================================================================================
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-KSB

[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
    1934:

    For the fiscal year ended  May 31, 2005

[ ] TRANSITIONAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
    OF 1934
                For the transition period from _______ to _______

                                     0-27539
                             ----------------------
                             Commission File Number


                     DISTRIBUTION MANAGEMENT SERVICES, INC.
        -----------------------------------------------------------------
        (Exact name of small business issuer as specified in its charter)

          FLORIDA                                            65-0574760
----------------------------                       ----------------------------
(State or other jurisdiction                       (IRS Employer Identification
      of Incorporation)                                       Number)

11601 BISCAYNE BOULEVARD, SUITE 201, MIAMI, FLORIDA            33181
---------------------------------------------------          ---------
(Address of principal executive offices)                     (Zip Code)

                                   305-893-9270
                         -------------------------------
                         (Registrant's telephone number)

         Securities registered under Section 12(b) of the Exchange Act:
                                      NONE

         Securities registered under Section 12(g) of the Exchange Act:
                          Common Stock, $.001 par value

Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes [ ] No [ X ]

Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure will be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. [ ]

Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). Yes [ ] No [X]

Issuer's revenues for its most recent fiscal year:   $ -0-

State the aggregate market value of the voting and non-voting common equity held
by non-affiliates: $149,275 at June 2, 2006 based on the average bid and ask
price on that date.

The number of shares outstanding of each of the Issuer's classes of common
equity: 9,717,328 at June 2, 2006

DOCUMENTS INCORPORATED BY REFERENCE: There are no documents incorporated by
reference in this Annual Report on Form 10-KSB other than as set forth in Part
III, Item 13.

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


<PAGE>

                                     PART I

ITEM 1.   DESCRIPTION OF BUSINESS

FORWARD-LOOKING STATEMENTS

         This annual report on Form 10-KSB and other statements issued or made
from time to time by Distribution Management Services, Inc., a Florida
corporation, contain statements which may constitute "Forward-Looking
Statements" within the meaning of the Securities Act of 1933, as amended (the
"Act") and the Securities Exchange Act of 1934 (the "Exchange Act") by the
Private Securities Litigation Reform Act of 1995, 15 U.S.C.A. Sections 77Z-2 and
78U-5 (SUPP. 1996). Those statements include statements regarding the intent,
belief or current expectations of Distribution Management and its
officers/directors as well as the assumptions on which such statements are
based. Prospective investors are cautioned that any such forward-looking
statements are not guarantees of future performance and involve risks and
uncertainties, and that actual results may differ materially from those
contemplated by such forward-looking statements. Distribution Management
Services, Inc. is sometimes referred to herein as "we", "us", "our" and the
"Company."

PRINCIPAL OPERATIONS, SERVICES AND MARKETS

         Distribution Management Services, Inc. was incorporated in Florida on
January 25, 1995. The Company was formed specifically to operate a construction
and demolition recycling center. In furtherance of its business plan, the
Company acquired a tract of land at 2000 N. Miami Avenue, Miami, Florida and
caused same to be zoned for operation as a recycling center. The recycling
center was licensed with the Florida Department of Environmental Regulation
("DERM") on July 6, 1995.

         Based upon the ongoing litigation in connection with the recycling
center, the Company decided to pursue different commercial avenues. On December
12, 2004, the Company entered into a real estate venture and acquired a contract
to purchase 266 single-family residential building sites in Poinciana, Florida
for the total sum of $4,655,000. The land, which is located in close proximity
to Disney World in Orlando, Florida, is in an area the Company believes will
appreciate in value.

         The Company has completed the financing and purchase of the 266 lots
and financed this acquisition by securing two mortgages aggregating $4.7
million.

         To date, the Company has completed the sale of eight lots for $440,000.

         The Company is also looking for other new business opportunities
beneficial to the Company's shareholders.

         The Company also intends to produce a motion picture from one of two
movie scripts previously acquired. To date, no agreements to produce the film
have been made, however, the Company is seeking to enter into such agreements.

COMPETITION

         The Company's real estate holdings located in Central Florida are
subject to competition from existing real estate holders in the area.

                                       2

<PAGE>

PATENTS AND PROPRIETARY RIGHTS

         The Company has acquired the rights to two (2) movie scripts, each of
which is copyrighted through the copyright office of the United States.

GOVERNMENTAL APPROVALS AND REGULATIONS

         The development of our real estate holdings located in Central Florida
is subject to local zoning regulations, none of which precludes us from selling
the lots as intended.

RESEARCH AND DEVELOPMENT COSTS

         The Company is not involved with any product research or development at
this time.

EMPLOYEES

         As of the present time the Company has no paid employees.


ITEM 2.   DESCRIPTION OF PROPERTY

         Our executive offices are located at 11601 Biscayne Boulevard, 201,
Miami, Florida 33181, and substantially all of its operating activities are
conducted from that location which is the office of the President. During 2005,
we paid $3,110 to a company affiliated to our president for the use of such
space. We believe that as we expand our business we will enter into an
appropriate lease agreement for such facilities as may be necessary for
conducting operations. Any such lease agreement is expected to be on such terms
and conditions customary for similar facilities in the Company's geographical
area.

         At May 31, 2005, we own 56 lots located in Polk County, Florida, owned
in fee simple interest of a tract of land under development and held for sale.


ITEM 3.   LEGAL PROCEEDINGS

         The Company is a party to the following legal proceedings:

         A lawsuit instituted on October 3, 2005 by Newgate Atlantic Holdings,
Inc. against us for specific performance of the sale of two lots located in Polk
County, Florida for $25,000. The lawsuit is pending in the Circuit Court of the
10th Judicial Circuit in and for Polk County, Florida. The Company asserts that
the lots were not specified timely and accordingly, does not have to consummate
the sale.

         A lawsuit instituted by Quality Affordable Construction, LLC, Southwest
Management Affiliates, Inc. and Karen Thomas Christensen Trust against us, on
July 6, 2005 in the Circuit Court of the 10th Judicial Circuit in and for Polk
County, Florida for the repayment of its $85,000 initial deposit on certain lots
located in Polk County, Florida.


ITEM 4.  SUBMISSION OF MATTERS TO SECURITY HOLDERS

         During the fourth quarter of fiscal 2005, no matter was submitted to a
vote of the security holders. 3

<PAGE>

                                     PART II


ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

MARKET INFORMATION

         The Company's common stock is traded on the OTCBB under the symbol
"DMGS." The Company's common stock consists of 50,000,000 shares authorized of
which, as of February 15, 2006, there were 9,717,328 shares issued and
outstanding. The following is the high and low prices of our stock for the last
four quarters.

Quarterly Common Stock Price Ranges

         QUARTER                                IN THE YEAR ENDING MAY 31, 2005

                                                     High                 Low
                                                     -----               -----
         First                                       $1.85               $0.12
         Second                                      $0.67               $0.17
         Third                                       $0.19               $0.08
         Fourth                                      $0.10               $0.03

HOLDERS OF COMMON STOCK

         As of May 15, 2006 there were approximately 34 holders of record of the
Company's common stock.

DIVIDENDS

         We currently intend to retain any future earnings for use in the
expansion of the business, and therefore do not intend to pay shareholder
dividends. The declaration and payment of cash dividends, if any, will be at the
discretion of the Board of Directors of the Company and will depend, among other
things, upon our earnings, capital requirements and financial condition.

SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS

         Recent issuance of unregistered securities:

         During August 2004, we issued 512,820 shares of our common stock to
Cornell Capital. We believe that these shares were wrongly issued by the
transfer agent. The fair value of the shares issued amounted to $25,641 based on
our price per share on the date of the issuance. We are seeking to recover these
shares from Cornell Capital, which has been unresponsive to our request. We
believe that these shares are not exempt from registration under the Securities
Act of 1933.

                                       4

<PAGE>

ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS AND RESULTS OF OPERATION OR PLAN
         OF OPERATIONS

INTRODUCTION

         The following discussion of our financial condition and results of our
operations should be read in conjunction with the Financial Statements and Notes
thereto. This document contains certain forward-looking statements including,
among others, anticipated trends in our financial condition and results of
operations and our business strategy. These forward-looking statements are based
largely on our current expectations and are subject to a number of risks and
uncertainties. Actual results could differ materially from these forward-looking
statements. Important factors to consider in evaluating such forward-looking
statements include (i) changes in external factors or in our internal budgeting
process which might impact trends in our results of operations; (ii)
unanticipated working capital or other cash requirements; (iii) changes in our
business strategy or an inability to execute our strategy due to unanticipated
changes in the industries in which we operate; and (iv) various competitive
market factors that may prevent us from competing successfully in the
marketplace.

PLAN OF OPERATIONS

         In July 2003, we discontinued our operations associated with the
recycling center we acquired in 1999. Accordingly, all transactions associated
with the recycling center have been accounted for as discontinued operations in
fiscal 2004.

         During May and July 2005, we have acquired certain real estate property
located in Orlando, Florida. We have sold certain lots and intend to orderly
dispose of the remaining lots at an appreciated value.

         We also hold certain rights in two movie scripts which we seek to
develop in motion pictures.

CRITICAL ACCOUNTING POLICIES

USE OF ESTIMATES

         The preparation of financial statements in accordance with accounting
principles generally accepted in the United States requires management 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 financial statements and the reported amounts of revenues and expenses
during the reporting periods. Significant estimates made by management include,
but are not limited to, the realization of receivables owed by the purchaser of
the recycling center and whether the value attributed to the movie scripts is
impaired. Actual results will differ from these estimates.

                                       5

<PAGE>

RESULTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                          For the year ended        Variation        Variation
                                                              May 31,                   $                %
                                                  ------------    ------------     ------------    ------------
                                                      2005            2004         2005 vs 2004    2005 vs 2004
                                                  ------------    ------------     ------------    ------------
<S>                                               <C>             <C>              <C>             <C>
Revenues:                                         $         --    $         --               --            NM

Operating expenses:
Selling, general, and administration expenses          232,701         240,712           (8,011)            -3%
                                                  ------------    ------------     ------------    ------------

Interest income                                          1,750              --            1,750              NM
Interest expense                                       (14,471)       (165,981)         151,510            -91%
                                                  ------------    ------------     ------------    ------------

Loss from continuing operations                       (257,422)       (406,693)        (149,271)           -37%

Loss from discontinued operations                       13,516          62,874           49,358             79%
                                                  ------------    ------------     ------------    ------------

Net loss                                              (243,906)       (343,819)    $    (99,913)            29%
                                                  ============    ============     ============    ============
</TABLE>

NM:  Not meaningful


Twelve Months Ended May 31, 2005 compared to May 31, 2004
---------------------------------------------------------

         We account for our operations related to the recycling center as
discontinued operations.


         Selling, general and administrative expenses are primarily comprised of
salaries, professional fees and other operating expenses associated with the
Company's efforts to develop new business ventures as well as a charge of
approximately $25,000 amounting to the fair value of 512,820 unregistered shares
wrongly issued to Cornell in connection with the Equity Line of Credit. The
selling, general, and administrative expenses during fiscal 2005 is consistent
when compared to the prior year period.

         Interest expense is primarily comprised of expenses associated with our
debt. The decrease in interest expense in fiscal 2005 when compared to fiscal
2004 is primarily due to a one-time charge of approximately $166,000 resulting
from the excess of fair value of shares issued to satisfy certain of our
liabilities in fiscal 2004.

         Other expenses in fiscal 2005 is primarily comprised of a write-down of
the carrying value of our equipment held for sale of $12,000, which is based on
an appraisal.

         Gain from discontinued operations for fiscal 2005 included expenses and
collection of claims of approximately $45,000 and $59,000 associated with the
recovery of the recycling center.

         Gain from discontinued operations for fiscal 2004 included revenues of
approximately $19,400, expenses of approximately $70,000, a loss on the sale of
the recycling center of approximately $32,000, and the recovery of equipment of
$60,000 and claims of approximately $85,000.

                                       6
<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

         As of May 31, 2005, the Company had cash on hand of approximately
$20,000.

         During fiscal 2005, the Company used approximately $39,000 in its
operations. The cash used in operating activities results primarily from:

          o    its loss from continuing operations amounting to approximately
               $257,000, adjusted for the fair value of the shares issued to
               Cornell Capital, the write-down of the equipment held for sale,
               the forfeiture of officer's compensation and the amortization of
               the deferred compensation which aggregated approximately $55,000
               and the increase in other liabilities resulting from an
               assignment of an initial deposit on the land we acquired in
               Central Florida which amounted to approximately $94,000;

          o    its gain from discontinued operations amounting to approximately
               $13,000.

         During fiscal 2004, the Company disposed of property and equipment
generating approximately $950,000. Such funds were used to repay the mortgage
related to the property of $375,000, and made principal repayments of
approximately $160,000 on amounts due to Double D, Inc., a company owned and
controlled by our President, Mr. Greenfield. The remaining funds were used to
finance our operating activities and as working capital.

GOING CONCERN

         The accompanying financial statements have been prepared on a going
concern basis. The Company has generated minimal revenue in the last three years
and has an accumulated deficit of approximately $1.6 million. The Company's
ability to continue as a going concern is dependent upon its ability to obtain
the necessary financing to meet its obligations and repay its liabilities
arising from normal business operations when they come due, to fund possible
future acquisitions, and to generate profitable operations in the future.
Management plans to continue to provide for its capital requirements by issuing
additional equity securities and debt. The outcome of these matters cannot be
predicted at this time and there are no assurances that if achieved, the Company
will have sufficient funds to execute its business plan or generate positive
operating results.

         We own the rights to two movie scripts. We intend to finance the
production costs estimated at $3,000,000 for the first of these films from the
proceeds of a private offering of restricted equity securities. If we are unable
to raise the requisite funding, this could have a material adverse impact on the
Company's planned business and its financial condition and prevent the
production of any of the films.

         From time to time, the Company may evaluate potential acquisitions
involving complementary businesses, services, products or technologies. The
Company's future capital requirements will depend on many factors, including
acquisitions, if any, growth of the Company's customer base, economic conditions
and other factors including the results of future operations. Any such
acquisition would require additional funding, through the sale of Company
securities and/or other financing sources. There can be no assurances that such
financing will be available to the Company.

         There are no present plans to hire any additional personnel in
connection with the Company's planned film production. However, if operations
are expanded through growth or acquisitions, the Company expects to hire
personnel to meet these needs and may enter into full-time employment agreements
with its president or others to oversee its operations. The number of employees
which may be hired will be determined by the expansion of the Company's present
business or into other business ventures. The number of employees actually hired
will be based on the Company's ability to support the increased cost through
cash flow generated by such business.

                                       7
<PAGE>

IMPACT OF RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

         In November 2004, Financial Accounting Standards Board issued statement
of Financial Accounting Standard No. 151, "Inventory Costs." The new statement
amends Accounting Research Bulletin No. 43, Chapter 4, "Inventory Pricing," to
clarify the accounting for abnormal amounts of idle facility expense, freight,
handling costs, and wasted material. This statement requires that those items be
recognized as current-period charges and requires that allocation of fixed
production overheads to the cost of conversion be based on the normal capacity
of the production facilities. This statement is effective for fiscal years
beginning after June 15, 2005. We do not expect adoption of this statement to
have a material impact on our financial condition or results of operations.

         In December 2004, the FASB issued FASB Statement No. 123R, "Share-Based
Payment, an Amendment of FASB Statement No. 123" ("FAS No. 123R"). FAS No. 123R
requires companies to recognize in the statement of operations the grant-date
fair value of stock options and other equity-based compensation issued to
employees. FAS No. 123R is effective beginning in our first quarter of fiscal
2006. We are in process of evaluating the impact of this pronouncement on our
financial position.

         In December 2004, the FASB issued SFAS Statement No. 153, "Exchanges of
Non-monetary Assets." The Statement is an amendment of APB Opinion No. 29 to
eliminate the exception for non-monetary exchanges of similar productive assets
and replaces it with a general exception for exchanges of non-monetary assets
that do not have commercial substance. We believe that the adoption of this
standard will have no material impact on our financial statements.

         In April 2005, the Securities and Exchange Commission's Office of the
Chief Accountant and its Division of Corporation Finance has released Staff
Accounting Bulletin (SAB) No.107 to provide guidance regarding the application
of FASB Statement No.123 (revised 2004), Share-Based Payment. Statement No.
123(R) covers a wide range of share-based compensation arrangements including
share options, restricted share plans, performance-based awards, share
appreciation rights, and employee share purchase plans. SAB 107 provides
interpretative guidance related to the interaction between Statement No. 123R
and certain SEC rules and regulations, as well as the staff's views regarding
the valuation of share-based payment arrangements for public companies. SAB 107
also reminds public companies of the importance of including disclosures within
filings made with the SEC relating to the accounting for share-based payment
transactions, particularly during the transition to Statement No. 123R.

         In May 2005, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards No. 154, "Accounting Changes and
Error Corrections-a replacement of APB Opinion No. 20 and FASB Statement No. 3"
("SFAS 154"). This Statement replaces APB Opinion No. 20, Accounting Changes,
and FASB Statement No. 3, Reporting Accounting Changes in Interim Financial
Statements, and 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.

         Opinion 20 previously required that most voluntary changes in
accounting principle be recognized by including in net income of the period of
the change the cumulative effect of changing to the new accounting principle.
This Statement requires retrospective application to prior periods' financial
statements of changes in accounting principle, unless it is impracticable to
determine either the period-specific effects or the cumulative effect of the
change. When it is impracticable to determine the period-specific effects of an
accounting change on one or more individual prior periods presented, this
Statement requires that the new accounting principle be applied to the balances
of assets and liabilities as of the beginning of the earliest period for which
retrospective application is practicable and that a corresponding adjustment be
made to the opening balance of retained earnings (or other appropriate
components of equity or net assets in the statement of financial position) for
that period rather than being reported in an income statement. When it is
impracticable to determine the cumulative effect of applying a change in
accounting principle to all prior periods, this Statement requires that the new
accounting principle be applied as if it were adopted prospectively from the
earliest date practicable. This Statement shall be effective for accounting
changes and corrections of errors made in fiscal years beginning after December
15, 2005. The Company does not believe that the adoption of SFAS 154 will have a
significant effect on its financial statements.

                                       8
<PAGE>

         Other accounting standards that have been issued or proposed by the
FASB or other standards-setting bodies that do not require adoption until a
future date are not expected to have a material impact on the consolidated
financial statements upon adoption.


FORWARD-LOOKING STATEMENTS

         In connection with the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995 (the "Reform Act"), the Company is providing
cautionary statements identifying important factors that could cause the
Company's actual results to differ materially from those projected in
forward-looking statements made herein. Any statements that express, or involve
discussions as to, expectations, beliefs, plans, objectives, assumptions of
future events or performance are not statements of historical facts and may be
forward-looking. These forward-looking statements are based largely on the
Company's expectations and are subject to a number of risks and uncertainties,
including but not limited to, economic, competitive, regulatory, growth
strategies, available financing and other factors discussed elsewhere in this
report and in documents filed by the Company with the SEC. Many of these factors
are beyond the Company's control. Actual results could differ materially from
the forward-looking statements made. In light of these risks and uncertainties,
there can be no assurance that the results anticipated in the forward-looking
information contained in this report will, in fact, occur. Any forward-looking
statement speaks only as of the date on which such statement is made, and the
Company undertakes no obligation to update any forward-looking statement or
statements to reflect events or circumstances after the date on which such
statement is made or to reflect the occurrence of unanticipated events. New
factors emerge from time to time and it is not possible for management to
predict all of such factors, nor can it assess the impact of each such factor on
the business or the extent to which any factor, or combination of factors, may
cause actual results to differ materially from those contained in any
forward-looking statements.

ITEM 7.  FINANCIAL STATEMENTS

         The financial statements of the Company required by Regulation S-B are
attached to this Report. Reference is made to Item 13 below for an index to the
financial statements and financial statements schedules.


ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
         AND FINANCIAL DISCLOSURE

None

ITEM 8A. CONTROLS AND PROCEDURES

         The Company has set up disclosures, control and procedures designed to
ensure that information required to be disclosed in reports filed under the
Securities Act of 1934, as amended, is recorded, processed, summarized, and
reported within the specified time period. At the end of the period covered by
this report, the Company's CEO and CFO have evaluated the effectiveness of the
Company's disclosure controls and procedures. Based on the evaluation, which
disclosed no significant deficiencies or material weaknesses, the Company's CEO
and CFO concluded that the Company's controls and procedures are effective as of
the end of the period covered by this report.

         There were no changes in the Company's internal controls and financial
reporting that occurred in the Company's most recent fiscal quarter, that had
materially affected or was reasonably likely to materially affect, the Company's
internal control over financial reporting.

ITEM 8B. OTHER INFORMATION

         None.


                                       9

<PAGE>

                                    PART III

ITEM 9.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
         COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT.

EXECUTIVE OFFICERS AND DIRECTORS

         The following table sets forth the information regarding our executive
officers and directors as of the date of this filing:


  NAME                               AGE             TITLE
  -----------------------------      ---             ---------------------------
  Leo Greenfield                     81              President and Director
  Barbara Greenfield                 67              Vice President and Director
  Maria Elena Lopez de Mendoza       65              Secretary and Director


         The Company's directors are elected at the annual meeting of
stockholders and hold office until their successors are elected and qualified.
The Company's officers are appointed by the Board of Directors and serve at the
pleasure of the Board and subject to employment agreements, if any, approved and
ratified by the Board. The Company did not hold an annual meeting in the fiscal
year ended May 31, 2004.

LEO GREENFIELD

         Mr. Greenfield has been President and a director of the Company since
March 1999. He is also the vice president of Double D, Inc., a privately held
Florida holding company with no operations or business, which is a major
shareholder of the Company. From May 1997 to March 1998, he acted as business
consultant for the Company in arranging the financing for and supervising
construction of the Company's facilities. In March 1998, he became the General
Manager of the Company. He still serves in that capacity although he has now
become President and Director of the Company. He holds an LLB Degree from the
University of Miami (1948) and a BSBA Degree from the University of Miami
(1950). In 1990 he was convicted of obstruction of justice and resigned from The
Florida Bar. On September 1, 1999 Mr. Greenfield was individually charged by the
State of Florida with "littering" in violation of Fla. Stat.403.413(4), a class
three felony with a maximum penalty of five years imprisonment and possibly up
to a $5,000 fine, based on a claim that 22 barrels of liquid material were
pumped from a ground storage tank during construction of the facility by the
contractor and during the time that Mr. Greenfield was not an officer or
director of the Company. They were temporarily stored in a fenced-off alley
adjoining the Company's property. These barrels and the material were disposed
of in accordance with the requirements and approval of DERM and all
environmental regulations three months prior to the charges being made and. Mr.
Greenfield denied any violation of such statute or wrongdoing of any kind;
however, in order to dispose of the charge, Mr. Greenfield entered a plea of
nolle contendre on March 21, 2000, without an adjudication, and the Company paid
the County's expenses of approximately $12,500.


                                       10
<PAGE>

BARBARA GREENFIELD

         Mrs. Greenfield has been Vice President and a director of the Company
since March 1998. She is president of Double D, Inc., a majority shareholder of
the Company. Since June 2000, Ms. Greenfield had been employed by the City of
Hollywood, Florida Fire Rescue Department. Ms. Greenfield has been employed as a
controller and consultant in designing computer programs. Since June 2000, she
has been employed by the City of Hollywood, Florida in a data entry/secretarial
position. In 1998 she was employed by Panciera Funeral Homes in Hollywood,
Florida and designed a computer program for their Pre-Need Division. She was
involved in the ownership and management of Powergate Plaza, a shopping center
located in Pompano Beach, Florida until it was sold in November 2001. Ms.
Greenfield attended the University of Miami and graduated from the School of
Interior Design, a private design school. She is a licensed practitioner and has
been active in the field since 1969.

MARIA ELENA LOPEZ DE MENDOZA

         Ms. Mendoza has been Secretary and Director of the Company since March
1998 and has been providing administrative services to the Company since such
time. She had previously been employed by Mr. Greenfield, President of the
Company, since 1973 in both the operation of his law office as well as various
business enterprises in which he had been engaged.

DIRECTORSHIPS

         None of the Company's executive officers or directors is a director of
any company with a class of equity securities registered pursuant to Section 12
of the Exchange Act or subject to the requirements of Section 15(d) of the
Exchange Act or any company registered as an investment company under the
Investment Company Act of 1940.

IDENTIFICATION OF CERTAIN SIGNIFICANT EMPLOYEES

None

FAMILY RELATIONSHIPS

         Leo Greenfield and Barbara Greenfield, President/Director and Vice
President/Director of the Company, respectively, have been married since 1959.
No other family relationship exists between the officers or any other person who
may be selected as a director or executive officer of the Company.

         The directors hold office until the next annual meeting of the
shareholders and until their successor(s) have been duly elected or qualified.

         None of the officers or directors have been subject to bankruptcy,
receivership or convicted in any criminal proceedings subject to any criminal
proceedings, have been subject to an order, judgment or decree that would
otherwise limit their involvement in any type of business, securities or banking
activities, and has never been found by a court of competent jurisdiction, or
any regulatory agency, to have violated any securities or commodity laws.

SECTION 16(A) BENEFICIAL OWNER REPORTING COMPLIANCE

         Section 16(a) of the Securities Exchange Act of 1934 requires that the
Company's directors, executive officers, and persons who own more than 10%
percent of registered class of the Company's equity securities, or file with the
Securities and Exchange Commission (SEC), initial reports of ownership and
report of changes in ownership of common stock and other equity securities of
the Company. Officers, directors, and greater than 10% beneficial owners are
required by SEC regulation to furnish the Company with copies of all Section
16(a) reports they file. As of the fiscal year ending May 31, 2005, Form 4
reports were not timely filed by Leo Greenfield, the Company's President, CEO
and Director

                                       11
<PAGE>

CODE OF ETHICS

         The Company has adopted code of ethics for all of the employees,
directors and officers.


ITEM 10. EXECUTIVE COMPENSATION

SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION

         Summary Compensation Table.

The following table reflects all forms of compensation ending May 31, 2005:

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------
                                           SUMMARY COMPENSATION TABLE
----------------------------------------------------------- ---------------------------------------- ---------------
                                                                    LONG TERM COMPENSATION
-------------------------- -------------------------------- ----------------------------- ---------- ---------------
                       ANNUAL COMPENSATION AWARDS PAYOUTS
------------------- ------ -------- -------- -------------- ------------ ---------------- ---------- ---------------
                                                 Other      Restricted       Securities        LTIP       All other
     Name and       Fiscal Salary    Bonus      Annual         Stock         Underlying       Payouts   compensation
Principle Position  Year     ($)      ($)    Compensation    Award(s)   ($) Options/SARs (#)    ($)          ($)
------------------- ------ -------- -------- -------------- ------------ ---------------- ---------- ---------------
<S>                 <C>    <C>      <C>      <C>            <C>                <C>           <C>          <C>
Leo Greenfield,
President, CEO,     2005    4,258    None        None          None            None          None         None
Director
------------------- ------ -------- -------- -------------- ------------ ---------------- ---------- ---------------
Barbara
Greenfield, VP,     2004    None     None        None          None            None          None         None
Director
------------------- ------ -------- -------- -------------- ------------ ---------------- ---------- ---------------
Maria Elena Lopez
de Mendosa,
Secretary           2004    None     None        None          None            None          None         None
------------------- ------ -------- -------- -------------- ------------ ---------------- ---------- ---------------
</TABLE>


OPTIONS GRANTED IN THE LAST FISCAL YEAR

         At the end of fiscal year ending May 31, 2005, no executive officer or
director were granted option to purchase shares of common stock.

FISCAL YEAR-END OPTION VALUES

         During the fiscal year ending May 31, 2005, no executive officer or
director exercised any options to purchase shares of common stock, and as of May
31, 2005, no executive, officer or director possessed any options to purchase
shares of common stock.

DIRECTORS REMUNERATION

         As of May 31, 2005, directors were not paid a fee for serving on the
board.



                                       12
<PAGE>

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS

         The following table set forth as May 31, 2005, information with respect
to (a) each person, (including "group") as that term is used in Section 13(d)(3)
of the Securities Exchange Act of 1934, whose known to the Company to be a
beneficial owner of more than 5% of outstanding common stock of the Company, and
(b) the number or percentage of the Company's common stock owned by each of the
directors and the executive officers named in the Summary Compensation Table
above, and all of the directors and executive officers of the company as a
group. The Company believes that unless otherwise indicated, each of the
shareholders has sole voting and investment power with respect to the shares
beneficially owned. The following table sets forth certain information regarding
the beneficial ownership of the Company's common capital stock as of the date of
this memorandum by (i) each person known to the Company of having beneficial
ownership of more than 5% of the Company's capital common stock (ii) existing
shareholders, (iii) and all others as a group.

(a)  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
<TABLE>
<CAPTION>

------------- -------------------------------------------------------------- --------------------- -----------------
                                                                                  AMOUNT AND           PERCENT
  TITLE OF                                                                        NATURE OF               OF
   CLASS                  NAME AND ADDRESS OF BENEFICIAL OWNER                 BENEFICIAL OWNER     OWNERSHIP (1)
------------- -------------------------------------------------------------- --------------------- -----------------
<S>           <C>                                                                  <C>                   <C>
Common        Fidra Holdings
              Cable Beach Ct., Suite 1, West Bay Street, Nassau, Bahamas           824,500               9.5%
------------- -------------------------------------------------------------- --------------------- -----------------
</TABLE>

(b)  SECURITY OWNERSHIP OF MANAGEMENT
<TABLE>
<CAPTION>

------------- -------------------------------------------------------------- --------------------- -----------------
<S>           <C>                                                                 <C>                   <C>
Common        Double D, Inc. (2)
              1721 Trafalgar Circle, Hollywood, FL 33069                          1,200,000             13.8%
------------- -------------------------------------------------------------- --------------------- -----------------
Common        Three G International, Inc. (3)
              11601 Biscayne Blvd., Suite 201, Miami,  FL 33181                   2,223,228             25.5%
------------- -------------------------------------------------------------- --------------------- -----------------
Common        Leo Greenfield (2)(3)
              11601 Biscayne Blvd., Suite 201, Miami, FL 33181                    3,423,228             39.3%
------------- -------------------------------------------------------------- --------------------- -----------------
Common        Barbara Greenfield (2)(3)
              11601 Biscayne Blvd., Suite 201, Miami, FL 33181                    1,200,000             13.8%
------------- -------------------------------------------------------------- --------------------- -----------------
Common        Maria Elena Lopez de Mendoza (3)
              11601 Biscayne Blvd., Suite 201, Miami, FL 33181                     100,000              11.5%
------------- -------------------------------------------------------------- --------------------- -----------------
</TABLE>
------------

(1)  All percentages are calculated based upon 8,717,328 shares issued and
     outstanding as of May 15, 2005.

(2)  Double D, Inc. is a Florida corporation. One hundred percent (100%) of the
     common stock of Double D, Inc. is owned by Barbara Greenfield, Vice
     President and a Director of the Company, and Leo Greenfield, President of
     the Company. For the purpose of Rule 13(d), Mr. Greenfield claims
     beneficial ownership of these shares with Barbara Greenfield, his wife.

(3)  Three G International, Inc.is a Florida corporation owned and controlled by
     Mr. Greenfield For the purposes of Rule 13(d), Mr. Greenfield claims
     beneficial ownership of these shares and Barbara Greenfield, his wife,
     disclaims beneficial ownership of these shares.


ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTION

         During the past two (2) years, the Company has not entered into a
transaction with a value in excess of $60,000 with a director, officer or
beneficial owner of 5% or more of the Company's common stock.

                                       13
<PAGE>

ITEM 13. EXHIBITS

Exhibits and reports on Form 10-KSB.

     a) The exhibits included in this report are indicated below.

     EXHIBIT NO.     DESCRIPTION OF EXHIBIT
     -----------     ----------------------
     3.1             Articles of incorporation (1)
     3.2             Bylaws (1)
     3.3             Articles of Amendment to Articles of Incorporation  (1)
     14.1            Code of Ethics
     31              Rule 13a-14(a)/15d-14a(a) Certification
     32              Section 1350 Certification

------------
1.   Incorporated by reference to Form 10-SB filed December 8, 1999.
2.   Incorporated by reference to Form 10-KSB filed May 31, 2003.



                                       14
<PAGE>

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

1.       Disclose, under the caption Audit Fees, the aggregate fees billed for
         each of the last two fiscal years for professional services rendered by
         the principal accountant for the audit of the registrant's annual
         financial statements and review of financial statements included in the
         registrant's Form 10-Q (17 CFR 249.308a) or 10-QSB (17 CFR 249.3086b)
         or services that are normally provided by the accountant in connection
         with statutory and regulatory filings or engagements for those fiscal
         years.

                  $15,625 and $11,875 for fiscal 2004 and 2005, respectively

2.       Disclose, under the caption Audit-Related Fees, the aggregate fees
         billed in each of the last two fiscal years for assurance and related
         services by the principal accountant that are reasonably related to the
         performance of the audit or review of the registrant's financial
         statements and are not reported under Item 9 (e)(1) of Schedule 14A.
         Registrants shall describe the nature of the services comprising the
         fees disclosed under this category.

                  $0

3.       Disclose, under the caption Tax Fees, the aggregate fees billed in each
         of the last two fiscal years for professional services rendered by the
         principal accountant for tax compliance, tax advice, and tax planning.
         Registrants shall describe the nature of the services comprising the
         fees disclosed under this category.

                  $0

4.       Disclose, under the caption All Other Fees, the aggregate fees billed
         in each of the last two fiscal years for products and services provided
         by the principal accountant, other than the services reported in Items
         9(e)(1) through 9(e)(3) of Schedule 14A. Registrants shall describe the
         nature of the services comprising the fees disclosed under this
         category.

                  For the years ending May 31, 2004 and May 31, 2005 for
                  products and services provided by the principal accountant
                  other than services reported in items 9(e) 1 through 9(e)(1)
                  of Schedule 14 A are $0.

There is no audit committee at present.


                                       15
<PAGE>

                                   SIGNATURES

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

                                DISTRIBUTION MANAGEMENT SERVICES, INC.


Date: June 12, 2006             By:  s/s Leo Greenfield
                                     -------------------------------------------
                                     Leo Greenfield
                                     Chief Executive Officer, Director

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


Date: June 12, 2006             By:  s/s Leo Greenfield
                                     ------------------------------------
                                     Leo Greenfield
                                     Chief Executive Officer, Director
                                     (Principal Executive Officer and
                                     Principal Financial and Accounting Officer)


Date: June 12, 2006             By:  s/s Leo Greenfield
                                     -------------------------------------------
                                     Barbara Greenfield
                                     Vice President and Director


                                       16
<PAGE>




                      Distribution Management Services, Inc
                              Financial Statements
                                  May 31, 2005














<PAGE>

             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors
Distribution Management Services, Inc.


         We have audited the accompanying balance sheet of Distribution
Management Services, Inc. as of May 31, 2005, and the related statements of
operations, stockholders' equity and cash flows for the years ended May 31, 2005
and 2004. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

         We conducted our audits in accordance with the standards of the Public
Company Accounting Oversight Board (United States). Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining on a test basis, evidence supporting the amount and disclosures in the
financial statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

         In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Distribution
Management Services, Inc. as of May 31, 2005, and the results of their
operations and their cash flows for the years ended May 31, 2005 and 2004 in
conformity with accounting principles generally accepted in the United States of
America.

         The accompanying financial statemens have been prepared assuming that
the Company will continue as a going concern. The Company incurred losses of
$243,906 and $343,819 for the years ended May 31, 2005 and 2004, respectively.
Additionally, the Company had a working capital deficiency of $167,300 at May
31, 2005. These conditions raised substantial doubt about the Company's ability
to continue as a going concern. Management plans with respect to these matters
are also described in Note 2 to the financial statements. The accompanying
financial statements do not include any adjustments that might result should the
Company be unable to continue as a going concern.

                                                    /s/ Sherb & Co., LLP
                                                    Certified Public Accountants

Boca Raton, Florida
November 30, 2005


                                      F-2

<PAGE>

                     DISTRIBUTION MANAGEMENT SERVICES, INC.
                                  BALANCE SHEET
                                  May 31, 2005


                                     ASSETS
Current Assets:
  Cash                                                              $    20,002
  Prepaid assets                                                          9,580
                                                                    -----------
    Total Current Assets                                                 29,582
                                                                    -----------

  Property and equipment, net of accumulated depreciation of $300         1,200
  Equipment held for sale                                                70,000
  Land held for sale                                                    934,354
  Prepaid interest                                                      118,549

Other assets:
  Movie rights                                                           90,000
                                                                    -----------

     Total assets                                                   $ 1,243,685
                                                                    ===========

                      LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
  Accounts payable and accrued expenses                             $    36,281
  Note payable                                                           47,000
  Debenture                                                              20,000
  Other liability                                                        93,601
                                                                    -----------
    Total current liabilities                                           196,882
                                                                    -----------

  Mortgage payable and accrued interest                               1,008,387

Stockholders' Equity:
  Common stock; $0.001 par value, 50,000,000 shares authorized,
      8,717,328 issued and outstanding                                    8,717
  Additional paid-in capital                                          1,645,442
  Subscription receivable                                                (3,600)
  Deferred compensation                                                 (14,446)
  Accumulated deficit                                                (1,597,697)
                                                                    -----------
  Total stockholders' equity                                             38,416

     Total liabilities and stockholders' equity                     $ 1,243,685
                                                                    ===========




                       See Notes to Financial Statements.

                                      F-3
<PAGE>


                     DISTRIBUTION MANAGEMENT SERVICES, INC.
                            STATEMENTS OF OPERATIONS


                                                     For the fiscal years ended
                                                               May 31,
                                                     --------------------------
                                                         2005          2004
                                                     -----------    -----------
Revenues                                             $        --    $        --

Operating expenses:
Selling, general, and administration expenses            232,701        240,712
                                                     -----------    -----------

Interest income                                            1,750             --
Other expense-  impairment in equipment                  (12,000)            --
Interest expense                                         (14,471)      (165,981)
                                                     -----------    -----------

Loss from continuing operations                         (257,422)      (406,693)

Gain from discontinued operations                         13,516         62,874
                                                     -----------    -----------
Net loss                                             $  (243,906)   $  (343,819)
                                                     ===========    ===========

Basic and diluted earnings (loss) per common share
   from discontinued operations                      $      0.00    $      0.01
                                                     ===========    ===========

Basic and diluted loss per common share from
   continuing operations                             $     (0.03)   $     (0.05)
                                                     ===========    ===========

Basic and diluted weighted average
shares outstanding                                     8,593,689      7,704,751
                                                     ===========    ===========


                       See Notes to Financial Statements.

                                      F-4
<PAGE>

                      Distribution Management Services, Inc
                Statement of Changes in the Stockholders' Equity
                        From June 1, 2003 to May 31, 2005

<TABLE>
<CAPTION>
                                                                Additional      Stock
                                              Common Stock        paid-in    subscription    Deferred     Accumulated
                                          Shares       Amount     capital     receivable   Compensation     deficit         Total
                                       -----------   --------   -----------   ----------    ----------    -----------    ----------
<S>                                      <C>         <C>        <C>           <C>           <C>           <C>            <C>
Balance, June 1, 2003                    5,231,280   $  5,231   $ 1,185,025   $   (3,100)   $       --    $(1,009,972)   $  177,184

Issuance of shares for movie rights        500,000        500            --         (500)           --             --            --

Issuance of shares for services            250,000        250        44,750           --       (45,000)            --            --

Issuance of shares to satisfy loans
   payable-related parties               2,223,228      2,223       352,797           --            --             --       355,020

Amortization of deferred compensation           --         --            --           --        13,750             --        13,750

Net loss                                        --         --            --           --            --       (343,819)     (343,819)
                                       -----------   --------   -----------   ----------    ----------    -----------    ----------

Balance, May 31, 2004                    8,204,508      8,204     1,582,572       (3,600)      (31,250)    (1,353,791)      202,135

Forfeiture of officer's compensation            --         --        37,742           --            --             --        37,742

Issuance of shares for services            512,820        513        25,128           --            --             --        25,641

Amortization of deferred compensation           --         --            --           --        16,804             --        16,804

Net loss                                        --         --            --           --            --       (243,906)     (243,906)
                                       -----------   --------   -----------   ----------    ----------    -----------    ----------
Balance, May 31, 2005                    8,717,328   $  8,717   $ 1,645,442   $   (3,600)   $  (14,446)   $(1,597,697)   $   38,416
                                       ===========   ========   ===========   ==========    ==========    ===========    ==========
</TABLE>



                                      F-5
<PAGE>

                DISTRIBUTION MANAGEMENT SERVICES, INC.
                       STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                            For the year ended
                                                                                 May 31,
                                                                       --------------------------
                                                                           2005           2004
                                                                       -----------    -----------
<S>                                                                    <C>            <C>
Cash flows from operating activities:
Loss from continuing operations                                        $  (257,422)   $  (406,693)
Adjustments to reconcile net loss to net cash
 used in operating activities:
  Fair value of shares issued to investment advisor                         25,641             --
  Impairment equipment held for sale                                        12,000
  Amortization of deferred compensation                                     16,804         13,750
  Amortization of prepaid interest                                           3,058             --
  Excess of fair value of shares issued in settlement of liabilities            --        155,474
  Provision for doubtful account                                             6,000             --
  Forfeiture of officer's compensation                                      37,742             --
  Depreciation                                                                 300             --
Changes in operating assets and liabilities:
  Other assets                                                                  --         (6,000)
  Prepaid expenses                                                          (9,580)            --
  Other liabilities                                                         93,600             --
  Accrued interest on mortgage payable                                       8,387             --
  Accounts payable and accrued expenses                                     10,728             (5)
                                                                       -----------    -----------
                                                                           (52,742)      (243,474)

Gain from discontinued operations                                           13,516         62,874
  Decrease in assets of discontinued operations                                 --         11,518
  Value of equipment received in settlement of lawsuit                          --        (60,000)
                                                                       -----------    -----------
                                                                            13,516         14,392

                                                                       -----------    -----------
Net cash used in operating activities                                      (39,226)      (229,082)

Cash flows from investing activity:
  Principal repayments of note receivable                                   25,000             --
  Net proceeds from disposition of property and equipment                       --        848,646
  Acquisition of land                                                   (1,055,961)            --
  Issuance of note receivable                                              (25,000)            --
                                                                       -----------    -----------

Net cash provided by (used in) investing activity                       (1,055,961)       848,646
                                                                       -----------    -----------

Cash flows from financing activities:

  Principal repayments on loan payable-related party                            --       (159,945)
  Repayments of due to related party                                       (14,475)            --
  Advances from related party                                               17,483
  Proceeds from issuance of note payable                                    25,000             --
  Proceeds from issuance of mortgage payable                             1,000,000             --
  Principal repayments on mortgage                                              --       (375,000)
                                                                       -----------    -----------

Net cash (used in) provided by financing activities                      1,028,008       (534,945)
                                                                       -----------    -----------
 Net (decrease) increase in cash                                           (67,179)        84,619

Cash, beginning of period                                                   87,181          2,562
                                                                       -----------    -----------

Cash, end of period                                                    $    20,002    $    87,181
                                                                       ===========    ===========

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
     Cash paid for taxes                                               $        --    $        --
                                                                       ===========    ===========
     Cash paid for interest                                            $        --    $        --
                                                                       ===========    ===========

SUPPLEMENTAL DISCLOSURES FOR NON-CASH FINANCING ACTIVITY:

Issuance of shares to satisfy loan to related party                    $        --    $   199,546
                                                                       ===========    ===========
Issuance of shares for services                                        $        --    $    45,000
                                                                       ===========    ===========
Transfer of real estate in prepayment of interest on
mortgage payable                                                       $   121,841    $        --
                                                                       ===========    ===========
</TABLE>

                  See Notes to Financial Statements.

                                      F-6


<PAGE>

                     DISTRIBUTION MANAGEMENT SERVICES, INC.
                        NOTES TO THE FINANCIAL STATEMENTS
                                  MAY 31, 2005


NOTE 1- NATURE OF OPERATIONS AND DISCONTINUED OPERATIONS

     Distribution Management Services, Inc. (the Company) was incorporated in
the State of Florida on January 25, 1995. The Company was initially organized
for the purpose of operating a transfer station for recycling of construction
and demolition materials in Miami, Florida. In April 2003, the Company entered
into a contract to sell its recycling center. The closing of this transaction
occurred on July 25, 2003.

     During May and July 2005, the Company acquired 266 single-family
residential building sites located in Central Florida for the total sum of
$4,655,000. The Company financed this acquisition by securing a mortgage on the
property of approximately $4.7 million. The Company intends to orderly dispose
of such sites.

     Gain from discontinued operations for fiscal 2005 included expenses of
approximately $45,000 and the recovery of claims of approximately $58,000.

     Gain from discontinued operations for fiscal 2004 included revenues of
approximately $19,400, expenses of approximately $70,000, a loss on the sale of
the recycling center of approximately $32,000, and the recovery of equipment of
$60,000 and claims of approximately $85,000.

NOTE 2- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

GOING CONCERN

         The accompanying financial statements have been prepared on a going
concern basis. The Company has generated minimal revenue in the last three years
and has an accumulated deficit of approximately $1.6 million. The Company's
ability to continue as a going concern is dependent upon its ability to obtain
the necessary financing to meet its obligations and repay its liabilities
arising from normal business operations when they come due, to fund possible
future acquisitions, and to generate profitable operations in the future.
Management plans to continue to provide for its capital requirements by issuing
additional equity securities and debt. The outcome of these matters cannot be
predicted at this time and there are no assurances that if achieved, the Company
will have sufficient funds to execute its business plan or generate positive
operating results.

CONCENTRATION OF CREDIT RISKS

     The Company is subject to concentrations of credit risk primarily from
cash. The Company's cash and cash equivalents accounts are held at financial
institutions and are insured by the Federal Deposit Insurance Corporation
("FDIC") up to $100,000. During fiscal 2005, the Company has not reached bank
balances exceeding the FDIC insurance limit. However, when and if it reaches
bank balances exceeding the FDIC insurance limit and to reduce its risk
associated with the failure of such financial institutions, the Company
periodically evaluates the credit quality of the financial institutions in which
it holds deposits.

FAIR VALUE OF FINANCIAL INSTRUMENTS

     The carrying value of cash, accounts payable and accrued expenses, other
liabilities, note payable and debenture approximate their fair value due to
their short-term maturities. The carrying value of the mortgage payable
outstanding at May 31, 2005, with an imputed market rate of 15.6%, approximates
its fair value, when compared to similar rates offered by third party lenders.

CASH AND CASH EQUIVALENTS

     Cash and cash equivalents include all highly liquid investments with
maturities of three months or less when purchased.

                                      F-7
<PAGE>


                     DISTRIBUTION MANAGEMENT SERVICES, INC.
                        NOTES TO THE FINANCIAL STATEMENTS
                                  MAY 31, 2005


NOTE 2- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES-CONTINUED

LAND HELD FOR SALE

     Land held for sale at May 31, 2005 is recorded at cost, which consist of
$1,000,000 mortgage and an initial deposit made by a general contractor of
approximately $94,000 adjusted for certain closing costs and prepaid interest.

INCOME TAXES

     Income taxes are accounted for in accordance with SFAS No. 109, Accounting
for Income Taxes. SFAS No. 109 requires the recognition of deferred tax assets
and liabilities to reflect the future tax consequences of events that have been
recognized in the Company's financial statements or tax returns. Measurement of
the deferred items is based on enacted tax laws. In the event the future
consequences of differences between financial reporting bases and tax bases of
the Company's assets and liabilities result in a deferred tax asset, SFAS No.
109 requires an evaluation of the probability of being able to realize the
future benefits indicated by such assets. A valuation allowance related to a
deferred tax asset is recorded when it is more likely than not that some or the
entire deferred tax asset will not be realized.

USE OF ESTIMATES

     The preparation of financial statements in accordance with accounting
principles generally accepted in the United States requires management 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 financial statements and the reported amounts of revenues and expenses
during the reporting periods. Significant estimates made by management include,
but are not limited to, the realization of receivables owed by the purchaser of
the recycling center and whether the value attributed to the movie scripts is
impaired. Actual results will differ from these estimates.

BASIC AND DILUTED LOSS PER SHARE

     Basic loss per share is calculated by dividing income available to
stockholders by the weighted-average number of common shares outstanding during
each period. Diluted loss per share is computed using the weighted average
number of common and dilutive common share equivalents outstanding during the
period. There are no outstanding shares issuable pursuant to common shares
equivalents at May 31, 2005.

SEGMENT REPORTING

     The Company's chief operating decision-maker evaluates the performance of
the Company based upon revenues and expenses by functional areas as disclosed in
the Company's statements of operations.

                                      F-8
<PAGE>

                     DISTRIBUTION MANAGEMENT SERVICES, INC.
                        NOTES TO THE FINANCIAL STATEMENTS
                                  MAY 31, 2005


NOTE 2- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES-CONTINUED
IMPAIRMENT OF LONG-LIVED ASSETS

     The Company reviews long-lived assets for impairment whenever circumstances
and situations change such that there is an indication that the carrying amounts
may not be recovered. In such circumstances, the Company will estimate the
future cash flows expected to result from the use of the asset and its eventual
disposition. Future cash flows are the future cash inflows expected to be
generated by an asset less the future outflows expected to be necessary to
obtain those inflows. If the sum of the expected future cash flows (undiscounted
and without interest charges) is less than the carrying amount of the asset, the
Company will recognize an impairment loss to adjust to the fair value of the
asset. At May 31, 2005, the Company believes that there has been no impairment
of its long-lived assets.

RECENT PRONOUNCEMENTS

     In December 2004, the FASB issued FASB Statement No. 123R, "Share-Based
Payment, an Amendment of FASB Statement No. 123" ("FAS No. 123R"). FAS No. 123R
requires companies to recognize in the statement of operations the grant-date
fair value of stock options and other equity-based compensation issued to
employees. FAS No. 123R is effective beginning in our first quarter of fiscal
2006. We are in process of evaluating the impact of this pronouncement on our
financial position.

     In December 2004, the FASB issued SFAS Statement No. 153, "Exchanges of
Non-monetary Assets." The Statement is an amendment of APB Opinion No. 29 to
eliminate the exception for non-monetary exchanges of similar productive assets
and replaces it with a general exception for exchanges of non-monetary assets
that do not have commercial substance. We believe that the adoption of this
standard will have no material impact on our financial statements.

     In April 2005, the Securities and Exchange Commission's Office of the Chief
Accountant and its Division of Corporation Finance has released Staff Accounting
Bulletin (SAB) No.107 to provide guidance regarding the application of FASB
Statement No.123 (revised 2004), Share-Based Payment. Statement No. 123(R)
covers a wide range of share-based compensation arrangements including share
options, restricted share plans, performance-based awards, share appreciation
rights, and employee share purchase plans. SAB 107 provides interpretative
guidance related to the interaction between Statement No. 123R and certain SEC
rules and regulations, as well as the staff's views regarding the valuation of
share-based payment arrangements for public companies. SAB 107 also reminds
public companies of the importance of including disclosures within filings made
with the SEC relating to the accounting for share-based payment transactions,
particularly during the transition to Statement No. 123R.

                                       F-9
<PAGE>

                     DISTRIBUTION MANAGEMENT SERVICES, INC.
                        NOTES TO THE FINANCIAL STATEMENTS
                                  MAY 31, 2005


NOTE 2- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES-CONTINUED

     In May 2005, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards No. 154, "Accounting Changes and
Error Corrections-a replacement of APB Opinion No. 20 and FASB Statement No. 3"
("SFAS 154"). This Statement replaces APB Opinion No. 20, Accounting Changes,
and FASB Statement No. 3, Reporting Accounting Changes in Interim Financial
Statements, and 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.

     Opinion 20 previously required that most voluntary changes in accounting
principle be recognized by including in net income of the period of the change
the cumulative effect of changing to the new accounting principle. This
Statement requires retrospective application to prior periods' financial
statements of changes in accounting principle, unless it is impracticable to
determine either the period-specific effects or the cumulative effect of the
change. When it is impracticable to determine the period-specific effects of an
accounting change on one or more individual prior periods presented, this
Statement requires that the new accounting principle be applied to the balances
of assets and liabilities as of the beginning of the earliest period for which
retrospective application is practicable and that a corresponding adjustment be
made to the opening balance of retained earnings (or other appropriate
components of equity or net assets in the statement of financial position) for
that period rather than being reported in an income statement. When it is
impracticable to determine the cumulative effect of applying a change in
accounting principle to all prior periods, this Statement requires that the new
accounting principle be applied as if it were adopted prospectively from the
earliest date practicable. This Statement shall be effective for accounting
changes and corrections of errors made in fiscal years beginning after December
15, 2005. The Company does not believe that the adoption of SFAS 154 will have a
significant effect on its financial statements.

     Other accounting standards that have been issued or proposed by the FASB or
other standards-setting bodies that do not require adoption until a future date
are not expected to have a material impact on the consolidated financial
statements upon adoption.

PROPRIETY INTEREST IN MOVIE RIGHTS

     In May 2003, the Company acquired the rights to two (2) movie scripts which
are recorded at the trading value of the shares issued in consideration thereof.
The scripts were acquired from two individuals who had contracted with the
Company to produce the film, including the use of certain equipment to produce
these films. The Company does not believe that these assets have been impaired
based on the initial interest it has received from prospective producers.

PROPERTY AND EQUIPMENT AND EQUIPMENT HELD FOR SALE

     Pursuant to a settlement agreement with Delta Dade Recycling Corp. ("DD"),
the Company received certain equipment with a carrying value of $70,000, which
is included in its equipment held for sale at May 31, 2005. The Company intends
to dispose or lease the property and equipment.

                                      F-10
<PAGE>

                     DISTRIBUTION MANAGEMENT SERVICES, INC.
                        NOTES TO THE FINANCIAL STATEMENTS
                                  MAY 31, 2005

NOTE 3- NOTE RECEIVABLE

         During fiscal 2005, the Company issued a note receivable for $25,000,
which was satisfied in February 2005. The note bore interest at 18% per annum
and was secured by certain real estate property located in Florida. The note
receivable initially matured in May 2005.

NOTE 4- LITIGATIONS

         The purchaser of the recycling center claims that the Company and its
chief executive officer owe them approximately $25,000 pursuant to the sale
agreement. The Company counterclaims the recovery of the recycling center or the
receipt of the balance due under the initial sale contract of $450,000. The
Company has provided for a full valuation on the receivable of $450,000 due from
the purchaser. Management cannot predict the outcome of such litigation at this
time but it believes that it will not have a significant impact on its financial
statements.

         A lawsuit instituted on October 3, 2005 by Newgate Atlantic Holdings,
Inc. against us for specific preference of the sole of two lots located in Polk
County, Florida for $25,000. The lawsuit is pending in the Circuit Court of the
10th Judicial Circuit in and for Polk County, Florida. The Company asserts that
the lots were not specified timely by the purchaser, and accordingly, the
Company is not obligated to sell such lots at the specified price. Should an
adverse judgment be entered against the Company, it would recognize a loss of
approximately $10,000. The Company believes that this lawsuit is without merit
and that it will not result in losses material to it .

         A lawsuit instituted by Quality Affordable Construction, LLC, Southwest
Management Affiliates, Inc. and Karen Thomas Christensen Trust against us, on
July 6, 2005 in the Circuit Court of the 10th Judicial Circuit in and for Polk
County, Florida for the repayment of its $85,000 initial deposit on certain lots
located in Polk County, Florida. The initial deposit is included in the other
liability in the accompanying financial statement. Management contents that this
amount is not immediately due but will be repaid as a percentage of the return
on the sale of the land held for sale.



NOTE 5-OTHER LIABILITY

         A general contractor has assigned approximately $94,000 to the Company
in return of a 50% return on the sale of the land held for the sale owned by the
Company. The Company has recognized this assignment as a liability until it
fulfills its obligation of compensating the general contractor for the value of
its assignment.

                                      F-11
<PAGE>

                     DISTRIBUTION MANAGEMENT SERVICES, INC.
                        NOTES TO THE FINANCIAL STATEMENTS
                                  MAY 31, 2005


NOTE 6- DEBENTURE AND NOTE PAYABLE

         The terms of the debenture and note payable outstanding at May 31, 2005
are as follows:

         $20,000 debenture, bearing interest at 6% per annum, payable at the
Company's option at any time or convertible through April 2002 at the holders'
option in 100,000 shares of the Company's common stock. The convertible
debenture is payable on demand and is unsecured. The debenture is no longer
convertible.

         $47,000 note payable, bearing interest at 10%, through February 2005
and 18% thereafter, payable in February 2005, secured by the Company's equipment
for sale and certain real estate property located in Florida which is owned by
an affiliate controlled by the Company's chief executive officer. While the note
is past due, the note holder has not notified company of its default.

NOTE 7-  MORTGAGE PAYABLE

         The Company partly secured the financing of the land held for sale it
acquired in May 2005 with a mortgage of $1,000,000, bearing interest at 12% per
annum. Principal and accrued interest are payable on June 1, 2008.

NOTE 8- STOCKHOLDERS' EQUITY

         On May 30, 2003, the Company entered into an agreement with two
individuals to purchase certain movie scripts that had been produced by the two
individuals. As consideration for the assets during August, 2003, the Company
issued to the two individuals an aggregate of 500,000 shares of its restricted
common stock and agreed to pay two (2%) percent of the gross proceeds received
by the Registrant, if any, from the marketing and distribution of the assets.
The two individuals were also appointed to the Company's Board of Directors but
resigned their positions in February 2004,

         During fiscal 2004, the Company satisfied approximately $362,000
payable to its Chief executive officer, in considerations of $162,000 and the
Company's issuance of 2,223,228 shares of its common stock valued at
approximately $355,000. The shares were issued to an entity owned and controlled
by the Company's chief executive officer. The fair value of the shares was based
upon the Company's closing price per share at the date the transaction was
consummate. The excess of the fair value of the consideration over the amounts
due to its chief executive officer, which amounted to approximately $155,000 has
been recorded as interest expense.








         In July 2003, an investment consulting service provider and one of its
officers received 250,000 shares of the Company's restricted common stock as
payment for investment consulting services. The fair value of the shares issued
to the investment consulting service firm and its officer amounted to $40,000.
The value of the shares was based upon the closing price of a share of common
stock at the date the transaction was consummated. This transaction was recorded
as deferred compensation and is amortized over three years. The amortization of
deferred compensation amounted to approximately $17,000 and $14,000 during
fiscal 2005 and 2004, respectively.

         The chief executive officer forfeited compensation amounting to
approximately $38,000 during fiscal 2005. The forfeiture is recorded as
additional paid-in capital and a corresponding increase to operating expenses.

         On February 12, 2004, the Company entered into Standby Equity
Distribution Agreement for an equity line of credit (the "Equity Line of
Credit") with Cornell Capital Partners, L.P., a private limited partnership
(`Cornell") whose business operations are conducted through its general partner,
Yorkville Advisors, LLC. Pursuant to the Equity Line of Credit, in order for the
Company to access the Equity Line of Credit, it must first file a registration
statement with the SEC registering up to a maximum of $5 million of its common
stock and the registration statement must be declared effective by the SEC. The
Company is no longer seeking the effectiveness of its registration statement and
has no further obligation related to its Equity Line of Credit.


                                      F-12
<PAGE>

                     DISTRIBUTION MANAGEMENT SERVICES, INC.
                        NOTES TO THE FINANCIAL STATEMENTS
                                  MAY 31, 2005


NOTE 9- STOCKHOLDERS' EQUITY-CONTINUED

         The Company withdrew its registration statement because it believes
that Cornell and or its affiliates were manipulating its stock price during the
registration statement process. Pursuant to the Equity Line of Credit, Cornell
was to receive a commitment fee of $190,000 issued as a convertible debenture,
convertible at price equivalent of 97% of its lowest closing bid price for the
three days preceding its notice of conversion. Immediately prior to the
Company's withdrawal of its registration statement, and after the Company's
refusal to honor the commitment fee based on non-performance and manipulation of
the stock, the Company' stock transfer agent issued to Cornell 512,820 shares of
the Company's common stock without restrictive legend. Such shares were never
registered and the Company disputes its issuance. The Company has since
dismissed its stock transfer agent. For financial reporting purposes, the
Company recorded a charge of approximately $25,000 as selling, general, and
administrative expenses to reflect the issuance of such shares. The issuance of
the shares was recorded at the fair value of the shares at their issuance date.
The Company intends to recover the physical stock certificate to properly cancel
the wrongly issued shares.

         In addition, the Company engaged a broker-dealer to advise it in
connection with the Equity Line of Credit. For its services, in March, 2004 TN
Capital Equities, Ltd. received 117,647 shares of the Company's common stock
equal to approximately $10,000 based on the Company's stock price on March 1,
2004. In March 2004, the Company also issued an aggregate of 88,235 shares to
counsel for Cornell Capital's legal services provided in connection with the
transaction on the same basis as the shares issued to TN Capital Equities. The
Company has rescinded the issuance of these shares based on non-performance of
the broker-dealer and Cornell Capital's counsel.

NOTE 10- SUBSEQUENT EVENT

         During July 2005 the Company secured the acquisition of single-family
residential building sites in located in Central Florida secured by a mortgage
of $3.7 million and the issuance to the lender of 1,000,000 shares and the
assignment of 52 lots. The Company intends to orderly dispose of such sites.

NOTE 11-INCOME TAXES

         Deferred income taxes reflect the net tax effect of temporary
differences between the carrying amounts of assets and liabilities for financial
reporting purposes and the amounts used for income tax purposes. Significant
components of the net deferred taxes, as of May 31, 2005, are as follows:


Deferred tax assets:
Net operating loss carryforward                             $ 474,000
Less valuation allowance                                     (474,000)
Total net deferred tax assets:                              $      --

                                      F-13
<PAGE>


         SFAS No. 109 requires a valuation allowance to reduce the deferred tax
assets reported, if any, based on the weight of the evidence, it is more likely
than not that some portion or all of the deferred tax assets will not be
realized. Management has determined that a valuation allowance of $ 474,000 at
May 31, 2005 is necessary to reduce the deferred tax assets to the amount that
will more likely than not be realized. The change in the valuation allowance
during fiscal 2005 and 2004 was an increase of approximately $86,000 and
$88,000, respectively.

         As of May 31, 2005, the Company had a net operating loss carryforward
amounting to approximately $1,185,000 for U.S. tax purposes that expire in
various amounts through 2018.

         The federal statutory tax rate reconciled to the effective tax rate
during fiscal 2005 and 2004, respectively, is as follows:


                                           2004              2003
                                         --------          --------
Tax at U.S Statutory Rate:                   35.0%             35.0%
State tax rate, net of federal benefits       5.0               5.0
Change in valuation allowance               (40.0)            (40.0)
                                         --------          --------
Effective tax rate                            0.0%              0.0%
                                         ========          ========



                                      F-14