**SECURITIES AND EXCHANGE COMMISSION**** Washington, D.C. 20549**

** FORM 10-QSB**

** QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF**** THE SECURITIES EXCHANGE ACT OF 1934**

** For the quarterly period ended July 31, 2007**

| **000-29921**          |
|------------------------|
|                        |
| Commission file number |

| ****                                                              |
|-------------------------------------------------------------------|
| **DESTINATION TELEVISION, INC.**                                  |
|                                                                   |
| (Exact name of small business issuer as specified in its charter) |

| **Delaware**             |   | **65-0494581**                       |
|--------------------------|--------|--------------------------------------|
|                          |   |                                      |
| (State of incorporation) |   | (IRS Employer Identification Number) |

| **530 North Federal Highway**** Fort Lauderdale, Florida 33301** |
|-----------------------------------------------------------------------|
|                                                                       |
| (Address of principal executive office)                               |

| **(954) 332-6600**          |
|-----------------------------|
|                             |
| (Issuer's telephone number) |

| **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)

** Yes [X] No[  ]**                        |
| and                                                                                                                                                                                                                                                      |
| (2) has been subject to such filing requirements for the past 90 days.

** Yes [X] No [ ]**

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

** Yes [  ] No  [X]** |

|                                                                                                                                                              |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **Applicable only to corporate issuers**                                                                                                                          |
| As of September 15, 2007 (the most recent practicable date), there were 51,758,760 shares of the issuer's Common Stock, $0.0001 par value per share, outstanding. |

| Transitional Small Business Disclosure Format (check one)

** Yes [  ] No [X]** |
|-------------------------------------------------------------------------------------------|

----

| **DESTINATION TELEVISION, INC.**

** FORM 10-QSB**

** TABLE OF CONTENTS** |
|--------------------------------------------------------------------------------------|
|                                                                                 |   |   |
| **PART I**                                                                           |   | **FINANCIAL INFORMATION** |
| Item 1                                                                               |   | Financial Statements |
|                                                                                 |   |      Consolidated Balance Sheets |
|                                                                                 |   |      Consolidated Statements of Operations |
|                                                                                 |   |      Consolidated Statements of Cash Flows |
|                                                                                 |   |      Notes to Financial Statements |
| Item 2                                                                               |   | Management's Discussion and Analysis of Financial Condition and Results of Operations |
| Item 3                                                                               |   | Controls and Procedures |
|                                                                                 |   |   |
| **PART II**                                                                          |   | **OTHER INFORMATION** |
| Item 2                                                                               |   | Unregistered Sales of Equity Securities and Use of Proceeds |
| Item 5                                                                               |   | Other Information |
| Item 6                                                                               |   | Exhibits and Reports on Form 8-K |
|                                                                                 |   |   |
| **SIGNATURES**                                                                       |

----

**PART I**

** FINANCIAL INFORMATION**

** ITEM 1 - FINANCIAL STATEMENTS**

| **DESTINATION TELEVISION, INC.**** Consolidated Balance Sheets**                                                                                                   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                    |
|                                                                                                                                                                    |   |   | **July 31,****2007****(unaudited)** |   | **October 31,**** 2006** |
|                                                                                                                                                                    |   |   |  |   |  |
| ASSETS                                                                                                                                                                  |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                    |   |   |   |   |   |   |   |   |   |
| Current Assets:                                                                                                                                                         |   |   |   |   |   |   |   |   |   |
|    Cash and cash equivalents                                                                                                                             |   |   | $ | 90,665 |   |   | $ | 12,044 |   |
|    Prepaid expenses                                                                                                                                           |  |  |   |          4,587 |  |  |   | 0 |  |
|    Cash - restricted                                                                                                                                          |   |   |   | 48,000 |   |   |   | 100,000 |   |
|                                                                                                                                                                    |   |   |   |  |   |   |   |  |   |
|       Total Current Assets                                                                                                                |   |   |   | 143,252 |   |   |   | 112,044 |   |
|                                                                                                                                                                    |   |   |   |   |   |   |   |   |   |
| Property and equipment - net                                                                                                                                            |   |   |   | 100,448 |   |   |   | 106,834 |   |
| Acquired amortizable intangible assets                                                                                                                                  |   |   |   | 2,155 |   |   |   | 2,380 |   |
| Other assets                                                                                                                                                            |  |  |  |  |  |          2,000 |  |  |  | 0 |  |
|                                                                                                                                                                    |   |   |   |  |   |   |   |  |   |
|       Total Assets                                                                                                                        |   |   | $ | 247,855 |   |   | $ | 221,258 |   |
|                                                                                                                                                                    |   |   |   |  |   |   |   |  |   |
| LIABILITIES AND STOCKHOLDERS' DEFICIENCY                                                                                                                                |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                    |   |   |   |   |   |   |   |   |   |
| Current Liabilities:                                                                                                                                                    |   |   |   |   |   |   |   |   |   |
|    Accounts and accrued expenses payable                                                                                                                      |   |   | $ | 440,664 |   |   | $ | 318,003 |   |
|    Payroll taxes payable                                                                                                                                 |   |   |   | 301,703 |   |   |   | 268,409 |   |
|    Convertible notes payable - related party                                                                                                             |   |   |   |   |   | 400,000 |   |   |   | 400,000 |   |
|    Loans payable - related party                                                                                                                              |   |   |   |   |   | 135,000 |   |   |   | 50,000 |   |
|    Loans payable - officer                                                                                                                                    |   |   |   |   |   | 0 |   |   |   | 25,000 |   |
|    Loans payable - other                                                                                                                                      |   |   |   |   |   |        15,000 |   |   |   | 25,000 |   |
|                                                                                                                                                                    |   |   |   |   |   |  |   |   |   |  |   |
|       Total Current Liabilities                                                                                                           |   |   |   |   |   | 1,292,367 |   |   |   | 1,086,412 |   |
|                                                                                                                                                                    |   |   |   |   |   |  |   |   |   |  |   |
| Stockholders' Deficiency                                                                                                                                                |   |   |   |   |   |   |   |   |   |   |   |
|    Preferred stock, Series B convertible ($0.0001 par value)                   3,750,000 shares authorized and issued |   |   |   |   |   | 150,000 |   |   |   |        150,000 |   |
|    Common stock                                                                                                                                          |   |   |   |   |   |   |   |   |   |   |   |
|       200,000,000 ($0.0001 par value) shares authorized                                                                                        |   |   |   |   |   |   |   |   |   |   |   |
|       50,533,760 shares issued (43,348,427 in 2006)                                                                                            |   |   |   |   |   | 6,036,557 |   |   |   | 5,656,295 |   |
|    Accumulated deficit                                                                                                                              |   |   |   |   |   | (7,222,736 | ) |   |   | (6,638,116 | ) |
|    Deferred compensation                                                                                                                                      |   |   |   |   |   | (8,333 | ) |   |   | (33,333 | )  |
|                                                                                                                                                                    |   |   |   |   |   |  |   |   |   |  |   |
|       Total Stockholders' Deficiency                                                                                                      |   |   |   |   |   | (1,044,512 | ) |   |   | (865,154 | ) |
|                                                                                                                                                                    |   |   |   |   |   |  |   |   |   |  |   |
|       Total Liabilities and Stockholders' Deficiency                                                                                      |   |   |   |   | $ | 247,855 |   |   | $ | 221,258 |   |
|                                                                                                                                                                    |   |   |   |   |   |  |   |   |   |  |   |
|                                                                                                                                                                         |  |  |  |  |  |  |  |  |  |  |  |

See Notes to Financial Statements

The interim financial statements include all adjustments, which, in the opinion of management, are necessary in order to make the financial statements not misleading.

F-1

----

| **DESTINATION TELEVISION, INC.**** Consolidated Statements of Operations** |
|---------------------------------------------------------------------------------|
|                                                                            |   |   |   |  |  |  |   |  |  |  |
|                                                                            |   | **Three Months Ended** |   |  | **Nine Months Ended** |  |
|                                                                            |   | **July 31,**** 2007**** (unaudited)** |   | **July 31,**** 2006**** (unaudited)** |   |  | **July 31,**** 2007**** (unaudited)** |  |   |  | **July 31,**** 2006**** (unaudited)** |  |
|                                                                            |   |  |   |  |   |  |  |  |   |  |  |  |
| Net sales                                                                       |   | $ | 2,887 |   |   | $ | 4,924 |   |   | $ | 13,663 |  |   | $ | 13,502 |  |
|                                                                            |   |   |  |   |   |   |  |   |   |  |  |  |   |  |  |  |
| Selling, general and administrative expenses                                    |   |   |      137,445 |   |   |   | 229,844 |   |   |  | 453,449 |  |   |  | 707,611 |  |
| Consulting expense                                                              |   |   | 0 |   |   |   |   35,000 |   |   |  | 99,358 |  |   |  | 74,807 |  |
| Interest expense                                                                |   |   | 15,701 |   |   |   | 112,350 |   |   |  | 45,476 |  |   |  | 229,909 |  |
|                                                                            |   |   |  |   |   |   |  |   |   |  |  |  |   |  |  |  |
| Total expenses                                                                  |   |   |      153,146 |   |   |   | 377,194 |   |   |  | 598,283 |  |   |  | 1,012,327 |  |
|                                                                            |   |   |  |   |   |   |  |   |   |  |  |  |   |  |  |  |
| Net loss before income taxes                                                    |   |   | (150,259 | ) |   |   | (372,270 | ) |   |   | (584,620 | ) |   |   | (998,825 | ) |
|                                                                            |   |   |   |   |   |   |   |   |   |  |  |  |   |  |  |  |
| Income tax expense                                                              |   |   | 0 |   |   |   | 0 |   |   |  | 0 |  |   |  | 0 |  |
|                                                                            |   |   |  |   |   |   |  |   |   |  |  |  |   |  |  |  |
| Net loss                                                                        |   | $ | (150,259 | ) |   | $ | (372,270 | ) |   | $ | (584,620 | ) |   | $ | (998,825 | ) |
|                                                                            |   |   |  |   |   |   |  |   |   |  |  |  |   |  |  |  |
| Basic and diluted loss per share                                                |   | $ |  (NIL | ) |   | $ | (0.01 | ) |   | $ | (0.01 | ) |   | $ | (0.02 | ) |
|                                                                            |   |   |  |   |   |   |  |   |   |  |  |  |   |  |  |  |
| Weighted average common share equivalent outstanding                            |   |   | 53,205,499 |   |   |   | 45,371,462 |   |   |  | 50,186,076 |  |   |  | 44,363,296 |  |
|                                                                            |   |   |  |   |   |   |  |   |   |  |  |  |   |  |  |  |

See Notes to Financial Statements.

The interim financial statements include all adjustments, which, in the opinion of management, are necessary in order to make the financial statements not misleading.

F-2

----

| **DESTINATION TELEVISION, INC.**** Consolidated Statements of Cash Flows** |
|---------------------------------------------------------------------------------|
|                                                                            |   |   |
|                                                                            |   | **Nine Months Ended** |
|                                                                            |   | **July 31,**** 2007**** (unaudited)** |   | **July 31,**** 2006**** (unaudited)** |
|                                                                            |   |  |   |  |
| Operating activities:                                                           |   |   |   |   |   |   |   |   |
| Net loss                                                                        |   | $ |                  (584,620 | ) |      | $ | (998,825 | ) |
| Adjustments to reconcile net loss to cash:                                      |   |   |   |   |   |   |   |   |
| Non-cash expenses included in net loss                                          |   |   |   |   |   |   |   |   |
|                                                                            | Depreciation and amortization |   |   |                     19,725 |   |   |   | 31,725 |   |
|                                                                            | Stock issued for services |   |   | 94,437 |  |  |   | 250,507 |   |
|                                                                                 | Grant of stock options for consulting services |  |  | 49,225 |  |  |  | 0 |  |
|                                                                            | Recognition of deferred compensation |   |   | 25,000 |   |   |   |   25,000 |   |
|                                                                                 | Discount arising from beneficial conversion              feature included in interest expense |  |  | 0 |  |  |  | 200,000 |  |
|                                                                                 | Change in operating assets and liabilities: |  |  |  |  |  |  |  |  |
|                                                                                 |    Decrease (increase) in restricted cash for payment of               payroll taxes |  |  |                                           52,000 |  |  |  | (100,000 | ) |
|                                                                            |    Increase in payables and accrued expenses |   |   | 155,955 |  |   |   | 169,012 |   |
|                                                                            |    Increase in prepaid expenses  |   |   | (4,587 | ) |   |   |               0 |  |
|                                                                                 |    Increase in other assets |  |  |                      (2,000 | ) |  |  |               0 |  |
|                                                                            |   |   |  |   |   |   |  |   |
| Cash used by operating activities                                               |   |   | (194,865 | ) |   |   | (422,581 | ) |
|                                                                            |   |   |   |   |   |   |   |   |
| Financing activities:                                                           |   |   |   |   |   |   |   |   |
|                                                                            | Proceeds from issuance of common stock |   |   | 236,600 |   |   |   | 205,500 |   |
|                                                                                 | Proceeds note payable - related party |  |  | 85,000 |  |  |  |    200,000 |  |
|                                                                                 | Repayment loans payable - other |  |  |                    (35,000 | ) |  |  |               0 |  |
|                                                                            |   |   |  |   |   |   |  |   |
| Cash generated by financing activities                                          |   |   | 286,600 |  |   |   |    405,500 |   |
|                                                                            |   |   |   |   |   |   |   |   |
| Investing activities:                                                           |   |   |   |   |   |   |   |   |
|                                                                            | Acquisition of fixed assets |   |   | (13,114 | ) |   |   | (11,903 | ) |
|                                                                            |   |   |  |   |   |   |  |   |
| Cash used by investing activities                                               |   |   | (13,114 | ) |   |   | (11,903 | ) |
|                                                                            |   |   |  |   |   |   |  |   |
|                                                                            |   |   |   |   |   |   |   |   |
| Increase (decrease) in cash                                                     |   |   | 78,621 |  |   |   | (29,984 | ) |
| Cash and cash equivalents - beginning                                           |   |   | 12,044 |   |   |   | 38,735 |   |
|                                                                            |   |   |  |   |   |   |  |   |
| Cash and cash equivalents - ending                                              |   | $ | 90,665 |  |   | $ | 9,751 |   |
|                                                                            |   |   |  |   |   |   |  |   |

See Notes to Financial Statements

The interim financial statements include all adjustments, which, in the opinion of management, are necessary in order to make the financial statements not misleading.

F-3

----

** DESTINATION TELEVISION, INC.**     Notes to Interim Consolidated Financial Statements      July 31, 2007     (Unaudited)

**Note 1 -** **Basis of Presentation**

            The interim consolidated financial statements of Destination Television, Inc. ("the Company") include all adjustments, which, in the opinion of management, are necessary in order to make the financial statements not misleading. The accompanying unaudited financial statements have been prepared in accordance with the instructions to Form 10-QSB and do not include all of the information and footnotes required by Generally Accepted Accounting Principles in the United States for complete financial statements. The financial statements presented herein have been prepared in accordance with the accounting policies described in the Company's October 31, 2006 Annual Report on Form 10-KSB and should be read in conjunction with the Notes to financial statements which appear in that report. The consolidated financial statements include the results of the Company's wholly-owned subsidiaries; Bar TV, Inc., Destination Television, Inc., and Hotel TV, Inc., which were incorporated in Florida in November 2002, August 2003, and November 2004, respectively. All significant inter-company account balances and transactions between the Company and its subsidiaries have been eliminated in consolidation.

**Note 2 - Cash - Restricted**

**           ** In connection with the issuance by the Company in March 2006 of a secured convertible note, described below in *Note 3 - Notes Payable - Convertible Note Payable*, the proceeds were deposited in a cash trust account to be used in connection with settlement of the Company's payroll tax liability. 

**Note 3 - Notes Payable**

**Convertible Notes Payable - Dr. Terry**

            On April 15, 2003, the Company issued to Dr. H. K. Terry a $100,000 unsecured promissory note originally due April 15, 2004, which has been extended to April 15, 2005 and further extended to April 15, 2008. On October 12, 2003, the Company issued an additional one-year promissory note for up to $100,000 of which $60,000 had been advanced as of October 31, 2003 and an additional $40,000 was advanced on November 24, 2003. The maturity date of this note was extended to October 12, 2005 and further extended to October 12, 2007. The notes are unsecured and bear interest at 6%. The notes, including any accrued interest, are convertible, at the holder's option, into common stock at the average closing price of the Company's common stock for the five trading days prior to the date of receipt of election to convert but not less than $0.05 per share.

            On March 27, 2006, the Company issued a 6%, one-year, $100,000 secured convertible note to Dr. Terry for $100,000 cash. The note, which has been extended to March 27, 2008,  is convertible into common stock at $0.10 per share. The note is collateralized by all of the Company's assets, both tangible and intangible and is restricted as to transferability. The proceeds of the note were to be used in connection with settlement of the Company's payroll tax liability. 

            On May 10, 2006, the Company issued an additional 6%, one-year secured convertible note, restricted as to transferability, in the principal amount of $100,000 to Dr. Terry for $100,000 cash. The maturity date of the note has been extended to May 10, 2008. The proceeds of the note were for working capital.

            Pursuant to the requirements *of Emerging Issues Task Force ("EITF") 98-5 "Accounting for Convertible Securities with Beneficial Conversion Features or Contingently Adjustable Conversion Ratios" and EITF 00-27 "Application of Issue No. 98-5 to Certain Convertible Instruments,"* the issuance of the March 27, 2006 $100,000 convertible note resulted in a discount being recorded in the amount of $100,000 arising from an embedded beneficial conversion feature. The note conversion formula provides for a $0.15 per share discount from fair market value. The total discount was limited to the principal amount of the note, $100,000, which was fully amortized as interest expense at the time of issuance of the note; correspondingly, *Shareholders' equity - Common stock* was increased by a like amount. The issuance of the May 10, 2006, $100,000 convertible note also resulted in a discount in the amount of $100,000 arising from an embedded beneficial conversion feature. The total discount was limited to the principal amount of the note, $100,000, which was fully amortized as interest expense at the time of issuance of the note; correspondingly, *Shareholders' equity - Common stock* was increased by a like amount.

            The convertible notes have not been registered under the Securities Act of 1933, as amended, and therefore, may not be transferred in the absence of an exemption from registration under such laws and will be considered "restricted securities" as that term is defined in Rule 144 adopted under the Securities Act, and may be sold only in compliance with the resale provisions set forth therein.

**Note 4** - **Stockholders' Deficiency**

**           ****Stock Issued for Cash**

**           ** During the nine months ended July 31, 2007, the Company issued for cash a total of 4,600,000 shares of common stock, which included 750,000 shares that were sold to Dr. Terry in November 2006, for $60,000 or $0.08 per share; 850,000 shares that were sold in March 2007, to an accredited investor, for $25,000, or approximately $0.03 per share; 1,000,000 shares that were sold in April 2007 for $50,000, to two accredited investors, at $0.05 per share; and 2,000,000 shares that were sold in June 2007 for $60,000 to an accredited investor, at $0.03 per share.  These shares have not been registered under the Securities Act of 1933, as amended, and therefore, may not be transferred in the absence of an exemption from registration under such laws and will be considered "restricted securities" as that term is defined in Rule 144 adopted under the Securities Act, and may be sold only in compliance with the resale provisions set forth therein.

**           ****Stock Issued for Services           **

            During the nine months ended July 31, 2007, the Company issued a total of 2,085,333 shares of common stock for services. Of this total, 200,000 shares were issued in December 2006 for consulting services and were valued at $12,000 or $0.06 per share, which was representative of the approximate market value at the date of issuance. In April 2007, a total of 1,885,333 shares were issued to various employees, independent contractors and consultants and were valued at $98,037 or $0.052 per share, which was representative of the approximate market value at the date of issuance. These shares, except for 633,333, which were registered pursuant to Form S-8, have not been registered under the Securities Act of 1933, as amended, and therefore, may not be transferred in the absence of an exemption from registration under such laws and will be considered "restricted securities" as that term is defined in Rule 144 adopted under the Securities Act, and may be sold only in compliance with the resale provisions set forth therein.

            On April 2, 2007, the Company entered into a six-month consulting agreement that provided payment to the consultant as follows: 333,333 shares of the Company's common stock per month during the term of the agreement; and stock options to purchase up to 8,416,667 additional shares at prices ranging from $0.06 to $0.25 per share. The Company issued 333,333 shares and then the agreement was canceled. The options, which are described in *Note 4* - *Common Stock Options,* remain outstanding.

**            Common****Stock Options**

            On April 2, 2007, the Company granted options, pursuant to a consulting agreement, to purchase 8,416,667 shares of common stock. The options  have an expiration date of October 2, 2007 and give the right to the grantee to purchase shares of common stock at exercise prices of $0.06 to $0.25, or an average of $0.133 per share. The number of shares of common stock to be received by the grantee was limited so that he would not beneficially own more than 10% of the then outstanding shares of common stock.  At the date of grant, the options were deemed to have a fair value of $49,225, pursuant to the Black-Scholes valuation model, which amount has been reflected as additional *Consulting Expense* in the Consolidated Statement of Operations for the nine months ended July 31, 2007. 

            The following table summarizes the key assumptions used in determining the fair value of options granted during the nine months ended July 31, 2007.
| Table of Key Assumptions |
|--------------------------|
|                     |
|                     | Interest          Rate |   | Dividend          Yield |   | Expected          Volatility |   | Expected          Life |
|                          |  |   |  |   |  |   |  |
|                     | 5.0% |   | 0.0% |   | 70.0% |   | 6 mos. |
|                     |  |   |  |   |  |   |  |
|                          |  |  |  |  |  |  |  |
|                          |  |  |  |  |  |  |  |

            The following table summarizes the option activity during the nine months ended July 31, 2007.

|                  |   | Shares                    |   |                  | Weighted Average |
|-----------------------|--------|---------------------------|--------|-----------------------|------------------|
|                  |   |
|                  |   | Exercise            Price |   | Fair            Value |
|                       |   |                           |   |                  |                  |   |  |
| Balance 11/1/2006     |   | 0                         |   |                  | -                |   | - |
| Granted during 2007   |   |    8,416,667    |        |                  | $  0.133    |   | $  0.006 |
| Exercised/Lapsed 2007 |   | 0                         |   |                  | -                |   | - |
|                  |   |                           |   |                  |                  |   |  |
| Balance 7/31/2007     |   | 8,416,667                 |   |                  | $  0.133    |   | $  0.006 |
|                  |   |                           |   |                  |                  |   |  |

            The following is a summary of Options outstanding at July 31, 2007. There were no options outstanding at October 31, 2006.

| Options Outstanding and Exercisable at July 31, 2007 |
|------------------------------------------------------|
| Range of Exercise Prices                             | Shares | Weighted Average            Remaining Contractual            Life in Months | Weighted Average            Exercise Price |
|                                                      |  |  |  |
| $0.06- $0.25                                         | 8,416,667 | 2.0 | $0.133 |
|                                                      |  |  |  |

**            Facilities**

**           ** The Company leases from a stockholder, Dr. H. K. Terry, pursuant to an oral agreement on a month-to-month basis, an 8,500 square foot building in Fort Lauderdale, Florida, which serves as its administrative offices and computer operations center. The rent is $4,500 per month and the Company is responsible for utilities. Rent expense was $13,500 and $40,500 for  the three months and nine months ended July 31, 2007, respectively.

**            Employment Agreements**

            Gordon Scott Venters is employed as the Company's President and Chief Executive Officer, pursuant to an employment agreement, which began October 1, 1997 and provided for a base salary of $75,000, $100,000 and $133,000 for years one, two and three, respectively and which was renewed to October 31, 2004. On November 15, 2004, effective November 1, 2004, the employment agreement was extended until October 31, 2007, and provides for an annual salary of $133,000, which is the same as in previous years; annual increases of a minimum of 5%; and participation in incentive or bonus plans at the discretion of the Board of Directors. Mr. Venters also received 1,000,000 shares of the Company's common stock, at that time, which were restricted as to transferability. The shares were valued at $100,000, ($0.10 per share), which was charged to *Deferred Compensation,* to be expensed over the 36-month term of the agreement at $2,778 per month. In September 2006, Mr. Venters was issued, as additional compensation, 1,300,000 shares that are restricted as to transferability. These shares were valued at $117,000 ($0.09 per share). The agreement additionally provides for certain confidentiality and non-competition provisions and a minimum payment of 18 months salary in the event of a change of control or termination "without cause," or if the employee terminates for "good reason." As of July 31, 2007, Mr. Venters was owed $115,299 for accrued unpaid salary.

**Note 6 - Related Party Transactions**

**           ** In November 2006, Dr. Harold Terry, a major shareholder of the Company's common stock, acquired 750,000 shares of common stock from the Company for cash consideration of $60,000. The shares, which are restricted as to transferability, were issued at $0.08 per share. His ownership of the Company's convertible notes payable is described above *Note 3* - *Notes Payable - Convertible Notes Payable - Dr. Terry.* The Company leases the building that houses its offices from Dr. Terry on a month-to-month basis, at $4,500 per month, which has been accrued by the Company but not paid. Additionally, in fiscal year 2006, Dr. Terry made $50,000 of unsecured loans to the Company, and in February 2007 and June 2007, he made additional unsecured loans in the amounts of $25,000 and $60,000, respectively. As of July 31,  2007 and October 31, 2006, the Company owed Dr. Terry for accrued rent, $247,500 and $207,000, respectively; and for accrued interest, $67,599 and $46,249, respectively. These amounts are included in the accompanying balance sheets as accounts and accrued expenses payable.

            In November 2004, Gordon Scott Venters, entered into a new three-year employment agreement with the Company, which is described above in *Note 5* - *Commitments-Employment Agreements.*  In August 2006 and February 2007, Mr. Venters made non-interest bearing unsecured loans to the Company in the amounts of $25,000 and $5,000, respectively. On April 2, 2007 the Company repaid the $5,000 loan and on April 5, 2007, Mr. Venters acquired from the Company 500,000 shares of its common stock, which were valued at $26,000, or $0.052 per share, in exchange for the $25,000 loan and the balance of $1,000 was applied to accrued unpaid salary. As of July 31, 2007, Mr.Venters was owed $115,299 for accrued unpaid salary.

**Note 7 - Litigation**

            In April 2006, the Company was sued in an action entitled *More + Life, Inc., Aaron Gorinstein and Max Neuman v. Magic Media Networks, Inc. and Destination Television, Inc. * (Circuit Court of the 17th Judicial District, Civil Division, Broward County, Florida - Case No.06 -004046), for breach of contract. The complaint asserted damages of $53,000 related to advertising materials provided by the Company. In February 2007, the Company settled the litigation by payment of $25,000 to the plaintiffs. The Company had accrued $10,000 as contingent expense related to the litigation in the fiscal year ended October 31, 2006. The balance of $15,000 was accrued as additional expense for the three months ended January 31, 2007.

            Upon settlement of this lawsuit in February 2007, the Company was not involved in any litigation.

**Note 8 - Proposed Acquisition of American Broadcast Group LLC**

           On July 8, 2007, the Company entered into a purchase agreement with American Broadcast Group LLC ("ABG"), a privately held Florida based digital signage advertising sales organization, and ABG's sole member. Under the terms of the purchase agreement, the Company will purchase from the sole member all of  ABG's issued and outstanding member's interests in exchange for 3,520,000 shares of its common stock.

**  **        Completion of the proposed transaction is subject to various conditions that are set forth in the purchase agreement.  The parties to the securities purchase agreement anticipate closing the transaction on or about September 30, 2007.

**Note 9 - Ability to Continue as a Going Concern and Management Plan**

            The financial statements have been prepared assuming that the Company will continue as a going concern. The Company has had only nominal revenue in the ordinary course of its business. The lack of sales and recurring losses from operations, lack of working capital and shareholders' deficiency and delinquent payroll taxes and the filing of a federal tax lien in the amount of $120,827 raise substantial doubt about the Company's ability to continue as a going concern. Management's plan in regards to these matters is to seek further equity or debt funding to allow it to pursue its business plan which involves the sale of advertising on the Company's Bar TV, Gym TV and Hotel TV networks and affiliated networks and the possible acquisition of companies in related or unrelated businesses. The Company intends to increase its revenues by retaining or acquiring sales organizations to attract national advertisers; to negotiate a plan of payment of its payroll tax liability and to reduce its fixed cash operating expenses so that sales exceed the Company's fixed expenses. If the Company is unable to raise additional capital it may be required to curtail its operations, abandon its business plan, or file for reorganization or liquidation.

----

** ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS**

**GENERAL**

            Destination Television, Inc. ("we" or "the Company") is a media production, promotion and distribution company focused primarily on the out-of-home (OOH) digital signage industry. We provide remote, custom edited content and advertising delivery platforms to high traffic OOH locations and deliver national, regional, and local advertising and short format entertainment content. In addition, we have agreements with associated national networks which grant them the right to place national advertisements on our networks and, reciprocally, grant our networks the right to place national ads on their networks. We currently have reciprocal relationships with national networks, Hollywood Video, Movie Gallery, Wild Blue Yonder on Frontier Airlines; the GETV networks; MJM Sports; and the Boondoggle sports networks.

**           ** On December 5, 2006, we received our registered trademark status for Destination Television® with the United States Patent and Trademark Office (Registration Number #3,179,292) under Section 038 of narrowcast media/audio in out-of- home locations.

**           ** Our core business is the implementation of digital signage in high traffic OOH destinations. We are implementing agreements for additional revenue streams for our company as an out-of-home national network syndicator by cross-platforming or providing national advertising on third-party national OOH networks.

**           ** Destination Television currently broadcasts Bar TV, Gym TV and Hotel TV, which air first run movie trailers and new music videos that are strategically placed next to quality digital advertising, creating our unique brand of "advertainment". We intend to bring this content platform to our associated national networks creating a uniform Destination Television "Signature" throughout the United States in high traffic OOH locations.

**           ** Our primary business is the creating and implementing out-of-home distribution network platforms and the syndicating third-party OOH national networks to reach captive audience viewers, primarily in high traffic OOH leisure destinations. We provide proprietary advertising and marketing concepts and strategies, which we produce, as well as advertising content provided by us or our advertisers. Our flexible digital network platforms allow for content that can be specific for each targeted demographic group, time of day and monitor and measure frequency and rotation of those ads and messages. We promote our networks as being able to increase exposure and brand recognition and strengthen the influence of consumer purchasing decisions, both at the point-of-purchase as well as at the retail level. Our digital technology and premium locations can provide advertisers with instant delivery and flexibility of content that can be unique to each location, which allows our clients the ability to change their programming or select a specific location to target-market potential consumers. Our private television networks are not currently regulated by the FCC, which offers distribution opportunities to companies that are unable to advertise their products on conventional networks or cable television.

**           ** We have completed our beta test at a sample of our locations and have concluded that we will now charge our locations a monthly subscription fee to be part of our networks. We have advised our locations' managers that media boxes will be available to replace all DVD formats and we intend to expand aggressively into new locations on the subscription-based platform. Our proven digital technology platform will allow for content to be updated remotely as the locations add products and services and marketing campaign changes. We plan to charge a monthly subscription fee of $199 for each location.

**           ** Previously our revenue was solely derived from the production and sale of custom advertising and the subsequent airing of the ads on our Bar TV, Gym TV and Hotel TV networks and in the future, we expect revenue from advertisers from third-party OOH national networks. We have begun to receive our first revenues from national advertisers.

**           ** We offer locations a turnkey solution consisting of hardware, software, location programmed content, entertainment and advertiser content and if necessary and economically viable, television monitors to distribute our programming.

**           ** Our executive offices are located at 530 North Federal Highway, Fort Lauderdale, Florida 33301 and our telephone number is (954) 332-6600. Our website address is www.destinationtelevision.com.

**Strategy**

**           ** We have revised our business model to concentrate on high traffic leisure OOH locations, of "leisure destinations driving traffic to retail locations." We have developed relationships with leisure destinations such as bars, taverns and nightclubs; gyms and health clubs, video stores and in hotels and resorts in desirable tourist areas.

**           ** Destination Television's digital signage networks broadcast first-run movie trailers and new music videos. The abbreviated short content format is designed for the specific demographic of these high traffic OOH environments.

**           ** According to Forrester Research, movie trailers and music videos are the most popular downloads of today's youth.

**           ** Traditionally, viewing audiences have become highly fragmented and specialized due to the growth of cable television channels, video recorders and the Internet, limiting the ability of advertisements to be seen. Destination Television can then air high quality local, regional and national digital advertisements or commercial spots to specific high traffic out-of- home captive audiences and specific demographics.

**           ** Beginning in January 2007, we have consolidated our operations and re-positioned our company as a media production, promotion and distribution company focused primarily on the out-of-home digital signage industry.

**           ** We intend to solicit national advertisements on our networks at such time as a uniform measurement and metric methodology is implemented for the digitial signage industry that can provide proven and quantitative impressions of advertiser viewership. We intend to actively solicit national advertisments through advertising and media placement agencies.

**           ** We intend to focus our core operations on executing joint agreements with other companies and licensing from them certain rights to their pre-existing OOH digital networks for the placement of mutually beneficial advertisements in their high traffic captive audience locations.

**           ** We have secured new bar, gym, hotel, airline, gaming and video store locations through these agreements, which are referred to in the advertising industry as OOH  areas of dominant influence (ADI's) and we intend to secure additional agreements for OOH digital locations in these major DMI's. We believe that by increasing our portfolio of these OOH digital locations, we will be able to enter into substantive third party agreements with major advertising agencies, media representation firms and other independent contractors interested in purchasing national, regional and local advertising slots on "clusters" of OOH television network platforms.

**           ** We plan to actively solicit advertising agencies and customers for our networks, and expand locations aggressively until we have or achieve sufficient locations to draw critical mass for national advertisers. We believe we can acquire certain national commercials via "promo only" while we are expanding our networks and locations leveraging local and regional advertisements, and in the future replace them with paying national advertisements. In addition, we intend to derive a substantial portion of our revenues from strategic alliances and agreements with retail locations, whereby the product or service at the location agrees to pay for co-op advertising. We have begun to obtain agreements from locations that will pay us a monthly subscription fee for the services they receive on being on the network(s). New locations will pay a monthly fee per location in exchange for custom advertisement of the location's brand, product or service to its customers. 

**           ** We are retiring, consolidating and implementing new locations as a result of the cancellation of beta test locations or conversion to our subscription based service. We previously had a total of approximately 53 locations installed and broadcasting Bar TV on a daily basis that have served as the beta test for the advertising platform. We believe that this beta test of anchor locations established our regional footprint in the Southeast Florida corridor and provided us with information to solicit new locations for our subscription based service. We intend to re-solicit these markets on the new subscription based service. Some of these locations are not actively engaged in our network and may be removed by us, may discontinue their association with Bar TV, or may again become active participants. Our revised business model is now focused on appealing to regional and national chains as a subscription based service in contrast to pursuing individual locations. 

**           ** We believe that our business model can only be successful if we are able to attract a sufficient number of subscribers and locations to reach critical mass in order to attract national and major regional advertisers that are interested in reaching the demographics of our advertiser platforms. In order to accomplish this goal, we must continue to place our broadcasts in high traffic OOH locations in entertainment and retail districts throughout the United States. There is no assurance that we will able to enter into agreements with a sufficient number of business locations to interest the advertisers that we are seeking.

**           ** In order to interest viewers to watch our monitors and see and pay attention to our advertisements, we must provide entertaining content. We believe our advertainment platform is the correct mix of short content entertainment and advertisements; however there can be no assurance that the general public will embrace this format. Just as an "ads-only" channel has not proven to be popular, we believe that to be successful in presenting advertisements, we must provide some form of entertainment and we have chosen first-run motion picture trailers and new music videos mixed with quality digital advertisements to create our unique brand of "advertainment." We have not taken any surveys as to whether our locations' patrons like being exposed to ads or movie trailers or music videos.**           **

            We utilize as "backbone" or "core" content, movie trailers of first-run motion pictures from the major motion picture studios, including Twentieth Century Fox, Columbia Pictures, MGM, Warner Bros., Paramount Pictures, Dreamworks and Universal, highlighting upcoming releases, and new music videos from the major record labels including Geffen, Universal Atlantic, Capitol, EMI, Epic, Electra, Def Jam, Island, J Records and Maverick. The movie trailers, which are rated as suitable for general audiences, are supplied to us, without charge, by EPK.TV, a division of DBS InteleStream, Fahlgren Entertainment, Inc.., and Alliance, an Atlanta based entertainment oriented advertising and public relations agency. 

**           ** Fahlgren Entertainment, Inc. has agreements with the studios to receive print and ad ("P & A") marketing materials, which they provide to third-party entertainment companies, such as our company, to promote upcoming theatrical releases. The music videos, which are promotions for upcoming album releases, are provided to us for promotional purposes, as well.

**           ** We then schedule local, regional and national advertisements, before and after the filmed movie trailers.  Because music is generally played in some of our locations by disk jockeys or juke boxes, it is necessary that some of our broadcasts of movie trailers and music videos and ads be graphically intensive and sometimes aired without sound ("MOS").

**           ** We currently do not receive any direct revenues from these trailers and videos, but are free to use them as core content in our broadcasts to the locations that comprise our network. However, a recent industry shift is appearing where the "promo-only" music videos are now being represented to the OOH marketplace as "content," whereas the distributors of this content may in the future expect a monthly fee per location.

            We previously had Gym TV beta test locations, except that in addition to providing the businesses with free advertisements, we entered into agreements to pay the locations, on a pro-rata basis, from 10% to 33% of the gross ad revenue. We may or may not continue revenue sharing when a national rollout of the Gym TV network is implemented. We are currently "rolling up" those locations upon expiration of their agreements or as soon as practicable.

            **Industry Background**

            The point-of-purchase OOH market together with the digital signage and out-of-home advertising business is currently estimated at $6 billion annually. The advertising industry is diverse and includes television, newspapers, magazines, radio, specialty media, the Internet, billboards, direct mail and telephone directories. Approximately $460 billion was spent on worldwide advertising in 2000, including over $240 billion in the United States alone.

**           ** In recent years, non-traditional media, particularly digital technology, has brought in an era of change, providing advertisers new forms and formats by which they can connect with and impact their target audience.  Many industry analysts believe that the relative importance of traditional advertising media will decrease as advertisers look for more creative solutions to reach consumers.

            Through our networks, we have created advertising distribution channels that permit advertisers to effectively reach their audience in an out-of-home environment. We intend to capture an increasing share of the total advertising market. We believe that point-of-purchase advertising networks appeal to out-of-home advertisers who today employ a broad range of advertising mediums.

**            Network Program**

            Our "networks," which is the term we use to describe our groups of locations that permit their patrons to view our broadcasts, offer advertisers the ability to target specific demographics on a site-by-site basis. Placing monitors in OOH high traffic leisure destinations such as sports bars, taverns, nightclubs, gyms and health clubs, hotels and airlines increases exposure and ad impressions. The monitors are profiled based on specific characteristics of their audience, including age, gender, race and income. This is not accomplished scientifically, but by word-of-mouth and anecdotal observation, which we believe to be reliable. Some examples of the type of information which may be helpful for advertisers are the price of drinks in a bar, which gives information as to patrons' income; the breakdown by sexes, which might indicate the type of drink, which would appeal to a particular gender; the types of cars and trucks in the parking lot, are all items of information that may be useful to advertisers in determining the demographics make-up of the viewing population.  This information availability allows us to appeal to both local advertisers targeting a small geographic area within a major city, as well as national advertisers targeting a wide range of demographic groups.

            Our advertising monitors play a repeating or looping sequence of advertising and programming.  As currently configured, a broadcast consists of approximately 60 thirty-second advertising spots per hour. The broadcast in each specific area can support 480 thirty-second daily airing slots, including entertainment spots, on the forward storage media player installed at each location. New technology has been announced that may make available to us a high definition broadcast and provide increased storage and broadcast quality. We have researched this technology and elected to convert all current locations to the forward storage media player, and on all new installations, and to deliver content terrestrially via the Internet.

            Installation costs for a new site include the cost of acquiring hardware and the cost of installing equipment.  The fully installed average per site cost for a typical location with a single video monitor is approximately $800.  Some sites may contain multiple monitors that would be supported from a single forward storage media player.

**           ** We secure three to five year location agreements. We do not permit ads of competing bars, gyms, hotels, video stores or airlines to be broadcast to the locations on our network.  The location establishment is responsible for supplying electricity to the equipment and keeping the designated monitor on, during normal business hours. As compensation for allowing us to place our monitors or networks in their business location, which at present is generally a busy bar, tavern, nightclub, gym, or hotel, the location receives monthly advertising spots. We usually provide the business location with at least four times the advertisements that air, and at least four times per hour. The location may display its monthly event calendar, five-second static ad and photo gallery, or the locations' products or services that are all updated monthly, at a cost of $199 per month per location.  

**            Advertising Sales**

**           ** Our strategy is to derive a significant portion of our revenue from advertisements placed on our network and affiliated networks.  We are attempting to procure national advertisers, primarily through advertising and promotion agencies and public relations firms that have the ability to direct promotion funds to our networks. Examples of industries that are constantly having special promotions are the automobile, fashion and entertainment industries. We are also seeking advertisers that are looking for alternate media to promote their products that are limited by law or tradition as to their advertising options. We also look for opportunities for advertisers whose products can be sold immediately on an impulse basis such as beverages in a Bar TV location and health foods and supplements in Gym TV locations. Recent surveys have shown that 61% of people leaving gym locations make an immediate purchase, with 55% purchasing goods from a supermarket or drugstore (source: Health Club Panel). We intend to target advertisers that relate to this mentality of "leisure destinations driving traffic to retail locations," as we have implemented this tag line in our marketing efforts.

**           ** We believe that advertising and product demonstrations at the point-of-purchase could significantly influence which products consumers purchase.

**           ** Advertising rates are based upon the availability of space for the desired location, the size and demographic make-up of the market served by the screens and the availability of alternative advertising media in the area. Advertising sales are generally made pursuant to contracts with local, regional or national advertisers. Advertising rates currently implemented by us may change when a uniform measurement has been obtained for the digital signage industry creating a relevant cost per thousand ("CPM").

**           ** We intend to operate the new locations and network broadcast remotely, utilizing a "forward storage media player" consisting of a terrestrial digital Internet/Ethernet connected hard drive, located at the out-of-home location that uses "pull" not "push" technology, to deliver the content to the location. Utilizing this "real-time" technology, we can update content on-demand, track data from the location, including commercial spot line-up, frequency and rotation, one-time advertisements, play lists and other digital signage data and configurations. We may, in the future, establish an in-house sales force that could be paid a base salary plus incentive compensation. If we are unable to operate the new territories remotely, it could have a substantial and adverse impact on our expansion and capital plan.

**Competition**

**           ** Competition for advertisers is intense. We will be competing with similar networks and also with radio, television and cable companies and other forms of advertising including newspapers, magazines, the Internet, direct mail and billboards. We believe that our strategy of offering advertising in leisure destinations provides particular advertisers with access to a select clientele at attractive rates with favorable brand recall and significant point-of-purchase potential. We expect to compete with these forms of advertising on the basis of price and our ability to reach potential customers at the point-of-purchase. A large number of companies that provide advertising in the point-of-purchase segment of the advertising industry and other sectors have significantly greater financial, marketing, technical and other resources than we have. Potential competitors may be able to devote greater resources to marketing promotional campaigns, adopt more aggressive pricing policies and devote more resources to technology than we can. Increased competition may reduce our market share and may require us to reduce advertising rates and therefore lower our operating margins. We may not be able to compete successfully against current and future competitors. There can be no assurances that we will be able to obtain the desired results from our business strategy or to be profitable.

**            Bar TV and Gym TV**           

**           ** We plan to aggressively expand the Bar TV concept, which is directed at a specific demographic population focused on chain or multiple location bars, taverns and entertainment destinations. We look to work with the locations utilizing their pre-existing marketing materials, logos and websites to create their digital signage signature and to work with their vendors to provide us with early advertisement and promotion tie-ins on the network. We plan to convert suitable current locations to a forward storage media player and a monthly subscription service fee.  We have completed the beta testing of our Gym TV network at locations with Gold's Gym franchisees and World Gyms and independent gyms throughout Florida. We have attended the National Fitness Trade Shows, and were able to execute new agreements for Gym TV locations in several additional states as part of our currently planed national rollout. We are converting suitable current locations to a forward storage media player and a monthly subscription service fee. We now broadcast to approximately 34 locations and are awaiting installation of our equipment at approximately 19 new additional facilities. In June 2006, Gym TV presented at the Club Industry East Trade Show. Gym TV signed at that convention new Gym TV locations as subscribers for Gym TV. We are currently following up on national chains and intend to expand Gym TV as a subscription service. We believe that upon obtaining critical mass, manufacturers and retailers that market health related products such as vitamins, health foods, bicycles, athletic equipment and sporting events will consider directing part of their promotional/advertising budget to a specific sector of the population. We believe that the health club/gym market is well suited to our concept of "leisure destinations driving traffic to retail locations." 

**           ** In addition to having made application to register the trademark for Bar TVTM, we have made application to register the trademark of the Gym TVTM and Hotel TVTM brands with the United States Patent and Trademark Office under Section 038 of narrowcast media/audio in out-of- home locations.

**           ****Hotel TV**

**            Acquisition of National Hotel Network and ALW Communications **

**           ** On December 31, 2004, we completed the acquisition of all of the issued and outstanding stock of National Hotel Network, Inc. ("NHN") and ALW Communications, Inc. ("ALW"). We planned to integrate the new acquisitions, under the brand Hotel TV, Inc., with our existing operations, Bar TV and Gym TV so as to offer national advertisers an opportunity to reach a targeted audience at leisure destinations at relatively reasonable advertising rates. In May 2005, we commenced a lawsuit regarding the acquisition of ALW and NHN. The lawsuit was settled in June 2006 with payment to us of $25,000 by a third-party, and the exchange of mutual releases.

**Description of the Acquired Companies **

**           ** ALW Communications, Inc. was formed in August 2002 and shortly thereafter, the concept for the City Traveler television program was introduced to South Florida's largest and most well known hotels. The show is an in-room television program designed to be a hotel guest's visual guide to the area. Unlike traditional television shows with conventional commercials, City Traveler attracts advertisers by offering advertisements that are actual pieces of a television show. Our production staff works with each client to create a unique 60- to 120-second "advertorial" to entertain, educate and motivate targeted hotel guests. City Traveler episodes consist of 15 to 30 of these individual segments, each highlighting a specific destination.

**           ** In early 2004, in order to attract national advertisers, the National Hotel Network was formed as a sales organization to represent five companies (including ALW Communications, Inc.) that operated City Traveler-type channels in 11 U.S. cities. Through these local affiliates, the network had a viewer base in more than 470 hotels and 135,000 hotel rooms. Each affiliate independently produces their own travel show; however the National Hotel Television Network has contracts with each to sell customary 30, 60, and 90-second commercials. These contracts require that affiliates may not join a competing network, and that National Hotel Television Network not represent competitors airing programming in the affiliates' local markets. Shortly after completing our acquisition of ALW and NHN, we were notified that the largest of the five companies, City Explorer TV, cancelled its agreement with NHN. This cancellation resulted in a reduction of the number of affiliates from 11 to five and the reduction of the number of hotels to 228 and the number of hotel rooms to 37,715 and virtually all the major demographic market areas ("DMAs") of the National Hotel Television network.

**Government Regulation**

**           ** Because we operate private networks at retail locations, we are not currently restricted by licensing program content and related regulations of the Federal Communications Commission.  In addition, the advertising industry is subject to regulation by the Federal Trade Commission, the Food and Drug Administration and other federal and state agencies and is reviewed by various civic groups and trade organizations.  The introduction of new laws, regulations or interpretation of existing regulations governing advertising could have a material adverse effect on our business.

**Employees**

**           ** We currently have three full-time employees and also employ independent commission representatives. We typically enter into independent contractor agreements or work-for-hire agreements with individuals to provide services on an as-needed basis.

**Mergers and Acquisitions**

**           ** In addition to pursuing our revised business model, we are seeking to acquire companies or enter into joint ventures with companies that are in the advertising or promotion fields, especially companies that have in-house or affiliated sales departments. We believe that our concept of leisure destinations driving traffic to retail locations is relevant to all forms of advertising, whether in digital or print or sound format. We believe that there are companies, in Florida and elsewhere, that could benefit from our capabilities and industry relationships and that can also complement our existing network structure. In light of our limited cash position and relatively high debt load, there is no assurance that we will be able to complete the acquisition of any company.

            **Letter of Intent to Acquire Charter Digital Media Inc.**

            In March 2007, we entered into a letter of intent to acquire Charter Digital Media Inc., a national representative for digital signage. The letter of intent is subject to approval by the parties of a definitive acquisition agreement that will include various conditions. There can be no assurance that we will be successful in negotiating a definitive agreement or achieving completion of the proposed transaction.

           **Definitive Agreement to Acquire American Broadcast Group LLC**

            On July 8, 2007, we entered into a purchase agreement with American Broadcast Group LLC ("ABG"), a privately held Florida based digital signage advertising sales organization, and ABG's sole member. Under the terms of the purchase agreement, we will purchase from the sole member all of ABG's issued and  outstanding member's interests in exchange for 3,520,000 shares of our common stock. ** **Completion of the proposed transaction is subject to various conditions that are set forth in the purchase agreement.  The parties to the securities purchase agreement expect the acquisition to be completed on or about September 30,  2007.  In anticipation of the consummation of the transaction, ABG has relocated its offices to our premises.

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**RESULTS OF OPERATIONS**

**Critical Accounting Policies**

**           ** The following critical accounting policies are important to the portrayal of our company's financial condition and results.

***Revenue Recognition:***

**           ** Our revenue is derived from (1) subscription fees ("Subscription revenue") paid by network member locations that air our network content and such revenue is recorded ratably over the term of the subscription agreement; and (2) the production and sale of custom advertising and pre-produced local, regional and national advertising that is subsequently aired throughout our TV networks. Production revenue is recognized upon the delivery and acceptance of the produced piece while Air Time revenue is recognized ratably over the term of the advertising contract.  

**           ** We account for revenue under the guidance provided by EITF 00-21 "*Revenue Arrangements with Multiple Deliverables*." We only recognize production revenue, separately from air time revenue, if we bill the advertising client separately for both elements and if the customer has been so advised as part of its initial arrangement with us. In order to record the production revenue as a separate part of the advertising contract, billing rates, whether by the job or based on time and materials, must be presented to the advertising client for approval as part of the original contract. Video clips produced by our art department have stand alone value and can be used for purposes other than to be aired on our networks. Once completed and delivered to the client, the video clip is non- returnable and hence "not subject to a general right of return." Air time is recognized as revenue over the term of the advertising contract or proportionately by spots delivered, depending on the initial contract terms. We recognize air time revenue as air time is delivered. If the client has not been informed that billing is separate for production and airtime, then all revenue from that contract is treated as air time revenue and is recognized as commercials are aired.  Since, we have always delivered airtime as contracted, management has determined that delivery of the airtime is "probable" and since we have control over our networks, the delivery of the airtime meets the criterion of "controlled by the Company."

***Valuation of Long-Lived Assets:***

**           ** We review the recoverability of our long-lived assets including equipment, goodwill and other intangible assets, when events or changes in circumstances occur that indicate that the carrying value of the asset may not be recoverable. The assessment of possible impairment is based on our ability to recover the carrying value of the asset from the expected future pre-tax cash flows (undiscounted and without interest charges) of the related operations. If these cash flows are less than the carrying value of such asset, an impairment is recognized for the difference between estimated fair value and carrying value. Our primary measure of fair value is based on discounted cash flows. The measurement of impairment requires management to make estimates of these cash flows related to long-lived assets, as well as other fair value determinations.

**           ** We amortize the costs of other intangibles over their estimated useful lives unless such lives are deemed indefinite. Amortizable intangible assets are also tested for impairment based on undiscounted cash flows and, if impaired, written down to fair value based on either discounted cash flows or appraised values. Intangible assets with indefinite lives are tested for impairment, at least annually, and written down to fair value as required.

***Results of operations for the Three Months Ending July 31, 2007 and July 31, 2006***

            The following discussion and analysis provides information that our management believes is relevant to an assessment and understanding of our results of operations and financial condition. The discussion should be read in conjunction with the financial statements and footnotes that appear elsewhere in this report.

**Sales and Other Revenues**

             In the three months ending July 31, 2007, we had incidental sales in the nominal amount of $2,887. This compares to the nominal sales of $4,924 in the three months ended July 31, 2006. Our sales in both periods were primarily of an experimental nature in which we tested and refined different concepts and approaches for potential advertisers. We do not expect any sum of revenues other than nominal amounts until we have in place a sufficient number of broadcast locations to realize substantial monthly subscription fees that will also attract national and regional advertisers; and/or complete the acquisitions of sales agents Charter Digital Media Inc. and American Broadcast Group LLC. 

**Expenses**

            Total expenses for the fiscal quarter ended July 31, 2007 were $153,146 compared to $377,194 for the fiscal quarter ended July 31, 2006.

            **Selling, general and administrative expenses** for the fiscal quarter ended July 31, 2007 decreased $92,399, or approximately 40%, to $137,445 from $229,844 in the fiscal three months ended July 31, 2006.  Expenses in the 2007 fiscal quarter included production and sales personnel expense, $29,315; accrued officer's salary, $36,658; allocation of expense of previously issued shares, $8,333; accrued but unpaid rent expense, $13,500; and depreciation and amortization, $6,575.

            Selling, general and administrative expenses in the comparative 2006 quarter included $54,053 paid to production employees and independent sales personnel; and officer's compensation, $43,246, of which $8,333 was the allocation of expense of previously issued shares . Other significant expenses in the 2006 quarter included $35,000 for net settlement and accrual of estimated litigation expense; professional fees, $20,512;  rent expense, $13,500; and approximately $16,000 for the cost of exhibiting at industry trade shows. Additionally, in the 2006 quarter, we incurred consulting expenses of $35,000, of which $2,500 was paid in cash and $32,500 was paid in stock, in lieu of cash.

             **Interest expense** decreased to $15,701 in the fiscal quarter ended July 31, 2007 from $112,350 in the fiscal quarter ended July 31, 2006. Interest expense in the 2007 quarter consisted of interest on loans payable and convertible notes payable to Dr. Terry and accrued interest payable on unpaid payroll taxes.

             Interest expense for the quarter endedJuly 31, 2006was $112,350, which included $100,000 that represented the embedded value of the beneficial conversion feature of the secured convertible note payable issued in May 2006. The remaining $12,350 of interest expense was for the stated interest on our convertible notes and accrued interest on payroll taxes payable.

**Income Tax Expense (Benefit)**

            We have substantial net operating loss carry-forwards, which may be used to offset operating profits in the future. In the periods covered by this report, there was no income tax expense or benefit reported on our financial statements. We determined that it was more likely than not that our net operating loss carry-forwards would not be utilized; therefore, we have provided a valuation allowance against the related deferred tax asset.

**Losses**

            Our net loss before taxes for the fiscal quarter ended July 31, 2007 decreased approximately $222,000, or approximately 60%, to $150,259 from $372,270 in the comparable fiscal 2006 quarter. This decrease in loss before taxes was primarily the result of a decrease of selling, general and administrative expenses and interest expense.

             Although we believe our revised business model may provide for an increase in revenue and a reduction in losses for the year ending October 31, 2008, there can be no assurance that we will achieve or maintain profitability or that revenues will be generated or that growth can be sustained in the future. The viability of our business plan necessitates that we significantly expand the number of locations that are part of our network to reach that level of critical mass of locations needed to attract sales organizations that are able to secure national advertisers for our networks. Without required funding, we will not be able to increase our locations or attract sales organizations and national advertisers.

**Loss per Share**

            The basic and diluted loss per share of common stock was $NIL (less than $0.005) in  the fiscal quarter ended July 31, 2007 and $0.01 in the fiscal quarter ended July 31, 2006. The loss per share, in both periods, was computed by dividing the net loss by the weighted average common shares outstanding. In the fiscal 2007 quarter, the weighted average of outstanding common shares which includes the weighted average number of common shares into which the preferred stock is convertible was 53,205,499 compared to 45,371,462 in the fiscal year 2006 quarter. For the purpose of computing loss per share of common stock, the Preferred Stock is treated as if it were a separate class of common stock with rights and attributes identical to the common shares in all respects except voting rights.

**Sales and Other Revenues**

            In the nine months ended July 31, 2007, our sales were $13,663 compared to $13,502 in the nine months ended July 31, 2006. Sales efforts in the beginning of  the 2007 period were hindered, as management concentrated its efforts on completing the acquisition of Be Media, which was not  consummated.                                                                                                                                                                                                                                                                       **Expenses**

            Total expenses for the nine months ended July 31, 2007 were $598,283, which was a decrease of approximately $414,000 from total expenses of $1,012,327 in the nine months ended July 31, 2006.

            **Selling, general and administrative expenses** for the nine months ended July 31, 2007, excluding consulting expenses, decreased approximately $254,000, or 36%, to $453,449 from $707,611 in the comparable 2006 nine-month period. Included in the 2007 expenses were officer's compensation, $134,974, which included $25,000 for the allocation of expense of previously issued shares; payroll and independent sales and production personnel expense, $105,901; professional expenses, $41,766; settlement of last remaining litigation, $15,000; and depreciation and amortization, $19,725.

            In the nine months endedJuly 31, 2006, our major expenses included payroll and independent sales and production personnel expense of $269,320 of which, $171,000 was paid in stock in lieu of cash; $40,500 for accrued rent; and $129,737 for officer's compensation, of which $25,000 included the allocation of expense of previously issued shares. Depreciation and amortization expense, for the 2006 nine months was $31,725.

            **Consulting expenses** were $99,358 for the nine months ended July 31, 2007, which included payments in stock, $50,137; and the value of options granted, $49,225. For the nine months ended July 31, 2006, consulting expense was $74,807, of which $10,300 was paid in cash; and $64,507 was paid in stock, in lieu of cash.

            **Interest expense** for the nine months ended July 31, 2007 was $29,775 for accrued interest on the Terry notes and accrued interest on past due payroll taxes. This compares to interest expense in the 2006 period of $229,909, which included $200,000 that represented the embedded value of the beneficial conversion feature of the $200,000 principal amount of secured convertible notes payable issued in March and May 2006. The remaining $29,909 of interest expense was for the stated interest on our convertible notes, and accrued interest on payroll taxes payable.

**Losses**

              Our net loss, before taxes, declined approximately $414,200 from $988,825, in the July 31, 2006 nine months, to $585,620 in the July 31, 2007 nine-month period. Included in our losses in the 2007 period was the non-cash charge of $49,225 for the value of stock options granted.  The 2006 period earnings were impacted by a non-cash charge of $200,000 for the discount recorded, which resulted from an embedded beneficial conversion feature in our secured convertible note. Although we have substantial tax carry-forwards, we have not reduced our net loss for the nine-month periods by any tax benefit because we determined that it was more likely than not that our net operating loss carry-forwards would not be utilized; therefore, we have provided a valuation allowance against the related deferred tax asset and, consequently, our net loss before taxes and after taxes is the same.     

**Loss per Share**

            The basic and diluted loss per share of common stock, for the nine months ended July 31, 2007, was $0.01, compared to $0.02 in the like nine-month period of fiscal 2006. The loss per share was computed by dividing the net loss, by the weighted average common and equivalent shares outstanding. In the fiscal 2007 nine-month period, the weighted average, which includes the weighted average number of common shares into which the preferred stock is convertible, was 50,186,076 compared to 44,363,296 in the fiscal 2006 nine-month period. For the purpose of computing loss per share of common stock, the Series B Preferred Stock was treated as if it were a separate class of common stock as the rights and attributes of the common shares and preferred shares are identical in all respects except for voting rights.            **Impact of Inflation**

             It is management's opinion that inflation has had only a negligible effect on our operations in the past several years.

** Liquidity and Capital Resources**

           We have not generated cash from operations in the period November 1, 1999 through July 31, 2007. Operating activities consumed cash of $194,865 in the  fiscal nine months ended July 31, 2007 and $422,851 in the fiscal nine months ended July 31, 2006.

            We have been able to continue in business primarily from the receipt of cash from financing activities. During the nine months ended July 31, 2007, our financing activities provided total funds of $286,600. Similarly, our financing activities provided total funds of $405,500 in the July 31, 2006 nine-month period.

            Our liabilities, all of which are current liabilities (due within one year), totaled approximately $1,292,000 at July 31, 2007.  Of that amount, $535,000 plus accrued interest of $67,599 was owed to Dr. Terry. The $535,000 of principal consists of: $400,000 in the form of 6% convertible notes, $200,000 of which is secured by all of our assets; and $135,000 in 6% non-convertible unsecured loans. Additionally, we owed Dr. Terry $247,500 for accrued rent.

            Our other major liability is for payroll taxes, which is approximately $302,000, including interest and penalties, at July 31, 2007. On August 1, 2007, a notice of federal tax lien was filed by the Internal Revenue Service in the amount of $120,827.  We recognize the high priority of resolving this debt in an orderly manner. We have retained an accounting firm that is experienced in negotiating with the Internal Revenue Service regarding payroll tax liabilities, and  we plan to make a substantial lump-sum payment and are continuing discussions regarding structuring a manageable payment schedule. There is no assurance that we will be able to reach a settlement of our payroll tax liabilities that is acceptable to us.

**           ** We have funded our cash needs during the last several fiscal years through the issuance of our common stock and convertible notes, for cash. We also used our common stock, in lieu of cash, to obtain professional and employment services. We intend to cover our cash needs over the next 12 months through the sale of additional shares of our common stock and/or convertible securities.

**Capital Expenditures**

            We expect that our only significant capital expenditure in the upcoming year will be for television screens and related equipment to be placed in various locations that receive and transmit our programming and advertising. We estimate that the total expenditures for the next 12 months will not exceed $500,000. There is no assurance that we will be able to obtain financing to acquire the equipment at terms acceptable to us.

**Ability to Continue as a Going Concern and Management Plan**

            Our financial statements have been prepared assuming that we will continue as a going concern. We have generated only nominal revenue in the ordinary course of our business. The lack of sales and recurring losses, lack of working capital, shareholders' deficiency and delinquent payroll taxes and recently filed federal tax lien raise substantial doubt about our ability to continue as a going concern. Our management's plan in regard to these matters is to seek further equity or debt funding to allow us to pursue our business plan which involves the sale of advertising on our Bar TV, Gym TV and Hotel TV networks; the licensing of and affiliation with other networks; and the possible acquisition of companies in related or unrelated businesses. We intend to increase our revenues by concentrating our sales efforts on attracting national advertisers to our Gym TV network and other networks; to negotiate a plan of payment of our payroll tax liability and to reduce our fixed cash operating expenses so that sales exceed our fixed expenses.

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** ITEM 3 - CONTROLS AND PROCEDURES**

**           ** (a) Evaluation of disclosure controls and procedures

            We carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of July 31, 2007. This evaluation was accomplished under the supervision and with the participation of our chief executive officer, principal executive officer, chief financial officer/principal accounting officer who concluded that our disclosure controls and procedures are not effective to ensure that all material information required to be filed in the quarterly report on Form 10-QSB has been made known to him.

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

            Based upon an evaluation conducted for the period ended July 31, 2007, Gordon Scott Venters who served as our Chief Executive Officer and Chief Financial Officer (which duties include that of principal accounting officer) as of July 31, 2007, and the date of this Report, has concluded that as of the end of the period covered by this report, we have identified the following material weakness of our internal controls: 

           ·     Reliance upon independent financial reporting consultants for review of critical accounting areas and disclosures and material non-standard transactions.                 ·     Lack of sufficient accounting staff which results in a lack of segregation of duties necessary for a good system of internal control.

**           ** In order to remedy our existing internal control deficiencies, as soon as our finances allow, we will hire a Chief Financial Officer who will be sufficiently versed in public company accounting to implement appropriate procedures for timely and accurate disclosures.   

**           ** (b) Changes in internal controls

**           ** We have not yet made any changes in our internal control over financial reporting that occurred during the period covered by this report on Form 10-QSB that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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** PART II**

** OTHER INFORMATION**

**ITEM 2 - UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS**

            During the three months ended July 31, 2007, we issued the following unregistered securities:     

            In June 2007, we issued to an accredited investor 2,000,000 shares of our common stock for $60,000, or $0.03 per share. The issuance of these shares was made in reliance on Section 4(2) of the Securities Act of 1933 and was made without general solicitation or advertising. The purchaser is a sophisticated "accredited" investor with access to all relevant information necessary to evaluate the investment and he represented to us that the securities were being acquired for investment purposes. The proceeds from the sale were used for working capital.

            The shares listed above have not been registered under the Securities Act of 1933, as amended, and therefore, may not be transferred in the absence of an exemption from registration under such laws and will be considered "restricted securities" as that term is defined in Rule 144 adopted under the Securities Act, and may be sold only in compliance with the resale provisions set forth therein. 

            As of July 31, 2007, we had 50,533,760 shares of common stock outstanding. As of the same date, we had 3,750,000 shares of Series B Preferred Stock outstanding.

** ITEM 5 - OTHER INFORMATION**

           On July 8, 2007, we entered into a purchase agreement with American Broadcast Group LLC ("ABG"), a privately held Florida based digital signage advertising sales organization, and ABG's sole member. Under the terms of the purchase agreement, we will purchase from the sole member all of ABG's issued and  outstanding member's interests in exchange for 3,520,000 shares of our common stock.                  

**           ** Completion of the proposed transaction is subject to various conditions that are set forth in the purchase agreement.  The parties to the securities purchase agreement expect to close on or about September 30, 2007.  In anticipation of the consummation of the transaction, ABG has relocated its offices to our premises.    

** ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K**
|   | (a)    |   | Exhibits

Exhibit 31.1 - Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 of the Principal Executive Officer and Principal Financial Officer and Principal Accounting Officer

Exhibit 32.1 - Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 of the Principal Executive Officer and Principal Financial Officer and Principal Accounting Officer |
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|   | (b)    |   | Reports on Form 8-K

On July 10, 2007, we reported on Form 8-K, under Items 1.01 and 9.01, that we had entered into a purchase agreement to acquire American Broadcast Group LLC.                                                                                                                                                                                                                                                                                                              |

            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.
|   |                                                 |   |      | **DESTINATION TELEVISION, INC.**                                                                                                                                                                                                                     |
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|   | September 17, 2007          |   | By:  | /s/ Gordon Scott Venters                                                                                                                                                                                                                             |
|   |                                                 |   |      |                                                                                                                                                                                                                                                      |
|   |                                                 |   |      | Gordon Scott Venters          President and Chief Executive Officer          (Principal Executive Officer) and          Acting Chief Financial Officer          (Principal Financial Officer and          Principal Accounting Officer) and Director |