SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                   Form 10-QSB

|X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE
ACT OF 1934

                  For the quarterly period ended June 30, 2005

|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the transition period from _____ to _____

Commission File number: 0-25429

                      Diversified Product Inspections, Inc.
                     ---------------------------------------
                     (Exact name of small business issuer as
                            specified in its charter)

           Florida                                               65-0832025
-------------------------------                              -------------------
(State of other jurisdiction of                                 (IRS Employer
incorporation or organization)                               Identification No.)

                           1059 East Tri-County Blvd.,
                            Oliver Springs, TN 37830
                    ----------------------------------------
                    (Address of principal executive offices)

                                 (865) 482-8480
                           ---------------------------
                           (Issuer`s telephone number)

                                 Not applicable
              -----------------------------------------------------
              (Former name, former address, and former fiscal year,
                          if changed since last report)

Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15 (d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes |X| No |_|

      As of August 10, 2005, there were 19,246,961 shares of common stock, $0.01
par value, issued and outstanding.

<PAGE>

                              INDEX TO FORM 10-QSB

                                                                            PAGE
PART I     FINANCIAL INFORMATION

Item 1     Financial Statements

           Condensed Balance Sheets as of June 30, 2005 (unaudited) and
              December 31, 2004                                              3
           Condensed Statements of Operations (unaudited) for the
              three and six months ended June 30, 2005 and 2004              4
           Condensed Statements of Stockholders' (Deficit) Equity
              for the year ended December 31, 2004 and the six
              months ended June 30, 2005                                     5
           Condensed Statements of Cash Flows (unaudited)
              for the six months ended June 30, 2005 and 2004                6
           Notes to Condensed Financial Statements                           7

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

Item 3     Controls and Procedures                                           10

PART II    OTHER INFORMATION                                                 11

SIGNATURES                                                                   12

CAUTIONARY STATEMENT FOR PURPOSES OF THE "SAFE HARBOR" STATEMENT UNDER THE
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

      This Form 10-QSB includes "forward-looking statements" within the meaning
of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. All statements, other than
statements of historical facts, included or incorporated by reference in this
Form 10-QSB which address activities, events or developments which the Company
expects or anticipates will or may occur in the future, including such things as
future capital expenditures (including the amount and nature thereof), finding
suitable merger or acquisition candidates, expansion and growth of the Company's
business and operations, and other such matters are forward-looking statements.
These statements are based on certain assumptions and analyses made by the
Company in light of its experience and its perception of historical trends,
current conditions and expected future developments as well as other factors it
believes are appropriate in the circumstances. However, whether actual results
or developments will conform with the Company's expectations and predictions is
subject to a number of risks and uncertainties, general economic market and
business conditions; the business opportunities (or lack thereof) that may be
presented to and pursued by the Company; changes in laws or regulation; and
other factors, most of which are beyond the control of the Company.
Consequently, all of the forward-looking statements made in this Form 10-QSB are
qualified by these cautionary statements and there can be no assurance that the
actual results or developments anticipated by the Company will be realized or,
even if substantially realized, that they will have the expected consequence to
or effects on the Company or its business or operations. The Company assumes no
obligations to update any such forward-looking statements.

                                       2
<PAGE>
                         Part I - FINANCIAL INFORMATION

Item 1. Financial Statements.

                      Diversified Product Inspections, Inc.

                            Condensed Balance Sheets

                                                          June 30    December 31
                                                           2005         2004
                                                           ----         ----
                                                        (Unaudited)
Assets
Current assets:
   Cash                                                  $   66,504   $  328,048
   Accounts receivable, net of reserve for
     doubtful accounts of $25,000 in 2005 and 2004          112,362      146,272
   Current portion of deferred income taxes                  10,821       27,656
   Prepaid expenses and other current assets                  1,405       13,007
                                                         ----------   ----------
 Total current assets                                       191,092      514,983

Property and equipment:
   Land                                                     150,000           --
   Building and building improvements                       735,318           --
   Equipment, furniture and fixtures                        386,287      336,208
   Vehicles                                                  71,512       88,200
   Leasehold improvements                                        --       22,727
                                                         ----------   ----------
                                                          1,343,117      447,135
   Less accumulated depreciation and amortization           288,452      278,030
                                                         ----------   ----------
   Net property and equipment used in operations          1,054,665      169,105
   Land, building and improvements not presently used
     in operations                                               --      836,318
                                                         ----------   ----------
Net property and equipment                                1,054,665    1,005,423

Other assets                                                  5,000           --
Deferred income taxes, less current portion                 484,602      374,746
                                                         ----------   ----------
Total assets                                             $1,735,359   $1,895,152
                                                         ==========   ==========

Liabilities and stockholders' equity
Current liabilities:
   Accounts payable and accrued expenses                 $   53,120   $   44,026
   Accrued salaries                                          18,455       29,019
   Current portion of notes payable                          39,124       25,248
                                                         ----------   ----------
Total current liabilities                                   110,699       98,293

Notes payable, less current portion                         783,904      804,021
                                                         ----------   ----------
Total liabilities                                           894,603      902,314

Stockholders' equity                                        840,756      992,838
                                                         ----------   ----------
Total liabilities and stockholders' equity               $1,735,359   $1,895,152
                                                         ==========   ==========

See accompanying Notes to Condensed Financial Statements.

                                       3
<PAGE>

                      Diversified Product Inspections, Inc.

                 Condensed Statements of Operations (Unaudited)
<TABLE>
<CAPTION>
                                              Three months ended             Six months ended
                                                   June 30                       June 30
                                             2005           2004           2005           2004
                                             ----           ----           ----           ----
<S>                                      <C>            <C>            <C>            <C>
Revenues                                 $   417,736    $   529,564    $   783,141    $ 1,119,815

Operating expenses:
   Salaries                                  253,408        263,202        530,960        567,911
   Depreciation and amortization              18,001         13,897         33,690         30,897
   General and administrative                222,801        243,528        446,309        483,730
                                         -----------    -----------    -----------    -----------
 Total operating expenses                    494,210        520,627      1,010,959      1,082,538
                                         -----------    -----------    -----------    -----------

 Operating (loss) income                     (76,474)         8,937       (227,818)        37,277

 Interest expense                            (15,438)        (6,379)       (30,610)       (12,124)
                                         -----------    -----------    -----------    -----------

(Loss) income before income taxes            (91,912)         2,558       (258,428)        25,153

Deferred income tax benefit (expense)         29,262         (1,000)        93,021        (13,292)
                                         -----------    -----------    -----------    -----------

Net (loss) income                        $   (62,650)   $     1,558    $  (165,407)   $    11,861
                                         ===========    ===========    ===========    ===========

 Basic and diluted (loss) earnings per   $     (0.00)   $      0.00    $     (0.01)   $      0.00
   common share                          ===========    ===========    ===========    ===========

See accompanying Notes to Condensed Consolidated Financial Statements.

</TABLE>

                                       4
<PAGE>

                      Diversified Product Inspections, Inc.

            Condensed Statements of Stockholders' Equity (Unaudited)

<TABLE>
<CAPTION>
                                                           Number of
                                                             Shares                      Additional                        Total
                                                           Issued and       Common        Paid-in      Accumulated     Stockholders'
                                                          Outstanding       Stock         Capital        Deficit          Equity
                                                          -----------       -----         -------        -------          ------
<S>                                                        <C>           <C>            <C>            <C>             <C>
Balance at January 1, 2004                                 14,961,457    $   149,615    $ 1,620,328    $(1,141,428)    $   628,515
   Stock issued for convertible debt                        4,173,857         41,738        294,808             --         336,546
   Net income for 2004                                             --             --             --         27,777          27,777
                                                          -----------    -----------    -----------    -----------     -----------
Balance at December 31, 2004                               19,135,314        191,353      1,915,136     (1,113,651)        992,838
   Stock issued for services                                  111,647          1,116         12,209             --          13,325
   Net loss for six months ended June 30, 2005                     --             --             --       (165,407)       (165,407)
                                                          -----------    -----------    -----------    -----------     -----------
Balance at June 30, 2005                                   19,246,961    $   192,469    $ 1,927,345    $(1,279,058)    $   840,756
                                                          ===========    ===========    ===========    ===========     ===========
</TABLE>

See accompanying Notes to Condensed Financial Statements.

                                       5
<PAGE>

                      Diversified Product Inspections, Inc.

                 Condensed Statements of Cash Flows (Unaudited)

                                                             Six months ended
                                                                 June 30
                                                            2005         2004
                                                            ----         ----
Operating activities
   Net (loss) income                                     $(165,407)   $  11,861
   Adjustments to reconcile net (loss)
      income to net cash (used in)
      provided by operating activities:
        Depreciation and amortization                       33,689       30,897
        Deferred tax (benefit) expense                     (93,021)      13,292
        (Gain) loss on disposal of assets                     (654)         916
        Services paid with stock                            13,325           --
        Changes in operating assets and liabilities:
          Accounts receivable                               33,910      119,491
          Prepaid expenses and other assets                  6,602          127
          Accounts payable and accrued expenses              9,094        6,277
          Accrued salaries                                 (10,564)       2,398
          Deferred revenue                                      --      (50,000)
                                                         ---------    ---------
   Net cash (used in) provided by operating activities    (173,026)     135,259

   Investing activities
   Proceeds from disposal of assets                          2,050       10,500
   Purchases of property and equipment                     (84,327)     (44,110)
                                                         ---------    ---------
   Net cash used in investing activities                   (82,277)     (33,610)

   Financing activities
   Principal payments on notes payable and capital
      lease obligation                                      (6,241)     (19,326)
                                                         ---------    ---------

   Net (decrease) increase in cash                        (261,544)      82,323

   Cash at beginning of period                             328,048      296,409
                                                         ---------    ---------
   Cash at end of period                                 $  66,504    $ 378,732
                                                         =========    =========

     Supplemental disclosure of cash flow information

   Cash paid for interest during the period              $  27,676    $  12,124
                                                         =========    =========

See accompanying Notes to Condensed Financial Statements.

                                       6
<PAGE>

                      Diversified Product Inspections, Inc.

               Notes to Condensed Financial Statements (Unaudited)

                                  June 30, 2005

1. Basis of Presentation

The  accompanying   unaudited  condensed  financial  statements  of  Diversified
Products Inspections, Inc. (the "Company") have been prepared in accordance with
accounting  principles  generally  accepted in the United  States of America for
interim  financial  information and pursuant to the rules and regulations of the
Securities and Exchange Commission.  Accordingly, they do not include all of the
information and footnotes required by accounting  principles  generally accepted
in the United  States of  America  for  complete  financial  statements.  In the
opinion of management, all adjustments (consisting of normal recurring accruals)
considered  necessary  for a fair  presentation  have been  included.  Operating
results  for the  three  and  six-month  period  ended  June  30,  2005  are not
necessarily  indicative  of the results  that may be expected for the year ended
December 31, 2005.

The  balance  sheet at  December  31,  2004 has been  derived  from the  audited
financial  statements  at that date but does not include all of the  information
and footnotes required by accounting principles generally accepted in the United
States of America for complete financial statements.

For further information, refer to the financial statements and footnotes thereto
included  in the  Company's  annual  report on Form  10-KSB  for the year  ended
December 31, 2004.

2. Employee Stock Options

The Company  accounts for its stock options under the intrinsic  value method in
accordance with Accounting Principles Board Opinion No. 25, Accounting for Stock
Issued to  Employees,  ("APB 25") and related  interpretations.  The Company has
adopted the  disclosure-only  provisions of the Financial  Accounting  Standards
Board ("FASB") Statement No. 123, Accounting for Stock-Based  Compensation ("FAS
123")  as  amended  by  FASB  Statement  No.  148,  Accounting  for  Stock-Based
Compensation - Transition and Disclosure ("FAS 148"). Had the Company elected to
adopt the fair value recognition  provisions of FAS123, pro forma net income and
earnings per share would be as follows:

<TABLE>
<CAPTION>
                                          Three months ended         Six months ended
                                               June 30                   June 30
                                          2005         2004         2005          2004
                                          ----         ----         ----          ----
<S>                                    <C>          <C>          <C>           <C>
Basic:
   Net (loss) income, as reported      $  (62,650)  $    1,558   $ (165,407)   $   11,861
   Employee compensation, net of tax        6,465        6,465        12,931       12,931
                                       ----------   ----------   -----------   ----------
   Total                               $  (69,115)  $   (4,907)  $  (178,338)  $   (1,070)
                                       ==========   ==========   ===========   ==========
(Loss) earnings per share:
   Basic, as reported                  $    (0.00)  $     0.00   $     (0.01)  $     0.00
                                       ==========   ==========   ===========   ==========
   Diluted, as reported                $    (0.00)  $     0.00   $     (0.01)  $     0.00
                                       ==========   ==========   ===========   ==========
   Basic, pro forma                    $    (0.00)  $     0.00   $     (0.01)  $     0.00
                                       ==========   ==========   ===========   ==========
   Diluted, pro forma                  $    (0.00)  $     0.00   $     (0.01)  $     0.00
                                       ==========   ==========   ===========   ==========
</TABLE>


                                       7
<PAGE>

                      Diversified Product Inspections, Inc.

         Notes to Condensed Financial Statements (Unaudited) (continued)

3. Commitments and Contingencies

The Company  currently leases its former office and warehouse under an agreement
classified as an operating lease. An early  termination of this lease,  which is
currently set to expire on December 31, 2005, and provides for monthly  payments
of $18,125,  is currently being negotiated between the Company and the landlord.
Management believes the Company has satisfied separate termination  arrangements
made with the landlord and has therefore  suspended lease payments subsequent to
March 31, 2005.

4. Earnings per Share

Basic earnings per share assumes no dilution and is computed by dividing  income
available to common  stockholders by the weighted average number of common stock
outstanding during each period.  Diluted earnings per share reflect,  in periods
in which they have a dilutive effect,  the effect of common shares issuable upon
the exercise of stock  options or warrants,  using the treasury  stock method of
computing such effects and contingent shares, or conversion of convertible debt.
The following table sets forth the computation of basic and diluted earnings per
share for the periods indicated:

<TABLE>
<CAPTION>
                                                        Three months ended                      Six months ended
                                                              June 30                                June 30
                                                      2005                2004               2005                2004
                                                      ----                ----               ----                ----
<S>                                               <C>                 <C>                <C>                 <C>
Basic:
   Net (loss) income                              $    (62,650)       $      1,558       $   (165,407)       $     11,861
   Average shares outstanding                       19,163,226          14,961,457         19,151,264          14,961,457
                                                  ------------        ------------       ------------        ------------
   Basic (loss) earnings per share                $       0.00        $       0.00       $      (0.01)       $       0.00
                                                  ============        ============       ============        ============
Diluted:
   Net (loss) income                              $    (62,650)       $      1,558       $   (165,407)       $     11,861
   Add interest on convertible debt                         --               2,700                 --               2,700
                                                  ------------        ------------       ------------        ------------
   Total                                          $    (62,650)       $      4,258       $   (165,407)       $     14,561
                                                  ============        ============       ============        ============

   Average shares outstanding                       19,163,226          14,961,457         19,151,264          14,961,457
   Effect of dilutive stock options - based
     on treasury stock method                        1,406,820           2,770,253          1,406,820           2,770,253
   Assumed conversion of 6% convertible debt                --           1,992,022                 --           1,992,022
                                                  ------------        ------------       ------------        ------------
   Total                                            20,570,046          19,723,732         20,558,084          19,723,732
                                                  ============        ============       ============        ============
   Diluted (loss) earnings per share              $       0.00        $       0.00       $      (0.01)       $       0.00
                                                  ============        ============       ============        ============
</TABLE>

5. Line of Credit

During  April  2005,  the Company  entered  into an  agreement  with a financial
institution  for a $100,000  revolving  line of credit.  Under the terms of this
agreement, any borrowings bear interest at the financial institutions prime rate
and is secured by the Company's land and building. This line of credit is due on
demand.  At June 30,  2005,  the  Company  had  made no  borrowings  under  this
agreement.  Subsequent to June 30, 2005,  the Company made  borrowings  totaling
$50,000 under this agreement.

                                       8
<PAGE>

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

Introduction

This  Quarterly  Report on Form 10-QSB for the period ended June 30, 2005 should
be read in conjunction with our unaudited financial  statements included as part
of this Form 10-QSB  Report.  This report  contains  forward-looking  statements
which are described and defined below.

General

We specialize in conducting  investigations  and  laboratory  analysis of a wide
variety of products to determine the cause and origin of product  failures.  Our
primary customers consist of national insurance companies that are interested in
pursuing  claims to which they have become  subrogated.  Subrogation  is a legal
principle,  which  provides  that, to the extent an insurer has paid for a loss,
the insurer  receives the  policyholder's  right to recover from any third party
that caused the loss. We have  accumulated a large  database of known  defective
products  that  includes  photos  and other  documentation  that are used in our
clients'  investigations.  Additionally,  we provide for the storage of evidence
collected  during an  investigation,  until  our  customer  requests  that it be
disposed.

Results of Operations

Six Months Ended June 30, 2005 Compared to Six Months Ended June 30, 2004

Our revenues decreased from $1,119,815 for the six months ended June 30, 2004 to
$783,141 for the six months ended June 30, 2005, or by approximately 30.1%. This
decrease is  primarily  due to our move to a new office and  warehouse  location
during the first quarter that caused us to miss  inspection  services during the
location  transition and created inspection backlogs as we orientated to our new
facilities.  We have also seen a decrease  in the overall  number of  inspection
referrals that has been offset somewhat by an increase in our inspection  rates.
We anticipate  that  comparable  revenues will return to a level more consistent
with 2004 by the fourth quarter.  We also had $25,000 of use agreement  revenues
in 2004 that were not recognized in 2005 due to disagreements  with our customer
over contractual terms.

Our  total  operating  expenses  for the  six-months  ended  June 30,  2005 were
$1,010,959,  a decrease of $71,579,  or approximately  6.6% compared to the same
period in 2004.  Salary  expense  decreased by $36,951,  or  approximately  6.5%
primarily due to our efforts to reduce personnel to a level more appropriate for
2005  revenues.  General and  administrative  expenses  decreased  by $37,421 or
approximately  7.7%  primarily  as a result of the  elimination  of rent expense
associated with our previous office and warehouse facilities at the beginning of
the second quarter,  offset somewhat by the costs  associated with our move to a
new location.

As a result of the reduction in our revenues and, to a lesser extent,  operating
expenses,  our net income of  $11,861  for the six  months  ended June 30,  2004
decreased  $177,268 to a net loss of $165,407  for the six months ended June 30,
2005.

                                       9
<PAGE>

Financial Position

Our net accounts receivable decreased by $33,910, or 23.2%, between December 31,
2004 and June 30,  2005,  primarily  as a result of our  successful  efforts  in
collecting past due amounts and lower revenues  during the period.  Our accounts
payable and accrued expenses increased by $9,094, or 20.7%, between December 31,
2004  and June  30,  2005,  primarily  due to  timing  of  payments  on  related
liabilities.  Improvements to our new office and warehouse totaled approximately
$72,000  during the six  months  ended June 30,  2005.  We also made  additional
computer and software  acquisitions with a total cost of approximately  $12,000.
As a result of these  items  combined  with our year to date net loss,  our cash
balance has decreased by  approximately  $262,000  between December 31, 2004 and
June 30, 2005.

Liquidity and Capital Resources

During April 2005, we entered into a $100,000  revolving credit agreement with a
local  bank,  payable on demand,  bearing  interest  at the bank's  prime  rate,
secured by a deed of trust on our new office and warehouse. As of June 30, 2005,
no draws have been made under this  agreement.  However,  subsequent to June 30,
2005 we have made $50,000 in draws under this credit  agreement.  We  anticipate
that our internal cash flow,  supplemented  by our revolving  credit  agreement,
will be sufficient to fund operations for the next 12 months.

We are not aware of any material trend, event or capital commitment, which would
potentially adversely affect our liquidity.  In the event such a trend develops,
we believe  that we will have  sufficient  funds  available  to satisfy  working
capital needs through lines of credit and the funds expected from equity sales.

Critical Accounting Policies

The  preparation  of  financial  statements  and  related  disclosures  requires
management to make judgments,  assumptions and estimates that affect the amounts
in the  financial  statements  and  accompanying  notes.  Item  6.  Management's
Discussion and Analysis or Plan of Operation  contained in the Company's  Annual
Report on Form  10-KSB for the year ended  December  31,  2004  describes  these
critical accounting policies.

Item 3. Controls and Procedures.

DISCLOSURE CONTROLS AND PROCEDURES

The Company's Chief Executive  Officer is also its Chief Accounting  Officer and
Chief  Financial  Officer.  He is primarily  responsible for the accuracy of the
financial information that is presented in this Quarterly Report on Form 10-QSB.
He has,  within 90 days of the filing date of this Quarterly  Report,  evaluated
the Company's disclosure controls and procedures, as defined in the rules of the
SEC, and has  determined  that such controls and  procedures  were  effective in
ensuring that material information relating to the Company was made known to him
during the period covered by this Quarterly Report.

                                       10
<PAGE>

INTERNAL CONTROLS

To meet his responsibility for financial reporting,  the CEO/CFO has established
internal  controls  and  procedures  which he believes  are  adequate to provide
reasonable assurance that the Company's assets are protected from loss.

There were no significant changes in the Company's internal controls or in other
factors that could significantly affect internal controls subsequent to the date
of the CEO/CFO's most recent evaluation.

                          PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

The Company knows of no legal proceedings to which it is a party or to which any
of its property is the subject which are pending,  threatened or contemplated or
any unsatisfied judgments against the Company.

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

No equity  securities  were issued by the Company  during the quarter ended June
30, 2005. On July 19, 2005 the Company  issued an aggregate of 111,041 shares of
its Common Stock to an employee for services  performed during the quarter ended
June 30, 2005. The issuance was exempt from the registration  requirements under
the  Securities  Act of 1933,  as amended  (the "Act") by virtue of an exemption
provided under Section 4(2) of the Act for  transactions  not involving a public
offering.

Item 3. Defaults Upon Senior Securities

      None

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

      None.

Item 5. Other Information

      None

Item 6. Exhibits.

      31.1  Certification of Chief Financial  Officer pursuant to Section 302 of
            Sarbanes-Oxley Act.

      32.1  Certification  of Chief  Executive  Officer  pursuant  to 18  U.S.C.
            Section 1350, as adopted  pursuant to Section 906 of  Sarbanes-Oxley
            Act.

                                       11
<PAGE>

                                   SIGNATURES

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

                                 Diversified Product Inspections, Inc.
                                              (Registrant)

Date: August 12, 2005            /s/ John Van Zyll
                                 -----------------------------------------------
                                 John Van Zyll
                                 President, Chief Executive Officer and Chairman
                                 (Principal Executive Officer and
                                 Principal Accounting Officer)

                                       12