Washington, D.C. 20549

                                   FORM 10-QSB

[X]  Quarterly report under Section 13 or 15(d) of the Securities Exchange Act
     of 1934 for the quarterly period ended June 30, 2005

[ ]  Transition report under Section 13 or 15(d) of the Securities  Exchange Act
     of 1934 for the transition period from ______________ to ______________

                        Commission file number: 000-32309

                        MASTER DISTRIBUTION SYSTEMS, INC.
          ------------------------------------------------------------
        (Exact name of small business issuer as specified in its charter)


           Nevada                                             86-1010155
--------------------------------------------------------------------------------
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
incorporation or organization)

                              6224 Arctic Loon Way
                               Rocklin, CA, 95765
                   ------------------------------------------
                     (Address of principal executive office)

                                 (541) 350-0341
                              ---------------------
                           (Issuer's telephone number)

SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:  NONE

SECURITIES  REGISTERED  PURSUANT TO SECTION 12(g) OF THE ACT: COMMON STOCK,  PAR
VALUE $.001 PER SHARE

Check  whether the  Registrant:  (1) filed all  reports  required to be filed by
Section 13 or 15(d) of the  Exchange  Act during the past 12 months (or for such
shorter period that the  Registrant was required to file such reports),  and (2)
has been subject to such filing requirements for the past 90 days.

Yes [X]   No [ ]

The number of outstanding  shares of the Registrant's  common stock,  $0.001 par
value, as of June 30, 2005 was 10,496,000.

                                       1
<PAGE>


                        MASTER DISTRIBUTION SYSTEMS, INC.

                                TABLE OF CONTENTS

PART I: FINANCIAL INFORMATION                                          Page


Part I  Financial Information

Item 1. Financial Statements:

        Condensed Balance Sheets
        June 30, 2005 (unaudited) and December 31, 2004......................3

        Unaudited Condensed Statements of Operations for the
        three and six months ended June 30, 2005 and 2004....................4

        Unaudited Condensed Statements of Cash Flows for the
        six months ended June 30, 2005 and 2004..............................5

        Statement of Stockholders' equity for the period from
        December 31, 2002 to June 30, 2005(unaudited)........................6

        Notes to Financial Statements (unaudited) ...........................7


Item 2. Managements Discussion and Analysis of Financial Condition
         and Plan of Operations ............................................10

Item 3. Controls and Procedures ............................................13


PART II: OTHER INFORMATION

Item 1. Legal Proceedings ..................................................14

Item 2. Changes in Securities ..............................................14

Item 3. Defaults upon Senior Securities.....................................14

Item 4. Submission of Matters for a Vote of Security Holders................14

Item 5. Other Information...................................................14

Item 6. Exhibits and Reports on Form 8-K ...................................14

SIGNATURES..................................................................15



                                       2
<PAGE>




This Form 10-QSB contains  forward-looking  statements within the meaning of the
"safe harbor"  provisions  under Section 21E of the  Securities  Exchange Act of
1934.  We use  forward-looking  statements in our  description  of our plans and
objectives for future  operations  and  assumptions  underlying  these plans and
objectives.  Forward-looking  terminology  includes the words "may,"  "expects,"
"believes,"  "anticipates,"  "intends," "projects," or similar terms, variations
of such terms or the negative of such terms.  These  forward-looking  statements
are based on management's  current  expectations  and are subject to factors and
uncertainties, which could cause actual results to differ materially from those,
described  in  such  forward-looking   statements.  We  expressly  disclaim  any
obligation or  undertaking  to release  publicly any updates or revisions to any
forward-looking  statements  contained in this Form 10-QSB to reflect any change
in our  expectations or any changes in events,  conditions or  circumstances  on
which any forward-looking  statement is based.  Factors,  which could cause such
results  to  differ  materially  from  those  described  in the  forward-looking
statements, and elsewhere,, are incorporated by reference into this Form 10-QSB.
The  term  the  "Company"  includes  Master  Distribution  Systems,   Inc.,  its
predecessors,  and its  wholly  owned  subsidiary  described  elsewhere  in this
report.

                                       3
<PAGE>

PART I: FINANCIAL INFORMATION

Item1. Financial Statements


                        MASTER DISTRIBUTION SYSTEMS, INC.
                            CONDENSED BALANCE SHEETS




                                                    June 30,    December 31,
                                                      2005         2004
                                                   ---------    ---------
                                                  (Unaudited)
                                     ASSETS
                                    ---------

 CURRENT ASSETS

     Cash                                          $   2,713    $     500
     Dealership license inventory                    250,000       50,000
                                                   ---------    ---------

      Total current assets                           252,713       50,500
                                                   ---------    ---------
 OTHER ASSETS

     Deferred offering costs                           5,000        5,000
     Investment, at cost                              25,000       25,000
     Dealership reseller rights, net                   4,167        6,667
                                                   ---------    ---------
                                                      34,167       36,667
                                                   ---------    ---------

                                                   $ 286,879    $  87,167
                                                   =========    =========

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)


CURRENT LIABILITIES


      Accounts payable                             $ 266,441    $  65,071
      Advances-related parties                        64,598       38,331
      Accrued management fees-parent company          80,000       50,000
                                                   ---------    ---------

       Total Current Liabilities                     411,039      153,401
                                                   ---------    ---------

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY (DEFICIT)


Common stock, par value $.001, 25,000,000 shares

  authorized, 10,496,000 shares outstanding           10,496       10,496
Paid in capital                                       66,509       66,509
Retained earnings (deficit)                         (201,165)    (143,240)
                                                   ---------    ---------

Total Stockholders' Equity (Deficit)                (124,160)     (66,235)
                                                   ---------    ---------

                                                   $ 286,879    $  87,167
                                                   =========    =========


                 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS



                                       3
<PAGE>




                        MASTER DISTRIBUTION SYSTEMS, INC.
                       CONDENSED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)
<TABLE>
<CAPTION>

                                           Three months Ended               Six months Ended
                                                 June 30,                        June 30,
                                     ----------------------------    ----------------------------
                                           2005            2004            2005            2004
                                     ------------    ------------    ------------    ------------
                                                        restated                        restated
<S>                                       <C>             <C>              <C>             <C>
REVENUES
  Dealership license sales           $       --      $     69,075    $       --      $     69,075
  Commissions                               5,030            --             5,030            --
  Royalties                                 8,884            --            10,972            --
                                     ------------    ------------    ------------    ------------

                                           13,914          69,075          16,002          69,075
                                     ------------    ------------    ------------    ------------
 COSTS AND EXPENSES
   General and administrative:
    Cost of dealership licenses              --            50,000            --            50,000
    Commissions - parent company             --             7,633            --             7,633
    Professional fees                      12,889            --            38,639            --
    Management fees-parent company         14,000          54,000          30,000          54,000
    Other                                   1,599           5,179           2,788           7,606
   Amortization                             1,250             833           2,500             833
                                     ------------    ------------    ------------    ------------

   Total costs and expenses                29,738         117,645          73,927         120,072
                                     ------------    ------------    ------------    ------------

NET (LOSS)                           $    (15,824)   $    (48,570)   $    (57,925)   $    (50,997)
                                     ============    ============    ============    ============

BASIC NET (LOSS) PER SHARE                      *    $      (0.01)   $      (0.01)   $      (0.01)
                                     ============    ============    ============    ============
WEIGHTED AVERAGE NUMBER OF
  COMMON SHARES OUTSTANDING            10,496,000       5,498,667      10,496,000       4,249,333
                                     ============    ============    ============    ============

*  less than $(.01) per share
</TABLE>


                                       4
<PAGE>



                        MASTER DISTRIBUTION SYSTEMS, INC.
                            STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)


                                                          Six Months Ended
                                                              June 30,

                                                          2005          2004
                                                       -----------  -----------


OPERATING ACTIVITIES
  Net (loss) from operations                          $   (57,925)   $  (50,997)

   Adjustments to reconcile net (loss) to net
    cash used by operating activities:
       Amortization                                          2,500          833

   Changes in operating assets and liabilities:
      Dealership license inventory                        (200,000)           -
      Accounts payable                                     201,370          260
      Accrued management fees-parent company                30,000       54,000
                                                       -----------  -----------

              Total adjustments                             33,870       55,093
                                                       -----------  -----------

NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES           (24,055)       4,096
                                                       -----------  -----------


FINANCING ACTIVITIES
      Advances-shareholders                                 26,267        3,043
                                                       -----------  -----------

NET CASH PROVIDED BY FINANCING ACTIVITIES                   26,267        3,043
                                                       -----------  -----------

NET INCREASE IN CASH                                         2,213        7,139

CASH, BEGINNING OF PERIOD                                      500            -
                                                       -----------  -----------

CASH, END OF PERIOD                                   $      2,713  $     7,139
                                                       ===========  ===========


NON-CASH INVESTING AND FINANCING ACTIVITIES

    Contributed capital                                                 $25,480
                                                                    ===========
   10 Million Common shares issued to acquire
     dealership rights                                                  $10,000
                                                                    ===========



 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS


                                       5
<PAGE>





                        MASTER DISTRIBUTION SYSTEMS, INC.
                  STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)

<TABLE>
<CAPTION>


                                                              Common Stock                     Retained
                                                    --------------------------    Paid-in      Earnings
                                                        Shares        Amount      Capital      (Deficit)        Total
                                                    ------------- ------------  ------------  ------------- -------------


<S>                                                        <C>          <C>            <C>           <C>          <C>
Balances, December 31, 2003                             3,000,000   $    3,000     $       -     $  (22,933)  $   (19,933)
  On June 25, 2004, outstanding shares were

    contributed and cancelled                          (2,504,000)      (2,504)        2,504                            -
  Contribution of advances by shareholder

    on June 25, 2004                                                                  23,005                       23,005
  Issuance of shares for dealership rights at par

   on June 28, 2004                                    10,000,000       10,000                                     10,000

  Costs to register restricted common stock                                         (21,000)                      (21,000)
  Contribution of management fees by shareholder

    on December 31, 2004                                                              62,000                       62,000

  Net (loss) for the year                                                                          (120,307)     (120,307)
                                                    ------------- ------------  ------------  ------------- -------------


Balances, December 31, 2004                            10,496,000       10,496        66,509       (143,240)      (66,235)
(Unaudited)

  Net (loss) for six months                                                                         (57,925)      (57,925)
                                                    ------------- ------------  ------------  -------------  ------------


Balances, June 30, 2005 (Unaudited)                    10,496,000   $   10,496     $  66,509     $ (201,165)  $  (124,160)
                                                    ============= ============  ============  =============  ============


</TABLE>


                 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS



                                       6
<PAGE>



                        MASTER DISTRIBUTION SYSTEMS, INC.
                          NOTES TO FINANCIAL STATEMENTS
                                   (unaudited)


NOTE 1.  BASIS OF PRESENTATION

In the opinion of management,  the accompanying  unaudited  condensed  financial
statements have been prepared in accordance with generally  accepted  accounting
principles for interim  financial  information and with the instructions to Form
10-QSB.  Accordingly,  they do not include all of the  information and footnotes
required by generally  accepted  accounting  principles  for complete  financial
statements. In the opinion of management,  all adjustments (consisting of normal
recurring  accruals)  considered  necessary  for  a  fair  presentation  of  the
Company's  financial  position  as of  June  30,  2005  and the  results  of its
operations  for the three and six months ended June 30, 2005 and 2004,  and cash
flows for six  months  ended June 30,  2005 and 2004 have been  made.  Operating
results for the six months ended June 30, 2005 are not necessarily indicative of
the results that may be expected for the year ended December 31, 2005.

These  condensed  financial  statements  should be read in conjunction  with the
financial  statements  and notes thereto  contained in the Company's Form 10-KSB
for the year ended December 31, 2004.


NOTE 2.  REVENUE RECOGNITION

Previous year dealership license sales, Restated

The agreement relating to the reselling of dealership licenses commencing in May
2004,  required  the  Company to  purchase a minimum of 50  dealership  licenses
within the first two years at $25,000  each.  Through  September  30, 2004,  the
Company  originally  believed  that  the  proper  accounting   presentation  for
reporting such transactions was to net the cost paid for the dealership licenses
against the related sales resulting in commission revenues, rather than grossing
up the  transaction as a sale and cost of sale.  This  accounting  treatment was
based on the presumption that dealership sales would be greater than the minimum
number of  dealership  licenses  that were  required  to be  purchased,  and the
transaction  were considered more similar to brokering such licenses rather than
acquiring them for sale.

However,  as of June 30, 2004, and for the 3 months then ended,  the Company was
required to purchase  two  dealership  licenses to meet their  minimum  purchase
commitment.   Accordingly,  the  Company  has  changed  its  accounting  policy,
retroactively  in 2004,  the  first  year of such  sales,  with  respect  to the
treatment  of  dealership  license  sales,  as a sale  and a cost of  sale.  The
previously  reported  $19,075 of net commission  income as of June 30, 2004, has
been  restated as sales of $69,075 and cost of sales as $50,000.  This change in
accounting  had no effect on  previously  reported net loss or loss per share at
any date in 2004.


Royalty revenues

The master  dealership  also provides that the Company be paid  one-third of all
gross  receipts  CRYSTAL  CLEAR  receives  for  product  sales  relating  to the
dealerships sold by the Company. Such sales will be recorded at the time CRYSTAL
CLEAR renders such sales information to the Company.



                                       7
<PAGE>


NOTES TO FINANCIAL STATEMENTS - CONTINUED.

Dealership License Inventory

The Company was required to purchase five dealership  licenses from the licensor
during the current quarter,  per its resale license  agreement.  These licenses,
which cost $25,000  each,  were  classified  as  inventory  on the  accompanying
balance as of June 30, 2005, at cost, on the basis that they were salable during
future  periods.  Therefore as of June 30, 2005, the inventory of ten dealership
licenses totaled $250,000,  the cost of which is included in accounts payable at
that date.



NOTE 3.  FOREIGN SALES

Included in total revenues for the six months ending June 30, 2005 and 2004 were
the following in U. S. dollars:

                          2005           2005          2004         2004

                       Commissions    Royalties    Commissions     Royalties
                      -------------  -------------  ------------- ------------
Canadian revenues        $    5,030       $  9,257   $    -  0  -   $  -  0  -
U. S. revenues               -  0 -          1,715        -  0  -      -  0  -
                      ------------- -------------- -------------- ------------
Total                    $    5,030       $ 10,972   $    -  0  -   $  -  0  -
                      ============= ============== ============== ============

Included in total  revenues for the three  months  ending June 30, 2005 and 2004
were the following in U. S. dollars:



                          2005           2005          2004           2004

                       Commissions    Royalties      Commissions    Royalties
                      ------------- -------------- -------------- ------------
Canadian revenues        $    5,030       $  8,309   $    -  0  -   $  -  0  -
U. S. revenues               -  0 -            575        -  0  -      -  0  -
                      ------------- -------------- -------------- ------------
Total                    $    5,030      $   8,884   $    -  0  -  $   -  0  -
                      ============= ============== ============== ============



In the six months ending June 30, 2004, there were no royalty payments to the
Company.



                                       8
<PAGE>

Included in total revenues for the three and six months ending June 30, 2005 and
2004 were the following in U. S. dollars:


                           Dealership Sales             Dealership Sales
                         Three months ended             Six months ended

                          2005         2004            2005           2004
                      ------------- -------------- -------------- ------------
Canadian revenues     $      - 0  -       $ 69,075   $    -  0  -     $ 69,075
U. S. revenues               - 0  -        -  0  -        -  0  -      -  0  -
                      ------------- -------------- -------------- ------------
Total                  $    -  0  -      $  69,075   $    -  0  -    $  69,075
                      ============= ============== ============== ============




NOTE 4.  RELATED PARTY TRANSACTIONS

During the current quarter, accrued management fees were incurred of $14,000, to
OFG  EuroPacific  Limited,  who provided such services and other benefits to the
Company.  During  this same  period,  OFG  provided  working  capital of $12,667
interest free. As of June 30, 2005, OFG was owed $61,370 for working capital and
$80,000 for management services.

     The  president  of MDS also has  provided  interest  free  advances  to the
Company, and as of June 30, 2005 he was owed $3,228.


NOTE 5.  ACCOUNTS PAYABLE

As of June 30, 2005, the Company had an accounts payable balance of $266,441 due
to trade  creditors  which  included  $247,929  payable to Crystal  Clear Window
Works,  Inc.  (CCWWI).  This  balance  includes  the  purchase  price of  eleven
dealership  licenses,  at $25,000 each,  for a total of $275,000,  less payments
made to CCWWI of $10,000 and less royalties owed to the Company of $17,071.

NOTE 6.  CONSULTING CONTRACT

On March 7, 2005,  the Company  entered into an agreement  with a consultant  to
provide  value-added  strategic  advisory and consulting  services to assist the
Company in furthering its business plan including the sale of dealerships.

The  agreement  will  remain in force  for 60 days at the end of which  time the
parties will  determine if any extension of the  agreement is  desirable.  As of
June 30, 2005, the Company and the consultant have not renewed their  agreement.
Compensation  for the consultant is: a), an hourly rate of $125 for a maximum of
15 hours per week,  and b), a bonus of $3,500  for each  CCWWI  dealership  sold
directly or indirectly to or through any of consultant's parties. As of June 30,
2005, only total hourly fees of $11,250 were payable,  since no dealerships were
sold.

The parties have agreed to defer payment of the weekly fees until the earlier of
when cash is available for payment,  or when free trading shares,  pursuant to a
filing on Form S-8, can be made available to consultant.  The bonus may be paid,
at the consultant's option, in free trading shares of the Company at the closing
of each  dealership  sale  involving  the  consultant at a price per share to be
determined   between  the  parties.   The  consultant   also  signed  a  3  year
non-circumvention,  non-disclosure  and  confidentiality  agreement  on the same
date.



                                       9
<PAGE>


NOTES TO FINANCIAL STATEMENTS - CONTINUED.

NOTE 7.  COLLATERALIZED INVENTORY

The total inventory amount of $250,000 has been  collateralized  for the payable
balance of $247,929 to Crystal Clear Window Works Inc. (CCWWI).  In the event of
default  of payment to CCWWI,  the  inventory  of  dealership  licenses  will be
returned to CCWWI for payment of its outstanding debt.


NOTE 8.  SUBSEQUENT EVENTS

Dealerships for Equity agreement with CCWWI

The Company has signed a Letter of Intent on August 16, 2005 with Crystal  Clear
Window Works Inc.  (CCWWI) to acquire the balance of the initial 50  dealerships
in exchange for equity.  Under the  agreement the company will issue 4.5 million
shares to CCWWI in exchange for 47 dealership  licenses and for  consulting  and
support services to be provided by CCWWI in the sale of these dealerships.  Also
included in this agreement is the total accounts payable balance owed to CCWW of
$275,000,  which will be  forgiven  as part of the equity  exchange.  The amount
already  paid to CCWWI of $10,000  will be converted to a credit in favor of the
Company,  and the  outstanding  receivable  balance  of  $17,071  would  remain.
Subsequent to the Letter of Intent we expect a formal  agreement to be signed by
the end of August 2005.


Item 2. MANAGEMENT'S DISCUSSION & ANALYSIS OF FINANCIAL CONDITION
        & RESULTS OF OPERATION

                              Management Discussion

o Dealerships for Equity agreement with CCWWi.

MDS has been in  negotiation  with Crystal  Clear  Window  Works Inc.  (CCWW) to
acquire the balance of the initial 50 dealerships  in exchange for equity.  That
discussion  led to the signing of a Letter of Intent on August 16,  2005.  Under
the agreement the company will issue 4.5 million  shares to CCWW in exchange for
47 dealership licenses and for consulting and support services to be provided by
CCWW in the sale of these  dealerships.  Subsequent  to the  Letter of Intent we
expect a formal  agreement  to be  signed  by the end of  August  2005.  The new
agreement further strengthens the relationship between the two companies.

With  this  agreement  in place  the  company  will now have 47  dealerships  in
inventory  and every  dealership  sold by the company will  generate  $45,000 in
revenue  based on the current  selling  price.  When MDS owns the 47  dealership
licenses outright,  cash flow can be strengthened  because every dealership sold
can net the company  $41,500 after  commission and we will still have the income
generated from royalties on supplies  purchased by the dealerships that are sold
by MDS under the terms of the original reseller agreement.

MDS has in the last few quarters  applied only minimum  resources to the sale of
dealerships due to the ongoing  discussions  with CCWW on the exchange of equity
for  dealerships  as the  outcome  would  affect the  relationship  between  the
companies.  Furthermore,  a new  obstacle to  dealership  sales  emerged when it
became more and more apparent that CCWW couldn't sell  dealerships into about 15
states  that have very  stringent  franchise  laws.  The  business  relationship
between CCWW and its dealers can in these states be construed to fall within the
definition of a  "franchise"  and a franchisor  must provide to the  prospective
franchisee  a  state  approved  Uniform  Franchise   Offering  Circular  (UFOC).
Therefore,  before CCWW and MDS can offer any dealerships in these states,  CCWW
must submit the UFOC to the applicable states for their approval.



                                       10
<PAGE>


Management's Discussion & Analysis of Financial Condition
 & Results of Operation - continued.


This issue was not evident when the reseller agreement was entered into. When it
became  apparent  that  the  western  US was  not  available  in  which  to sell
dealerships, it forced the company to re-evaluate its marketing approach because
the initial sales efforts were focused on this area.  Until the UFCO's have been
filed and approved in the applicable  states, the company has agreed not to sell
dealerships  in these  15  states.  CCWW is  preparing  to file the  appropriate
documents in most of these states before December 2005, thereby clearing the way
to sell dealerships in California, Oregon and Washington.

o Dealership Sales

Until the UFCO  documents have been approved later this year and early 2006, the
company will focus its dealership sales on the non-franchise  states and Canada.
We expect to sell 3  dealerships  before  the end of 2005 and when the UFCO have
been  approved  sales we expect to sell 5 dealerships  per quarter.  The company
plans to develop a marketing and sales plan in  cooperation  with CCWW as agreed
under the Letter of Intent.

o Set up of MDS owned Dealerships.

Because of the agreement reached with CCWWi the company's  original plans to set
up its own  corporately  wholly  owned  stores  needs to be revisited to be in a
alignment  with the  plans of CCWW in Canada  and the US.  The  dealerships  for
equity  agreement  should  enhance  cash flows for MDS  compared to the previous
arrangement,  because the full sales  price will now flow to the  company  which
would make it easier to finance corporately owned stores.  However,  the company
has agreed to coordinate the sale and set up of corporate  dealerships with CCWW
to ensure that strong brand  recognition  for CCWW is ensured  throughout  North
America and that our corporate  stores do not impede other  dealerships  sold by
CCWW  directly.  At this stage it is uncertain  how and where  corporate  stores
would be set up.

o Other Master Dealership Agreements

With the CCWW  agreement  in place,  the company  will resume its plan to pursue
other master dealership  agreements in the glass  restoration  industry or other
opportunities that have synergy with the current operation.


                              Results of Operation

Three Months Ended June 30, 2005 compared to Three Months Ended March 31, 2005.
-------------------------------------------------------------------------------

The company  facilitated  the sale of a  1-technician  dealership  in Canada and
received  a $5,030  commission.  This  dealership  is not  covered  under the 50
dealerships  in  reseller  agreement  as  the  agreement  only  covers  2  and 4
technician  dealerships.  An additional  $8,884  revenue was  generated  through
royalties on supplies  purchased  by the 2  dealerships  previously  sold by the
company in the 2nd quarter of 2004. Revenue for the 3 months ending 30 June 2005
was $13,914  compared to $2,087 in the period ending March 31, 2005. The revenue
in the previous quarter was from royalties on supplies only.



                                       11
<PAGE>


Management's Discussion & Analysis of Financial Condition
 & Results of Operation - continued.

Net loss for the period  decreased from $42,101 in the period ending March 31st,
2005 to $15,803 for the 3 months ended June 30, 2005. Even though no dealerships
were  sold  under  the  CCWW  reseller  agreement,  commissions  on  the  1-tech
dealership and  substantially  higher  royalties  resulted in an improved bottom
line.

Six Months Ended June 30, 2005 compared to Six Months Ended June 30, 2004.
--------------------------------------------------------------------------

Having put the brakes on dealership  sales,  due to the franchise issue referred
to earlier as well as the negotiations  with CCWW on the exchange of dealerships
for equity,  resulted in revenue of $16,001 from royalties and  commission  only
for the 6-month period ended June 30, 2005. This compares to $69,075 of revenue,
which came from the sale of 2 dealerships, during the same period in 2004. There
was no  revenue  from  royalties  during the first 6 months of 2004 as the newly
sold dealerships had not been long enough in operation at that time.

Net loss for the 6 months  ending June 30, 2005 was $57,925  compared to $50,997
for the same period in 2004.


                        Liquidity and Capital Resources.

At June 30, 2005, the company had $2,713 in cash and cash equivalents.

Sources of  liquidity  are  dealership  sales,  royalty on product  purchases by
existing  dealers and working  capital  provided  by OFG.  Although  the sale of
dealerships in some states is still not possible until the appropriate franchise
paperwork  has been  filed,  the  recent  agreement  with CCWW will allow MDS to
re-focus on dealership sales in Canada and the non-franchise states. This should
provide  sufficient  working  capital to  continue  our current  operations.  If
working  capital is  needed,  due to lack of  operating  revenue,  such  working
capital may be obtained through shareholder loans. To effectively take advantage
of the market  potential of the different glass  restoration  processes or other
similar master dealership agreements,  we would have to raise additional debt or
equity  capital.  Although  failure to raise capital when needed could adversely
impact the growth of our business,  operating  results and liquidity,  it is not
expected to put continued  operations  at risk.  If additional  funds are raised
through the issuance of convertible debt or equity securities, the percentage of
ownership of existing  stockholders  may be diluted.  Furthermore,  these equity
securities  might have rights,  preferences  or privileges  senior to our Common
Stock. Additional sources of financing may not be available on acceptable terms,
if at all.

We will have  sufficient  cash flow and working  capital  resources to cover all
operations  within the  parameters and guidelines we have set for our operations
for the next  twelve  (12)  months if we were to sell only  1dealership  every 2
months due to the fact that now the entire sales price will generate cash flows,
whereas before the cost of each dealership was a reduction of cash flows.

We will  continue  to  offer  a  $3,500  fee  for  referring  a  dealer  that we
successfully  sign up.  Management  fees  payable  to OFG amount to a maximum of
$12,000  per  month  depending  on  the  amount  of  time  spent  on  management
responsibilities   and  payments   thereto  are  deferred  until   liquidity  is
sufficient.



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<PAGE>


Item 3. Controls and Procedures

                Evaluation of Disclosure Controls and Procedures

Disclosure  controls  and  procedures  are  designed to ensure that  information
required to be  disclosed in the reports  filed or submitted  under the Exchange
Act of 1934 are recorded,  processed,  summarized and reported,  within the time
periods  specified  in the  rules  and  forms  of the  Securities  and  Exchange
Commission.  Disclosure  controls and procedures  include,  without  limitation,
controls  and  procedures  designed  to ensure that  information  required to be
disclosed  in the reports  filed under the  Securities  Exchange  Act of 1934 is
accumulated and  communicated to management,  including our Principal  Executive
Officer and  Principal  Accounting  Officer,  as  appropriate,  to allow  timely
decisions regarding required disclosure.

Within the 90 days prior to the filing  date of this  report,  we carried out an
evaluation of the  effectiveness  of the design and operation of our  disclosure
controls and procedures  pursuant to Exchange Act Rule 13a-14.  This  evaluation
was done  under the  supervision  and with the  participation  of our  Principal
Executive  Officer/Principal  Accounting Officer. Based upon that evaluation, we
have  concluded  that our  disclosure  controls and  procedures are effective in
gathering, analyzing and disclosing information needed to satisfy our disclosure
obligations under the Exchange Act.

                          Changes in Internal Controls

There were no significant  changes in our internal  controls or in other factors
that could significantly  affect those controls since the most recent evaluation
of such controls.


                                       13
<PAGE>

PART II: OTHER INFORMATION

Item 1. Legal Proceedings

         None

Item 2. Changes in Securities

         None

Item 3.  Defaults upon Senior Securities

         None

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

         None

Item 5: Other Information

         None

Item 6. Exhibits and Reports on Form 8-K

     (a) Exhibits

     31.1 Certificate of Principal Executive Officer

     31.2 Certificate of Principal Accounting Officer

     32.1 Certification  Pursuant  to 18 U.S.C.  1350,  as Adopted  Pursuant  to
          Section 906 of the Sarbanes-Oxley Act of 2002

     32.2 Certification  Pursuant  to 18 U.S.C.  1350,  as Adopted  Pursuant  to
          Section 906 of the Sarbanes-Oxley Act of 2002

     (b) Reports on Form 8-K

         Report filed on Form 8-K on March 21, 2005

                                       14
<PAGE>

                                   SIGNATURES

In accordance  with Section 13 or 15(d) of the Securities  Exchange Act of 1934,
the Registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.

MASTER DISTRIBUTION SYSTEMS, INC.
(Registrant)

By:/s/Harry P. Beugelink                    Date:  August 22, 2005
----------------------------
Harry P. Beugelink
Principal Executive Officer

By:/s/Harry P. Beugelink                    Date:  August 22, 2005
----------------------------
Harry P. Beugelink
Principal Financial Officer

By:/s/Harry P. Beugelink                    Date:  August 22, 2005
----------------------------
Harry P. Beugelink
Principal Accounting Officer

In accordance  with the  Securities  Exchange Act of 1934,  this report has been
signed below by the  following  persons on behalf of the  Registrant  and in the
capacities and on the dates indicated.

By:/s/Harry P. Beugelink                    Date:  August 22, 2004
----------------------------
Harry P. Beugelink
Director


                                       15
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