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**Index          to Financial Statements**

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**UNITED      STATES**

**SECURITIES      AND EXCHANGE COMMISSION**

**FORM      10-QSB**

**|X|      QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT**

**OF      1934 **

**|_|      TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT      **

**OF      1934 **

*Commission      file number 333-52268 *

**DIRECT      RESPONSE FINANCIAL SERVICES, INC.**

**COLORADO**

**2899      AGOURA ROAD #115**

**WESTLAKE      VILLAGE, CA 91361**

**APPLICABLE      ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS**

**DURING      THE PRECEDING FIVE YEARS**

**APPLICABLE      ONLY TO CORPORATE ISSUERS**

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**Index          to Financial          Statements**

**DIRECT      RESPONSE FINANCIAL SERVICES, INC. **

**QUARTERLY      REPORT ON FORM 10-QSB **

**FOR      THE QUARTER ENDED JULY 31, 2006 **

TABLE      OF CONTENTS

| PART                I. FINANCIAL INFORMATION                                                        |                     |
|-----------------------------------------------------------------------------------------------------|--------------------------|
| ITEM                1 - FINANCIAL STATEMENTS AND NOTES                                              | F-1                - F-8 |
| ITEM                2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL                CONDITION  | 3                        |
| ITEM                3 - CONTROLS AND PROCEDURES                                                     | 5                        |
|                                                                                                |                     |
| PART                II. OTHER INFORMATION                                                           |                     |
| ITEM                1. - LEGAL PROCEEDINGS                                                          | 6                        |
| ITEM                2. - UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF                PROCEEDS | 6                        |
| ITEM                3. - DEFAULTS UPON SENIOR                SECURITIES                             | 6                        |
| ITEM                4. - SUBMISSION OF MATTERS TO A VOTE OF SECURITY                HOLDERS         | 6                        |
| ITEM                5. - OTHER INFORMATION                                                          | 6                        |
| ITEM                6. - EXHIBITS                                                                   | 6                        |
| SIGNATURES                                                                                          | 7                        |

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**Index            to Financial            Statements**

**INDEX      TO FINANCIAL STATEMENTS **

**DIRECT      RESPONSE FINANCIAL SERVICES, INC. **

**CONSOLIDATED      INTERIM FINANCIAL STATEMENTS **

|                                                                     | Page   |
|--------------------------------------------------------------------------|--------|
|                                                                     |   |
| Consolidated                Balance Sheets                               | F-2    |
|                                                                     |   |
| Consolidated                Statements of Operations                     | F-4    |
|                                                                     |   |
| Consolidated                Statements of Cash Flows                     | F-5    |
|                                                                     |   |
| Notes                to Consolidated Financial                Statements | F-6    |

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**Index            to Financial            Statements**

**DIRECT      RESPONSE FINANCIAL SERVICES, INC.**

***Consolidated      Balance Sheets***

| ASSETS                                                                                                                                                                                                 |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                                                                                                   |   | July                31,2006(Unaudited) |   | January                31,2006(Note                1) |   |
| CURRENT                ASSETS                                                                                                                                                                          |   |   |   |   |   |
| Cash                                                                                                                                                                                                   |   | $ | 3,630 |   | $ | 4,047 |   |
| Net                investment in capital leases                                                                                                                                                        |   |   | 117,563 |   |   | 50,371 |   |
| Accounts                Receivable net of allowance for doubtful accounts                                                                                                                              |   |   | — |   |   | — |   |
| Inventory                                                                                                                                                                                              |   |   | 58,000 |   |   | 58,000 |   |
| Prepaid                Expense                                                                                                                                                                         |   |   | 35,933 |   |   | 36,933 |   |
| Total                current assets                                                                                                                                                                    |   |   | 215,126 |   |   | 149,351 |   |
|                                                                                                                                                                                                   |   |   |   |   |   |   |   |
| PROPERTY                AND EQUIPMENT                                                                                                                                                                  |   |   |   |   |   |   |   |
| Net                of $2,119 and $1,116 depreciation at July 31, 2006 and                                                                                                                              |   |   | 32,116 |   |   | 893 |   |
| January                31, 2006                                                                                                                                                                        |   |   |   |   |   |   |   |
| OTHER                ASSETS                                                                                                                                                                            |   |   |   |   |   |   |   |
| Investments                                                                                                                                                                                            |   |   | 200,000 |   |   | 200,000 |   |
| Less                valuation allowance                                                                                                                                                                |   |   | (200,000 | ) |   | (200,000 | ) |
| Total                assets                                                                                                                                                                            |   | $ | 247,242 |   | $ | 150,243 |   |
|                                                                                                                                                                                                   |   |   |   |   |   |   |   |
| LIABILITIES                AND STOCKHOLDERS’ EQUITY (DEFICIT)                                                                                                                                    |
| CURRENT                LIABILITIES                                                                                                                                                                     |   |   |   |   |   |   |   |
| Bank                notes payable                                                                                                                                                                      |   | $ | 348,766 |   | $ | 255,937 |   |
| Revolving                loan payable                                                                                                                                                                  |   |   | 96,832 |   |   | — |   |
| Debenture                payable                                                                                                                                                                       |   |   | 92,342 |   |   | 92,342 |   |
| Accounts                payable                                                                                                                                                                        |   |   | 214,219 |   |   | 115,826 |   |
| Accounts                payable - related party                                                                                                                                                        |   |   | 716,948 |   |   | 596,300 |   |
| Accrued                expenses                                                                                                                                                                        |   |   | 74,782 |   |   | 66,396 |   |
| Shareholder                deposit                                                                                                                                                                     |   |   | 165,000 |   |   | 165,549 |   |
| Advances                from related party                                                                                                                                                             |   |   | 223,600 |   |   | 26,766 |   |
| Advances                from stockholders, current portion                                                                                                                                             |   |   | 381,760 |   |   | 381,760 |   |
| Total                current liabilities                                                                                                                                                               |   |   | 2,314,249 |   |   | 1,700,876 |   |
| Total                liabilities                                                                                                                                                                       |   |   | 2,314,249 |   |   | 1,700,876 |   |
|                                                                                                                                                                                                   |   |   |   |   |   |   |   |
| Commitments                and contingencies                                                                                                                                                           |   |   | — |   |   | — |   |
|                                                                                                                                                                                                   |   |   |   |   |   |   |   |
| STOCKHOLDERS’                EQUITY (DEFICIT)                                                                                                                                                    |   |   |   |   |   |   |   |
| Common                stock - authorized 100,000,000 shares, no par value,                74,256,335 and 78,537,168 shares issued and outstanding                at July 31, 2006 and January 31, 2006 |   |   | 3,556,164 |   |   | 3,681,556 |   |
| Common                stock warrants                                                                                                                                                                   |   |   | 112,606 |   |   | 115,106 |   |
| Accumulated                other comprehensive (loss)                                                                                                                                                  |   |   | (200,000 | ) |   | (200,000 | ) |
| Subscribed                stock                                                                                                                                                                        |   |   | — |   |   | (111,824 | ) |
| (Deficit)                accumulated during the development stage                                                                                                                                      |   |   | (5,535,777 | ) |   | (5,035,471 | ) |
| Total                stockholders’ equity (deficit)                                                                                                                                              |   |   | (2,067,007 | ) |   | (1,550,633 | ) |
| Total                liabilities and stockholders’ equity (deficit)                                                                                                                              |   | $ | 247,242 |   | $ | 150,243 |   |

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**Index            to Financial            Statements**

|                                                    |   | Six                MonthsEndingJuly                31, 2006 |       | Six                MonthsEndingJuly                31, 2005 |   | April                24, 2002(inception)                throughJuly                31, 2006 |   |
|---------------------------------------------------------|--------|-------------------------------------------------------------|------------|-------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------|--------|
|                                                    |   |                                                        |       |                                                        |   |                                                                                        |   |
| Revenues                                                |   | $                                                           | 36         |                                                        | $      | 10,097                                                                                      |   | $ | 37,702 |   |
| Cost                of sales                            |   |                                                        | —    |                                                        |   | —                                                                                     |   |   | 5,888 |   |
| Gross                Profit                             |   |                                                        | 36         |                                                        |   | 10,097                                                                                      |   |   | 31,814 |   |
| Lease                financing interest                 |   |                                                        | 66,360     |                                                        |   | —                                                                                     |   |   | 78,303 |   |
| Total                                                   |   |                                                        | 66,396     |                                                        |   | 10,097                                                                                      |   |   | 110,117 |   |
|                                                    |   |                                                        |       |                                                        |   |                                                                                        |   |   |   |   |
| Costs                and Expenses:                      |   |                                                        |       |                                                        |   |                                                                                        |   |   |   |   |
| Consulting                expense paid by issuing stock |   |                                                        | —    |                                                        |   | 284,000                                                                                     |   |   | 2,760,758 |   |
| Consulting                expense paid by cash          |   |                                                        | 88,253     |                                                        |   | 63,584                                                                                      |   |   | 340,649 |   |
| Professional                fees                        |   |                                                        | 150,794    |                                                        |   | 154,125                                                                                     |   |   | 919,401 |   |
| Advertising                and marketing                |   |                                                        | 141,090    |                                                        |   | 42,393                                                                                      |   |   | 385,234 |   |
| General                and administrative               |   |                                                        | 123,857    |                                                        |   | 112,580                                                                                     |   |   | 791,716 |   |
| Rent                                                    |   |                                                        | 30,549     |                                                        |   | 12,000                                                                                      |   |   | 119,405 |   |
| Total                                                   |   |                                                        | 534,543    |                                                        |   | 668,682                                                                                     |   |   | 5,317,163 |   |
|                                                         |   |                                                        |       |                                                        |   |                                                                                        |   |   |   |   |
| Earnings                (loss) from operations          |   |                                                        | (468,147   | )                                                           |   | (658,585                                                                                    | )      |   | (5,207,046 | ) |
|                                                    |   |                                                        |       |                                                        |   |                                                                                        |   |   |   |   |
| Interest                income                          |   |                                                        | —    |                                                        |   | —                                                                                     |   |   | 794,807 |   |
| Interest                expense                         |   |                                                        | (38,159    | )                                                           |   | (11,550                                                                                     | )      |   | (1,129,538 | ) |
|                                                    |   |                                                        |       |                                                        |   |                                                                                        |   |   |   |   |
| Net                (loss)                               |   | $                                                           | (506,306   | )                                                           | $      | (670,135                                                                                    | )      | $ | (5,541,777 | ) |
|                                                    |   |                                                        |       |                                                        |   |                                                                                        |   |   |   |   |
| (Loss)                per share                         |   | $                                                           | (.01       | )                                                           | $      | (.01                                                                                        | )      | $ | (.15 | ) |
|                                                    |   |                                                        |       |                                                        |   |                                                                                        |   |   |   |   |
|                                                    |   |                                                        |       |                                                        |   |                                                                                        |   |   |   |   |
| Weighted                average shares outstanding      |   |                                                        | 76,878,628 |                                                        |   | 71,216,136                                                                                  |   |   | 38,835,927 |   |

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**Index            to Financial            Statements**

**DIRECT      RESPONSE FINANCIAL SERVICES, INC.**

***Consolidated      Statements of Operations***

*(Unaudited)*

|                                                    |   | Three                MonthsEndingJuly                31, 2005 |       | Three                MonthsEndingJuly                31, 2005 |   |
|---------------------------------------------------------|--------|---------------------------------------------------------------|------------|---------------------------------------------------------------|--------|
|                                                    |   |                                                          |       |                                                          |   |
| Revenues                                                |   | $                                                             | —    |                                                          | $      | 10,078 |   |
| Lease                financing interest                 |   |                                                          | 47,404     |                                                          |   | — |   |
| Total                                                   |   |                                                          | 47,404     |                                                          |   | 10,078 |   |
|                                                    |   |                                                          |       |                                                          |   |   |   |
| Costs                and Expenses:                      |   |                                                          |       |                                                          |   |   |   |
| Consulting                expense paid by issuing stock |   |                                                          | —    |                                                          |   | 14,000 |   |
| Consulting                expense paid by cash          |   |                                                          | 36,480     |                                                          |   | 12,584 |   |
| Professional                fees                        |   |                                                          | 79,738     |                                                          |   | 86,128 |   |
| Advertising                and marketing                |   |                                                          | 41,400     |                                                          |   | 39,098 |   |
| General                and administrative               |   |                                                          | 53,701     |                                                          |   | (28,953 | ) |
| Rent                                                    |   |                                                          | 10,973     |                                                          |   | 6,000 |   |
| Total                                                   |   |                                                          | 222,292    |                                                          |   | 128,857 |   |
|                                                         |   |                                                          |       |                                                          |   |   |   |
| Earnings                (loss) from operations          |   |                                                          | (174,888   | )                                                             |   | (118,779 | ) |
|                                                    |   |                                                          |       |                                                          |   |   |   |
| Interest                expense                         |   |                                                          | (20,899    | )                                                             |   | (5,676 | ) |
|                                                    |   |                                                          |       |                                                          |   |   |   |
| Net                (loss)                               |   | $                                                             | (195,787   | )                                                             | $      | (124,455 | ) |
|                                                    |   |                                                          |       |                                                          |   |   |   |
| (Loss)                per share                         |   | $                                                             | (.01       | )                                                             | $      | (.01 | ) |
|                                                    |   |                                                          |       |                                                          |   |   |   |
| Weighted                average shares outstanding      |   |                                                          | 75,349,968 |                                                          |   | 77,720,470 |   |

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**Index            to Financial            Statements**

**DIRECT      RESPONSE FINANCIAL SERVICES, INC.**

***Consolidated      Statement of Cash Flows***

***(Unaudited)***

|                                                                   |   |  SixMonthsEndingJuly                31,2006 |     |  SixMonthsEndingJuly                31,2005 |   | April                24,2002(inception)throughJuly                31,2006 |   |
|------------------------------------------------------------------------|--------|--------------------------------------------------|----------|--------------------------------------------------|--------|---------------------------------------------------------------------------|--------|
| Cash                flows from operating activities:                   |   |                                             |     |                                             |   |                                                                      |   |
| Net                (loss)                                              |   | $                                                | (506,306 | )                                                | $      | (670,135                                                                  | )      | $ | (5,541,777 | ) |
| Non-cash                items included in net (loss):                  |   |                                             |     |                                             |   |                                                                      |   |   |   |   |
| Depreciation                                                           |   |                                             | 779      |                                             |   | 223                                                                       |   |   | 2,119 |   |
| Conversion                and warrant derivative expense               |   |                                             | —  |                                             |   | —                                                                   |   |   | 142,861 |   |
| Expenses                paid by issuing stock                          |   |                                             | —  |                                             |   | 270,000                                                                   |   |   | 2,655,633 |   |
| Loss                on investment                                      |   |                                             | —  |                                             |   | —                                                                   |   |   | 60,000 |   |
| Net                change in operating assets and liabilities:         |   |                                             |     |                                             |   |                                                                      |   |   |   |   |
| Accounts                receivable                                     |   |                                             | —  |                                             |   | 9,384                                                                     |   |   | — |   |
| Net                investment in capital leases                        |   |                                             | (67,192  | )                                                |   | —                                                                   |   |   | (17,029 | ) |
| Prepaid                expenses and deposits                           |   |                                             | 1,000    |                                             |   | (27,287                                                                   | )      |   | 14,067 |   |
| Inventory                                                              |   |                                             | —  |                                             |   | —                                                                   |   |   | (58,000 | ) |
| Accounts                payable and accrued liabilities                |   |                                             | 233,516  |                                             |   | 144,795                                                                   |   |   | 919,415 |   |
| Net                cash (used) by operating activities                 |   |                                             | (338,203 | )                                                |   | (273,020                                                                  | )      |   | (1,822,711 | ) |
|                                                                   |   |                                             |     |                                             |   |                                                                      |   |   |   |   |
| Cash                flows from investing activities:                   |   |                                             |     |                                             |   |                                                                      |   |   |   |   |
| Purchase                of investments                                 |   |                                             | —  |                                             |   | —                                                                   |   |   | (260,000 | ) |
| Purchase                of property and equipment                      |   |                                             | (32,001  | )                                                |   | —                                                                   |   |   | (34,234 | ) |
| Net                cash (used) by investing activities                 |   |                                             | (32,001  | )                                                |   | —                                                                   |   |   | (294,234 | ) |
|                                                                   |   |                                             |     |                                             |   |                                                                      |   |   |   |   |
| Cash                flows from financing activities:                   |   |                                             |     |                                             |   |                                                                      |   |   |   |   |
| Proceeds                from revolving loans                           |   |                                             | 92,829   |                                             |   | —                                                                   |   |   | 348,766 |   |
| Proceeds                from loans payable                             |   |                                             | 96,832   |                                             |   | —                                                                   |   |   | 96,832 |   |
| Proceeds                from shareholder deposit                       |   |                                             | —  |                                             |   | —                                                                   |   |   | 465,000 |   |
| (Repayment)                of shareholder deposit                      |   |                                             | (549     | )                                                |   | —                                                                   |   |   | (549 | ) |
| Proceeds                from advances - related parties                |   |                                             | 196,834  |                                             |   | 11,863                                                                    |   |   | 620,777 |   |
| Repayment                of advances —related parties            |   |                                             | —  |                                             |   | —                                                                   |   |   | (19,417 | ) |
| Proceeds                from common stock warrants                     |   |                                             | —  |                                             |   | —                                                                   |   |   | 115,106 |   |
| Proceeds                from issuance of common stock                  |   |                                             | —  |                                             |   | 185,595                                                                   |   |   | 412,038 |   |
| (Purchase)                of common stock                              |   |                                             | (16,068  | )                                                |   | —                                                                   |   |   | (17,978 | ) |
| Proceeds                from debenture                                 |   |                                             | —  |                                             |   | —                                                                   |   |   | 100,000 |   |
| Bank                overdraft                                          |   |                                             | (91      | )                                                |   | 25,529                                                                    |   |   | — |   |
| Net                cash provided by financing activities               |   |                                             | 369,787  |                                             |   | 223,027                                                                   |   |   | 2,120,575 |   |
| Net                increase (decrease) in cash                         |   |                                             | (417     | )                                                |   | (49,993                                                                   | )      |   | 3,630 |   |
| Cash                at beginning of period                             |   |                                             | 4,047    |                                             |   | 49,993                                                                    |   |   | — |   |
| Cash                at end of period                                   |   | $                                                | 3,630    |                                             |   | —                                                                   |   |   | 3,630 |   |
|                                                                   |   |                                             |     |                                             |   |                                                                      |   |   |   |   |
| Supplemental                disclosure of cash flow information:       |   |                                             |     |                                             |   |                                                                      |
| Noncash                transactions                                    |   |                                             |     |                                             |   |                                                                      |   |   |   |   |
| Note                payable issued for acquisition of  investment |   |                                             | —  |                                             |   | —                                                                   |   |   | 220,000 |   |
| Cash                paid during the period for:                        |   |                                             |     |                                             |   |                                                                      |   |   |   |   |
| Interest                                                               |   | $                                                | 3,381    |                                             | $      | —                                                                   |   | $ | 13,574 |   |
| Income                taxes                                            |   | $                                                | —  |                                             | $      | —                                                                   |   | $ | — |   |

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**Index            to Financial            Statements**

**DIRECT      RESPONSE FINANCIAL SERVICES, INC.**

***(A      Development Stage Company)***

***Notes      to Consolidated Financial      Statements***

***(Unaudited)***

***Note      1 - Financial Statements***

***Note      2 - Summary of Significant Accounting Policies***

**Organization      and Description of Business**

**Development      Stage Company**

**Basis      of Consolidation**

***Note      3- Contingencies***

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**Index            to Financial            Statements**

**DIRECT      RESPONSE FINANCIAL SERVICES, INC.**

***(A      Development Stage Company)***

***Notes      to Consolidated Financial Statements***

***(Unaudited)***

***Note      4 - Financing***

***Note      5 - Accounting for Stock-Based Compensation***

***Note      6 - Lease***

| Period                ended     |   | Amount |   |
|---------------------------------|--------|--------|--------|
| January                31, 2007 |   | $      | 52,898 |   |
| January                31, 2008 |   |   | 61,966 |   |
| January                31, 2009 |   |   | 63,825 |   |
| January                31, 2010 |   |   | 10,689 |   |

***Note      7 - Related Party Transactions***

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**Index            to Financial            Statements**

**DIRECT      RESPONSE FINANCIAL SERVICES, INC.**

***(A      Development Stage Company)***

***Notes      to Consolidated Financial Statements***

***(Unaudited)***

***Note      8 - Subsequent Event***

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**Index            to Financial            Statements**

**ITEM      2. MANAGEMENT DISCUSSION AND ANALYSIS **

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**Index            to Financial            Statements**

|   | · | The                Company conceived of and started a new division called Direct2own                which                markets via the Internet, tv, print and other media. This division                offers                select consumer electronics such as brand name computers and tvs                to                consumers in the sub-prime credit market. www.direct2own.com.                This group focuses on the sub-prime credit consumer who is looking                to                acquire a consumer electronic product regardless of price since the                consumer needs financial assistance from the Company to acquire the                consumer product. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The                Company conceived of and started a new division called Direct2own                Electronics which markets and sells select groupings of premier audio                and                video components to those consumers who want the best in car or home                audio/video. www.d2oelectronics.com.                This group focuses on those consumers who want the best in car and                home                audio/video at the best price. The Company collects full payment                from                these consumers at the time of sale. What is unique about the business                model and product offerings of this group is that the products are                generally offered in groups which include all electronic cables,                components, batteries, etc. which are specifically selected to function                with the audio/video units selected by the customer. By doing so                the                division makes it easy for the consumer to buy all they need for                a                successful audio/video installation or upgrade. The product lines                offered                by this group and the combination of product packages is very unique                in                the consumer electronic retail industry and will set the Company                apart                from most of its competitors in this space. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The                Company re-modeled its Direct Card Services group to focus on implementing                its core business strategy - the offering and distribution of pre-paid                debit cards - to coincide with the successful launch of the VISA                debit                card loading network. By coordinating pre-paid debit card offers                with the                start and expansion of the VISA debit card loading network, the Company                has a higher certainty that the utility of its debit cards will be                recognized by the consumer and accordingly the demand for the Company’s                debit cards will increase since the ability for a customer to load                a debit                card offered by the Company at any VISA bank partner should prove                compelling to the consumer. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The                Company entered into an agreement with Suntasia Marketing, Inc. located                in                Largo, Florida. Pursuant to the agreement Suntasia Marketing will                provide                customer leads to the Direct2Own division in exchange for commission                payments when a confirmed sale occurs. This agreement is strategically                beneficial to the Company since Suntasia Marketing has the ability                to                dramatically increase sales in the Direct2Own division. For more                information please see www.suntasia.com. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**CAPITAL      RAISING ACTIVITIES **

**Revolving      Loan and Security Agreement **

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**Index            to Financial            Statements**

**PRIVATE      SALE OF STOCK **

**ONGOING      REQUIREMENTS **

**CRITICAL      ACCOUNTING POLICIES AND RECENT ACCOUNTING PRONOUNCEMENTS**

**ITEM      3. CONTROLS AND PROCEDURES **

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**Index            to Financial            Statements**

**PART      II**

**OTHER      INFORMATION **

**ITEM      1. LEGAL PROCEEDINGS **

**ITEM      2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS**

**ITEM      3. DEFAULTS UPON SENIOR SECURITIES**

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

**ITEM      5. OTHER INFORMATION**

**ITEM      6. EXHIBITS **

| 31.1 | Certification                by Chief Executive Officer pursuant to Sarbanes-Oxley Section 302:                Provided Herewith |
|------|----------------------------------------------------------------------------------------------------------------------------------|

| 31.2 | Certification                by Chief Financial Officer pursuant to Sarbanes-Oxley Section 302:                Provided Herewith |
|------|----------------------------------------------------------------------------------------------------------------------------------|

| 32.1 | Certification                by Chief Executive Officer pursuant to 18 U.S. C. Section 1350: Provided                Herewith |
|------|-------------------------------------------------------------------------------------------------------------------------------|

| 32.2 | Certification                by Chief Financial Officer pursuant to 18 U.S. C. Section 1350: Provided                Herewith |
|------|-------------------------------------------------------------------------------------------------------------------------------|

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**Index          to Financial          Statements**

**SIGNATURES**

**DIRECT      RESPONSE FINANCIAL SERVICES, INC.**

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| NAME                                    |   | TITLE                           |   | DATE                              |
|-----------------------------------------|--------|---------------------------------|--------|-----------------------------------|
|                                    |   |                            |   |                              |
| /s/                T. Randolph Catanese |   | CEO                and Chairman |   | September                21, 2006 |
| T.                Randolph Catanese     |   |                            |   |                              |
|                                    |   |                            |   |                              |
| /s/                Daniel Brandt        |   | CFO                             |   | September                21, 2006 |
| Daniel                Brandt            |   |                            |   |                              |
|                                    |   |                            |   |                              |
| /s/                Douglas Hume         |   | Director                        |   | September                21, 2006 |
| Douglas                Hume             |   |                            |   |                              |

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