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

                                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: 000-49690


                        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 ___

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

On August 17, 2005, there were  29,883,471 shares  outstanding of the issuer's
common stock, $.001 par value.

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


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

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

Item 1. Financial Statements...............................................F-1

 Condensed Consolidated Balance Sheets as
  of June 30, 2005 and September 30,2004,..................................F-1

 Condensed Consolidated Statements of Loss and Comprehensive Loss for the
  three and nine months ended June 30, 2005 and 2004.......................F-2

 Condensed Consolidated Statements of Cash Flows for
  the nine months ended June 30, 2005 and 2004............................ F-3-4

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

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

Item 3.  Controls and Procedures...........................................5

Part II.  Other Information

Item 6.  Exhibits..........................................................5

Signatures.................................................................6
================================================================================

Item 1. Financial Statements



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

                                    ASSETS
         		                                 June 30   September 30
                                                           2005	       2004
						       (Unaudited)
						       ---------    ---------
Current:
 Cash and cash equivalents	                       $ 152,435     $ 562,250
 Refundable taxes and other receivables                  110,398        86,696
 Prepaid expenses and deposits		                  94,460       200,896
 Reclamation cash bond		                          41,000       338,685
 Deferred issue and finance costs (notes 4 and 6)        922,800       359,724
                                                       ----------   ----------
Total current assets		                       1,320,093     1,548,251
Property and equipment           	                  28,214        31,580
Other assets                                              36,792        35,590
                                                       ----------    ---------
    Total assets	                              $1,385,099    $1,615,421
	                                               ==========    =========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current:
 Bank indebtedness (note 10)	                       $  93,144     $ 102,264
 Accounts payable and accrued liabilities              3,054,820     2,380,916
 Convertible promissory notes, net of discount (note 4)  101,775       643,944
 Promissory note (note 5)                              2,125,000             -
 Current portion of long-term debt       		 287,169       219,740
 Reclamation and closure liabilities            	  40,000       350,000
 Redeemable capital stock 		                       -        86,775
                                                       ----------    ---------
Total current liabilities		               5,701,908     3,783,639
Long-term debt (note 6)		                       1,057,135     1,084,763
                                                       ----------    ---------
Total liabilities		                       6,759,043     4,868,402
                                                       ----------    ---------
Commitments and Contingencies

Stockholders' equity (deficit):
 Common stock - $0.001 par value (note 3):
  75,000,000 shares authorized,
  29,485,595 and 26,407,393 shares
  issued and outstanding		                  27,896        24,818
 Additional paid in capital		              23,258,049    20,133,739
 Deficit accumulated during the development stage    (28,119,503)  (23,020,986)
 Accumulated other comprehensive income (loss)		(540,386)     (390,552)
                                                     ------------  -----------
Total stockholders' deficit		              (5,373,944)   (3,252,981)
			                             ------------  -----------
Total liabilities and stockholders' deficit	    $  1,385,099  $  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>           <c>              <c>
                                                                                                           Cumulative
                                                       Three months ended         Nine months ended      from inception
                                                           June 30,                  June 30,              on August 23,
                                                     2005           2004         2005          2004    1996 to June 30, 2005
                                                  -----------    -----------  ----------   ----------- ---------------------
Revenue                                          $         -    $        -  $         -   $        -     $     12,825
                                                  -----------    -----------  ----------   ------------    ------------
Expenses (Other income):
Mineral resources                                     81,375       (66,719)     258,920      (41,688)       7,536,291
Research and development, net                        253,810       174,789    1,520,440      339,147        2,826,291
General administration                               134,596        99,642      321,137      295,511        1,810,999
Wages and benefits                                   118,878        16,818      146,999       85,246        1,327,811
Managements wages and benefits                       199,032       166,717      572,001    1,031,365        4,070,877
Professional fees                                    371,262       166,984      817,830      455,063        3,101,114
Promotion and travel                                  87,292        46,704      206,666      112,858        1,207,921
Depreciation                                           1,802         4,382        5,466       12,472          409,728
Interest and finance charges (note 8)                142,317        15,953    1,477,997       50,626        1,911,942
Write-down of assets                                       -             -            -            -        1,626,821
Write off on incorporation and reorganization cost         -             -            -            -          152,051
Loss on marketable securities                              -             -            -            -        1,242,242
Gain on sale of property and equipment                     -             -            -            -          (26,806)
Gain on settlement of debt                               (97)            -     (176,667)           -         (176,667)
Interest income                                      (52,184)            -      (52,272)      (3,103)         (80,272)
                                                  -----------    ----------- -----------  ------------   --------------
Loss before income and mining taxes and
 cumulative effect of changes in accounting
 principle                                        (1,338,083)     (625,270)  (5,098,517)  (2,337,497)     (26,927,518)
Income tax and mining taxes recovery                       -             -            -            -          141,000
                                                  -----------    ----------- -----------  ------------   --------------
Loss before cumulative effect of change in
 accounting principle                             (1,338,083)     (625,270)  (5,098,517)  (2,337,497)     (26,786,518)
Cumulative effect of change in accounting
 principle for SFAS 142                                    -             -            -            -         (146,972)
                                                  -----------    ----------- -----------  ------------   --------------
Net Loss                                          (1,338,083)     (625,270)  (5,098,517)  (2,337,497)     (26,933,490)
                                                  -----------    ----------- -----------  ------------   --------------
Foreign currency translation adjustment                3,158        55,042     (149,834)     (24,252)        (540,386)
                                                  -----------    ----------- -----------  ------------   --------------
Comprehensive loss                               $(1,334,925)   $ (570,228) $(5,248,351) $(2,361,749)    $(27,473,876)
                                                  ===========    =========== ===========  ============   ==============
Basic and diluted loss per share                 $     (0.05)   $    (0.02) $     (0.18) $     (0.09)
                                                  ===========    =========== ===========  ============

                 (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
                                                           Nine months ended         from inception
                                                                 June 30,            on August 23, 1996
                                                           2005            2004      to June 30, 2005
                                                        ----------      ----------    ---------------
Operating activities:
 Net loss                                             $(5,098,517)   $  (2,337,497)  $  (26,933,490)
  Adjustments to reconcile net loss to net cash used
   in operating activities:
    Cumulative effect of change in accounting principle         -                -          146,972
    Depreciation                                            5,466           12,472          409,728
    Amortization of debt discount and deferred finance
     cost                                               1,222,285                -        1,317,844
    Expenses settled through issuance of common stock      24,099                -        1,954,941
    Write-down of assets                                        -                -        1,626,821
    Loss on sale of marketable securities                       -                -        1,242,242
    Gain on sale of property and equipment                      -                -          (26,806)
    Gain on settlement of debt                           (176,667)               -         (176,667)
    Stock-based payment                                     6,075          794,467        2,511,165
    Other                                                       -                -          (30,061)
 Net change in working capital related to operations:
    Refundable taxes and other receivables                (20,800)         172,329          (97,248)
    Deferred finance charges and issue costs             (563,076)               -         (587,340)
    Prepaid expenses and deposits                         106,436           90,568          (19,712)
    Accounts payable and accrued liabilities              582,667         (139,319)       2,830,346
    Reclamation and closure costs                        (310,000)               -           40,000
                                                        ----------       ----------     -------------
 Net cash used in operating activities                 (4,222,032)      (1,406,980)     (15,791,265)
                                                        ----------       ----------     -------------
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
  Proceeds from (purchase of) reclamation cash bond       297,685                -          (41,000)
  Purchase of property and equipment                       (2,265)         (13,974)      (2,085,440)
  Acquisition of business, net of cash acquired                 -                -          (31,286)
                                                         ----------       ----------     -------------
Net cash provided by (used in) investing activities        295,420          (13,974)      (3,299,968)
                                                         ----------       ----------     -------------
<page>F-3

Financing activities:
  Issuance of notes payable                                     -                -           350,000
  Increase in bank indebtedness                           (12,163)          19,775            79,663
  Proceeds from issuance of convertible debt
   and warrants                                                 -                -         1,121,505
  Increase in convertible notes payable                 3,500,000                -         3,500,000
  Repayment of convertible note                        (1,375,000)               -        (1,375,000)
  Payment of financing fees and issue costs                     -                -          (100,000)
  Issuance of long-term debt                                    -                -           137,435
  Repayment of long-term debt                                   -          (29,529)         (137,435)
  Repayment of government assistance                     (128,289)               -          (128,289)
  Receipt of repayable government assistance              118,307            4,795         1,203,937
  Proceeds from sale of common stock                    1,420,000        1,424,401        14,735,558
  Proceeds on 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               3,522,855        1,419,442        19,233,412
                                                        ----------       ----------     --------------
Effect of foreign currency
  exchange rate changes on cash and equivalents            (7,058)            (125)            9,256
                                                        ----------       ----------     --------------
Net increase (decrease) in cash and cash
  equivalents                                            (410,815)          (1,637)          151,435
                                                        ----------       ----------     --------------
Cash and cash equivalents, beginning of period            562,250           49,208                 -
                                                        ----------       ----------     --------------
Cash and cash equivalents, end of period             $    151,435   $       47,571    $      151,435
                                                        ==========       ==========     ==============
Supplemental non-cash financing activities:

Cash paid for interest                               $     23,545   $       11,943    $      226,980

Issuance of commons stock in lieu of settlement
  of debt                                                  74,750                -            74,750

Issuance of common stock in lieu of payment
  of issue costs                                          270,000          280,000           550,000

Issuance of common stock in lieu of repurchasing
  redeemable common stock                                  32,500           60,000           202,500

Issuance of options in lieu of repurchasing
  redeemable common stock                                       -                -           605,210

Issuance of commons stock in lieu of repayment of
  convertible promissory note                             825,000                -           850,626

Issuance of common stock in lieu of payment of notes
  payable                                                       -                -           356,424

Repurchase of capital 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)

                                 JUNE 30, 2005
           (Amounts stated in US 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 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 fiscal 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 nine-months periods ended June 30, 2005 are not
necessarily indicative of the results of operations that may be expected for the
fiscal 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 has 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.

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 June 30, 2005 and 2004:


                          Three months ended           Nine months ended
                                June 30,                    June 30,

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

Net loss, as reported  $(1,338,083)  $(625,270)  $(5,098,517) $(2,337,497)

Add:  Stock-based
employee compensation
expense included in
reported net income,
net of related tax
effects                     2,025        6,443         6,075      739,326

Deduct:  Total
stock-based employee
compensation expense
determined under fair
value based method for
all awards, net of
related tax effects     (149,156)      (21,539)   (1,021,318)  (1,952,634)
                      -----------   -----------   -----------  -----------
Pro forma net loss   $(1,485,214)   $ (640,366)  $(6,113,760) $(3,550,805)
                      ===========   ===========   ===========  ===========

<page>F-6

Basic and diluted
earning per share:

As reported            $  (0.05)   $    (0.02)    $   (0.18)   $    (0.09)

Pro forma              $  (0.05)   $    (0.02)    $   (0.22)   $    (0.14)


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 June 30, 2005 and 2004:

                               Three months ended           Nine months ended
                                    June 30,                    June 30,

                               2005         2004          2005           2004
                            ----------    ----------    ----------    ----------
Risk Free interest rate	        4.04%	    4.32%	   4.06%	 4.32%
Expected average life (years)	9.86	    10.00     	    9.36   	 10.00
Dividend yield		           0%	       0%	      0%            0%
Volatility		         121%        105%	    126%	  105%
Fair values of option grants
per share	              $	0.93	  $ 1.72	  $ 1.09	$ 1.72


(e)	Reclassifications

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


<page>F-7

3. Common stock

The following table summarizes the activity related to common stock for the nine
months ended June 30, 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      387,575

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

Expiration of redeemable capital
 stock rights                        -               -              8,450        8,450
---------------------------------------------------------------------------------------
Balance, March 31, 2005     28,307,798        $ 26,718        $22,464,920  $22,491,638
---------------------------------------------------------------------------------------
Common shares issued for
 cash and other ($0.58
 Wt. Avg./share)            1,142,790	         1,143	          667,160      668,303


Common shares issued for
 settlement of expenses
 and accounts payable
($0.62 Wt. Avg./share          35,007		    35	           21,653	21,688

Stock options, compensation         -                -              2,025        2,025

Fair value of warrants
 issued to private placement
 agent                              -                -             56,466       56,466

Expiration of redeemable
 capital stock                      -                -             45,825       45,825
---------------------------------------------------------------------------------------
Balance, June 30, 2005     29,485,595         $ 27,896        $23,258,049  $23,285,945
======================================================================================

</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 June 30, 2005, options to purchase an
      aggregate of 1,040,000 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 June 30, 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 June 30,
      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:

<page>F-9

                                                          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
        Granted                            315,000         $ 0.99
                                     --------------    -------------
Options outstanding
 June 30, 2005                          14,813,484         $ 1.09
                                     ==============    =============

<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		     -		$      -
0.97-1.07 11,236,917	4.44	 1.00		10,501,917	    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
          ----------                            -----------
	  14,813,484				13,003,484
          ==========                            ==========

<page>F-10

(b) 	Stock warrants

As of June 30, 2005, the following warrants for the purchase of common stock
were 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
        Issued                            116,457
        ---------------------------------------------
        Outstanding, June 30, 2005	2,281,388
        =============================================

The warrants outstanding at June 30, 2005, can be exercised at prices ranging
from $0.65 to $3.00.  The expiration dates of the warrants range from August 19,
2005 to June 27, 2007.

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 initially due and payable on November 14, 2004 although the date
was subsequently extended to February 18, 2005. The lenders were entitled to
convert the notes into a total of 666,667 shares of common stock.  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 was due upon the conversion of the promissory notes to shares
of common stock or when the promissory notes became 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 were
substantially the same as those of the loans of August 13, 2004, except that the
notes were 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, a registration statement filed by the Company with the
Securities and Exchange Commission (SEC) which included the shares obtainable by
the lenders upon conversion of the promissory notes was declared effective by
the SEC.

<page>F-11

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 June 30, 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.

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, L.P (Cornell Capital Partners) and issued its 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 were issued to Cornell Capital
Partners.

The promissory note issued to Cornell Capital Partners bears interest at the
annual rate of 12% and was payable on or before June 4, 2005.  Proceeds from the
sale of the shares issued to Cornell Capital Partners were 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
had been insufficient to repay all amounts due, the Company had agreed to
immediately place in escrow such number of additional shares of its common stock
of which the proceeds of the sale of such shares would be sufficient to repay
all amounts due under the promissory note. There was no limit on the number of
shares the Company may have been 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 increased the number of shares the Company would
otherwise be required to issue to Cornell.

<page>F-12

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 began 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.

On May 13, 2005, the Company borrowed $500,000 from Cornell Capital Partners and
issued its 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 19 requests for advances under the Standby Equity
Distribution Agreement, each in the amount of $25,000 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 was and will continue to be issued to Cornell Capital Partners.

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.  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.

<page>F-13

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 June 30,   Nine Months ended June 30,
	                             2005               2004           2005           2004
	                          ------------       --------------  ------------   -----------
	Net Loss                 $ (1,338,083)     $     (625,270)  $ (5,098,517)  $(2,337,497)
	                          ------------       --------------  ------------   -----------
	Total Weighted Average
	Number of Common Shares
	and Equivalents            28,821,709          26,082,842     27,783,450     25,691,524
	                          ------------       --------------  ------------  ------------
	Net Loss per
	Common Share            $       (0.05)       $      (0.02)   $     (0.18)  $     (0.09)
	                          ============       ==============  ============   ===========

</table>

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:

<page>F-14
				               Shares at end of period
				                       June 30,
					            2005	2004
						   -----       ------
Shares issuable upon exercise of stock options	14,813,484   13,522,817
Shares issuable upon exercise of warrants        2,281,388	834,485

8.	Interest and finance charges

Interest and finance charges consist of the following:
<table>

                                       <c>                               <c>

                                          Three Months ended               Nine Months ended
                                                June 30,                         June 30,
                                        2005               2004           2005           2004
                                    ------------       --------------  ------------   -----------
Amortization of the fair value of     $        -         $      -       $   119,394      $     -
 warrants issued for placement fees

Amortization of debt discount
 related to the intrinsic value of
 the beneficial conversion feature
 of the convertible promissory notes           -                 -          568,661            -

Amortization of deferred finance
 charges and issue costs paid
 in connection with the convertible
 promissory note                               -	         -           79,724            -

Amortization of debt discount related
 to warrants issued in connection with
 the convertible promissory notes              -                 -          454,506           -

Interest paid on convertible promissory
  notes                                  56,844                  -           96,005            -

Interest on promissory note              33,328                  -           72,090            -

Other interest	                   	 52,145              15,953          87,617       50,626
                                     -------------------------------------------------------------
                                     $  142,317           $  15,953     $ 1,477,997     $ 50,626
                                     =============================================================
</table>

<page>F-15

9. Related party transactions

The Company has retained a law firm to perform legal services for which Company
has incurred total expenditure of $1,009 for services for the three months and
$111,273 for the nine months ended June 30, 2005 ($33,984 for three months and
$92,145 for nine months ended June 30, 2004). A director of the Company was a
partner in that law firm during the time those services were rendered.  The
transactions were valued at the exchange amount, which is the amount of
consideration agreed to by the related parties. As of June 30, 2005 an amount of
$134,041 ($102,440 as of June 30, 2004) resulting from these transactions is
included in accounts payable and accrued liabilities.

10. Commitments and Contingencies

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 $ 93,144 as of
June 30, 2005 ($90,101 as of September 30, 2004), carries interest at 4.25% per
annum and is secured by an assignment of Dermond Inc.'s  refundable research and
development tax credit.

  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 $101,528 for 2006, $106,232 for 2007 and
$45,080 for 2008.


11.	Subsequent events

On July 15, 2005 Dermond Inc. issued its 12% unsecured convertible debenture due
March 31, 2006 to borrow $103,135.  The debenture is convertible into 103,135
common shares of McKenzie Bay International Ltd (MKBY) on or before the due
date.  Upon any conversion, MKBY will issue a warrant to purchase one common
share for each two shares issued upon the conversion for $1.25 per share. The
warrants will expire on July 15, 2007.

On August 1, 2005, Gary L. Westerholm, the president of the Company, agreed to
loan up to $250,000 to the Company pursuant to a 3.58% promissory note issued to
him by the Company.  The principal amount along with interest accrued is payable
no later than September 15, 2005. As of August 15, 2005, Mr. Westerholm had
loaned $22,600 to the Company.

On August 1, 2005 the board of directors extended the expiration of 604,900
options to August 15, 2006.

Options

<page>F-16


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

Development of WindStor

Final engineering of a commercial version of the WindStor Wind Turbine ("WWT"),
in a 200 kW configuration, continued during the quarter with completion expected
in our 4th quarter.   Engineering drawings were in process, to be provided to
manufacturers for component quotes, and are also expected to be completed in our
4th quarter.  We continue to work with prospective customers for WWT
installation contracts.  Any contract entered into will depend upon adequate
funding to pay for the units and complete installation.  Sites for installations
have not been finalized.

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 June 30, 2005 and was
primarily directed at software and control program optimization.

During the June 30, 2005 quarter we spent approximately $234,000 on WindStor
related R&D expenditures and approximately $1,531,000 for the fiscal year to
date.

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, in addition to the development funds required
above, we will require and would intend to use the net funding proceeds as
follows:

          USE	                                                  AMOUNT
-------------------------------------------------------------------------
Repayment of convertible promissory notes, including interest $   97,000
WindStor Commercial Installations 	                      $1,000,000
Repayment of loans from Cornell Capital Partners	      $2,200,000
Working capital and other corporate purposes	              $  751,994
------------------------------------------------------------------------
Total	                                                      $4,048,994
                                                              ==========

<page>2

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.

We have hired an investment banking firm to assist it in identifying a buyer or
strategic partner for the Lac Dore deposit.

We only intend to only continue the maintenance of our claims rather than any
other activities at Lac Dore.  Whether the refining technology developed during
the preliminary feasibility study 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	                               $  383,000

Professional costs (includes consultants, outside
accountants, independent auditors and legal counsel)   $  147,000

General and administrative (includes lease obligations,
travel and other administrative costs)	               $2,000,000
--------------------------------------------------------------------

<page>3

Neither MKBY 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 a statement to this effect in their report dated
January 12, 2005 on our consolidated financial statements for the fiscal 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 12 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.  MKBY 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 June 30, 2005, 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.

<page>4

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 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 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.

4.2	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.

4.3	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.

4.4	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.

4.5	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.

4.6	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.

4.7	Form of Promissory Notes payable to Cornell Capital Partners, LP.
	Previously filed as an exhibit to our Annual Report on Form 10-KSB for
	the fiscal year ended September 30, 3004 and incorporated herein by
	reference
<page>5

4.8	Form of Debenture dated July 14, 2005 payable to Centre local de
	developpement MRC Rouyn-Noranda and related Loan Agreement, Suretyship
	and form of warrant.  Previously filed as an exhibit to Post-Effective
	Amendment to our registration statement on Form SB-2, file number
	333-119493, and incorporated herein by reference.

10.1	Employment Agreement dated as of June 28, 2005 between Doris F. Galvin
	and WindStor Power Co.  Previously filed as an exhibit to Post-Effective
	Amendment No. 2 to our registration statement on Form SB-2, file number
	333-119493, and incorporated herein by reference.

10.2	Agreement of July 7, 2005 between McKenzie Bay International, Ltd., and
	Brooks, Houghton & Company, Inc. Previously filed as an exhibit to Post-
	Effective Amendment No. 2 to our registration statement on Form SB-2,
	file number 333-119493, and incorporated herein by reference.

10.3	Employment Agreement dated as of April 1, 2005 between Donald C. Harms
	and McKenzie Bay International, Ltd. Previously filed as an exhibit to
	Post-Effective Amendment No. 2 to our registration statement on Form
	SB-2, file number 333-119493, 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:  August 17, 2005

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



Date:  August 17, 2005

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

<page>6