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 June 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 35, 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 June 30, 2003 (Unaudited) and December 31, 2002

            Statements  of  Operations  for the three months ended June 30, 2003
      and 2002 (Unaudited)

            Statements of Operations  for the six months ended June 30, 2003 and
      2002 (Unaudited)

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

            Notes to Financial Statements - June 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>
                                                              June 30        December 31
                                                               2003             2002
                                                             ----------      ----------
                                                            (Unaudited)
<S>                                                          <C>             <C>
Assets
Current assets:
   Cash                                                      $   15,896      $   15,439
   Restricted cash                                                  641             680
  Accounts receivable, less allowance for uncollectible
      accounts of $20,140 (unaudited) and $117,560 in
      2003 and 2002, respectively                               122,802          28,491
   Inventory                                                     21,499           8,550
   Prepaid expenses                                              62,070         153,047
   Debt discount and deferred financing costs                   345,451          95,625
                                                             ----------      ----------
Total current assets                                            568,359         301,832

   Furniture and Equipment, net                                     349          12,158
    Deposits and other assets                                        --          24,395
                                                             ----------      ----------
Total assets                                                 $  568,708      $  338,385
                                                             ==========      ==========
Liabilities and Shareholders' Deficiency
Current liabilities:
   Accounts payable                                          $  300,320      $  391,067
   Accrued expenses                                             234,421         118,493
   Accrued interest                                             229,829         145,333
   Accrued payroll and related withholdings                          --          84,848
   Due to officers and directors                                 39,634              --
Deferred income                                                 419,462         545,724
   Current portion of equipment loan                              4,130           7,289
   Convertible debentures                                     1,596,837       1,103,732
                                                             ----------      ----------
Total current liabilities
                                                              2,824,633       2,396,486

   Equipment Loan, Net of Current Portion                            --          12,766
                                                             ----------      ----------
Total liabilities                                            $2,824,633      $2,409,252
                                                             ----------      ----------
</Table>


                                      -3-
<Page>

                        DIGITAL DESCRIPTOR SYSTEMS, INC.
                           BALANCE SHEETS (continued)

<Table>
<Caption>
                                                                     June 30          December 31
                                                                      2003                2002
                                                                   ------------       ------------
                                                                    (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 -
     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                                              (19,649,289)       (19,042,104)
                                                                   ------------       ------------
Total shareholder's deficiency                                       (2,255,925)        (2,070,867)
                                                                   ------------       ------------
Total liabilities and shareholders' deficiency                     $    568,708       $    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                   Six Months Ended
                                                             June 30,           June 30             June 30,          June 30
                                                               2003               2002               2003               2002
                                                           ------------       ------------       ------------       ------------
<S>                                                        <C>                <C>                <C>                <C>
Revenues:
   Software                                                $     94,448       $     13,349       $    146,673       $     52,941
   Hardware                                                       7,776             14,858             55,177
                                                                                                                          27,962
   Maintenance                                                  108,961            157,416            205,142            314,590
   Other                                                         49,153              4,373             64,044             18,665
                                                           ------------       ------------       ------------       ------------
                                                                260,338            189,996       471,036                 414,158

Costs and expenses:
   Cost of revenues                                              95,882             13,688            119,108             82,013
   General and administrative                                   344,208            239,265            508,679            510,565
   Sales and marketing                                           60,230             33,392            119,177             57,238
   Research and development                                      12,309             74,582             33,638            151,375
   Depreciation and amortization                                  2,150              8,305              5,747             18,214
   Interest and amortization of
       deferred debt costs                                      270,484            255,805            345,451            515,569
   Other (income) expense, net                                  (46,726)            (3,352)           (61,872)
                                                           ------------       ------------       ------------       ------------
                                                                                                                         (24,296)
                                                                738,537            621,685          1,078,221          1,310,678
                                                           ------------       ------------       ------------       ------------
           Net loss                                        $   (478,199)      $   (431,689)      $   (607,185)      $   (896,520)
                                                           ============       ============       ============       ============

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

Weighted average number of common shares outstanding:
    Basic and diluted                                        96,530,244         56,724,007         81,311,081         53,844,741
                                                           ============       ============       ============       ============
</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>
                                                                           Six Months Ended
                                                                        June 30         June 30
                                                                         2003             2002
                                                                       ---------       ---------
<S>                                                                    <C>             <C>
Cash flows from operating activities:
Net loss                                                               ($607,185)      ($896,520)
Adjustments to reconcile net loss to net cash
   used in operating activities:
      Depreciation and amortization                                        5,747          18,215
      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                   269,174         456,513
       Gain on disposal of fixed assets                                   (6,833)             --
     Changes in operating assets and liabilities:
      Accounts receivable                                                (94,311)         97,462
      Inventory                                                          (12,950)        (17,161)
      Prepaid expenses, deposits and other assets                        115,372         (79,086)
      Advances - Employees                                                    --        (110,066)
      Accounts payable                                                   (11,479)        (81,029)
      Accrued expenses                                                   203,613              92
      Due to officers and directors                                      (39,634)             --
      Accrued payroll and related withholdings                           (84,848)        173,929
      Deferred income                                                   (126,262)        (35,946)
                                                                       ---------       ---------
Net cash used in operating activities                                   (389,596)       (459,197)

Cash flows from investing activities:
   Decrease in restricted cash                                                39           4,925
                                                                       ---------       ---------
Net cash provided by investing activities                                     39           4,925

Cash flows from financing activities:
   Proceeds from issuance of convertible debentures, net
         of issuance costs of $106,958 in 2003 and $0 in 2002            393,042          64,750
Repayment of equipment loan                                               (3,028)         (3,597)
                                                                       ---------       ---------
Net cash provided by financing activities                                390,014          61,153
                                                                       ---------       ---------
Net increase in cash                                                         457        (393,119)
Cash at beginning of period                                               15,439         435,661
                                                                       ---------       ---------
Cash at end of period                                                  $  15,896       $  42,542
                                                                       =========       =========
</Table>


                                      -6-
<Page>

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

<Table>
<Caption>
                                                                             June 30       June 30
                                                                               2003          2002
                                                                             --------      --------
<S>                                                                          <C>           <C>
Supplemental disclosure of cash flow information:

  Cash paid during the period for:
      Interest                                                               $     86      $  1,937
                                                                             ========      ========
      Income taxes                                                           $     --      $     --
                                                                             ========      ========

Supplemental disclosure of non-cash investing and financial activities:

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

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


Conversion of liquidated damages into 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)
                                  June 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 June 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 for the six months
ended June 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 six month periods ended June 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 years 2002 and 2001
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


                                      -8-
<Page>

fixes, and rights to upgrades on a  when-and-if-available  basis.  Other related
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.  Since the Company has already  classified  it's Series A  Cumulative
Convertible  Preferred Stock outside its stockholders'  deficiency section,  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  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
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, $1,200 in liquidated damages relating to notes issued in December
2001 were converted into an additional 6,000,000 shares of common stock.

In May 2003,  $890 in  liquidated  damages  relating to notes issued in December
2001 were converted into an additional 4,450,000 shares of common stock.

During  June 2003,  1,011,250  shares of common  stock  were  issued for $202 in
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 six
months ended June 30, 2003,  the  services  amounted to $16,800.  As of June 30,
2003, the Company owes the director $33,000 with no repayment terms.

The Company also owes the former chief  executive  officer of the Company $6,634
at June 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 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.

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.

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) $.005 and (2) 40% of the average of the lowest  three
inter-day  sales  prices of the common  stock  during the  twenty  Trading  Days


                                      -11-
<Page>

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.

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 $478,199  and  $431,689  during the three months ended June
30, 2003 and 2002,  respectively.  As of June 30, 2003, we had a cash balance in
the  amount  of  $15,896  and  current   liabilities  of  $2,824,633   including
obligations  of $39,634 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 ability to


                                      -12-
<Page>

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

Six Months Ended June 30, 2003 Compared to the Six Months Ended June 30 2002

Revenues for the six months ended June 30, 2003 of $471,036 increased $56,878 or
13% from the six months ended June 30, 2002. The Company  generates its revenues


                                      -13-
<Page>

through software  licenses,  hardware,  post customer  support  arrangements and
other services.  The overall increase in the Company's  revenue is attributed to
the  completion of two SI-3000  projects.  Software,  hardware and  installation
combined sales increased  $166,326 or 167% while maintenance  revenues decreased
$109,448  or 35% from the six  months  ended  June 30,  2002.  Cost of  revenues
increased  $37,095 or 45% due to the  completion  of the  SI-3000  projects  and
increased to 25% of total revenues from 20% in the same period a year earlier.

Costs and  expenses  decreased  $232,457 or 18% during the six months ended June
30, 2003 versus the six months  ended June 30, 2002.  Cost of revenue  increased
$37,095, interest and amortization of deferred debt cost decreased by ($161,825)
due to the decrease in the costs  related to  debentures,  depreciation  expense
decreased  ($12,467),  general and administrative  expenses decreased  ($1,886),
sales and marketing  increased  $61,939 and research and  development  decreased
($117,737) and other income increased  $37,576 for the six months ended June 30,
2003. The overall decrease is primarily due to the cost  containment  efforts of
the Company.

General and  Administrative  expenses for the six month  period  ending June 30,
2003 was $508,679 versus $510,565 for the same period prior year for an decrease
of $1,886.  This decrease was due to a combination  of the judgment  against the
company  for  $160,313  (net of rent  deposit)  for  breaking  its  lease and an
increase in filing fees of $19,948 to a decrease in salaries and related payroll
expenses of ($135,742), consulting fees of ($14,400) for services paid in stock,
legal fees of  ($16,016),  travel  expense  of  ($7,410),  telephone  expense of
($6,626) and miscellaneous items for ($1,953).

Sales and Marketing  expenses  increased $61,939 for the six months period ended
June 30, 2003 from $57,238 (2002) to $119,177  (2003) or a 108%  increase.  This
increase was mainly  attributable to an increase in  professional  consulting of
$42,350, an increase in salaries, commissions, benefits and payroll taxes in the
aggregate of $35,190,  a decrease in trade show expenses of ($3,168),  travel of
($4,461), advertising of ($6,176) and miscellaneous items for ($1,796).

Research  and  development  for the six months  ended June 30,  2003 was $33,638
compared to $151,375  for the same period  prior year for a decrease of $117,737
that was due in part to a decrease in research and development  consulting costs
of ($113,272)  and support line of ($1,880).  Also  contributing  to the overall
decrease  was the  decline  in  salaries,  benefits  and  payroll  taxes  in the
aggregate of ($2,585).  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  32% for the six months  ending June 30,
2003 to $607,185 from $896,520 for the six months ending June 30, 2002. This was
principally  due to the decrease in expenses and debentures  incurred during the
period.

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

Revenues  for the three  months  ended June 30,  2003 of $260,338  versus  three
months ended June 30, 2002 of $189,996  increased $70,342 or 37%. The completion
of two SI-3000 projects attributed to the overall increase in revenue.  Software
and installation revenues increased $118,797. With the completion of the SI-3000


                                      -14-
<Page>

projects,  the cost of revenues also  increases.  Costs of revenue for the three
months  ended June 30, 2003 of $95,882  versus the three  months  ended June 30,
2002 of $13,688 increased $82,194. Maintenance revenues decreased $48,455 or 31%
during the three months ended June 30, 2003 from the three months ended June 30,
2002.  This is  attributable  to the decrease in software  maintenance  contract
dollar amount in 2003.

Costs of revenue and expenses  increased  116,852 or 19% during the three months
ended June 30, 2003 versus the three months  ended June 30,  2002.  As discussed
above,  cost of revenue  increased  $82,194 due to the  completion  of 2 SI-3000
projects.  General  and  administrative  expenses  increased  $104,943 or 44% to
$344,208 for the three  months  ended June 30, 2003 from  $239,265 for the three
months ended June 30, 2002. The judgment against the company by its landlord for
breaking its lease of $160,313 was offset by the reduction in salaries and other
payroll related  expenses,  travel expense,  telephone expense and rent expense.
Research  and  development  have also  contributed  to the  overall  decrease in
reducing consulting costs of ($62,273). Sales and Marketing increased $26,838 or
80% during the three months ended June 30, 2003 from the three months ended June
30, 2002. The addition of professional consulting and increased salary and other
related  payroll  costs account for the increase for the three months ended June
30, 2003  versus the three  months  ended June 30,  2002.  Depreciation  expense
decreased  ($6,155) due to the lack of asset  purchases in 2003. Also attributed
to the  decrease  are the expenses  related to the  debentures  incurred for the
three  months  ended June 30, 2003 and 2002.  Debenture  expenses  for the three
months  ended June 30, 2003 of $270,484  versus three months ended June 30, 2002
of $255,805  increased  $14,679.  Other income increased  $43,374 due to refunds
from overpayment from prior years.

The net loss for the Company increased $46,510 or 11% for the three months ended
June 30, 2003 to ($478,199)  from ($431,689) for the three months ended June 30,
2002.  This was  principally  due to the increase in sales and  marketing  costs
during the period.


                                      -15-
<Page>

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 $2,824,634 as
of June 30, 2003. These contractual  obligations,  along with the dates on which
such payments are due, are described below:

<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                   $   39,634          $   39,634          $        0
Notes Payable - Related Parties                   0                   0                   0
Convertible Debentures                    1,596,837           1,596,837                   0
Accounts Payable and Accrued
  Expenses                                1,188,163           1,188,163                   0
                                         ----------          ----------          ----------
Total Contractual Obligations            $2,824,634          $2,824,634          $        0
                                         ==========          ==========          ==========
</Table>

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

Net Cash Used In Operating Activities

Net cash used in operating activities for the six months ended June 30, 2003 and
2002 was ($389,596) and ($459,197), respectively. The decrease in cash used from
operating  activities  in the six months  ended  June 30,  2003  versus  2002 of
$69,601 was principally due to the decrease in net loss for the six months.

Net Cash Provided By (Used In) Investing Activities

Net cash  provided by  investing  activities  six months ended June 30, 2003 and
2002 was ($39) and $4,925  respectively,  reflecting  a change of  $4,886.  This
change is due to a reduction of restricted  cash ended June 30, 2003 as compared
to the same period prior year.



                                      -16-
<Page>

Net Cash Provided By Financing Activities

Net cash provided by financing  activities  was $390,014 and $61,153 for the six
months  ended June 30, 2003 and 2002,  respectively,  reflecting  an increase of
$328,861.  This  increase  is  primarily  due to  the  issuance  of  convertible
debentures in the amount of $500,000 net of issuance costs of $106,958.

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

The statements in this quarterly  report,  Form 10-QSB,  that are not historical
constitute "forward-looking statements". Such forward-looking statements involve
risks and  uncertainties  that may  cause the  actual  results,  performance  or
achievements  of the Company and its subsidiary to be materially  different from
any future  results,  performances or  achievements,  express or implied by such
forward-looking  statements.  These forward-looking statements are identified by
their  use  of  such  terms  and  phrases  as  "expects",   "intends",  "goals",
"estimates", "projects", "plans", "anticipates", "should", "future", "believes",
and "scheduled".

Item 1. Legal Proceedings

None during the period ending June 30, 2003.

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.


                                      -18-
<Page>

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

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  1,155,000  warrants were issued on October 1, 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)
$.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.  The warrants have an exercise price of $0.005 and
expire on September 30, 2008.

Item 3. Defaults Upon Senior Securities:

None.


                                      -19-
<Page>

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.

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-