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, 2003

                                       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, Suite 250, Sea Girt,                          NJ 08750
(Address of principal executive offices)                       (Zip Code)

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

 446 Lincoln Highway, Fairless Hills, PA 19030
  (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                                         February 4, 2004
---------------------                                         ------------------
   $.001 par value                                            145,958,423 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, 2003  (Unaudited)  and December 31,
      2002

            Statemt 18 0 ents of Operations  for the three and nine months ended
      September 30, 2003 and 2002 (Unaudited)

            Statements  of Cash Flows for the nine months  ended  September  30,
      2003 and 2002 (Unaudited)

            Notes to Financial Statements - September 30, 2003 (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
                                                                2003           2002
                                                             ----------      ----------
                                                             (Unaudited)
<S>                                                          <C>             <C>
Assets
Current assets:
   Cash                                                      $    5,375      $   15,439
   Restricted cash                                                  617             680
  Accounts receivable, less allowance for uncollectible
      accounts of $13,441 (unaudited) and $117,560 in
      2003 and 2002, respectively                               124,165          28,491
   Inventory                                                         --           8,550
   Prepaid expenses                                              58,740         153,047
   Debt discount and deferred financing costs                   188,576          95,625
                                                             ----------      ----------
Total current assets                                            377,473         301,832

   Furniture and Equipment, net                                      --          12,158
    Deposits and other assets                                        --          24,395
                                                             ----------      ----------
Total assets                                                 $  377,473      $  338,385
                                                             ==========      ==========

Liabilities and Shareholders' Deficiency
Current liabilities:
   Accounts payable                                          $  311,535      $  391,067
   Accrued expenses                                             233,730         118,493
   Accrued interest                                             275,110         145,333
   Accrued payroll taxes                                             --          84,848
   Due to officers and directors                                 60,390              --
   Deferred income                                              407,126         545,724
   Current portion of equipment loan                              4,130           7,289
   Convertible debentures                                     1,596,837       1,103,732
                                                             ----------      ----------
Total current liabilities                                     2,888,858       2,396,486

   Equipment Loan, Net of Current Portion                            --          12,766
                                                             ----------      ----------
Total liabilities                                            $2,888,858      $2,409,252
                                                             ----------      ----------
</Table>


                                      -3-
<Page>

                        DIGITAL DESCRIPTOR SYSTEMS, INC.
                           BALANCE SHEETS (continued)

<Table>
<Caption>
                                                                   September 30       December 31
                                                                       2003               2002
                                                                   ------------       ------------
<S>                                                                <C>                <C>
(Unaudited) Shareholders' deficiency:
   Preferred Stock, $.01 par value, authorized shares -
     1,000,000; issued and outstanding - none                                --                 --
   Common Stock, $.001 par value, authorized shares -
     150,000,000; issued and outstanding shares - 111,137,789
     and 61,351,387 at June 30, 2003 and December 31, 2002,
     respectively                                                       111,137             61,351
   Additional paid-in capital                                        17,282,227         16,909,886
   Accumulated deficit                                              (19,904,749)       (19,042,104)
                                                                   ------------       ------------
Total shareholder's deficiency                                       (2,511,385)        (2,070,867)
                                                                   ------------       ------------
Total liabilities and shareholders' deficiency                     $    377,473       $    338,385
                                                                   ============       ============
</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
                                                              2003                2002                2003               2002
                                                         -------------       -------------       -------------       -------------
<S>                                                      <C>                 <C>                 <C>                 <C>
Revenues:
   Software                                              $       1,500       $     386,448       $     148,173       $     439,390
   Hardware                                                         --              36,022              55,177              63,984
   Maintenance                                                  88,396             139,877             293,537             454,469
   Other                                                         2,910              11,545              66,955              30,208
                                                         -------------       -------------       -------------       -------------
                                                                92,806             573,892             563,842             988,051

Costs and expenses:
   Cost of revenues                                             22,422             294,847             141,530             376,860
   General and administrative                                   85,295             212,808             593,974             723,373
   Sales and marketing                                          33,295              18,268             152,472              75,505
   Research and development                                      4,397              16,716              38,035             168,091
   Depreciation and amortization                                   349               3,103               6,097              21,318
   Interest and amortization of
       deferred debt costs                                     202,508             257,240             556,251             772,809
   Other (income) expense, net                                      --                  (7)            (61,872)            (24,302)
                                                         -------------       -------------       -------------       -------------
                                                               348,266             802,975           1,426,487           2,113,654
                                                         -------------       -------------       -------------       -------------

           Net loss                                      $    (255,460)      $    (229,083)      $    (862,645)      $  (1,125,603)
                                                         =============       =============       =============       =============

Net loss per common share                                $       (0.00)      $       (0.00)      $       (0.01)      $       (0.02)
                                                         =============       =============       =============       =============
 (basic and diluted)

Weighted average number of common shares outstanding:
    Basic and diluted                                      110,126,539          55,297,784          91,021,784          55,297,784
                                                         =============       =============       =============       =============
</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
                                                                           2003              2002
                                                                       -----------       -----------
<S>                                                                    <C>               <C>
Cash flows from operating activities:
Net loss                                                               ($  862,645)      ($1,125,603)
Adjustments to reconcile net loss to net cash
   used in operating activities:
      Depreciation and amortization                                          6,096            21,318
      Provision for doubtful note receivable - former officer                   --                --
      Compensation expense in connection with issuance
          of  Common Stock                                                      --                --
      Common stock issued for services                                          --            14,400
      Amortization of deferred financing costs and debt discounts
          related to the issuance of warrants and the beneficial
          conversion feature of convertible debentures                     426,050           684,201
     Gain on disposal of fixed assets                                       (6,833)               --
     Changes in operating assets and liabilities:
      Accounts receivable                                                  (95,674)          100,128
      Inventory                                                              8,550            (8,333)
      Prepaid expenses, deposits and other assets                          118,701           106,858
      Advances - Employees                                                      --          (200,716)
      Accounts payable                                                     (79,533)          (49,710)
      Accrued expenses                                                     248,204
                                                                                              55,323
      Accrued payroll and related withholdings                             (84,848)          289,247
      Due to officers and directors                                         60,390                --
     Deferred income                                                      (138,598)         (356,675)
                                                                       -----------       -----------
Net cash used in operating activities                                     (400,141)         (469,562)

Cash flows from investing activities:

   Decrease in restricted cash                                                  63             4,918
                                                                       -----------       -----------
Net cash provided by investing activities                                       63             4,918

Cash flows from financing activities:
   Proceeds from issuance of convertible debentures, net
         of issuance costs of $106,958 in 2003 and $37,750
       in 2002                                                             393,042           137,250
   Repayment of equipment loan                                              (3,028)           (5,402)
                                                                       -----------       -----------
Net cash provided by financing activities                                  390,014           131,848
                                                                       -----------       -----------
Net decrease in cash                                                       (10,064)         (332,796)
Cash at beginning of period                                                 15,439           435,661
                                                                       -----------       -----------
Cash at end of period                                                  $     5,375       $   102,865
                                                                       ===========       ===========
</Table>


                                      -6-
<Page>

                        DIGITAL DESCRIPTOR SYSTEMS, INC.
                            STATEMENTS OF CASH FLOWS
                                   (Unaudited)
                                Nine Months Ended
<Table>
<Caption>

                                                                                    September 30  September 30
                                                                                        2003          2002
                                                                                      --------      --------
<S>                                                                                   <C>           <C>
Supplemental disclosure of cash flow information:

  Cash paid during the period for:                                                    $    474      $  3,694
                                                                                      ========      ========
      Interest
      Income taxes                                                                    $     --      $     --
                                                                                      ========      ========

Supplemental disclosure of non-cash investing and financial activities:

Conversion of debentures in common stock                                              $  6,895      $ 51,640
                                                                                      ========      ========

Debt discount relating to the issuance of warrants and the                            $393,042      $     --
   Beneficial conversion factors of convertible debt                                  ========      ========


Conversion of liquidated damages in common stock                                      $  3,191      $     --
                                                                                      ========      ========
</Table>

Theequipment  loan  payable  was reduced by $12,896 in May 2003 when
   the Company returned two vehicles

   The accompanying notes are an integral part of these financial statements


                                      -7-
<Page>

                        DIGITAL DESCRIPTOR SYSTEMS, INC.
                          NOTES TO FINANCIAL STATEMENTS
                                   (Unaudited)
                               September 30, 2003

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, 2003 and 2002.  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 as of and for the three
and nine  months  ended  September  30,  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 three and nine month  periods  ended
September 30, 2003 and 2002 are not  necessarily  indicative of the results that
may be expected for the year ended December 31, 2003. Our  independent  auditors
have added an explanatory paragraph to their audit opinions issued in connection
with the fiscal year 2002 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.  ACCOUNTING POLICIES

Use of Estimates

The  preparation  of the  financial  statements in  conformity  with  accounting
principles  generally accepted in the United States requires  management to make
estimates  and  assumptions  that affect the amounts  reported in the  financial
statements  and  accompanying  notes.  Actual  results  could  differ from those
estimates.

Revenue Recognition

The Company derives revenue from the sale of hardware,  software,  post customer
support (PCS), and other related services.  PCS includes telephone support,  bug
fixes, and rights to upgrades on a  when-and-if-available  basis.  Other related


                                      -8-
<Page>

services  include basic  consulting and training.  Included with the hardware is
software that is not considered to be incidental. Revenue from transactions with
customers  where the software  component is not  considered  to be incidental is
allocated  between the hardware and  software  components  based on the relative
fair value of the respective components.

The Company  also derives  revenue  from the sale of software  without a related
hardware  component.   Revenue  allocable  to  software  components  is  further
allocated to the individual  deliverable elements of the software portion of the
arrangement such as PCS and other services.  In arrangements that include rights
to  PCS  for  the  software  and/or  other  services,   the  software  component
arrangement fee is allocated among each  deliverable  based on the relative fair
value of each of the  deliverables  determined using  vendor-specific  objective
evidence,   which  has  been   established   by  the  separate  sales  of  these
deliverables.

The Company  recognizes the revenue  allocable to hardware and software licenses
upon  delivery  of the product to the  end-user,  unless the fee is not fixed or
determinable  or  collectibility  is  not  probable.  If  collectibility  is not
considered  probable,  revenue is recognized when the fee is collected.  Revenue
allocable to PCS is recognized on a straight-line  basis over the period the PCS
is provided.  Revenue  allocable to other services is recognized as the services
are provided.

Net Loss Per Common Share

Basic loss per share is  calculated  by  dividing  the net loss by the  weighted
average  common  shares  outstanding  for the period.  Diluted loss per share is
calculated  by  dividing  the net loss by the  weighted  average  common  shares
outstanding of the period plus the dilutive effect of common stock  equivalents.
No exercise of common stock  equivalents  were assumed during any period because
the assumed exercise of these securities would be antidilutive.

New Accounting Pronouncements

In May 2003,  the  Financial  Accounting  Standards  Board  issued  Statement of
Financial Accounting Standard 150, "Accounting for Certain Financial Instruments
with Characteristics of both Liabilities and Equity". This Statement establishes
standards  for  how  an  issuer   classifies  and  measures  certain   financial
instruments with  characteristics  of both  liabilities and equity.  It requires
that an issuer  classify a  financial  instrument  that is within its scope as a
liability (or an asset in some  circumstances).  Many of those  instruments were
previously  classified as equity.  Some of the  provisions of this Statement are
consistent with the current definition of liabilities in FASB Concepts Statement
No. 6,  Elements  of  Financial  Statements.  The  remaining  provision  of this
statement are consistent with the Board's  proposal to revise that definition to
encompass  certain  obligations  that a  reporting  entity can or must settle by
issuing  its own equity  shares,  depending  on the nature of this  relationship
established  between the holder and the issuer.  This Statement is effective for
financial instruments entered into or modified after May 31, 2003, and otherwise
is effective at the beginning of the first interim period  beginning  after June
15, 2003. The Company does not believe that the adoption of SFAS 150 will have a
material impact upon the Company's financial statements.


                                      -9-
<Page>

4.  CONVERTIBLE DEBENTURES

On January 10, 2003, DDSI issued three  convertible  debentures for an aggregate
amount of  $250,000,  with simple  interest  accruing at the annual rate of 10%.
These  debentures are due January 10, 2004.  Interest  payable on the Debentures
shall be paid  quarterly  commencing  March 31, 2003. The holders shall have the
right to convert the principal amount and interest due under the debentures into
shares of DDSI's common stock.  The conversion price in effect on any Conversion
Date shall be the  lesser of (1) $.005 and (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 2003,  $1,000 of the convertible  debentures  issued in December
2001 was converted into 2,857,142 shares of common stock.

On February 27, 2003, DDSI issued three convertible  debentures for an aggregate
amount of $125,000, with simple interest accruing at the annual rate of 10%. The
debentures are due February 27, 2004.  Interest  payable on the Debentures shall
be paid quarterly commencing March 31, 2003. The holders shall have the right to
convert the principal  amount and interest due under the debentures  into shares
of DDSI's common stock.  The conversion  price in effect on any Conversion  Date
shall be the lesser of (1) $.005 and (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.

In March 2003, $1,600 of the convertible  debentures issued in December 2001 was
converted into 8,000,000 shares of common stock.

On April 2, 2003 DDSI  issued  three  convertible  debentures  for an  aggregate
amount of $125,000, with simple interest accruing at the annual rate of 10%. The
debentures are due March 31, 2004.  Interest  payable on the Debentures shall be
paid  quarterly  commencing  June 30, 2003.  The holders shall have the right to
convert the principal  amount and interest due under the debentures  into shares
of DDSI's common stock.  The conversion  price in effect on any Conversion  Date
shall be the lesser of (1) $.005 and (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.

In April 2003, $1,600 of the convertible  debentures issued in December 2001 was
converted into 8,000,000 shares of common stock.

In May 2003,  $1,600 of the convertible  debentures  issued in December 2001 was
converted into 8,000,000 shares of common stock. .

During June 2003,  $1,093 of the convertible  debentures issued in December 2001
were converted into 5,468,010 shares of common stock.


                                      -10-
<Page>

5. EQUITY TRANSACTIONS

The Company  defaulted on its debt and pursuant to the agreement  dated December
2001, a portion of the damages were paid in company stock as follows:

In April 2003 liquidated  damages relating to notes issued in December 2001 were
converted into 6,000,000 shares of common stock.

In May 2003,  liquidated  damages relating to notes issued in December 2001 were
converted into 4,450,000 shares of common stock.

In June  2003,  1,011,250  shares of common  stock were  issued  for  liquidated
damages relating to notes issued in December 2001.

6. RELATED PARTY TRANSACTIONS

A director of the Company provided consulting services during 2003. For the nine
months  ended  September  30,  2003,  the  services  amounted to $11,900.  As of
September  30, 2003,  the company  owes the  director  $44,900 with no repayment
terms.

The Company also owes the former chief executive  officer of the Company $15,490
at  September  30, 2003 for back payroll and sundry  expenses  with no repayment
terms.

7. SUBSEQUENT EVENTS

On September 30, 2003, a judgment was entered  against the Company by Primezone,
Inc in the amount of $3,134.50. The Company satisfied the judgment on October 9,
2003.

On October 1, 2003,  DDSI issued three  convertible  debentures for an aggregate
amount of $300,000, with simple interest accruing at the annual rate of 12%. The
debentures are due October 1, 2004.  Interest payable on the Debentures shall be
paid quarterly commencing December 30, 2003. The holders shall have the right to
convert the principal  amount and interest due under the debentures  into shares
of DDSI's common stock.  The conversion  price in effect on any Conversion  Date
shall be the lesser of (1) $.01 and (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 debenture holders also
received  warrants to purchase  2,100,000  shares at an exercise price of $0.005
per share anytime before September 30, 2008.

On October 16, 2003, 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 expenses at September 30, 2003.


                                      -11-
<Page>

In October  2003,  management  changes were as follow:  Mr.  Michael  Pellegrino
resigned  effective  October 6, 2003 as President and CEO of DDSI.  Mr.  Anthony
Shupin accepted the position of CEO and President of the Corporation.  The Board
of Director's  unanimously  elected Mr. Pellegrino as Chairman of the Board. Mr.
Shupin remains a Director of the Company.

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, 2002.

New Accounting Pronouncements

In May 2003,  the  Financial  Accounting  Standards  Board  issued  Statement of
Financial Accounting Standard 150, "Accounting for Certain Financial Instruments
with Characteristics of both Liabilities and Equity". This Statement establishes
standards  for  how  an  issuer   classifies  and  measures  certain   financial
instruments with  characteristics  of both  liabilities and equity.  It requires
that an issuer  classify a  financial  instrument  that is within its scope as a
liability (or an asset in some  circumstances).  Many of those  instruments were
previously  classified as equity.  Some of the  provisions of this Statement are
consistent with the current definition of liabilities in FASB Concepts Statement
No. 6,  Elements  of  Financial  Statements.  The  remaining  provision  of this
statement are consistent with the Board's  proposal to revise that definition to
encompass  certain  obligations  that a  reporting  entity can or must settle by
issuing  its own equity  shares,  depending  on the nature of this  relationship
established  between the holder and the issuer.  This Statement is effective for
financial instruments entered into or modified after May 31, 2003, and otherwise
is effective at the beginning of the first interim period  beginning  after June
15, 2003. The Company does not believe that the adoption of SFAS 150 will have a
material impact upon the Company's financial statements.

General

Financial Condition

We had net  losses of  $862,645  and  $1,125,603  during the nine  months  ended
September  30, 2003 and 2002,  respectively.  As of September 30, 2003, we had a
cash  balance in the amount of $5,375 and  current  liabilities  of  $2,888,858,
including  obligations  of $60,390 and  $1,596,837  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 years 2003 and 2002 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


                                      -12-
<Page>

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.

Short-Term Objectives

1. The short-term objective of the Company is to continue to expand the sale and
acceptance of its core solutions by offering new and synergistic products to its
installed base in the criminal  justice  market.  The Company's  objective is to
expand  with these,  and  additional  products  and  services,  into much larger
commercial and federal markets.

Long-Term Objectives

1. To seek additional products to sell into its basic business  market--Criminal
Justice -- so that DDSI can generate sales adequate enough to allow for profits.
New products include FMS (Fingerprint Matching System), and Identify on Demand.

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

      o     Increase  revenues  through the  introduction  of  Compu-Capture  to
            schools,  specifically  towards kindergarten through twelfth grades,
            for the  creation  of ID cards.

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

      o     Expand  the   Compu-Capture   product   acceptance  as  an  employee
            identification/badging system in response to market demand

      o     Focus on recruiting and supporting  Value Added Resellers  targeting
            DDSI's primary market.

      o     Pursuing strategic relationships enabling the Company to develop and
            support products and services related to our primary markets.

Results of Operations

Nine Months Ended September 30, 2003 Compared to the Nine Months Ended September
30 2002

Revenues  for the nine months  ended  September  30, 2003 of $563,842  decreased
$424,209 or 43% from the nine  months  ended  September  30,  2002.  The Company


                                      -13-
<Page>

generates  its revenues  through  software  licenses,  hardware,  post  customer
support  arrangements and other services.  The overall decrease in the Company's
revenue is attributed to two major factors:  a decrease in software  maintenance
contract dollar amounts and recognition of a large SI-3000 project.  Maintenance
revenues  decreased by $160,932 or 35% from the nine months ended  September 30,
2002. In the third quarter of 2002,  DDSI recognized  approximately  $366,000 in
SI-3000 completed  projects.  There remains one SI-3000 project with anticipated
completion  date before the end of 2003.  Software,  hardware  and  installation
combined  sales  decreased  by  $263,277  or 49%  during the nine  months  ended
September  30,  2003.  Cost of  revenues  decreased  $235,330  or 62% due to the
decrease in SI-3000  projects and was reduced to 25% of total  revenues from 38%
in the same period a year earlier.

Costs and  expenses  decreased  $687,167  or 33%  during the nine  months  ended
September  30, 2003 versus the nine months ended  September  30,  2002.  Cost of
revenue  decreased  ($235,330),  interest and amortization of deferred debt cost
decreased by ($216,558),  depreciation expense decreased ($15,221),  general and
administrative  operating costs decreased ($129,399),  sales and marketing costs
increased  $76,967 and research and development  costs decreased  ($130,056) and
there was an  increase in other  income for  $37,570  for the nine months  ended
September  30,  2003.  The  decrease is due  primarily  to the cost  containment
efforts of the Company.

General and  Administrative  expenses for the nine month period ending September
30, 2003 was  $593,974  versus  $723,373  for the same  period  prior year for a
decrease of $129,399 or 18%. This decrease was mainly attributable to a decrease
in salaries  and related  payroll  expenses of  ($217,054),  consulting  fees of
($14,400) for services paid in stock,  professional services of ($9,108), travel
expense  of  ($19,658),  telephone  expense  of  ($18,946),  vehicle  expense of
($9,255) and miscellaneous  items for ($9,734).  There was an increase in filing
fees of $8,443 and the judgment  against the company for  $160,313  (net of rent
deposit) for breaking its lease that offset the decrease.

Sales and marketing  department  expenses increased $76,967 or 102% for the nine
months ended September 30, 2003 from $75,505 (2002) to $152,472 (2003). This was
primarily  due to the  addition  of a sales  consultant  to fill the void of the
reduced  sales  staff  in the  amount  of  $57,490,  an  increase  in  salaries,
commissions,  benefits and payroll taxes in the aggregate of $35,958, a decrease
in trade show expenses of ($4,169), travel of ($5,508),  advertising of ($6,440)
and miscellaneous items for ($364).

Research and  development  the nine months ended  September 30, 2003 was $38,035
compared to $168,091  for the same period  prior year for a decrease of $130,056
or 77%. This is due in part to a decrease in research and development consulting
costs of ($119,772) and support line of ($3,300),  computer  related  expenses a
decrease of ($1,605) and an increase of miscellaneous  expenses of $1,450.  Also
contributing to the overall  decrease was the decline in salaries,  benefits and
payroll  taxes  in the  aggregate  of  ($6,829).  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.
The net loss for the Company  decreased 23% for the nine months ending September
30, 2003 to ($862,645) from  ($1,125,603)  for the nine months ending  September
30, 2002.  This was  principally  due to the decrease in expenses and debentures
incurred during the period.


                                      -14-
<Page>

Three Months September 30, 2003 Compared to the Three Months Ended September 30,
2002

Revenues for the three months ended  September 30, 2003 of $92,806  versus three
months  ended  September  30,  2002 of  $573,892  decreased  $481,086 or 84%. As
indicated above, 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 the  completion of an SI-3000  project.
Maintenance  decreased by $51,481 or 37% from the three  months ended  September
30,  2002 due to a decrease  in  maintenance  contract  dollar  amount.  Cost of
revenues  for the three months ended  September  30, 2003 of $22,422  versus the
three months ended  September 30, 2002 of $294,847  decreased  $272, 425 or 92%.
This is  attributable  to the decline of SI-3000 sales and related SI-300 costs.
Cost of revenues  consisted  of 24% of total  revenue for 2003,  whereas cost of
revenues in 2002 consisted of 51% of total revenue.

Costs and  expenses  decreased  $454,709  or 57% during the three  months  ended
September  30,  2003  versus the three  months  ended  September  30,  2002.  As
indicated above, the cost of revenue was reduced by ($272,425) due to no SI-3000
activity in the three months ended  September 30, 2003,  unlike the three months
ended  September  30, 2002.  General and  administrative  expenses  were reduced
overall by  ($127,513)  due to the  decline in  salaries,  benefits  and payroll
taxes.  The development and research  department also  contributed to the bottom
line by reducing  consulting  costs of ($12,319).  The sales  department  had an
increase of $15,027 due to the increase of professional consulting, salaries and
other related expenses. Also factoring into the overall reduction of expenses is
the decrease in costs related to the  debentures  of ($54,732) and  depreciation
expense of ($2,754)  for the three months  ended  September  30, 2003 versus the
three months ended  September  30,  2002.  Other income  decreased by $7 for the
three  months ended  September  30, 2003 as compared to the same period from the
prior year.

The net loss for the  Company  increased  $26,377  or 12% for the  three  months
ending  September 30, 2003 to ($255,460)  from  ($229,083)  for the three months
ending  September  30,  2002.  This was  primarily  due to the decrease in sales
offset by a reduction of operating costs during the period.

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 total  liabilities and contractual  obligations of $2,888,858 as
of September 30, 2003. These  contractual  obligations,  along with the dates on
which such payments are due, are described below:


                                      -15-
<Page>
<Table>
<Caption>
                                                         Payments Due by Period
                                         ------------------------------------------------------
Contractual Obligations                    Total          One Year or Less   More than One Year
                                         ----------          ----------          ----------
<S>                                      <C>                 <C>                 <C>
Due to Related Parties                   $   60,390          $   60,390          $        0
Notes Payable - Related Parties                   0                   0                   0
Convertible Debentures                    1,596,837           1,596,837                   0
Accounts Payable and Accrued Expenses     1,231,631           1,231,631                   0
                                         ----------          ----------          ----------
Total Contractual Obligations            $2,888,858          $2,888,858          $        0
                                         ==========          ==========          ==========
</Table>

Below is a  discussion  of our  sources  and uses of funds for the three  months
ended September 30, 2003 and 2002.

Net Cash Used In Operating Activities

Net cash used in operating  activities  for the nine months ended  September 30,
2003 and 2002 was ($400,141) and ($469,562),  respectively. The decrease in cash
used from  operating  activities  in the nine months  ended  September  30, 2003
versus 2002 of $69,421 was  principally  due to the decrease in net loss for the
nine months.

Net Cash Provided By (Used in) Investing Activities

Net cash provided by investing  activities  nine months ended September 30, 2003
and 2002 was $63 and $4,918  respectively,  reflecting a change of $4,855.  This
change is due to a reduction of restricted cash.

Net Cash Provided By Financing Activities

Net cash provided by financing activities was $390,014 and $131,848 for the nine
months ended September 30, 2003 and 2002,  respectively,  reflecting an increase
of $258,166.  This  increase  primarily  is due to the receipt of proceeds  from
issuance of  convertible  debentures  in the amount of $500,000  net of issuance
costs of $106,958.


                                      -16-
<Page>

Item 3. Control and Procedures

(a)   Evaluation of Disclosure Controls and Procedures

As of June 30, 2003, we carried out an  evaluation,  under the  supervision  and
with the  participation  of our Chief  Executive  Officer  and  Chief  Financial
Officer,  of the  effectiveness  of the design and  operation of our  disclosure
controls and procedures.  Based on this evaluation,  our Chief Executive Officer
and  Chief  Financial  Officer  concluded  that  our  disclosure   controls  and
procedures  are  effective  in  timely  alerting  them to  material  information
required  to be  included  in our  periodic  reports  that  are  filed  with the
Securities  and Exchange  Commission.  It should be noted that the design of any
system  of  controls  is  based  in part  upon  certain  assumptions  about  the
likelihood of future events,  and there can be no assurance that any design will
succeed in achieving  its stated goals under all  potential  future  conditions,
regardless of how remote. In addition,  we reviewed our internal  controls,  and
there have been no  significant  changes in our  internal  controls  or in other
factors that could significantly affect those controls subsequent to the date of
their last valuation.

(b)   Changes in Internal Controls

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


                                      -17-
<Page>

                           PART II. OTHER INFORMATION

Item 1. Legal Proceedings

On September 30, 2003, a judgment was entered  against the Company by Primezone,
Inc in the amount of $3,134.50. The Company satisfied the judgment on October 9,
2003.

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.

Item 2. Changes in Securities and Use of Proceeds  Recent Sales of  Unregistered
Securities

On January 10, 2003, DDSI issued three  convertible  debentures for an aggregate
amount of  $250,000,  with simple  interest  accruing at the annual rate of 10%.
These  debentures are due January 10, 2004.  Interest  payable on the Debentures
shall be paid  quarterly  commencing  March 31, 2003. The holders shall have the
right to convert the principal amount and interest due under the debentures into
shares of DDSI's common stock.  The conversion price in effect on any Conversion
Date shall be the  lesser of (1) $.005 and (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 2003,  $1,000 of the convertible  debentures  issued in December
2001 was converted into 2,857,142 shares of common stock.

On February 27, 2003, DDSI issued three convertible  debentures for an aggregate
amount of $125,000, with simple interest accruing at the annual rate of 10%. The
debentures are due February 27, 2004.  Interest  payable on the Debentures shall
be paid quarterly commencing March 31, 2003. The holders shall have the right to
convert the principal  amount and interest due under the debentures  into shares
of DDSI's common stock.  The conversion  price in effect on any Conversion  Date
shall be the lesser of (1) $.005 and (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.

In March 2003, $1,600 of the convertible  debentures issued in December 2001 was
converted into 8,000,000 shares of common stock. Additionally,  accrued interest
relating to the note dated May 2001 was converted  into an additional  1,820,634
shares of common stock.

In April,  DDSI issued three  convertible  debentures for an aggregate amount of
$125,000,  with  simple  interest  accruing  at the  annual  rate  of  10%.  The
debentures are due March 31, 2004.  Interest  payable on the Debentures shall be
paid  quarterly  commencing  May 31, 2003.  The holders  shall have the right to
convert the principal  amount and interest due under the debentures  into shares
of DDSI's common stock.  The conversion  price in effect on any Conversion  Date
shall be the lesser of (1) $.005 and (2) 40% of the average of the lowest  three


                                      -18-
<Page>

inter-day  sales  prices of the common  stock  during the  twenty  Trading  Days
immediately preceding the applicable Conversion Date.

In April 2003, $1,600 of the convertible  debentures issued in December 2001 was
converted  into  8,000,000  shares of  common  stock.  Additionally,  liquidated
damages  relating to these notes were  converted  into an  additional  6,000,000
shares of common stock.

In May 2003,  $1,600 of the convertible  debentures  issued in December 2001 was
converted  into  8,000,000  shares of  common  stock.  Additionally,  liquidated
damages  relating to these notes were  converted  into an  additional  4,450,000
shares of common stock.

During June 2003,  $1,093 of the convertible  debentures issued in December 2001
were converted into 5,468,010 shares of common stock,  while 1,011,250 shares of
common stock were converted for liquidated dames relating to these notes.

On October 1, 2003, we entered into a Securities Purchase Agreement,  with three
accredited  investors,  that  provides  for the  issuance of  convertible  notes
payable up to an aggregate  face value of $300,000 and warrants to acquire up to
an aggregate  2,100,000 shares of our common stock.  The agreement  provides for
the funding of the notes in three  tranches,  of which the first,  amounting  to
$165,000 with 1,115,000 warrants were issued on September 30, 2003. On the final
business  day of each of the three (3)  months  beginning  in  October  2003 and
ending in December  2003,  the Company  will issue and sell to the  investors an
aggregate  of $45,000  principal  amount of  convertible  notes and  warrants to
purchase an aggregate of 315,000 shares.

The  convertible  notes  are due one year  from the date of  issuance.  Interest
payable on the convertible notes shall be paid quarterly commencing December 30,
2003.  The  holders  shall have the right to convert  the  principal  amount and
interest due under the convertible notes into shares of DDSI's common stock. The
conversion  price in effect on any  conversion  date  shall be the lesser of (1)
$.01 and (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 $0.005 and
expire on September 30, 2008.

Item 3. Defaults Upon Senior Securities

None.

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

None.

Item 5. Other Information

None.


                                      -19-
<Page>

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

(a)   Exhibits.

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

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


                                      -20-
<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:  February 11, 2004        By:  /s/ ANTHONY SHUPIN
                                           -------------------------------------
                                           Anthony Shupin
                                           (President, Chief Executive Officer,
                                           Acting Chief Financial Officer
                                           and Director)


                                      -21-