|                                           |
|------------------------------------------------|
| OMB                APPROVAL                    |
| OMB                Number: 3235-0070           |
| Expires:                January 31, 2008       |
| Estimated                average burden        |
| hours                per response...192.00 |

**UNITED      STATES**

**SECURITIES      AND EXCHANGE COMMISSION**

**Washington,      D.C. 20549**

----

**FORM      10-Q**

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

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

----

**BLACKHAWK      CAPITAL GROUP BDC, INC.**

| Delaware                                         |   | 20-1031329                           |
|--------------------------------------------------|--------|--------------------------------------|
| (State                  or other jurisdiction of |   | (I.R.S.                  Employer    |
| incorporation                  or organization)  |   | Identification                  No.) |

| **14                  Wall Street, 11th Floor, New York,                  NY** |   | **10005**                   |
|--------------------------------------------------------------------------------|--------|-----------------------------|
| (Address                  of principal executive offices)                      |   | (Zip                  Code) |

**(212)      566-8300**

----

| Large                accelerated filer o | Accelerated                filer o |
|-----------------------------------------------|-----------------------------------------|

| Yes x | No o |
|------------|-----------|

| Class                                           |   | Outstanding                on May 6, 2008 |
|-------------------------------------------------|--------|-------------------------------------------|
| Common                Stock, $0.00001 par value |   | 31,867,484                                |

**            Potential persons who are to respond to the collection of information contained      in this form are not required to respond unless the form displays a currently      valid OMB control number.**

----

**BLACKHAWK      CAPITAL GROUP BDC, INC.**

**INDEX**

| **PART                I. **  | ** FINANCIAL                INFORMATION**                                                                                                                                                    | **Page** |
|-----------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------|
|                              |                                                                                                                                                                                              |     |
|  Item                1.      | Financial                Statements.                                                                                                                                                              |     |
|                              |                                                                                                                                                                                              |     |
|                              | Condensed                Statements of Assets and Liabilities as of March 31, 2008 (unaudited)                and                December 31, 2007                                                | 2        |
|                              |                                                                                                                                                                                              |     |
|                              | Condensed                Schedule of Investments (unaudited)                                                                                                                                      | 3        |
|                              |                                                                                                                                                                                              |     |
|                              | Condensed                Statements of Operations for the three months ended March 31, 2008                (unaudited) and March 31, 2007 (unaudited)                                             | 4        |
|                              |                                                                                                                                                                                              |     |
|                              | Condensed                Statements of Changes in Net Assets (Liabilities) for the three months                ended March 31, 2008 (unaudited) and year ended December 31,                2007   | 5        |
|                              |                                                                                                                                                                                              |     |
|                              | Condensed                Statement of Stockholders' Equity (Capital Deficit) for the three                months                ended March 31, 2008 (unaudited) and year ended December 31, 2007 | 6        |
|                              |                                                                                                                                                                                              |     |
|                              | Condensed                Statements of Cash Flows for the three months ended March 31, 2008                (unaudited) and March 31, 2007 (unaudited)                                             | 7        |
|                              |                                                                                                                                                                                              |     |
|                              | Notes                to Condensed Financial Statements (unaudited)                                                                                                                                | 8        |
|                              |                                                                                                                                                                                              |     |
|  Item                2.      | Management’s                Discussion and Analysis of Financial Condition and Results of Operations.                                                                                       | 13       |
|                              |                                                                                                                                                                                              |     |
|  Item                3.      | Quantitative                and Qualitative Disclosures about Market Risk.                                                                                                                        | 15       |
|                              |                                                                                                                                                                                              |     |
|  Item                4.      | Controls                and Procedures.                                                                                                                                                           | 15       |
|                              |                                                                                                                                                                                              |     |
| ** PART                II.** | **OTHER                INFORMATION**                                                                                                                                                              | 16       |
|                              |                                                                                                                                                                                              |     |
|  Item                1.      | Legal                Proceedings.                                                                                                                                                                 | 16       |
|                              |                                                                                                                                                                                              |     |
| Item                1A.           | Risk                Factors                                                                                                                                                                       | 16       |
|                              |                                                                                                                                                                                              |     |
|  Item                2.      | Unregistered                Sales of Equity Securities and Use of Proceeds.                                                                                                                       | 16       |
|                              |                                                                                                                                                                                              |     |
| Item                3.       | Defaults                upon Senior Securities.                                                                                                                                                   | 16       |
|                              |                                                                                                                                                                                              |     |
|  Item                4.      | Submission                of Matters to a Vote of Security Holders.                                                                                                                               | 16       |
|                              |                                                                                                                                                                                              |     |
|  Item                5.      | Other                Information.                                                                                                                                                                 | 16       |
|                              |                                                                                                                                                                                              |     |
| Item                6.            | Exhibits.                                                                                                                                                                                         | 16       |

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**BLACKHAWK      CAPITAL GROUP BDC INC.**

----

|                                                                                                                                                                                                                          |   | MARCH 31,2008 |        | DECEMBER 31, 2007 |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------|-------------|-----------------------------|--------|
|                                                                                                                                                                                                                          |   | (Unaudited)        |        |                        |   |
| **ASSETS:**                                                                                                                                                                                                                   |   |               |        |                        |   |   |   |
| Investment                at fair value (cost $530,933 and $242,815)                                                                                                                                                          |   | $                  | 529,800     |                        | $      | 248,028 |   |
| Cash                                                                                                                                                                                                                          |   |               | 200,680     |                        |   | 4,450 |   |
| Restricted                Cash                                                                                                                                                                                                |   |               | 100,000     |                        |   |   |   |
| Prepaid                insurance                                                                                                                                                                                              |   |               | 3,418       |                        |   | 8,545 |   |
|                                                                                                                                                                                                                          |   |               |        |                        |   |   |   |
| **TOTAL                ASSETS**                                                                                                                                                                                               |   | **$**              | **833,898** |                        | **$**  | **261,023** |   |
|                                                                                                                                                                                                                          |   |               |        |                        |   |   |   |
| **LIABILITIES**                                                                                                                                                                                                               |   |               |        |                        |   |   |   |
|                                                                                                                                                                                                                          |   |               |        |                        |   |   |   |
| Due                to investor                                                                                                                                                                                                |   | $                  | 100,000     |                        | $      | - |   |
| Accrued                expenses                                                                                                                                                                                               |   |               | 265,480     |                        |   | 298,258 |   |
| **TOTAL                LIABILITIES**                                                                                                                                                                                          |   |               | **365,480** |                        |   | **298,258** |   |
|                                                                                                                                                                                                                          |   |               |        |                        |   |   |   |
| **NET                ASSETS (LIABILITIES)**                                                                                                                                                                                   |   |               |        |                        |   |   |   |
| Common                stock, par value $.00001 per share 1,000,000,000 shares authorized,                31,867,484 and 31,169,372 shares issued and outstanding in 2008 and                2007,                respectively |   |               | 319         |                        |   | 312 |   |
| Additional                paid-in capital                                                                                                                                                                                     |   |               | 1,434,647   |                        |   | 805,853 |   |
| Accumulated                net investment loss                                                                                                                                                                                |   |               | (965,415    | )                           |   | (848,613 | ) |
| Net                unrealized gain/(loss) on investment                                                                                                                                                                       |   |               | (1,133      | )                           |   | 5,213 |   |
| **TOTAL                NET ASSETS/(LIABILITIES)**                                                                                                                                                                             |   |               | **468,418** |                        |   | **(37,235** | **)** |
|                                                                                                                                                                                                                          |   |               |        |                        |   |   |   |
| **TOTAL                LIABILITIES AND NET ASSETS/(LIABILITIES)**                                                                                                                                                             |   | **$**              | **833,898** |                        | **$**  | **261,023** |   |
|                                                                                                                                                                                                                          |   |               |        |                        |   |   |   |
| **NET                ASSETS/(LIABILITIES) VALUE PER COMMON SHARE**                                                                                                                                                            |   | **$**              | **0.01470** |                        | **$**  | **(.00119** | **)** |

----

----

**BLACKHAWK      CAPITAL GROUP BDC INC.**

----

|   **COMPANY**                                                   |   |   **INVESTMENT** |   | **INITIAL****ACQUISITION****DATE** |   | **PRINCIPAL****AMOUNT** |   |   **COST** |    | **FAIR****VALUE** |   | **% OF****TOTAL****ASSETS** |   |
|---------------------------------------------------------------------------|--------|----------------------------|--------|------------------------------------|--------|-------------------------|--------|----------------------|---------|-------------------|--------|----------------------------------|--------|
| Federal                Home Loan Bank5.125%                due 8/8/08     |   |                       | Notes  |                               |   | 2/13/08                 |   |                 | 30,000  |              | $      | 30,386                           |   | $ | 30,305 |   |   | 3.6 | % |
| Federal                National Mortgage 4.75%                due 8/25/08 |   |                       | Notes  |                               |   | 2/13/08                 |   |                 | 50,000  |              |   | 51,679                           |   |   | 50,503 |   |   | 6.1 | % |
| General                Electric Capital3.375%                due 8/15/08  |   |                       | Notes  |                               |   | 2/15/08                 |   |                 | 25,000  |              |   | 25,165                           |   |   | 24,995 |   |   | 3.0 | % |
| US                Treasury Bill0%                due 4/10/08              |   |                       | Notes  |                               |   | 2/22/08                 |   |                 | 25,000  |              |   | 24,930                           |   |   | 24,994 |   |   | 3.0 | % |
| General                Electric Capital3.5%                due 5/1/08     |   |                       | Notes  |                               |   | 2/26/08                 |   |                 | 50,000  |              |   | 50,654                           |   |   | 50,009 |   |   | 6.0 | % |
| US                Treasury Strip0%                due 8/15/08             |   |                       | Notes  |                               |   | 2/28/08                 |   |                 | 50,000  |              |   | 49,640                           |   |   | 49,734 |   |   | 6.0 | % |
| US                Treasury Bill0%                due 8/28/08              |   |                       | Notes  |                               |   | 2/28/08                 |   |                 | 80,000  |              |   | 79,211                           |   |   | 79,523 |   |   | 9.5 | % |
| US                Treasury Bill0%                due 4/15/08              |   |                       | Notes  |                               |   | 2/28/08                 |   |                 | 50,000  |              |   | 49,862                           |   |   | 49,976 |   |   | 6.0 | % |
| US                Treasury Bill0%                due 4/15/08              |   |                       | Notes  |                               |   | 3/4/08                  |   |                 | 70,000  |              |   | 69,835                           |   |   | 69,966 |   |   | 8.4 | % |
| US                Treasury Bill0%                due 5/29/08              |   |                       | Notes  |                               |   | 3/4/08                  |   |                 | 100,000 |              |   | 99,571                           |   |   | 99,795 |   |   | 12.0 | % |
|                                                                      |   |                       |   |                               |   |                    |   |                 |    |              | $      | 530,933                          |   | $ | 529,800 |   |   | 63.5 | % |

----

----

**BLACKHAWK      CAPITAL GROUP BDC INC.**

----

|                                                                |   | THREE                MONTHS ENDED MARCH 31, |           |
|---------------------------------------------------------------------|--------|---------------------------------------------|----------------|
|                                                                |   | 2008                                        |           | 2007 |   |
| **INVESTMENT                INCOME:**                               |   |                                        |           |   |   |   |   |
| Interest                income                                      |   | $                                           | 8,116          |   | $ | - |   |
| **TOTAL                INVESTMENT INCOME**                          |   |                                        | **8,116**      |   |   | **-** |   |
|                                                                |   |                                        |           |   |   |   |   |
| **EXPENSES:**                                                       |   |                                        |           |   |   |   |   |
| Professional                fees                                    |   |                                        | 112,805        |   |   | 87,525 |   |
| Advisory                fees                                        |   |                                        | 2,400          |   |   | - |   |
| Filing                fees                                          |   |                                        | 4,070          |   |   | 1,907 |   |
| Insurance                                                           |   |                                        | 5,471          |   |   | 5,491 |   |
| Interest                expense to affiliate                        |   |                                        | -              |   |   | 2,865 |   |
| Other                                                               |   |                                        | 172            |   |   | - |   |
| **TOTAL                EXPENSES**                                   |   |                                        | **124,918**    |   |   | **97,788** |   |
|                                                                |   |                                        |           |   |   |   |   |
| **NET                INVESTMENT (LOSS)**                            |   |                                        | **(116,802**   | **)** |   | **(97,788** | **)** |
| **UNREALIZED                LOSS ON INVESTMENTS**                   |   |                                        | **(6,346**     | **)** |   | **-** |   |
| **NET                DECREASE IN ASSETS RESULTING FROM OPERATIONS** |   | **$**                                       | **(123,148**   | **)** | **$** | **(97,788** | **)** |
|                                                                |   |                                        |           |   |   |   |   |
| **LOSS                PER COMMON SHARE, BASIC AND DILUTED**         |   | **$**                                       | **(0.00390**   | **)** | **$** | **(0.00320** | **)** |
|                                                                |   |                                        |           |   |   |   |   |
| **WEIGHTED                AVERAGE SHARES OUTSTANDING,**             |   |                                        |           |   |   |   |   |
| **BASIC                AND DILUTED**                                |   |                                        | **31,541,123** |   |   | **30,511,481** |   |

----

----

**BLACKHAWK      CAPITAL GROUP BDC INC.**

----

|                                                              |   | THREE MONTHSENDEDMARCH 31, 2008 |         |  YEAR ENDEDDECEMBER 31, 2007 |   |
|-------------------------------------------------------------------|--------|------------------------------------------------|--------------|--------------------------------------------------|--------|
|                                                              |   | (Unaudited)                                    |         |                                             |   |
|                                                              |   |                                           |         |                                             |   |
| **DECREASE                IN NET ASSETS FROM OPERATIONS**         |   |                                           |         |                                             |   |   |   |
| Net                investment loss                                |   | $                                              | (116,802     | )                                                | $      | (403,916 | ) |
| Unrealized                (loss) gain on investments              |   |                                           | (6,346       | )                                                |   | 5,213 |   |
| **NET                DECREASE IN NET ASSETS**                     |   |                                           |         |                                             |   |   |   |
| **RESULTING                FROM OPERATIONS**                      |   |                                           | **(123,148** | **)**                                            |   | **(398,703** | **)** |
|                                                              |   |                                           |         |                                             |   |   |   |
| **CAPITAL                STOCK TRANSACTIONS:**                    |   |                                           |         |                                             |   |   |   |
| Proceeds                from common stock sold                    |   |                                           | 698,112      |                                             |   | 525,001 |   |
| Conversion                of notes and advances                   |   |                                           |         |                                             |   |   |   |
| to                affiliate into common stock                     |   |                                           | -            |                                             |   | 132,891 |   |
| Offering                costs                                     |   |                                           | (69,311      | )                                                |   | - |   |
|                                                              |   |                                           |    |                                             |   |    |   |
| **NET                INCREASE IN NET ASSETS FROM**                |   |                                           |         |                                             |   |   |   |
| **CAPITAL                STOCK TRANSACTIONS**                     |   |                                           | **628,801**  |                                             |   | **657,892** |   |
|                                                              |   |                                           |         |                                             |   |   |   |
| **TOTAL                INCREASE IN NET ASSETS**                   |   |                                           | **505,653**  |                                             |   | **259,189** |   |
|                                                              |   |                                           |         |                                             |   |   |   |
| **NET                ASSETS/(LIABILITIES) - BEGINNING OF PERIOD** |   |                                           | **(37,235**  | **)**                                            |   | **(296,424** | **)** |
|                                                              |   |                                           |         |                                             |   |   |   |
| **NET                ASSETS/(LIABILITIES) - END OF PERIOD**       |   | **$**                                          | **468,418**  |                                             | **$**  | **(37,235** | **)** |

----

----

**BLACKHAWK      CAPITAL GROUP BDC INC.**

----

|                                                                                                       |       | ** COMMON                      STOCK** |                                   |       |       | **PREFERRED                      STOCK** |       | **ADDITIONAL****PAID-IN** |             | **NET****UNREALIZED****APPRECIATION                      (DEPRECIATION)****ON** |       |  **ACCUMULATED****NET****INVESTMENT** |       |
|------------------------------------------------------------------------------------------------------------|------------|---------------------------------------------|----------------------------------------|------------|------------|------------------------------------------|------------|---------------------------|------------------|---------------------------------------------------------------------------------|------------|--------------------------------------------|------------|
|                                                                                                       |       | **TOTAL**                                   |                                   | **SHARES** |       | **AMOUNT**                               |       | **SHARES**                |             | **AMOUNT**                                                                      |       | **CAPITAL**                                |       | **INVESTMENT** |   | **LOSS** |   |
| **Balance                      - December 31, 2006**                                                       | ** ** | **$**                                       | **(296,424**                           | **)**      | ** ** | **30,511,481**                           | ** ** | **$**                     | **305**          | ** **                                                                      | ** ** | **-**                                      | ** ** | **$** | **-** | ** ** | **$** | **147,968** | ** ** | **$** | **-** | ** ** | **$** | **(444,697** | **)** |
|                                                                                                       | ** ** | ** **                                  |                                        | ** ** | ** ** |                                          | ** ** | ** **                |                  | ** **                                                                      | ** ** |                                            | ** ** | ** ** |  | ** ** | ** ** |  | ** ** | ** ** |  | ** ** | ** ** |  | ** ** |
| **Net                      decrease in assets resulting from operations**                                  | ** ** | ** **                                  | **(398,703**                           | **)**      | ** ** | **-**                                    | ** ** | ** **                | **-**            | ** **                                                                      | ** ** | **-**                                      | ** ** | ** ** | **-** | ** ** | ** ** |  | ** ** | ** ** | **5,213** | ** ** | ** ** | **(403,916** | **)** |
|                                                                                                       | ** ** | ** **                                  |                                        | ** ** | ** ** |                                          | ** ** | ** **                |                  | ** **                                                                      | ** ** |                                            | ** ** | ** ** |  | ** ** | ** ** |  | ** ** | ** ** |  | ** ** | ** ** |  | ** ** |
| **Sale                      of stock pursuant to offering plan (at $1.00 per                      share)** | ** ** | ** **                                  | **525,001**                            | ** ** | ** ** | **525,000**                              | ** ** | ** **                | **6**            | ** **                                                                      | ** ** | **-**                                      | ** ** | ** ** | **-** | ** ** | ** ** | **524,995** | ** ** | ** ** | **-** | ** ** | ** ** | **-** | ** ** |
|                                                                                                       | ** ** | ** **                                  |                                        | ** ** | ** ** |                                          | ** ** | ** **                |                  | ** **                                                                      | ** ** |                                            | ** ** | ** ** |  | ** ** | ** ** |  | ** ** | ** ** |  | ** ** | ** ** |  | ** ** |
| **Conversion                      of amount owed to affiliate (at $1.00 per share)**                       | ** ** | ** **                                  | **132,891**                            | ** ** | ** ** | **132,891**                              | ** ** | ** **                | **1**            | ** **                                                                      | ** ** | **-**                                      | ** ** | ** ** | **-** | ** ** | ** ** | **132,890** | ** ** | ** ** | **-** | ** ** | ** ** | **-** | ** ** |
|                                                                                                       | ** ** | ** **                                  | **                        ** | ** ** | ** ** | ** **                               | ** ** | ** **                | ** **       | ** **                                                                      | ** ** | **  **                           | ** ** | ** ** |      | ** ** | ** ** | ** ** | ** ** | ** ** | **  ** | ** ** | ** ** | ** ** | ** ** |
| **Balance-December                      31,2007**                                                          | ** ** | **$**                                       | **(37,235**                            | **)**      | ** ** | **31,169,372**                           | ** ** | **$**                     | **312**          | ** **                                                                      | ** ** | **-**                                      | ** ** | **$** | **-** | ** ** | **$** | **805,853** | ** ** | **$** | **5,213** | ** ** | **$** | **(848,613** | **)** |
|                                                                                                       | ** ** | ** **                                  |                                        | ** ** | ** ** |                                          | ** ** | ** **                |                  | ** **                                                                      | ** ** |                                            | ** ** | ** ** |  | ** ** | ** ** |  | ** ** | ** ** |  | ** ** | ** ** |  | ** ** |
| **Net                      decrease in assets resulting from operations**                                  | ** ** | ** **                                  | **(123,148**                           | **)**      | ** ** |                                          | ** ** | ** **                |                  | ** **                                                                      | ** ** |                                            | ** ** | ** ** |  | ** ** | ** ** |  | ** ** | ** ** | **(6,346** | **)** | ** ** | **(116,802** | **)** |
|                                                                                                       | ** ** | ** **                                  |                                        | ** ** | ** ** |                                          | ** ** | ** **                |                  | ** **                                                                      | ** ** |                                            | ** ** | ** ** |  | ** ** | ** ** |  | ** ** | ** ** |  | ** ** | ** ** |  | ** ** |
| **Sale                      of stock pursuant to offering plan (at $1.00 per                      share**  | ** ** | ** **                                  | **698,112**                            | ** ** | ** ** | **698,112**                              | ** ** | ** **                | **7**            | ** **                                                                      | ** ** | **-**                                      | ** ** | ** ** | **-** | ** ** | ** ** | **698,105** | ** ** | ** ** |  | ** ** | ** ** |  | ** ** |
|                                                                                                       | ** ** | ** **                                  |                                        | ** ** | ** ** |                                          | ** ** | ** **                |                  | ** **                                                                      | ** ** |                                            | ** ** | ** ** |  | ** ** | ** ** |  | ** ** | ** ** |  | ** ** | ** ** |  | ** ** |
| **Offering                      costs**                                                                    | ** ** | ** **                                  | **(69,311**                            | **)**      | ** ** |                                          | ** ** | ** **                |                  | ** **                                                                      | ** ** |                                            | ** ** | ** ** |  | ** ** | ** ** | **(69,311** | **)** | ** ** |  | ** ** | ** ** |  | ** ** |
|                                                                                                       | ** ** | ** **                                  | **  **                       | ** ** | ** ** | **  **                         | ** ** | ** **                | **  ** | ** **                                                                      | ** ** | **  **                           | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | **  ** | ** ** | ** ** | ** ** | ** ** |
| **Balance-March                      31, 2008 (Unaudited)**                                                | ** ** | **$**                                       | **468,418**                            | ** ** | ** ** | **31,867,484**                           | ** ** | **$**                     | **319**          | ** **                                                                      | ** ** | **-**                                      | ** ** | **$** | **-** | ** ** | **$** | **1,434,647** | ** ** | **$** | **(1,133** | **)** | **$** | **(965,415** | **)** |

----

----

**BLACKHAWK      CAPITAL GROUP BDC INC.**

----

|                                                                                     |   | THREE MONTHS ENDED MARCH 31, |         |
|------------------------------------------------------------------------------------------|--------|--------------------------------------------------|--------------|
|                                                                                     |   | 2008                                             |         | 2007 |   |
|                                                                                     |   |                                             |         |   |   |
| **CASH                FLOWS FROM OPERATING****AND                INVESTING ACTIVITIES:** |   |                                             |         |   |   |   |   |
| Net                investment loss and decrease in                                       |   |                                             |         |   |   |   |   |
| ** **                net assets resulting from operations                           |   | $                                                | (123,148     | ) | $ | (97,788 | ) |
| Unrealized                loss on investments                                            |   |                                             | 1,133        |   |   |   |   |
| Purchase                of Investments                                                   |   |                                             | (530,905     | ) |   |   |   |
| Proceeds                from sale and redemption of investments                          |   |                                             | 248,000      |   |   |   |   |
| Adjustments                to reconcile net decrease:                                    |   |                                             |         |   |   |   |   |
| (Decrease)                Increase in accrued expenses and accrued interest              |   |                                             | (32,778      | ) |   | 79,658 |   |
| Decrease                in prepaid expenses                                              |   |                                             | 5,127        |   |   | 5,400 |   |
|                                                                                     |   |                                             |         |   |   |   |   |
| **NET                CASH USED IN OPERATING AND INVESTING ACTIVITIES**                   |   |                                             | **(432,571** | **)** |   | **(12,730** | **)** |
|                                                                                     |   |                                             |         |   |   |   |   |
| **CASH                FLOWS FROM FINANCING ACTIVITIES:**                                 |   |                                             |         |   |   |   |   |
| Offering                costs                                                            |   |                                             | (69,311      | ) |   | - |   |
| Proceeds                from the issuance of stock                                       |   |                                             | 698,112      |   |   |   |   |
| Advance                from affiliated company                                           |   |                                             | -            |   |   | 12,500 |   |
|                                                                                     |   |                                             |         |   |   |   |   |
| **NET                CASH PROVIDED BY FINANCING ACTIVITIES**                             |   |                                             | **628,801**  |   |   | **12,500** |   |
|                                                                                     |   |                                             |         |   |   |   |   |
| **NET                INCREASE (DECREASE) IN CASH**                                       |   |                                             | **196,230**  |   |   | **(230** | **)** |
|                                                                                     |   |                                             |         |   |   |   |   |
| **CASH –                BEGINNING OF PERIOD**                                 |   |                                             | **4,450**    |   |   | **637** |   |
|                                                                                     |   |                                             |         |   |   |   |   |
| **CASH –                END OF PERIOD**                                       |   |                                             | **200,680**  |   | **$** | **407** |   |
|                                                                                     |   |                                             |         |   |   |   |   |
| **Supplemental                Disclosure**                                               |   |                                             |         |   |   |   |   |

| During                March 2008, the Company received $100,000 from an investor which                was                recorded as restricted cash. Subsequently, the funds were returned                to the                investor in April 2008. |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

**BLACKHAWK      CAPITAL GROUP BDC INC.**

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**1.      SIGNIFICANT ACCOUNTING POLICIES**

***Business      description***

***Basis      of presentation***

***Revenue      recognition***

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***Use      of Estimates***

***Investments***

***New      accounting pronouncement***

***Net      loss per common share***

**2.      INCOME TAXES**

**3.      **
**FAIR      VALUE MEASUREMENT**
** **

|   | · | Defines                fair value as the price that would be received to sell an asset or                paid to                transfer a liability in an orderly transaction between market participants                at the measurement date; |
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|   | · | Establishes                a three-level hierarchy (“Valuation Hierarchy”) for fair value                measurements; |
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|   | · | Requires                consideration of the Company’s creditworthiness when valuing liabilities;                and |
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|   | · | Expands                disclosures about instruments measured at fair value. |
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|   | · | Level                1 – inputs to the valuation methodology are quoted prices (unadjusted)                for                identical assets or liabilities in active markets. |
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|   | · | Level                2 – inputs to the valuation methodology include quoted prices for                similar assets and liabilities in active markets, and inputs that                are                observable for the asset or liability, either directly or indirectly,                for                substantially the full term of the financial instrument. |
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|   | · | Level                3 – inputs to the valuation methodology are unobservable and significant                to the fair value measurement. |
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**4.      RELATED PARTY TRANSACTIONS**

**5.      INVESTMENT ADVISORY AGREEMENT; CONSULTING AGREEMENT**

**6.      ACCRUED EXPENSES**

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**7.      STOCKHOLDERS’ EQUITY**

**8.      FINANCIAL HIGHLIGHTS**

|                                                                  |   | **THREE ****MONTHS ****ENDED****March 31, 2008** |       | **THREE ****MONTHS ****ENDED****March 31, 2007** |   | **YEAR ENDED ****DECEMBER 31,****2007** |   |
|-----------------------------------------------------------------------|--------|----------------------------------------------------------------------|------------|----------------------------------------------------------------------|--------|--------------------------------------------------------|--------|
| **Per Share Data:**                                         |   |                                                                 |       |                                                                 |   |                                                   |   |   |   |   |
| Net                asset value – beginning of period            |   |                                                                 | (0.00119   | )                                                                    | $      | (                0.00972                               | )      | $ | (0.00972 | ) |
|                                                                  |   |                                                                 |       |                                                                 |   |                                                   |   |   |   |   |
| Net                investment loss *                                  |   |                                                                 | (0.00390   | )                                                                    |   | (0.00320                                               | )      |   | (0.01307 | ) |
| Issuance                of common stock                               |   |                                                                 | 1.00000    |                                                                 |   | -                                                      |   |   | 1.00000 |   |
| Net                realized and unrealized gain(loss)**               |   |                                                                 | (0.98021   | )                                                                    |   | -                                                      |   | $ | (0.97840 | ) |
|                                                                  |   |                                                                 |       |                                                                 |   |                                                   |   |   |   |   |
| Net                asset/(liability) value – end of period      |   |                                                                 | 0.01470    |                                                                 | $      | (0.01292                                               | )      | $ | (0.00119 | ) |
|                                                                  |   |                                                                 |       |                                                                 |   |                                                   |   |   |   |   |
| **Total                return based on net asset value *****          |   |                                                                 | (327       | )%                                                                   |   | (33                                                    | )%     |   | (135 | )% |
|                                                                  |   |                                                                 |       |                                                                 |   |                                                   |   |   |   |   |
| Common                shares outstanding – end of period        |   |                                                                 | 31,867,484 |                                                                 |   | 30,511,481                                             |   |   | 31,169,372 |   |
| **Ratio/Supplemental                Data:**                           |   |                                                                 |       |                                                                 |   |                                                   |   |   |   |   |
| Net                asset/(liabilities) – end of period          |   | $                                                                    | 468,418    |                                                                 | $      | (394,212                                               | )      | $ | (37,235 | ) |
|                                                                  |   |                                                                 |       |                                                                 |   |                                                   |   |   |   |   |
| Ratio                of net investment loss to average net assets**** |   |                                                                 | (210       | )%                                                                   |   | N/A                                                    |   |   | (813 | )% |
|                                                                  |   |                                                                 |       |                                                                 |   |                                                   |   |   |   |   |
| Ratio                of operating expenses to average net assets****  |   |                                                                 | 213        | %                                                                    |   | N/A                                                    |   |   | 819 | % |

|  | * | Calculated                based on average shares outstanding during                period |
|--|---|--------------------------------------------------------------------------------------------|

|  | ** | Net                realized and unrealized gain (loss) represents the dilutive effect                of                share issuance This                caption used per the AICPA Audit and Accounting Guide for investment                Companies Section                7.74 (c) |
|--|----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|  | *** | Total                returns for periods of less than one year are not annualized. |
|--|-----|------------------------------------------------------------------------------------|

|  | **** | Annualized                for periods less than one year |
|--|------|----------------------------------------------------------|

**9.      SUBSEQUENT EVENTS**

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**Item      2. Management’s Discussion and Analysis of Financial Condition and Results of      Operations.**

*Overview*

*Accounting      Policies*

*Basis      of Presentation*

*Use      of Estimates in the Preparation of Financial Statements*

*Income      Taxes*

*Portfolio      and Investment Activity*

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*Investment      Strategy*

*Results      of Operations*

*Sales      Revenues*

*General      and Administrative Expenses*

*Unrealized      Loss on Investments*

*Liquidity      and Capital Resources*

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**Item      3. Quantitative and Qualitative Disclosures about Market      Risk.**

**Item      4. Controls and Procedures.**

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**PART      II. OTHER INFORMATION**

**Item      1. Legal Proceedings. **

**Item      1A. Risk Factors**

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

**Item      3. Defaults upon Senior Securities.**

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

**Item      5. Other Information.**

**Item      6. Exhibits.**

|                   31.1 |   | Certification                by Chief Executive Officer Pursuant to Section 302 of the Sarbanes                Oxley                Act of 2002 |
|----------------------------------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------|
|                             |   |                                                                                                                                            |
|                   31.2 |   | Certification                by Chief Financial Officer Pursuant to Section 302 of the Sarbanes                Oxley                Act of 2002 |
|                             |   |                                                                                                                                            |
|                   32.1 |   | Certification                by Chief Executive Officer Pursuant to Section 906 of the Sarbanes                Oxley                Act of 2002 |
|                             |   |                                                                                                                                            |
|                   32.2 |   | Certification                by Chief Financial Officer Pursuant to Section 906 of the Sarbanes                Oxley                Act of 2002 |

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|                                                                                 **BLACKHAWK CAPITAL GROUP BDC,                INC.**  |
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|                                                                                                                                                                                                                                                                                                                                                                                  |   |   |
| Date:                May 7, 2008                                                                                                                                                                                                                                                                                                                                                      |  By: | /s/                Craig A. Zabala |
|                                                                                                                                                                                                                                                                                                                                                                                  |   | Craig                A. Zabala, Chief Executive Officer |
|                                                                                                                                                                                                                                                                                                                                                                                  |   |   |
| Date:                May 7, 2008                                                                                                                                                                                                                                                                                                                                                      |  By: | /s/                Craig A. Zabala |
|                                                                                                                                                                                                                                                                                                                                                                                  |   | Craig                A. Zabala, Acting Chief Financial                Officer |

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