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, 2004

                                       OR

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

        For the transition period from _______________ to _______________

                         Commission file number 0-21384

                        Digital Descriptor Systems, Inc.

             (Exact name of registrant as specified in its charter)

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

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

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

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

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X                      No
                              -

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

                                                      Outstanding at
                  Class of Common Stock               August 12, 2004
                  ---------------------               ------------------
                     $.001 par value                  174,180,645 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, 2004 (Unaudited)
                  and December 31, 2003

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

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

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

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

            Item 3.  Control and Procedures


PART II. - OTHER INFORMATION

         Item 1.  Legal Proceedings

         Item 2.  Changes in Securities and Use of Proceeds

         Item 3.  Defaults Upon Senior Securities

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

         Item 5. Other Information

         Item 6. Exhibits and Reports on Form 8-K

SIGNATURES


                                      -2-
<PAGE>


                          PART I. FINANCIAL INFORMATION

ITEM I. FINANCIAL STATEMENTS

                        DIGITAL DESCRIPTOR SYSTEMS, INC.
                                 BALANCE SHEETS

                                                     June 30      December 31
                                                       2004         2003
                                                    ----------   ----------
                                                    (Unaudited)

Assets
Current assets:
   Cash                                             $  151,495   $   51,264
   Restricted cash                                         545          593
   Accounts receivable, less allowance for
      uncollectible accounts of $34,550
      (unaudited) and $46,841 in
      2004 and 2003, respectively                       58,053      136,329
   Prepaid expenses                                     58,880       63,600
   Debt discount and deferred financing costs          380,169      300,430
                                                    ----------   ----------
Total current assets                                   649,142      552,216

   Deposits                                              1,730        1,730
                                                    ----------   ----------
Total assets                                        $  650,872   $  553,946
                                                    ==========   ==========

Liabilities and Shareholders' Deficiency
Current liabilities:
   Accounts payable                                 $  232,958   $  214,771
   Accrued expenses                                    277,717      306,029
   Accrued interest                                    491,425      353,214
   Due to officer and director                          10,430       55,620
   Deferred income                                     310,889      382,878
   Convertible debentures                            2,138,337    1,846,837
                                                    ----------   ----------
Total current liabilities                            3,461,756    3,159,349

Total liabilities                                   $3,461,756   $3,159,349
                                                    ----------   ----------


                                      -3-
<PAGE>

<TABLE>
<CAPTION>

                        DIGITAL DESCRIPTOR SYSTEMS, INC.
                           BALANCE SHEETS (continued)

                                                                               June 30         December 31
                                                                                 2004             2003
                                                                              ------------    ------------
                                                                              (Unaudited)

<S>                                                                          <C>              <C>
Shareholders' deficiency:
   Preferred Stock, $.01 par value, authorized shares -
     1,000,000; issued and outstanding - none                                           --              --
   Common Stock, $.001 par value, authorized shares -
     9,999,000,000; issued and outstanding shares - 145,958,423 at June 30,
     2004; authorized shares - 150,000,000; issued and
     outstanding shares - 115,958,423, at December 31, 2003                        145,958         115,958
   Additional paid-in capital                                                   17,934,600      17,627,600
   Accumulated deficit                                                         (20,891,442)    (20,348,961)
                                                                              ------------    ------------
Total shareholder's deficiency                                                  (2,810,884)     (2,605,403)
                                                                              ------------    ------------
Total liabilities and shareholders' deficiency                                $    650,872    $    553,946
                                                                              ============    ============

</TABLE>

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

                                      -4-
<PAGE>

<TABLE>
<CAPTION>

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


                                         Three Months Ended                Six Months Ended
                                      June 30           June 30         June 30         June 30
                                        2004             2003             2004            2003
                                   -------------    -------------    -------------    -------------
Revenues:
<S>                                <C>              <C>              <C>              <C>
   Software                        $       5,000    $      94,448    $      25,088    $     146,673
   Hardware                                   --            7,776            3,917           55,177
   Maintenance                            69,090          108,961          147,190          205,142
   Other                                      --           49,153              997           64,044
                                   -------------    -------------    -------------    -------------
                                          74,090          260,338          177,192          471,036

Costs and expenses:
   Cost of revenues                           19           95,882            4,967          119,108
   General and administrative            132,608          344,208          247,401          508,679
   Sales and marketing                    18,663           60,230           37,470          119,177
   Research and development                2,855           12,309           12,173           33,638
   Depreciation and amortization              --            2,150               --            5,747
   Interest and amortization of
       deferred debt costs               210,090          270,484          421,535          353,744
   Other (income) expense, net                --          (46,726)          (3,873)         (61,872)
                                   -------------    -------------    -------------    -------------
                                         364,235          738,537          719,673        1,078,221
                                   -------------    -------------    -------------    -------------
         Net loss                  $    (290,145)   $    (478,199)   $    (542,481)   $    (607,185)
                                   =============    =============    =============    =============

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

Weighted average number of
 common shares outstanding:
    Basic and diluted                145,958,423       96,530,244      144,969,412       81,311,081
                                   =============    =============    =============    =============

</TABLE>

    The accompanying notes are an integral part of these financial statements

                                      -5-
<PAGE>

<TABLE>
<CAPTION>

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

                                                                      Six Months Ended
                                                                   June 30       June 30
                                                                     2004         2003
                                                                   ---------    ---------
Cash flows from operating activities:
<S>                                                                <C>          <C>
Net loss                                                           ($542,481)   ($607,185)
Adjustments to reconcile net loss to net cash
   used in operating activities:
   Depreciation and amortization                                          --        5,747
   Amortization of deferred financing costs and debt discounts
          related to the issuance of warrants and the beneficial
          conversion feature of convertible debentures               283,325      269,174
    Bad debt expense                                                 (12,291)     (97,420)
    Gain on disposal of fixed asset                                       --       (6,833)
   Changes in operating assets and liabilities:
   Accounts receivable                                                90,567        3,109
   Inventory                                                              --      (12,950)
   Prepaid expenses, deposits and other assets                         4,720      115,372
   Accounts payable                                                   18,187      (11,479)
   Accrued expenses                                                  (28,312)     119,117
   Accrued interest                                                  138,211       84,496
   Accrued payroll and related withholdings                               --      (84,848)
   Deferred income                                                   (71,988)    (126,262)
                                                                   ---------    ---------
Net cash used in operating activities                               (120,062)    (349,962)


Cash flows from investing activities:
  Increase in restricted cash                                             48           39
                                                                   ---------    ---------
  Net cash provided by investing activities                               48           39

Cash flows from financing activities:
   Proceeds from issuance of convertible debentures                  226,935      393,042
    Repayment of convertible debenture                                (3,500)          --
    Due to officer and director                                       (3,190)     (39,634)

   Repayment of equipment loan                                            --       (3,028)
                                                                   ---------    ---------
Net cash provided by financing activities                            220,245      350,380
                                                                   ---------    ---------
Net increase in cash                                                 100,231          457
Cash at beginning of period                                           51,264       15,439
                                                                   ---------    ---------
Cash at end of period                                              $ 151,495    $  15,896

</TABLE>


                                      -6-
<PAGE>

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

                                                          Six Months Ended
                                                         June 30   June 30
                                                          2004       2003
                                                        --------   --------
Supplemental disclosure of cash flow information:

Cash paid during the period for:

     Interest                                           $     --   $     86
                                                        ========   ========
     Income Taxes                                       $  3,147   $     --
                                                        ========   ========

Supplemental disclosure of non-cash
 investing and financial activities:

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

Conversion of debentures into common stock              $     --   $  6,895
                                                        ========   ========

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

Conversion of liquidated damages into common stock      $     --   $  3,191
                                                        ========   ========

    The accompanying notes are an integral part of these financial statements


                                      -7-
<PAGE>

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

1.  BUSINESS

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

2. BASIS OF PRESENTATION

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

3. CONVERTIBLE DEBENTURES

During May 2004, the Company issued four convertible debentures for an aggregate
amount of $250,000 with simple interest at 12%. The debentures are due May 2006.
Interest shall be paid quarterly commencing June 2004. The holder shall have the
right to convert the principal  amount and interest due into common  stock.  The
conversion  price in effect on any  Conversion  Date  shall be the lesser of (1)
$.0045 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  2004,  the Company  issued two  convertible  debentures for an
aggregate  amount of $45,000 with simple interest at 12%. The debentures are due
February  2005.  Interest  shall be paid  quarterly  commencing  March 2004. The
holder  shall have the right to convert the  principal  amount and  interest due
into common stock.  The conversion  price in effect on any Conversion Date shall
be the  lesser of (1)  $.005  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.


                                      -8-
<PAGE>

4. RELATED PARTY TRANSACTIONS

For the year ended December 31, 2003, a director  provided  consulting  services
amounting  to $51,980.  As of June 30,  2004,  the company  owes to the director
$2,430 for back consulting fees and sundry expenses with no repayment terms.

The Company also owes the former  chief  executive  officer,  who is presently a
director,  $8,000 at June 30, 2004, for back payroll and sundry expenses with no
repayment  terms.  For the six month period  ended June 30,  2004,  the director
provided consulting services amounting to $27,000.

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

5. SUBSEQUENT EVENTS

During July 2004,  $35,000 of the  convertible  debentures  issued in  September
2001, were converted into 7,000,000  shares of common stock and 7,000,000 shares
of common stock were issued for liquidated  damages relating to the notes issued
December 2001.


                                      -9-
<PAGE>

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

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

Critical Accounting Policies

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

General

Financial Condition

We had net losses of $290,145  and  $478,199  during the three months ended June
30, 2004 and 2003,  respectively.  As of June 30, 2004, we had a cash balance in
the  amount  of  $151,495  and  current  liabilities  of  $3,461,756   including
obligations  of $10,430 and  $2,138,337  to officers and  convertible  debenture
holders,  respectively.  We do not have  sufficient cash or other assets to meet
our current  liabilities.  In order to meet those  obligations,  we will need to
raise  cash from the sale of  securities  or from  borrowings.  Our  independent
auditors have added an explanatory  paragraph to their audit opinions  issued in
connection with the fiscal year 2003 financial statements, which states that our
ability to  continue  as a going  concern  depends  upon our  ability to resolve
liquidity  problems,  principally  by obtaining  capital,  commencing  sales and
generating  sufficient  revenues  to become  profitable.  Our  ability to obtain
additional  funding will  determine our ability to continue as a going  concern.
Our financial  statements do not include any adjustments  that might result from
the outcome of this uncertainty.

Plan of Operations

The short-term objective of DDSI is the following:

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

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


                                      -10-
<PAGE>

DDSI's long-term objective is as follows:

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

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

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

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

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

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

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

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

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

Results of Operations

Six Months Ended June 30, 2004 Compared to the Six Months Ended June 30, 2003

Revenues for the six months ended June 30, 2004, of $177,192  decreased $293,844
or 62% from the six months  ended  June 30,  2003.  The  Company  generates  its
revenues through software licenses, hardware, post customer support arrangements
and other  services.  The decrease in the  Company's  revenue is attributed to a
decrease in software  maintenance contract dollar amount, a loss in client base,
a reduction in sales and marketing  staff and the lack of new product  offerings
to their clients.  Cost of revenue decreased  $114,141 or 96% and was reduced to
3% of total revenues from 25% in the same period a year earlier.

Costs and  expenses  decreased  $358,548 or 33% during the six months ended June
30, 2004,  versus the six months  ended June 30, 2003.  The increase in interest
and  amortization  of deferred  debt cost of $67,791 was offset by the  combined
reduction  in expenses  for all other areas of $426,339 for the six months ended
June 30,  2004 as  compared to 2003.  The costs of revenue  decreased  $114,141,
expenses for the general and administration department decreased $261,278, sales
and marketing department decreased $81,707,  research and development  decreased
$21,465,   depreciation   expense  decreased  $5,747  and  miscellaneous  income
decreased $57,999 for the six months ended June 30, 2004 as compared to 2003. In
keeping with the goal to  streamline  costs yet achieve a working  product,  the
Company  is  re-evaluating  its  current  development   strategy  and  resources
resulting in a cutback of expenses.


                                      -11-
<PAGE>

General and  Administrative  expenses for the six month  period  ending June 30,
2004, was $247,401 versus $508,679 for the same period prior year for a decrease
of $261,278  or 51%.  This  decrease  was mainly  attributable  to a decrease in
salaries and related payroll  expenses of $20,575,  rent of $207,888,  telephone
expense of $14,688, filing fees $21,974, vehicle expense 9,966 and miscellaneous
items for $13,187.  There was an increase in professional services of $27,000 to
offset the decrease.

Sales and Marketing  expenses  decreased $81,707 for the six months period ended
June 30, 2004,  from $119,177  (2003) to $37,470 (2004) or a 69% decrease.  This
decrease was mainly  attributable  to a decrease in  professional  consulting of
$42,350, a decrease in salaries, commissions,  benefits and payroll taxes in the
aggregate of $39,513, and an increase in miscellaneous items for $157.

Research and  development  for the six months  ended June 30, 2004,  was $12,173
compared to $33,638  for the same  period  prior year for a decrease of $21,465.
The decrease was due to the decline in salaries,  benefits and payroll  taxes in
the aggregate of $20,601 and a decline in miscellaneous expense $864.

The net loss for the Company  decreased  11% for the six months  ending June 30,
2004, to $542,481  from  $607,185 for the six months ending June 30, 2003.  This
was principally due to the decrease in both sales and expenses.

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

Revenues  for the three  months  ended June 30, 2004 were  $74,090  versus three
months ended June 30, 2003 of $260,338  decreased  $186,248 or 72%. In the three
months ended June 30, 2003, software,  hardware and other revenues reflected the
completion of two SI-3000  projects of $151,377.  There were no SI-3000 projects
completed  during the three months ended June 30, 2004. Costs of revenue for the
three months ended June 30, 2004 were $19 versus the three months ended June 30,
2003 of $95,882 decreased $95,863. This decrease is directly related to the lack
of completed SI-3000  projects.  Maintenance  revenues  decreased $39,871 or 37%
during the three months ended June 30, 2004 from the three months ended June 30,
2003.  This is  attributable  to the decrease in software  maintenance  contract
dollar amount and loss of customer base in 2004.

Cost of revenue and expenses  decreased  $95,863 or 100% during the three months
ended June 30, 2004 versus the three  months  ended June 30,  2003.  General and
administrative  expenses  decreased  $211,600 or 61 % to $132,608  for the three
months  ended June 30, 2004 from  $344,208  for the three  months ended June 30,
2003.  Research and development  costs for the three month period ended June 30,
2004  decreased  by $9,454  compared to the prior  period.  Sales and  marketing
decreased  $41,567 or 69% during the three  months  ended June 30, 2004 from the
three months ended June 30, 2003.  Depreciation  expense decreased $2,150 due to
the lack of asset purchases in 2004. Due to less issuances of debentures  during
the three  months ended June 30, 2004  compared to June 30,  2003,  interest and
amortization  of deferred debt cost decreased  from $270,484 to $210,090.  Other
income decreased $46,726.


                                      -12-
<PAGE>

The net loss for the  Company  decreased  $188,054  or 39% for the three  months
ended June 30, 2004 to $290,145  from  $478,199  for the three months ended June
30, 2003.  This was  principally  due to the decrease in sales and overall 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 contractual obligations of $3,150,867 as of June 30, 2004. These
contractual obligations, along with the dates on which such payments are due are
described below:

<TABLE>
<CAPTION>


Contractual Obligations                      Total               One Year or Less           More Than One Year
------------------------------------------------------- --------------------------- ---------------------------
<S>                                         <C>                         <C>                       <C>
Due to Related Parties                      $   10,430                  $   10,430                $          0
Convertible Debentures                       2,138,337                   2,138,337                           0
Accounts Payable and Accrued Expenses        1,002,100                   1,002,100                           0
Total Contractual Obligations              $ 3,150,867                 $ 3,150,867                $          0

</TABLE>

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

Net Cash Used in Operating Activities

Net cash used in operating activities for the six months ended June 30, 2004 and
2003 was $120,062  and  $349,962,  respectively.  The decrease in cash used from
operating  activities  in the six months  ended  June 30,  2004  versus  2003 of
$229,899 was  principally due to the decrease in net operating costs for the six
months.

Net Cash Provided By Investing Activities

Net cash  provided by  investing  activities  six months ended June 30, 2004 and
2003 was $48 and $39 respectively,  reflecting a change of $9. This reflected no
significant change in restricted cash.


                                      -13-
<PAGE>

Net Cash Provided By Financing Activities

Net cash provided by financing  activities was $220,245 and $350,380 for the six
months  ended June 30,  2004 and 2003,  respectively,  reflecting  a decrease of
$130,135.  This is  primarily  due to a decrease  in receipt  of  proceeds  from
issuance of  convertible  debentures  in the amount of $226,935  net of issuance
costs of $68,063.

Item 3.  Control and Procedures

(a)      Evaluation of Disclosure Controls and Procedures

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

(b)      Changes in Internal Controls

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


                                      -14-
<PAGE>

                           PART II. OTHER INFORMATION

Item 1.  Legal Proceedings

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

Item 2.  Changes in Securities and Use of Proceeds

During July 2004,  $35,000 of the  convertible  debentures  issued in  September
2001, were converted into 7,000,000 shares of common stock. and 7,000,000 shares
of common stock were issued for liquidated  damages relating to the notes issued
December 2001.

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

During  February  2004,  the Company  issued two  convertible  debentures for an
aggregate  amount of $45,000 with simple interest at 12%. The debentures are due
February  2005.  Interest  shall be paid  quarterly  commencing  March 2004. The
holder  shall have the right to convert the  principal  amount and  interest due
into common stock.  The conversion  price in effect on any Conversion Date shall
be the  lesser of (1)  $.005  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.

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) $.01 and (2) 50% 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.


                                      -15-
<PAGE>

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) $.01 and (2) 50% 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.

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 12%. 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) $.01 and (2) 50% 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,  $1,130 of the convertible  debentures  issued in March 2001, was
converted  into  5,650,000  shares of common  stock.  Also in April  $470 of the
convertible  debentures  issued in September 2001, were converted into 2,350,000
of common stock. In addition 6,000,000 shares of common stock were converted for
liquidated damages relating to the notes issued December 2001.

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

In June 2003, $1,093 of the convertible debentures issued in September 2001, was
converted  into  5,468,010  shares of  common  stock.  Additionally,  liquidated
damages  relating  to the  notes  issued  December  2001,  were  converted  into
1,011,250 shares of common stock.

On October 1, 2003, we entered into a Securities  Purchase  Agreement,  with two
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  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 DDS'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.


                                      -16-
<PAGE>

Item 3. Defaults Upon Senior Securities:

The  Company  is in  default  of  $1,591,837  of their  outstanding  debentures.
Although  the  debenture  holders  have not  pursued  their  rights  under  such
debentures, there can be no assurances that such rights will not be exercised.

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

During  February 2004, the Company filed a Preliminary  Proxy Statement with the
U. S.  Securities  and Exchange  Commission in order to increase the  authorized
shares of common stock to 9,999,000,000 from 150,000,000.

On June 17,  2004,  a special  shareholder's  meeting was held to vote the proxy
approved by the U.S.  Securities  and Exchange  Commission,  which asked for the
increase in authorized shares of common stock to 9,999,000,000 from 150,000,000.
The count of shares voted was  128,648,211,  over 88% of the outstanding  voting
stock of the company. The results of the voting indicated that 114,659,014 voted
FOR  the  increase  versus  13,849,627  AGAINST,  with  139,570  ABSTAINING.   A
Certificate  of Amendment to the  Certificate  of  Incorporation  increasing the
authorization  of stock  available  to be issued was filed and  accepted  by the
State of Delaware on June 24, 2004. A copy of the  Certificate  of Amendment and
the  Certification  issued by the Secretary of State for Delaware is included in
Item 6.


Item 5. Other Information

None

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

(a) Exhibits

Exhibit 3.1     Copy of the Certificate of Amendment to the Certificate of
                Incorporation, including Certification by State of Delaware.

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

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



                                      -17-
<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:  August 13, 2004    By:  /s/ ANTHONY SHUPIN
                                    -------------------------------------------
                                    Anthony Shupin
                                    (President, Chief Executive Officer,
                                    Acting Chief Financial Officer and Director)


      Date:  August 13, 2004    By: /s/ MICHAEL J. PELLEGRINO
                                    -------------------------------------------
                                    Michael J. Pellegrino
                                    (Director - Chairman)


      Date:  August 13, 2004    By: /s/ VINCENT MORENO
                                    -------------------------------------------
                                    Vincent Moreno.
                                    (Director)


      Date:  August 13, 2004    By: /s/ ROBERT GOWELL.
                                    -------------------------------------------
                                    Robert Gowell
                                    (Director)


                                      -18-