**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** |
|-------|------------------------------------------------------------------------------------------------------------------------------------------|

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

**(212)      566-8300**

----

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

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

| Class                                           | Outstanding                on November 12, 2008 |
|-------------------------------------------------|-------------------------------------------------|
| Common                Stock, $0.00001 par value | 32,467,484                                      |

| SEC 1296 (12-05) | **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 September 30, 2008 (unaudited)                and December 31, 2007                                                                             | 2        |
|                             |                                                                                                                                                                                                                |     |
|                             | Condensed                Schedule of Investments as of September 30, 2008                (unaudited)                                                                                                                | 3        |
|                             |                                                                                                                                                                                                                |     |
|                             | Condensed                Statements of Operations for the three and nine months ended September                30,                2008 (unaudited) and September 30, 2007 (unaudited)                               | 4        |
|                             |                                                                                                                                                                                                                |     |
|                             | Condensed                Statements of Changes in Net Assets (Liabilities) for the nine months                ended September 30, 2008 (unaudited) and year ended December 31,                2007                  | 5        |
|                             |                                                                                                                                                                                                                |     |
|                             | Condensed                Statement of Stockholders' Equity (Capital Deficit) for the nine                months                ended September 30, 2008 (unaudited) and year ended December 31,                2007 | 6        |
|                             |                                                                                                                                                                                                                |     |
|                             | Condensed                Statements of Cash Flows for the nine months ended September 30,                2008                (unaudited) and September 30, 2007 (unaudited)                                         | 7        |
|                             |                                                                                                                                                                                                                |     |
|                             | Notes                to Condensed Financial Statements                                                                                                                                                              | 8        |
|                             |                                                                                                                                                                                                                |     |
| Item                2.           | Management’s                Discussion and Analysis of Financial Condition and Results of Operations.                                                                                                         | 12       |
|                             |                                                                                                                                                                                                                |     |
| Item                3.           | Quantitative                and Qualitative Disclosures about Market Risk.                                                                                                                                          | 14       |
|                             |                                                                                                                                                                                                                |     |
| Item                4T.          | Controls                and Procedures.                                                                                                                                                                             | 16       |
|                             |                                                                                                                                                                                                                |     |
| **PART                II.**      | **OTHER                INFORMATION**                                                                                                                                                                                |     |
|                             |                                                                                                                                                                                                                |     |
| 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       |

----

**BLACKHAWK      CAPITAL GROUP BDC, INC.**

----

|                                                                                                                                                                                                                          |   | SEPTEMBER 30, 2008 |        | DECEMBER 31, 2007 |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------|-------------|-----------------------------|--------|
|                                                                                                                                                                                                                          |   |  (Unaudited)            |        |                        |   |
| **ASSETS:**                                                                                                                                                                                                                   |   |                         |        |                        |   |   |   |
| Investments,                at fair value (cost $589,765 and $242,815)                                                                                                                                                        |   | $                            | 590,034     |                        | $      | 248,028 |   |
| Cash                                                                                                                                                                                                                          |   |                         | 349,909     |                        |   | 4,450 |   |
| Prepaid                insurance                                                                                                                                                                                              |   |                         | 13,671      |                        |   | 8,545 |   |
|                                                                                                                                                                                                                          |   |                         |        |                        |   |   |   |
| **TOTAL                ASSETS**                                                                                                                                                                                               |   | **$**                        | **953,614** |                        | **$**  | **261,023** |   |
|                                                                                                                                                                                                                          |   |                         |        |                        |   |   |   |
| **LIABILITIES**                                                                                                                                                                                                               |   |                         |        |                        |   |   |   |
| Accrued                expenses                                                                                                                                                                                               |   | $                            | 149,772     |                        | $      | 298,258 |   |
| **TOTAL                LIABILITIES**                                                                                                                                                                                          |   |                         | **149,772** |                        |   | **298,258** |   |
|                                                                                                                                                                                                                          |   |                         |        |                        |   |   |   |
| **NET                ASSETS (LIABILITIES)**                                                                                                                                                                                   |   |                         |        |                        |   |   |   |
| Common                stock, par value $.00001 per share 1,000,000,000 shares authorized,                32,467,484 and 31,169,372 shares issued and outstanding in 2008 and                2007,                respectively |   |                         | 325         |                        |   | 312 |   |
| Additional                paid-in capital                                                                                                                                                                                     |   |                         | 1,974,641   |                        |   | 805,853 |   |
| Accumulated                net investment loss                                                                                                                                                                                |   |                         | (1,171,393  | )                           |   | (848,613 | ) |
| Net                unrealized gain on investment                                                                                                                                                                              |   |                         | 269         |                        |   | 5,213 |   |
| **TOTAL                NET ASSETS (LIABILITIES)**                                                                                                                                                                             |   |                         | **803,842** |                        |   | **(37,235** | **)** |
|                                                                                                                                                                                                                          |   |                         |        |                        |   |   |   |
| **TOTAL                LIABILITIES AND NET ASSETS (LIABILITIES)**                                                                                                                                                             |   | **$**                        | **953,614** |                        | **$**  | **261,023** |   |
|                                                                                                                                                                                                                          |   |                         |        |                        |   |   |   |
| **NET                ASSETS (LIABILITIES) VALUE PER COMMON SHARE**                                                                                                                                                            |   | **$**                        | **0.02476** |                        | **$**  | **(.00119** | **)** |

----

**BLACKHAWK      CAPITAL GROUP BDC, INC.**

----

| **COMPANY**                                                                            |   | **INVESTMENT** |   | **INITIAL****ACQUISITION****DATE** |   | **PRINCIPAL****AMOUNT** |   |  **COST** |    |  **FAIR****VALUE** |   | **%                OF****TOTAL****ASSETS** |   |
|----------------------------------------------------------------------------------------|--------|----------------|--------|------------------------------------|--------|-------------------------|--------|----------------|---------|-------------------------|--------|--------------------------------------------|--------|
| US                Treasury INV                GR REC11/15/08                           |   |           | Notes  |                               |   | 4/15/08                 |   |           | 50,000  |                    | $      | 49,517                                     |   | $ | 49,925 |   |   | 5.3 | % |
| GE                CapitalCORP                (3.6%)Due                10/15/08         |   |           | Notes  |                               |   | 6/20/08                 |   |           | 40,000  |                    |   | 40,406                                     |   |   | 39,973 |   |   | 4.2 | % |
| American                ExpressCRT                CPDue                10/31/08        |   |           | Notes  |                               |   | 7/30/08                 |   |           | 150,000 |                    |   | 148,980                                    |   |   | 150,000 |   |   | 15.7 | % |
| General                ElectronicCAPT                CORP CPDue                10/2/08 |   |           | Notes  |                               |   | 7/30/08                 |   |           | 150,000 |                    |   | 149,394                                    |   |   | 150,000 |   |   | 15.7 | % |
| Federal                Home LoanMTG-4.9%Due                11/3/08                     |   |           | Notes  |                               |   | 8/26/08                 |   |           | 100,000 |                    |   | 101,976                                    |   |   | 100,136 |   |   | 10.5 | % |
| American                ExpCRT                CPDue                11/26/08            |   |           | Notes  |                               |   | 9/24/08                 |   |           | 100,000 |                    |   | 99,492                                     |   |   | 100,000 |   |   | 10.5 | % |
|                                                                                   |   |           |   |                               |   |                    |   |           |    |                    |   |                                       |   |   |   |   |   |   |   |
|                                                                                   |   |           |   |                               |   |                    |   |           |    |                    | $      | 589,765                                    |   | $ | 590,034 |   |   | 61.9 | % |

**BLACKHAWK      CAPITAL GROUP BDC, INC.**

----

|                                                                      |   | THREE MONTHS ENDEDSEPTEMBER 30, |           | NINE MONTHS ENDEDSEPTEMBER 30, |   |
|---------------------------------------------------------------------------|--------|------------------------------------------------|----------------|-----------------------------------------------|--------|
|                                                                      |   | 2008                                           |           | 2007                                          |   | 2008 |   | 2007 |   |
| **INVESTMENT                INCOME:**                                     |   |                                           |           |                                          |   |   |   |   |   |   |   |   |   |
| Interest                income                                            |   | $                                              | 3,275          |                                          | $      | 1,625 |   | $ | 12,827 |   | $ | 1,691 |   |
| **TOTAL                INVESTMENT INCOME**                                |   |                                           | 3,275          |                                          |   | **1,625** |   |   | 12,827 |   |   | **1,691** |   |
|                                                                      |   |                                           |           |                                          |   |   |   |   |   |   |   |   |   |
| **EXPENSES:**                                                             |   |                                           |           |                                          |   |   |   |   |   |   |   |   |   |
| Professional                fees                                          |   |                                           | 53,490         |                                          |   | 102,206 |   |   | 304,929 |   |   | 290,168 |   |
| Advisory                fees                                              |   |                                           | 3,115          |                                          |   | 1,503 |   |   | 6,882 |   |   | 1,905 |   |
| Filing                fees                                                |   |                                           | 1,576          |                                          |   | 3,044 |   |   | 7,378 |   |   | 7,741 |   |
| Insurance                                                                 |   |                                           | 5,127          |                                          |   | 5,126 |   |   | 15,724 |   |   | 16,071 |   |
| Interest                expense                                           |   |                                           | -              |                                          |   | - |   |   | - |   |   | 3,266 |   |
| Other                                                                     |   |                                           | 104            |                                          |   | 100 |   |   | 694 |   |   | 4,228 |   |
| **TOTAL                EXPENSES**                                         |   |                                           | **63,412**     |                                          |   | **111,979** |   |   | **335,607** |   |   | **323,379** |   |
|                                                                      |   |                                           |           |                                          |   |   |   |   |   |   |   |   |   |
| **NET                INVESTMENT (LOSS)**                                  |   |                                           | **(60,137**    | **)**                                         |   | **(110,354** | **)** |   | **(322,780** | **)** |   | **(321,688** | **)** |
|                                                                      |   |                                           |           |                                          |   |   |   |   |   |   |   |   |   |
| **UNREALIZED                GAIN (LOSS) ON INVESTMENTS**                  |   |                                           | **2,943**      |                                          |   | **41** |   |   | **(4,944** | **)** |   | **6,970** |   |
|                                                                      |   |                                           |           |                                          |   |   |   |   |   |   |   |   |   |
| **NET                DECREASE IN ASSETS RESULTING FROM OPERATIONS**       |   | **$**                                          | **(57,194**    | **)**                                         | **$**  | **(110,313** | **)** | **$** | **(327,724** | **)** | **$** | **(314,718** | **)** |
|                                                                      |   |                                           |           |                                          |   |   |   |   |   |   |   |   |   |
| **LOSS                PER COMMON SHARE, BASIC AND DILUTED**               |   | **$**                                          | **(0.00177**   | **)**                                         | **$**  | **(0.00354** | **)** | **$** | **(0.01026** | **)** | **$** | **(0.01022** | **)** |
|                                                                      |   |                                           |           |                                          |   |   |   |   |   |   |   |   |   |
| **WEIGHTED                AVERAGE SHARES OUTSTANDING, BASIC AND DILUTED** |   |                                           | **32,382,701** |                                          |   | **31,169,372** |   |   | **31,933,241** |   |   | **30,804,934** |   |

----

**BLACKHAWK      CAPITAL GROUP BDC, INC.**

----

|                                                                     |   | NINE MONTHSENDEDSEPTEMBER 30, 2008 |          | YEAR ENDEDDECEMBER 31, 2007 |   |
|--------------------------------------------------------------------------|--------|---------------------------------------------------|---------------|--------------------------------------------|--------|
|                                                                     |   | (Unaudited)                                       |          |                                       |   |
|                                                                     |   |                                              |          |                                       |   |
| **DECREASE                IN NET ASSETS FROM OPERATIONS**                |   |                                              |          |                                       |   |   |   |
| Net                investment loss                                       |   | $                                                 | (322,780      | )                                          | $      | (403,916 | ) |
|                                                                     |   |                                              |          |                                       |   |   |   |
| Unrealized                (loss)/gain on investments                     |   |                                              | (4,944        | )                                          |   | 5,213 |   |
|                                                                     |   |                                              |          |                                       |   |   |   |
| **NET                DECREASE IN NET ASSETS**                            |   |                                              |          |                                       |   |   |   |
| **RESULTING                FROM OPERATIONS**                             |   |                                              | **(327,724**  | **)**                                      |   | **(398,703** | **)** |
|                                                                     |   |                                              |          |                                       |   |   |   |
| **CAPITAL                STOCK TRANSACTIONS:**                           |   |                                              |          |                                       |   |   |   |
| Proceeds                from common stock sold                           |   |                                              | 1,298,112     |                                       |   | 525,001 |   |
| Conversion                of amounts owed to affiliate into common stock |   |                                              | -             |                                       |   | 132,891 |   |
| Offering                costs                                            |   |                                              | (129,311      | )                                          |   | - |   |
|                                                                     |   |                                              |          |                                       |   |   |   |
| **NET                INCREASE IN NET ASSETS FROM**                       |   |                                              |          |                                       |   |   |   |
| **CAPITAL                STOCK TRANSACTIONS**                            |   |                                              | **1,168,801** |                                       |   | 657,892 |   |
|                                                                     |   |                                              |          |                                       |   |   |   |
| **TOTAL                INCREASE IN NET ASSETS**                          |   |                                              | **841,077**   |                                       |   | **259,189** |   |
|                                                                     |   |                                              |          |                                       |   |   |   |
| **NET                ASSETS (LIABILITIES) – BEGINNING OF PERIOD**  |   |                                              | **(37,235**   | **)**                                      |   | **(296,424** | **)** |
|                                                                     |   |                                              |          |                                       |   |   |   |
| **NET                ASSETS (LIABILITIES) – END OF PERIOD**        |   | **$**                                             | **803,842**   |                                       | **$**  | **(37,235** | **)** |

----

**BLACKHAWK      CAPITAL GROUP BDC, INC.**

----

|                                                                                           |       |       |          | COMMON STOCK |       |           |       | PREFERRED STOCK |       |       |       | ADDITIONALPAID-IN |       | NETUNREALIZEDAPPRECIATION (DEPRECIATION)ON |       | ACCUMULATEDNETINVESTMENT |       |
|------------------------------------------------------------------------------------------------|------------|------------|---------------|-------------------|------------|----------------|------------|----------------------|------------|------------|------------|-------------------|------------|-------------------------------------------------|------------|--------------------------|------------|
|                                                                                           |       | 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**                            | ** ** | ** ** | **(327,724**  | **)**             | ** ** | ** **     | ** ** | ** **           | ** ** | ** ** | ** ** | ** **        | ** ** | ** **                                      | ** ** | ** **               | ** ** | ** ** | ** ** | ** ** | **(4,944** | **)** | ** ** | **(322,780** | **)** |
| ** **                                                                                     | ** ** | ** ** | ** **    | ** **        | ** ** | ** **     | ** ** | ** **           | ** ** | ** ** | ** ** | ** **        | ** ** | ** **                                      | ** ** | ** **               | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** |
| **Sale                of stock pursuant to offering plan (at $1.00 per                share)** | ** ** | ** ** | **1,298,112** | ** **        | ** ** | **1,298,112**  | ** ** | ** **           | **13**     | ** ** | ** ** | **-**             | ** ** | ** **                                      | **-**      | ** **               | ** ** | **1,298,099** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** |
| ** **                                                                                     | ** ** | ** ** | ** **    | ** **        | ** ** | ** **     | ** ** | ** **           | ** ** | ** ** | ** ** | ** **        | ** ** | ** **                                      | ** ** | ** **               | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** |
| **Offering                costs**                                                              | ** ** | ** ** | **(129,311**  | **)**             | ** ** | ** **     | ** ** | ** **           | ** ** | ** ** | ** ** | ** **        | ** ** | ** **                                      | ** ** | ** **               | ** ** | **(129,311** | **)** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** |
| ** **                                                                                     | ** ** | ** ** | ** **    | ** **        | ** ** | ** **     | ** ** | ** **           | ** ** | ** ** | ** ** | ** **        | ** ** | ** **                                      | ** ** | ** **               | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** |
| **Balance-September                30, 2008 (Unaudited)**                                      | ** ** | **$**      | **803,842**   | ** **        | ** ** | **32,467,484** | ** ** | **$**                | **325**    | ** ** | ** ** | **-**             | ** ** | **$**                                           | **-**      | ** **               | **$**      | **1,974,641** | ** ** | **$** | **269** | ** ** | **$** | **(1,171,393** | **)** |

----

**BLACKHAWK      CAPITAL GROUP BDC, INC.**

----

|                                                                                                                         |   | NINE                MONTHS ENDEDSEPTEMBER                30, |          |
|------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------------------|---------------|
|                                                                                                                         |   | 2008                                                         |          | 2007 |   |
|                                                                                                                         |   |                                                         |          |   |   |
| **CASH                FLOWS FROM OPERATING AND INVESTING ACTIVITIES:**                                                       |   |                                                         |          |   |   |   |   |
| Net                investment loss and decrease in net assets resulting from                operations                       |   | $                                                            | (327,724      | ) | $ | (314,718 | ) |
| Unrealized                gain on investments                                                                                |   |                                                         | (269          | ) |   | (6,970 | ) |
| Purchase                of Investments                                                                                       |   |                                                         | (1,619,737    | ) |   | (311,060 | ) |
| Proceeds                from sale and redemption of investments                                                              |   |                                                         | 1,278,000     |   |   | 150,030 |   |
| Adjustments                to reconcile net decrease:Increase                in prepaid expenses                             |   |                                                         | (5,126        | ) |   | (4,527 | ) |
| Decrease                in accrued expenses and accrued interest                                                             |   |                                                         | (148,486      | ) |   | 55,509 |   |
|                                                                                                                         |   |                                                         |          |   |   |   |   |
| **NET                CASH USED IN OPERATING AND INVESTING ACTIVITIES**                                                       |   |                                                         | **(823,342**  | **)** |   | **(431,736** | **)** |
|                                                                                                                         |   |                                                         |          |   |   |   |   |
| **CASH                FLOWS FROM FINANCING ACTIVITIES:**                                                                     |   |                                                         |          |   |   |   |   |
| Offering                Costs                                                                                                |   |                                                         | (129,311      | ) |   | - |   |
| Proceeds                from issuance of stock                                                                               |   |                                                         | 1,298,112     |   |   | 525,001 |   |
| Loan                from affiliated company                                                                                  |   |                                                         |          |   |   | 17,500 |   |
|                                                                                                                         |   |                                                         |          |   |   |   |   |
| **NET                CASH PROVIDED BY FINANCING ACTIVITIES**                                                                 |   |                                                         | **1,168,801** |   |   | **542,501** |   |
|                                                                                                                         |   |                                                         |          |   |   |   |   |
|                                                                                                                         |   |                                                         |          |   |   |   |   |
| **NET                INCREASE IN CASH**                                                                                      |   |                                                         | **345,459**   |   |   | **110,765** |   |
|                                                                                                                         |   |                                                         |          |   |   |   |   |
| **CASH                – BEGINNING OF PERIOD**                                                                          |   |                                                         | **4,450**     |   |   | **637** |   |
|                                                                                                                         |   |                                                         |          |   |   |   |   |
| **CASH                – END OF PERIOD**                                                                                |   | **$**                                                        | **349,909**   |   | **$** | **111,402** |   |
|                                                                                                                         |   |                                                         |          |   |   |   |   |
| Non-cash                financing activities:Conversion                of amount due to affiliated company into common stock |   |                                                         | **—**   |   | **$** | **132,891** |   |

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**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***

***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; |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Establishes                a three-level hierarchy (“Valuation Hierarchy”) for fair value                measurements; |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Requires                consideration of the Company’s creditworthiness when valuing liabilities;                and |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------|

|   | · | Expands                disclosures about instruments measured at fair                value. |
|--------|--------|---------------------------------------------------------------------------------------------|

|   | · | Level                1 - inputs to the valuation methodology are quoted prices (unadjusted)                for                identical assets or liabilities in active                markets. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | 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. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | 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**

|                                                                  |   | NINE MONTHS ENDEDSEPTEMBER 30, |       | NINE MONTHS ENDEDSEPTEMBER 30, |   | YEAR ENDED DECEMBER 31 |   |
|-----------------------------------------------------------------------|--------|-----------------------------------------------|------------|-----------------------------------------------|--------|---------------------------------------|--------|
|                                                                  |   | 2008                                          |       | 2007                                          |   | 2007                                  |   |
| **Per                Share Data:**                                    |   |                                          |       |                                          |   |                                  |   |   |   |   |
| Net                asset value - beginning of period                  |   | $                                             | (0.00119   | )                                             | $      | (0.00972                              | )      | $ | (0.00972 | ) |
|                                                                  |   |                                          |       |                                          |   |                                  |   |   |   |   |
| Net                investment loss *                                  |   |                                          | (0.01011   | )                                             |   | (0.01044                              | )      |   | (0.01307 | ) |
| Issuance                of common stock                               |   |                                          | 1.00000    |                                          |   | 1.00000                               |   |   | 1.00000 |   |
| Net                realized and unrealized gain(loss)**               |   |                                          | (0.96394   | )                                             |   | (0.97834                              | )      |   | (0.97840 | ) |
| Net                asset (liability) value - end of period            |   |                                          | 0.02476    |                                          |   | 0.00150                               |   | $ | (0.00119 | ) |
|                                                                  |   |                                          |       |                                          |   |                                  |   |   |   |   |
| **Total                return based on net asset value *****          |   |                                          | (849       | )%                                            |   | (105                                  | )%     |   | (135 | )% |
|                                                                  |   |                                          |       |                                          |   |                                  |   |   |   |   |
| Common                shares outstanding - end of period              |   |                                          | 32,467,484 |                                          |   | 31,169,372                            |   |   | 31,169,372 |   |
| **Ratio/Supplemental                Data:**                           |   |                                          |       |                                          |   |                                  |   |   |   |   |
| Net                asset/(liabilities) - end of period                |   | $                                             | 803,842    |                                          | $      | 46,750                                |   | $ | (37,235 | ) |
|                                                                  |   |                                          |       |                                          |   |                                  |   |   |   |   |
| Ratio                of net investment loss to average net assets**** |   |                                          | (108       | )%                                            |   | (863                                  | )%     |   | 813 | % |
|                                                                  |   |                                          |       |                                          |   |                                  |   |   |   |   |
| Ratio                of operating expenses to average net assets****  |   |                                          | 112        | %                                             |   | 867                                   | %      |   | 819 | % |

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

|  | ** | Net                realized and unrealized gain (loss) represents the dilutive effect                of                share issuance. |
|--|----|----------------------------------------------------------------------------------------------------------------------------------------|

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

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

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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*

*Investment      Income and Net Decrease in Assets Resulting from Operations*

*General      and Administrative Expenses*

*Unrealized      gain (loss) on investments*

*Liquidity      and Capital Resources*

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

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**Item      4T. Controls and Procedures **

**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.** |
|----------------------------------------|-----------------------------------------------------------|
|                                   |                                                      |   |
| Date:                November 12, 2008 |  By:                                                 | /s/                Craig A. Zabala |
|                                   |                                                      | Craig                A. Zabala, Chief Executive Officer |
|                                   |                                                      |   |
| Date:                November 12, 2008 |  By:                                                 | /s/                Craig A. Zabala |
|                                   |                                                      | Craig                A. Zabala, Acting Chief Financial                Officer |

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