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| Florida                                                                                      |   | 59-3087128                                                           |
|----------------------------------------------------------------------------------------------|--------|----------------------------------------------------------------------|
| (State                of other jurisdiction of incorporation                or organization) |   | (IRS                Employer Identification                No.) |

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|                            |                                                                                                                                                                     | PAGE  |
|---------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|
| PART              I   | FINANCIAL              INFORMATION                                                                                                                                  |       |
|                            |                                                                                                                                                                     |       |
| Item                1           | Financial                Statements                                                                                                                                      |       |
|                            |                                                                                                                                                                     |       |
|                            | Condensed                Balance Sheets as of June 30, 2007 (Unaudited) and December 31,                2006                                                             | 3          |
|                            | Condensed                Statements of Operations (Unaudited) for the three and six months                ended                June 30, 2007 and 2006                    | 4          |
|                            | Condensed                Statements of Stockholders’ Equity (Unaudited) for the year ended December                31, 2006 and the six months ended June 30, 2007 | 5          |
|                            | Condensed                Statements of Cash Flows (Unaudited) for the six months ended June                30,                2007 and 2006                              | 6          |
|                            | Notes                to Condensed Financial Statements (Unaudited)                                                                                                       | 7          |
|                            |                                                                                                                                                                     |       |
| Item                2           | Management's                Discussion and Analysis or Plan of Operation                                                                                                 | 10         |
|                            |                                                                                                                                                                     |       |
| Item                3           | Controls                and Procedures                                                                                                                                   | 11         |
|                            |                                                                                                                                                                     |       |
| PART                II          | OTHER                INFORMATION                                                                                                                                         | 11         |
|                            |                                                                                                                                                                     |       |
| SIGNATURES                      | 12                                                                                                                                                                       |

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|                                                                                                   |   | **June                    30****2007** |                  | **December                    31**2006 |   |
|--------------------------------------------------------------------------------------------------------|--------|----------------------------------------|-----------------------|----------------------------------------|--------|
|                                                                                                   |   |                                   | **(Unaudited)**  |                                   |   |   |   |
| **Assets**                                                                                             |   |                                   |                  |                                   |   |   |   |
| Current                  assets:                                                                       |   |                                   |                  |                                   |   |   |   |
| Cash                                                                                                   |   | **$**                                  | **271,130**           |                                   | $      | 331,793 |   |
| Accounts                  receivable, net of reserve for doubtful accounts of                  $50,000 |   |                                   | **336,627**           |                                   |   | 286,473 |   |
| Current                  portion of deferred income taxes                                              |   |                                   | **70,281**            |                                   |   | 70,281 |   |
| Prepaid                  expenses and other current assets                                             |   |                                   | **16,000**            |                                   |   | 2,914 |   |
| Total                  current assets                                                                  |   |                                   | **694,038**           |                                   |   | 691,461 |   |
|                                                                                                   |   |                                   |                  |                                   |   |   |   |
| Property                  and equipment:                                                               |   |                                   |                  |                                   |   |   |   |
| Land                                                                                                   |   |                                   | **150,000**           |                                   |   | 150,000 |   |
| Building                  and building improvements                                                    |   |                                   | **735,318**           |                                   |   | 735,318 |   |
| Equipment,                  furniture and fixtures                                                     |   |                                   | **449,473**           |                                   |   | 432,572 |   |
| Vehicles                                                                                               |   |                                   | **71,512**            |                                   |   | 71,512 |   |
|                                                                                                   |   |                                   | **1,406,303**         |                                   |   | 1,389,402 |   |
| Less                  accumulated depreciation and amortization                                        |   |                                   | **436,882**           |                                   |   | 400,840 |   |
| Net                  property and equipment                                                            |   |                                   | **969,421**           |                                   |   | 988,562 |   |
|                                                                                                   |   |                                   |                  |                                   |   |   |   |
| Other                  assets                                                                          |   |                                   | **5,000**             |                                   |   | 5,000 |   |
| Deferred                  income taxes, less current portion                                           |   |                                   | **329,568**           |                                   |   | 332,735 |   |
| Total                  assets                                                                          |   | **$**                                  | **1,998,027**         |                                   | $      | 2,017,758 |   |
|                                                                                                   |   |                                   |                  |                                   |   |   |   |
| **Liabilities                  and stockholders’ equity**                                        |   |                                   |                  |                                   |   |   |   |
| Current                  liabilities:                                                                  |   |                                   |                  |                                   |   |   |   |
| Accounts                  payable and accrued expenses                                                 |   | **$**                                  | **61,473**            |                                   | $      | 57,793 |   |
| Accrued                  salaries                                                                      |   |                                   | **23,629**            |                                   |   | 21,775 |   |
| Current                  portion of deferred revenue                                                   |   |                                   | **133,333**           |                                   |   | 133,333 |   |
| Current                  portion of long-term debt                                                     |   |                                   | **47,469**            |                                   |   | 45,989 |   |
| Current                  portion of capital lease obligation                                           |   |                                   | **3,988**             |                                   |   | 3,906 |   |
| Total                  current liabilities                                                             |   |                                   | **269,892**           |                                   |   | 262,796 |   |
|                                                                                                   |   |                                   |                  |                                   |   |   |   |
| Deferred                  revenue, less current portion                                                |   |                                   | **18,334**            |                                   |   | 25,000 |   |
| Long-term                  debt, less current portion                                                  |   |                                   | **696,281**           |                                   |   | 719,312 |   |
| Capital                  lease obligation, less current portion                                        |   |                                   | –               |                                   |   | 1,882 |   |
| Total                  liabilities                                                                     |   |                                   | **984,507**           |                                   |   | 1,008,990 |   |
|                                                                                                   |   |                                   |                  |                                   |   |   |   |
| Stockholders’                  equity                                                            |   |                                   | **1,013,520**         |                                   |   | 1,008,768 |   |
| Total                  liabilities and stockholders’ equity                                      |   | **$**                                  | **1,998,027**         |                                   | $      | 2,017,758 |   |

*See      accompanying Notes to Condensed Financial Statements.*

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|                                                              |   | **Three                months ended** |        | **Six                months ended** |   |
|-------------------------------------------------------------------|--------|---------------------------------------|-------------|-------------------------------------|--------|
|                                                              |   | **June                30**            |        | **June                30**          |   |
|                                                              |   | **2007**                              |        | **2006**                            |   | **2007** |   | **2006** |   |
|                                                              |   |                                  |        |                                |   |   |   |   |   |
| Revenues                                                          |   | **$**                                 | **629,639** |                                | $      | 509,399 |   | **$** | **1,213,004** |   | $ | 1,100,734 |   |
|                                                              |   |                                  |        |                                |   |   |   |   |   |   |   |   |   |
| Operating                expenses:                                |   |                                  |        |                                |   |   |   |   |   |   |   |   |   |
| Salaries                                                          |   |                                  | **343,517** |                                |   | 319,254 |   |   | **660,785** |   |   | 635,368 |   |
| Depreciation                and amortization                      |   |                                  | **17,562**  |                                |   | 19,396 |   |   | **36,042** |   |   | 38,474 |   |
| General                and administrative                         |   |                                  | **254,513** |                                |   | 157,169 |   |   | **483,224** |   |   | 327,415 |   |
| Total                operating expenses                           |   |                                  | **615,592** |                                |   | 495,819 |   |   | **1,180,051** |   |   | 1,001,257 |   |
|                                                              |   |                                  |        |                                |   |   |   |   |   |   |   |   |   |
| Operating                income                                   |   |                                  | **14,047**  |                                |   | 13,580 |   |   | **32,953** |   |   | 99,477 |   |
|                                                              |   |                                  |        |                                |   |   |   |   |   |   |   |   |   |
| Other                expenses:                                    |   |                                  |        |                                |   |   |   |   |   |   |   |   |   |
| Interest                                                          |   |                                  | **12,964**  |                                |   | 13,257 |   |   | **25,034** |   |   | 27,305 |   |
| Settlement                of lawsuit                              |   |                                  | –     |                                |   | 55,000 |   |   | – |   |   | 55,000 |   |
| Total                other expenses                               |   |                                  | **12,964**  |                                |   | 68,257 |   |   | **25,034** |   |   | 82,305 |   |
|                                                              |   |                                  |        |                                |   |   |   |   |   |   |   |   |   |
| Income                (loss) before income taxes                  |   |                                  | **1,083**   |                                |   | (54,677 | ) |   | **7,919** |   |   | 17,172 |   |
|                                                              |   |                                  |        |                                |   |   |   |   |   |   |   |   |   |
| Deferred                income tax (expense) benefit              |   |                                  | **(274**    | **)**                               |   | 22,592 |   |   | **(3,167** | **)** |   | (5,281 | ) |
| Net                income (loss)                                  |   | **$**                                 | **809**     |                                | $      | (32,085 | ) | **$** | **4,752** |   | $ | 11,891 |   |
| Basic                and diluted earnings (loss) per common share |   | **$**                                 | **(0.00**   | **)**                               | $      | (0.00 | ) | **$** | **(0.00** | **)** | $ | (0.00 | ) |

*See      accompanying Notes to Condensed Financial Statements.*

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|                                                              |   | **Number                of****Shares****Issued                and****Outstanding** |           |   **Common****Stock** |   |  **Additional****Paid-in****Capital** |   |   **Accumulated****Deficit** |          |  **Total****Stockholders’****Equity** |   |
|--------------------------------------------------------------|--------|------------------------------------------------------------------------------------|----------------|---------------------------------|--------|--------------------------------------------|--------|----------------------------------------|---------------|--------------------------------------------------|--------|
|                                                         |   |                                                                               |           |                            |   |                                       |   |                                   |          |                                             |   |
| Balance                at January 1, 2006                    |   |                                                                               | 19,634,821     |                            | $      | 196,348                                    |   | $                                      | 1,958,578     |                                             | $      | (1,258,207 | ) | $ | 896,719 |   |
| Stock                issued for services                     |   |                                                                               | 546,046        |                            |   | 5,460                                      |   |                                   | 39,258        |                                             |   | - |   |   | 44,718 |   |
| Net                income for 2006                           |   |                                                                               | -              |                            |   | -                                          |   |                                   | -             |                                             |   | 67,331 |   |   | 67,331 |   |
| Balance                at December 31, 2006                  |   |                                                                               | 20,180,867     |                            |   | 201,808                                    |   |                                   | 1,997,836     |                                             |   | (1,190,876 | ) |   | 1,008,768 |   |
| Net                income for six months ended June 30, 2007 |   |                                                                               | **-**          |                            |   | **-**                                      |   |                                   | **-**         |                                             |   | **4,752** |   |   | **4,752** |   |
| Balance                at June 30, 2007                      |   |                                                                               | **20,180,867** |                            | **$**  | **201,808**                                |   | **$**                                  | **1,997,836** |                                             | **$**  | **(1,186,124** | **)** | **$** | **1,013,520** |   |

*See      accompanying Notes to Condensed Financial Statements.*

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|                                                                                                                      |   | **Three                months ended****June                30** |                   |
|---------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------|------------------------|
|                                                                                                                      |   |  **2007**                                                  |                   |  **2006** |   |
|                                                                                                                      |   |                                                            |                   |   |   |   |   |
| **Operating                activities**                                                                                   |   |                                                            |                   |   |   |   |   |
| Net                income                                                                                                 |   | **$**                                                           | **4,752**              |   | $ | 11,891 |   |
| Adjustments                to reconcile net income to net cash (used in) provided by operating                activities: |   |                                                            |                   |   |   |   |   |
| Depreciation                and amortization                                                                              |   |                                                            | **36,042**             |   |   | 38,474 |   |
| Deferred                income tax expense                                                                                |   |                                                            | **3,167**              |   |   | 5,281 |   |
| Services                paid with stock                                                                                   |   |                                                            | **–**            |   |   | 44,718 |   |
| Changes                in operating assets and liabilities:                                                               |   |                                                            |                   |   |   |   |   |
| Accounts                receivable                                                                                        |   |                                                            | **(50,154**            | **)** |   | 12,253 |   |
| Prepaid                expenses and other assets                                                                          |   |                                                            | **(13,086**            | **)** |   | (6,328 | ) |
| Accounts                payable and accrued expenses                                                                      |   |                                                            | **3,680**              |   |   | 34,783 |   |
| Accrued                salaries                                                                                           |   |                                                            | **1,854**              |   |   | 4,572 |   |
| Deferred                revenue                                                                                           |   |                                                            | **(6,666**             | **)** |   | – |   |
| Net                cash (used in) provided by operating activities                                                        |   |                                                            | **(20,411**            | **)** |   | 145,644 |   |
|                                                                                                                      |   |                                                            |                   |   |   |   |   |
| **Investing                activities**                                                                                   |   |                                                            |                   |   |   |   |   |
| Purchases                of property and equipment                                                                        |   |                                                            | **(16,901**            | **)** |   | (19,928 | ) |
|                                                                                                                      |   |                                                            |                   |   |   |   |   |
| **Financing                activities**                                                                                   |   |                                                            |                   |   |   |   |   |
| Net                repayments on line of credit                                                                           |   |                                                            | **–**            |   |   | (46,266 | ) |
| Principal                payments on long-term debt and capital lease obligation                                          |   |                                                            | **(23,351**            | **)** |   | (21,526 | ) |
| Net                cash used in financing activities                                                                      |   |                                                            | **(23,351**            | **)** |   | (67,792 | ) |
|                                                                                                                      |   |                                                            |                   |   |   |   |   |
| Net                (decrease) increase in cash                                                                            |   |                                                            | **(60,663**            | **)** |   | 57,924 |   |
|                                                                                                                      |   |                                                            |                   |   |   |   |   |
| Cash                at beginning of period                                                                                |   |                                                            | **331,793**            |   |   | 196,893 |   |
| Cash                at end of period                                                                                      |   | **$**                                                           | **271,130**            |   | $ | 254,817 |   |
|                                                                                                                      |   |                                                            |                   |   |   |   |   |
| **Supplemental              disclosure of cash flow information**                                                         |   |                                                            |                   |   |   |   |   |
|                                                                                                                      |   |                                                            |                   |   |   |   |   |
| Cash                paid for interest during the period                                                              |   |  $                                                         | ** 25,034**  |   |  $ | **27,305**  |   |

*See      accompanying Notes to Condensed Financial Statements.*

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**1.      Basis of Presentation**

**2.      Recent Accounting Pronouncements**

*Accounting      for Uncertainty in Income Taxes (an interpretation of FASB Statement      No. 109) *

**3.      Employee Stock Options**

*)*
*      Share-Based Payment *

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**4.**
**Commitments      and Contingencies**

**5.           **
**Earnings          per Share**

|                                                       |   | Three                  months ended**June                30** |           | **Six                  months ended****June                  30** |   |
|------------------------------------------------------------|--------|---------------------------------------------------------------|----------------|-------------------------------------------------------------------|--------|
|                                                       |   | **2007**                                                      |           | **2006**                                                          |   | **2007** |   | **2006** |   |
| Basic                and diluted:                          |   |                                                          |           |                                                              |   |   |   |   |   |   |   |   |   |
| Net                income (loss)                           |   | **$**                                                         | **809**        |                                                              | $      | (32,085 | ) | **$** | **4,752** |   | $ | 11,891 |   |
| Average                shares outstanding                  |   |                                                          | **20,180,867** |                                                              |   | 19,979,115 |   |   | **20,180,867** |   |   | 19,831,560 |   |
| Basic                and diluted earnings (loss) per share |   | **$**                                                         | **0.00**       |                                                              | $      | 0.00 |   | **$** | **0.00** |   | $ | 0.00 |   |

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|                                 | Diversified                Product Inspections, Inc.           |
|--------------------------------------|----------------------------------------------------------------|
|                                 |     (Registrant)                           |
|                                 |                                                           |
| Date:                August 10, 2007 | /s/                John Van Zyll John                Van Zyll  |
|                                 | President,                Chief Executive Officer and Chairman |
|                                 | (Principal                Executive Officer and                |
|                                 | Principal                Accounting Officer)                   |

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