| Delaware                        | 11-2895590                     |
|---------------------------------|--------------------------------|
| (State or other jurisdiction of | (I.R.S. Employer               |
| incorporation or organization)  | Identification  No.) |
|                            |                           |

| 13450 West Sunrise Blvd., Suite 510, Sunrise, FL | 33323      |
|--------------------------------------------------|------------|
| (Address of principal executive offices)         | (Zip Code) |
|                                             |       |

| Large accelerated filer [ ] | Accelerated filer [  ]               |
|-----------------------------|------------------------------------------------|
| Non-accelerated filer [ ]   | Smaller reporting company   [X] |

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|                                                                                                |  Page |
|-----------------------------------------------------------------------------------------------------|------------|
| PART I – FINANCIAL INFORMATION                                                                |       |
|                                                                                                |       |
| Item 1. Financial Statements.                                                                       |       |
|                                                                                                |       |
| Condensed Consolidated Balance Sheets as of March 31, 2011 (Unaudited) and                          |       |
| December 31, 2010                                                                                   | 3          |
|                                                                                                |       |
| Condensed Consolidated Statements of Income                                                         |       |
| For the Three Months Ended March 31, 2011 and 2010 (Unaudited)                                      | 4          |
|                                                                                                |       |
| Condensed Consolidated Statements of Cash Flows                                                     |       |
| For the Three Months Ended March 31, 2011 and 2010 (Unaudited)                                      | 5          |
|                                                                                                |       |
| Notes to Condensed Consolidated Financial Statements (Unaudited)                                    | 6          |
|                                                                                                |       |
| Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations | 11         |
|                                                                                                |       |
| Item 3. Quantitative and Qualitative Disclosure About Market Risk                                   | 15         |
|                                                                                                |       |
| Item 4. Controls and Procedures                                                                     | 15         |
|                                                                                                |       |
| PART II – OTHER INFORMATION                                                                   |       |
|                                                                                                |       |
| Item 6. Exhibits                                                                                    | 17         |
|                                                                                                |       |
| Signatures                                                                                          | 18         |
|                                                                                                |       |
| CERTIFICATIONS                                                                                      | Exhibits   |

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|                                                                                                                                                                                                                             |   | March 31,   |           |   | December 31, |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------|----------------|--------|--------------|
|                                                                                                                                                                                                                             |   | 2011        |           |   | 2010         |
|                                                                                                                                                                                                                             |   | (Unaudited) |           |   |         |
| ASSETS                                                                                                                                                                                                                           |   |        |           |   |         |
| Current assets                                                                                                                                                                                                                   |   |        |           |   |         |
|   Cash and cash equivalents                                                                                                                                                                                            |   | $           | 1,338          |   |  $      | 1,707 |   |
|   Accounts receivable, net of allowance for doubtful accounts of   $0 in 2011 and 2010                                                                                                                  |   |        | 1,653          |   |         | 1,325 |   |
|   Deferred tax asset – current                                                                                                                                                                                   |   |        | 750            |   |         | 750 |   |
|   Prepaid expenses and other current assets                                                                                                                                                                            |   |        | 140            |   |         | 159 |   |
|                                                                                                                                                                                                                             |   |        |           |   |         |   |   |
| Total current assets                                                                                                                                                                                                             |   |        | 3,881          |   |         | 3,941 |   |
|                                                                                                                                                                                                                             |   |        |           |   |         |   |   |
| Property and equipment, net                                                                                                                                                                                                      |   |        | 387            |   |         | 421 |   |
| Deferred tax asset                                                                                                                                                                                                               |   |        | 2,117          |   |         | 2,117 |   |
| Other assets                                                                                                                                                                                                                     |   |        | 229            |   |         | 226 |   |
|                                                                                                                                                                                                                             |   |        |           |   |         |   |   |
|          TOTAL ASSETS                                                                                                                                                               |   | $           | 6,614          |   |  $      | 6,705 |   |
|                                                                                                                                                                                                                             |   |        |           |   |         |   |   |
| LIABILITIES AND SHAREHOLDERS’ EQUITY                                                                                                                                                                                       |   |        |           |   |         |   |   |
| Current liabilities                                                                                                                                                                                                              |   |        |           |   |         |   |   |
|   Accounts payable and accrued expenses                                                                                                                                                                                |   | $           | 1,273          |   |  $      | 1,425 |   |
|   Current portion of capital lease obligations                                                                                                                                                                         |   |        | 14             |   |         | -- |   |
|   Current portion of notes payable                                                                                                                                                                                     |   |        | 127            |   |         | 157 |   |
|   Deferred revenue                                                                                                                                                                                                     |   |        | 45             |   |         | 69 |   |
|                                                                                                                                                                                                                             |   |        |           |   |         |   |   |
| Total current liabilities                                                                                                                                                                                                        |   |        | 1,459          |   |         | 1,651 |   |
|                                                                                                                                                                                                                             |   |        |           |   |         |   |   |
| Capital lease obligations, net of current portion                                                                                                                                                                                |   |        | 28             |   |         | -- |   |
| Notes payable, net of current portion                                                                                                                                                                                            |   |        | 79             |   |         |  104 |   |
|                                                                                                                                                                                                                             |   |        |           |   |         |   |   |
| Total liabilities                                                                                                                                                                                                                |   |        | 1,566          |   |         | 1,755 |   |
|                                                                                                                                                                                                                             |   |        |           |   |         |   |   |
| Commitments and contingencies                                                                                                                                                                                                    |   |        |           |   |         |   |   |
|                                                                                                                                                                                                                             |   |        |           |   |         |   |   |
| Shareholders’ equity                                                                                                                                                                                                       |   |        |           |   |         |   |   |
|    Preferred stock, $0.0001 par value; 2,000,000 shares authorized; 0    issued and outstanding in 2011 and 1010.                                                                             |   |        |           |   |         |   |   |
| Common stock, $0.0001 par value; 50,000,000 shares authorized;11,737,610 and 11,717,310  shares issued in 2011 and 2010, respectively; and 11,697,683 and 11,677,383 shares outstanding in 2011 and 2010, respectively |   |        |    1 |   |         |     1 |   |
|   Additional paid-in capital                                                                                                                                                                                           |   |        | 115,004        |   |         | 114,990 |   |
|   Accumulated deficit                                                                                                                                                                                                  |   |        | (109,629       | )      |         | (109,713 | ) |
|                                                                                                                                                                                                                             |   |        | 5,376          |   |         | 5,278 |   |
|   Common stock in treasury, at cost  - 24,371 shares                                                                                                                                                         |   |        | (328           | )      |         | (328 | ) |
| Total shareholders’ equity                                                                                                                                                                                                 |   |        | 5,048          |   |         | 4,950 |   |
|                                                                                                                                                                                                                             |   |        |           |   |         |   |   |
|           TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY                                                                                                                |   | $           | 6,614          |   |  $      | 6,705 |   |
|                                                                                                                                                                                                                             |   |        |           |   |         |   |   |
|                                                                                                                                                                                                                             |   |        |           |   |         |   |   |

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|                                                                    |   |  Three Months Ended |   |
|-------------------------------------------------------------------------|--------|--------------------------|--------|
|                                                                    |   | March 31,                |   |
|                                                                    |   | 2011                     |   |   | 2010 |   |
|                                                                    |   |                     |   |   |   |   |
| Revenue                                                                 |   | $                        | 2,128  |   |   | $ | 2,381 |   |
|                                                                    |   |                     |   |   |   |   |   |   |
| Costs and expenses                                                      |   |                     |   |   |   |   |   |   |
|   Operations, research and development                        |   |                     | 848    |   |   |   | 893 |   |
|   Sales and marketing                                         |   |                     | 468    |   |   |   | 471 |   |
|   General and administrative                                  |   |                     | 647    |   |   |   | 730 |   |
|   Amortization and depreciation                               |   |                     | 77     |   |   |   | 76 |   |
|                                                                    |   |                     | 2,040  |   |   |   | 2,170 |   |
|                                                                    |   |                     |   |   |   |   |   |   |
| Operating income                                                        |   |                     | 88     |   |   |   | 211 |   |
|                                                                    |   |                     |   |   |   |   |   |   |
| Other expense (income)                                                  |   |                     |   |   |   |   |   |   |
|   Change in fair value of warrant liability                   |   |                     | ---    |   |   |   | (195 | ) |
|   Other income                                                |   |                     | ---    |   |   |   | (26 | ) |
|   Interest expense, net                                       |   |                     | 4      |   |   |   | 7 |   |
|                                                                    |   |                     |   |   |   |   |   |   |
| Income  before  income taxes                        |   |                     | 84     |   |   |   | 425 |   |
|                                                                    |   |                     |   |   |   |   |   |   |
| Provision for income tax                                                |   |                     | --     |   |   |   | 10 |   |
|                                                                    |   |                     |   |   |   |   |   |   |
| Net income                                                              |   |                     | 84     |   |   |   | 415 |   |
|                                                                    |   |                     |   |   |   |   |   |   |
| Preferred stock dividends                                               |   |                     | --     |   |   |   | (26 | ) |
|                                                                    |   |                     |   |   |   |   |   |   |
| Net  income  attributable to common shareholders    |   | $                        | 84     |   |   | $ | 389 |   |
|                                                                    |   |                     |   |   |   |   |   |   |
| Basic  income per share attributable to common shareholders   |   | $                        | 0.01   |   |   | $ | 0.03 |   |
|                                                                    |   |                     |   |   |   |   |   |   |
| Diluted  income per share attributable to common shareholders |   | $                        | 0.01   |   |   | $ | 0.03 |   |
| Basic weighted average common shares outstanding                        |   |                     | 11,693 |   |   |   | 11,282 |   |
| Diluted weighted average common shares outstanding                      |   |                     | 11,784 |   |   |   | 11,553 |   |

----

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   For the three months ended  March 31, |           |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------|----------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |  2011                                                  | 2010           |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                                                        |           |
| Cash flows from operating activities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                                                        |           |
|  Net income                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | $                                                           | 84             |   | $ | 415 |   |
|  Adjustments to reconcile net income  to net cash (used in ) provided by operations:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                                        |           |   |   |   |   |
|     Amortization and depreciation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                        | 77             |   |   | 76 |   |
|     Stock based compensation expense                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                                        | 14             |   |   | 134 |   |
|     Change in fair value of warrant liability                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                        | --             |   |   | (195 | )  |
|    Changes in operating assets and liabilities:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                                                        |           |   |   |   |   |
|     Accounts receivable                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                        | (328           | ) |   | (444 | )  |
|     Prepaid expenses and other current assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                        | 14             |   |   | 17 |   |
|     Accounts payable and accrued expenses                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                                                        | (152           | ) |   | -- |   |
| Deferred revenue                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                        | (24            | ) |   | -- |   |
| Net cash (used in) provided by operations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                        | (315           | ) |   | 3 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                                                        |           |   |   |   |   |
| Cash flows used in investing activities:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                                        |           |   |   |   |   |
|     Expenditures for property and equipment                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                        | --             |   |   | (2 | )  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                                                        |           |   |   |   |   |
| Cash flows from financing activities:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                        |           |   |   |   |   |
|     Payment of dividends on preferred stock                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                        | --             |   |   | (26 | )  |
|     Principal payments on capital lease obligations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                        | --             |   |   | (2 | )  |
|     Repayments of long-term debt                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                                                        | (54            | ) |   | (47 | )  |
| Net cash used in financing activities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                        | (54            | ) |   | (75 | )  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                                                        |           |   |   |   |   |
| Net decrease  in cash and cash equivalents                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                                                        | (369           | ) |   | (74 | )  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                                                        |           |   |   |   |   |
| Cash and cash equivalents – beginning of period                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                        | 1,707          |   |   | 1,758 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                                                        |           |   |   |   |   |
| Cash and cash equivalents – end of period                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | $                                                           | 1,338          |   | $ | 1,684 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                                                        |           |   |   |   |   |
|   Supplemental Disclosures:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                        |           |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                                                        |           |   |   |   |   |
|  Cash paid for interest                                                                                                            |  $                                                     |           |   |  $ | 8  |   |
|  Cash paid for income taxes                                                                                                                                                          |  $                                                     |  45  |   |  $ | 10  |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                                                        |           |   |   |   |   |
|   Non-cash investing and financing activities:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                                                        |           |   |   |   |   |
|  Dividends accrued and unpaid                                                                                                                                                                                           |  $                                                     | --             |   |  $ | 26  |   |
|  Equipment acquired from capital lease                                                                                                                                                                                                                                                        |  $                                                     |  42       |   |  $ | --  |   |

----

1.          Interim Financial Information   

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|                              |   |  Shares(in thousands) |   | Weighted Average Exercise Price |   | Weighted Average Remaining ContractualTerm (in years) |   | Aggregate Intrinsic Value(in thousands) |   |
|-----------------------------------|--------|----------------------------|--------|---------------------------------|--------|-----------------------------------------------------------------|--------|-----------------------------------------|--------|
| Balance, January 1, 2011          |   | 425                        |   | $                               | 0.78   |                                                            |   | 2.0                                     |   | $ | 60 |   |
|     Granted   |   | --                         |   |                            | --     |                                                            |   |                                    |   |   |   |   |
|     Exercised |   | --                         |   |                            | --     |                                                            |   |                                    |   |   |   |   |
|     Canceled  |   | --                         |   |                            | --     |                                                            |   |                                    |   |   |   |   |
|     Forfeited |   | --                         |   |                            | --     |                                                            |   |                                    |   |   |   |   |
| Balance, March 31, 2011           |   | 425                        |   | $                               | 0.78   |                                                            |   | 1.8                                     |   | $ | 116 |   |
| Exercisable, March 31, 2011       |   | 425                        |   | $                               | 0.78   |                                                            |   | 1.8                                     |   | $ | 116 |   |

|                          |  Shares (in thousands) |   | Weighted-average Grant Date Fair Value |   |
|-------------------------------|----------------------------------|--------|----------------------------------------|--------|
| Non-vested at January 1, 2011 |                             | 26     |                                   | $      | 0.95 |   |
| Granted                       |                             | 81     |                                   | $      | 0.79 |   |
| Vested                        |                             | (17    | )                                      | $      | 0.85 |   |
| Forfeited                     |                             | --     |                                   |   | -- |   |
| Non-vested at March 31, 2011  |                             | 90     |                                   | $      | 0.83 |   |

----

|                                       |   | In thousands |   |
|--------------------------------------------|--------|--------------|--------|
| Balance, January 1, 2011                   |   | $            | 4,950  |   |
|    Stock based compensation |   |         | 14     |   |
|    Net income               |   |         | 84     |   |
| Balance – March 31, 2011             |   | $            | 5,048  |   |

----

|                                       |   | Three Months EndedMarch 31, 2011 |         |   | Three Months EndedMarch 31, 2010 |   |
|--------------------------------------------|--------|----------------------------------|--------------|--------|----------------------------------|--------|
|                                       |   | (in thousands)                   |         |   | (in thousands)                   |   |
| Weighted Average Common shares outstanding |   |                             |  11,693 |   |                             |   |  11,282 |   |
| Options to purchase common stock           |   |                             | 88           |   |                             |   | 265 |   |
| Restricted stock grants                    |   |                             | 3            |   |                             |   | 6 |   |
| Total diluted shares                       |   |                             | 11,784       |   |                             |   | 11,553 |   |

|                              |   | Three Months Ended March 31, 2011 |   |   | Three Months Ended March 31, 2010 |   |
|-----------------------------------|--------|----------------------------------------|--------|--------|----------------------------------------|--------|
|                              |   | (in thousands)                         |   |   | (in thousands)                         |   |
| Options to purchase common stock  |   |                                   | 75     |   |                                   |   | 75 |   |
| Warrants to purchase common stock |   |                                   | --     |   |                                   |   | 500 |   |
| Restricted stock grants           |   |                                   | 16     |   |                                   |   | 197 |   |
|                              |   |                                   |   |   |                                   |   |   |   |
| Total potential common shares     |   |                                   | 91     |   |                                   |   | 772 |   |

|                                |   | Three Months Ended March 31, |   |
|-------------------------------------|--------|------------------------------|--------|
|                                |   | 2011                         |   |   | 2010 |   |
|   SaaS fees               |   | $                            | 1,896  |   |   | $ | 2,172 |   |
|   Custom engineering fees |   |                         | 232    |   |   |   | 209 |   |
|                                |   |                         |   |   |   |   |   |   |
| Total Revenue                       |   | $                            | 2,128  |   |   | $ | 2,381 |   |

----

----

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

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| ·   | it requires assumptions to be made that were uncertain at the time the estimate was made; and |
|--------------------|-----------------------------------------------------------------------------------------------|

| ·   | changes in the estimate, or the use of different estimating methods that could have been selected, could have a material impact on the Company's condensed consolidated results of operations or financial condition. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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----

----

Item 3. Quantitative and Qualitative Disclosure About Market Risk

Item 4.  Controls and Procedures

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Item 6. Exhibits

| 31     | Certifications pursuant to Rules 13a-14(a) as adopted pursuant to     |
|--------|-----------------------------------------------------------------------|
|   | Section 302 of the Sarbanes-Oxley Act of 2002.                        |
|   |                                                                  |
| 32     | Certifications pursuant to 18 U.S.C. Section 1350 as adopted pursuant |
|   | to Section 906 of the Sarbanes-Oxley Act of 2002.                     |

----

Pursuant to the requirements 

| DIRECT INSITE CORP.                         |         |
|---------------------------------------------|--------------|
|                                        |         |
|                                        |         |
| /s/  James A. Cannavino           |         |
| James A. Cannavino, Chief Executive Officer | May 16, 2011 |
|                                        |         |
|                                        |         |
|                                        |         |
| /s/  Michael J. Beecher           |         |
| Michael J. Beecher, Chief Financial Officer | May 16, 2011 |

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