================================================================================

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB

(Mark One)

[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2005

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

             For the Transition Period from ________ to ___________

                          Commission File No.: 0-32523

                        DOBI MEDICAL INTERNATIONAL, INC.
                 ----------------------------------------------
                 (Name of small business issuer in its charter)


              DELAWARE                                  98-0222710
  --------------------------------------   -----------------------------------
  (State or other jurisdiction of          (I.R.S. Employer Identification No.)
  incorporation or organization)


           1200 MACARTHUR BLVD.
                  MAHWAH, NJ                               07430
  ---------------------------------------  -----------------------------------
  (Address of principal executive offices)              (Zip Code)

                                 (201) 760-6464
                           --------------------------
                           (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), and (2) has been
subject to such filing requirements for the past 90 days. [ X ] Yes [ ] 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 ]

As of November 3, 2005, 65,971,665 shares of the issuer's Common Stock were
outstanding.

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

================================================================================


<PAGE>
<TABLE>
<CAPTION>


                                                  DOBI Medical International, Inc.

                                           September 30, 2005 Form 10-QSB Quarterly Report

                                                          Table of Contents

                                                                                                               Page

<S>                                                                                                              <C>
Part I  Financial Information.....................................................................................3

                     Item 1.  Financial Statements................................................................3

                         Condensed Consolidated Balance Sheet at September 30, 2005...............................3

                         Condensed Consolidated Statements of Operations for the Three and Nine Month Periods
                             ended September 30, 2005 and 2004 and for the Period from September 7, 1999
                             (Inception) to September 30, 2005....................................................4

                         Condensed Consolidated Statements of Cash Flows for the Nine Month Periods Ended
                             September 30, 2005 and 2004 and for the Period from September 7, 1999 (Inception)
                             to September 30, 2005..............................................................5-6

                         Notes to Condensed Consolidated Financial Statements..................................7-11

                     Item 2.  Management's Discussion and Analysis or Plan of Operation..........................12

                     Item 3.  Controls and Procedures............................................................19

Part II  Other Information.......................................................................................20

                     Item 1.  Legal Proceedings..................................................................20

                     Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds........................21

                     Item 3.  Defaults Upon Senior Securities....................................................21

                     Item 4.  Submission of Matters to a Vote of Security Holders................................21

                     Item 5.  Other Information..................................................................21

                     Item 6.  Exhibits and Reports on Form 8-K...................................................21

                     Signatures..................................................................................22


</TABLE>

                                       2

<PAGE>


Part I  Financial Information

Item 1.  Financial Statements



                 DOBI Medical International, Inc. and Subsidiary
                          (A Development Stage Company)
                      Condensed Consolidated Balance Sheet
                               September 30, 2005
                                   (Unaudited)


ASSETS
Current assets:
     Cash and cash equivalents                             $       5,223,753
     Accounts receivable                                              33,630
     Prepaid expenses and other current assets                       240,967
     Inventory                                                       408,470
                                                        ------------------------
Total current assets                                               5,906,820

Property and equipment, net                                          636,278
Intangible assets, net                                                 7,538
Other assets                                                          45,529
                                                        ------------------------
Total assets                                               $       6,596,165
                                                        ========================

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
     Accounts payable                                      $         432,807
     Accrued expenses                                                860,504
     Deferred revenue                                                109,810
                                                        ------------------------
Total current liabilities                                          1,403,121

Stockholders' Equity
     Preferred stock, $.0001 par value, 10,000,000 shares
        authorized, 178 issued and outstanding                             -
     Common stock, $.0001 par value, 140,000,000 shares
        authorized, 65,766,619 issued and outstanding                  6,577
     Additional paid-in capital                                   36,072,097
     Deficit accumulated during development stage                (30,885,630)
                                                        ------------------------
Total stockholders' equity                                         5,193,044
                                                        ------------------------
Total liabilities and stockholders' equity                 $       6,596,165
                                                        ========================

See notes to condensed consolidated financial statements



                                       3
<PAGE>

<TABLE>
<CAPTION>



                                       DOBI Medical International, Inc. and Subsidiary
                                                (A Development Stage Company)

                                       Condensed Consolidated Statements of Operations
                                                         (Unaudited)

                                                                                                                Period from
                                                                                                                September 7,
                                                                                                                    1999
                                                 Three months ended                Nine months ended           (inception) to
                                                    September 30,                    September 30,             September 30,
                                        ----------------------------------------------------------------
                                                2005            2004             2005             2004              2005
                                        ----------------------------------------------------------------------------------------
<S>                                        <C>             <C>               <C>             <C>                 <C>
Revenue
   Product                                 $   43,835      $      -         $  181,149       $     -             $    497,465
   Service                                     21,150             -             57,000             -                   61,950
                                        ----------------------------------------------------------------------------------------
                                               64,985             -            238,149             -                  559,415
                                        ----------------------------------------------------------------------------------------
Cost of sales
   Product                                    153,251             -            437,499             -                  800,813
   Service                                     67,122             -            197,959             -                  218,477
                                        ----------------------------------------------------------------------------------------
                                              220,373             -            635,458             -                1,019,290
                                        ----------------------------------------------------------------------------------------
   Gross loss                                (155,388)            -           (397,309)            -                 (459,875)
                                        ----------------------------------------------------------------------------------------


Research and development expenses             644,223         527,371        1,562,131          1,497,352          10,421,641
General and administrative expenses           882,381         566,195        2,373,690          1,558,986           8,888,144
Clinical program expenses                   1,002,004         235,311        2,027,824            512,064           4,672,406
Sales and marketing expenses                  384,230         568,752          868,098          1,281,182           4,557,465
                                        ----------------------------------------------------------------------------------------
   Total operating expenses                 2,912,838       1,897,629        6,831,743          4,849,584          28,539,656
                                        ----------------------------------------------------------------------------------------
Operating income (loss)                    (3,068,226)     (1,897,629)      (7,229,052)        (4,849,584)        (28,999,531)

Other income (expense)
   Interest expense                            (2,565)         (2,632)          (7,626)            (6,772)         (2,180,777)
   Interest income                             43,487           4,478          102,010              8,968             294,678
                                        ----------------------------------------------------------------------------------------
Net loss                                   (3,027,304)     (1,895,783)      (7,134,668)        (4,847,388)        (30,885,630)
Deemed dividend on preferred stock            (34,681)       (645,167)        (107,162)          (645,167)           (912,555)
Preferred stock dividends                     (88,977)       (103,227)        (275,433)          (103,227)           (481,887)
                                        ----------------------------------------------------------------------------------------
Net loss applicable to common stock      $ (3,150,962)   $ (2,644,177)    $ (7,517,263)    $   (5,595,782)   $    (32,280,072)
                                        ========================================================================================

Basic and diluted loss per common share  $      (0.05)   $      (0.07)    $      (0.13)    $        (0.15)
                                        ========================================================================================

Weighted average common shares,
   basic and diluted                       65,625,810      37,737,073       58,515,154         37,670,271
                                        ========================================================================================

See notes to condensed consolidated financial statements
</TABLE>


                                       4

<PAGE>

<TABLE>
<CAPTION>




                                           DOBI Medical International, Inc. and Subsidiary
                                                    (A Development Stage Company)

                                           Condensed Consolidated Statements of Cash Flows
                                                             (Unaudited)
                                                                                                                  Period from
                                                                                 Nine months ended             September 7,1999
                                                                                    September 30,               (inception) to
                                                                          ---------------------------------
                                                                                2005             2004         September 30, 2005
                                                                          ---------------------------------------------------------
Operating activities
<S>                                                                        <C>              <C>                <C>
Net loss                                                                   $  (7,134,668)   $  (4,847,388)     $   (30,885,630)
Adjustments to reconcile net loss to net cash used in operating
activities:

   Depreciation and amortization                                                 180,799           56,896              501,146
   Amortization of financing costs                                                     -                -              854,343
   Loss on sale of equipment                                                           -                -                  334
   Write-off of purchased in-process research and development costs                    -                -            1,023,525
   Interest receivable in connection with share subscription
      notes charged to equity                                                          -                -              (14,625)
   Stock based compensation                                                        2,393           46,539              448,131
   Accrued interest converted to equity                                                -                -              340,454
   Accretion of discount on Series 1and 2 convertible notes                            -                -              808,113
   Common stock warrants in connection with
      the conversion of notes payable                                                  -                -               61,806
   Changes in assets and liabilities:
      (Increase) in accounts receivable                                          (33,630)               -              (33,630)
      (Increase) in inventory                                                    (29,058)        (364,431)            (408,470)
      (Increase) decrease in prepaid expenses and other current assets          (102,906)         448,682             (240,745)
      (Increase) Decrease in other assets                                              -          (81,692)              42,996
      Increase in accounts payable                                               162,212          276,959              698,282
      Increase (decrease) in accrued expenses                                    248,520         (199,926)             419,920
      Increase (decrease) in deferred revenue                                    (26,685)         103,645              109,810
                                                                          ---------------------------------------------------------
Net cash used in operating activities
                                                                              (6,733,023)      (4,560,716)         (26,274,240)
Investing activities
Purchase of business, net of cash received                                             -                -             (500,000)
Purchase of property and equipment                                              (162,832)        (521,604)            (998,414)
Patent costs                                                                           -                -              (43,022)
Proceeds from sale of equipment                                                        -                -                  250
                                                                          ---------------------------------------------------------

Net cash used in investing activities                                           (162,832)        (521,604)          (1,541,186)

Financing activities
Proceeds from founding members                                                         -                -              525,000
Cash paid for transaction costs associated with equity transactions             (835,000)               -           (2,843,107)
Cash paid for transaction costs associated with debt transactions                      -                -             (719,485)
Deferred offering costs                                                                -                -              (75,000)
Proceeds from subscriptions receivable - Class A preferred shares                      -                -              940,020
Dividends - Class A redeemable convertible preferred units                             -                -             (132,689)
Proceeds from share subscription note - related party                                  -                -              239,625
Proceeds (payments) from Series 1 & Series 2 Convertible Notes - net                   -         (170,000)           4,386,000
Proceeds from notes payable, net                                                       -                -            3,113,799
Proceeds from sale of common stock                                            10,500,000                -           23,626,149
Net proceeds from sale of preferred stock                                              -        4,250,722            4,208,167
Repayment of notes payable                                                             -                -             (229,300)
                                                                          ---------------------------------------------------------


                                       5
<PAGE>

Net cash provided by financing activities                                      9,665,000        4,080,722           33,039,179

Increase (decrease) in cash and cash equivalents                               2,769,145       (1,001,598)           5,223,753
Cash and cash equivalents at beginning of year/period                          2,454,608        2,627,887                   -
                                                                          ---------------------------------------------------------
Cash and cash equivalents at end of year/period                            $   5,223,753    $   1,626,289      $     5,223,753
                                                                          =========================================================

See notes to condensed consolidated financial statements




                                           DOBI Medical International, Inc. and Subsidiary
                                                    (A Development Stage Company)

                                     Condensed Consolidated Statements of Cash Flows (continued)
                                                             (unaudited)

                                                                                                                 Period from
                                                                                Nine months ended             September 7,1999
                                                                                  September 30,                (inception) to
                                                                        ----------------------------------
                                                                              2005              2004         September 30, 2005
                                                                        ----------------------------------------------------------
Supplemental disclosures of cash flow information
Cash paid during the period for interest                                   $    7,626       $     6,770        $      105,731
                                                                        ==========================================================

Income taxes paid                                                          $        -                 -                     -
                                                                        ==========================================================
Purchase of business, net of cash received:
   Fair value of assets purchased                                                   -                 -               109,693)
   Acquisition of in-process research and development costs                         -                 -            (1,023,525)
   Assumption of promissory notes                                                   -                 -               417,877
   Transaction costs                                                                -                 -                56,250
   Issuance of shares                                                               -                 -               159,091
                                                                        ----------------------------------------------------------
Net cash used to acquire business                                          $        -       $         -        $     (500,000)
                                                                        ==========================================================

Non-cash investing and financing activities:

   Conversion of notes payable and accrued interest to common stock        $        -       $         -        $    8,026,451
                                                                        ==========================================================
   Conversion of preferred shares to common stock                          $  712,500       $         -        $    2,020,346
                                                                        ==========================================================
   Preferred stock dividends                                               $  275,433       $   103,227        $      481,887
                                                                        ==========================================================
   Deemed dividends to preferred stock shareholders                        $  107,162       $   645,167        $      912,555
                                                                        ==========================================================
   Share subscription note                                                 $        -       $         -        $      239,625
                                                                        ==========================================================
   Issuance of common warrants for consulting                              $        -       $         -        $      326,348
                                                                        ==========================================================
   Accretion of Class A redeemable convertible preferred shares            $        -       $         -        $      364,334
                                                                        ==========================================================

See notes to condensed consolidated financial statements
</TABLE>


                                                                 6


<PAGE>


                 DOBI Medical International, Inc. and Subsidiary
                          (A Development Stage Company)

              Notes to Condensed Consolidated Financial Statements
                                   (unaudited)

1.  Organization of Business

     The consolidated financial statements include the accounts of DOBI Medical
International, Inc. and its wholly-owned subsidiary, DOBI Medical Systems, Inc.
All significant inter-company balances and transactions have been eliminated.

     The Company was formed to acquire and further develop a new technology for
imaging of the human body, referred to as Dynamic Optical Breast Imaging ("DOBI"
(R)).

2.  Basis of Presentation

     The accompanying interim unaudited financial statements have been prepared
in accordance with generally accepted accounting principles for interim
financial information and the instructions to Form 10-QSB. Accordingly, they do
not include all the information and footnotes required by generally accepted
accounting principles for complete financial statements. In the opinion of
management, all adjustments (which include only normal recurring adjustments)
necessary to present fairly the financial position, results of operations and
cash flows for all periods presented have been made. The results of operations
for the three and nine month periods ended September 30, 2005 are not
necessarily indicative of the operating results that may be expected for the
year ending December 31, 2005.

     These consolidated financial statements should be read in conjunction with
the consolidated financial statements and related notes included in the
Company's 2004 Annual Report on Form 10-KSB (as amended) filed with the
Securities and Exchange Commission.

     The Company's principal activities to date have been in the research and
development of a medical diagnostic system known as the ComfortScan(R) system,
which is an optically-based medical device for improved diagnosis of breast
cancer as an adjunct to mammography. The accompanying financial statements have
been prepared in accordance with Statement of Financial Accounting Standards No.
7, Development Stage Enterprises, since limited, principal operations only began
in the fourth quarter of 2004.

     The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. The Company is currently a development
stage enterprise and its continued existence is dependent upon its ability to
resolve its liquidity problems, principally by obtaining additional debt and/or
equity financing. The Company has yet to generate a positive internal cash flow,
and unless or until meaningful sales of our product begin, we are totally
dependent upon debt and equity funding.

     In the event that the Company is unable to obtain debt or equity financing
or unable to obtain such financing on terms and conditions that are acceptable
to the Company, we may have to cease or severely curtail our operations. These
factors raise substantial doubt about the Company's ability to continue as a
going concern. Management has so far been able to raise the capital necessary to
reach this stage of product development and has been able to obtain funding for
operating requirements to date, but there can be no assurance that the Company
will be able to continue to do so. There is no assurance that, if and when FDA
premarket approval is obtained, the ComfortScan system as an adjunct to
mammography will achieve market acceptance to achieve meaningful sales or
profitability. The accompanying financial statements do not include any
adjustments that might be necessary should the Company be unable to continue as
a going concern.

3.  Summary of Significant Accounting Policies

Equity-Based Compensation

     As permitted by FASB Statement No. 123, Accounting for Stock-Based
Compensation ("FAS 123"), which establishes a fair value-based method of
accounting for equity-based compensation plans, the Company has


                                    7

<PAGE>


                 DOBI Medical International, Inc. and Subsidiary
                          (A Development Stage Company)

              Notes to Condensed Consolidated Financial Statements
                                   (unaudited)


elected to follow Accounting Principles Board Opinion No. 25, Accounting
for Stock Issued to Employees ("APB 25"), for recognizing equity-based
compensation expense for financial statement purposes. Under APB 25, no
compensation expense is recognized at the time of option grant if the exercise
price of the employee stock option is fixed and equals or exceeds the fair
market value of the underlying common stock on the date of grant and the number
of shares to be issued pursuant to the exercise of such options are known and
fixed at the grant date.

     The Company accounts for equity instruments issued to non-employees in
accordance with the provisions of FAS 123 and the Emerging Issues Task Force in
Issue No. 96-18, Accounting for Equity Instruments That Are Issued to Other Than
Employees for Acquiring, or In Conjunction with Selling, Goods or Services which
require that such equity instruments are recorded at their fair value on the
measurement date, which is typically the date the services are performed.

     In December 2002, the FASB issued Statement No. 148, Accounting for
Stock-Based Compensation-Transition and Disclosure ("FAS 148"). This standard
amends the disclosure requirements of SFAS 123 for fiscal years ending after
December 15, 2002 to require prominent disclosure in both annual and interim
financial statements about the method used and the impact on reported results.
The Company follows the disclosure-only provisions of FAS 123 which require
disclosure of the pro forma effects on net income (loss) as if the fair value
method of accounting prescribed by FAS 123 had been adopted, as well as certain
other information.

     Option valuation models require the input of highly subjective assumptions
including the expected life of the option. Because the Company's employee stock
options have characteristics significantly different from those of traded
options, and because changes in the subjective input assumptions can materially
affect the fair value estimate, in management's opinion, the existing models do
not necessarily provide a reliable single measure of the fair value of its
employee stock options.

     During the nine months ended September 30, 2005, the Board of Directors
granted stock options to purchase 2,601,500 shares of the Company's stock. These
options have various exercise prices from $.44 to $.93 per share. They expire
between 5 and 10 years from the date of grant. Options granted to non-employees
are accounted for under SFAS No. 123, whereby compensation measurement of equity
awards is based on their fair value. The weighted average fair market value per
share of these options was estimated to be $.34 per share at the date of grant
using the Black-Scholes option pricing model. Compensation expense generally
must be recorded based on the fair value of the stock options over the vesting
period.

     The following table summarizes relevant information as to reported results
under the Company's intrinsic value method of accounting for stock awards, with
supplemental information as if the fair value recognition provisions of FAS 123
had been applied for the following nine months ended September 30:

<TABLE>
<CAPTION>

                                                                 Three months ended             Nine months ended
                                                                    September 30,                 September 30,
                                                            ----------------------------- ------------------------------
                                                                2005           2004            2005           2004
                                                            -------------------------------------------------------------
<S>                                                          <C>            <C>            <C>             <C>
Net loss applicable to common stock, as reported             $(3,150,962)   $(2,644,177)   $(7,517,263)    $(5,595,782)
Add total stock-based compensation, as reported                    1,258         24,171          2,393          46,539
Deduct total stock-based compensation determined
   under fair value based method for all awards                 (295,314)       (70,756)      (724,282)       (217,691)
                                                            -------------------------------------------------------------
Pro forma net loss applicable to common stock                $(3,445,018)   $(2,690,762)   $(8,239,152)    $(5,766,934)
                                                            =============================================================
Basic and diluted loss per common share - as reported        $     (0.05)   $     (0.07)   $     (0.13)    $     (0.15)
                                                            =============================================================
Pro forma loss per share basic and diluted                   $     (0.05)   $     (0.07)   $     (0.14)    $     (0.15)
                                                            =============================================================
</TABLE>

                                       8

<PAGE>

                 DOBI Medical International, Inc. and Subsidiary
                          (A Development Stage Company)

              Notes to Condensed Consolidated Financial Statements
                                   (unaudited)


Net Loss PerCommon Share

     Basic net loss per common share is computed using the weighted average
number of common shares outstanding during the periods presented. There were no
common stock equivalents consisting of options, warrants and convertible
preferred shares which were required to be included in the calculation of
diluted loss per share for the periods presented since their inclusion would be
antidilutive. The total number of stock options, warrants and convertible
preferred shares outstanding as of September 30, 2005 was 7,015,500, 34,031,719
and 3,396,062, respectively.

Recently Issued Accounting Standards

     In December 2004, the FASB issued Statement of Financial Accounting
Standard ("SFAS") No. 123R, "Share Based Payment." This Statement is a revision
of SFAS Statement No. 123, "Accounting for Stock-Based Compensation," and
supersedes APB Opinion No. 25, "Accounting for Stock Issued to Employees," and
its related implementation guidance. SFAS 123R addresses all forms of
share-based payment ("SBP") awards including shares issued under employee stock
purchase plans, stock options, restricted stock and stock appreciation rights.
Under SFAS 123R, SBP awards result in a cost that will be measured at fair value
on the awards grant date, based on the estimated number of awards that are
expected to vest. This Statement is effective for public entities that file as
small business issuers as of the beginning of the first fiscal year that begins
after December 15, 2005. The Company is currently in the process of evaluating
the effect that the adoption of this pronouncement may have on its financial
statements.

     In May 2005, the FASB issued FASB 154, "Accounting Changes and Error
Corrections", a replacement of APB Opinion No. 20 and FASB Statement No. 3,
"Reporting Accounting Changes in Interim Financial Statements." This statement
changes the requirements for the accounting for and reporting of a change in
accounting principle. This Statement applies to all voluntary changes in
accounting principle. It also applies to changes required by an accounting
pronouncement in the unusual instance that the pronouncement does not include
specific transition provisions. When a pronouncement includes specific
transition provisions, those provisions should be followed. This statement is
effective for accounting changes and corrections of errors made in fiscal years
beginning after December 15, 2005.

     On September 28, 2005, the FASB ratified the following consensus reached in
EITF Issue 05-8 ("Income Tax Consequences of Issuing Convertible Debt with a
Beneficial Conversion Feature"): a) The issuance of convertible debt with a
beneficial conversion feature results in a basis difference in applying FASB
Statement of Financial Accounting Standards SFAS No. 109, Accounting for Income
Taxes. Recognition of such a feature effectively creates a debt instrument and a
separate equity instrument for book purposes, whereas the convertible debt is
treated entirely as a debt instrument for income tax purposes. b) The resulting
basis difference should be deemed a temporary difference because it will result
in a taxable amount when the recorded amount of the liability is recovered or
settled. c) Recognition of deferred taxes for the temporary difference should be
reported as an adjustment to additional paid-in capital. This consensus is
effective in the first interim or annual reporting period commencing after
December 15, 2005, with early application permitted. The effect of applying the
consensus should be accounted for retroactively to all debt instruments
containing a beneficial conversion feature that are subject to EITF Issue 00-27,
"Application of Issue No. 98-5 to Certain Convertible Debt Instruments" (and
thus is applicable to debt instruments converted or extinguished in prior
periods but which are still presented in the financial statements). The adoption
of this pronouncement is not expected to have a material impact on the Company's
financial statements.

4. Common Stock


                                       9


<PAGE>


                 DOBI Medical International, Inc. and Subsidiary
                          (A Development Stage Company)

              Notes to Condensed Consolidated Financial Statements
                                   (unaudited)


     On March 30, 2005, the Company completed a private placement for 21,000,000
shares of its common stock at a purchase price of $.50 per share, for gross
proceeds of $10,500,000 and net proceeds of approximately $9,665,000 (net of
transaction costs totaling $835,000). The investors also received 5,250,000
five-year warrants to purchase shares of common stock at an exercise price of
$.75 per share and 5,250,000 five-year warrants to purchase shares of common
stock at an exercise price of $1.25. In addition, the placement agent received
840,000 four-year warrants to purchase shares of common stock at an exercise
price of $.88 per share.

     During the nine months ended September 30, 2005, the Company issued 574,891
shares of common stock in payment of accrued preferred stock dividends totaling
$392,908.

     During the nine months ended September 30, 2005, the Company issued 443,434
shares of common stock to Series A preferred stockholders converting 28.5 shares
of outstanding Series A preferred shares into shares of common stock.

5. Series A Preferred Convertible Shares

     On July 30, 2004, the Company completed a private placement financing in
which it sold 206.45 Series A preferred shares, which are convertible into
2,580,667 shares of common stock, for $25,000 per share. Proceeds from the
transaction were $4,208,167 net of fees. The Company also issued 2,580,667
four-year investor warrants to purchase common stock at an exercise price of
$3.00 per share. Deemed dividends of $107,162 for the nine months ended
September 30, 2005 consisted of imputed dividends resulting from increasing rate
preferred stock in accordance with Emerging Issue Task Force ("EITF") 98-5 and
Staff Accounting Bulletin ("SAB") Topic 5.Q, "Increasing Rate Preferred Stock."
In connection with the December 17, 2004 sale of 6,000,000 shares of common
stock and the March 30, 2005 sale of 21,000,000 million shares of common stock,
we reduced the conversion price of the Series A preferred shares from $2.00 per
share to $1.31 per share.

6.  Legal Proceedings

     In the ordinary course of business, the Company may become a party to legal
or regulatory proceedings resulting from litigation, claims, or other disputes.
There can be no assurance that one or more future actions, if they occur, would
not have a material adverse effect on the Company's business. As of the filing
of this report, except as follows, there is no material litigation, threatened
or pending, involving the Company.

     On April 15, 2005, the Company filed suit in the Supreme Court of the State
of New York, County of New York, Index No. 601348/05, against Brian Vodicka, a
former member of the Company's Board of Directors, alleging breach of contract
and breach of fiduciary duty and seeking specific performance and injunctive
relief preventing the disclosure and requiring the return of certain
confidential and proprietary documents. On July 11, 2005, the New York Supreme
Court issued an order preliminarily enjoining Mr. Vodicka from using documents
or information provided to Mr. Vodicka by the Company wrongfully and in
violation of the confidentiality agreement between Mr. Vodicka and the Company.
Mr. Vodicka's attorney has withdrawn from the case and Mr. Vodicka is
representing himself pro se. This court order against Mr. Vodicka remains in
effect. Mr. Vodicka has been put on written notice that he has not fully
complied with its terms.

     On April 25, 2005, the Company received a copy of a Verified Petition to
Take Depositions before Suit from a Robin Chiswell filed in the Harris County,
TX District Court, apprising the Company that the petitioner wished to take the
deposition of a custodian of the Company's records to investigate whether there
have been possible violations of the Texas Securities Act. No further action has
been initiated by petitioner in this proceeding. On the contrary, the proceeding
has been dismissed without prejudice. The Company believes that this proceeding
was related to the federal court cases described below.


                                       10
<PAGE>


                 DOBI Medical International, Inc. and Subsidiary
                          (A Development Stage Company)

              Notes to Condensed Consolidated Financial Statements
                                   (unaudited)

     On July 13, 2005, Mr. Vodicka filed a complaint with the U.S. Occupational
Safety and Health Administration of the Department of Labor ("OSHA") under the
employee protection provisions of Title VIII of the Sarbanes-Oxley Act of 2002,
("SOX") alleging that the Company has harassed him by filing the above
referenced New York lawsuit against him. On September 9, 2005, the Regional
Administrator of OSHA investigated the complaint and determined that it had no
merit and that there is no reasonable cause to believe that the Company violated
SOX. Mr. Vodicka appealed the findings to the US Department of Labor Office of
Administrative Law Judges. The Company believes that the allegations are without
merit and intends to continue to vigorously defend against Mr. Vodicka's
allegations and claim.

     On July 15, 2005, the Company was served with a complaint that had been
filed in the United States District Court for the Western District of Texas on
July 7, 2005 by Steve Aubrey and a group of other shareholders, many of whom are
associated with Mr. Vodicka, alleging, among other things, that the Company and
certain of its officers and directors, as well as two of its previous advisors,
had violated federal and state securities laws and seeking damages, interest,
and attorneys' fees and costs. On July 28, 2005 Mr. Vodicka himself filed a
complaint against the same defendants in the same court containing substantially
the same allegations and claims. On September 24, 2005 the Company received an
Amended Complaint consolidating the Aubrey and Vodicka suits. On October 6, 2005
plaintiffs filed self-executing papers in the Western District of Texas
voluntarily dismissing their claims. Shortly thereafter, several plaintiffs
moved to withdraw or vacate their voluntary dismissals. In addition, plaintiffs'
counsel has petitioned the court to withdraw from the case. As of this filing,
these motions have not been determined. The Company anticipates that Mr. Vodicka
and several of the other plaintiffs may retain new legal counsel and seek to
restate their claims. The plaintiffs have claimed in the Amended Complaint that
the Company and certain of its officers and directors made material omissions
and/or misrepresentations and that this caused plaintiffs to privately purchase
shares of the Company's stock at allegedly artificially inflated prices. The
Company believes that the allegations are without merit and that they stem from
plaintiffs' dissatisfaction with the current market price of the Company's
stock. The Company intends to continue to vigorously defend against plaintiffs'
claims. As of September 30, 2005, no amounts have been provided for in the
financial statements.


                                       11

<PAGE>


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

     We completed a reverse merger transaction on December 9, 2003 with Lions
Gate Investment Limited, a Nevada corporation formed on October 29, 1999. Until
the merger, Lions Gate engaged in oil and gas exploration activities, which
Lions Gate discontinued following the merger and succeeded to the business of
DOBI Medical Systems. The directors and management of DOBI Medical Systems
thereupon became the directors and management of Lions Gate. On January 30,
2004, we changed our corporate name from Lions Gate Investment Limited to DOBI
Medical International and changed our state of incorporation from Nevada to
Delaware pursuant to an Agreement and Plan of Merger dated as of January 29,
2004, between Lions Gate and DOBI Medical International. DOBI Medical Systems
currently remains a wholly-owned subsidiary of DOBI Medical International.

     DOBI Medical Systems, LLC was formed as a Delaware limited liability
company in October 1999. In December 1999, DOBI Medical Systems, LLC acquired
substantially all the assets of Dynamics Imaging, Inc., including a number of
patents and trade secrets that form the basis for its current proprietary
technology.

     On January 1, 2003, DOBI Medical was incorporated in Delaware and became
DOBI Medical Systems. Since the reverse merger transaction on December 9, 2003,
DOBI Medical Systems has been a wholly-owned subsidiary of DOBI Medical
International.

     Since our post-merger business is that of DOBI Medical only, the
information in this report is that of DOBI Medical International as if DOBI
Medical Systems had been the registrant for all the periods presented in this
report. Management's Discussion and Analysis or Plan of Operation presented in
this Item 2 and the unaudited consolidated financial statements presented in
Item 1 of this report include those of DOBI Medical Systems prior to the reverse
merger, as these provide the most relevant information for us on a continuing
basis.

     For accounting purposes, DOBI Medical Systems was the acquirer in the
reverse merger transaction, and consequently the transaction is treated as a
recapitalization of the company. DOBI Medical's financial statements are the
historical financial statements of the post-merger entity, DOBI Medical
International.

OVERVIEW

     We are a developmental stage company with no significant revenues. Our goal
is to establish the ComfortScan(R) system as an important tool for improving
breast imaging diagnostic care in the United States and international medical
community. The first steps in attaining this goal are to receive U.S. Federal
Food and Drug Administration ("FDA") approval for our ComfortScan system as an
adjunct to mammography and establish our ComfortScan system as a recognized and
widely utilized technology to aid physicians in the effective diagnosis of
breast cancer.

     During 2004, we released version 1.0 of our ComfortScan system, renewed our
CE Mark, implemented FDA and quality systems standards, invested in
production-level tooling, established a manufacturing facility compliant with
good manufacturing practices, received our FDA Export Certificate, finalized
agreements with several international distributors in select countries in Latin
America, Europe and the Asia-Pacific regions, verified and validated our first
release of the ComfortScan system, and sold and shipped 12 revenue-producing and
production level ComfortScan investigative units to international markets for
the purpose of conducting local clinical regulatory and marketing studies. In
addition, our PMA clinical trial protocol was accepted by the FDA, we delivered
and installed our ComfortScan system in our first three PMA sites, and we
trained those sites and commenced the collection of patient scan data pursuant
to our PMA clinical trial protocol. The PMA clinical trial protocol requires the
enrollment of approximately 1,200 patients between the ages of 18 and 50, in
order to obtain 120 malignant scans for the purpose of conducting a blinded read
of 120 benign cases and 120 malignant cases comparing the diagnostic results
achieved by a combination of ComfortScan(R) and mammography against the
diagnostic results of mammography alone, both comparing to biopsy results.

     During 2005, we have signed agreements with an additional five
international distributors, and delivered four ComfortScan systems to
distributors in order to commence clinical studies. To date, we have commenced


                                       12

<PAGE>


eight clinical studies in international locations and continue to expand
the number of clinical studies conducted for the purposes of generating
publishable clinical data concerning the efficacy of the ComfortScan system,
obtaining patient data for the continued development of the ComfortScan system,
and obtaining local ministry of health approval. The data collection process for
our clinical study in Beijing is near completion. When the study data has been
gathered and the research results compiled, we expect to submit the final
documentation to the Chinese State Food and Drug Administration, China's FDA
organization, for their review when finalized.

     In the United States, we have expanded the number of clinical sites
participating in our PMA clinical trial from 10 in June 2005 to 23 sites. To
date, we have enrolled more than 700 patients, of which approximately 400 have
been enrolled in the last 90 days. We have experienced malignancy prevalence
rates of approximately 12%. The enrollment capacity of our PMA clinical sites is
more than 200 cases per month. We will then conduct the reading portion of the
PMA clinical trial and plan to submit Module Five, the final Module of the
submission package, to the FDA when finalized.

     In November 2004, after successful completion of verification and
validation testing in accordance with current quality systems regulations, and
with outside, independent physicians as readers, we released our first
production level version 1.0 ComfortScan system as an investigational device. In
late 2004, we sold and shipped 12 revenue-producing, production level
ComfortScan investigational systems to international distributors for conducting
local clinical studies. Subsequently, in January 2005, in connection with the
development of version 2.0 of our ComfortScan system, internal testing by
non-physician employees raised concerns about scan acceptance rates,
repeatability performance, and the overall diagnostic accuracy.

     While we continue to make significant progress towards releasing
ComfortScan system 2.0, we have not as yet finished our work to reduce image
artifact and to improve our image reconstruction algorithms and diagnostic
accuracy. We expect to perform verification and validation testing on
ComfortScan system 2.0, and if we pass, release it. Once we have released
ComfortScan system version 2.0, we will continue to reduce image artifact and to
improve our image reconstruction algorithms. We believe that the emergence and
resolution of concerns such as these arise within the ordinary course of medical
device product development efforts and result in the continued improvement of
the medical device and its underlying technology. We do not currently believe
that the improvements we have made to our software and hardware in connection
with the development of ComfortScan system 2.0 will require reinitiating our PMA
clinical trial. If we had to restart our PMA, our best estimate is that our PMA
submission to the FDA may be delayed by up to twelve months and possibly longer.

     During the balance of 2005, we plan to sell investigative ComfortScan
systems to our international distributors for installation at international
clinical sites in order to generate clinical results supporting the use of our
ComfortScan system as an adjunct to mammography. We have shipped four
ComfortScan systems to date, and have received orders for delivery of two
devices prior to the end of 2005. We plan to continue to seek distribution
alliances in international markets in order to seek local regulatory approval
and to acquire patient scans for use in our research and development efforts and
hopefully get peer-reviewed clinical papers published.

     We have generated insignificant ComfortScan system revenues to date, and
therefore can draw no conclusions regarding the seasonality of our business.

     The accompanying financial statements in Item 1 of this report have been
prepared assuming that we will continue as a going concern. We are currently a
development stage enterprise and, as such, our continued existence is dependent
upon our ability to resolve our liquidity problems, principally by obtaining
additional debt or equity financing. We have yet to generate a positive internal
cash flow, and until meaningful sales of our product begin, we are totally
dependent upon debt and equity funding.

     In the event that we are unable to obtain debt or equity financing or we
are unable to obtain financing on terms and conditions that are acceptable to
us, we may have to cease or severely curtail our operations. These factors raise
substantial doubt about the Company's ability to continue as a going concern. So
far, we have been able to raise the capital necessary to reach this stage of
product development and have been able to obtain funding for operating
requirements, but there can be no assurance that we will be able to continue to
do so. Moreover, there is no assurance that, if and when FDA premarket approval
is obtained, our ComfortScan system will achieve market acceptance or that we
will achieve a profitable level of operations. The accompanying financial
statements


                                       13

<PAGE>


in Item 1 of this report do not include any adjustments that might be necessary
should we be unable to continue as a going concern.

APPLICATION OF CRITICAL ACCOUNTING POLICIES

     We generally recognize revenue upon the shipment of our product to our
customers except for the initial maintenance component. That component is
deferred and is recognized on a straight-line basis over the initial maintenance
term.

     We account for stock-based compensation in accordance with the fair value
recognition provisions of SFAS 123, Accounting for Stock-Based Compensation.
Under the fair value recognition provisions of SFAS 123, stock-based
compensation cost is measured at the grant date based on the value of the award
and is recognized as expense over the vesting period. Determining the fair value
of stock-based awards at the grant date requires judgment, including estimating
the expected term of stock options, the expected volatility of our stock and
expected dividends. In addition, judgment is also required in estimating the
amount of stock-based awards that are expected to be forfeited. If actual
results differ significantly from these estimates, stock-based compensation
expense and our results of operations could be materially impacted.

     In the conduct of our business, we incur research and development expenses,
general and administrative expenses, clinical expenses and sales and marketing
expenses.

     Research and development expenses consist primarily of compensation,
benefits and related expenses for personnel engaged in research and development
activities, outside contract and consulting expenses, material and supplies, and
personnel costs to produce prototype units and develop manufacturing processes,
methods and templates.

     General and administrative expenses consist of compensation, benefits and
related expenses for personnel engaged in general management, finance and
administrative positions. They also include expenses for financial advisory,
legal and accounting fees, medical and scientific advisory board expenses,
insurance and other expenses.

     Clinical program expenses consist of compensation, benefits and related
expenses for personnel engaged in clinical-related activities. These expenses
also include costs of developmental studies, consultants, and that portion of
travel and general corporate expenses allocated to that department.

     Sales and marketing expenses consist of compensation, benefits and related
expenses for personnel engaged in sales, marketing, and related business
development activities. These expenses also include consultants, printing of
promotional materials, trade shows and that portion of travel and general
corporate expenses allocated to that department.

     We account for income taxes under Statement of Financial Accounting
Standards No. 109, "Accounting for Income Taxes" ("SFAS No. 109"). SFAS No. 109
requires the recognition of deferred tax assets and liabilities for both the
expected impact of differences between the financial statements and tax basis of
assets and liabilities, and for the expected future tax benefit to be derived
primarily from tax loss carry forwards. The Company has established a valuation
allowance related to the benefits of net operating losses for which utilization
in future periods is uncertain. We believe it is more likely than not that we
will not realize the benefits of these deductible differences in the near future
and therefore a full valuation allowance of approximately $6,500,000 is
provided.

     As of September 30, 2005, we had approximately $19,300,000 of federal net
operating losses available to offset future taxable income, which if not
utilized will expire in 2024. No provision for income taxes has been recorded in
the financial statements as a result of continued losses. Any benefit for income
taxes as a result of utilization of net operating losses may be limited as a
result of change in control.

     The preparation of financial statements are in conformity with accounting
principles generally accepted in the United States and requires management to
make estimates and assumptions that affect the amounts reported

                                       14

<PAGE>


in the financial statements and accompanying notes. Actual results could
differ from those estimates. As a development stage enterprise, we have not had
to make material estimates which have an effect on financial presentation.

OFF-BALANCE SHEET ARRANGEMENTS

     Our office facilities are subject to a five-year operating lease requiring
monthly lease payments of approximately $20,000 per month through June 2009. We
have no other material off-balance sheet arrangements or liabilities.

RESULTS OF OPERATIONS

COMPARISON OF THREE MONTHS ENDED SEPTEMBER 30, 2005 AND 2004

     Revenues for the quarter ended September 30, 2005 were approximately
$65,000. Limited sales began in the quarter ended December 31, 2004 and,
therefore, there were no sales to compare with for the prior year.

     Cost of sales was approximately $220,000 for the three months ended
September 30, 2005 creating a gross loss of approximately $155,000 due to the
limited sales for the period. We maintain a manufacturing facility with a
breakeven point of approximately 15 devices per quarter. Production volumes of
less than 15 units per quarter will continue to negatively affect gross profit
margins. We plan to produce approximately 30 devices in 2005 in order to meet
our PMA clinical site and international sales requirements.

     Research and development expenses increased approximately $117,000, or 22%,
from $527,000 to approximately $644,000 for the three months ended September 30,
2005 compared to the prior year. We expended approximately $169,000 more for the
three months ended September 30, 2005 compared to the prior year for additional
personnel and consulting services in connection with the continued development
of the ComfortScan system. In addition, we expended an additional $73,000 over
the prior year's corresponding period to obtain clinical scans solely for
research and development purposes, offset by a reduction of approximately
$104,000 in prototype development.

     General and administrative expenses increased approximately $316,000, or
56%, from $566,000 to approximately $882,000 for the three months ended
September 30, 2005 compared to the prior year. This increase was due to higher
personnel related costs of approximately $92,000 related to the increase
staffing and approximately $238,000 in additional legal costs compared to the
prior year.

     Clinical program expenses increased approximately $767,000, to $1,002,000
for the three months ended September 30, 2005 compared to the prior year due to
the expansion of the PMA clinical trials. PMA clinical trial costs totaled
$811,000 during the quarter ended September 30, 2005. These costs included
device costs, site costs, personnel and consulting costs, and travel expenses.

     Sales and marketing expenses of approximately $384,000 for the three months
ended September 30, 2005 reflect a decrease of approximately $185,000 compared
to the three months ended June 30, 2004. This was primarily due to the decreased
costs of approximately $298,000 in investor relations programs offset by an
increase in costs related to overseas market penetration activities of
approximately $112,000.

     Interest expense for the three months ended September 30, 2005 and 2004 was
insignificant.

COMPARISON OF NINE MONTHS ENDED SEPTEMBER 30, 2005 AND 2004

     Revenues for the nine months ended September 30, 2005 were approximately
$238,000. Limited sales began in the quarter ended December 31, 2004 and,
therefore, there were no sales to compare with for the prior year.

     Cost of sales was approximately $635,000 for the nine months ended
September 30, 2005, creating a gross loss of approximately $397,000 due to the
limited sales for the period. We maintain a manufacturing


                                       15

<PAGE>


facility with a breakeven point of approximately 15 devices per quarter.
Production volumes of less than 15 units per quarter will continue to negatively
affect gross profit margins. We plan to produce approximately 30 devices in 2005
in order to meet our PMA clinical site and international sales requirements.

     Research and development expenses increased approximately $65,000, or 4%,
from $1,497,000 to approximately $1,562,000 for the nine months ended September
30, 2005 compared to the prior year. The following areas created the primary
variances during these comparative periods. Approximately $215,000 in production
and production facility costs that were within the research and development
group in 2004 have been reassigned to manufacturing. We expended approximately
$286,000 more for the nine months ended September 30, 2005 compared to the prior
year for additional personnel and consulting services in connection with the
continued development of the ComfortScan system. In addition, we expended an
additional $182,000 over the prior year's corresponding period to obtain
clinical scans solely for research and development purposes and reduced
prototype development expenditures by $250,000.

     General and administrative expenses increased approximately $815,000, or
52%, from $1,559,000 to approximately $2,374,000 for the nine months ended
September 30, 2005 compared to same period in the prior year. This increase was
primarily due to higher payroll costs, including performance bonuses to the
Chief Executive Officer and Chief Financial Officer, of approximately $173,000
and other payroll costs of approximately $240,000 related to the increase in
staffing. In addition, the Company's legal costs increased approximately
$350,000 over the same period last year, principally to defend the Company
against the numerous legal proceedings brought by Mr. Vodicka as described under
the heading "Legal Proceedings" above.

     Clinical program expenses increased approximately $1,516,000, to $2,028,000
for the nine months ended September 30, 2005 compared to the prior year due to
the expansion of the PMA clinical trials. PMA clinical trial costs totaled
$1,501,000 during the nine months ended September 30, 2005. These costs included
device costs, site costs, personnel and consulting costs, and travel expenses.

     Sales and marketing expenses decreased approximately $413,000 for the nine
months ended September 30, 2005 compared to the nine months ended September 30,
2004. This was primarily due to the decreased costs of approximately $684,000 in
investor relations programs and increases in the cost of marketing programs of
approximately $168,000 and consulting costs of approximately $90,000 primarily
related to overseas activities.

     Interest expense for the nine months ended September 30, 2005 and 2004 was
insignificant.

LIQUIDITY AND CAPITAL RESOURCES

     We have financed our operations since inception through private issuances
of equity securities, generating approximately $38,500,000 in gross proceeds to
date, described chronologically below.

     Prior to its merger into a publicly-traded company in December 2003, DOBI
Medical raised approximately $14.58 million in gross proceeds through the sale
of common stock, preferred stock and convertible debt, which were converted into
shares of the publicly-traded company DOBI Medical International, Inc. in
December 2003.

     In December 2003, DOBI Medical Systems merged into a publicly-traded
company, Lions Gate Investment Limited, which became the surviving entity (in
January, 2004, Lions Gate changed its corporate name to DOBI Medical
International, Inc.), and simultaneously completed the first tranche of a
two-tranche private placement in which we issued 5,500,000 shares of common
stock at a price of $1.00 per share and three-year warrants to purchase
2,750,000 shares of common stock at an exercise price of $1.54 per share,
generating gross proceeds of $5,500,000.

     In July 2004, we completed the private placement of approximately $5.16
million in shares of our Series A preferred convertible stock and associated
warrants. The shares of Series A preferred stock sold in the private placement
carry a dividend of 8% per year and were initially convertible into 2,580,667
shares of common stock. We also issued four-year investor warrants to purchase
2,580,667 shares of common stock at an exercise price of $3.00 per share. In
connection with the closing of the second tranche of the December 2003 private


                                       16

<PAGE>


placement and the March 2005 private placement, the number of common shares into
which the Series A preferred stock is convertible was increased to approximately
3,839,496 shares, reflecting anti-dilution adjustments.

     At the closing of the performance milestone-based second tranche in
December 2004, we issued 6,000,002 shares of common stock at a price of $.50 per
share, generating gross proceeds of approximately $3,000,000. In that
connection, we issued three-year warrants to purchase 3,000,000 shares of common
stock at an exercise price of $1.54 per share.

     On March 30, 2005, we completed a private placement of 21,000,000 shares of
our common stock at a price of $.50 per share, and warrants to purchase
10,500,000 shares of our common stock at an exercise price of $.75 for the first
5,250,000 warrant shares and $1.25 for the next 5,250,000 warrant shares,
resulting in aggregate gross cash proceeds of $10,500,000 and approximate net
cash proceeds of $9,665,000. We believe that with these proceeds we will meet
our funding needs into 2006.

     As of September 30, 2005, we had cash and cash equivalents of approximately
$5,224,000. Net cash used in operating activities during the nine months ended
September 30, 2005 totaled approximately $6,733,000, and capital expenditures
totaled approximately $163,000. For the balance of 2005, we have no significant
capital expenditure commitments. We expect net cash used in operating activities
for 2005 to be approximately $9,800,000, which includes approximately
$2,800,000 in PMA clinical trial project costs and approximately $100,000 in
costs associated with the continued development of a screening version of our
ComfortScan breast imaging system.

     We are a development stage enterprise and, as such, our continued existence
is dependent upon our ability to resolve our liquidity problems, principally by
obtaining additional debt or equity financing. We have yet to generate a
positive internal cash flow, and until meaningful sales of our product begin, we
are totally dependent upon debt and equity funding.

     In the event that we are unable to obtain debt or equity financing or we
are unable to obtain financing on terms and conditions that are acceptable to
us, we may have to cease or severely curtail our operations. These factors raise
substantial doubt about the Company's ability to continue as a going concern. So
far, we have been able to raise the capital necessary to reach this stage of
product development and have been able to obtain funding for operating
requirements, but there can be no assurance that we will be able to continue to
do so.



                                       17


<PAGE>



                  CAUTIONARY STATEMENT FOR FORWARD-LOOKING STATEMENTS

Statements contained in this report contain information that includes or is
based upon certain "forward-looking statements" relating to our business. These
forward-looking statements represent management's current judgment and
assumptions, and can be identified by the fact that they do not relate strictly
to historical or current facts. Forward-looking statements are frequently
accompanied by the use of such words as "anticipates," "plans," "believes,"
"expects," "projects," "intends," and similar expressions. Such forward-looking
statements involve known and unknown risks, uncertainties, and other factors,
including without limitation, those relating to our ability to timely and
successfully complete our U.S. Food and Drug Administration ("FDA") patient
premarket approval ("PMA") clinical trials, as well as our other clinical trials
being conducted around the world; our ability to timely and successfully
complete and submit to the FDA our PMA application of the PMA clinical trial
results; the timely and final approval by local foreign governments of our
ComfortScan system as an adjunct to mammography in various international
markets, including China; the success and continued improvements of our product
development and research efforts, including without limitation, our ability to
timely and successfully release version 2.0 and subsequent versions of our
ComfortScan System; our ability to timely meet U.S. and foreign government laws
and industry standards; our ability to meet U.S. and foreign medical device
quality regulation standards required to maintain our CE Mark, and ISO, UL and
FDA export certifications; our ability to timely deliver our products into
international markets; the acceptance, adoption, and use of our ComfortScan
system by physicians, imaging clinics, and patients; and our ability to obtain
third party reimbursement from U.S. and foreign governments and private payers.

Any one of these or other risks, uncertainties, other factors, and any
inaccurate assumptions, may cause actual results to be materially different from
those described herein or elsewhere by us. We caution readers not to place undue
reliance on any such forward-looking statements, which speak only as of the date
they were made. Certain of these risks, uncertainties, and other factors are
described in greater detail in our filings from time to time with the Securities
and Exchange Commission, which we strongly urge you to read and consider,
including the "Investment Considerations" and the "Cautionary Factors That May
Affect Future Results" as set forth in our 2004 Annual Report on Form 10-KSB, as
amended, and the "Risk Factors" in our Registration Statement on Form SB-2
declared effective on May 11, 2005, our Quarterly Reports on 10-QSB, and our
Current Reports on Form 8-K, all of which may be accessed from our website at
www.dobimedical.com. Subsequent written and oral forward-looking statements
attributable to us or to persons acting on our behalf are expressly qualified in
their entirety by the cautionary statements set forth above and elsewhere in our
reports filed with the Securities and Exchange Commission. We expressly disclaim
any intent or obligation to update any forward-looking statements.





                                       18


<PAGE>


Item 3.  Controls and Procedures

     At the period end of this Quarterly Report on Form 10-QSB, the Company's
management, including the Company's Chief Executive Officer and Chief Financial
Officer evaluated the effectiveness of the design and operation of the Company's
disclosure controls and procedures. Based on that evaluation, the Company's
Chief Executive Officer and Chief Financial Officer have concluded, as of the
end of the quarter covered by this report, that:

     The Company's disclosure controls and procedures are designed to ensure
that information required to be disclosed by the Company in the reports it files
or submits under the Securities Exchange Act of 1934 is recorded, processed,
summarized and reported within the time periods specified.

     The Company's disclosure controls and procedures are effective to ensure
that such information is accumulated and communicated to the Company's
management, and made known to the Company's Chief Executive Officer and Chief
Financial Officer, to allow timely decision regarding the required disclosure.

     There have been no changes in the Company's internal controls over
financial reporting that have materially affected, or are reasonably likely to
materially affect the Company's internal controls over financial reporting
during the period covered by this Quarterly Report.


                                       19
<PAGE>


Part II  Other Information

Item 1.  Legal Proceedings

     In the ordinary course of business, the Company may become a party to legal
or regulatory proceedings resulting from litigation, claims, or other disputes.
There can be no assurance that one or more future actions, if they occur, would
not have a material adverse effect on the Company's business. As of the filing
of this report, except as follows, there is no material litigation, threatened
or pending, involving the Company.

     On April 15, 2005, the Company filed suit in the Supreme Court of the State
of New York, County of New York, Index No. 601348/05, against Brian Vodicka, a
former member of the Company's Board of Directors, alleging breach of contract
and breach of fiduciary duty and seeking specific performance and injunctive
relief preventing the disclosure and requiring the return of certain
confidential and proprietary documents. On July 11, 2005, the New York Supreme
Court issued an order preliminarily enjoining Mr. Vodicka from using documents
or information provided to Mr. Vodicka by the Company wrongfully and in
violation of the confidentiality agreement between Mr. Vodicka and the Company.
Mr. Vodicka's attorney has withdrawn from the case and Mr. Vodicka is
representing himself pro se. This court order against Mr. Vodicka remains in
effect. Mr. Vodicka has been put on written notice that he has not fully
complied with its terms.

     On April 25, 2005, the Company received a copy of a Verified Petition to
Take Depositions before Suit from a Robin Chiswell filed in the Harris County,
TX District Court, apprising the Company that the petitioner wished to take the
deposition of a custodian of the Company's records to investigate whether there
have been possible violations of the Texas Securities Act. No further action has
been initiated by petitioner in this proceeding. On the contrary, the proceeding
has been dismissed without prejudice. The Company believes that this proceeding
was related to the federal court cases described below.

     On July 13, 2005, Mr. Vodicka filed a complaint with the U.S. Occupational
Safety and Health Administration of the Department of Labor ("OSHA") under the
employee protection provisions of Title VIII of the Sarbanes-Oxley Act of 2002
("SOX") alleging that the Company has harassed him by filing the above
referenced New York lawsuit after him. On September 9, 2005, the Regional
Administrator of OSHA investigated the complaint and determined that it had no
merit. and that there is no reasonable cause to believe that the Company
violated SOX. Mr. Vodicka appealed the findings to the US Department of Labor
Office of Administrative Law Judges. The Company believes that the allegations
are without merit and intends to continue to vigorously defend against Mr.
Vodicka's allegations and claim.

On July 15, 2005, the Company was served with a complaint that had been
filed in the United States District Court for the Western District of Texas on
July 7, 2005 by Steve Aubrey and a group of other shareholders, many of whom are
associated with Mr. Vodicka, alleging, among other things, that the Company and
certain of its officers and directors, as well as two of its previous advisors,
had violated federal and state securities laws and seeking damages, interest,
and attorneys' fees and costs. On July 28, 2005 Mr. Vodicka himself filed a
complaint against the same defendants in the same court containing substantially
the same allegations and claims. On September 24, 2005 the Company received an
Amended Complaint consolidating the Aubrey and Vodicka suits. On October 6, 2005
plaintiffs filed self-executing papers in the Western District of Texas
voluntarily dismissing their claims. Shortly thereafter, several plaintiffs
moved to withdraw or vacate their voluntary dismissals. In addition, plaintiffs'
counsel has petitioned the court to withdraw from the case. As of this filing,
these motions have not been determined. The Company anticipates that Mr. Vodicka
and several of the other plaintiffs may retain new legal counsel and seek to
restate their claims. The plaintiffs have claimed in the Amended Complaint that
the Company and certain of its officers and directors made material omissions
and/or misrepresentations and that this caused plaintiffs to privately purchase
shares of the Company's stock at allegedly artificially inflated prices. The
Company believes that the allegations are without merit and that they stem from
plaintiffs' dissatisfaction with the current market price of the Company's
stock. The Company intends to continue to vigorously defend against plaintiffs'
claims. As of September 30, 2005, no amounts have been provided for in the
financial statements.


                                       20

<PAGE>


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

          None

Item 3. Defaults Upon Senior Securities

          None

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

          None

Item 5. Other Information

          None

Item 6. Exhibits and Reports on Form 8-K

          a) Exhibits

                   10.1     2000 DOBI Medical International, Inc. Stock
                            Incentive Plan, as amended through December 10, 2003

                   31.1     Certification of C.E.O. Pursuant to Section 302 of
                            the Sarbanes-Oxley Act of 2002

                   31.2     Certification of C.F.O. Pursuant to Section 302 of
                            the Sarbanes-Oxley Act of 2002

                   32.1     Certificate Pursuant to 10 U.S.C. Section 1350,
                            Section 906 of the Sarbanes-Oxley Act of 2002

         b) Reports on Form 8-K

                            1. We filed a Current Report on Form 8-K on October
                   25, 2005 regarding an interview by Phillip C. Thomas, CEO of
                   the Company, for The Wall Street Transcript.

                            2. We filed a Current Report on Form 8-K on July 18,
                   2005 regarding the order of the New York Supreme Court
                   preliminarily enjoining Brian Vodicka, a former director of
                   the Company, from using document or information provided to
                   Mr. Vodicka by the Company wrongfully and in violation of
                   the confidentiality agreement between Mr. Vodicka and the
                   Company, and regarding a complaint filed in the United
                   States District Court for the Western District of Texas by a
                   group of shareholders, some of whom are associated with Mr.
                   Vodicka, against the Company and certain of its officers and
                   directors and financial advisors alleging among other
                   things, violation of federal and certain state securities
                   laws.


                                       21
<PAGE>


SIGNATURES

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


Dated:  November 14, 2005              DOBI MEDICAL INTERNATIONAL, INC.



                                       By: /s/ Phillip C. Thomas
                                          --------------------------------------
                                            Phillip C. Thomas
                                            Chief Executive Officer


                                       By: /s/ Michael R. Jorgensen
                                          --------------------------------------
                                            Michael R. Jorgensen
                                            EVP, Chief Financial Officer


                                       22