.





The
      following exhibits are filed as part of this report:





Exhibit
                No.
            
            Description
                of Exhibit31.1
            --
            Certification
                of Chief Executive Officer pursuant to Rule 13a-14(a) under the Securities
                Exchange Act of 1934.31.2
            --
            Certification
                of Chief Financial Officer pursuant to Rule 13a-14(a) under the Securities
                Exchange Act of 1934.32.1
            --
            Certification
                of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley
                Act of 2002 (18 U.S.C. 1350).32.2
            --
            Certification
                of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley
                Act of 2002 (18 U.S.C. 1350).








20




**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:
                August 20, 2007
            DCI
                USA, INC.By:
            /s/
                David RothsteinDavid
                Rothstein
              Chief
                Executive Officer
              (Principal
                Executive Officer)





By:
            /s/
                Jonathan RigbiJonathan
                Rigbi
              Chief
                Financial Officer
              (Principal
                Financial and Accounting Officer)








21