United States
                       SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C.  20549

                                 _____________

                                  FORM 10-QSB

                                   (Mark One)

 [ X ]   Quarterly Report Under Section 13 or 15(d) of the Securities Exchange
                                  Act of 1934

                         For the quarterly period ended

                                 March 31, 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: 000-49690


                        MCKENZIE BAY INTERNATIONAL, LTD.
       (Exact Name of Small Business Issuer as Specified in Its Charter)


             Delaware                                   51-0386871

    (State or Other Jurisdiction of        (IRS Employer Identification No.)
                         Incorporation or Organization)


                            37899 Twelve Mile Road, Ste.#300
                          Farmington Hills, Michigan 48331

                    (Address of Principal Executive Offices)

                                 (248) 489-1961

                   (Issuer's Telephone Number, Including Area Code)

Check whether the issuer: (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 ___


On May 20, 2005, the registrant had outstanding 28,984,114 shares of common
stock, $.001 par value.

Transitional Small Business Disclosure Format (check one):  Yes      No    X

------------------------------------------------------------------------------


                        MCKENZIE BAY INTERNATIONAL, LTD.
                              INDEX TO FORM 10-QSB

                                                                          Page
                                                                         Number
                                                                        --------
Part I. Financial Information

Item 1. Financial Statements...................................................1

 Condensed Consolidated Balance Sheets as
  of March 31, 2005 and September 30,2004,.....................................1

 Condensed Consolidated Statements of Loss and Comprehensive Loss for the
  three and six months ended March 31, 2005 and 2004...........................2

 Condensed Consolidated Statements of Cash Flows for
  the six months ended March 31, 2005 and 2004.................................3

  Notes to Condensed Consolidated Financial Statements.........................5

Item 2.  Management's Discussion and Analysis or Plan of Operation............16

Item 3.  Controls and Procedures..............................................18

Part II.  Other Information

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds..........19

Item 6.  Exhibits.............................................................19

Signatures....................................................................22
================================================================================

Item 1. Financial Statements

              MCKENZIE BAY INTERNATIONAL, LTD. and subsidiaries
                         (A development-stage company)
                     CONDENSED CONSOLIDATED BALANCE SHEETS
                        (Amounts stated in US dollars)

                                     ASSETS
         		                                March 31, September 30,
                                                           2005	       2004
						       (Unaudited)
						        ---------    --------
Current:
 Cash and cash equivalents	                       $  64,334    $ 562,250
 Refundable taxes and other receivables                   78,066       86,696
 Prepaid expenses and deposits		                 144,135      200,896
 Reclamation cash bond    		                 338,685      338,685
 Deferred issue and finance costs (note 4 & 8)           994,191      359,724
                                                        --------     --------
Total current assets		                       1,619,411    1,548,251
Property and equipment  		                  29,919       31,580
Other assets                                              37,144       35,590
                                                        --------    ---------
    Total assets	                              $1,686,474   $1,615,421
	                                               =========    =========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current:
 Bank indebtedness (note 10)	                      $   98,044    $ 102,264
 Accounts payable and accrued liabilities              2,251,673    2,380,916
 Convertible promissory notes, net of discount (note 4)	 102,750      643,944
 Promissory note (note 5)                              2,500,000            -
 Current portion of long-term debt       		 289,920      219,740
 Reclamation and closure liabilities     		 181,426      350,000
 Redeemable common stock (note 3)		          62,075       86,775
                                                        ----------  ----------
 Total current liabilities		               5,485,888    3,783,639
Long-term liabilities:
  Long-term debt          		               1,033,911    1,084,763
                                                       ----------  ----------
                                                       6,519,799    4,868,402
                                                       ----------  ----------
Commitments and Contingencies

Stockholders' equity (deficit):
 Common stock - $0.001 par value (note 3):
  75,000,000 shares authorized,
  28,307,798 and 26,407,393 shares
  issued and outstanding		                  26,718       24,818
 Additional paid in capital		              22,464,920   20,133,739
 Deficit accumulated during the development stage    (26,781,419) (23,020,986)
 Accumulated other comprehensive income (loss)		(543,544)    (390,552)
                                                     ------------ ------------
Total stockholders' deficit		              (4,833,325)  (3,252,981)
			                             ------------  ------------
Total liabilities and stockholders' deficit	    $ 1,686,474   $ 1,615,421
                                                     ============ ============
 (See accompanying notes to condensed consolidated financial statements)


<page>F-1


                MCKENZIE BAY INTERNATIONAL LTD. and subsidiaries
                         (A development-stage company)
                        CONSOLIDATED STATEMENTS OF LOSS
                                  (unaudited)
                         (Amounts stated in US dollars)

<table>
  
                                                     <c>                           <c>                      <c>
                                                                                                             Cumulative
                                                                                                           from inception
                                                       Three months ended           Six months ended        on August 23
                                                           March 31,                    March 31,              1996,to
                                                     2005           2004           2005          2004      March 31, 2005
                                                  ----------    -----------    ----------    ----------   ---------------
Revenue                                           $        -    $        -    $         -    $        -    $       12,825
                                                  ----------    -----------    ----------    ----------   ---------------
Expenses:
 Mineral resources                                   156,401         2,423        177,545        25,031         7,454,916
 Research, development, net                          373,854        91,180      1,266,630       114,358         2,572,481
 General administration                              104,809       111,521        186,541       195,869         1,676,403
 Wages and benefits                                   16,051        16,897         28,121        35,928         1,208,933
 Management wages and benefits                       213,424       872,457        372,969       995,481         3,871,845
 Professional fees                                   228,723       215,076        446,568       273,000         2,729,852
 Promotion and travel                                 58,750        30,717        119,374        66.154         1,120,629
 Depreciation                                          1,830         4,044          3,664         8,090           407,926
 Interest and finance charges (note 8)               653,227        18,156      1,335,680        34,673         1,769,625
 Write-down of assets                                      -             -              -             -         1,626,821
 Write-off of incorporation and
  reorganization costs                                     -             -              -             -           152,051
 Loss on marketable securities                             -             -              -             -         1,242,242
 Gain on sale of property and equipment                    -             -              -             -           (26,806)
 Gain on settlement of debt                         (176,570)            -       (176,570)            -          (176,570)
 Interest income                                         (88)       (3,059)           (88)       (3,103)          (28,088)
                                                    ---------      ----------     --------     ----------    -------------

Loss before income and
 mining taxes and cumulative
 effect of change in accounting principle         (1,630,411)    (1,359,412)   (3,760,434)   (1,745,481)      (25,589,435)
Income and mining tax recovery                             -              -             -             -           141,000
                                                    ---------     ----------    ---------     ---------       ------------
Loss before cumulative effect of change
  in accounting principle for SFAS 142            (1,630,411)    (1,359,412)   (3,760,434)   (1,745,481)      (25,448,435)

Cumulative effect of change in accounting
  principle for SFAS 142                                   -             -              -             -          (146,972)
                                                   ---------      ----------    ---------     ----------     -------------
Net loss                                          (1,630,411)    (1,359,412)   (3,760,434)   (1,745,481)      (25,595,407)
                                                   ---------      ----------    ---------     ----------     -------------
Foreign currency translation adjustment                1,307         30,053      (152,992)      (79,294)         (543,544)
                                                   ---------      ----------    ----------    ----------     -------------
Comprehensive loss                               $(1,629,104)   $(1,329,359)  $(3,913,426)  $(1,824,775)    $ (26,138,951)
                                                  ===========     ==========   ===========   ============    =============
Basic and diluted loss per share (note 7):
Net loss                                         $     (0.06)   $   (0.05)    $     (0.14)   $    (0.07)
                                                   ==========      ========     ==========    ==========


   (See accompanying notes to condensed consolidated financial statements)

</table>



<page>F-2
                MCKENZIE BAY INTERNATIONAL LTD. and subsidiaries
                         (A development-stage company)
                      CONSOLIDATED STATEMENT OF CASH FLOWS
                                  (Unaudited)
                         (Amounts stated in US dollars)
<table>

                                                     <c>            <c>           <c>
										       Cumulative
                                                                                     from inception
                                                          Six months ended            on August 23
                                                               March 31,                 1996,to
                                                          2005            2004       March 31, 2005
                                                       ----------      ----------    ---------------
Cash flows used in operating activities:
Net loss                                             $(3,760,434)   $   (1,745,481)  $   (25,595,407)
Adjustmemnts to reconcile net loss to net cash
 used in operating activities:
   Cumulative effect of change in accounting principle         -                 -           146,972
   Depreciation                                            3,664             8,090           407,926
   Amortization of debt discount and deferred
    finance costs                                      1,222,285                 -         1,317,844
   Expenses settled through issuance of common stock           -                 -         1,930,842
   Write-down of assets                                        -                 -         1,626,821
   Loss on sale of marketable securities                       -                 -         1,242,242
   (Gain) on sale of property & equipment                      -                 -           (26,806)
   (Gain) on settlement of debt                         (176,570)                -          (176,570)
   Stock-based payment                                     4,050           785,796         2,509,140
   Other                                                       -                 -           (30,061)
 Net change working capital items:
   Refundable taxes and other receivables	          13,241           102,532           (63,207)
   Deferred finance charges and issue costs             (634,467)                -          (658,731)
   Prepaid expenses and deposits                          56,761            55,022           (69,387)
   Accounts payable and accrued liabilities	           1,024           283,554         2,248,703
   Reclamation and closure cost                         (168,574)                -           181,426
                                                       ----------        ----------     -------------
Net cash used in operating activities                 (3,439,020)         (510,487)      (15,008,253)
                                                       ----------        ----------     --------------
Investing activities:
   Purchase of marketable securities		     $         -       $         -    $	  (1,767,835)
   Proceeds on sale of property and equipment		       -	         -	     100,000
   Proceeds on sale of marketable securities		       -		 -	     525,593
   Purchase of reclamation cash bond      		       -	         -	    (338,685)
   Purchase of property and equipment		          (2,375)           (6,499)       (2,085,550)
   Acquisition of business, net of cash acquired	       -		 -	     (31,286)
                                                       ------------    ------------      ------------
Net cash provided by (used by) investing activities       (2,375)	    (6,499)	  (3,597,763)
                                                        ------------   ------------      ------------
<page>F-3

Financing activities:
  Issuance of notes payable	                      $        -	$         -	$    350,000
  Increase in bank indebtedness                           (8,155)	     36,189	      83,671
  Proceeds from issuance of convertible
    debt and warrants                                          -	          -        1,121,505
  Increase in convertible note payment                  3,000,000                 -        3,000,000
  Payment of financing fees and issue costs              (542,500)	          -	    (642,500)
  Issuance of long-term debt		                        -		  -	     137,435
  Repayment of long-term debt                                   -           (19,445)        (137,435)
  Repayment of government assistance             	 (129,465)	          -         (129,465)
  Receipt of repayable government assistance               86,229             4,945        1,171,859
  Proceeds from sale of common stock		          545,000	    613,571	  13,860.558
  Proceeds from sale of options	    	                        -	          -	      33,160
  Redemption of redeemable capital stock 		        -		  -	     (37,500)
  Purchase of common stock for treasury		                -	          -	    (149,622)
                                                        ------------    ------------     ------------
Net cash provided by financing activities               2,951,109           635,260	  18,661,666
                                                        ------------    ------------     ------------
Effect of foreign currency exchange rate
    changes on cash and equivalents		           (7,630)	    (2,690)            8,684
                                                         ------------    ------------     ------------
Net increase (decrease) in cash and cash equivalents	 (497,916)	   115,584            64,334

Cash and cash equivalents, beginning of period	          562,250	    49,208		   -
                                                         ------------    ------------     ------------
Cash and cash equivalents, end of period	     $     64,334	$  164,792	 $    64,334
		                                         ============    ============     ============
Supplemental information:
Cash paid for interest	                             $	   11,167	$    7,975	 $   210,555
issuance of common stock in lieu of settlement
     of debt                                               74,750                -            74,750
Issuance of common stock in lieu of payment of issue
    costs		                                        -	         -           550,000
Issuance of common stock in lieu of repurchasing
    redeemable common stock	                           16,250	    30,000           186,250
Issuance of options in lieu of repurchasing
    redeemable common stock		                        -		 -	     605,210
Issuance of commons stock in lieu of repayment of
    convertable promissory note                           825,000                -           850,626
Issuance of common stock in lieu of payment
    of notes payable		                                -	         -	     356,424
Repurchase of common stock in settlement of
    accounts receivable		                                -                -            11,300


                      (See accompanying notes to condensed consolidated financial statements)
 </table>
<page>F-4

               MCKENZIE BAY INTERNATIONAL, LTD. and subsidiaries
                         (A Development Stage Company)
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  (Unaudited)
                               MARCH 31, 2005
          (Amounts stated in U.S. dollars unless indicated otherwise)

1.  Nature of operations

McKenzie Bay International, Ltd. and subsidiaries (Company) is a development
stage company with no operations.  The Company's primary business activity is
the development of wind powered alternative energy systems. In addition, the
Company holds mining claims to a vanadium/titanium deposit in Northern Quebec.

2.  Accounting policies

(a) Basis of presentation

The accompanying unaudited condensed consolidated 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 entries)
considered necessary for a fair presentation have been included.  The
accompanying financial statements should be read with Notes to Consolidated
Financial Statements included in the Company's Annual Report of Form 10-KSB for
the year ended September 30, 2004.  The balance sheet at September 30, 2004 has
been derived from the audited financial statements at that date but does not
include all of the information and footnotes required by generally accepted
accounting principles for complete financial statements.  Operating results for
the three-months and six-months periods ended March 31, 2005 are not necessarily
indicative of the results of operations that may be expected for the year ending
September 30, 2005.

The financial statements of the Company have been prepared on the basis of the
Company continuing as a going concern, which contemplates the realization of
assets and the payment of liabilities in the ordinary course of business. Should
the Company be unable to continue as a going concern, it may be unable to
realize the carrying value of its assets and to meet its liabilities as they
become due.

The Company suffered recurring losses and has a deficiency in net assets that
raise substantial doubt about its ability to continue as a going concern. The
Company's continued existence is dependent upon its ability to raise additional
capital and generate profits. However, management believes that it will be
successful at raising additional capital in the short-term and will have
profitable operations in the long-term.

The accompanying financial statements do not include any adjustments relating to
the recoverability and classification of recorded assets and classification of
liabilities that might be necessary should the Company is unable to continue as
a going concern.

<page>F-5

(b) Consolidation

These financial statements include the activities of the Company and its wholly-
owned subsidiaries, Lac Dore Mining Inc., Great Western Diamond Company, DERMOND
INC., WindStor Power Company and a 62.5% interest in Ptarmigan Energie Inc.  All
intercompany balances and transactions have been eliminated in consolidation.

(c) New accounting pronouncements

On December 16, 2004, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards (SFAS) No. 123 (revised 2004), Share-Based
Payment.  The new statement replaces existing requirements under SFAS No. 123,
Accounting for Stock-Based Compensation, and eliminates the ability to account
for share-based compensation transactions using APB Opinion No. 25, Accounting
for Stock Issued to Employees.  As a result, compensation cost relating to
share-based payment transactions will be measured based on the fair value of the
equity or liability instruments issued.  This statement does not change the
accounting for similar transactions involving parties other than employees.
Publicly traded companies must apply this statement as of the beginning of the
first annual period that begins after June 15, 2005, while those that file as
small business issuers must comply as of the beginning of the first annual
reporting period that begins after December 15, 2005.  This statement applies to
all awards granted after the required effective date and to awards modified,
repurchased, or cancelled after that date.  The cumulative effect of initially
applying this statement, if any, is recognized as of the required effective
date.  The Company has not completed its evaluation of the impact of adopting
the new statement on its consolidated financial statements, but anticipates that
additional compensation costs will be recorded if the use of options for
employee and director compensation continues.

(d) Share Based Payment

The Company has stock-based compensation plans which are described in note 3.
The Company uses the fair value method of accounting for all stock options and
common shares issued to non-employees for services in accordance with the
provisions of SFAS No. 123 and the intrinsic value method for stock options
granted to employees, officers and directors in conformity with APB Opinion
No. 25 and its related interpretations, as allowed by SFAS No. 123.  Under the
fair value method, compensation cost is measured at the date of the grant and
recognized over the vesting period, as is the case under the intrinsic value
method when the exercise price is lower than the current market price at the
date of the grant.

<page>F-6

Had the compensation cost for stock options issued to employees, officers and
directors been determined based on the fair value method consistent with SFAS
No. 123, the Company's net loss and loss per share would have been as follows
for the periods ended March 31, 2005 and 2004:

<table>

                                          <c>                          <c>

				          Three Months                   Six Months
                                         Ended March 31,               Ended March 31,
			               2005          2004             2005          2004
        		            -----------   ------------    -----------   ------------
 Net loss, as reported	          $ (1,630,411)	 $ (1,359,412)	$ (3,760,434)  $ (1,745,481)
 		                    -----------   ------------    -----------   ------------
 Add:  Stock-based employee
 compensation expense included
 in reported net income, net
 of related tax effects                  2,025        726,442          4,050        732,884

 Deduct:  Total stock-based
 employee compensation expense
 determined under the fair value
 method for all awards, net of
 related tax effects                   (63,855)    (1,010,334)      (872,162)    (1,931,095)
                                   -------------  -------------   -------------  ------------
 Pro forma net loss	          $ (1,692,241)  $ (1,643,304)   $(4,628,546)   $(2,943,692)
 				   =============  ==============  =============  ============
 Basic and diluted loss per share:
 As reported			  $      (0.06)  $     (0.05)    $     (0.14)   $      (0.07)
 Pro forma	                  $      (0.06)  $     (0.06)    $     (0.17)   $      (0.12)

The fair value of options was estimated as of the date of grant using the Black-
Scholes option-pricing method with the following weighted average assumptions
for the periods ended March 31, 2005 and 2004:
  Three months ended
                                      Three months ended     Six months ended
			                  March, 31              March 31,
			                 2005   2004	      2005     2004
			                -----  ------        -------  -------
 Risk-free interest rate                    -    4.32%        4.06%    3.30%
 Expected average life (years)              -   10.00         9.19     7.57
 Dividend yield		                    -       -            -        -
 Volatility		                    -	  105%        128%     168%
 Fair values of option grants per share	$   -   $1.72       $1.15     $1.09

(e) Reclassifications

Certain amounts from the prior year have been reclassified to conform to the
current year presentation.

</table>

<page>F-7

3.  Common stock

The following table summarizes the activity related to common stock for the
three months ended March 31, 2005:

<table>
<caption>

                                     <c>                                    <c>
                            			             Additional
                               Shares      Common stock     paid in capital    Total
                            ----------------------------------------------------------
Balance, September 30, 2004  26,407,393	     $	24,818	     $20,133,739   $20,158,557

Common shares issued
for cash ($1.18 Wt.
Avg./share)                      42,481	            42	          40,066        40,108

Common shares issued
for services ($2.25 Wt.
Avg./share)                     119,984	           120	         269,880       270,000

Stock options issued
for compensation                     - 	             -	           2,025         2,025

Value of beneficial
conversion feature of
convertible promissory note          -	             -		 568,661       568,661
(Note 4)

Fair value of warrants
issued to private placement
agent for  convertible
promissory note                      -	             -	         115,822       115,822
--------------------------------------------------------------------------------------
Balance, December 31, 2004  26,569,858	     $  24,980	     $21,130,193   $21,155,173
--------------------------------------------------------------------------------------

Common shares issued for
settlement of debt ($1.15 Wt.
Avg./share)                     65,000              65             74,685       74,750

Common shares issued for cash
 and other ($0.68 Wt, Avg/
 share)                        569,931             570            387,005      387,574

Common shares issued on
 conversion of promissory
 notes ($0.75 wt. Avg/share) 1,100,009           1,100            823,900      825,000

Common shares issued for
 exercise of options ($1.00
 Wt. Avg./share                  3,000               3              2,997        3,000

Stock option compensation            -               -              2,025        2,025

Fair value of warrant issued
 to private placement agent          -               -             35,665       35,665

Expiry of redeemable captial
 stock rights                        -               -              8,450        8,450
---------------------------------------------------------------------------------------
Balance, March 31, 2005     28,307,798        $ 26,718        $22,464,920  $22,491,638
=======================================================================================

</table>
<page>F-8

(a) 	Share-based incentive plans

The Company has three share-based incentive plans, each being limited so that
options to acquire no more than 2,500,000 common shares per plan may be
outstanding at any one time.

(i)	Under the 2001 Employee Incentive Stock Option Plan, options may be
granted at an exercise price equal to the market price on the date of the grant.
All options expire no later than ten years from the grant date.  In the event an
option is granted to an employee who owns 10% or more of the voting power of
common stock of the Company, the purchase price of each share shall be 110% of
the market price on the date of grant and the expiration date of the option
shall be no more than five years from the date of grant of such option.  As of
March 31, 2005, options to purchase an aggregate of 725,000 common shares have
been issued under this plan.

(ii)	Under the 2001 Employee Non-Qualified Stock Option Plan, options may be
granted to employees or certain non-employees at an exercise price as determined
by the administrator of the plan on the date of the grant.  The options expire
ten years from the date of grant.  As of March 31, 2005, options to purchase an
aggregate of 2,080,000 common shares have been issued under this plan.

(iii)	Under the 2001 Directors Non-Qualified Stock Option Plan, options may be
granted to directors of the Company or certain non-employees for terms of up to
ten years at an exercise price as determined by the administrator on the date of
the grant.  The options vest over three years.  As of March 31, 2005, options to
purchase an aggregate of 1,709,584 common shares have been issued under this
plan.

The following tables contain information with respect to all options granted by
the Company, in addition to those granted under the preceding incentive plans:

                                                          Weighted
                                                          average
                                                          exercise
                                                           price
                                                            per
                                         Shares            share
                                     --------------    -------------
Options outstanding,
  September 30, 2004                    13,632,817         $ 1.08
        Granted                            924,167         $ 1.33
                                     --------------    -------------
Options outstanding,
 December 31, 2004                      14,556,984         $ 1.10
        Exercised                           (3,000)        $ 1.00
        Expired                            (55,500)        $ 2.00
                                     --------------    -------------
Options outstanding,
 March 31, 2005                         14,498,484         $ 1.10
                                     ==============    =============

<page>F-9

                     Outstanding options         Exercisable options
	             ---------------------     ------------------------
	              Weighted  Weighted                         Weighted
	              Average   average                           average
	               life     price                             price
  Price      Shares   (years)  US$/share           Shares       US$/share
  ------   --------  -------  ----------          ---------    ----------
  0.74	     300,000	2.70	$0.74		     -		$      -
  1.00	  10,921,917	4.27     1.00		10,401,917          1.00
1.22-1.25    617,400	2.88	 1.24		   467,400	    1.25
1.30-1.50  2,059,167	6.84	 1.37		 1,434,167          1.39
  1.88	     525,000	8.75	 1.88		   525,000          1.88
2.00-3.00     75,000	3.98     2.70	            75,000          2.70
          ----------                            -----------
	  14,498,484				12,903,484
          ==========                            ==========
(b)  Stock warrants

As of March 31, 2005, the following warrants for the purchase of common stock
are outstanding:
                                   Number
                                 of warrants
                               --------------
Outstanding, September 30, 2004	2,153,980
Issued                           150,000
Expired	                        (190,625)
---------------------------------------------
Outstanding, December 31, 2004	2,113,355
Issued                             59,513
Expired	                           (7,937)
---------------------------------------------
Outstanding, March 31, 2005     2,164,931
=============================================

The warrants outstanding at March 31, 2005, can be exercised at prices ranging
from $0.78 to $3.00.  The expiration dates of the warrants range from August 19,
2005 to March 29, 2007.

<page>F-10

(c) Redeemable common stock

The Company has granted to the holders of an aggregate of 24,100 outstanding
common shares the right to require the Company to repurchase the shares at a
price of $3.25 per share.  If the holders exercise their rights, the Company
will be obligated to pay, as of March 31, 2005 or gradually over the this fiscal
year, a maximum amount of $62,075.

4. Convertible promissory notes

On August 13, 2004, the Company borrowed $500,000 from 13 lenders and issued its
12% convertible promissory notes in that aggregate amount.  The notes and
interest were due and payable on the 14th day of November 2004.  If, however, a
registration statement filed by the Company under the Securities Act of 1933 to
register the shares which may be obtained by the lenders upon conversion of the
notes has been declared effective by the Securities and Exchange Commission
(SEC) by that date, the maturity date of the notes would be extended for a
period of 90 days from the date the registration statement was declared
effective and the lenders can convert the notes into a total of 666,667 shares
of common stock during the 90 day period.  The Company also issued warrants to
the lenders for the purchase of an aggregate of 750,000 shares of the Company's
common stock on or before August 13, 2006 at $1.07 per share.   Interest is due
upon the conversion of the promissory notes to shares of common stock or when
the promissory notes are due.

On September 7, 2004, the Company borrowed $598,450 from ten lenders and issued
its 12% convertible promissory notes in that aggregate amount.  The terms of the
notes and the issuance of warrants in connection with the notes are
substantially the same as those of the loans of August 13, 2004, except that the
notes are convertible into 746,867 shares of common stock and lenders received
warrants for the purchase of an aggregate amount of 873,300 shares of common
stock on or before September 7, 2006, at $1.42 per share.

On November 15, 2004, the registration statement which included the shares
obtainable by the lenders upon conversion of the promissory notes, was declared
effective by the SEC.

The 12% promissory notes and warrants were recorded at their relative fair
values. The fair value assigned to the warrants of $529,789 was estimated using
the Black Scholes option-pricing model.  The intrinsic value of the conversion
feature at the date the promissory notes were issued was $568,661, after taking
into account the fair value of the warrants.  These amounts have been recorded
as debt discount, with an offsetting increase to additional paid-in capital.  As
of March 31, 2005, all of the debt discount has been amortized as additional
non-cash interest expense over the life of the debt using the effective interest
method.

<page>F-11

The Company also incurred $100,000 of costs in connection with the issuance of
the convertible promissory notes.  These costs have been amortized on a basis
that approximates the interest method over the expected term of the related
debt.

During the quarter ended March 31, 2005, $825,000 of the promissory notes were
converted into 1,100,009 common shares.  A further $175,000 of promissory notes
was repaid to lenders who chose not to convert into common shares.  The maturity
date for the remaining promissory note of $102,750 has been extended until
September 30, 2005 with all other terms of the promissory note remaining the
same.

5. Promissory notes

On January 10, 2005, the Company borrowed $1,000,000 from Cornell Capital
Partners and issued a promissory note to Cornell Capital Partners in that
amount.  At the same time, the Company placed 1,000,000 shares of common stock
in escrow with an escrow agent designated by Cornell Capital Partners and also
deposited with the same escrow agent 19 requests for advances under the Standby
Equity Distribution Agreement, each in the amount of $50,000 and one such
advance in the amount of $75,479.45.  The escrow agent agreed to release the
requests to Cornell Capital Partners every seven days beginning January 17,
2005.  Upon the release of each request, the appropriate number of our shares
held in escrow will be issued to Cornell Capital Partners.

The promissory note issued to Cornell Capital Partners bears interest at the
annual rate of 12% and is payable on or before June 4, 2005.  Proceeds from the
sale of the shares issued to Cornell Capital Partners will be utilized in
payment of outstanding amounts under the promissory note.  In the event that
during the life of the promissory note, the proceeds from the sales of the
escrowed shares are insufficient to repay all amounts due, the Company will
immediately place in escrow such number of additional shares of its common stock
of which the proceeds of the sale of such shares shall be sufficient to repay
all amounts due under the promissory note. There is no limit on the number of
shares the Company may be required to issue to Cornell Capital Partners to
satisfy its obligation under the promissory note.  Any decline in the market
price of the Company's shares will increase the number of shares the Company
would otherwise be required to issue to Cornell.

On each of February 14, 2005 and March 14, 2005 the Company borrowed an
additional $1,000,000 from Cornell Capital Partners under the same terms and
conditions, except that the weekly advances will begin June 6, 2005 and the
promissory notes are payable on or before October 17, 2005 and October 21, 2005,
respectively. The share escrow with respect to the loans consists of 2,000,000
shares and 1,000,000 shares, respectively.

<page>F-12

The Company's proceeds from the promissory notes were reduced by the prepayment
of fees due to Cornell Capital, the placement agent, investment advisors and the
escrow agent for the advances of shares under the terms of the Standby Equity
Distribution Agreement. These prepaid fees have been recorded as deferred issue
costs and will be amortized as shares are issued to Cornell Capital as repayment
of the promissory notes.

6. Standby equity distribution agreement

On April 6, 2004, the Company entered into a Standby Equity Distribution
Agreement (SEDA) with Cornell Capital Partners, L.P (Cornell Capital Partners).
Under the Agreement and subject to its terms and conditions, the Company may
require Cornell Capital Partners to purchase newly issued common shares from the
Company, for a maximum total purchase price of $15 million over a 24-month
period, less certain fees and expenses.  The amount of any advance (periodic
sale of stock) may not exceed $625,000 and the Company may not request advances
if the shares to be issued in connection with such advances would result in
Cornell Capital Partners owning more than 9.9% of the Company's then outstanding
common stock.  The Company incurred $550,000 in issue costs related to the
signing of the Agreement.  These costs were settled through the issuance of
224,412 of common shares at $2.25 per share, which represented the volume
weighted average trading price of the Company's shares on the signing date of
the agreement.  These costs have been deferred and will be treated as a
reduction to the proceeds from the shares issued under the Agreement.

Under the terms of the SEDA, the Company will pay 5% of the proceeds to Cornell
Capital Partners as a fee and $500 each sale to the escrow agent for services.

Additionally, the Company will pay 10% of the proceeds to the placement agent as
a fee and issue warrants to the agent to purchase the Company's common stock
equal to 10% of the number of the Company's common stock issued in each advance.
Effective January 10, 2005 the company will pay an advisory fee of 2-2.5% to a
company related to Cornell Capital Partners LLP.

7.  Basic and diluted loss per common share

<table>

                                  <c>                             <c>
                            Three Months ended March 31,    Six Months ended March 31,
                             2005               2004           2005           2004
                          ------------       --------------  ------------   -----------
Net Loss                 $ (1,630,411)     $   (1,359,412)  $ (3,760,434)  $(1,745,481)
                          ------------       --------------  ------------   -----------
Total Weighted Average
Number of Common Shares
and Equivalents            28,093,859          25,583,250     26,839,146    25,452,712
                          ------------       --------------  ------------  ------------
Net Loss per
Common Share            $       (0.06)       $      (0.05)   $     (0.14)  $     (0.07)
                          ============       ==============  ============   ===========

</table>
<page>F-13

The following outstanding common stock equivalents were excluded from the
computation of diluted net loss per share attributable to common stockholders as
they had an anti-dilutive effect:



						      Shares at end of
						          March 31,
						       2005	   2004
						------------------------------
Shares issuable upon exercise of stock options      14,498,484	13,522,817
Shares issuable upon exercise of warrants	     2,164,931	   806,035
Shares issuable upon conversion of promissory note      80,200     	 -




8. Interest and finance charges

Interest and finance charges consist of the following:

<table>

                                       <c>                               <c>

                                     Three Months ended March 31,    Six Months ended March 31,
                                        2005               2004           2005           2004
                                    ------------       --------------  ------------   -----------
Amortization of the fair value of     $  60,197          $      -      $   119,395      $     -
 warrants issued for placement fees
Amortization of debt discount
 related to the intrinsic value of
 the beneficial conversion feature
 of the convertible promissory notes    330,404                  -          568,661            -
Amortization of deferred finance
 charges and issue costs paid
 in connection with the convertible
 promissory note                         25,793	                 -           79,724            -
Amortization of debt discount related
 to warrants issued in connection with
 the convertible promissory notes       179,088                  -          454,506            -
Interest paid on convertible promissory
  notes                                   8,494                  -           39,161            -
Interest on promissory note              38,762                  -           38,762            -
Other interest	                   	 10,490              18,156          35,472       34,673
                                     -------------------------------------------------------------
                                     $  653,227           $  18,156     $ 1,335,680     $ 34,673
                                     =============================================================
</table>
<page>F-14

9.  Related party transactions

The Company has retained a law firm to perform legal services for which Company
has incurred total expenditure of $68,795 for services for the three months and
$110,264 for the six months ended March 31, 2005 ($36,662 for three months and
$58,161 for six months ended March 31, 2004). A director of the Company is a
partner in that law firm. The transactions were valued at the exchange amount,
which is the amount of consideration agreed to by the related parties. As of
March 31, 2005 an amount of $133,032 ($118,456 as of March 31, 2004) resulting
from these transactions is included in accounts payable and accrued liabilities.

10.  Commitments and Contingencies

The company has provided to a creditor a 50% lien on the reclamation bond on
deposit with the state of Colorado with payment being made in the event that the
Great Western Diamond Company is sold and the deposit returned.

As a result of exploration work performed at the Lac Dore Vanadium/Titanium
Project, the Company has a potential environmental liability in the range of
$15,000 to $30,000.  This liability will not be incurred if the project goes
into production.  As management believes that the project will go into
production, the amount has not been accrued in the financial statements.

        Royalty Agreements

The Company has entered into a royalty agreement that will pay 2.5% of Dermond
wind turbine sales to the former owners.

        Bank Indebtedness and other loans

The bank indebtedness of DERMOND INC. in the amount of $94,037 as of March 31,
2005 ($90,101 as of September 30, 2004), carries interest at 7.5% per annum and
is secured by an assignment of DERMOND INC.'s  refundable research and
development tax credit.

The bank indebtedness of Great Western Diamond Company in the amount of $4,007
as of March 31, 2005 ($12,163 as of September 30, 2004), carries interest at 8%
per annum and is secured by the assets of Great Western Diamond Company.

<page>F-15

        Legal

In the normal course of business, the Company and its subsidiaries are parties
to various legal claims, actions and complaints and various other risks. It is
not possible to predict with certainty whether or not the Company and its
subsidiaries will ultimately be successful in any of these legal matters or, if
not, what the impact might be. However, the Company's management does not expect
that the results in any of these legal proceedings will have a material adverse
effect on the Company's results of operations, financial position or cash flows.

	Rental of Premises

On March 2, 2005, the Company entered into a three-year operating lease for
office facilities with an unrelated third party.  In addition to the minimum
rents due under the lease terms, the Company is responsible for its
proportionate share of common area costs. Future minimum lease payments under
the terms of the operating lease are $98,784 for 2006, $102,488 for 2007 and
$108,192 for 2008.

11.	Subsequent events

On May 13, 2005, the Company borrowed $500,000 from Cornell Capital Partners and
issued a promissory note to Cornell Capital Partners in that amount.  At the
same time, the Company placed 1,000,000 shares of common stock in escrow with an
escrow agent designated by Cornell Capital Partners and the Company deposited
with the escrow agent 5 requests for advances under the Standby Equity
Distribution Agreement, each in the amount of $100,000 and one such advance in
the amount of $40,534.25.  The escrow agent has agreed to release the requests
to Cornell Capital Partners every seven days beginning June 6, 2005.  Upon the
release of each request, the appropriate number of the Company's shares held in
escrow will be issued to Cornell Capital Partners.

The promissory note issued to Cornell Capital Partners bears interest at the
annual rate of 14% and is payable on or before October 21, 2005.  Proceeds from
the sale of the shares issued to Cornell Capital Partners will be utilized in
payment of outstanding amounts under the promissory note.  In the event that
during the life of the promissory note, the proceeds from the sales of the
escrowed shares are insufficient to repay all amounts due, the Company will
immediately place in escrow such number of additional shares of its common stock
of which the proceeds of the sale of such shares shall be sufficient to repay
all amounts due under the promissory note.  There is no limit on the number of
shares the Company may be required to issue to Cornell Capital Partners to
satisfy its obligation under the promissory note.  Any decline in the market
price of the Company's shares will increase the number of shares the Company
would otherwise be required to issue to Cornell.

<Page>F-16

Item 2. Management's Discussion and Analysis or Plan of Operation.


Development of WindStor

Testing of the 100 kilowatt (kW) WindStor Wind Turbine ("WWT") prototype,
installed at the Universite du Quebec en Abitibi-Temiscamingue, in Rouyn-
Noranda, Quebec Canada, continued during the quarter ended March 31, 2005.  In
January, the first series of systems testing was completed.  During the rest of
the quarter, tests evaluating WWT operating controls were conducted with a goal
of autonomous operation in late spring.

Engineering of a commercial version of the WWT in a 200 kW configuration
advanced during the quarter.   Final engineering drawings are expected to be
complete in mid May and orders for the first two commercial units placed shortly
thereafter.  These orders will depend upon adequate funding to pay for the units
and complete installation.  Sites for the installations have not been finalized
as of this date.

During the March 31, 2005 quarter we spent approximately $340,983 on WindStor
related R&D expenditures and approximately $1,203,008 for the fiscal year to
date.

Our plan to go directly to commercial installations for the 200 kW WWTs has
altered the funding requirements.  Previously we intended to install a 200 kW
prototype at a Department of Energy site for testing.  Now this location has
requested commercial installations to meet a portion of their electricity load
with renewable energy.  The terms of a potential commercial installation (the
number of WWTs and selling price of electricity) are in discussion.  Our near
term funding expectations are as follows, if we are able to obtain the funds:

	                       REQUIRED              ANTICIPATED
        USE                     FUNDS	      TIME PERIOD FOR USE OF FUNDS
--------------------------------------------------------------------------
Design & Engineering Completion	$  100,000	1 month
2 x 200 kW WWT Fabrication	$1,000,000	3 months
Installation and Commissioning	$  500,000	1 month

Our business model continues to focus on retained ownership of the WindStor
installations and the sale of electricity generated by WWTs to WindStor
customers.  If our WIndstor prototype performs as we anticipate and WindStor
operates successfully in initial commercial installations, we will seek debt
financing to fund a portion of future WindStor installations.  We will, however,
require significant amounts of capital to install WindStor and for general and
administrative expenses.  If we are successful in obtaining funds to be utilized
in connection with WindStor, we intend to allocate them as follows:

      USES	                                 Balance of FY 2005
--------------------------------------------------------------------
Cash Used For Operations	                       $ 2,600,000
Engineer and test WindStor prototypes and ongoing R&D  $   400,000
Capital Expenditures - WindStor Projects               $ 1,400,000
Repayment of Long Term Debt	                       $   110,000
Inventory, working capital, funding availability       $ 5,490,000
--------------------------------------------------------------------
TOTAL	                                               $10,000,000
                                                      ==============

18 companies in the United States have entered into sales representation
agreements with us that provide for a payment to them in the event that one or
more WindStors are sold or leased through their efforts. The payment will
consist of 5% of WindStor's installed cost payable within 60 days of
installation of a system, exclusive of taxes and transportation.  Certain of the
agents will also receive a 2% "carried equity interest" in each WindStor system
they sell.  Each of the agents has represented to us that it has expertise in
the sale and promotion of energy products.

Lac Dore Mining Co.

Management has decided to seek a buyer or strategic partner for the Lac Dore
deposit.  Current market prices, at all time highs for Vanadium pentoxide, and
our focus on WindStor have initiated this effort.  We intend to engage an
Investment Banking firm to assist us in this activity.

We intend to continue the development of our vanadium refining technologies if
funding becomes available.  Whether this technology is part of a potential sale
of Lac Dore will depend upon the value allocation.  We may consider a license of
the technology rather than sale if the prospects of increased value is
determined.

Cash Requirements for 2005 Fiscal Year Administrative Costs

To date our activities have been funded primarily through the sale of equity
securities and financial assistance from Canadian governmental agencies in the
form of loans and grants.  As noted above, we must obtain substantial additional
capital to engage in our proposed businesses.

Our anticipated cash requirements for administrative costs for the balance of
our fiscal year ending September 30, 2005 (including direct support of
subsidiary operations) are as follows:


     USE	                                         AMOUNT
-------------------------------------------------------------------
Employee salaries	                               $1,500,000

Professional costs (includes consultants, outside
accountants, independent auditors and legal counsel)   $  435,000

General and administrative (includes lease obligations,
travel and other administrative costs)	               $  636,000
--------------------------------------------------------------------

Neither McKenzie Bay nor our subsidiaries are able to continue development and
administrative functions for more than a few months unless additional funding
becomes available.

In the notes to our financial statements we have indicated that because we have
suffered recurring losses and have a deficiency in assets (and working capital)
there is substantial doubt about our ability to continue as a going concern.
Our auditors have included this in their report dated January 12, 2005 on our
consolidated financial statements for the year ended September 30, 2004.

There can be no assurance that we will be able to obtain adequate funding from
outside sources to fund our operations.  If we are unable to obtain the
necessary funding, we will not be able to continue to operate.

Additional Employees and other Employment related activities

Currently, we have 11 fulltime employees.  DERMOND will need to add a number of
employees in anticipation of successful WWT and WindStor prototype testing.
Additions include, project managers, mechanical, aeronautic and electrical
engineers and administrative personnel.  WindStor Power Co. intends to add
project managers and administrative personnel.  McKenzie Bay intends to add
administrative personnel, including a controller and project supervisor.

Forward-Looking Statements

This Form 10-QSB contains statements that are forward-looking statements. In
some cases, you can identify forward-looking statements by terminology such as
"estimates," "anticipates," "plans," "believes," "projects," "expects,"
"intends," "predicts," "potential," "future," "may," "contemplates," "will,"
"should," "could," "would" or the negative of such terms or other comparable
terminology. These statements relate to our future operations and financial
performance or other future events.  Many of the forward-looking statements are
based on current expectations, management beliefs, certain assumptions made by
our management and estimates and projections about our industry.

Forward-looking statements are not guarantees of future performance and are
subject to certain risks, uncertainties and assumptions that are difficult to
predict with respect to timing, extent, likelihood and degree of occurrence.
Therefore, actual events, results, performance or achievements may differ
materially from the events, results, performance or achievements expressed,
forecasted or contemplated by any such forward-looking statements.  In addition
to factors described in this Quarterly Report on Form 10-QSB for the quarter
ended December 31, 2004, and other periodic reports filed with the SEC including
those disclosed in our Annual Report on Form 10-KSB for the fiscal year ended
September 30, 2004 under the caption "FORWARD LOOKING STATEMENTS AND CERTAIN
RISKS ASSOCIATED WITH AN INVESTMENT IN OUR COMMON STOCK," which disclosure is
hereby incorporated by reference, could cause actual results to differ from
those described in the forward-looking statements.

Item 3.  Controls and Procedures.

We maintain controls and procedures designed to ensure that information required
to be disclosed in the reports that we file or submit under the Securities
Exchange Act of 1934 is recorded, processed, summarized and reported within the
time periods specified in the rules and forms of the Securities and Exchange
Commission. Based upon their evaluation of those controls and procedures
performed as the end of the period covered by this report, our chief executive
officer and the principal financial officer concluded that our disclosure
controls and procedures were adequate.  There were no significant changes in our
internal control over financial reporting identified in connection with the
evaluation that has materially affected, or is reasonably likely to materially
affect, our internal control over financial reporting.

PART II.  OTHER INFORMATION

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

The following information relates to equity securities we sold during the
quarter ended March 31, 2005 that were not registered under the Securities Act
of 1933.

On January 4, 2005, we sold 3,000 shares of common stock to an investor at $1.00
per share, upon the exercise of an option.

On March 18, 2005, we issued 17,291 shares of common stock to an individual in
exchange for the cancellation of his right to require us to repurchase an
aggregate of 5,000 shares of our common stock from him at $3.25 per share.

There were no principal underwriters in connection with any of the foregoing
transactions.

We claimed exemption from registration provisions of the Securities Act of 1933
pursuant to Section 4(2) thereof and/or Rule 506 thereunder.  Although we
believed that the transactions did not involve a public offering and that each
purchaser either received adequate information about us or had access, through
employment or other relationships, to such information, the exemptions may not
have been available to us.

(b)	We did not receive any "offering proceeds" within the meaning of Rule
463 under the Securities Act of 1933 during the period covered by this report.

(c)  During the quarter ended December 31, 2004, there were no purchases by or
on behalf of us or any "affiliated purchaser" as defined in Rule 10b-18(a)(3)
under the Securities Exchange Act of 1934 of shares or other units of any class
of our equity securities.


Item 6.  	Exhibits.

Exhibit
Number        Description

2.1	Share Purchase Agreement between McKenzie Bay International, Ltd. and
	Jacquelin Dery, Laurent Mondou and Experts Conseils Dermond Inc. of
	February 12, 2002. Previously filed as an exhibit to Amendment No. 2 to
	our registration statement on Form 10-SB and incorporated herein by
	reference.

3.1	Certificate of Incorporation, as amended. Previously filed as an exhibit
	to our registration statement on Form 10-SB and incorporated herein by
	reference.

3.2	Bylaws. Previously filed as an exhibit to our registration statement on
	Form 10-SB and incorporated herein by reference.

4.1	See Exhibits 3.1 and 3.2.

4.3	Specimen Stock Certificate. Previously filed as an exhibit to our Annual
	Report on Form 10-KSB for the fiscal year ended September 30, 2002 and
	incorporated herein by reference.

4.4	Form of Warrant. Previously filed as an exhibit to our Annual Report on
	Form 10-KSB for the fiscal year ended September 30, 2002 and
	incorporated herein by reference.

4.5	Form of Subscription Agreement. Previously filed as an exhibit to our
	Annual Report on Form 10-KSB for the fiscal year ended September 30,
	2002 and incorporated herein by reference.  Previously filed as an
	exhibit to our Quarterly Report on Form 10-QSB for the quarterly period
	year ended June 30, 2004 and incorporated herein by reference.

4.6	Promissory Note and Warrant issued on August 13, 2004, letter of August
	16, 2004 amending certain terms and "Debenture" setting forth certain
	terms.  Previously filed as an exhibit to our Quarterly Report on Form
	10-QSB for the quarterly period ended June 30, 2004 and incorporated
	herein by reference.

4.7	Promissory Note and Warrant issued on September 7, 2004 and "Debenture"
	setting forth certain terms.  Previously filed as an exhibit to our
	Quarterly Report on Form 10-QSB for the quarterly period ended June 30,
	2004 and incorporated herein by reference.

4.8     Form of Promissory Notes payable to Cornell Capital Partners, LP.
	Previously filed as an exhibit to our Annual Report on Form 10KSB for
	the fiscal year ended September 30, 2004 and incorporated herein by
	reference.

10.1    Consulting Services Agreement of January 10, 2005 between McKenzie
	Bay International, Ltd, and Stone Street Advisors, LLC.  Previously
	filed as an exhibit to our Annual Report on Form 10KSB for the fiscal
	year ended September 30, 2004 and incorporated herein by reference.

31.1	Rule 13a-14(a) Certification of Gary L. Westerholm. ++

31.2    Rule 13a-14(a) Certification of Gregory N. Bakeman. ++

32.1    Certification Pursuant to 18 U.S.C. Section 1350
        of Gary L. Westerholm.++


32.2   Certification Pursuant to 18 U.S.C. Section 1350
       of Gregory N. Bakeman.++

++	Filed herewith.


SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.


	McKENZIE BAY INTERNATIONAL, LTD.


Date:  May 23, 2005

By:	/s/ Gary L. Westerholm
	-----------------------
	    Gary L. Westerholm
            President, Chief Executive Officer and Director
            (Principal Executive Officer)


Date:  May 23, 2005

By:	/s/ Gregory N. Bakeman
	-----------------------
	Gregory N. Bakeman
        Treasurer, Chief Financial Officer and
        Director (Principal Financial and Accounting Officer)