##### Table of Contents









SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549


Form 10-K


ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)


OF THE SECURITIES EXCHANGE ACT OF 1934




|                                           |                            
|------------------------------------------ | ---------------------------
|For the fiscal year ended January 30, 2005 | Commission File No. 0-25858

DAVE & BUSTERS, INC.


(Exact name of registrant as specified in its charter)


|                                                                             |  |                                            
|---------------------------------------------------------------------------- |  | -------------------------------------------
|Missouri                                                                     |  | 43-1532756                                 
|(State or other jurisdiction of
    incorporation or organization)           |  | (I.R.S. employer
    identification number)
|                                                                            
|2481 Manana Drive,
    Dallas, Texas(Address of principal executive offices) |  | 75220(Zip Code)                            

Registrants telephone number,


Including area code (214) 357-9588


Securities registered pursuant to Section 12(b) of the
Act:


Title of Each Class







Securities registered pursuant to Section 12(g) of the
Act:


None


þ o


o


þ o






DOCUMENTS INCORPORATED BY REFERENCE












---










FORM 10-K


TABLE OF CONTENTS


|                                                                                                         |  |                                                                                                                      |    |  |    |  |  | 
|-------------------------------------------------------------------------------------------------------- |  | -------------------------------------------------------------------------------------------------------------------- | -- |  | -- |  |  | 
|PART I                                                                                                  
|Item 1.                                                                                                  |  | Business                                                                                                             |    |  | 1  | 
|Item 2.                                                                                                  |  | Properties                                                                                                           |    |  | 9  | 
|Item 3.                                                                                                  |  | Legal Proceedings                                                                                                    |    |  | 10 | 
|Item 4.                                                                                                  |  | Submission of Matters to a Vote of Security
    Holders                                                              |    |  | 10 | 
|PART II                                                                                                 
|Item 5.                                                                                                  |  | Market for Registrants Common Equity,
    Related Stockholder Matters and Issuer Purchases of Equity
    Securities |    |  | 11 | 
|Item 6.                                                                                                  |  | Selected Financial Data                                                                                              |    |  | 11 | 
|Item 7.                                                                                                  |  | Managements Discussion and Analysis
    of Financial Condition and Results of Operations                            |    |  | 12 | 
|Item 7A.                                                                                                 |  | Quantitative and Qualitative Disclosures
    About Market Risk                                                       |    |  | 21 | 
|Item 8.                                                                                                  |  | Financial Statements and Supplementary
    Data                                                                      |    |  | 21 | 
|Item 9.                                                                                                  |  | Changes in and Disagreements with
    Accountants on Accounting and Financial Disclosure                             |    |  | 21 | 
|Item 9A.                                                                                                 |  | Controls and Procedures                                                                                              |    |  | 21 | 
|Item 9B.                                                                                                 |  | Other Information                                                                                                    |    |  | 23 | 
|Report of Independent Registered Public
    Accounting Firm on Internal Control over Financial Reporting |  |                                                                                                                      | 24 | 
|PART III                                                                                                
|Item 10.                                                                                                 |  | Directors and Executive Officers of the
    Registrant                                                               |    |  | 26 | 
|Item 11.                                                                                                 |  | Executive Compensation                                                                                               |    |  | 26 | 
|Item 12.                                                                                                 |  | Security Ownership of Certain Beneficial
    Owners and Management and Related Stockholder Matters                   |    |  | 26 | 
|Item 13.                                                                                                 |  | Certain Relationships and Related
    Transactions                                                                   |    |  | 26 | 
|Item 14.                                                                                                 |  | Principal Accountant Fees and Services                                                                               |    |  | 26 | 
|PART IV                                                                                                 
|Item 15.                                                                                                 |  | Exhibits and Financial Statement
    Schedules                                                                       |    |  | 26 | 
|Ratio of Earnings to Fixed Charges                                                                      
|Subsidiaries                                                                                            
|Consent of Registered Public Accounting Firm                                                            
|Rule 13a-14(a)/15d-14(a) Certifications                                                                 
|Section 1350 Certifications                                                                             



i



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PART I







|        |         
|------- | --------
|Item 1. | Business

Overview














1



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Acquisition of Certain Assets of Jillians Entertainment
Holdings, Inc.


Amendment to Senior Bank Credit Facility.


Competition






| |   |                                                         
| | - | --------------------------------------------------------
| |  | cost;                                                   
|
| |  | breadth of attractions;                                 
|
| |  | the geographic range from which they draw customers; and
|
| |  | frequency and duration of customer visits.              





Seasonality




2



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Strategy


Continue to improve revenues and profitability.


Continue focus on product enhancement.




| |                                                                                                                                                            
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------
| | 1) Introducing new and exciting game offerings by remaining
    on the leading edge of technology in concert with the game
    manufacturers.              
|
| | 2) Continuing the assimilation of the Jillians stores
    with emphasis on product improvement in food, beverage and
    amusements.                      
|
| | 3) Continuing our progress in reducing amusements costs
    through our program of direct purchase of merchandise from Asia.                               
|
| | 4) Continuing our emphasis on a well-rounded, quality, food
    and beverage menu by routine updates, which reflect current
    trends and guest favorites.

Pursue A Disciplined Growth Strategy.


Products




| |              
| | -------------
| | Entertainment

Traditional Entertainment.


Million Dollar Midway Games.






3



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| |                  
| | -----------------
| | Food and Beverage





| |                         
| | ------------------------
| | Location and Development





| |   |                                                                                                                
| | - | ---------------------------------------------------------------------------------------------------------------
| |  | visibility;                                                                                                    
|
| |  | accessibility to regional highway systems;                                                                     
|
| |  | zoning; regulatory restrictions; and                                                                           
|
| |  | proximity to shopping areas, office complexes, tourist
    attractions, theaters and other high traffic venues.







4



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Marketing, Advertising And Promotion








| |   |                                               
| | - | ----------------------------------------------
| |  | advertising and system-wide promotions;       
|
| |  | field marketing and local promotions; and     
|
| |  | special events for corporate and group guests.





Foreign Operations




Suppliers




Intellectual Property




5



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Government Regulation And Environmental Matters










Employees






6



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Executive Officers Of The Registrant


















7



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Risk Factors




| |                                                                                  
| | ---------------------------------------------------------------------------------
| | Our results of operations are dependent upon consumer
    discretionary spending.





| |                                                                                                                               
| | ------------------------------------------------------------------------------------------------------------------------------
| | We operate a limited number of entertainment complexes and
    new entertainment complexes require significant
    investment.





| |                                                                                                        
| | -------------------------------------------------------------------------------------------------------
| | We may not be able to compete favorably in the highly
    competitive out-of-home entertainment market.





| |                                                                                                
| | -----------------------------------------------------------------------------------------------
| | Our operations are subject to many government regulations
    that could affect our operations.



8



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| |                                                                                                              
| | -------------------------------------------------------------------------------------------------------------
| | We may face difficulties in attracting and retaining
    qualified employees for our entertainment complexes.





| |                                                                             
| | ----------------------------------------------------------------------------
| | Our growth depends upon our ability to open new
    entertainment complexes.





| |                                                                                        
| | ---------------------------------------------------------------------------------------
| | Local conditions, events and natural disasters could
    adversely affect our business.



Available Information.









|        |           
|------- | ----------
|Item 2. | Properties



9



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|                 |                 |                 |    |                     |           |  |   |       |  |  |    |    | 
|---------------- | --------------- | --------------- | -- | ------------------- | --------- |  | - | ----- |  |  | -- | -- | 
|                 |                 |                 |    | Number of Complexes |           |  |  
|State or Country |                 | Dave & Busters |    |                     | Jillians |  |   | Total | 
|                 |                 |                 |    |                     |           |  |   |       | 
|UNITED STATES    |                 |                 |    |                     |           |  |   |       |  |  |    |   
|                 | Arizona         |                 |    |                    |           |  |   | 1     |  |  |    | 1  | 
|                 | California      |                 |    | 6                   |           |  |   |      |  |  |    | 6  | 
|                 | Colorado        |                 |    | 2                   |           |  |   |      |  |  |    | 2  | 
|                 | Florida         |                 |    | 3                   |           |  |   |      |  |  |    | 3  | 
|                 | Georgia         |                 |    | 2                   |           |  |   |      |  |  |    | 2  | 
|                 | Hawaii          |                 |    | 1                   |           |  |   |      |  |  |    | 1  | 
|                 | Illinois        |                 |    | 2                   |           |  |   |      |  |  |    | 2  | 
|                 | Maryland        |                 |    | 1                   |           |  |   | 1     |  |  |    | 2  | 
|                 | Michigan        |                 |    | 1                   |           |  |   |      |  |  |    | 1  | 
|                 | Minnesota       |                 |    |                    |           |  |   | 1     |  |  |    | 1  | 
|                 | Missouri        |                 |    | 1                   |           |  |   |      |  |  |    | 1  | 
|                 | New York        |                 |    | 2                   |           |  |   | 2     |  |  |    | 4  | 
|                 | North Carolina  |                 |    |                    |           |  |   | 1     |  |  |    | 1  | 
|                 | Ohio            |                 |    | 3                   |           |  |   |      |  |  |    | 3  | 
|                 | Pennsylvania    |                 |    | 2                   |           |  |   | 1     |  |  |    | 3  | 
|                 | Rhode Island    |                 |    | 1                   |           |  |   |      |  |  |    | 1  | 
|                 | Tennessee       |                 |    |                    |           |  |   | 1     |  |  |    | 1  | 
|                 | Texas           |                 |    | 6                   |           |  |   | 1     |  |  |    | 7  | 
|                 |                 |                 |    |                     |           |  |   |       | 
|                 |                 |                 | 33 |                     |           |  | 9 |       |  |  | 42 |   
|                 |                 |                 |    |                     |           |  |   |       | 
|CANADA           |                 |                 |    |                     |           |  |   |       |  |  |    |   
|                 | Toronto, Canada |                 |    | 1                   |           |  |   |      |  |  |    | 1  | 
|                 |                 |                 |    |                     |           |  |   |       | 
|                 | TOTAL           |                 |    | 34                  |           |  |   | 9     |  |  |    | 43 | 
|                 |                 |                 |    |                     |           |  |   |       | 








|        |                   
|------- | ------------------
|Item 3. | Legal Proceedings.








|        |                                                         
|------- | --------------------------------------------------------
|Item 4. | Submission Of Matters To A Vote Of Security
    Holders.



10



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PART II







|        |                                                                                                                      
|------- | ---------------------------------------------------------------------------------------------------------------------
|Item 5. | Market For Registrants Common Equity, Related
    Stockholder Matters And Issuer Purchases Of Equity
    Securities.



|                 |  |      |       |  |     |   |       | 
|---------------- |  | ---- | ----- |  | --- | - | ----- | 
|                 |  | High |       |  | Low |  
|                 |  |      |       |  |     |  
|Fiscal Year 2004 |  |      |       |  |     |   |       | 
|Fourth Quarter   |  | $    | 20.31 |  |     | $ | 17.70 | 
|Third Quarter    |  |      | 19.19 |  |     |   | 15.16 | 
|Second Quarter   |  |      | 18.86 |  |     |   | 16.10 | 
|First Quarter    |  |      | 18.75 |  |     |   | 12.26 | 
|Fiscal Year 2003 |  |      |       |  |     |   |       | 
|Fourth Quarter   |  | $    | 14.65 |  |     | $ | 12.24 | 
|Third Quarter    |  |      | 13.15 |  |     |   | 9.73  | 
|Second Quarter   |  |      | 11.35 |  |     |   | 9.27  | 
|First Quarter    |  |      | 9.39  |  |     |   | 7.49  | 










|        |                         
|------- | ------------------------
|Item 6. | Selected Financial Data.



|                                                                                                          |         |                                                         |         |               |             |   |               |             |  |               |             |        |               |             |         |        |  |   |         |        | 
|--------------------------------------------------------------------------------------------------------- | ------- | ------------------------------------------------------- | ------- | ------------- | ----------- | - | ------------- | ----------- |  | ------------- | ----------- | ------ | ------------- | ----------- | ------- | ------ |  | - | ------- | ------ | 
|                                                                                                          |         | Fiscal Year Ended                                       |        
|                                                                                                          |         |                                                         |        
|                                                                                                          |         | January 30,                                             |         |               | February 1, |   |               | February 2, |  |               | February 3, |        |               | February 4, |        
|                                                                                                          |         | 2005(2)                                                 |         |               | 2004(1)     |   |               | 2003(1)     |  |               | 2002(1)     |        |               | 2001(1)     |        
|                                                                                                          |         |                                                         |         |               |             |   |               |             |  |               |             |        |               |             |        
|                                                                                                          |         |                                                         |         | (As restated) |             |   | (As restated) |             |  | (As restated) |             |        | (As restated) |            
|                                                                                                          |         | (In thousands, except per share amounts and store data) |        
|Statement of Operations Data:                                                                             |         |                                                         |         |               |             |   |               |             |  |               |             |        |               |             |         |        |  |   |         |       
|Total revenues                                                                                            |         | $                                                       | 390,267 |               |             | $ | 362,822       |             |  | $             | 373,752     |        |               | $           | 358,009 |        |  | $ | 332,303 |       
|Operating income                                                                                          |         |                                                         | 25,391  |               |             |   | 23,466        |             |  |               | 14,823      |        |               |             | 19,178  |        |  |   | 26,864  |       
|Income before provision for income taxes and cumulative effect
    of a change in an accounting principle |         |                                                         | 19,805  |               |             |   | 16,540        |             |  |               | 7,680       |        |               |             | 11,358  |        |  |   | 18,152  |       
|Cumulative effect of a change in an accounting principle, net of
    income taxes                         |         |                                                         |        |               |             |   |              |             |  |               | (7,096      | )      |               |             |        |        |  |   |        |       
|Net income (loss)                                                                                         |         | $                                                       | 12,880  |               |             | $ | 10,921        |             |  | $             | (2,008      | )      |               | $           | 7,259   |        |  | $ | 11,567  |       
|Earnings (loss) per share - after cumulative effect of change in
    an accounting principle:             |         |                                                         |         |               |             |   |               |             |  |               |             |        |               |             |         |        |  |   |         |       
|                                                                                                          | Basic   |                                                         | $       | 0.97          |             |   | $             | 0.83        |  |               | $           | (0.15  | )             |             | $       | 0.56   |  |   | $       | 0.89   | 
|                                                                                                          | Diluted |                                                         |         | 0.87          |             |   |               | 0.79        |  |               |             | (0.15  | )             |             |         | 0.56   |  |   |         | 0.89   | 
|Weighted average shares outstanding:                                                                      |         |                                                         |         |               |             |   |               |             |  |               |             |        |               |             |         |        |  |   |         |       
|                                                                                                          | Basic   |                                                         |         | 13,331        |             |   |               | 13,128      |  |               |             | 12,997 |               |             |         | 12,956 |  |   |         | 12,953 | 
|                                                                                                          | Diluted |                                                         |         | 16,540        |             |   |               | 14,646      |  |               |             | 13,404 |               |             |         | 13,016 |  |   |         | 12,986 | 

11



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|                                                 |  |                                                         |         |               |             |   |               |             |  |               |             |   |               |             |         |   |  |   |         | 
|------------------------------------------------ |  | ------------------------------------------------------- | ------- | ------------- | ----------- | - | ------------- | ----------- |  | ------------- | ----------- | - | ------------- | ----------- | ------- | - |  | - | ------- | 
|                                                 |  | Fiscal Year Ended                                       |        
|                                                 |  |                                                         |        
|                                                 |  | January 30,                                             |         |               | February 1, |   |               | February 2, |  |               | February 3, |   |               | February 4, |        
|                                                 |  | 2005(2)                                                 |         |               | 2004(1)     |   |               | 2003(1)     |  |               | 2002(1)     |   |               | 2001(1)     |        
|                                                 |  |                                                         |         |               |             |   |               |             |  |               |             |   |               |             |        
|                                                 |  |                                                         |         | (As restated) |             |   | (As restated) |             |  | (As restated) |             |   | (As restated) |            
|                                                 |  | (In thousands, except per share amounts and store data) |        
|Balance Sheet Data:                              |  |                                                         |         |               |             |   |               |             |  |               |             |   |               |             |         |   |  |   |         | 
|Working capital (deficit)                        |  | $                                                       | (7,656  | )             |             | $ | (220          | )           |  | $             | (4,231      | ) |               | $           | (4,478  | ) |  | $ | 5,126   | 
|Total assets                                     |  |                                                         | 397,408 |               |             |   | 340,201       |             |  |               | 338,531     |   |               |             | 358,316 |   |  |   | 341,066 | 
|Long-term debt, less current installments        |  |                                                         | 80,351  |               |             |   | 50,201        |             |  |               | 59,494      |   |               |             | 84,896  |   |  |   | 103,860 | 
|Stockholders equity                             |  |                                                         | 196,945 |               |             |   | 179,784       |             |  |               | 166,585     |   |               |             | 167,390 |   |  |   | 159,951 | 
|Other information:                               |  |                                                         |         |               |             |   |               |             |  |               |             |   |               |             |         |   |  |   |         | 
|Company operated complexes open at end of period |  |                                                         | 43      |               |             |   | 33            |             |  |               | 32          |   |               |             | 31      |   |  |   | 27      | 






|    |                                                                                                                                                                                                                                                                                                                        
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | As more fully described in Managements Discussion and
    Analysis of Financial Condition and Results of Operations and in
    Footnote 2 to the Consolidated Financial Statements, the
    Company has restated the previously issued financial statements
    for these periods for certain lease accounting issues.
|   
|(2) | On November 1, 2004 we completed the acquisition of nine
    Jillians locations.                                                                                                                                                                                                                                      






|        |                                                                                                                                             
|------- | --------------------------------------------------------------------------------------------------------------------------------------------
|Item 7. | Managements Discussion And Analysis Of Financial
    Condition And Results Of Operations (Dollars in thousands,
    except per share data).

General




Restatement of Previously Issued Financial Statements










12



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Acquisitions






Overview of Operations




Revenues








Cost of products


13



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Operating payroll and benefits


Other store operating expenses


Liquidity and cash flows


Quarterly fluctuations, seasonality, and
inflation




Results of Operations




| |         
| | --------
| | Revenues



|                                     |  |      |         |  |      |   |         |               |   |   |        |  |  |               |      |  |   |   |         |  |  |   |         |   |  |  |      |   
|------------------------------------ |  | ---- | ------- |  | ---- | - | ------- | ------------- | - | - | ------ |  |  | ------------- | ---- |  | - | - | ------- |  |  | - | ------- | - |  |  | ---- | --
|                                     |  | 2004 |         |  | 2003 |   |         | 2004 vs. 2003 |   |   | 2002   |  |  | 2003 vs. 2002 |     
|                                     |  |      |         |  |      |   |         |               |   |   |        |  |  |               |     
|                                     |  |      |         |  |      | $ |         |               | % |   |        |  |  | $             |      |  | % |  
|Food and beverage                    |  | $    | 209,689 |  |      | $ | 191,881 |               |   | $ | 17,808 |  |  |               | 9.3% |  |   | $ | 192,882 |  |  | $ | (1,001  | ) |  |  | (0.5 | )%
|Amusement and other                  |  |      | 180,578 |  |      |   | 170,941 |               |   |   | 9,637  |  |  |               | 5.6% |  |   |   | 180,870 |  |  |   | (9,929  | ) |  |  | (5.5 | )%
|                                     |  |      |         |  |      |   |         |               |   |   |        |  |  |               |      |  |   |   |         |  | 
|Total revenues                       |  | $    | 390,267 |  |      | $ | 362,822 |               |   | $ | 27,445 |  |  |               | 7.6% |  |   | $ | 373,752 |  |  | $ | (10,930 | ) |  |  | (2.9 | )%
|                                     |  |      |         |  |      |   |         |               |   |   |        |  |  |               |      |  |   |   |         |  | 
|Number of comparable stores          |  |      | 32      |  |      |   | 28      |               |   |   |        |  |  |               |      |  |   |   | 26      |  |  |   |         |   |  |  |      |   
|Number of non-comparable stores      |  |      | 11      |  |      |   | 5       |               |   |   |        |  |  |               |      |  |   |   | 6       |  |  |   |         |   |  |  |      |   
|Revenue from international licensees |  | $    | 627     |  |      | $ | 331     |               |   |   |        |  |  |               |      |  |   | $ | 564     |  |  |   |         |   |  |  |      |   







14



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| |                 
| | ----------------
| | Cost of Products



|                             |                       |      |        |        |      |   |        |               |   |   |       |       |  |               |      |     |   |   |        |        |  |   |      |      |   |  |      |      |   
|---------------------------- | --------------------- | ---- | ------ | ------ | ---- | - | ------ | ------------- | - | - | ----- | ----- |  | ------------- | ---- | --- | - | - | ------ | ------ |  | - | ---- | ---- | - |  | ---- | ---- | --
|                             |                       | 2004 |        |        | 2003 |   |        | 2004 vs. 2003 |   |   | 2002  |       |  | 2003 vs. 2002 |     
|                             |                       |      |        |        |      |   |        |               |   |   |       |       |  |               |     
|                             |                       |      |        |        |      | $ |        |               | % |   |       |       |  | $             |      |     | % |  
|Food and beverage            |                       | $    | 51,367 |        |      | $ | 46,354 |               |   | $ | 5,013 |       |  |               | 10.8 | %   |   | $ | 46,220 |        |  | $ | 134  |      |   |  | (0.3 | )%  
|Amusement and other          |                       |      | 21,704 |        |      |   | 21,788 |               |   |   | (84   | )     |  |               | (0.4 | )%  |   |   | 22,532 |        |  | $ | (744 | )    |   |  | (3.3 | )%  
|                             |                       |      |        |        |      |   |        |               |   |   |       |       |  |               |      |     |   |   |        |        | 
|                             | Total cost of product |      | $      | 73,071 |      |   | $      | 68,142        |   |   | $     | 4,929 |  |               |      | 7.2 | % |   | $      | 68,752 |  |   | $    | (610 | ) |  |      | (0.9 | )%
|                             |                       |      |        |        |      |   |        |               |   |   |       |       |  |               |      |     |   |   |        |        | 
|Percentage of total revenues |                       |      | 18.7   | %      |      |   | 18.8   | %             |   |   |       |       |  |               |      |     |   |   | 18.4   | %      |  |   |      |      |   |  |      |     







| |                               
| | ------------------------------
| | Operating Payroll and Benefits



|                                     |  |      |         |   |      |   |         |               |   |   |       |  |  |               |     |   |   |   |         |   |  |   |        |   |  |  |      |   
|------------------------------------ |  | ---- | ------- | - | ---- | - | ------- | ------------- | - | - | ----- |  |  | ------------- | --- | - | - | - | ------- | - |  | - | ------ | - |  |  | ---- | --
|                                     |  | 2004 |         |   | 2003 |   |         | 2004 vs. 2003 |   |   | 2002  |  |  | 2003 vs. 2002 |    
|                                     |  |      |         |   |      |   |         |               |   |   |       |  |  |               |    
|                                     |  |      |         |   |      | $ |         |               | % |   |       |  |  | $             |     |   | % |  
|Total operating payroll and benefits |  | $    | 110,542 |   |      | $ | 105,027 |               |   | $ | 5,515 |  |  |               | 5.3 | % |   | $ | 114,904 |   |  | $ | (9,877 | ) |  |  | (8.6 | )%
|Percentage of total revenues         |  |      | 28.3    | % |      |   | 28.9    | %             |   |   |       |  |  |               |     |   |   |   | 30.7    | % |  |   |        |   |  |  |      |   





15



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| |                               
| | ------------------------------
| | Other Store Operating Expenses



|                               |  |      |         |   |      |   |         |               |   |   |        |  |  |               |      |   |   |   |         |   |  |   |        |   |  |  |      |   
|------------------------------ |  | ---- | ------- | - | ---- | - | ------- | ------------- | - | - | ------ |  |  | ------------- | ---- | - | - | - | ------- | - |  | - | ------ | - |  |  | ---- | --
|                               |  | 2004 |         |   | 2003 |   |         | 2004 vs. 2003 |   |   | 2002   |  |  | 2003 vs. 2002 |     
|                               |  |      |         |   |      |   |         |               |   |   |        |  |  |               |     
|                               |  |      |         |   |      | $ |         |               | % |   |        |  |  | $             |      |   | % |  
|Other store operating expenses |  | $    | 119,509 |   |      | $ | 108,413 |               |   | $ | 11,096 |  |  |               | 10.2 | % |   | $ | 114,957 |   |  | $ | (6,544 | ) |  |  | (5.7 | )%
|Percentage of total revenues   |  |      | 30.6    | % |      |   | 29.9    | %             |   |   |        |  |  |               |      |   |   |   | 30.8    | % |  |   |        |   |  |  |      |   







| |                                    
| | -----------------------------------
| | General and Administrative Expenses



|                             |  |      |        |   |      |   |        |               |   |   |       |  |  |               |      |   |   |   |        |   |  |   |      |   |  |  |       |   
|---------------------------- |  | ---- | ------ | - | ---- | - | ------ | ------------- | - | - | ----- |  |  | ------------- | ---- | - | - | - | ------ | - |  | - | ---- | - |  |  | ----- | --
|                             |  | 2004 |        |   | 2003 |   |        | 2004 vs. 2003 |   |   | 2002  |  |  | 2003 vs. 2002 |     
|                             |  |      |        |   |      |   |        |               |   |   |       |  |  |               |     
|                             |  |      |        |   |      | $ |        |               | % |   |       |  |  | $             |      |   | % |  
|General and administrative   |  | $    | 26,221 |   |      | $ | 25,033 |               |   | $ | 1,188 |  |  |               | 4.7  | % |   | $ | 25,640 |   |  | $ | (607 | ) |  |  | (2.4  | )%
|Percentage of total revenues |  |      | 6.7    | % |      |   | 6.9    | %             |   |   |       |  |  |               |      |   |   |   | 6.9    | % |  |   |      |   |  |  |       |   
|Average headcount            |  |      | 176    |   |      |   | 151    |               |   |   | 25    |  |  |               | 16.6 |   |   |   | 177    |   |  |   | (26  | ) |  |  | (14.7 | )%







| |                                       
| | --------------------------------------
| | Depreciation and Amortization Expenses



|                              |  |      |        |   |      |   |        |               |   |   |       |  |  |               |     |   |   |   |        |   |  |   |      |   |  |  |      |   
|----------------------------- |  | ---- | ------ | - | ---- | - | ------ | ------------- | - | - | ----- |  |  | ------------- | --- | - | - | - | ------ | - |  | - | ---- | - |  |  | ---- | --
|                              |  | 2004 |        |   | 2003 |   |        | 2004 vs. 2003 |   |   | 2002  |  |  | 2003 vs. 2002 |    
|                              |  |      |        |   |      |   |        |               |   |   |       |  |  |               |    
|                              |  |      |        |   |      | $ |        |               | % |   |       |  |  | $             |     |   | % |  
|Depreciation and amortization |  | $    | 34,238 |   |      | $ | 32,741 |               |   | $ | 1,497 |  |  |               | 4.6 | % |   | $ | 33,156 |   |  | $ | (415 | ) |  |  | (1.3 | )%
|Percentage of total revenues  |  |      | 8.8    | % |      |   | 9.0    | %             |   |   |       |  |  |               |     |   |   |   | 8.9    | % |  |   |      |   |  |  |      |   



16



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##### Table of Contents









| |                    
| | -------------------
| | Preopening Expenses





| |                  
| | -----------------
| | Interest Expenses



|                             |  |      |       |   |      |   |       |               |   |   |        |   |  |               |       |    |   |   |       |   |  |   |      |   |  |  |      |   
|---------------------------- |  | ---- | ----- | - | ---- | - | ----- | ------------- | - | - | ------ | - |  | ------------- | ----- | -- | - | - | ----- | - |  | - | ---- | - |  |  | ---- | --
|                             |  | 2004 |       |   | 2003 |   |       | 2004 vs. 2003 |   |   | 2002   |   |  | 2003 vs. 2002 |      
|                             |  |      |       |   |      |   |       |               |   |   |        |   |  |               |      
|                             |  |      |       |   |      | $ |       |               | % |   |        |   |  | $             |       |    | % |  
|Interest                     |  | $    | 5,586 |   |      | $ | 6,926 |               |   | $ | (1,340 | ) |  |               | (19.4 | )% |   | $ | 7,143 |   |  | $ | (217 | ) |  |  | (3.0 | )%
|Percentage of total revenues |  |      | 1.4   | % |      |   | 1.9   | %             |   |   |        |   |  |               |       |    |   |   | 1.9   | % |  |   |      |   |  |  |      |   







| |                           
| | --------------------------
| | Provision for Income Taxes



|                             |  |      |       |   |      |   |       |               |   |   |       |  |  |               |      |   |   |   |       |   |  |   |       |  |  |  |       |  
|---------------------------- |  | ---- | ----- | - | ---- | - | ----- | ------------- | - | - | ----- |  |  | ------------- | ---- | - | - | - | ----- | - |  | - | ----- |  |  |  | ----- | -
|                             |  | 2004 |       |   | 2003 |   |       | 2004 vs. 2003 |   |   | 2002  |  |  | 2003 vs. 2002 |     
|                             |  |      |       |   |      |   |       |               |   |   |       |  |  |               |     
|                             |  |      |       |   |      | $ |       |               | % |   |       |  |  | $             |      |   | % |  
|Income tax expense           |  | $    | 6,925 |   |      | $ | 5,619 |               |   | $ | 1,306 |  |  |               | 23.2 | % |   | $ | 2,592 |   |  | $ | 3,027 |  |  |  | 116.8 | %
|Percentage of total revenues |  |      | 1.8   | % |      |   | 1.6   | %             |   |   |       |  |  |               |      |   |   |   | 0.7   | % |  |   |       |  |  |  |       |  
|Effective tax rate           |  |      | 35.0  | % |      |   | 34.0  | %             |   |   |       |  |  |               |      |   |   |   | 34.0  | % |  |   |       |  |  |  |       |  



Liquidity and Capital Resources


|                     |  |      |        |  |      |   |        |               |   |   |       |  |  |               |     |   |   |   |        |  |  |   |       |  |  |  |     |  
|-------------------- |  | ---- | ------ |  | ---- | - | ------ | ------------- | - | - | ----- |  |  | ------------- | --- | - | - | - | ------ |  |  | - | ----- |  |  |  | --- | -
|                     |  | 2004 |        |  | 2003 |   |        | 2004 vs. 2003 |   |   | 2002  |  |  | 2003 vs. 2002 |    
|                     |  |      |        |  |      |   |        |               |   |   |       |  |  |               |    
|                     |  |      |        |  |      | $ |        |               | % |   |       |  |  | $             |     |   | % |  
|Operating cash flows |  | $    | 48,339 |  |      | $ | 45,517 |               |   | $ | 2,822 |  |  |               | 6.2 | % |   | $ | 41,840 |  |  | $ | 3,723 |  |  |  | 8.9 | %



17



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##### Table of Contents



|                     |  |      |         |   |      |   |         |               |   |   |         |   |  |               |       |   |   |   |         |   |  |   |        |   |  |  |      |  
|-------------------- |  | ---- | ------- | - | ---- | - | ------- | ------------- | - | - | ------- | - |  | ------------- | ----- | - | - | - | ------- | - |  | - | ------ | - |  |  | ---- | -
|                     |  | 2004 |         |   | 2003 |   |         | 2004 vs. 2003 |   |   | 2002    |   |  | 2003 vs. 2002 |      
|                     |  |      |         |   |      |   |         |               |   |   |         |   |  |               |      
|                     |  |      |         |   |      | $ |         |               | % |   |         |   |  | $             |       |   | % |  
|Investing cash flows |  | $    | (81,772 | ) |      | $ | (27,421 | )             |   | $ | (54,351 | ) |  |               | 198.2 | % |   | $ | (22,206 | ) |  | $ | (5,261 | ) |  |  | 23.7 | %



|                     |  |      |        |  |      |   |         |               |   |   |        |  |  |               |       |   |   |   |         |   |  |   |       |  |  |  |       |   
|-------------------- |  | ---- | ------ |  | ---- | - | ------- | ------------- | - | - | ------ |  |  | ------------- | ----- | - | - | - | ------- | - |  | - | ----- |  |  |  | ----- | --
|                     |  | 2004 |        |  | 2003 |   |         | 2004 vs. 2003 |   |   | 2002   |  |  | 2003 vs. 2002 |      
|                     |  |      |        |  |      |   |         |               |   |   |        |  |  |               |      
|                     |  |      |        |  |      | $ |         |               | % |   |        |  |  | $             |       |   | % |  
|Financing cash flows |  | $    | 37,160 |  |      | $ | (16,729 | )             |   | $ | 53,889 |  |  |               | 322.1 | % |   | $ | (21,625 | ) |  | $ | 4,896 |  |  |  | (22.6 | )%















18



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##### Table of Contents





Contractual Obligations and Commercial Commitments




|                                                   |  |       |         |                        |         |   |        |       |  |     |        |  |       |         |         |  |  |   |         | 
|-------------------------------------------------- |  | ----- | ------- | ---------------------- | ------- | - | ------ | ----- |  | --- | ------ |  | ----- | ------- | ------- |  |  | - | ------- | 
|                                                   |  |       |         | Payments Due by Period |        
|                                                   |  |       |         |                        |        
|                                                   |  |       |         | 1 Year                 |         |   | 2-3    |       |  | 4-5 |        |  | After |        
|Contractual Obligations                            |  | Total |         |                        | or less |   |        | Years |  |     | Years  |  |       | 5 Years |        
|                                                   |  |       |         |                        |         |   |        |       |  |     |        |  |       |         |        
|Convertible debt                                   |  | $     | 30,000  |                        |         | $ |       |       |  | $   |       |  |       | $       | 30,000  |  |  | $ |        | 
|Senior bank credit facility                        |  |       | 58,143  |                        |         |   | 7,792  |       |  |     | 21,083 |  |       |         | 29,268  |  |  |   |        | 
|Operating leases under sale/leaseback transactions |  |       | 75,315  |                        |         |   | 4,051  |       |  |     | 8,408  |  |       |         | 8,577   |  |  |   | 54,279  | 
|Other operating leases                             |  |       | 468,320 |                        |         |   | 33,857 |       |  |     | 64,975 |  |       |         | 63,756  |  |  |   | 305,732 | 
|Capital leases                                     |  |       | 90      |                        |         |   | 90     |       |  |     |       |  |       |         |        |  |  |   |        | 
|                                                   |  |       |         |                        |         |   |        |       |  |     |        |  |       |         |        
|Total                                              |  | $     | 631,868 |                        |         | $ | 45,790 |       |  | $   | 94,466 |  |       | $       | 131,601 |  |  | $ | 360,011 | 
|                                                   |  |       |         |                        |         |   |        |       |  |     |        |  |       |         |        



Accounting Policies




Property and Equipment




Income Taxes


Accounting for Contingencies.


19



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##### Table of Contents





Accounting for Amusements Operations


Recent Accounting Pronouncements


Stock Based Compensation




Market Risk








Safe Harbor Statement Under the Private
Securities Litigation Reform Act of 1995




20



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##### Table of Contents










|         |                                                                
|-------- | ---------------------------------------------------------------
|Item 7A. | Quantitative And Qualitative Disclosures About Market
    Risk.










|        |                                             
|------- | --------------------------------------------
|Item 8. | Financial Statements And Supplementary Data.








|        |                                                                                          
|------- | -----------------------------------------------------------------------------------------
|Item 9. | Changes In And Disagreements With Accountants On
    Accounting And Financial Disclosure.








|         |                         
|-------- | ------------------------
|Item 9A. | Controls And Procedures.

Disclosure Controls and Procedures






Managements Report On Internal Control Over Financial
Reporting




21



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##### Table of Contents

















22



---



##### Table of Contents







Remediation of Material Weakness




Changes in Internal Control Over Financial Reporting









|         |                  
|-------- | -----------------
|Item 9B. | Other Information



23



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##### Table of Contents






Report of Independent Registered Public Accounting Firm


on Internal Control over Financial Reporting














24



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##### Table of Contents







| |                      
| | ---------------------
| | /s/ Ernst & Young LLP





25



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##### Table of Contents






PART III







|         |                                                    
|-------- | ---------------------------------------------------
|Item 10. | Directors And Executive Officers Of The Registrant.








|         |                        
|-------- | -----------------------
|Item 11. | Executive Compensation.








|         |                                                                                                    
|-------- | ---------------------------------------------------------------------------------------------------
|Item 12. | Security Ownership Of Certain Beneficial Owners And
    Management And Related Stockholder Matters.








|         |                                                
|-------- | -----------------------------------------------
|Item 13. | Certain Relationships And Related Transactions.








|         |                                        
|-------- | ---------------------------------------
|Item 14. | Principal Accountant Fees And Services.






PART IV







|         |                                            
|-------- | -------------------------------------------
|Item 15. | Exhibits and Financial Statement Schedules.



|                                                                                                                                     |  |      |                  | 
|------------------------------------------------------------------------------------------------------------------------------------ |  | ---- | ---------------- | 
|                                                                                                                                     |  | Page |                 
|                                                                                                                                     |  |      |                 
|Report of Independent Registered Public
    Accounting Firm                                                                          |  |      | F-1              | 
|Consolidated Balance Sheets -
    January 30, 2005 and February 1, 2004                                                              |  |      | F-2              | 
|Consolidated Statement of Operations -
    Fiscal years ended January 30, 2005, February 1, 2004
    and February 2, 2003            |  |      | F-3              | 
|Consolidated Statements of
    Stockholders Equity - Fiscal years ended January 30,
    2005, February 1, 2004 and February 2, 2003 |  |      | F-4              | 
|Consolidated Statements of Cash Flows -
    Fiscal years ended January 30, 2005, February 1, 2004
    and February 2, 2003           |  |      | F-5              | 
|Notes to Consolidated Financial
    Statements                                                                                       |  |      | F-6 through F-19 | 

26



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##### Table of Contents







| |                                                                                                                                                            
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------
| | All schedules are omitted as the required information is
    inapplicable or the information is presented in the financial
    statements or related notes.





| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The exhibits listed below filed with or incorporated by
    reference into this Annual Report on Form 10-K. Exhibits
    noted by an asterisk are filed with this report. Exhibits
    denominated with numbered footnotes are incorporated by
    reference to the other filings with the Commission set forth
    below. Unless otherwise indicated, the exhibit number below
    corresponds to the exhibit number incorporated by reference.
    Items listed in boldface are management contracts or
    compensatory plans or arrangements required to be filed pursuant
    to Item 15(c) of this Report.

| |    |             |  |                                                                                                                                                                                                                                               
| | -- | ----------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 3  | .1          |  | Restated Articles of Incorporation of the Company.(1)                                                                                                                                                                                         
| | 3  | .2          |  | Amended and Restated Bylaws of the Company.(10)                                                                                                                                                                                               
|
| | 4  | .1          |  | Form of 5.0 percent Convertible Subordinated Note Due
    2008.(13)                                                                                                                                                                           
|
| | 4  | .2          |  | Form of Warrant to Purchase Common Stock.(13)                                                                                                                                                                                                 
|
| | 4  | .3          |  | Registration Rights Agreement dated as of August 6, 2003 by
    and between Dave and Busters, Inc., U.S. Bancorp
    Piper Jaffray, Inc. and the Buyers as defined therein.(13)                                                              
|
| | 4  | .4          |  | Form of Indenture dated as of August 7, 2003 between
    Dave & Busters, Inc. and Bank of New York.(13)                                                                                                                                      
|
| | 4  | .5          |  | Form of Warrant Agent Agreement dated as of August 7, 2003
    between Dave and Busters, Inc. and U.S. Bancorp Piper
    Jaffray, Inc.(13)                                                                                                   
|
| | 10 | .1          |  | Securities Purchase Agreement dated as of August 6, 2003 by
    and between the Company, U.S. Bancorp Piper Jaffray, Inc.
    and the buyers as defined therein.(13)                                                                          
|
| | 10 | .1.1-10.1.5 |  | Intentionally omitted                                                                                                                                                                                                                         
|
| | 10 | .1.6        |  | Amended and Restated Revolving Credit and Term Loan Agreement
    dated November 1, 2004 by and among the Company and its
    subsidiaries, Bank of America NA (as agent) and the financial
    institutions named therein.(12)               
|
| | 10 | .2-10.6     |  | Intentionally omitted                                                                                                                                                                                                                         
|
| | 10 | .7          |  | Rights Agreement between the Company and Rights Agent, dated
    June 16, 1995.(1)                                                                                                                                                            
|
| | 10 | .8          |  | 1995 Stock Option Plan (As Amended and Restated
    April 26, 2000).(3)                                                                                                                                                                       
|
| | 10 | .9          |  | Stock Option Plan for Outside Directors.(4)                                                                                                                                                                                                   
|
| | 10 | .11         |  | Employment and Executive Retention Agreements for Co-Chief
    Executive Officers, dated June 16, 1995.(5)                                                                                                                                    
|
| | 10 | .12         |  | Form of Indemnity Agreements with Executive Officers and
    Directors.(6)                                                                                                                                                                    
|
| | 10 | .13         |  | Intentionally Omitted.                                                                                                                                                                                                                        
|
| | 10 | .14         |  | Executive Retention Agreement between the Company and
    Sterling R. Smith dated June 11, 2001(7)                                                                                                                                            
|
| | 10 | .15         |  | Intentionally Omitted.                                                                                                                                                                                                                        
|
| | 10 | .16         |  | Agreement of Sale and Purchase dated October 1, 2001
    between the Company, as seller, and General Electric Capital,
    Business Asset Funding Corporation, as purchaser, for the
    Companys corporate headquarters in Dallas, Texas.(8)
|
| | 10 | .17         |  | Lease Agreement dated October 1, 2001 between General
    Electric Capital Business Asset Funding Corporation, as
    landlord, and the Company, as tenant for the Companys
    corporate headquarters in Dallas, Texas.(8)                  
|
| | 10 | .18         |  | Agreement of Sale and Purchase dated November 12, 2001
    between D&B Realty Holding, Inc., as seller, and
    KAZA I, Ltd., as purchaser for Houston, Texas property.(9)                                                                    
|
| | 10 | .19         |  | Lease Agreement dated December 14, 2001 between KAZA I L.P.
    as landlord, and Dave & Busters I, L.P. as
    tenant for Houston, Texas property.(9)                                                                                        

27



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##### Table of Contents



| |    |     |  |                                                                                                                                                                                                                                                                                                    
| | -- | --- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | 10 | .20 |  | Agreement of Sale and Purchase dated as of December 17,
    2001 between D&B Realty Holding, Inc., as seller, and
    Landfair, LLC as purchaser for Marietta, Georgia property.(9)                                                                                                                
|
| | 10 | .21 |  | Lease Agreement dated December 17, 2001 between Landfair
    LLC, as landlord, and Dave & Busters I,
    L.P., as tenant, for Marietta, Georgia property.(9)                                                                                                                                      
|
| | 10 | .23 |  | Executive Retention Agreement dated December 3, 2001
    between the Company and William C. Hammett, Jr.(9)                                                                                                                                                                                        
|
| | 10 | .24 |  | Asset Purchase Agreement dated July 25, 2003 by and among
    Funtime Hospitality Corp. and the Company.(11)                                                                                                                                                                                       
|
| | 10 | .25 |  | Asset Purchase Agreement, dated September 24, 2004 by and
    among Tango Acquisition, Inc, Dave & Busters
    Inc., JBC Acquisition Corporation, Gemini Investors III,
    L.P. Jillians Entertainment Holdings, Inc. and various
    subsidiaries of Jillians Entertainment Holdings, Inc.(14)
|
| | 12 |     |  | Computation of Ratio of Earnings to Fixed Charges.*                                                                                                                                                                                                                                                
|
| | 21 |     |  | Subsidiaries of the Company.*                                                                                                                                                                                                                                                                      
|
| | 23 |     |  | Consent of Registered Public Accounting Firm.*                                                                                                                                                                                                                                                     
|
| | 24 |     |  | Power of Attorney (included on the Signature page of this
    report).*                                                                                                                                                                                                                            
|
| | 31 |     |  | Rule 13a-14(a)/15d-14(a) Certifications.*                                                                                                                                                                                                                                                          
|
| | 32 |     |  | Section 1350 Certifications.*                                                                                                                                                                                                                                                                      
| | 99 |     |  | Proxy Statement of Registrant(15)                                                                                                                                                                                                                                                                  








| |   |                
| | - | ---------------
| | * | Filed herewith.



| |     |                                                                                                          
| | --- | ---------------------------------------------------------------------------------------------------------
| | (1) | Filed as an Exhibit to the registrants Form 10-Q for
    the 13-week period ended April 30, 1995.       
|
| | (2) | Filed as an Exhibit to the registrants Form 10-Q for
    the 13-week period ended July 30, 2000.        
|
| | (3) | Filed as an Exhibit to the registrants Schedule 14A
    definitive Proxy Statement dated April 28, 2000.
|
| | (4) | Filed as an Exhibit to the registrants Form 10-K for
    the fiscal year ended February 1, 1997.        
|
| | (5) | Filed as an Exhibit to the registrants Form 10-K for the
    fiscal year ended February 4, 2001.         
|
| | (6) | Filed as an Exhibit to the registrants Form 10 filed
    April 11, 1995.                                
|
| | (7) | Filed as an Exhibit to the registrants Form 10-Q for
    the 13 week period ended August 5, 2001.       
|
| | (8) | Filed as an Exhibit to the registrants Form 10-Q for
    the 13 week period ended November 4, 2001.     
|
| | (9) | Filed as an Exhibit to the registrants Form 10-K for
    the fiscal year ended February 3, 2002.        



|     |                                                                                                     
|---- | ----------------------------------------------------------------------------------------------------
|(10) | Filed as an Exhibit to the registrants Form 10-K for
    the fiscal year ended February 2, 2003.   
|    
|(11) | Filed as an Exhibit to the registrants Form 10-Q for
    the 13-week period ended August 3, 2003.  
|    
|(12) | Filed as an Exhibit to the registrants Form 10-Q for
    the 13-week period ended November 2, 2003.
|    
|(13) | Filed as an Exhibit to the registrants Form 8-K filed
    on August 7, 2003.                       
|    
|(14) | Filed as an Exhibit to the registrants Form 8-K filed
    on September 24, 2004.                   
|    
|(15) | To be filed on or about April 25, 2005.                                                             

28



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##### Table of Contents






SIGNATURES






| |                       
| | ----------------------
| | Dave & Busters, Inc. 
| | a Missouri corporation



| |     |                            
| | --- | ---------------------------
| | By: | /s/ WILLIAM C. HAMMETT, JR.

| |                          
| | -------------------------
| |                          
| | William C. Hammett, Jr., 
| | Senior Vice President and
| | Chief Financial Officer  



POWER OF ATTORNEY


KNOW ALL MEN BY THESE PRESENTS,




|                                                       |  |                                                                                         |  | 
|------------------------------------------------------ |  | --------------------------------------------------------------------------------------- |  | 
|Name                                                   |  | Title                                                                                  
|                                                       |  |                                                                                        
|                                                      
|/s/ PETER A. EDISONPeter
    A. Edison                 |  | Chairman of the Board                                                                  
|                                                      
|/s/ JAMES W. CORLEYJames
    W. Corley                 |  | Chief Executive Officer and Director
    (Principal Executive Officer)                 
|                                                      
|/s/ DAVID O. CORRIVEAUDavid
    O. Corriveau           |  | President and Director                                                                 
|                                                      
|/s/ WILLIAM C. HAMMETT, JR.William
    C. Hammett, Jr. |  | Senior Vice President and
    Chief Financial Officer
    (Principal Financial Officer)
|                                                      
|/s/ MICHAEL J. METZINGERMichael
    J. Metzinger       |  | Vice President and Controller
    (Principal Accounting Officer)                       
|                                                      
|/s/ ALLEN J. BERNSTEINAllen
    J. Bernstein           |  | Director                                                                               

29



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##### Table of Contents



|                                                     |  |          |  | 
|---------------------------------------------------- |  | -------- |  | 
|Name                                                 |  | Title   
|                                                     |  |         
|                                                    
|/s/ WALTER J. HUMANNWalter
    J. Humann             |  | Director
|                                                    
|/s/ MARK A. LEVYMark
    A. Levy                     |  | Director
|                                                    
|/s/ CHRISTOPHER C. MAGUIREChristopher
    C. Maguire |  | Director
|                                                    
|/s/ DAVID B. PITTAWAYDavid
    B. Pittaway           |  | Director
|                                                    
|/s/ PATRICIA P. PRIESTPatricia
    P. Priest         |  | Director

30



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##### Table of Contents






Report of Independent Registered Public Accounting Firm


















| |                      
| | ---------------------
| | /s/ Ernst & Young LLP





F-1



---



##### Table of Contents



DAVE & BUSTERS, INC.





CONSOLIDATED BALANCE SHEETS


|                                                   |                                                                                                                                                                                 |                                            |         |               |             |  |         |         |         | 
|-------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------ | ------- | ------------- | ----------- |  | ------- | ------- | ------- | 
|                                                   |                                                                                                                                                                                 | January 30,                                |         |               | February 1, | 
|                                                   |                                                                                                                                                                                 | 2005                                       |         |               | 2004        | 
|                                                   |                                                                                                                                                                                 |                                            |         |               |             | 
|                                                   |                                                                                                                                                                                 |                                            |         | (As restated, |            
|                                                   |                                                                                                                                                                                 |                                            |         | Note 2)       |            
|                                                   |                                                                                                                                                                                 | (In thousands, except share                |        
|                                                   |                                                                                                                                                                                 | amounts)                                   |        
|ASSETS                                            
|Current assets:                                    |                                                                                                                                                                                 |                                            |         |               |             |  |         |        
|                                                   | Cash and cash equivalents                                                                                                                                                       |                                            | $       | 7,624         |             |  | $       | 3,897   |        
|                                                   | Inventories                                                                                                                                                                     |                                            |         | 28,935        |             |  |         | 26,233  |        
|                                                   | Prepaid expenses                                                                                                                                                                |                                            |         | 3,034         |             |  |         | 2,709   |        
|                                                   | Other current assets                                                                                                                                                            |                                            |         | 2,612         |             |  |         | 2,518   |        
|                                                   |                                                                                                                                                                                 |                                            |         |               |             | 
|                                                   |                                                                                                                                                                                 | Total current assets                       |         |               | 42,205      |  |         |         | 35,357  | 
|Property and equipment, net (Note 4)               |                                                                                                                                                                                 |                                            | 331,478 |               |             |  | 291,473 |        
|Other assets and deferred charges                  |                                                                                                                                                                                 |                                            | 23,725  |               |             |  | 13,371  |        
|                                                   |                                                                                                                                                                                 |                                            |         |               |             | 
|                                                   |                                                                                                                                                                                 | Total assets                               |         | $             | 397,408     |  |         | $       | 340,201 | 
|                                                   |                                                                                                                                                                                 |                                            |         |               |             | 
|                                                  
|LIABILITIES AND STOCKHOLDERS EQUITY              
|Current liabilities:                               |                                                                                                                                                                                 |                                            |         |               |             |  |         |        
|                                                   | Current installments of long-term debt (Note 6)                                                                                                                                 |                                            | $       | 7,792         |             |  | $       | 3,333   |        
|                                                   | Accounts payable                                                                                                                                                                |                                            |         | 12,146        |             |  |         | 13,346  |        
|                                                   | Accrued liabilities (Note 5)                                                                                                                                                    |                                            |         | 18,119        |             |  |         | 12,898  |        
|                                                   | Income taxes payable (Note 7)                                                                                                                                                   |                                            |         | 5,802         |             |  |         | 2,889   |        
|                                                   | Deferred income taxes (Note 7)                                                                                                                                                  |                                            |         | 6,002         |             |  |         | 3,111   |        
|                                                   |                                                                                                                                                                                 |                                            |         |               |             | 
|                                                   |                                                                                                                                                                                 | Total current liabilities                  |         |               | 49,861      |  |         |         | 35,577  | 
|Deferred income taxes (Note 7)                     |                                                                                                                                                                                 |                                            | 4,959   |               |             |  | 11,689  |        
|Deferred rent liability                            |                                                                                                                                                                                 |                                            | 63,113  |               |             |  | 60,959  |        
|Other liabilities                                  |                                                                                                                                                                                 |                                            | 2,179   |               |             |  | 1,991   |        
|Long-term debt, less current installments (Note 6) |                                                                                                                                                                                 |                                            | 80,351  |               |             |  | 50,201  |        
|Commitments and contingencies (Notes 6, 8 and 13)  |                                                                                                                                                                                 |                                            |         |               |             |  |         |        
|Stockholders equity (Note 9):                     |                                                                                                                                                                                 |                                            |         |               |             |  |         |        
|                                                   | Preferred stock, 10,000,000 authorized; none issued                                                                                                                             |                                            |         |              |             |  |         |        |        
|                                                   | Common stock, $0.01 par value, 50,000,000 authorized;
    13,452,267 and 13,181,284 shares issued and outstanding as
    of January 30, 2005 and February 1, 2004, respectively |                                            |         | 135           |             |  |         | 132     |        
|                                                   | Paid-in capital                                                                                                                                                                 |                                            |         | 122,173       |             |  |         | 118,669 |        
|                                                   | Restricted stock awards                                                                                                                                                         |                                            |         | 1,454         |             |  |         | 905     |        
|                                                   | Accumulated comprehensive income                                                                                                                                                |                                            |         | 225           |             |  |         |        |        
|                                                   | Retained earnings                                                                                                                                                               |                                            |         | 74,804        |             |  |         | 61,924  |        
|                                                   |                                                                                                                                                                                 |                                            |         |               |             | 
|                                                   |                                                                                                                                                                                 |                                            | 198,791 |               |             |  | 181,630 |        
|                                                   | Less treasury stock, at cost (175,000 shares)                                                                                                                                   |                                            |         | 1,846         |             |  |         | 1,846   |        
|                                                   |                                                                                                                                                                                 |                                            |         |               |             | 
|                                                   |                                                                                                                                                                                 | Total stockholders equity                 |         |               | 196,945     |  |         |         | 179,784 | 
|                                                   |                                                                                                                                                                                 |                                            |         |               |             | 
|                                                   |                                                                                                                                                                                 | Total liabilities and stockholders equity |         | $             | 397,408     |  |         | $       | 340,201 | 
|                                                   |                                                                                                                                                                                 |                                            |         |               |             | 



F-2



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##### Table of Contents



DAVE & BUSTERS, INC.





CONSOLIDATED STATEMENTS OF OPERATIONS


|                                                                      |                                                                            |                                          |         |               |             |   |               |             |  |   |         |         |  
|--------------------------------------------------------------------- | -------------------------------------------------------------------------- | ---------------------------------------- | ------- | ------------- | ----------- | - | ------------- | ----------- |  | - | ------- | ------- | -
|                                                                      |                                                                            | Fiscal Year Ended                        |        
|                                                                      |                                                                            |                                          |        
|                                                                      |                                                                            | January 30,                              |         |               | February 1, |   |               | February 2, | 
|                                                                      |                                                                            | 2005                                     |         |               | 2004        |   |               | 2003        | 
|                                                                      |                                                                            |                                          |         |               |             |   |               |             | 
|                                                                      |                                                                            |                                          |         | (As restated, |             |   | (As restated, |            
|                                                                      |                                                                            |                                          |         | Note 2)       |             |   | Note 2)       |            
|                                                                      |                                                                            | (In thousands, except per share amounts) |        
|Food and beverage revenues                                            |                                                                            | $                                        | 209,689 |               |             | $ | 191,881       |             |  | $ | 192,882 |        
|Amusement and other revenues                                          |                                                                            |                                          | 180,578 |               |             |   | 170,941       |             |  |   | 180,870 |        
|                                                                      |                                                                            |                                          |         |               |             |   |               |             | 
|                                                                      | Total revenues                                                             |                                          |         | 390,267       |             |   |               | 362,822     |  |   |         | 373,752 |  
|Cost of food and beverage                                             |                                                                            |                                          | 51,367  |               |             |   | 46,354        |             |  |   | 46,220  |        
|Cost of amusement and other                                           |                                                                            |                                          | 21,704  |               |             |   | 21,788        |             |  |   | 22,532  |        
|                                                                      |                                                                            |                                          |         |               |             |   |               |             | 
|                                                                      | Total cost of products                                                     |                                          |         | 73,071        |             |   |               | 68,142      |  |   |         | 68,752  |  
|Operating payroll and benefits                                        |                                                                            |                                          | 110,542 |               |             |   | 105,027       |             |  |   | 114,904 |        
|Other store operating expenses                                        |                                                                            |                                          | 119,509 |               |             |   | 108,413       |             |  |   | 114,957 |        
|General and administrative expenses                                   |                                                                            |                                          | 26,221  |               |             |   | 25,033        |             |  |   | 25,640  |        
|Depreciation and amortization expense                                 |                                                                            |                                          | 34,238  |               |             |   | 32,741        |             |  |   | 33,156  |        
|Preopening costs                                                      |                                                                            |                                          | 1,295   |               |             |   |              |             |  |   | 1,520   |        
|                                                                      |                                                                            |                                          |         |               |             |   |               |             | 
|                                                                      | Total operating costs                                                      |                                          |         | 364,876       |             |   |               | 339,356     |  |   |         | 358,929 |  
|                                                                      |                                                                            |                                          |         |               |             |   |               |             | 
|                                                                      | Operating income                                                           |                                          |         | 25,391        |             |   |               | 23,466      |  |   |         | 14,823  |  
|Interest expense, net                                                 |                                                                            |                                          | 5,586   |               |             |   | 6,926         |             |  |   | 7,143   |        
|                                                                      |                                                                            |                                          |         |               |             |   |               |             | 
|                                                                      | Income before provision for income taxes                                   |                                          |         | 19,805        |             |   |               | 16,540      |  |   |         | 7,680   |  
|Provision for income taxes (Note 7)                                   |                                                                            |                                          | 6,925   |               |             |   | 5,619         |             |  |   | 2,592   |        
|                                                                      |                                                                            |                                          |         |               |             |   |               |             | 
|                                                                      | Income before cumulative effect of a change in an accounting
    principle |                                          |         | 12,880        |             |   |               | 10,921      |  |   |         | 5,088   |  
|Cumulative effect of a change in an accounting principle
    (Note 1) |                                                                            |                                          |        |               |             |   |              |             |  |   | (7,096  | )      
|                                                                      |                                                                            |                                          |         |               |             |   |               |             | 
|                                                                      | Net income (loss)                                                          |                                          | $       | 12,880        |             |   | $             | 10,921      |  |   | $       | (2,008  | )
|                                                                      |                                                                            |                                          |         |               |             |   |               |             | 
|Net income (loss) per share - basic: (Note 10)                        |                                                                            |                                          |         |               |             |   |               |             |  |   |         |        
|                                                                      | Before cumulative effect of a change in an accounting principle            |                                          | $       | 0.97          |             |   | $             | 0.83        |  |   | $       | 0.40    |  
|                                                                      | Cumulative effect of a change in an accounting principle                   |                                          |         |              |             |   |               |            |  |   |         | (0.55   | )
|                                                                      |                                                                            |                                          |         |               |             |   |               |             | 
|                                                                      |                                                                            | $                                        | 0.97    |               |             | $ | 0.83          |             |  | $ | (0.15   | )      
|                                                                      |                                                                            |                                          |         |               |             |   |               |             | 
|Net income (loss) per share - diluted: (Note 10)                      |                                                                            |                                          |         |               |             |   |               |             |  |   |         |        
|                                                                      | Before cumulative effect of a change in an accounting principle            |                                          | $       | 0.87          |             |   | $             | 0.79        |  |   | $       | 0.38    |  
|                                                                      | Cumulative effect of a change in an accounting principle                   |                                          |         |              |             |   |               |            |  |   |         | (0.53   | )
|                                                                      |                                                                            |                                          |         |               |             |   |               |             | 
|                                                                      |                                                                            | $                                        | 0.87    |               |             | $ | 0.79          |             |  | $ | (0.15   | )      
|                                                                      |                                                                            |                                          |         |               |             |   |               |             | 
|Weighted average shares outstanding:                                  |                                                                            |                                          |         |               |             |   |               |             |  |   |         |        
|                                                                      | Basic                                                                      |                                          |         | 13,331        |             |   |               | 13,128      |  |   |         | 12,997  |  
|                                                                      | Diluted                                                                    |                                          |         | 16,540        |             |   |               | 14,646      |  |   |         | 13,404  |  



F-3



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##### Table of Contents



DAVE & BUSTERS, INC.





CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY


|                                                                                    |                      |                |        |   |         |   |     |          |  |             |            |   |  |               |        |   |          |   |       |       |  |   |       |   |  |   |        |   |  |   |         |        | 
|----------------------------------------------------------------------------------- | -------------------- | -------------- | ------ | - | ------- | - | --- | -------- |  | ----------- | ---------- | - |  | ------------- | ------ | - | -------- | - | ----- | ----- |  | - | ----- | - |  | - | ------ | - |  | - | ------- | ------ | 
|                                                                                    |                      |                |        |   |         |   |     |          |  | Accumulated |            |   |  |               |       
|                                                                                    |                      | Common Stock   |        |   |         |   |     |          |  |             | Other      |   |  |               |        |  
|                                                                                    |                      |                |        |   | Paid-in |   |     | Retained |  |             | Restricted |   |  | Comprehensive |        |   | Treasury |   |       |      
|                                                                                    |                      | Shares         |        |   | Amount  |   |     | Capital  |  |             | Earnings   |   |  | Stock         |        |   | Income   |   |       | Stock |  |   | Total |  
|                                                                                    |                      |                |        |   |         |   |     |          |  |             |            |   |  |               |        |   |          |   |       |       |  |   |       |  
|                                                                                    |                      | (In thousands) |       
|Balance, February 3, 2002(as previously reported)                                   |                      |                | 12,959 |   |         | $ | 131 |          |  | $           | 115,701    |   |  | $             | 55,778 |   |          | $ | 382   |       |  | $ |      |   |  | $ | (1,846 | ) |  | $ | 170,146 |       
|Effect on prior periods of restatement for lease accounting
    (Note 2)            |                      |                |       |   |         |   |    |          |  |             |           |   |  |               | (2,777 | ) |          |   |      |       |  |   |      |   |  |   |       |   |  |   | (2,777  | )     
|Balance, February 3, 2002(as restated, Note 2)                                      |                      |                | 12,959 |   |         |   | 131 |          |  |             | 115,701    |   |  |               | 53,001 |   |          |   | 382   |       |  |   |      |   |  |   | (1,846 | ) |  |   | 167,369 |       
|Net earnings (as restated, Note 2)                                                  |                      |                |       |   |         |   |    |          |  |             |           |   |  |               | (2,008 | ) |          |   |      |       |  |   |      |   |  |   |       |   |  |   | (2,008  | )     
|Stock option exercises                                                              |                      |                | 121    |   |         |   | 1   |          |  |             | 870        |   |  |               |       |   |          |   |      |       |  |   |      |   |  |   |       |   |  |   | 871     |       
|Tax benefit related to stock option exercises                                       |                      |                |       |   |         |   |    |          |  |             | 107        |   |  |               |       |   |          |   |      |       |  |   |      |   |  |   |       |   |  |   | 107     |       
|Amortization of restricted stock awards                                             |                      |                |       |   |         |   |    |          |  |             |           |   |  |               |       |   |          |   | 226   |       |  |   |      |   |  |   |       |   |  |   | 226     |       
|                                                                                    |                      |                |        |   |         |   |     |          |  |             |            |   |  |               |        |   |          |   |       |       |  |   |       |  
|Balance, February 2, 2003(as restated, Note 2)                                      |                      |                | 13,080 |   |         |   | 132 |          |  |             | 116,678    |   |  |               | 50,993 |   |          |   | 608   |       |  |   |      |   |  |   | (1,846 | ) |  |   | 166,565 |       
|Net earnings (as restated, Note 2)                                                  |                      |                |       |   |         |   |    |          |  |             |           |   |  |               | 10,921 |   |          |   |      |       |  |   |      |   |  |   |       |   |  |   | 10,921  |       
|Stock option exercises                                                              |                      |                | 101    |   |         |   |    |          |  |             | 704        |   |  |               |       |   |          |   |      |       |  |   |      |   |  |   |       |   |  |   | 704     |       
|Tax benefit related to stock option exercises                                       |                      |                |       |   |         |   |    |          |  |             | 137        |   |  |               |       |   |          |   |      |       |  |   |      |   |  |   |       |   |  |   | 137     |       
|Amortization of restricted stock awards                                             |                      |                |       |   |         |   |    |          |  |             |           |   |  |               |       |   |          |   | 297   |       |  |   |      |   |  |   |       |   |  |   | 297     |       
|Fair value of warrants issued in connection with convertible
    subordinated notes |                      |                |       |   |         |   |    |          |  |             | 1,150      |   |  |               |       |   |          |   |      |       |  |   |      |   |  |   |       |   |  |   | 1,150   |       
|Other                                                                               |                      |                |       |   |         |   |    |          |  |             |           |   |  |               | 10     |   |          |   |      |       |  |   |      |   |  |   |       |   |  |   | 10      |       
|                                                                                    |                      |                |        |   |         |   |     |          |  |             |            |   |  |               |        |   |          |   |       |       |  |   |       |  
|Balance, February 1, 2004(as restated, Note 2)                                      |                      |                | 13,181 |   |         |   | 132 |          |  |             | 118,669    |   |  |               | 61,924 |   |          |   | 905   |       |  |   |      |   |  |   | (1,846 | ) |  |   | 179,784 |       
|Net earnings                                                                        |                      |                |       |   |         |   |    |          |  |             |           |   |  |               | 12,880 |   |          |   |      |       |  |   |      |   |  |   |       |   |  |   | 12,880  |       
|Unrealized foreign currency translation gain                                        |                      |                |       |   |         |   |    |          |  |             |           |   |  |               |       |   |          |   |      |       |  |   | 225   |   |  |   |       |   |  |   | 225     |       
|                                                                                    |                      |                |        |   |         |   |     |          |  |             |            |   |  |               |        |   |          |   |       |       |  |   |       |  
|                                                                                    | Comprehensive income |                |        |  |         |   |     |         |  |             |            |  |  |               |        |  |          |   |       |      |  |   |       |  |  |   |        |  |  |   |         | 13,105 | 
|Stock option exercises                                                              |                      |                | 271    |   |         |   | 3   |          |  |             | 2,799      |   |  |               |       |   |          |   |      |       |  |   |      |   |  |   |       |   |  |   | 2,802   |       
|Tax benefit related to stock option exercises                                       |                      |                |       |   |         |   |    |          |  |             | 705        |   |  |               |       |   |          |   |      |       |  |   |      |   |  |   |       |   |  |   | 705     |       
|Amortization of restricted stock awards                                             |                      |                |       |   |         |   |    |          |  |             |           |   |  |               |       |   |          |   | 549   |       |  |   |      |   |  |   |       |   |  |   | 549     |       
|                                                                                    |                      |                |        |   |         |   |     |          |  |             |            |   |  |               |        |   |          |   |       |       |  |   |       |  
|Balance, January 30, 2005                                                           |                      |                | 13,452 |   |         | $ | 135 |          |  | $           | 122,173    |   |  | $             | 74,804 |   |          | $ | 1,454 |       |  | $ | 225   |   |  | $ | (1,846 | ) |  | $ | 196,945 |       
|                                                                                    |                      |                |        |   |         |   |     |          |  |             |            |   |  |               |        |   |          |   |       |       |  |   |       |  



F-4



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##### Table of Contents



DAVE & BUSTERS, INC.





CONSOLIDATED STATEMENTS OF CASH FLOWS


|                                                   |                                                                                                                                           |                                                     |                                                                                         |                                   |             |        |               |             |         |        |        |         |         |        |        |  
|-------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------- | --------------------------------------------------------------------------------------- | --------------------------------- | ----------- | ------ | ------------- | ----------- | ------- | ------ | ------ | ------- | ------- | ------ | ------ | -
|                                                   |                                                                                                                                           | Fiscal Year Ended                                   |                                                                                        
|                                                   |                                                                                                                                           |                                                     |                                                                                        
|                                                   |                                                                                                                                           | January 30,                                         |                                                                                         |                                   | February 1, |        |               | February 2, |        
|                                                   |                                                                                                                                           | 2005                                                |                                                                                         |                                   | 2004        |        |               | 2003        |        
|                                                   |                                                                                                                                           |                                                     |                                                                                         |                                   |             |        |               |             |        
|                                                   |                                                                                                                                           |                                                     |                                                                                         | (As restated,                     |             |        | (As restated, |            
|                                                   |                                                                                                                                           |                                                     |                                                                                         | Note 2)                           |             |        | Note 2)       |            
|                                                   |                                                                                                                                           | (In thousands)                                      |                                                                                        
|Cash flows from operating activities:              |                                                                                                                                           |                                                     |                                                                                         |                                   |             |        |               |             |         |        |        |        
|                                                   | Income before cumulative effect of a change in an accounting
    principle                                                                |                                                     | $                                                                                       | 12,880                            |             |        | $             | 10,921      |         |        | $      | 5,088   |        
|                                                   | Adjustments to reconcile income before cumulative change in an
    accounting principle to net cash provided by operating
    activities: |                                                     |                                                                                         |                                   |             |        |               |             |         |        |        |         |        
|                                                   |                                                                                                                                           |                                                     | Depreciation and amortization expense                                                   |                                   |             | 34,238 |               |             |         | 32,741 |        |         |         | 33,156 |       
|                                                   |                                                                                                                                           |                                                     | Deferred income tax expense (benefit)                                                   |                                   |             | (3,820 | )             |             |         | 822    |        |         |         | 6,233  |       
|                                                   |                                                                                                                                           |                                                     | Tax benefit related to stock options                                                    |                                   |             | 705    |               |             |         | 137    |        |         |         | 107    |       
|                                                   |                                                                                                                                           |                                                     | Restricted stock awards                                                                 |                                   |             | 549    |               |             |         | 297    |        |         |         | 226    |       
|                                                   |                                                                                                                                           |                                                     | Warrants related to convertible debt                                                    |                                   |             | 254    |               |             |         | 107    |        |         |         |       |       
|                                                   |                                                                                                                                           |                                                     | Other, net                                                                              |                                   |             | 314    |               |             |         | (256   | )      |         |         | (222   | )     
|                                                   |                                                                                                                                           |                                                     | Changes in operating assets and liabilities, net of effect of
    business acquisitions |                                   |             |        |               |             |         |        |        |         |         |        |       
|                                                   |                                                                                                                                           |                                                     |                                                                                         | Inventories                       |             |        | (2,069        | )           |         |        | 401    |         |         |        | (670   | )
|                                                   |                                                                                                                                           |                                                     |                                                                                         | Prepaid expenses                  |             |        | (325          | )           |         |        | (660   | )       |         |        | (607   | )
|                                                   |                                                                                                                                           |                                                     |                                                                                         | Other current assets              |             |        | (94           | )           |         |        | (382   | )       |         |        | 309    |  
|                                                   |                                                                                                                                           |                                                     |                                                                                         | Other assets and deferred charges |             |        | (1,884        | )           |         |        | (502   | )       |         |        | 940    |  
|                                                   |                                                                                                                                           |                                                     |                                                                                         | Accounts payable                  |             |        | (1,200        | )           |         |        | (1,606 | )       |         |        | (1,039 | )
|                                                   |                                                                                                                                           |                                                     |                                                                                         | Accrued liabilities               |             |        | 3,535         |             |         |        | 697    |         |         |        | 1,116  |  
|                                                   |                                                                                                                                           |                                                     |                                                                                         | Income taxes payable              |             |        | 2,914         |             |         |        | 2,564  |         |         |        | (4,729 | )
|                                                   |                                                                                                                                           |                                                     |                                                                                         | Deferred rent liability           |             |        | 2,154         |             |         |        | (115   | )       |         |        | 1,066  |  
|                                                   |                                                                                                                                           |                                                     |                                                                                         | Other liabilities                 |             |        | 188           |             |         |        | 351    |         |         |        | 866    |  
|                                                   |                                                                                                                                           |                                                     |                                                                                         |                                   |             |        |               |             |        
|                                                   |                                                                                                                                           | Net cash provided by operating activities           |                                                                                         |                                   | 48,339      |        |               |             | 45,517  |        |        |         | 41,840  |       
|Cash flows from investing activities:              |                                                                                                                                           |                                                     |                                                                                         |                                   |             |        |               |             |         |        |        |        
|                                                   | Capital expenditures                                                                                                                      |                                                     |                                                                                         | (34,234                           | )           |        |               | (24,292     | )       |        |        | (22,956 | )      
|                                                   | Business acquisition, net of cash acquired                                                                                                |                                                     |                                                                                         | (47,876                           | )           |        |               | (3,600      | )       |        |        |        |        
|                                                   | Proceeds from sales of property and equipment                                                                                             |                                                     |                                                                                         | 338                               |             |        |               | 471         |         |        |        | 750     |        
|                                                   |                                                                                                                                           |                                                     |                                                                                         |                                   |             |        |               |             |        
|                                                   |                                                                                                                                           | Net cash used in investing activities               |                                                                                         |                                   | (81,772     | )      |               |             | (27,421 | )      |        |         | (22,206 | )     
|Cash flows from financing activities:              |                                                                                                                                           |                                                     |                                                                                         |                                   |             |        |               |             |         |        |        |        
|                                                   | Borrowings under long-term debt                                                                                                           |                                                     |                                                                                         | 78,446                            |             |        |               | 44,825      |         |        |        | 12,000  |        
|                                                   | Repayments of long-term debt                                                                                                              |                                                     |                                                                                         | (43,250                           | )           |        |               | (57,789     | )       |        |        | (34,602 | )      
|                                                   | Debt costs                                                                                                                                |                                                     |                                                                                         | (841                              | )           |        |               | (4,469      | )       |        |        |        |        
|                                                   | Proceeds from exercises of stock options                                                                                                  |                                                     |                                                                                         | 2,805                             |             |        |               | 704         |         |        |        | 977     |        
|                                                   |                                                                                                                                           |                                                     |                                                                                         |                                   |             |        |               |             |        
|                                                   |                                                                                                                                           | Net cash provided by (used in) financing activities |                                                                                         |                                   | 37,160      |        |               |             | (16,729 | )      |        |         | (21,625 | )     
|                                                   |                                                                                                                                           |                                                     |                                                                                         |                                   |             |        |               |             |        
|Increase (decrease) in cash and cash equivalents   |                                                                                                                                           |                                                     | 3,727                                                                                   |                                   |             |        | 1,367         |             |         |        | (1,991 | )      
|Beginning cash and cash equivalents                |                                                                                                                                           |                                                     | 3,897                                                                                   |                                   |             |        | 2,530         |             |         |        | 4,521  |        
|                                                   |                                                                                                                                           |                                                     |                                                                                         |                                   |             |        |               |             |        
|Ending cash and cash equivalents                   |                                                                                                                                           | $                                                   | 7,624                                                                                   |                                   |             | $      | 3,897         |             |         | $      | 2,530  |        
|                                                   |                                                                                                                                           |                                                     |                                                                                         |                                   |             |        |               |             |        
|Supplemental disclosures of cash flow information: |                                                                                                                                           |                                                     |                                                                                         |                                   |             |        |               |             |         |        |        |        
|                                                   | Cash paid for income taxes - net of refunds                                                                                               |                                                     | $                                                                                       | 7,146                             |             |        | $             | 1,798       |         |        | $      | 679     |        
|                                                   | Cash paid for interest, net of amounts capitalized                                                                                        |                                                     | $                                                                                       | 2,504                             |             |        | $             | 5,428       |         |        | $      | 7,353   |        



F-5



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##### Table of Contents



DAVE & BUSTERS, INC.





NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


Dollars In Thousands, Except Per Share Amounts




|        |                                           
|------- | ------------------------------------------
|Note 1: | Summary of Significant Accounting Policies

Basis of Presentation


Reclassifications 


Use of Estimates


Fiscal Year


Cash and Cash Equivalents


Inventories


|                   |  |             |        |  |             |   |        | 
|------------------ |  | ----------- | ------ |  | ----------- | - | ------ | 
|                   |  | January 30, |        |  | February 1, |  
|                   |  | 2005        |        |  | 2004        |  
|                   |  |             |        |  |             |  
|Food and beverage  |  | $           | 2,249  |  |             | $ | 1,809  | 
|Amusements         |  |             | 2,467  |  |             |   | 2,393  | 
|Smallware supplies |  |             | 17,535 |  |             |   | 16,715 | 
|Other              |  |             | 6,684  |  |             |   | 5,316  | 
|                   |  |             |        |  |             |  
|                   |  | $           | 28,935 |  |             | $ | 26,233 | 
|                   |  |             |        |  |             |  

Property and Equipment


F-6



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##### Table of Contents



DAVE & BUSTERS, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




Intangible assets


Goodwill Goodwill and Other
Intangible Assets,


Income Taxes


Accounting for Contingencies.


Stock-Based Compensation Accounting for Stock Issued to Employees


Accounting for Stock-Based
Compensation


F-7



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##### Table of Contents



DAVE & BUSTERS, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                                                                                                   |  |                   |        |               |             |   |               |             |  |   |        |  
|-------------------------------------------------------------------------------------------------- |  | ----------------- | ------ | ------------- | ----------- | - | ------------- | ----------- |  | - | ------ | -
|                                                                                                   |  | Fiscal Year Ended |       
|                                                                                                   |  |                   |       
|                                                                                                   |  | January 30,       |        |               | February 1, |   |               | February 2, | 
|                                                                                                   |  | 2005              |        |               | 2004        |   |               | 2003        | 
|                                                                                                   |  |                   |        |               |             |   |               |             | 
|                                                                                                   |  |                   |        | (As restated, |             |   | (As restated, |            
|                                                                                                   |  |                   |        | Note 2)       |             |   | Note 2)       |            
|Net income (loss), as reported                                                                     |  | $                 | 12,880 |               |             | $ | 10,921        |             |  | $ | (2,008 | )
|Stock compensation expenses recorded under the intrinsic method,
    net of income taxes           |  |                   | 357    |               |             |   | 196           |             |  |   | 149    |  
|Pro forma stock compensation expense recorded under the fair
    value method, net of income taxes |  |                   | (1,180 | )             |             |   | (801          | )           |  |   | (1,288 | )
|                                                                                                   |  |                   |        |               |             |   |               |             | 
|Pro forma net income (loss)                                                                        |  | $                 | 12,057 |               |             | $ | 10,316        |             |  | $ | (3,147 | )
|                                                                                                   |  |                   |        |               |             |   |               |             | 
|Basic earnings (loss) per common share, as reported                                                |  | $                 | 0.97   |               |             | $ | 0.83          |             |  | $ | (0.15  | )
|Diluted earnings (loss) per common share, as reported                                              |  | $                 | 0.87   |               |             | $ | 0.79          |             |  | $ | (0.15  | )
|Pro forma basic earnings (loss) per common share                                                   |  | $                 | 0.90   |               |             | $ | 0.79          |             |  | $ | (0.24  | )
|Pro forma diluted earnings (loss) per common share                                                 |  | $                 | 0.82   |               |             | $ | 0.75          |             |  | $ | (0.23  | )



|                                               |  |                   |      |   |             |   |      |             |  |   |      |  
|---------------------------------------------- |  | ----------------- | ---- | - | ----------- | - | ---- | ----------- |  | - | ---- | -
|                                               |  | Fiscal Year Ended |     
|                                               |  |                   |     
|                                               |  | January 30,       |      |   | February 1, |   |      | February 2, | 
|                                               |  | 2005              |      |   | 2004        |   |      | 2003        | 
|                                               |  |                   |      |   |             |   |      |             | 
|Volatility                                     |  |                   | 0.56 |   |             |   | 0.59 |             |  |   | 0.62 |  
|Weighted-average expected lives                |  |                   | 5.00 |   |             |   | 4.40 |             |  |   | 5.00 |  
|Weighted-average risk-free interest rates      |  |                   | 3.58 | % |             |   | 2.82 | %           |  |   | 3.89 | %
|Weighted-average fair value of options granted |  | $                 | 9.41 |   |             | $ | 5.05 |             |  | $ | 4.89 |  





F-8



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##### Table of Contents



DAVE & BUSTERS, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




Foreign Currency Translation


Revenue Recognition




Amusements Costs of Products


Advertising Costs


Preopening Costs


Lease Accounting


Comprehensive Income




|        |                                    
|------- | -----------------------------------
|Note 2. | Restatement of Financial Statements



F-9



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##### Table of Contents



DAVE & BUSTERS, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)










F-10



---



##### Table of Contents



DAVE & BUSTERS, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                                      |                                       |                                    |   |         |            |  |    |          |     |  |   |         |         | 
|------------------------------------- | ------------------------------------- | ---------------------------------- | - | ------- | ---------- |  | -- | -------- | --- |  | - | ------- | ------- | 
|                                      |                                       | Fiscal Year Ended February 1, 2004 |  
|                                      |                                       |                                    |  
|                                      |                                       | As                                 |   |         |           
|                                      |                                       | Previously                         |   |         |            |  | As |         
|                                      |                                       | Reported                           |   |         | Adjustment |  |    | Restated |    
|                                      |                                       |                                    |   |         |            |  |    |          |    
|Consolidated balance sheet:           |                                       |                                    |   |         |            |  |    |          |     |  |   |        
|                                      | Property and equipment, net           |                                    | $ | 247,161 |            |  | $  | 44,312   |     |  | $ | 291,473 |        
|                                      | Total assets                          |                                    |   | 295,889 |            |  |    | 44,312   |     |  |   | 340,201 |        
|                                      | Deferred lease liabilities            |                                    |   | 11,632  |            |  |    | 49,327   |     |  |   | 60,959  |        
|                                      | Deferred income tax liability         |                                    |   | 13,620  |            |  |    | (1,931   | )   |  |   | 11,689  |        
|                                      | Retained earnings                     |                                    |   | 65,029  |            |  |    | (3,105   | )   |  |   | 61,924  |        
|                                      | Total stockholders equity            |                                    |   | 182,889 |            |  |    | (3,105   | )   |  |   | 179,784 |        
|Consolidated statement of operations: |                                       |                                    |   |         |            |  |    |          |     |  |   |        
|                                      | Other store operating expenses        |                                    |   | 111,310 |            |  |    | (2,897   | )   |  |   | 108,413 |        
|                                      | Depreciation and amortization expense |                                    |   | 29,734  |            |  |    | 3,007    |     |  |   | 32,741  |        
|                                      |                                       | Total operating costs              |   |         | 339,246    |  |    |          | 110 |  |   |         | 339,356 | 
|                                      | Income before income taxes            |                                    |   | 16,650  |            |  |    | (110     | )   |  |   | 16,540  |        
|                                      | Income taxes                          |                                    |   | 5,661   |            |  |    | (42      | )   |  |   | 5,619   |        
|                                      | Net income                            |                                    |   | 10,989  |            |  |    | (68      | )   |  |   | 10,921  |        
|                                      | Basic earnings per share              |                                    | $ | 0.84    |            |  | $  | (0.01    | )   |  | $ | 0.83    |        
|                                      | Diluted earnings per share            |                                    | $ | 0.80    |            |  | $  | (0.01    | )   |  | $ | 0.79    |        
|Consolidated statement of cash flows: |                                       |                                    |   |         |            |  |    |          |     |  |   |        
|                                      | Cash provided by operations           |                                    | $ | 45,517  |            |  | $  |         |     |  | $ | 45,517  |        
|                                      | Cash used in investing activities     |                                    |   | (27,421 | )          |  |    |         |     |  |   | (27,421 | )      
|                                      | Cash used in financing activities     |                                    |   | (16,729 | )          |  |    |         |     |  |   | (16,729 | )      

F-11



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##### Table of Contents



DAVE & BUSTERS, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)


|                                      |                                                                   |                                    |   |         |            |  |    |          |   |  |   |         |  
|------------------------------------- | ----------------------------------------------------------------- | ---------------------------------- | - | ------- | ---------- |  | -- | -------- | - |  | - | ------- | -
|                                      |                                                                   | Fiscal Year Ended February 2, 2003 |  
|                                      |                                                                   |                                    |  
|                                      |                                                                   | As                                 |   |         |           
|                                      |                                                                   | Previously                         |   |         |            |  | As |         
|                                      |                                                                   | Reported                           |   |         | Adjustment |  |    | Restated |  
|                                      |                                                                   |                                    |   |         |            |  |    |          |  
|Consolidated balance sheet:           |                                                                   |                                    |   |         |            |  |    |          |   |  |   |        
|                                      | Property and equipment, net                                       |                                    | $ | 249,451 |            |  | $  | 47,319   |   |  | $ | 296,770 |  
|                                      |                                                                   |                                    |   |         |            |  |    |          |  
|                                      | Deferred lease liabilities                                        |                                    |   | 8,850   |            |  |    | 52,224   |   |  |   | 61,074  |  
|                                      | Deferred income tax liability                                     |                                    |   | 14,065  |            |  |    | (1,888   | ) |  |   | 12,177  |  
|                                      | Retained earnings                                                 |                                    |   | 54,030  |            |  |    | (3,017   | ) |  |   | 51,013  |  
|                                      | Total stockholders equity                                        |                                    |   | 169,602 |            |  |    | (3,017   | ) |  |   | 166,585 |  
|Consolidated statement of operations: |                                                                   |                                    |   |         |            |  |    |          |   |  |   |        
|                                      | Other store operating expenses                                    |                                    |   | 117,666 |            |  |    | (2,708   | ) |  |   | 114,958 |  
|                                      | Depreciation and amortization expense                             |                                    |   | 30,056  |            |  |    | 3,100    |   |  |   | 33,156  |  
|                                      | Pre-opening costs                                                 |                                    |   | 1,488   |            |  |    | 32       |   |  |   | 1,520   |  
|                                      | Total operating costs                                             |                                    |   | 358,506 |            |  |    | 423      |   |  |   | 358,929 |  
|                                      | Income before income taxes                                        |                                    |   | 8,103   |            |  |    | (423     | ) |  |   | 7,680   |  
|                                      | Income taxes                                                      |                                    |   | 2,755   |            |  |    | (163     | ) |  |   | 2,592   |  
|                                      | Income before cumulative effect of change in accounting principle |                                    |   | 5,348   |            |  |    | (260     | ) |  |   | 5,088   |  
|                                      | Net income                                                        |                                    |   | (1,748  | )          |  |    | (260     | ) |  |   | (2,008  | )
|                                      | Basic earnings per share                                          |                                    | $ | (0.14   | )          |  | $  | (0.01    | ) |  | $ | (0.15   | )
|                                      | Diluted earnings per share                                        |                                    | $ | (0.14   | )          |  | $  | (0.01    | ) |  | $ | (0.15   | )
|Consolidated statement of cash flows: |                                                                   |                                    |   |         |            |  |    |          |   |  |   |        
|                                      | Cash provided by operations                                       |                                    | $ | 40,604  |            |  | $  | 1,236    |   |  | $ | 41,840  |  
|                                      | Cash used in investing activities                                 |                                    |   | (20,970 | )          |  |    | (1,236   | ) |  |   | (22,206 | )
|                                      | Cash used in financing activities                                 |                                    |   | (21,625 | )          |  |    |         |   |  |   | (21,625 | )



|        |             
|------- | ------------
|Note 3: | Acquisitions

Acquisition of Certain Assets of Jillians Entertainment
Holdings Inc.






Acquisition of Toronto, Canada Complex


F-12



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##### Table of Contents



DAVE & BUSTERS, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)








|        |                       
|------- | ----------------------
|Note 4: | Property and Equipment



|                                    |                             |                       |                             |  |             |               |         |             |  |   |         |         | 
|----------------------------------- | --------------------------- | --------------------- | --------------------------- |  | ----------- | ------------- | ------- | ----------- |  | - | ------- | ------- | 
|                                    |                             | Estimated Depreciable |                             |  | January 30, |               |         | February 1, | 
|                                    |                             | Lives (In Years)      |                             |  | 2005        |               |         | 2004        | 
|                                    |                             |                       |                             |  |             |               |         |             | 
|                                    |                             |                       |                             |  |             | (As restated, |        
|                                    |                             |                       |                             |  |             | Note 2)       |        
|Land                                |                             |                       |                            |  |             | $             | 6,706   |             |  | $ | 6,706   |        
|Buildings                           |                             |                       | 40                          |  |             |               | 44,194  |             |  |   | 44,663  |        
|Leasehold and building improvements |                             |                       | shorter of 20 or lease term |  |             |               | 242,099 |             |  |   | 202,026 |        
|Furniture, fixtures and equipment   |                             |                       | 5-10                        |  |             |               | 123,680 |             |  |   | 106,009 |        
|Games                               |                             |                       | 5                           |  |             |               | 98,886  |             |  |   | 86,382  |        
|Construction in progress            |                             |                       |                             |  |             |               | 4,504   |             |  |   | 5,560   |        
|                                    |                             |                       |                             |  |             |               |         |             | 
|                                    | Total cost                  |                       |                             |  |             |               |         | 520,069     |  |   |         | 451,346 | 
|Less accumulated depreciation       |                             |                       |                             |  |             |               | 188,591 |             |  |   | 159,873 |        
|                                    |                             |                       |                             |  |             |               |         |             | 
|                                    | Property and equipment, net |                       |                             |  |             |               | $       | 331,478     |  |   | $       | 291,473 | 
|                                    |                             |                       |                             |  |             |               |         |             | 



|        |                    
|------- | -------------------
|Note 5: | Accrued Liabilities



|                          |                           |             |       |        |             |   |       |        | 
|------------------------- | ------------------------- | ----------- | ----- | ------ | ----------- | - | ----- | ------ | 
|                          |                           | January 30, |       |        | February 1, |  
|                          |                           | 2005        |       |        | 2004        |  
|                          |                           |             |       |        |             |  
|Compensation and benefits |                           | $           | 6,084 |        |             | $ | 7,554 |       
|Sales and use taxes       |                           |             | 2,471 |        |             |   | 1,330 |       
|Real estate taxes         |                           |             | 1,921 |        |             |   | 1,143 |       
|Other                     |                           |             | 7,643 |        |             |   | 2,871 |       
|                          |                           |             |       |        |             |  
|                          | Total accrued liabilities |             | $     | 18,119 |             |   | $     | 12,898 | 
|                          |                           |             |       |        |             |  

F-13



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##### Table of Contents



DAVE & BUSTERS, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|        |               
|------- | --------------
|Note 6: | Long-term Debt



|                                                |  |             |        |  |             |   |        | 
|----------------------------------------------- |  | ----------- | ------ |  | ----------- | - | ------ | 
|                                                |  | January 30, |        |  | February 1, |  
|                                                |  | 2005        |        |  | 2004        |  
|                                                |  |             |        |  |             |  
|Revolving credit facility                       |  | $           | 5,871  |  |             | $ | 10,517 | 
|Term debt facility                              |  |             | 53,167 |  |             |   | 14,167 | 
|Convertible subordinated notes, net of discount |  |             | 29,105 |  |             |   | 28,850 | 
|                                                |  |             |        |  |             |  
|                                                |  |             | 88,143 |  |             |   | 53,534 | 
|Less current installments                       |  |             | 7,792  |  |             |   | 3,333  | 
|                                                |  |             |        |  |             |  
|Long-term debt, less current installments       |  | $           | 80,351 |  |             | $ | 50,201 | 
|                                                |  |             |        |  |             |  







F-14



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##### Table of Contents



DAVE & BUSTERS, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)










|                     |                                                |         |        |        |  
|-------------------- | ---------------------------------------------- | ------- | ------ | ------ | -
|Fiscal Year          |                                                | Payment |       
|                     |                                                |         |       
|2005                 |                                                | $       | 7,792  |       
|2006                 |                                                |         | 9,625  |       
|2007                 |                                                |         | 11,458 |       
|2008                 |                                                |         | 13,292 |       
|2009                 |                                                |         | 46,871 |       
|                     |                                                |         |       
|                     | Total future payments                          |         |        | 89,038 |  
|                     | Less: Unamortized discount on convertible debt |         |        | (895   | )
|                     | Current installments of
    long-term debt     |         |        | (7,792 | )
|                     |                                                |         |       
|Total long-term debt |                                                | $       | 80,351 |       
|                     |                                                |         |       



|        |             
|------- | ------------
|Note 7: | Income Taxes



|                           |                                  |                   |        |               |             |  |               |             |  |  |       |        |  
|-------------------------- | -------------------------------- | ----------------- | ------ | ------------- | ----------- |  | ------------- | ----------- |  |  | ----- | ------ | -
|                           |                                  | Fiscal Year Ended |       
|                           |                                  |                   |       
|                           |                                  | January 30,       |        |               | February 1, |  |               | February 2, | 
|                           |                                  | 2005              |        |               | 2004        |  |               | 2003        | 
|                           |                                  |                   |        |               |             |  |               |             | 
|                           |                                  |                   |        | (As restated, |             |  | (As restated, |            
|                           |                                  |                   |        | Note 2)       |             |  | Note 2)       |            
|Current expense (benefit)  |                                  |                   |        |               |             |  |               |             |  |  |       |       
|                           | Federal                          |                   | $      | 9,813         |             |  | $             | 4,353       |  |  | $     | (3,876 | )
|                           | State and local                  |                   |        | 932           |             |  |               | 444         |  |  |       | 235    |  
|Deferred expense (benefit) |                                  |                   | (3,820 | )             |             |  | 822           |             |  |  | 6,233 |       
|                           |                                  |                   |        |               |             |  |               |             | 
|                           | Total provision for income taxes |                   | $      | 6,925         |             |  | $             | 5,619       |  |  | $     | 2,592  |  
|                           |                                  |                   |        |               |             |  |               |             | 



F-15



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##### Table of Contents



DAVE & BUSTERS, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                          |                                |                            |       |               |             |   |        |        |        | 
|------------------------- | ------------------------------ | -------------------------- | ----- | ------------- | ----------- | - | ------ | ------ | ------ | 
|                          |                                | January 30,                |       |               | February 1, |  
|                          |                                | 2005                       |       |               | 2004        |  
|                          |                                |                            |       |               |             |  
|                          |                                |                            |       | (As restated, |            
|                          |                                |                            |       | Note 2)       |            
|Deferred tax liabilities: |                                |                            |       |               |             |   |        |       
|Property and equipment    |                                | $                          | 9,941 |               |             | $ | 19,322 |       
|Prepaid expenses          |                                |                            | 478   |               |             |   | 451    |       
|Smallware supplies        |                                |                            | 5,332 |               |             |   | 355    |       
|Other                     |                                |                            | 864   |               |             |   | 777    |       
|                          |                                |                            |       |               |             |  
|                          | Total deferred tax liabilities |                            |       | 16,615        |             |   |        | 20,905 |       
|Deferred tax assets:      |                                |                            |       |               |             |   |        |       
|Preopening costs          |                                |                            | 4,934 |               |             |   | 4,184  |       
|Leasing transactions      |                                |                            | 54    |               |             |   | 1,351  |       
|Workers compensation     |                                |                            | 666   |               |             |   | 570    |       
|                          |                                |                            |       |               |             |  
|                          | Total deferred tax assets      |                            |       | 5,654         |             |   |        | 6,105  |       
|                          |                                |                            |       |               |             |  
|                          |                                | Net deferred tax liability |       | $             | 10,961      |   |        | $      | 14,800 | 
|                          |                                |                            |       |               |             |  



|                                                                |                    |                   |      |               |             |  |               |             |   |  |       |      |  
|--------------------------------------------------------------- | ------------------ | ----------------- | ---- | ------------- | ----------- |  | ------------- | ----------- | - |  | ----- | ---- | -
|                                                                |                    | Fiscal Year Ended |     
|                                                                |                    |                   |     
|                                                                |                    | January 30,       |      |               | February 1, |  |               | February 2, |  
|                                                                |                    | 2005              |      |               | 2004        |  |               | 2003        |  
|                                                                |                    |                   |      |               |             |  |               |             |  
|                                                                |                    |                   |      | (As restated, |             |  | (As restated, |            
|                                                                |                    |                   |      | Note 2)       |             |  | Note 2)       |            
|Federal corporate statutory rate                                |                    |                   | 35.0 | %             |             |  | 35.0          | %           |   |  | 35.0  | %   
|State and local income taxes, net of federal income tax benefit |                    |                   | 2.7  | %             |             |  | 2.2           | %           |   |  | 6.9   | %   
|Foreign taxes                                                   |                    |                   | (2.1 | )%            |             |  |              |             |   |  |      |     
|Nondeductible expenses                                          |                    |                   | 2.0  | %             |             |  | 2.8           | %           |   |  | 6.3   | %   
|Tax credits                                                     |                    |                   | (4.2 | )%            |             |  | (6.6          | )%          |   |  | (16.5 | )%  
|Other                                                           |                    |                   | 1.6  | %             |             |  | 0.6           | %           |   |  | 2.1   | %   
|                                                                |                    |                   |      |               |             |  |               |             |  
|                                                                | Effective tax rate |                   |      | 35.0          | %           |  |               | 34.0        | % |  |       | 33.8 | %
|                                                                |                    |                   |      |               |             |  |               |             |  



|        |       
|------- | ------
|Note 8: | Leases



|     |         |  |      |  |         |      |  |  |         |  |  |      |         |  |            |  |         |       |  |  |          |  |  |  |          | 
|---- | ------- |  | ---- |  | ------- | ---- |  |  | ------- |  |  | ---- | ------- |  | ---------- |  | ------- | ----- |  |  | -------- |  |  |  | -------- | 
|2005 |         |  | 2006 |  |         | 2007 |  |  | 2008    |  |  | 2009 |         |  | Thereafter |  |         | Total | 
|     |         |  |      |  |         |      |  |  |         |  |  |      |         |  |            |  |         |       | 
|     | $37,998 |  |      |  | $36,963 |      |  |  | $36,420 |  |  |      | $35,963 |  |            |  | $36,370 |       |  |  | $360,011 |  |  |  | $543,725 | 

F-16



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##### Table of Contents



DAVE & BUSTERS, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)






|     |        |  |      |  |        |      |  |  |        |  |  |      |        |  |            |  |        |       |  |  |         |  |  |  |         | 
|---- | ------ |  | ---- |  | ------ | ---- |  |  | ------ |  |  | ---- | ------ |  | ---------- |  | ------ | ----- |  |  | ------- |  |  |  | ------- | 
|2005 |        |  | 2006 |  |        | 2007 |  |  | 2008   |  |  | 2009 |        |  | Thereafter |  |        | Total | 
|     |        |  |      |  |        |      |  |  |        |  |  |      |        |  |            |  |        |       | 
|     | $4,051 |  |      |  | $4,183 |      |  |  | $4,225 |  |  |      | $4,267 |  |            |  | $4,310 |       |  |  | $54,279 |  |  |  | $75,315 | 



|     |      |  |      |  |      |      |  |  |      |  |  |      |      |  |            |  |      |       |  |  |        |  |  |  |         | 
|---- | ---- |  | ---- |  | ---- | ---- |  |  | ---- |  |  | ---- | ---- |  | ---------- |  | ---- | ----- |  |  | ------ |  |  |  | ------- | 
|2005 |      |  | 2006 |  |      | 2007 |  |  | 2008 |  |  | 2009 |      |  | Thereafter |  |      | Total | 
|     |      |  |      |  |      |      |  |  |      |  |  |      |      |  |            |  |      |       | 
|     | $652 |  |      |  | $652 |      |  |  | $652 |  |  |      | $652 |  |            |  | $652 |       |  |  | $7,629 |  |  |  | $10,889 | 



|        |             
|------- | ------------
|Note 9: | Common Stock

Stock-Based Compensation






F-17



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##### Table of Contents



DAVE & BUSTERS, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                                |  |                   |       |          |                  |   |       |                  |          |  |        |   |  |          |       |  |        |  |       |   |  |   |       | 
|------------------------------- |  | ----------------- | ----- | -------- | ---------------- | - | ----- | ---------------- | -------- |  | ------ | - |  | -------- | ----- |  | ------ |  | ----- | - |  | - | ----- | 
|                                |  | Fiscal Year Ended |      
|                                |  |                   |      
|                                |  | January 30, 2005  |       |          | February 1, 2004 |   |       | February 2, 2003 |         
|                                |  |                   |       |          |                  |   |       |                  |         
|                                |  |                   |       | Exercise |                  |   |       |                  | Exercise |  |        |   |  | Exercise |      
|                                |  | Options           |       |          | Price*           |   |       | Options          |          |  | Price* |   |  | Options  |       |  | Price* | 
|                                |  |                   |       |          |                  |   |       |                  |          |  |        |   |  |          |       |  |        | 
|Outstanding - beginning of year |  |                   | 2,417 |          |                  | $ | 11.55 |                  |          |  | 2,498  |   |  | $        | 11.79 |  |        |  | 2,785 |   |  | $ | 11.81 | 
|Granted                         |  |                   | 277   |          |                  |   | 17.30 |                  |          |  | 256    |   |  |          | 9.96  |  |        |  | 112   |   |  |   | 8.62  | 
|Exercised                       |  |                   | (271  | )        |                  |   | 10.34 |                  |          |  | (101   | ) |  |          | 6.95  |  |        |  | (121  | ) |  |   | 7.20  | 
|Forfeited                       |  |                   | (98   | )        |                  |   | 13.41 |                  |          |  | (236   | ) |  |          | 14.30 |  |        |  | (278  | ) |  |   | 12.76 | 
|                                |  |                   |       |          |                  |   |       |                  |          |  |        |   |  |          |       |  |        | 
|Outstanding - end of year       |  |                   | 2,325 |          |                  |   | 12.29 |                  |          |  | 2,417  |   |  |          | 11.55 |  |        |  | 2,498 |   |  |   | 11.79 | 
|                                |  |                   |       |          |                  |   |       |                  |          |  |        |   |  |          |       |  |        | 
|Exercisable - end of year       |  |                   | 1,680 |          |                  | $ | 12.86 |                  |          |  | 1,592  |   |  | $        | 13.13 |  |        |  | 1,411 |   |  | $ | 14.25 | 






|  |                                
|- | -------------------------------
|* | Weighted average exercise price





F-18



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##### Table of Contents



DAVE & BUSTERS, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|         |                   
|-------- | ------------------
|Note 10: | Earnings Per Share



|                                                                                           |                                                 |                   |        |               |             |   |               |             |  |   |        |        |  
|------------------------------------------------------------------------------------------ | ----------------------------------------------- | ----------------- | ------ | ------------- | ----------- | - | ------------- | ----------- |  | - | ------ | ------ | -
|                                                                                           |                                                 | Fiscal Year Ended |       
|                                                                                           |                                                 |                   |       
|                                                                                           |                                                 | January 30,       |        |               | February 1, |   |               | February 2, | 
|                                                                                           |                                                 | 2005              |        |               | 2004        |   |               | 2003        | 
|                                                                                           |                                                 |                   |        |               |             |   |               |             | 
|                                                                                           |                                                 |                   |        | (As restated, |             |   | (As restated, |            
|                                                                                           |                                                 |                   |        | Note 2)       |             |   | Note 2)       |            
|Numerator for basic earnings per common share - net income (loss)                          |                                                 | $                 | 12,880 |               |             | $ | 10,921        |             |  | $ | (2,008 | )     
|                                                                                           | Impact of convertible debt interest and fees    |                   |        | 1,479         |             |   |               | 662         |  |   |        |       |  
|                                                                                           |                                                 |                   |        |               |             |   |               |             | 
|                                                                                           | Income (loss) applicable to common shareholders |                   | $      | 14,359        |             |   | $             | 11,583      |  |   | $      | (2,008 | )
|                                                                                           |                                                 |                   |        |               |             |   |               |             | 
|Denominator for basic earnings per common share - weighted
    average shares              |                                                 |                   | 13,331 |               |             |   | 13,128        |             |  |   | 12,997 |       
|Dilutive securities:                                                                       |                                                 |                   |        |               |             |   |               |             |  |   |        |       
|                                                                                           | Employee stock options and warrants             |                   |        | 887           |             |   |               | 357         |  |   |        | 407    |  
|                                                                                           | Convertible debt                                |                   |        | 2,322         |             |   |               | 1,161       |  |   |        |       |  
|                                                                                           |                                                 |                   |        |               |             |   |               |             | 
|Denominator for diluted earnings per common share - adjusted
    weighted average shares   |                                                 |                   | 16,540 |               |             |   | 14,646        |             |  |   | 13,404 |       
|                                                                                           |                                                 |                   |        |               |             |   |               |             | 
|Diluted earnings (loss) per common share before cumulative
    effect of accounting change |                                                 | $                 | 0.87   |               |             | $ | 0.79          |             |  | $ | 0.38   |       
|Cumulative effect of a change in accounting principle                                      |                                                 |                   |       |               |             |   |              |             |  |   | (0.53  | )     
|                                                                                           |                                                 |                   |        |               |             |   |               |             | 
|Diluted earnings (loss) per common share                                                   |                                                 | $                 | 0.87   |               |             | $ | 0.79          |             |  | $ | (0.15  | )     
|                                                                                           |                                                 |                   |        |               |             |   |               |             | 





|         |                       
|-------- | ----------------------
|Note 11: | Related Party Activity







|         |                      
|-------- | ---------------------
|Note 12: | Employee Benefit Plan



F-19



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##### Table of Contents



DAVE & BUSTERS, INC.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)






|         |              
|-------- | -------------
|Note 13: | Contingencies





|         |                                            
|-------- | -------------------------------------------
|Note 14: | Quarterly Financial Information (unaudited)

(in thousands, except per share amounts)


|                                                |  |                                    |        |  |               |   |        |               |  |   |        |   |  |   |         | 
|----------------------------------------------- |  | ---------------------------------- | ------ |  | ------------- | - | ------ | ------------- |  | - | ------ | - |  | - | ------- | 
|                                                |  | Fiscal Year Ended January 30, 2005 |       
|                                                |  |                                    |       
|                                                |  | First                              |        |  | Second        |   |        | Third         |  |   | Fourth |  
|                                                |  |                                    |        |  |               |   |        |               |  |   |        |  
|                                                |  | (As restated)                      |        |  | (As restated) |   |        | (As restated) |  |   |       
|Total revenues                                  |  | $                                  | 94,966 |  |               | $ | 89,844 |               |  | $ | 84,043 |   |  | $ | 121,414 | 
|Income (loss) before provision for income taxes |  |                                    | 5,452  |  |               |   | 3,402  |               |  |   | (139   | ) |  |   | 11,089  | 
|Net income (loss)                               |  |                                    | 3,600  |  |               |   | 2,202  |               |  |   | (88    | ) |  |   | 7,166   | 
|Basic net income (loss) per share               |  | $                                  | 0.27   |  |               | $ | 0.17   |               |  | $ | 0.00   |   |  | $ | 0.53    | 
|Basic weighted average shares outstanding       |  |                                    | 13,205 |  |               |   | 13,319 |               |  |   | 13,381 |   |  |   | 13,418  | 
|Diluted net income per share                    |  | $                                  | 0.25   |  |               | $ | 0.16   |               |  | $ | 0.00   |   |  | $ | 0.46    | 
|Diluted weighted average shares outstanding     |  |                                    | 16,192 |  |               |   | 16,486 |               |  |   | 13,381 |   |  |   | 16,562  | 

|                                                |  |                                    |        |  |               |   |        |               |  |   |               |   |  |   |         | 
|----------------------------------------------- |  | ---------------------------------- | ------ |  | ------------- | - | ------ | ------------- |  | - | ------------- | - |  | - | ------- | 
|                                                |  | Fiscal Year Ended February 1, 2004 |       
|                                                |  |                                    |       
|                                                |  | First                              |        |  | Second        |   |        | Third         |  |   | Fourth        |  
|                                                |  |                                    |        |  |               |   |        |               |  |   |               |  
|                                                |  | (As restated)                      |        |  | (As restated) |   |        | (As restated) |  |   | (As restated) |  
|Total revenues                                  |  | $                                  | 91,587 |  |               | $ | 88,309 |               |  | $ | 82,882        |   |  | $ | 100,044 | 
|Income (loss) before provision for income taxes |  |                                    | 4,591  |  |               |   | 2,190  |               |  |   | (801          | ) |  |   | 10,558  | 
|Net income (loss)                               |  |                                    | 3,032  |  |               |   | 1,447  |               |  |   | (526          | ) |  |   | 6,969   | 
|Basic net income (loss) per share               |  | $                                  | 0.23   |  |               | $ | 0.11   |               |  | $ | (0.04         | ) |  | $ | 0.54    | 
|Basic weighted average shares outstanding       |  |                                    | 13,090 |  |               |   | 13,116 |               |  |   | 13,144        |   |  |   | 13,161  | 
|Diluted net income (loss) per share             |  | $                                  | 0.23   |  |               | $ | 0.11   |               |  | $ | (0.04         | ) |  | $ | 0.46    | 
|Diluted weighted average shares outstanding     |  |                                    | 13,283 |  |               |   | 13,458 |               |  |   | 13,144        |   |  |   | 15,944  | 





F-20



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##### Table of Contents






INDEX OF EXHIBITS FILED HEREWITH


|        |    |             |  |                                                                       
|------- | -- | ----------- |  | ----------------------------------------------------------------------
|Exhibit |    |            
|Number  |    | Description
|        |    |            
|        | 12 |             |  | Computation of Ratio of Earnings to Fixed Charges.                    
|       
|        | 21 |             |  | Subsidiaries of the Company.                                          
|       
|        | 23 |             |  | Consent of Registered Public Accounting Firm.                         
|       
|        | 24 |             |  | Power of Attorney (included on the Signature page of this
    report).
|       
|        | 31 |             |  | Rule 13a-14(a)/15d-14(a) Certifications.                              
|       
|        | 32 |             |  | Section 1350 Certifications.