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

                                  FORM 10-QSB

                                  (Mark one)
          [X] Quarterly Report Pursuant to Section 13 or 15(d) of the
                        Securities Exchange Act of 1934

                  FOR THE FISCAL QUARTER ENDED December 31, 2005

                        Commission file Number 0-28416
                                      or
         [  ] Transition Report Pursuant to Section 13 or 15(d) of the
                        Securities Exchange Act of 1934

    =======================================================================
                                 VALCOM,  INC.
       (Name  of  small  business  issuer  specified  in  its  charter)
    ======================================================================

          Delaware                                         58-1700840
          --------                                         ----------
(State  or  other  jurisdiction  of                 (IRS  Employer
    incorporation  or  organization)                Identification  Number)




                  920 S. Commerce Street, Las Vegas, NV 89106
                ----------------------------------------------
              (Address of Principal executive offices) (Zip code)

                                (702) 385-9000
                            -----------------------
                           Issuer's telephone number

Securities  registered  pursuant  to  12(b)  of  the Act: None Securities to be
registered pursuant to Section 12(g) of the Act:

                         COMMON STOCK $0.001 PAR VALUE
                         -----------------------------
                               (Title of Class)

Indicate  by  check  mark  whether the registrant (1)  has  filed  all  reports
required to be filed by Section  13  or 15(d) of the Securities Exchange Act of
1934 during the  preceding  12  months   (or   for such shorter period that the
registrant was required  to  file  such  reports),  and (2)  has  been  subject
to such filing requirements  for  the  past  90  days.

                 YES  [  X  ]  NO  [  ]

As  of  February 17, 2006 the issuer had 51,066,435 shares of its $0.001 par
value common  stock  outstanding.



                                      -1-





<PAGE>

UNAUDITED  INTERIM  FINANCIAL  STATEMENTS

The  accompanying  financial  statements  are  unaudited   and   are   prepared
in  accordance   with  rules  and  regulations  of  the Securities and Exchange
Commission  for  interim  quarterly  reporting.  Accordingly,  these  financial
statements do not include all disclosures  required  under  generally  accepted
accounting principles.

In   the   opinion  of  management,  the  accompanying  consolidated  financial
statements contain   all  adjustments  (which  include  only  normal  recurring
adjustments) necessary   to   present   fairly   the   financial   position  of
ValCom,   Inc.   and subsidiaries  as  of December 31, 2005 and the results  of
their operations   and   their   cash    flows   for  the  three  months  ended
December 31, 2005.   These  consolidated financial  statements    include   the
accounts  of ValCom,  Inc.  and   its  subsidiary  companies   (together   "the
Company"). Results   for   the three  months  ended  December 31,   2005,   are
not  necessarily indicative  of  the  operations,  which  may occur  during the
year ending  December 31, 2006.  Refer to the Company's Annual Report  on  Form
10- KSB  for  the  year  ended  September  30, 2005 for further information.


                                      -2-

<PAGE>

                                 VALCOM, INC.

                                 FORM 10-QSB

INDEX                                                                      Page
-----                                                                      ----
PART  I.    FINANCIAL  INFORMATION

Item  1.   Condensed  Consolidated  Financial  Statements:
           Condensed  Consolidated  Balance  Sheet  as  of
           December  31,  2005  (unaudited)                                4-5

           Condensed  Consolidated  Statements  of  Operations
           for the three month period ended December 31,
           2005  and  2004  (unaudited)                                    6-7

           Condensed Consolidated Statements of Cash Flows
           for the three month period ended December  31,2005
           and 2004  (unaudited)                                             8

           Notes  to  Condensed  Consolidated  Financial  State-
           ments (unaudited)                                              9-12

Item  2.   Management's  Discussion  and  Analysis  of  Financial
           Condition  and  Results  of  Operations                          13

Item  3.   Disclosure  Controls  and  Procedures                            14


Part  II.   OTHER INFORMATION

Item  1.    Legal Proceedings                                               15

Item  2.    Changes in  Securities                                          15

Item  3.    Defaults Upon  Senior  Securities                               16

Item  4.    Submission of Matters to a Vote of Security Holders             16

Item  5.    Other Information                                               16


SIGNATURES




                                         -3-












<PAGE>

<TABLE>
<CAPTION>
           			VALCOM, INC. AND SUBSIDIARIES
             			  CONSOLIDATED BALANCE SHEET



                       ASSETS

                                                                          AS OF
                                                                       DECEMBER 31,
                                                                           2005
                                                                       (unaudited)
								       ------------
<S>									<C>

   CURRENT ASSETS
      Cash                          				       $      4,686
      Accounts receivable, net           				    114,723
      Prepaid expenses                    				     25,000
      Notes receivable                   				    490,190
								       ------------

        TOTAL CURRENT ASSETS             				    634,600

   NET PROPERTY & EQUIPMENT              				    106,840

   OTHER ASSETS
      Deposits                             				      8,350
      Other assets                    					  1,150,000
								       ------------

        TOTAL OTHER ASSETS             					  1,158,350
								       ------------

                     TOTAL ASSETS 				       $  1,899,790
								       ============
</TABLE>

                                         -4-

<TABLE>
<CAPTION>
                             VALCOM, INC. AND SUBSIDIARIES
                              CONSOLIDATED BALANCE SHEETS



                          LIABILITIES AND STOCKHOLDERS' EQUITY

                                                                          AS OF
                                                                       DECEMBER 31,
                                                                           2005
                                                                       (unaudited)
								       ------------
<S>									<C>

   CURRENT LIABILITIES
      Accounts payable                                                 $    540,984
      Accrued interest                                                       49,064
      Accrued expenses                                                       20,000
      Deferred income
      Due to related parties                                                338,744
      Notes payable                                                         702,278
								       ------------
        TOTAL CURRENT LIABILITIES                                         1,651,069

   LIABILITIES SUBJECT TO COMPROMISE
       Mortgage payable                                                           -
       Long term loans                                                            -
								       ------------
        TOTAL LIABILITIES                                                         -
								       ------------


   TOTAL LIABILITIES                                                      1,651,069

   STOCKHOLDERS' EQUITY
      Convertible preferred stock: all with par value of $0.001;
        shares authorized and outstanding as of September 30,
        2005 and 2004 are as follow:
         Series B, 1,000,000 shares authorized; 38,000 shares issued
           and outstanding.                                                      38
         Series C, 15,000,000 shares authorized; 10,517,000
           shares issued and outstanding as of December 31, 2005             10,517

      Common stock ($0.001 par value, 100,000,000 shares authorized;
           41,883,717 and  28,119,449 shares issued and  outstanding
           as of September 30, 2005 and 2004, respectively)                  44,664
      Treasury stock                                                            (35)
      Additional paid-in capital                                         10,895,780
      Retained (deficit)                                                (10,702,243)
								       ------------
        TOTAL STOCKHOLDERS' EQUITY                                          248,721
								       ------------
   TOTAL LIABILITIEs
	& STOCKHOLDERS' EQUITY                         		       $  1,899,790
								       ============


    See accompanying notes to the condensed consolidated financial statements


					-5-


</TABLE>



<TABLE>
<CAPTION>
                            VALCOM, INC. AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF OPERATIONS



                                                      3 MONTH PERIOD ENDED
                                                 DECEMBER 31,      DECEMBER 31,
                                                     2005              2004
                                                 (unaudited)       (unaudited)
						-------------	 --------------
<S>							<C>		<C>

   REVENUES
      Rental income                             $      31,275    $      173,372
      Production income                             1,770,134            62,039
      Other income                                          -             5,000
						-------------	 --------------
   TOTAL REVENUES                                   1,801,409           240,411

   COSTS AND EXPENSES
      Production                                    1,712,514            47,786
      Selling and promotion                            63,908            12,062
      Depreciation and amortization                     8,650            26,253
      General and administrative                      259,670           617,634
      Consulting and professional fees                110,007           517,312
      Bad debts                                             -                 -
						-------------	 --------------
   TOTAL COSTS AND EXPENSES                         2,154,749         1,221,047
						-------------	 --------------
   OPERATING LOSS                                   (353,340)         (980,636)

                                           -6-
   OTHER INCOME & (EXPENSES)

      Interest expense                               (15,694)            (4,494)
      Gain on sale of assets                                -                 -
      Interest Income                                   3,125                 -
      Other income                                      9,016            25,686
						-------------	 --------------
   TOTAL OTHER INCOME & (EXPENSES)                    (3,553)            21,192
						-------------	 --------------
   NET LOSS                                     $    (356,893)   $     (959,444)
						=============	 ==============

   BASIC AND DILUTED EARNINGS (LOSS) PER SHARE  $       (0.01)   $        (0.27)
						=============	 ==============


   WEIGHTED AVERAGE NUMBER OF
    COMMON SHARES OUTSTANDING                      42,454,473    $   31,501,469
						=============	 ==============


    See accompanying notes to the condensed consolidated financial statements

					     -7-

</TABLE>





<TABLE>
<CAPTION>
                                                VALCOM, INC.
                                   CONSOLIDATED STATEMENTS OF CASH FLOWS


                                                                              3 MONTH PERIOD ENDED
                                                                          DECEMBER 30,   DECEMBER 31,
                                                                              2005           2004
                                                                          (unaudited)    (unaudited)
									  ------------	 ------------
<S>										<C>		<C>

   CASH FLOWS FROM OPERATING ACTIVITIES

       Net (loss)                                                         $   (356,893)  $   (959,444)
       Adjustments to reconcile net loss to net cash (used in) provided
         by operating activities:
         Accrued interest expense                                               15,694
         Depreciation expense                                                    8,650         26,253
         Stock issued for services & compensation                               67,419        547,781
      Changes in operating assets and liabilities:
         Receivables                                                          (27,103)          2,135
         Note receivables                                                    (490,190)
         Production in Progress                                                               (3,397)
         Prepaid Expenses                                                     (25,000)              -
         Accounts payable and accrued expenses                                  15,505        172,290
									  ------------	 ------------
        NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES                  (791,919)      (214,382)

   CASH FLOWS FROM INVESTING ACTIVITIES
         Acquisition of property plant and equipment                          (20,068)       (25,698)
         Proceeds from sale of fixed assets                                          -              -
									  ------------	 ------------
        NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES                   (20,068)       (25,698)

   CASH FLOWS FROM FINANCING ACTIVITIES

        Principal repayment of notes payable                                  (68,693)              -
        Preferred stock issued for cash                                              -              -
        Common tock issued for cash                                            248,000         48,090
        Principal borrowings on notes                                          290,298        176,664
        Net borrowings from related parties                                     70,788         16,000
									  ------------	 ------------
        NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES                    540,393        240,754
									  ------------	 ------------
        NET INCREASE (DECREASE) IN CASH                                       (271,594)           674
									  ------------	 ------------
        CASH AT BEGINNING OF YEAR                                              276,280         21,468

        CASH AT END OF YEAR                                               $      4,686 	 $     22,142
									  ============	 ============

        SUPPLEMENTAL  CASH FLOW DISCLOSURES:

        Cash paid during period for interest                              $          -   $      4,494
									  ============	 ============
        Cash paid during period for taxes                                 $          -   $          -
									  ============	 ============


    See accompanying notes to the condensed consolidated financial statements


					     -8-
</TABLE>



<PAGE>

                          VALCOM, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

NOTE  1  BANKRUPTCY  PROCEEDINGS,  DESCRIPTION  OF  BUSINESS   AND  SUMMARY  OF
SIGNIFICANT  ACCOUNTING  POLICIES
---------------------------------------------------

On  April 7, 2003, the Company filed on an emergency basis a voluntary  Chapter
11 bankruptcy  petition.

The   Company   requires  the  use  of  its  secured creditor's cash collateral
to operate.  Throughout  the pendency of this case, the Company has worked with
its two  real estate  secured lenders, Finance Unlimited, LLC and Laurus Master
Fund, Limited  on  the   details   of  cash  collateral  stipulation.  An order
approving a global interim cash collateral stipulation with  Finance  Unlimited
and  Laurus  was  entered  on  August  26, 2003. This stipulation permitted the
Company's use of the lenders'  cash  collateral  through  March  31,  2004.

On   January   15,   2004,   the   Court   approved    two    additional   cash
collateral  stipulations,   one  each  with  Finance  Unlimited   and   Laurus,
authorizing the Company's  continued  use  of  cash  collateral  through  March
31,  2004  (Second  Interim  Stipulation).   The   Second  Interim  Stipulation
generally grants Finance  Unlimited   and   Laurus  relief  from  the automatic
bankruptcy stay effective March 31,  2004,  and  the right to hold foreclosures
sales on their real and personal property  collateral  as  early  as  April  1,
2004.

In   May   2004,  Laurus  paid  off  Finance  Unlimited  and was subrogated  to
Finance's $6,565,998  claim,  which  became  included in the  senior of Laurus'
two claims. Laurus  then  sought to conduct a non-judicial foreclosure  sale of
the  Property,  and   VEI  objected.  The  Bankruptcy Court issued an order  on
June 3, 2004, that while   Laurus   could  conduct  a  non-judicial foreclosure
sale of the Property, Laurus  would   not   be   entitled   to   any deficiency
claim  against  either  VEI  or  Valcom,  or  any  other assets other than  the
Property itself (and the rents and leases  appurtenant  thereto).

On  June 10,  2004,  Laurus  had the  Property  sold.   At  this  sale,  Laurus
claimed that  its  senior note had a balance of $7,407,873 and its junior  note
a balance of  $2,405,093.  Virtually  all  of  the  disputed  penalties,  along
with   a  disproportionate   share   of  disputed legal fees and expenses, were
incorporated into  the  junior  balance,   while   the   senior   included  the
$6,565,998  million  subrogated   from   the   Finance  claim.   The  sale  was
conducted  through  the junior note, and the Property was sold for $2.9 million
to a third party.  An  affiliate  of this third party then purchased the senior
note directly from Laurus, without a  second  sale.

As a result of the Bankruptcy Court's  order  and the subsequent trustee's sale
of  the   Property,   neither  VEI  nor  Valcom  are  subject  to  any  further
liabilities  on account  of  the notes and deeds of trust  previously  held  by
Finance and Laurus. Even  though  the  senior  note  still  technically exists,
it has been rendered  non-recourse  by  the Bankruptcy Court's order, and could
only be enforced against the Property itself  (which no longer belongs to VEI).
Any liability owed to the third party, which purchased the Property with regard
to  the rents collected for June  2004,  has  been   resolved   by   settlement
with  that  party.

On  August   3,   2004,  the  Bankruptcy Court granted the motion for dismissal
of Chapter  11  bankruptcy  case  against  the  Company.


DESCRIPTION  OF  BUSINESS
-------------------------
ValCom,    Inc.    and     subsidiaries    (the    "Company"),   formerly   SBI
Communications,  Inc.,  was originally  organized  in  the  State  of  Utah  on
September 23, 1983, under the  corporate name of Alpine Survival Products, Inc.
Its name was subsequently  changed   to   Supermin,   Inc.   on   November  20,
1985.  On  September  29, 1986, Satellite  Bingo,  Inc.  became  the  surviving
corporate  entity in a statutory merger  with  Supermin,  Inc.  In   connection
with the above  merger,  the  former  shareholders   of  Satellite  Bingo, Inc.
acquired  control  of  the merged entity and changed  the  corporate  name   to
Satellite Bingo, Inc.  On  January  1,  1993,  the Company  executed  a plan of
merger that effectively changed the Company's state  of   domicile from Utah to
Delaware. Through shareholder approval dated March 10, 1998,   the   name   was
changed  to  SBI  Communications,  Inc.

In   October  2000,  the Company was issued 7,570,997 shares by SBI for 100% of
the  shares  outstanding   in   Valencia   Entertainment   International,   LLC
("VEI"),  a  California  limited  liability  company. This acquisition has been
accounted for as a  reverse  acquisition  merger  with  VEI  as  the  surviving
entity.  The corporate name  was  changed  to  ValCom,  Inc.  effective   March
21,  2001.

The   Company  is  a  diversified  entertainment  company  with  the  following
operating activities:

1.  STUDIO  RENTAL.

ValCom's   business    includes    television    production   for  network  and
syndication  programming,   motion   pictures,   and   real   estate  holdings,
however, revenue is primarily  generated  through  the  lease   of   the  sound
stages  and  production.   ValCom's   past  and present clients in addition  to
Paramount  Pictures  and   Don   Belisarious    Productions,    include  Warner
Brothers,  Universal  Studios,  MGM,  HBO,  NBC,  20th  Century  Fox,   Disney,
CBS, Sony, Showtime, and the USA  Network.   In   addition   to   leasing   its
sound stages, ValCom also owns a small library  of  television  content,  which
is  ready for worldwide distribution and several  major  television  series  in
advanced   stages  of  development. ValCom's Studio Division is composed of two
properties:   920  South  Commerce  which  is  leased and 41 North Mojave which
ValCom has 1/3 equity in the real estate of 7.5  acres,  160,000 square feet of
commercial  space,  giving  ValCom a total of 9 sound stages  and  a  recording
studio.  Corporate offices are  located  at the Commerce Studios which houses a
state-of-the art production studio, broadcast  facilities,  recording  studios,
production design construction, animation and post-production.

2.  FILM, PRODUCTION DIVISION.

In  addition  to producing our own television and motion  picture  programming,
we  have  an  exclusive  three-year  term  facilities  agreement  in  place for
productions in  Los  Angeles  County  with   Woody  Fraser  of   Woody   Fraser
Productions.  A  joint  venture   agreement   was   entered   into      between
ValCom  Inc   and   Woody  Fraser  Productions  and  Woody  Fraser  on  January
1, 2001.According  to   the   contract   Woody  Fraser  Productions and   Woody
Fraser   are  responsible  for  developing,  selling  and   producing   various
Television   and  Film  series and the developing expenses are to be  borne  by
ValCom  Inc. The  net profit  participation  to  be  ValCom  Inc  75%  and  WPF
together    with Fraser 25%.The  revenues  for  year  ending Sept. 30, 2002 was
around   $7    million.  The revenues for year ending  September  30, 2003 were
negligible  as  Woody Fraser was unable to obtain any  production  orders.  The
joint   venture  Agreement between the parties was terminated on April 10, 2003
and  was replaced   by   an  exclusive  facilities agreement for productions in
Los  Angeles  County  for  a three-year  term with  Woody  Fraser/Woody  Fraser
Productions.   The   future outlook  for  this  business is uncertain and  will
entirely   depend    on    Woody  Fraser's   ability   to   obtain   production
contracts.

ValCom  Inc. entered into a production agreement  with  entertainment  industry
billion dollar  producer  Jeff  Franklin  who  also  joins  ValCom's  Strategic
Advisory  Board.  Franklin has brought in more than $2 billion in domestic  box
office sales and with the addition of the film division. Mr. Franklin is one of
producers of  the  theatrical  feature,  "Casper"  and is executive producer on
"Kull, The Conqueror," "Cold Around The Heart," "Stuart  Little,"  and  "Stuart
Little 2."


3.  ANIMATION DIVISION.


October    1,   2003,   we   formed  New  Zoo  Revue  LLC  pursuant  to   a
joint  venture  agreement  with  O  Atlas   Enterprises   Inc.,  a   California
corporation. New Zoo Revue LLC  was formed for  the  development and production
of "New Zoo Revue" a feature film  and  television  series  and  marketing   of
existing  episodes.  ValCom  shall  contribute  all funding  required  for  the
development  of the above  to a  maximum  of $1,000,000   and   O  Atlas  shall
contribute    an  exclusive ten (10) year worldwide license  in  and   to   all
rights,  music  and characters as its equal contribution towards  Capital.  The
net  profit  after  all  expenses will be shared equally by ValCom  Inc.  and O
Atlas.  New   Zoo Review LLC  is  expected  to  generate  revenue  by  2005 and
expected to  grow  based on  our  ability  to  sell  the  TV  Series of New Zoo
Revue.  The  Company   has  secured  a  seven  year marketing contract with BCI
Navarre, a   video   marketing company.

On September 27, 2005,ValCom, Inc. signed a letter of intent to acquire Digital
Animation  Media,  Ltd., a privately held Irish  corporation  headquartered  in
Dublin, Ireland. Digital  Animation Media, Ltd., one of the premier independent
animation companies in Europe  and  a leading provider of animation software to
other  production  companies worldwide.  With  its  production  capability  and
proprietary technology, the company is well positioned to take advantage of the
growth in existing animation  markets  as  well  as  a  burgeoning  market  for
wireless  animation  tools  and content with clients such as Disney, Warner and
The New Zoo Revue.

4.  BROADCAST  TELEVISION.

The  Company  owns  a 45% equity  interest  in  ValCom Broadcasting, LLC, a New
York  limited   liability  company,  which  operates   KVPS   (Channel  8),  an
independent  television   broadcaster   in   the   Palm   Springs,   California
market,  which   is  strategically  located in the middle of four major markets
including Los Angeles, Phoenix,  Las  Vegas  and  San  Diego.

ValCom's   business   includes   television    production   for   network   and
syndication  programming,   motion   pictures,   and   real   estate  holdings,
however,  revenue is primarily  generated  through  the  lease  of  the   sound
stages and  production.   ValCom's   past   and  present clients in addition to
Paramount  Pictures  and   Don   Belisarious   Productions,    include   Warner
Brothers,  Universal  Studios,  MGM,   HBO,  NBC,  20th  Century  Fox,  Disney,
CBS,  Sony, Showtime, and the USA Network.   In   addition   to   leasing   its
sound stages, ValCom also owns a small library  of  television  content,  which
is ready  for worldwide distribution and several  major  television  series  in
advanced  stages   of  development. ValCom's Studio Division is composed of two
properties:  920 South  Commerce  which  is  leased  and  41 North Mojave which
ValCom has 1/3 equity in the real estate of 7.5 acres, 160,000  square  feet of
commercial  space,  giving  ValCom  a  total  of 9 sound stages and a recording
studio.  Corporate offices are located at the Commerce  Studios  which houses a
state-of-the  art  production studio, broadcast facilities, recording  studios,
production design construction, animation and post-production.

BASIS  OF  PRESENTATION
-----------------------
The   accompanying unaudited consolidated financial statements   have  been
prepared in  accordance  with  generally  accepted  accounting  principles  for
interim  financial   information   and   with  the instructions to Form 10-QSB.
Accordingly,  they   do   not  include  all  of the information  and  footnotes
required by generally accepted  accounting  principles  for  complete financial
statements and related notes  included  in  the  Company's  Form  10-KSB.

The  audited consolidated financial statements  of  the  Company  for  the year
ended  September   30,   2004   were   filed   on   March  10,  2005,  with the
Securities  and  Exchange   Commission   and   are  hereby  referenced.  In the
opinion  of  management, the  accompanying  unaudited  consolidated   financial
statements  contain   all  adjustments   (consisting  only  of normal recurring
accruals)  considered  necessary for fair presentation has been  included.  The
results of operations for  the  three and  nine  months  ended  June  30,  2004
are not necessarily indicative of  the  results   to   be   expected   for  the
entire  year.

Following   is   a  summary of the significant accounting policies followed  in
the preparation  of   these   consolidated financial statements, which policies
are in accordance with accounting  principles  generally accepted in the United
States of America.


PRINCIPLES  OF  CONSOLIDATION
-----------------------------
The  consolidated  financial statements include  the  accounts  of ValCom, Inc.
and two  wholly-owned subsidiaries, Valencia Entertainment International,  LLC,
which  was   acquired   effective  February  2001  and  Half  Day  Video, Inc.,
which was acquired  effective  March  2001.

Investments   in   affiliated    companies    over  which  the  Company  has  a
significant influence  or  ownership  of  more   than   20%   but  less than or
equal to 50% are accounted  for  under  the  equity  method.


USE  OF  ESTIMATES
------------------
The  preparation  of  consolidated  financial  statements  in  conformity  with
accounting   principles   generally   accepted   in   the   United   States  of
America. Management  is  required  to  make  estimates  and  assumptions   that
affect  the  reported   amounts   of  assets  and liabilities and disclosure of
contingent assets and  liabilities  at  the  date of the consolidated financial
statements  and  the reported  amounts  of  revenue  and  expenses  during  the
reporting period.   Actual  results   could   materially   differ   form  those
estimates.


DEPRECIATION  AND  AMORTIZATION
-------------------------------
For  financial   and   reporting  purposes,  the  Company  follows  the  policy
of providing  depreciation  and  amortization  on the straight-line method over
the estimated  useful  lives  of  the  assets,  which are  as  follows:

Building                        39 years
Building  Improvements          39 years
Production  Equipment            5 years
Office Furniture and Equipment   5  to 7 years
Leasehold  Improvements          5 years
Autos  and  Trucks               5 years


CONCENTRATIONS  AND  CREDIT  RISK
---------------------------------
The   Company   has   two   customers  who  accounted for approximately 99%  of
total rental  revenues for the  nine  months  ended  June  30,  2005  and 2004,
respectively. As  of  June 30, 2005, all sound and production stages were under
non-cancelable  operating  leases  for  one  year  from  two  major  production
companies.

Financial  instruments  that  potentially subject the Company to concentrations
of risk  consist  of trade receivables  principally arising from monthly leases
from television  producers.  The  Company  continuously  monitors  the  credit-
worthiness of  its  customers  to  minimize  its  credit  risk.


FAIR  VALUE  OF  FINANCIAL  INSTRUMENTS
---------------------------------------
Statement  of  financial  accounting  standard  No. 107, Disclosures about fair
value  of   financial   instruments   requires   that   the   Company  disclose
estimated  fair  values  of  financial  instruments.   The   carrying   amounts
reported  in  the  statements  of  financial  position  for  current assets and
current liabilities  qualifying   as   financial  instruments  are a reasonable
estimate of fair value.


IMPAIRMENT  OF  LONG-LIVED  ASSETS
----------------------------------
Effective  January  1,  2003,  the  Company  adopted   Statement  of  Financial
Accounting Standards  No.  144,  "Accounting  for  the Impairment  or  Disposal
of  Long-Lived  Assets" ("SFAS 144"), which addresses financial accounting  and
reporting  for the  impairment   or   disposal   of   long-lived   assets   and
supersedes   SFAS  No. 121, "Accounting for the Impairment of Long-Lived Assets
and for Long-Lived Assets to be  Disposed Of," and the accounting and reporting
provisions of APB Opinion  No.  30,   "Reporting   the  Results  of  Operations
for   a  Disposal  of  a  Segment  of  a Business."  The  Company  periodically
evaluates the carrying value of long-lived  assets  to  be  held  and  used  in
accordance  with  SFAS  144.   SFAS 144 requires  impairment   losses   to   be
recorded  on  long-lived  assets  used   in   operations  when  indicators   of
impairment  are  present  and  the undiscounted cash  flows  estimated  to   be
generated by those assets are less  than the assets' carrying amounts.  In that
event,  a  loss  is  recognized  based  on  the  amount  by  which the carrying
amount  exceeds  the  fair  market  value  of  the  long-lived   assets.   Loss
on  long-lived   assets   to  be disposed of is determined in a similar manner,
except that  fair  market   values   are  reduced  for  the  cost  of  disposal
As  per  Court  order  dated June 3, 2004  and  based  on  the  deed  of  trust
bearing  instrument  nos.  99-2400871,  02-1209820 and 02-1209821, the property
belonging to VEI,  as defined in the instruments  was  auctioned  for sale. The
properties  which  were   valued  at  Land  $7,392,292 Building $4,028,785  and
Building improvements $1,154,406  and  Accumulated  Depreciation  of $1,294,088
were sold to repay the obligations   to   Laurus   (Laurus   having   paid  the
obligations owed to Finance Unlimited)  under  Trust  Sale  Nos:  8413-40   and
8414-30.Consequently  the  loss incurred  due  to  this  sale  is  recorded  as
$1,405,656  under  the  heading  "Impairment  of Property and Equipment" in the
Profit and loss account of VEI for the  nine  months  ending  June  30,  2004.


REVENUE  RECOGNITION
--------------------
Revenues  from  studio  and  equipment  rentals   are  recognized  ratably over
the  contract   terms.   Revenues   from   the  production  and  licensing   of
television programming  are  recognized when  the films or series are available
for  telecast  and  certain  contractual terms of the  related  production  and
licensing agreements have  been  met.


EQUITY  INVESTMENT
------------------
The Company accounts for its investments  in  companies  over which the Company
has significant  influence  or  ownership of more than 20%  but  less  than  or
equal to 50%  under  the  equity  method.


GOING  CONCERN
--------------

The accompanying  consolidated financial statements have been prepared assuming
that   the   Company  will  continue as a going concern.  The Company has a net
loss to  date  of  $927,120   and  a working capital deficiency of $956,876 and
an accumulated deficit of $9,585,792 at June 30, 2005.

Valencia   Entertainment   International,    LLC,    a    California    limited
liability company  and  the  Registrant's  subsidiary  filed on April 7,  2003,
a  voluntary petition  in  bankruptcy  for  reorganization  under  Chapter   11
of   the   U.S.  Bankruptcy  Code in the United States Bankruptcy Court for the
Southern District  of   California   (note   8).   The   main   income  of  the
Registrant  is  from the operations of Valencia Entertainment International. As
of  May  30th,  2005,  we  have  closed the operation at Valencia Entertainment
International, California.

Management   has   taken   various   steps   to   revise   its   operating  and
financial  requirements,  which  it believes  are  sufficient  to  provide  the
Company with  the  ability   to  continue  on in next twelve months. Management
devoted considerable effort  during  the  period  ended  June 30, 2005, towards
management  of  liabilities  and  improving  the  operations.   The  management
believes that the above actions  will   allow   the  Company  to  continue  its
operations through the next twelve months.

                                      -9-

<PAGE>

                         VALCOM, INC. AND SUBSIDIARIES
       NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                  (UNAUDITED)
                                  -----------

NEW  ACCOUNTING  PRONOUNCEMENTS
-------------------------------

In November 2004, the Financial  Accounting  Standards Board (FASB) issued SFAS
151, Inventory Costs - an amendment of ARB No.  43,  Chapter 4.  This Statement
amends the guidance in ARB No. 43, Chapter 4, "Inventory  Pricing,"  to clarify
the accounting for abnormal amounts of idle facility expense, freight, handling
costs,  and  wasted  material  (spoilage).   Paragraph 5 of ARB 43, Chapter  4,
previously stated that "{ellipsis} under some circumstances, items such as idle
facility expense, excessive spoilage, double freight, and re-handling costs may
be  so  abnormal as to require treatment as current  period  charges{ellipsis}"
This Statement  requires  that  those  items  be  recognized  as current-period
charges  regardless  of  whether they meet the criterion of "so abnormal."   In
addition, this Statement requires that allocation of fixed production overheads
to the costs of conversion  be  based  on the normal capacity of the production
facilities.  This Statement is effective  for  inventory  costs incurred during
fiscal years beginning after June 15, 2005.  Management does  not  believe  the
adoption  of  this  Statement  will  have  any immediate material impact on the
Company.

On  December  16,  2004,  the  Financial Accounting  Standards  Board  ("FASB")
published Statement of Financial  Accounting  Standards No. 123 (Revised 2004),
Shared-Based Payment ("SFAS 123R).  SFAS 123R requires  that  compensation cost
related  to  share-based  payment  transactions be recognized in the  financial
statements.  Share-based payment transactions  within  the  scope  of SFAS 123R
include stock options, restricted stock plans, performance-based awards,  stock
appreciation rights, and employee share purchase plans.  The provisions of SFAS
123R  are  effective  as of the first interim period that begins after June 15,
2005.  Accordingly, the  Company  will  implement  the  revised standard in the
third  quarter of fiscal year 2005.  Currently, the Company  accounts  for  its
share-based payment transactions under the provisions of APB 25, which does not
necessarily  require  the  recognition  of  compensation  cost in the financial
statements.   The Company does not anticipate that the implementation  of  this
standard will have  a  material  impact  on  its financial position, results of
operations or cash flows.

On December 16, 2004, FASB issued Statement of  Financial  Accounting Standards
No. 153, Exchanges of Non-monetary Assets, an amendment of APB  Opinion No. 29,
Accounting  for Non-monetary transactions ("SFAS 153").  This statement  amends
APB Opinion 29  to eliminate the exception for no monetary exchanges of similar
productive assets  and  replaces it with a general exception of exchanges of no
monetary assets that do not have commercial substance.  Under SFAS 153, if a no
monetary exchange of similar  productive  assets  meets  a commercial-substance
criterion and fair value is determinable, the transaction must be accounted for
at  fair  value  resulting  in recognition of any gain or loss.   SFAS  153  is
effective for non-monetary transactions in fiscal periods that begin after June
15, 2005.  The Company does not  anticipate  that  the  implementation  of this
standard  will  have  a  material  impact on its financial position, results of
operations or cash flows.

RECLASSIFICATION
----------------

Certain   prior   period   amounts  have  been reclassified to conform  to  the
current period's  presentation.


NOTE  2  NET  INCOME  (LOSS)  PER  SHARE
----------------------------------------

The   Company's   net   loss per share was calculated  using  weighted  average
shares outstanding  of  42,454,473  for  the  three   months   ended   December
31,  2005  and 31,504,469 for the three ended December  31, 2004, respectively.
Although convertible  preferred  stock,  convertible  debt,  and  warrants  are
common stock equivalents, they are
not included in the calculation   of   diluted  earnings  per  share  as  their
effect  would  be anti-dilutive.


NOTE 3.  PROPERTY AND EQUIPMENT
==================================

Property and equipment consists of the following at:

                                 December     September
                                 31, 2005      30, 2005
                               ----------  ------------
Building Improvements              4,500          4,500
Production Equipment              68,708         68,708
Leasehold Improvements            62,677         62,677
Autos and Trucks                  33,971         33,971
Office Furniture and Equipment    44,814         47,814
Video Equipment                  181,877        279,021
Recording Studio                  17,068           -
                               ----------   -----------
                                 416,615        396,547
Less: accumulated depreciation  (309,775)      (301,125)
                                ----------  -----------
Net book value . . . . . . .    $106,840     $3,539,513
                              ==========    ===========

Depreciation expense for the periods ended December 31,  2005 and September 30,
2005  was $8,650 and $92,001, respectively.


NOTE 4. CONVERTIBLE NOTES PAYABLE
=================================

The following are convertible notes  issued  in 2004.  All of these notes incur
interest at 8% per annum with different due dates.  All  related  interest  has
been accrued and reflected in the financial statements.


1. AJW Partner             34,453
                         --------
2. AJW Partner             85,000
                         --------
3. AJW Qualified           94,746
                         --------
4. AJW Off Shore           79,672
                         --------
5. New Millenium Capital    6,460
                         --------
                         $300,331
                         ========
                                      -10-








<PAGE>

                         VALCOM, INC. AND SUBSIDIARIES
       NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                  (UNAUDITED)

NOTE  5  LITIGATION
-------------------

On   April   7, 2003, the Company filed on  an  emergency  basis,  a  voluntary
Chapter 11  bankruptcy   petition.   The  case  is pending in the United States
Bankruptcy Court, Central District of California, San Fernando Valley Division,
as Case No. SV  03-12998-GM.  As  of June  30,   2004,   the   Company  was  in
compliance  of  all of its duties  under the Bankruptcy Code and all applicable
guidelines of the Office of the  United  States  Trustee.

The  Company  requires   the   use  of  its  secured creditor's cash collateral
to operate.  Throughout  the pendency of this case, the Company has worked with
its two  real estate secured lenders,  Finance Unlimited, LLC and Laurus Master
Fund,  Limited  on  the  details  of cash  collateral  stipulation.   An  order
approving  a  global interim cash collateral stipulation with Finance Unlimited
and Laurus was  entered  on  August  26,  2003.  This stipulation permitted the
Company's use of the lenders'  cash  collateral  through  March  31,  2004.

On  April  28,  2004  the  court  approved   two   additional  cash  collateral
stipulations,  one  each  with  Finance  Unlimited   and   Laurus,  authorizing
the Company's  continued  use  of  cash  collateral through May 31, 2004.   The
court  approved  an  extension and granted the restructuring of notes/debt with
Finance  Unlimited   and   Laurus  for  settlement  and  to  be discharged from
bankruptcy.

In   May  2004,  Laurus  paid off  Finance  and  was  subrogated  to  Finance's
$6,565,998 claim,  which   became included in the senior of Laurus' two claims.
Laurus then sought  to  conduct   a   non-judicial   foreclosure   sale  of the
Property, and VEI objected.  The  Bankruptcy  Court  issued  an  order on  June
3, 2004, that while Laurus  could  conduct  a  non-judicial foreclosure sale of
the  Property,  Laurus  would  not  be entitled to any deficiency claim against
either VEI or ValCom, or any  other  assets  other  than  the  Property  itself
(and the rents and leases appurtenant  thereto).

On  June 10,  2004,  Laurus   had  the  Property  sold.   At  this sale, Laurus
claimed that  its  senior note had a balance of $7,407,873 and  its junior note
a balance of  $2,405,093.  Virtually  all  of  the  disputed  penalties,  along
with   a  disproportionate   share  of  disputed legal fees and expenses,  were
incorporated into  the  junior   balance,   while   the   senior   included the
$6,565,998  million  subrogated   from   the   Finance  claim.   The  sale  was
conducted  through  the junior note, and the Property was sold for $2.9 million
to a third party.  An  affiliate  of this third party then purchased the senior
note directly from Laurus, without a  second  sale.

As a result of the Bankruptcy Court's  order  and the subsequent trustee's sale
of  the   Property,   neither  VEI  nor  ValCom  are  subject  to  any  further
liabilities  on account  of  the notes and deeds of trust  previously  held  by
Finance and Laurus. Even  though  the  senior  note  still  technically exists,
it has been rendered  non-recourse  by  the Bankruptcy Court's order, and could
only be enforced against the Property itself  (which no longer belongs to VEI).
Any liability owed to the third party, which purchased the Property with regard
to  the rents collected for June  2004,  has  been   resolved   by   settlement
with  that  party.

On October 5, 2004, Valcom, Inc. and Valencia Entertainment International, LLC,
commenced a lawsuit in  the  Los  Angeles  Superior Court, State of California,
against Chicago Title Company and Laurus Master  Fund,  Ltd.  The suit seeks an
accounting of the amount due in connection with a non-judicial  foreclosure  of
a deed of trust securing a promissory note executed by Valcom and Valencia.  It
also  alleges  that  Chicago  Title  breached  its  trustee's duties and Laurus
breached   the  terms  of the promissory note and deed of  trust  securing  it.
Valcom's attorney has expressed  his belief that the lawsuit it meritorious but
at this stage in the proceeding, he  is  unable to state how much, if any, will
be recovered in the lawsuit.

Lloyd Kurtz

Pending  or  Threatened  Litigation,  Claims  and   Assessments  by  the  prior
contractor for the renovations, at ValCom Studios in  Nevada has been replaced.
Mr. Lloyd Kurtz filed suit on October 25, 2004 against  ValCom, Inc., A private
Nevada  Corporation which is 80% owned by ValCom, Inc. a Delaware  Corporation,
ValCom, Inc.  a Delaware Corporation and Vincent Vellardita. The suit alleges a
violation of Securities Act of 1933 and states that Mr. Kurtz purchased 600,000
shares of ValCom  -  Delaware  at  $0.25 per share and that the shares were not
registered. He claims he is owed an  additional $303,000. Mr. Kurtz has filed a
Mechanic's Lien for $303,000. A motion  to  dismiss  the claim of Mr. Kurtz has
been filed. If the corporation does not prevail on its  Motions  to Dismiss the
corporation  will  file  its  full  defense and counterclaims which exceed  the
amount claimed by Mr. Kurtz.

Farkhanda Rana

On October 20, 2004 a shareholder of  ValCom initiated suit against the Company
and its President alleging violations of State and Federal Securities Law along
with Fraud and Breach of Contract.  The  lawsuit  captioned  Farkhanda Rana vs.
ValCom, Inc., Valencia Entertainment and Vince Vellardita et al.  were filed in
Los Angeles Superior Court as Case Number PC035673.  On November 23, 2004 after
a  hearing  the  Plaintiff  in  this  matter  obtained  a pre-judgment writ  of
attachment against the Company for $325,000.00.  The case  has  been settled as
of November 2005.


NOTE  6  RELATED  PARTY  TRANSACTIONS
-------------------------------------
Mr. Vince Vellardita, CEO is owed 281,445 from advances, cash and accrued wages
from the Company as of December 31, 2005.

NOTE  7  STOCKHOLDERS'  EQUITY
------------------------------

(A)  CONVERTIBLE  PREFERRED  STOCK
----------------------------------
On December 31,  2005,  the  Company  had three series of convertible Preferred
Stock: B,  C,  and  D.

Series   B   Preferred  Stock has no voting  rights,  is  entitled  to  receive
cumulative  dividends in  preference  to  any dividend on the common stock at a
rate of 8% per share, per year. Series B Preferred Stock is to be issued if and
when  declared  by the Board of Directors,  and  can  be  converted at any time
into   common  stock  on  a  1 for 5 basis.  In the event of  any  liquidation,
the holders   of   shares   of   Series  B  Preferred  Stock  then outstanding,
shall be entitled  to  receive  an   amount  equal  to  the  purchase price per
share,  plus  an amount  equal  to  declared but unpaid dividends  thereon,  if
any, to the date of payment.

Series  C Preferred  Stock  has  no  voting  rights,  is  entitled  to  receive
cumulative  dividends  in  preference to any dividend on the common stock at  a
rate of  8%  per  share,  per  year,  to  be issued if and when declared by the
Board of Directors and can be converted at  any  time  into common stock on a 1
for  1  basis. In  the  event  of  any liquidation, the holders  of  shares  of
Series C Preferred Stock  then  outstanding,  shall  be  entitled to receive an
amount equal to the purchase  price per share, plus an amount equal to declared
but unpaid dividends thereon, if any, to the date of payment.

Series D  Preferred  Stock  has  no  voting  rights,  no  dividends  and can be
converted at any time to common stock on a 1 for 1  basis.  In  the  event   of
any  liquidation,  the  holders  of  shares  of Series D Preferred  Stock  then
outstanding, shall be entitled to receive an amount  equal  to   the   purchase
price  per  share.

With   respect  to  rights  on  liquidation, Series B, C, and D Preferred Stock
shall rank senior to the common stock,  but  Series  C Preferred Stock shall be
senior  to  both  Series  B and D Preferred Stock.  Series  D  Preferred  Stock
shall be junior  to   both  Series  B and C Preferred Stock.  No dividends have
been declared by the Board  of Directors  for  any of the Series of convertible
Preferred Stock for the three months ended December 31, 2005.


Assumption  used  (for  Black  Scholes  calculations):
======================================================

Exercise  Price                                              $  .25
Life                                                     12  months
Volatility                                                     125%
Interest  Rate                                                   8%
The  following  is  the  summary  of
warrants as  of  June  30,  2005:
Warrants as of September 30, 2003                                 0
Warrants issued during the period                           300,000
Warrants  exercised  during the period                            0
Warrants  expired  during  the  period                            0
Warrants  outstanding  as  of  June  30, 2004               300,000



                                      -11-


                         VALCOM, INC. AND SUBSIDIARIES
       NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                  (UNAUDITED)

(B)  COMMON  STOCK
-----------------

COMMON STOCK ISSUED

During   the   three   months  ended  December  31,  2005,  the Company  issued
750,000  shares of common    stock   in  lieu  of  compensation  for  legal and
consulting  services performed.   The  value   of   the  legal  and  consulting
services  performed  totaled  approximately  $42,500, which  was computed based
upon the market prices of the common stock on the applicable payment dates.

During the three months  ended  December  31,   2004, the Company issued 25,000
shares  of  common  stock  in lieu of compensation,  salaries  and  bonuses  to
employees.  Total  value  of  the   compensation,   salaries  and  bonuses  was
approximately $1,250, which was computed based upon   the  market prices of the
common stock on the applicable payment dates.

During the three months  ended  December  31,  2004, the Company issued 810,000
shares   of   common   stock  pursuant to its private placement  memorandum  in
exchange for $198,000 in cash.

During   the   three months  ended  December  31,  2004,  the  Company   issued
1,495,269 shares of common  stock  to  convert  $89,669  in  liabilities.



NOTE  9  DISPOSAL  OF  BUILDING  (UNDER  THE  ORDER  OF  BANKRUPTCY  COURT)

VEI  filed  a voluntary  chapter  11  bankruptcy petition on April 7, 2003.  By
May 2004,  the  Property was subject to three (3) secured claims.  These were a
note  and   first-priority   deed  of trust  held  by  Finance  Unlimited,  LLC
("Finance")  in the  amount  of  $6,565,998   and   two   notes,   secured   by
second-priority   and third-priority deeds of trust, both held by Laurus Master
Fund, Ltd. ("Laurus").  Laurus  claimed  that it was owed a total of $2,978,876
plus additional penalties and  additional  legal  fees on the two notes but VEI
disputed  many  of  the penalty claims  by  Laurus.  The   Finance   note   was
solely  the obligation  of  VEI,  but ValCom,  Inc.  was  also  an  obligor  on
the   two   Laurus   notes. In  May 2004,  Laurus  paid  off  Finance  and  was
subrogated to Finance's $6,565,998 claim,  which  became included in the senior
of Laurus' two claims.   Laurus  then  sought   to   conduct   a   non-judicial
foreclosure   sale  of the Property, and VEI objected.  The  Bankruptcy   Court
issued  an  order on  June  3, 2004, that while Laurus  could  conduct  a  non-
judicial foreclosure sale of  the  Property,  Laurus would  not  be entitled to
any deficiency claim against either VEI or valium, or any  other  assets  other
than  the  Property  itself (and the rents and leases appurtenant  thereto).

On   June  10,2004,   Laurus  had  the Property sold.   At  this  sale,  Laurus
claimed that  its  senior  note had a balance of $7,407,873 and its junior note
a balance of  $2,405,093.  Virtually  all  of  the  disputed  penalties,  along
with  a disproportionate  share   of   disputed  legal  fees and expenses, were
incorporated  into   the   junior  balance,  while  the  senior   included  the
$6,565,998  million  subrogated   from   the   Finance  claim.   The  sale  was
conducted through the  junior  note, and the Property was sold for $2.9 million
to a third party.  An affiliate  of  this third party then purchased the senior
note  directly  from Laurus, without a   second   sale.  As  a  result  of  the
Bankruptcy Court's  order  and  the subsequent trustee's sale of the  Property,
neither VEI nor ValCom are subject  to  any  further liabilities on account  of
the  notes  and  deeds of trust previously held by  Finance  and  Laurus.  Even
though  the  senior  note  still  technically exists, it has been rendered non-
recourse by the Bankruptcy  Court's  order,  and could only be enforced against
the Property itself (which no longer belongs to  VEI).   Any  liability owed to
the  third  party,  which  purchased  the  Property  with  regard to the  rents
collected  for  June   2004,  has  been  resolved  by  settlement   with   that
party.

VEI  filed  a  voluntary   chapter   11-bankruptcy   petition  on April 7, 2003
and  obtained   the   status   of  Debtor  in  Possession.  After  successfully
settling the debts  owed  to  secured  creditors   through  sale of property as
per  court  order  dated   June   3,   2004  VEI  applied to the United  States
Bankruptcy  Court,  Central  District  of  California,   San   Fernando  Valley
Division for a Motion to dismiss Chapter   11  Bankruptcy  case ("the Motion").
The  Court  on August 3, 2004, having considered  the  Motion   and   pleadings
filed  in support  thereof,  having heard argument  of  counsel,  finding  that
notice  was  proper,  and  for  good  cause appearing  therefore,  ordered  (1)
The  Motion granted (2) Debtor's Chapter 11 bankruptcy  case  dismissed.

On October 5, 2004, Valcom, Inc. and Valencia Entertainment International, LLC,
commenced a lawsuit in  the  Los  Angeles  Superior Court, State of California,
against Chicago Title Company and Laurus Master  Fund,  Ltd.  The suit seeks an
accounting of the amount due in connection with a non-judicial  foreclosure  of
a deed of trust securing a promissory note executed by Valcom and Valencia.  It
also  alleges  that  Chicago  Title  breached  its  trustee's duties and Laurus
breached  the  terms  of the promissory  note and deed of  trust  securing  it.
Valcom's attorney has expressed  his belief that the lawsuit it meritorious but
at this stage in the proceeding, he  is  unable to state how much, if any, will
be recovered in the lawsuit.

                                      -12-

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

INTRODUCTION

PLAN OF OPERATION

As  of  December 31, 2005, ValCom,  Inc.  operations  were  comprised  of  four
divisions:

STUDIO RENTAL

ValCom's    business    includes    television   production  for  network   and
syndication  programming,   motion   pictures,   and   real   estate  holdings,
however, revenue is primarily  generated   through   the  lease  of  the  sound
stages  and  production.  ValCom's  past  and present clients  in  addition  to
Paramount  Pictures   and    Don   Belisarious   Productions,   include  Warner
Brothers, Universal Studios, MGM,   HBO,   NBC,   20th   Century  Fox,  Disney,
CBS,  Sony,  Showtime,  and  the USA Network.  In  addition  to   leasing   its
sound stages, ValCom also owns a small library  of  television  content,  which
is ready for worldwide distribution  and several  major  television  series  in
advanced  stages  of  development. ValCom's  Studio Division is composed of two
properties:   920 South Commerce which is leased  and  41  North  Mojave  which
ValCom has 1/3  equity  in the real estate of 7.5 acres, 160,000 square feet of
commercial space, giving  ValCom  a  total  of  9  sound stages and a recording
studio.  Corporate offices are located at the Commerce  Studios  which houses a
state-of-the  art  production studio, broadcast facilities, recording  studios,
production design construction, animation and post-production.

FILM PRODUCTION DIVISION

In  addition  to producing our own television and motion  picture  programming,
we have  an  exclusive facilities agreement in place  for  productions  in  Los
Angeles County for a three-year term with Woody Fraser/Woody Fraser
Productions.

A joint venture  agreement  was  entered  into  between  ValCom Inc  and  Woody
Fraser   Productions  and  Woody Fraser on January 1, 2001.  According  to  the
contract  Woody Fraser  Productions  and  Woody  Fraser  are   responsible  for
developing, selling and producing  various Television and Film series  and  the
developing expenses are to be borne by ValCom Inc. The net profit participation
to be ValCom Inc 75% and WPF  together  with  Fraser 25%. The revenues for year
ending September 30, 2005 were around $7,000.

The revenues for year ending Sep 30, 2002 were around $7 million. The  revenues
for year ending September 30, 2003 were negligible as Woody  Fraser  was unable
to  obtain  any  production  orders.  The  joint  venture Agreement between the
parties was  terminated  on  April 10, 2003  and was replaced by  an  exclusive
facilities  agreement  for  productions  in Los Angeles County for a three-year
term with Woody Fraser/Woody  Fraser  Productions.  The future outlook for this
business is uncertain  and  will  entirely  depend  on Woody  Fraser's  ability
to  obtain production  contracts.

ValCom Inc. entered  into  a  production  agreement with entertainment industry
billion  dollar  producer  Jeff  Franklin  who also  joins  ValCom's  Strategic
Advisory Board. Franklin has brought in more  than  $2  billion in domestic box
office sales and with the addition of the film division. Mr. Franklin is one of
producers  of  the  theatrical feature, "Casper" and is executive  producer  on
"Kull, The Conqueror,"  "Cold  Around  The Heart," "Stuart Little," and "Stuart
Little 2."


ANIMATION

October  1,  2003,  we  formed  New  Zoo  Revue LLC pursuant to a joint venture
agreement with O Atlas Enterprises Inc., a California corporation. New
Zoo Revue LLC  was formed for the development and production of "New Zoo Revue"
a feature film  and  television  series and  marketing  of  existing  episodes.
ValCom shall contribute  all  funding required for the development of the above
to a maximum of $1,000,000  and  O  Atlas   shall  contribute an  exclusive ten
(10)  year worldwide license  in  and  to  all rights, music and  characters as
its  equal contribution towards Capital. The net profit after all expenses will
be shared equally by ValCom Inc. and O Atlas. New Zoo Review LLC is expected to
generate revenue by 2005 and expected to grow based on our ability to sell  the
TV Series of New Zoo Revue.

On September 27, 2005,ValCom, Inc. signed a letter of intent to acquire Digital
Animation  Media,  Ltd., a privately held Irish  corporation  headquartered  in
Dublin, Ireland. Digital  Animation Media, Ltd., one of the premier independent
animation companies in Europe  and  a leading provider of animation software to
other  production  companies worldwide.  With  its  production  capability  and
proprietary technology, the company is well positioned to take advantage of the
growth in existing animation  markets  as  well  as  a  burgeoning  market  for
wireless  animation  tools  and content with clients such as Disney, Warner and
The New Zoo Revue.


CHANNEL  8  IN  PALM  SPRINGS,  CALIFORNIA

In  connection  with  our joint venture with New  Global  Communications, Inc.,
we own  a  45%   equity  interest  in  ValCom  Broadcasting, LLC,  a  New  York
limited liability  company,  which  operates KVPS  (Channel 8), an  independent
television broadcaster  in  the  Palm  Springs,  California  market.


THREE  MONTHS  ENDED  December 31, 2005  VS.  December 31, 2004
-----------------------------------------------------------

Revenues  for  the  three  months December 31, 2005 increased by $1,560,997  or
649% from  $240,411   for  the  three  months   ended   December  31,  2004  to
$1,801,409  for  the  same  period   in   2005.   The increase  in  revenue was
principally due to increased production revenues  associated  with the Valcom's
activities.

Production   costs    for   the   three   months   ended   December   31,  2005
increased by $1,664,728  from $47,786 for the three  months  ended December 31,
2004   to  $1,712,514  for  the   same   period   in   2005.   The increase  in
production  costs  was principally due to  increased   production    associated
with Valcom Productions.

Depreciation   and   amortization  expense  for the three months ended December
31, 2005 decreased   by   $17,603  or  67.05% from $26,253 for the three months
ended December 31, 2004  to  $8,650  for  the  same  period  in  2005.

General  and  administrative  expenses  for the  three  months  ended  December
31, 2005  decreased   by   $257,964   or   41.77%  from  $617,634 for the three
months ended December 31, 2004  to  $359,670 for the same  period  in 2005. The
decrease  was  due  principally  to decreased  personnel  costs  for  the   new
projects.

Consulting and professional fees for  the   three   months  ended  December 31,
2005  decreased   by   $326,974   or  63.21% from $517,312 for the three months
ended December 31, 2004  to  $190,338 for the same period in 2005. The decrease
was due principally to decreases in use of professionals.

Interest   expense for the three months ended December  31,  2005  increased by
$11,200 or 249.22% from  $4,494 for the three months ended December 31, 2004 to
$15,694  for  the  same  period  in  2005. The increase was due principally  to
the increase in notes payables.

Due to the factors  described  above,  the  Company's  net  loss  decreased  by
$422,220  from    $959,444   for  the  three  months ended December 31, 2004 to
$537,224 for the same period  in  2005.



FUTURE  OUTLOOK

The  Company  has  entered  into  a  joint  venture  agreement  with  O.  Atlas
Enterprises to  produce  an  animation  movie and an animation TV series called
"New Zoo Revue" based  on  an  American   Classic   of the same name, which was
highly  successful.  BCI/Navarre  has  purchased  an  exclusive   agreement  to
distribute 195 existing  shows   of   New  Zoo Revue for the retail market.  We
anticipate the New Zoo Revue to be available  to  consumers  through 4,000 Wal-
Mart  retail outlets by August 31, 2004.  The  Company  has  already   incurred
start-up  costs,  which  have  been reflected  in  the financial statements for
the six months ended March 31, 2004.

The Company has entered into agreement with Q Television Network, Palm Springs,
CA on April  1, 2005. The Company has granted Q Television Network a License to
use 142 films  and  television  shows for a period of seven years. Q Television
Network issued 50,000,000 shares of the Company valued at $150,000 as advance.

September  22,  2005,  ValCom  Inc. entered into a  production  agreement  with
entertainment industry billion dollar  producer  Jeff  Franklin  who also joins
ValCom's  Strategic  Advisory  Board.   Franklin  has  brought in more than  $2
billion  in  domestic  box  office  sales  and with the addition  of  the  film
division.  Mr. Franklin is one of producers of the theatrical feature, "Casper"
and is executive producer on "Kull, The Conqueror,"  "Cold  Around  The Heart,"
"Stuart Little," and "Stuart Little 2."

On September 27, 2005,ValCom, Inc. signed a letter of intent to acquire Digital
Animation  Media,  Ltd., a privately held Irish  corporation  headquartered  in
Dublin, Ireland. Digital  Animation Media, Ltd., one of the premier independent
animation companies  in  Europe  and   a  provider  of  animation  software  to
other  production  companies worldwide.  With  its  production  capability  and
proprietary technology, the company is well positioned to take advantage of the
growth in existing animation  markets  as  well  as  a  burgeoning  market  for
wireless  animation  tools  and content with clients such as Disney, Warner and
The New Zoo Revue.

ValCom,  Inc.  entered  a  joint  venture  in February, 2006 with entertainment
giant,   Stan   Lee's  POW!  Entertainment.    POW!   (Purveyors   of   Wonder)
Entertainment, Inc.  is  founded  by  Stan Lee, together with Gill Champion and
Arthur  Lieberman.  POW's  principals  combined   have  over  a  hundred  years
experience creating, producing, and licensing original intellectual properties.
POW!  specializes  in  franchises  for  the entertainment  industry,  including
animation and live-action feature films,  plus  television,  DVDs, video games,
merchandising,  and related ancillary markets. POW! partners with  studios  and
networks in creating  new  and exciting characters. In some cases, POW! creates
'custom-tailored' properties for a specific star or director.

Stan Lee, chairman and chief  creative  officer  of  POW!,  is  the creator and
inventor  of  the  modern superhero. A prolific author, Lee revolutionized  the
comic  book  industry   by   creating   compelling   characters   who,  despite
extraordinary  powers  and talents, are nonetheless plagued by the same  doubts
and difficulties experienced  by  ordinary  people.  Some  of his most enduring
characters,  like  Spider-Man(R)(a), The Hulk(R)(a), and the X-Men(R)(a),  have
spun off into television  programs and feature films that have grossed hundreds
of millions of dollars at the box office.

On February 9, 2006 ValCom,  Inc.  named Jeff Kutash as President of their Live
Theatre  Division.  The  first venture  Kutash  will  undertake  is  a  theater
production called 'Headlights  and  Tailpipes'  that  will be unveiled at a Las
Vegas hotel and casino. In heading up this division, Kutash will be responsible
for  developing  and  directing  new  productions  and  live theatrical  events
throughout the world. Kutash's experience in the field of  theatre,  television
and film create a vast knowledge of the entertainment field.


Several  large-scale  productions  put Kutash on the map for live entertainment
including  the first rock n' roll revue  'Good  Ol'  Rock  n'  Roll,'  'Dancin'
Machine' and  most  notably  'Splash,'  which  recently  celebrated its 20 year
anniversary. Kutash received accolades for the choreography  he staged for John
Travolta's  appearance  in  the  film 'Saturday Night Fever.' Kutash  continued
staging  and  began co-producing television  for  ABC,  NBC,  CBS,  Viacom  and
Filmways. His television  work  garnered an Emmy(R) and Golden Globe(R) for his
participation on 'Taxi,' and was  responsible  for staging the 20th Anniversary
Grammy(R) Awards. He has spent the last several  years  commuting  to  and from
Europe   on   a   regular  basis,  coordinating  international  talent,  music,
theatrical, and television productions.



LIQUIDITY  AND  CAPITAL  RESOURCES

The   Company's   condensed   consolidated   financial   statements  have  been
prepared,  assuming  that  the Company will continue as a going  concern.   The
Company has  a net  loss  of  $356,893 and a negative cash flow from operations
of $271,594 for the three months ended  December  31,  2005,  a working capital
deficiency of $1,106,857  and an accumulated deficit of $10,882,574 at December
31,  2005.  These conditions   raise  substantial  doubt  about  the  Company's
ability to continue as a going  concern.

Cash totaled $4,686 on December 31, 2005 compared to $22,142 as at December 31,
2004.   During  the  three  months  ended  December  31, 2005, net cash used by
operating   activities    totaled   $815,588  compared  to  net  cash  used  by
operating  activities of $214,382 for the comparable  three-month   period   in
2004. A significant  portion  of  operating  activities  included  payments for
interest  and  production  development    costs.    Net  cash used by financing
activities  for  the  three  months  ended  December  30,2005 totaled  $564,062
compared to $240,754  for the comparable three-month period in 2004.

The above cash flow activities yielded a net  cash  decrease of $271,594 during
the three months ended December 31, 2005 compared to  a increase of $674 during
the comparable prior year  period.

Net working capital (current assets less current liabilities)   was  a negative
$936,801 as of December 31,2005.  The Company will need to raise  funds through
various  financings   to  maintain  its  operations  until  such  time  as cash
generated  by  operations  is  sufficient   to  meet  its operating and capital
requirements. There can be no assurance that the Company  will be able to raise
such capital on terms acceptable to the Company, if at all.
                                      -13-

ITEM  3.  DISCLOSURE  CONTROLS  AND  PROCEDURES


Evaluation  of  Disclosure  Controls  and  Procedures
-----------------------------------------------------

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

Within  the   90   days   prior   to   the   filing   date  of this Report, the
Company  conducted   an  evaluation  of  the effectiveness of  the  design  and
operation of its disclosure  controls  and  procedures  pursuant  to Securities
Exchange  Act  Rule  13a-14.   This  evaluation   was   conducted    under  the
supervision   and  with  the  participation   of  the Company's Chief Executive
Officer and Principal Financial Officer.


Effective  Disclosure  Controls
-------------------------------

Based  upon  that  evaluation, the Company's officers  concluded  that  many of
the  Company's   disclosure   controls   and   procedures   are  effective   in
gathering,   analyzing   and  disclosing  information  needed  to  satisfy  the
Company's disclosure obligations under the Securities Exchange Act of 1934. For
example, the Company's internal  controls,  particularly  the areas of payroll,
control  of cash and accounts payable, are effective.  In addition,  the  Audit
Committee  meets  with  the  principal accounting officer on a regular basis to
review and evaluate the Company's financial position.  The Audit Committee also
reports to the Board of Directors  on the accounting and finance functions on a
regular basis.

PART  II--OTHER  INFORMATION


ITEM  1.  LEGAL  PROCEEDINGS
----------------------------

The  Company  is involved from time to time  in  legal  proceedings incident to
the normal course of business.  Management believes that  the  ultimate outcome
of  any  pending  or  threatened  litigation would not have a material  adverse
effect on the Company's  consolidated financial position, results of operations
or cash flows.

On   April   7, 2003, the  Company filed on an emergency basis, a voluntary
Chapter 11  bankruptcy   petition.   The  case  is pending in the United States
Bankruptcy Court, Central District of California, San Fernando Valley Division,
as Case No. SV  03-12998-GM.  As  of June  30,   2004,   the   Company  was  in
compliance  of  all of its duties  under the Bankruptcy Code and all applicable
guidelines of the Office of the  United  States  Trustee.

The  Company  requires   the   use  of  its  secured creditor's cash collateral
to operate.  Throughout  the pendency of this case, the Company has worked with
its two  real estate secured lenders,  Finance Unlimited, LLC and Laurus Master
Fund,  Limited  on  the  details  of cash  collateral  stipulation.   An  order
approving  a  global interim cash collateral stipulation with Finance Unlimited
and Laurus was  entered  on  August  26,  2003.  This stipulation permitted the
Company's use of the lenders'  cash  collateral  through  March  31,  2004.

On  April  28,  2004  the  court  approved   two   additional  cash  collateral
stipulations,  one  each  with  Finance  Unlimited   and   Laurus,  authorizing
the Company's  continued  use  of  cash  collateral through May 31, 2004.   The
court  approved  an  extension and granted the restructuring of notes/debt with
Finance  Unlimited   and   Laurus  for  settlement  and  to  be discharged from
bankruptcy.

In   May  2004,  Laurus  paid off  Finance  and  was  subrogated  to  Finance's
$6,565,998 claim,  which   became included in the senior of Laurus' two claims.
Laurus then sought  to  conduct   a   non-judicial   foreclosure   sale  of the
Property, and VEI objected.  The  Bankruptcy  Court  issued  an  order on  June
3, 2004, that while Laurus  could  conduct  a  non-judicial foreclosure sale of
the  Property,  Laurus  would  not  be entitled to any deficiency claim against
either VEI or ValCom, or any  other  assets  other  than  the  Property  itself
(and the rents and leases appurtenant  thereto).

On  June 10,  2004,  Laurus   had  the  Property  sold.   At  this sale, Laurus
claimed that  its  senior note had a balance of $7,407,873 and  its junior note
a balance of  $2,405,093.  Virtually  all  of  the  disputed  penalties,  along
with   a  disproportionate   share  of  disputed legal fees and expenses,  were
incorporated into  the  junior   balance,   while   the   senior   included the
$6,565,998  million  subrogated   from   the   Finance  claim.   The  sale  was
conducted  through  the junior note, and the Property was sold for $2.9 million
to a third party.  An  affiliate  of this third party then purchased the senior
note directly from Laurus, without a  second  sale.

As a result of the Bankruptcy Court's  order  and the subsequent trustee's sale
of  the   Property,   neither  VEI  nor  ValCom  are  subject  to  any  further
liabilities  on account  of  the notes and deeds of trust  previously  held  by
Finance and Laurus. Even  though  the  senior  note  still  technically exists,
it has been rendered  non-recourse  by  the Bankruptcy Court's order, and could
only be enforced against the Property itself  (which no longer belongs to VEI).
Any liability owed to the third party, which purchased the Property with regard
to  the rents collected for June  2004,  has  been   resolved   by   settlement
with  that  party.

On October 5, 2004, Valcom, Inc. and Valencia Entertainment International, LLC,
commenced a lawsuit in  the  Los  Angeles  Superior Court, State of California,
against Chicago Title Company and Laurus Master  Fund,  Ltd.  The suit seeks an
accounting of the amount due in connection with a non-judicial  foreclosure  of
a deed of trust securing a promissory note executed by Valcom and Valencia.  It
also  alleges  that  Chicago  Title  breached  its  trustee's duties and Laurus
breached   the  terms  of the promissory note and deed of  trust  securing  it.
Valcom's attorney has expressed  his belief that the lawsuit it meritorious but
at this stage in the proceeding, he  is  unable to state how much, if any, will
be recovered in the lawsuit.

Lloyd Kurtz

Pending  or  Threatened  Litigation,  Claims  and   Assessments  by  the  prior
contractor for the renovations, at ValCom Studios in  Nevada has been replaced.
Mr. Lloyd Kurtz filed suit on October 25, 2004 against  ValCom, Inc., A private
Nevada  Corporation which is 80% owned by ValCom, Inc. a Delaware  Corporation,
ValCom, Inc.  a Delaware Corporation and Vincent Vellardita. The suit alleges a
violation of Securities Act of 1933 and states that Mr. Kurtz purchased 600,000
shares of ValCom  -  Delaware  at  $0.25 per share and that the shares were not
registered. He claims he is owed an  additional $303,000. Mr. Kurtz has filed a
Mechanic's Lien for $303,000. A motion  to  dismiss  the claim of Mr. Kurtz has
been filed. If the corporation does not prevail on its  Motions  to Dismiss the
corporation  will  file  its  full  defense and counterclaims which exceed  the
amount claimed by Mr. Kurtz.

Farkhanda Rana

On October 20, 2004 a shareholder of  ValCom initiated suit against the Company
and its President alleging violations of State and Federal Securities Law along
with Fraud and Breach of Contract.  The  lawsuit  captioned  Farkhanda Rana vs.
ValCom, Inc., Valencia Entertainment and Vince Vellardita et al.  were filed in
Los Angeles Superior Court as Case Number PC035673.  On November 23, 2004 after
a  hearing  the  Plaintiff  in  this  matter  obtained  a pre-judgment writ  of
attachment  against  the Company for $325,000.00.  The case has been settled as
of November 2005.


ITEM  2.  UNREGISTERED SALES OF EQUITY SECURITIES
---------------------------------

(A) PREFERRED STOCK:

On January 24 Company issued  4,000,000  shares  of  C preferred Stock in lieu
of cash payment.

COMMON  STOCK
------------------


During  the  three  months  ended  December   31,   2005,   the  Company issued
750,000  shares of common   stock   in  lieu  of  compensation  for   legal and
consulting  services  performed.   The  value   of   the  legal  and consulting
services   performed  totaled approximately $42,500, which  was computed  based
upon the market prices of the common stock on the applicable payment dates.


                                      -15-


ITEM  3.  DEFAULTS  UPON  SENIOR  SECURITIES
--------------------------------------------

Not  applicable


ITEM  4.  SUBMISSION  OF  MATTERS  TO  A  VOTE  OF  SECURITY  HOLDERS
---------------------------------------------------------------------

Not  applicable


ITEM  5.  OTHER  INFORMATION
----------------------------

Not  applicable


ITEM  6.  EXHIBITS
-------------------------------------------

(A) Exhibits

<TABLE>
<CAPTION>
31.1Certification by CEO pursuant to Section 302 of Sarbanes Oxley Act of 2002.
<S>  <C>

31.2Certification by CFO pursuant to Section 302 of Sarbanes Oxley Act of 2002.

32.1Certification of Chief Executive Office Pursuant to 18 U.S.C. Section 1350.

32.2Certification of Chief Executive Office Pursuant to 18 U.S.C. Section 1350.
</TABLE>




The Company incorporates by reference all exhibits to its Form 10-KSB for the
year ending September 30, 2005.


                                      -16-







<PAGE>


                                   SIGNATURES
                                   ----------

In  accordance  with  the  requirements of the Securities Exchange Act of 1934,
the registrant  caused  this   report   to  be  signed  on  its  behalf  by the
undersigned, thereunto  duly  authorized.

                                  VALCOM, INC.
                                  Date:  February 22, 2006

                                  By:  /s/Vince  Vellardita
                                  -------------------------------------
                                  Vince  Vellardita  Chairman  of  the
                                  Board  and  Chief  Executive  Officer
                                  (Principal  executive  officer)




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


Signature                       Title                Date
---------                       -----                ----

BY:  /s/  Vince  Vellardita    CEO/President  February 22, 2006
---------------------------Chairman of the Board
Vince  Vellardita


BY:  /s/  Sandy Markham        Secretary    February 22, 2006
-----------------------   (Principal Accounting Officer)
Sandy Markham