FORM 10-QSB
                     U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

            |X|   Quarterly Report Pursuant to Section 13 or 15(d) of the
                  Securities Exchange Act of 1934

                  For the quarterly period ended September 30, 2004

                                       OR

            |_|   Transition Report Pursuant to Section 13 or 15(d) of the
                  Securities Exchange Act of 1934

        For the transition period from _______________ to _______________

                         Commission file number 0-21384

                        Digital Descriptor Systems, Inc.
             (Exact name of registrant as specified in its charter)

          Delaware                                           23-2770048
-------------------------------                       -----------------------
(State or other jurisdiction of                          (I.R.S. employer
incorporation or organization)                        identification number)

                   2150 Highway 35, Sea Girt, New Jersey 08750
                  --------------------------------------------
               (Address of principal executive offices) (Zip Code)

       Registrant's Telephone number, including area code: (732) 359-0260

  ----------------------------------------------------------------------------
  (former, name, address and former fiscal year, if changed since last report)

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 |_|

State the number of shares  outstanding of each of the  Registrant's  classes of
common stock, as of the latest practicable date.

                                                      Outstanding at
                  Class of Common Stock               October 29, 2004
                  ---------------------               ------------------
                     $.001 par value                  210,716,359 Shares

          Transitional Small Business Disclosure Format Yes |_| No |X|


                                     - 1 -
<PAGE>

                                   FORM 10-QSB
                       Securities and Exchange Commission
                             Washington, D.C. 20549

                        DIGITAL DESCRIPTOR SYSTEMS, INC.

                                      Index

PART I - FINANCIAL INFORMATION

    Item 1. Financial Statements

            Balance  Sheets at September 30, 2004  (Unaudited)  and December 31,
            2003

            Statements of Operations  (Unaudited)  for the nine months and three
            months ended September 30, 2004 and 2003

            Statements  of Cash  Flows  (Unaudited)  for the nine  months  ended
            September 30, 2004 and 2003 (Unaudited)

            Notes to Financial Statements - September 30, 2004 (Unaudited)

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

    Item 3. Control and Procedures

PART II. - OTHER INFORMATION

    Item 1. Legal Proceedings

    Item 2. Changes in Securities and Use of Proceeds

    Item 3. Defaults Upon Senior Securities

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

    Item 5. Other Information

    Item 6. Exhibits and Reports on Form 8-K

                                   SIGNATURES


                                     - 2 -
<PAGE>

                          PART I. FINANCIAL INFORMATION

ITEM I. FINANCIAL STATEMENTS

                        DIGITAL DESCRIPTOR SYSTEMS, INC.
                                 BALANCE SHEETS

<TABLE>
<CAPTION>
                                                          September 30  December 31
                                                              2004          2003
                                                           ----------   ----------
                                                          (Unaudited)
<S>                                                        <C>          <C>
ASSETS
Current assets:
   Cash                                                    $   43,766   $   51,264
   Restricted cash                                                521          593
   Accounts receivable, less allowance for uncollectible
      accounts of $21,365 (unaudited) and $46,841 in
      2004 and 2003, respectively                              77,873      136,329
   Prepaid expenses                                            57,050       63,600
   Debt discount and deferred financing costs                 279,610      300,430
                                                           ----------   ----------
Total current assets                                          458,820      552,216

   Deposits                                                     1,730        1,730
                                                           ----------   ----------
Total assets                                               $  460,550   $  553,946
                                                           ==========   ==========

LIABILITIES AND SHAREHOLDERS' DEFICIENCY
Current liabilities:
   Accounts payable                                        $  156,539   $  214,771
   Accrued expenses                                           250,512      306,029
   Accrued interest                                           567,062      353,214
   Due to officer and director                                 11,631       55,620
   Deferred income                                            312,384      382,878
   Convertible debentures                                   1,879,237    1,846,837
                                                           ----------   ----------
Total current liabilities                                   3,177,365    3,159,349

Other liabilities
    Convertible debentures due May 2006                       250,000           --

Total liabilities                                          $3,427,365   $3,159,349
                                                           ----------   ----------
</TABLE>


                                     - 3 -
<PAGE>

                        DIGITAL DESCRIPTOR SYSTEMS, INC.
                           BALANCE SHEETS (continued)

<TABLE>
<CAPTION>
                                                                              September 30    December 31
                                                                                  2004            2003
                                                                              ------------    ------------
                                                                              (Unaudited)
<S>                                                                           <C>             <C>
Shareholders' deficiency:
   Preferred Stock, $.01 par value, authorized shares -
     1,000,000; issued and outstanding - none                                         --              --
   Common Stock, $.001 par value, authorized shares -
     9,999,000,000; issued and outstanding shares - 188,180,625 at
     September 30, 2004; authorized shares - 150,000,000; issued and
     outstanding shares - 115,958,423, at December 31, 2003                        188,180         115,958
   Additional paid-in capital                                                   17,910,678      17,627,600
   Accumulated deficit                                                         (21,065,673)    (20,348,961)
                                                                              ------------    ------------
Total shareholder's deficiency                                                  (2,966,815)     (2,605,403)
                                                                              ------------    ------------
Total liabilities and shareholders' deficiency                                $    460,550    $    553,946
                                                                              ============    ============
</TABLE>

The accompanying notes are an integral part of these financial statements.


                                     - 4 -
<PAGE>

                        DIGITAL DESCRIPTOR SYSTEMS, INC.
                            STATEMENTS OF OPERATIONS
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                             Three Months Ended                Nine Months Ended
                                                        ------------------------------    ------------------------------
                                                        September 30     September 30     September 30     September 30
                                                            2004             2003             2004             2003
                                                        -------------    -------------    -------------    -------------
<S>                                                     <C>              <C>              <C>              <C>
Revenues:
   Software                                             $       8,501    $       1,500    $      33,588    $     148,173
   Hardware                                                        --               --            3,917           55,177
   Maintenance                                                 62,567           88,396          209,757          293,537
   Other                                                           --            2,910              997           66,955
                                                        -------------    -------------    -------------    -------------
                                                               71,068           92,806          248,259          563,842

Costs and expenses:
   Cost of revenues                                            (2,030)          22,422            2,937          141,530
   General and administrative                                  58,355           85,295          305,756          593,974
   Sales and marketing                                         10,851           33,295           48,320          152,472
   Research and development                                     4,864            4,397           17,037           38,035
   Depreciation and amortization                                   --              349               --            6,097
   Interest and amortization of
       deferred debt costs                                    173,259          202,508          594,794          556,251
   Other (income) expense, net                                     --               --           (3,873)         (61,872)
                                                        -------------    -------------    -------------    -------------
                                                              245,299          348,266          964,971        1,426,487
                                                        -------------    -------------    -------------    -------------
         Net loss                                       $    (174,231)   $    (255,460)   $    (716,712)   $    (862,645)
                                                        =============    =============    =============    =============

Net loss per common share                               $       (0.00)   $       (0.00)   $       (0.00)   $       (0.01)
                                                        =============    =============    =============    =============
   (basic and diluted)

Weighted average number of common shares outstanding:
    Basic and diluted                                     169,913,737      110,126,539      153,344,879       91,021,784
                                                        =============    =============    =============    =============
</TABLE>

    The accompanying notes are an integral part of these financial statements


                                     - 5 -
<PAGE>

                        DIGITAL DESCRIPTOR SYSTEMS, INC.
                            STATEMENTS OF CASH FLOWS
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                       Nine Months Ended
                                                                 September 30   September 30
                                                                     2004            2003
                                                                 ------------   ------------
<S>                                                               <C>             <C>
Cash flows from operating activities:
Net loss                                                          ($716,712)      ($862,645)
Adjustments to reconcile net loss to net cash
 used in operating activities:
 Depreciation and amortization                                           --           6,096
 Amortization of deferred financing costs and debt discounts
    related to the issuance of warrants and the beneficial
    conversion feature of convertible debentures                    383,884         426,050
 Bad debt expense                                                   (25,475)         (6,833)
 Changes in operating assets and liabilities:
 Accounts receivable                                                 83,933         (95,675)
    Inventory                                                            --           8,550
 Prepaid expenses, deposits and other assets                          6,550         118,701
 Accounts payable                                                   (58,232)        (79,533)
 Accrued expenses                                                   (46,319)        118,427
 Accrued interest                                                   213,848         129,777
 Accrued payroll and related withholdings                                --         (84,848)
 Deferred income                                                    (70,494)       (138,598)
                                                                  ---------       ---------
Net cash used in operating activities                              (229,017)       (460,531)

Cash flows from investing activities:
 Increase in restricted cash                                             72              63
                                                                  ---------       ---------
 Net cash provided by investing activities                               72              63

Cash flows from financing activities:
 Proceeds from issuance of convertible debentures                   226,335         393,042
 Repayment of convertible debenture                                  (3,500)             --
 Due to officer and director                                         (1,990)         60,390
 Repayment of equipment loan                                             --          (3,028)
                                                                  ---------       ---------
Net cash provided by financing activities                           221,447         450,404
                                                                  ---------       ---------
Net decrease in cash                                                 (7,498)        (10,064)
Cash at beginning of period                                          51,264          15,439
                                                                  ---------       ---------
Cash at end of period                                             $  43,766       $   5,375
                                                                  =========       =========
</TABLE>


                                     - 6 -
<PAGE>

                        DIGITAL DESCRIPTOR SYSTEMS, INC.
                            STATEMENTS OF CASH FLOWS
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                                          Nine Months Ended
                                                                                 September 30            September 30
                                                                                     2004                  2003
                                                                                   --------              --------

<S>                                                                                <C>                   <C>
Supplemental disclosure of cash flow information:

Cash paid during the period for:
     Interest                                                                      $     --              $    474
                                                                                   ========              ========
     Income Taxes                                                                  $  3,147              $     --
                                                                                   ========              ========

Supplemental disclosure of non-cash investing and financial activities:

Debt discount relating to the issuance of warrants and the beneficial conversion
     features of
     convertible debt                                                              $363,065              $393,042
                                                                                   ========              ========

Conversion of debentures into common stock                                         $  9,100              $  6,895
                                                                                   ========              ========

Conversion of outstanding officer and director compensation
     Expense into common stock and additional paid in capital $                      42,000              $     --
                                                                                   ========              ========

Conversion of liquidated damages into common stock                                 $  9,200              $  3,191
                                                                                   ========              ========
</TABLE>

    The accompanying notes are an integral part of these financial statements


                                     - 7 -
<PAGE>

                        DIGITAL DESCRIPTOR SYSTEMS, INC.
                          NOTES TO FINANCIAL STATEMENTS
                                   (Unaudited)
                               September 30, 2004

1. BUSINESS

Digital Descriptor  Systems,  Inc.  incorporated in Delaware in 1994,  develops,
assembles  and  markets  computer  installations   consisting  of  hardware  and
software,  which capture video and scanned images,  link the digitized images to
text and store the images  and text on a computer  database  and  transmit  this
information  to remote  locations.  The principal  product of the Company is the
Compu-Capture  Law  Enforcement  Program,  which is marketed to law  enforcement
agencies  and jail  facilities  and  generated  the  majority  of the  Company's
revenues  during the quarters ended  September 30, 2004 and 2003.  Substantially
all of the  Company's  revenues  are derived  principally  from U.S.  government
agencies.

2. BASIS OF PRESENTATION

The financial  statements and  disclosures  included  herein for the nine months
ended September 30, 2004 and 2003 are unaudited.  These financial statements and
disclosures  have been  prepared by the  Company in  accordance  with  generally
accepted accounting principles for interim financial  information.  Accordingly,
they do not include all of the information  and footnotes  required by generally
accepted accounting principles for complete financial statements. In the opinion
of  management,  all  adjustments  (consisting  of  adjustments  of a normal and
recurring  nature)  considered  necessary  for a  fair  presentation  have  been
included.  Operating results for the nine month periods ended September 30, 2004
and 2003 are not necessarily  indicative of the results that may be expected for
the  year  ended  December  31,  2004.  Our  independent  auditor  has  added an
explanatory  paragraph to the audit opinion issued in connection with the fiscal
year 2003 financial  statements,  which states that our ability to continue as a
going  concern  depends  upon  our  ability  to  resolve   liquidity   problems,
principally by obtaining  capital,  commencing  sales and generating  sufficient
revenues to become  profitable.  Our ability to obtain  additional  funding will
determine our ability to continue as a going concern.  Our financial  statements
do not  include  any  adjustments  that might  result  from the  outcome of this
uncertainty.

3. CONVERTIBLE DEBENTURES

During May 2004, the Company issued four convertible debentures for an aggregate
amount of $250,000 with simple interest at 12%. The debentures are due May 2006.
Interest shall be paid quarterly commencing June 2004. The holder shall have the
right to convert the principal  amount and interest due into common  stock.  The
conversion  price in effect on any  Conversion  Date  shall be the lesser of (1)
$.0045 or (2) 40% of the average of the lowest three  inter-day  sales prices of
the common  stock  during the twenty  Trading  Days  immediately  preceding  the
applicable Conversion Date.

During  February  2004,  the Company  issued two  convertible  debentures for an
aggregate  amount of $45,000 with simple interest at 12%. The debentures are due
February  2005.  Interest  shall be paid  quarterly  commencing  March 2004. The
holder  shall have the right to convert the  principal  amount and  interest due
into common stock.  The conversion  price in effect on any Conversion Date shall
be the  lesser  of (1)  $.005  or (2) 40% of the  average  of the  lowest  three
inter-day  sales  prices of the common  stock  during the  twenty  Trading  Days
immediately preceding the applicable Conversion Date.


                                     - 8 -
<PAGE>

4. RELATED PARTY TRANSACTIONS

For the year ended December 31, 2003, a director  provided  consulting  services
amounting to $51,980. As of September 30, 2004, the company owes to the director
$3,630 for back consulting fees and sundry expenses with no repayment terms.

The Company also owes the former  chief  executive  officer,  who is presently a
director,  $8,000 at September  30, 2004,  for back payroll and sundry  expenses
with no repayment terms. For the nine month period ended September 30, 2004, the
director provided consulting services amounting to $39,000.

Issuance of 30,000,000  shares of common stock was executed  January 7, 2004, to
satisfy  partial  payment  relating to the  outstanding  debt for  services  and
accrued  payroll  provided and owed to the above  mentioned  directors for prior
year's services and expenses.

5. SUBSEQUENT EVENTS

During October 2004,  $1,400 of the convertible  debentures  issued in September
2001, were converted into 7,000,000 shares of common stock and 15,535,714 shares
of common stock were issued for liquidated  damages relating to the notes issued
December 2001.


                                     - 9 -
<PAGE>

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

The following is  management's  discussion  and analysis of certain  significant
factors  that  will  have  affected  our  financial  condition  and  results  of
operations.    Certain    statements   under   this   section   may   constitute
"forward-looking  statements".  The  following  discussion  should  be  read  in
conjunction  with our financial  statements  and notes thereto  included in this
report.

Critical Accounting Policies

No material changes have occurred in the disclosure with respect to our critical
accounting  policies  set forth in our Annual  Report form 10-KSB for the fiscal
year ended December 31, 2003.

General

Financial Condition

We had net  losses of  $174,231  and  $255,460  during  the three  months  ended
September  30, 2004 and 2003,  respectively.  As of September 30, 2004, we had a
cash  balance in the amount of $43,766 and  current  liabilities  of  $3,177,365
including  obligations  of $11,630 and  $1,879,237  to officers and  convertible
debenture holders,  respectively. We do not have sufficient cash or other assets
to meet our current  liabilities.  In order to meet those  obligations,  we will
need to  raise  cash  from  the  sale of  securities  or  from  borrowings.  Our
independent auditors have added an explanatory paragraph to their audit opinions
issued in  connection  with the fiscal  year 2003  financial  statements,  which
states that our ability to continue as a going concern  depends upon our ability
to resolve  liquidity  problems,  principally by obtaining  capital,  commencing
sales and generating  sufficient  revenues to become profitable.  Our ability to
obtain  additional  funding  will  determine  our ability to continue as a going
concern.  Our  financial  statements do not include any  adjustments  that might
result from the outcome of this uncertainty.

Plan of Operations

The short-term objective of DDSI is the following:

      o     To continue to expand the sale and  acceptance of its core solutions
            by upgrading  software and  offering  new  synergistic  biometric (a
            measurable,  physical  characteristic  or personal  behavioral trait
            used to recognize the identity,  or verify the claimed identity,  of
            an individual) (i.e. FMS) security products to its installed base in
            the Public Safety and Security market. DDSI's objective is to expand
            with these, and additional products, into much larger commercial and
            federal markets.

DDSI is  also  adding  additional  product  lines  as a  Value  Added  Reseller.
Technologies  related to DDSI's core business can bring additional cashflow with
relatively  small  internal  development  capital  outlay,  though  there  is no
certainty that the monies  expended on  development  will add any revenue to the
Company.


                                     - 10 -
<PAGE>

DDSI's long-term objective is as follows:

      o     To seek additional products to sell into its basic business market -
            Public  Safety  and  Security  - so that  DDSI  can  generate  sales
            adequate enough to allow for profits. New products include biometric
            devices such as FMS (Fingerprint Matching System) and our integrated
            digital image and fingerprint package, Identify on Demand.

DDSI believes that it will not reach profitability until the year 2005. Over the
next twelve months, management is of the opinion that sufficient working capital
will be obtained from  operations  and external  financing to meet the Company's
liabilities and commitments as they become payable.  The Company has in the past
successfully relied on private placements of common stock securities, bank debt,
loans from private  investors and the exercise of common stock warrants in order
to sustain operations.

DDSI is doing the following in its effort to reach profitability:

      o     Cut costs in areas that add the least value to DDSI.

      o     Upgrading  its present core  Compu-Capture(R)  products to include a
            fully scalable database and ANSI/NIST capability.

      o     Derive funds through  investigating  business  alliances  with other
            companies who may wish to license the FMS SDK (software  developer's
            kit).

      o     Increase  revenues  through the  introduction  of  Compu-Capture(R),
            specifically  towards the  education  market for the  creation of ID
            cards.

      o     Increase  revenues through the introduction of a scaled down version
            of our  Compu-Capture(R)  product.

      o     Increase revenues through the addition of innovative technologies as
            a Value Added Reseller.

Results of Operations

Nine Months Ended September 30, 2004 Compared to the Nine Months Ended September
30, 2003

Revenues for the nine months ended  September  30, 2004,  of $248,259  decreased
$315,583 or 56% from the nine  months  ended  September  30,  2003.  The Company
generates  its revenues  through  software  licenses,  hardware,  post  customer
support  arrangements and other services.  The decrease in the Company's revenue
is attributed to a decrease in software  maintenance  contract dollar amount,  a
loss in client base, a reduction  in sales and  marketing  staff and the lack of
new product offerings to their clients.  Cost of revenue  decreased  $138,593 or
98% and was reduced to 1% of total  revenues  from 25% in the same period a year
earlier.

Costs and  expenses  decreased  $461,516  or 32%  during the nine  months  ended
September  30,  2004,  versus the nine months  ended  September  30,  2003.  The
increase  in interest  and  amortization  of  deferred  debt cost of $38,543 was
offset by the combined reduction in expenses for all other areas of $500,059 for
the nine  months  ended  September  30,  2004 as  compared  to 2003.  The  costs
decreased  $138,593,  expenses  for the  general and  administration  department
decreased $288,218, sales and marketing department decreased $104,152,  research
and development  decreased  $20,998,  depreciation  expense decreased $6,097 and
miscellaneous income decreased $57,999 for the nine months ended September, 2004
as compared to 2003. In keeping with the goal to streamline  costs yet achieve a
working product,  the Company is re-evaluating its current development  strategy
and resources resulting in a cutback of expenses.


                                     - 11 -
<PAGE>

General and  Administrative  expenses for the nine month period ending September
30,  2004,  was  $305,756  versus  $593,974 for the same period prior year for a
decrease of $288,219 or 49%. This decrease was mainly attributable to a decrease
in rent expense of $206,768,  telephone expense of $23,135, filing fees $22,148,
vehicle expense 19,567 and miscellaneous items for $16,601.

Sales and Marketing expenses decreased $104,152 for the nine months period ended
September 30, 2004,  from $119,177  (2003) to $48,320  (2004) or a 59% decrease.
This decrease was mainly  attributable to a decrease in professional  consulting
of $57,490, a decrease in salaries,  commissions,  benefits and payroll taxes in
the aggregate of $38,833, and a decrease in miscellaneous items for $7,829.

Research and  development  for the nine months  ended  September  30, 2004,  was
$17,037  compared to $38,035  for the same  period  prior year for a decrease of
$20,998.  The decrease was due to the decline in salaries,  benefits and payroll
taxes in the  aggregate  of $24,356  and an increase  in  consulting  expense of
$3,358.

The net loss for the Company  decreased 17% for the nine months ending September
30, 2004, to $716,712  from  $862,645 for the nine months  ending  September 30,
2003. This was principally due to the decrease in both sales and expenses.

Three Months September 30, 2004 Compared to the Three Months Ended September 30,
2003

Revenues for the three months ended September 30, 2004 were $71,068 versus three
months ended September 30, 2003 of $92,806  decreased  $21,738 or 23%. Costs for
the three months ended  September 30, 2004 were ($2,030) versus the three months
ended  September 30, 2003 of $22,422  decreased  $24,452.  Maintenance  revenues
decreased  $25,829 or 29% during the three months ended  September 30, 2004 from
the three months ended  September 30, 2003. This is attributable to the decrease
in software  maintenance  contract  dollar  amount and loss of customer  base in
2004.

Costs and  expenses  decreased  $102,967  or 30% during the three  months  ended
September 30, 2004 versus the three months ended September 30, 2003. General and
administrative  expenses  decreased  $26,940  or 32 % to  $58,355  for the three
months  ended  September  30,  2004  from  $85,295  for the three  months  ended
September 30, 2003.  Research and  development  costs for the three month period
ended  September 30, 2004 increased by $467 compared to the prior period.  Sales
and marketing  decreased  $22,444 or 67% during the three months ended September
30, 2004 from the three months ended  September 30, 2003.  Depreciation  expense
decreased  $349 due to the lack of asset  purchases  in 2004.  During  the three
months ended  September 30, 2004  compared to September  30, 2003,  interest and
amortization of deferred debt cost decreased from $202,508 to $173,259 or 14%.


                                     - 12 -
<PAGE>

The net loss for the Company decreased $81,229 or 32% for the three months ended
September  30,  2004 to  $174,231  from  $255,460  for the  three  months  ended
September 30, 2003. This was principally due to overall decreased  expenses that
were in excess of the sales decrease.

Liquidity and Capital Resources

The Company's  revenues have been insufficient to cover the cost of revenues and
operating  expenses.  Therefore,  the  Company  has been  dependent  on  private
placements  of its Common  Stock and issuance of  convertible  notes in order to
sustain  operations.  In addition,  there can be no assurances that the proceeds
from private placements or other capital will continue to be available,  or that
revenues will increase to meet the  Company's  cash needs,  or that a sufficient
amount of the Company's  Common Stock or other securities can or will be sold or
that any Common Stock  purchase  options/warrants  will be exercised to fund the
operating needs of the Company.

The Company has contractual  obligations of $3,114,981 as of September 30, 2004.
These contractual  obligations,  along with the dates on which such payments are
due are described below:

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------
Contractual Obligations                          Total      One Year or Less          More Than One Year
--------------------------------------------------------------------------------------------------------
<S>                                           <C>              <C>                        <C>
Due to Related Parties                        $   11,630       $   11,630                 $        0
--------------------------------------------------------------------------------------------------------
Convertible Debentures                         2,129,237        1,879,237                    250,000
--------------------------------------------------------------------------------------------------------
Accounts Payable and Accrued Expenses            974,114          974,114                          0
--------------------------------------------------------------------------------------------------------
Total Contractual Obligations                 $3,114,981       $2,864,981                 $  250,000
--------------------------------------------------------------------------------------------------------
</TABLE>

Below is a discussion of our sources and uses of funds for the nine months ended
September 30, 2004 and 2003.

Net Cash Used in Operating Activities

Net cash used in operating  activities  for the nine months ended  September 30,
2004 and 2003 was $229,017 and $460,531, respectively. The decrease in cash used
from  operating  activities  in the nine months ended  September 30, 2004 versus
2003 of $231,514 was  principally due to the decrease in net operating costs for
the nine months.

Net Cash Provided By Investing Activities

Net cash provided by investing  activities  nine months ended September 30, 2004
and 2003 was $72 and $63 respectively, reflecting a change of $9. This reflected
no significant change in restricted cash.

Net Cash Provided By Financing Activities

Net cash provided by financing activities was $221,447 and $450,404 for the nine
months ended September 30, 2004 and 2003, respectively, reflecting a decrease of
$228,957.


                                     - 13 -
<PAGE>

ITEM 3. CONTROL AND PROCEDURES

(a) Evaluation of Disclosure Controls and Procedures

Our Chief Executive  Officer and acting Chief  Financial  Officer have evaluated
the  effectiveness  of our  disclosure  controls and procedures (as such term is
defined in Rules 13a-15 and 15d-15 under the Securities Exchange Act of 1934, as
amended  (the  "Exchange  Act"))  as of the end of the  period  covered  by this
quarterly  report  (the  "Evaluation  Date").  Based  on such  evaluation,  such
officers have concluded that, as of the Evaluation Date, our disclosure controls
and  procedures  are  effective  in alerting  them on a timely basis to material
information relating to our Company required to be included in our reports filed
or submitted under the Exchange Act.

(b) Changes in Internal Controls

There were no significant changes in the Company's internal controls or in other
factors  that could  significantly  affect  those  controls  during the  quarter
covered by this  Report or from the end of the  reporting  period to the date of
this Form 10-QSB.


                                     - 14 -
<PAGE>

                           PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

On  October  16,  2003,   in  the  Court  of  Common  Please  of  Bucks  County,
Pennsylvania,  a judgment was entered  against the Company by its  landlord,  BT
Lincoln  L.P.  for breach of lease in the  amount of  $184,706.76.  The  Company
intends to negotiate a settlement.  The liability,  net of the security deposit,
is included in accrued expense at September 30, 2004.

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

During October 2004,  $1,400 of the convertible  debentures  issued in September
2001, were converted into 7,000,000 shares of common stock and 15,535,714 shares
of common stock were issued for liquidated  damages relating to the notes issued
December 2001.

During  September 2004, $700 of the convertible  debentures  issued in September
2001, were converted into 7,000,000 shares of common stock.

During August 2004,  $3,500 of the  convertible  debentures  issued in September
2001, were converted into 14,000,000 shares of common stock and 7,222,222 shares
of common stock were issued for liquidated  damages relating to the notes issued
December 2001.

During July 2004, $4,900 of the convertible debentures issued in September 2001,
were converted into 7,000,000  shares of common stock.  and 7,000,000  shares of
common  stock were issued for  liquidated  damages  relating to the notes issued
December 2001.

On May 7, 2004,  we entered  into a  Securities  Purchase  Agreement,  with four
accredited investors that provides for the issuance of convertible notes payable
up to an aggregate face value of $250,000 with simple  interest  accruing at the
annual rate of 12% and warrants to acquire up to an aggregate  750,000 shares of
our  common  stock.  The  convertible  notes are due two years  from the date of
issuance.  Interest  payable on the  convertible  notes shall be paid  quarterly
commencing  June 30,  2004.  The  holders  shall have the right to  convert  the
principal  amount and  interest due under the  convertible  notes into shares of
DDS's common stock.  The conversion price in effect on any conversion date shall
be the  lesser  of (1)  $.0045 or (2) 40% of the  average  of the  lowest  three
inter-day  sales  prices of the common  stock  during the  twenty  trading  days
immediately  preceding  the  applicable  conversion  date.  The warrants have an
exercise price of $0.0045 and expire on May 7, 2009.

During  February  2004,  the Company  issued two  convertible  debentures for an
aggregate  amount of $45,000 with simple interest at 12%. The debentures are due
February  2005.  Interest  shall be paid  quarterly  commencing  March 2004. The
holder  shall have the right to convert the  principal  amount and  interest due
into common stock.  The conversion  price in effect on any Conversion Date shall
be the  lesser  of (1)  $.005  or (2) 40% of the  average  of the  lowest  three
inter-day  sales  prices of the common  stock  during the  twenty  Trading  Days
immediately preceding the applicable Conversion Date.


                                     - 15 -
<PAGE>

ITEM 3. DEFAULTS UPON SENIOR SECURITIES:

The Company is in default of $1,744,238 of outstanding debentures.  Although the
debenture holders have not pursued their rights under such debentures, there can
be no assurances that such rights will not be exercised.

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

None

ITEM 5. OTHER INFORMATION

None

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K:

(a) Exhibits

Exhibit 31.1  Certification  by Chief  Executive  Officer  and Chief  Financial
              Officer pursuant to Sarbanes-Oxley Section 302:

Exhibit 32.1  Certification  by Chief  Executive  Officer  and Chief  Financial
              Officer pursuant to 18 U.S.C., Section 1350


                                     - 16 -
<PAGE>

                                   SIGNATURES

      Pursuant  to the  requirements  of Section  13 or 15(d) of the  Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

                        DIGITAL DESCRIPTOR SYSTEMS, INC.
                        --------------------------------
                                  (Registrant)

      Date:  November 15, 2004      By: /s/ ANTHONY SHUPIN
                                        ----------------------------------------
                                        Anthony Shupin
                                        (President, Chief Executive Officer,
                                        Acting Chief Financial Officer
                                        and Director)

      Date:  November 15, 2004      By: /s/ MICHAEL J. PELLEGRINO
                                        ----------------------------------------
                                        Michael J. Pellegrino
                                        (Director - Chairman)

      Date:  November 15, 2004      By: /s/ VINCENT MORENO
                                        ----------------------------------------
                                        Vincent Moreno.
                                        (Director)

      Date:  November 15, 2004      By: /s/ ROBERT GOWELL.
                                        ----------------------------------------
                                        Robert Gowell
                                        (Director)


                                     - 17 -