##### Table of Contents





UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)



|þ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ---------------------------------------------------------------------------------------

For the quarterly period ended June 30, 2009

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: 000-30241

DDi CORP.

(Exact name of registrant as specified in its charter)



|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|Delaware                                                       |  | 06-1576013                          
|(State or other jurisdiction of incorporation or organization) |  | (I.R.S. Employer Identification No.)

1220 N. Simon Circle

Anaheim, California 92806

(Address of principal executive offices) (Zip code)

(714) 688-7200

(Registrants telephone number, including area code)

Not Applicable

(Former name, former 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  þ    No   ̈

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File
required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes   ̈    No   ̈

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting
company. See the definitions of large accelerated filer, accelerated filer, and smaller reporting company in Rule 12b-2 of the Exchange Act). (Check one):



|                           |  |                      |  |                                               |  |                             
|-------------------------- |  | -------------------- |  | --------------------------------------------- |  | ----------------------------
|Large accelerated filer   ̈ |  | Accelerated filer  þ |  | Non-accelerated filer   ̈                      |  | Smaller reporting company   ̈
|                           |  |                      |  | (Do not check if a smaller reporting company) |  |                             

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the
Exchange Act).

Yes   ̈    No  þ

As of July 31, 2009, DDi Corp. had 19,791,594 shares of common stock, par value $0.001 per share,
outstanding.









---

##### Table of Contents

DDi CORP.

FORM 10-Q for the Quarterly Period Ended June 30, 2009

TABLE OF CONTENTS



|                               |  |                                                                                                           |  |   
|------------------------------ |  | --------------------------------------------------------------------------------------------------------- |  | --
|                               |  | PageNo.                                                                                                  
|PART I  FINANCIAL INFORMATION |  |                                                                                                          
|                               |  |                                                                                                          
|Item 1.                        |  | Financial Statements (Unaudited):                                                                         |  |   
|                               |  |                                                                                                          
|                               |  | Condensed Consolidated Balance Sheets as of June 30, 2009 and December 31, 2008                           |  | 1 
|                               |  |                                                                                                          
|                               |  | Condensed Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2009 and
2008 |  | 2 
|                               |  |                                                                                                          
|                               |  | Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2009 and 2008           |  | 3 
|                               |  |                                                                                                          
|                               |  | Notes to Condensed Consolidated Financial Statements                                                      |  | 4 
|                               |  |                                                                                                          
|Item 2.                        |  | Managements Discussion and Analysis of Financial Condition and Results of Operations                     |  | 10
|                               |  |                                                                                                          
|Item 3.                        |  | Quantitative and Qualitative Disclosures about Market Risk                                                |  | 18
|                               |  |                                                                                                          
|Item 4.                        |  | Controls and Procedures                                                                                   |  | 18
|                               | 
|PART II  OTHER INFORMATION    |  |                                                                                                          
|                               |  |                                                                                                          
|Item 1.                        |  | Legal Proceedings                                                                                         |  | 20
|                               |  |                                                                                                          
|Item 1A.                       |  | Risk Factors                                                                                              |  | 20
|                               |  |                                                                                                          
|Item 2.                        |  | Unregistered Sales of Equity Securities and Use of Proceeds                                               |  | 20
|                               |  |                                                                                                          
|Item 3.                        |  | Defaults Upon Senior Securities                                                                           |  | 20
|                               |  |                                                                                                          
|Item 4.                        |  | Submission of Matters to a Vote of Security Holders                                                       |  | 20
|                               |  |                                                                                                          
|Item 5.                        |  | Other Information                                                                                         |  | 20
|                               |  |                                                                                                          
|Item 6.                        |  | Exhibits                                                                                                  |  | 21
|                               | 
|Signatures                     |  | 22                                                                                                       



---

##### Table of Contents

PART IFINANCIAL INFORMATION



|Item 1. | Financial Statements
|------- | --------------------

DDi Corp.

Condensed Consolidated Balance Sheets

(In thousands, except per share data)

(Unaudited)



|                                                                                                                                                    |  |              |          |   |                  |   |          |  
|--------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------ | -------- | - | ---------------- | - | -------- | -
|                                                                                                                                                    |  | June 30,2009 |          |   | December 31,2008 |  
|ASSETS                                                                                                                                              |  |              |          |   |                  |   |          |  
|Current assets:                                                                                                                                     |  |              |          |   |                  |   |          |  
|Cash and cash equivalents                                                                                                                           |  | $            | 23,941   |   |                  | $ | 20,081   |  
|Accounts receivable, net                                                                                                                            |  |              | 19,674   |   |                  |   | 25,504   |  
|Inventories                                                                                                                                         |  |              | 13,806   |   |                  |   | 13,768   |  
|Prepaid expenses and other current assets                                                                                                           |  |              | 922      |   |                  |   | 620      |  
|                                                                                                                                                    |  |              |          |   |                  |   |          |  
|Total current assets                                                                                                                                |  |              | 58,343   |   |                  |   | 59,973   |  
|Property, plant and equipment, net                                                                                                                  |  |              | 26,092   |   |                  |   | 27,848   |  
|Intangible assets, net                                                                                                                              |  |              | 1,754    |   |                  |   | 2,134    |  
|Other assets                                                                                                                                        |  |              | 690      |   |                  |   | 825      |  
|                                                                                                                                                    |  |              |          |   |                  |   |          |  
|Total assets                                                                                                                                        |  | $            | 86,879   |   |                  | $ | 90,780   |  
|                                                                                                                                                    |  |              |          |   |                  |   |          |  
|LIABILITIES AND STOCKHOLDERS EQUITY                                                                                                                |  |              |          |   |                  |   |          |  
|Current liabilities:                                                                                                                                |  |              |          |   |                  |   |          |  
|Current maturities of long-term debt                                                                                                                |  | $            | 244      |   |                  | $ | 244      |  
|Accounts payable                                                                                                                                    |  |              | 8,162    |   |                  |   | 11,635   |  
|Accrued expenses and other current liabilities                                                                                                      |  |              | 7,474    |   |                  |   | 8,776    |  
|Income taxes payable                                                                                                                                |  |              | 499      |   |                  |   | 1,636    |  
|                                                                                                                                                    |  |              |          |   |                  |   |          |  
|Total current liabilities                                                                                                                           |  |              | 16,379   |   |                  |   | 22,291   |  
|Long-term debt                                                                                                                                      |  |              | 1,150    |   |                  |   | 1,272    |  
|Other long-term liabilities                                                                                                                         |  |              | 1,896    |   |                  |   | 2,113    |  
|                                                                                                                                                    |  |              |          |   |                  |   |          |  
|Total liabilities                                                                                                                                   |  |              | 19,425   |   |                  |   | 25,676   |  
|                                                                                                                                                    |  |              |          |   |                  |   |          |  
|Commitments and contingencies (Note 13)                                                                                                             |  |              |          |   |                  |   |          |  
|Stockholders equity:                                                                                                                               |  |              |          |   |                  |   |          |  
|Common stock$0.001 par value, 190,000 shares authorized, 22,738 shares issued and 19,791 shares outstanding at June 30, 2009 and
December 31, 2008 |  |              | 23       |   |                  |   | 23       |  
|Additional paid-in-capital                                                                                                                          |  |              | 246,726  |   |                  |   | 245,589  |  
|Treasury stock, at cost  2,947 shares held in treasury at June 30, 2009 and December 31, 2008                                                      |  |              | (16,323  | ) |                  |   | (16,323  | )
|Accumulated other comprehensive loss                                                                                                                |  |              | (88      | ) |                  |   | (354     | )
|Accumulated deficit                                                                                                                                 |  |              | (162,884 | ) |                  |   | (163,831 | )
|                                                                                                                                                    |  |              |          |   |                  |   |          |  
|Total stockholders equity                                                                                                                          |  |              | 67,454   |   |                  |   | 65,104   |  
|                                                                                                                                                    |  |              |          |   |                  |   |          |  
|Total liabilities and stockholders equity                                                                                                          |  | $            | 86,879   |   |                  | $ | 90,780   |  
|                                                                                                                                                    |  |              |          |   |                  |   |          |  

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



1



---

##### Table of Contents

DDi Corp.

Condensed Consolidated Statements of Operations

(In thousands, except per
share data)

(Unaudited)



|                                                        |  |                            |        |   |                          |   |        |      |  |   |        |   |  |   |        |  
|------------------------------------------------------- |  | -------------------------- | ------ | - | ------------------------ | - | ------ | ---- |  | - | ------ | - |  | - | ------ | -
|                                                        |  | Three Months EndedJune 30, |        |   | Six Months EndedJune 30, |  
|                                                        |  | 2009                       |        |   | 2008                     |   |        | 2009 |  |   | 2008   |  
|Net sales                                               |  | $                          | 37,177 |   |                          | $ | 51,188 |      |  | $ | 76,452 |   |  | $ | 98,540 |  
|Cost of goods sold                                      |  |                            | 30,498 |   |                          |   | 40,815 |      |  |   | 62,513 |   |  |   | 78,424 |  
|                                                        |  |                            |        |   |                          |   |        |      |  |   |        |   |  |   |        |  
|Gross profit                                            |  |                            | 6,679  |   |                          |   | 10,373 |      |  |   | 13,939 |   |  |   | 20,116 |  
|Operating expenses:                                     |  |                            |        |   |                          |   |        |      |  |   |        |   |  |   |        |  
|Sales and marketing                                     |  |                            | 2,829  |   |                          |   | 3,192  |      |  |   | 5,734  |   |  |   | 6,468  |  
|General and administrative                              |  |                            | 2,835  |   |                          |   | 3,332  |      |  |   | 6,259  |   |  |   | 7,170  |  
|Amortization of intangible assets                       |  |                            | 190    |   |                          |   | 1,340  |      |  |   | 380    |   |  |   | 2,679  |  
|Restructuring and other related charges                 |  |                            |       |   |                          |   | 82     |      |  |   |       |   |  |   | 267    |  
|                                                        |  |                            |        |   |                          |   |        |      |  |   |        |   |  |   |        |  
|Operating income                                        |  |                            | 825    |   |                          |   | 2,427  |      |  |   | 1,566  |   |  |   | 3,532  |  
|Interest expense                                        |  |                            | 197    |   |                          |   | 191    |      |  |   | 395    |   |  |   | 386    |  
|Interest income                                         |  |                            | (52    | ) |                          |   | (76    | )    |  |   | (108   | ) |  |   | (232   | )
|Other expense (income), net                             |  |                            | 121    |   |                          |   | (26    | )    |  |   | 76     |   |  |   | (113   | )
|                                                        |  |                            |        |   |                          |   |        |      |  |   |        |   |  |   |        |  
|Income before income tax expense                        |  |                            | 559    |   |                          |   | 2,338  |      |  |   | 1,203  |   |  |   | 3,491  |  
|Income tax expense                                      |  |                            | 125    |   |                          |   | 831    |      |  |   | 256    |   |  |   | 1,266  |  
|                                                        |  |                            |        |   |                          |   |        |      |  |   |        |   |  |   |        |  
|Net income                                              |  | $                          | 434    |   |                          | $ | 1,507  |      |  | $ | 947    |   |  | $ | 2,225  |  
|                                                        |  |                            |        |   |                          |   |        |      |  |   |        |   |  |   |        |  
|Net income per share:                                   |  |                            |        |   |                          |   |        |      |  |   |        |   |  |   |        |  
|Basic                                                   |  | $                          | 0.02   |   |                          | $ | 0.07   |      |  | $ | 0.05   |   |  | $ | 0.10   |  
|Diluted                                                 |  | $                          | 0.02   |   |                          | $ | 0.07   |      |  | $ | 0.05   |   |  | $ | 0.10   |  
|Weighted-average shares used in per share computations: |  |                            |        |   |                          |   |        |      |  |   |        |   |  |   |        |  
|Basic                                                   |  |                            | 19,715 |   |                          |   | 21,303 |      |  |   | 19,715 |   |  |   | 21,646 |  
|Diluted                                                 |  |                            | 19,803 |   |                          |   | 21,326 |      |  |   | 19,772 |   |  |   | 21,659 |  

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



2



---

##### Table of Contents

DDi Corp.

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)



|                                                                                  |  |                          |        |   |      |   |        |  
|--------------------------------------------------------------------------------- |  | ------------------------ | ------ | - | ---- | - | ------ | -
|                                                                                  |  | Six Months EndedJune 30, |       
|                                                                                  |  | 2009                     |        |   | 2008 |  
|CASH FLOWS FROM OPERATING ACTIVITIES:                                             |  |                          |        |   |      |   |        |  
|Net income                                                                        |  | $                        | 947    |   |      | $ | 2,225  |  
|Adjustments to reconcile net income to net cash provided by operating activities: |  |                          |        |   |      |   |        |  
|Depreciation                                                                      |  |                          | 4,093  |   |      |   | 5,629  |  
|Amortization of intangible assets                                                 |  |                          | 380    |   |      |   | 2,679  |  
|Amortization of debt issuance costs and discount                                  |  |                          | 52     |   |      |   | 51     |  
|Non-cash compensation                                                             |  |                          | 1,137  |   |      |   | 1,301  |  
|Other                                                                             |  |                          | 48     |   |      |   | 342    |  
|Changes in operating assets and liabilities:                                      |  |                          |        |   |      |   |        |  
|Accounts receivable                                                               |  |                          | 6,084  |   |      |   | (5,132 | )
|Inventories                                                                       |  |                          | 97     |   |      |   | (961   | )
|Prepaid expenses and other assets                                                 |  |                          | (199   | ) |      |   | 37     |  
|Accounts payable                                                                  |  |                          | (3,569 | ) |      |   | 1,200  |  
|Accrued expenses and other current liabilities                                    |  |                          | (1,561 | ) |      |   | 634    |  
|Income taxes payable                                                              |  |                          | (1,160 | ) |      |   | 278    |  
|                                                                                  |  |                          |        |   |      |   |        |  
|Net cash provided by operating activities                                         |  |                          | 6,349  |   |      |   | 8,283  |  
|                                                                                  |  |                          |        |   |      |   |        |  
|CASH FLOWS FROM INVESTING ACTIVITIES:                                             |  |                          |        |   |      |   |        |  
|Purchases of property and equipment                                               |  |                          | (2,271 | ) |      |   | (5,209 | )
|                                                                                  |  |                          |        |   |      |   |        |  
|Net cash used in investing activities                                             |  |                          | (2,271 | ) |      |   | (5,209 | )
|                                                                                  |  |                          |        |   |      |   |        |  
|CASH FLOWS FROM FINANCING ACTIVITIES:                                             |  |                          |        |   |      |   |        |  
|Principal payments on long-term debt                                              |  |                          | (122   | ) |      |   | (122   | )
|Repurchases of common stock including commissions                                 |  |                          |       |   |      |   | (5,789 | )
|                                                                                  |  |                          |        |   |      |   |        |  
|Net cash used in financing activities                                             |  |                          | (122   | ) |      |   | (5,911 | )
|                                                                                  |  |                          |        |   |      |   |        |  
|Effect of exchange rate changes on cash and cash equivalents                      |  |                          | (96    | ) |      |   | 180    |  
|                                                                                  |  |                          |        |   |      |   |        |  
|Net increase (decrease) in cash and cash equivalents                              |  |                          | 3,860  |   |      |   | (2,657 | )
|Cash and cash equivalents, beginning of period                                    |  |                          | 20,081 |   |      |   | 20,445 |  
|                                                                                  |  |                          |        |   |      |   |        |  
|Cash and cash equivalents, end of period                                          |  | $                        | 23,941 |   |      | $ | 17,788 |  
|                                                                                  |  |                          |        |   |      |   |        |  

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



3



---

##### Table of Contents

DDi Corp.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

NOTE 1. BASIS OF PRESENTATION AND DESCRIPTION OF BUSINESS

Basis of Presentation

The unaudited condensed consolidated financial statements include the accounts of DDi Corp.
and its wholly-owned subsidiaries. DDi Corp. and its subsidiaries are referred to as the Company or DDi. All intercompany transactions have been eliminated in consolidation.

In the opinion of management, the accompanying unaudited condensed consolidated financial statements and notes thereto contain all adjustments necessary
for a fair statement of the financial position of the Company as of June 30, 2009 and the results of its operations and cash flows for the three and six months ended June 30, 2009 and 2008, and such adjustments are of a normal recurring
nature. The results of operations for the three and six months ended June 30, 2009 are not necessarily indicative of results of operations to be expected for the full year.

The Company has prepared these financial statements pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information
and disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such regulations, although the Company believes the disclosures provided are
adequate to prevent the information presented from being misleading. The condensed consolidated balance sheet data as of December 31, 2008 was derived from audited financial statements, but does not include all disclosures required by
accounting principles generally accepted in the United States of America. This report on Form 10-Q for the quarter ended June 30, 2009 should be read in conjunction with the audited financial statements presented in DDis Annual Report on
Form 10-K for the year ended December 31, 2008.

We have evaluated subsequent events through July 31, 2009, the date of issuance
of the condensed consolidated financial statements.

Description of Business

DDi is a leading provider of time-critical, technologically-advanced printed circuit board (PCB) engineering and manufacturing services. The
Company specializes in engineering and fabricating complex multi-layer PCBs on a quick-turn basis, with lead times as short as 24 hours. DDi has approximately 1,000 customers in various market segments including communications and computing,
military and aerospace, industrial electronics, instrumentation, medical, and high-durability commercial markets. The Companys engineering capabilities and manufacturing facilities located in the United States and Canada, together with its
suppliers in Asia, enable it to respond to time-critical orders and technology challenges for its customers. DDi operates primarily in one geographical area, North America.

Recent Accounting Pronouncements

In June 2009, the Financial Accounting Standards Board
(FASB) issued Statement of Financial Accounting Standard (SFAS) No. 168, The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles, a replacement of FASB Statement
No. 162(SFAS 168). SFAS 168 establishes the FASB Accounting Standards Codification as the source of authoritative accounting principles recognized by the FASB to be applied by nongovernmental entities in the preparation of
financial statements in conformity with U.S. GAAP. SFAS 168 is effective for interim and annual periods ending after September 15, 2009. SFAS 168 does not change U.S. GAAP and will not have a material impact on the Companys condensed
consolidated financial statements.

In May 2009, the FASB issued SFAS No. 165, Subsequent Events (SFAS 165).
SFAS 165 establishes general standards of accounting for and disclosures of events that occur after the balance sheet date but before financial statements are issued or are available to be issued. Among other things, SFAS 165 requires the disclosure
of the date through which an entity has evaluated subsequent events and the basis for that date. The Company adopted the new disclosure requirements in its June 30, 2009 condensed consolidated financial statements.

In April 2009, the FASB issued FASB Staff Position FAS 107-1 and APB 28-1, Interim Disclosures about Fair Value of Financial Instruments
(FSP FAS 107-1 and APB 28-1). FSP FAS 107-1 and APB 28-1 requires fair value disclosures in both interim as well as annual financial statements in order to provide more timely information about the effects of current market conditions on
financial instruments. The Companys adoption of the provisions of FSP FAS 107-1 and APB 28-1 effective June 30, 2009 had no impact on the Companys condensed consolidated financial statements.



4



---

##### Table of Contents

DDi Corp.

Notes to Condensed Consolidated Financial Statements

(Unaudited)



NOTE 2. INVENTORIES

Inventories are stated at the lower of cost (determined on a first-in, first-out or average cost basis) or market and consisted of the following (in thousands):



|                |  |              |        |                  |   |       
|--------------- |  | ------------ | ------ | ---------------- | - | ------
|                |  | June 30,2009 |        | December 31,2008
|Raw materials   |  | $            | 6,094  |                  | $ | 6,144 
|Work-in-process |  |              | 4,627  |                  |   | 4,513 
|Finished goods  |  |              | 3,085  |                  |   | 3,111 
|                |  |              |        |                  |   |       
|Total           |  | $            | 13,806 |                  | $ | 13,768
|                |  |              |        |                  |   |       

NOTE 3. REVOLVING CREDIT FACILITY

Availability under the Companys $25 million revolving credit facility (the Credit Facility) with General Electric Capital Corporation is
based on various liquidity and borrowing base tests including the Companys eligible accounts receivable and inventories. The Companys wholly-owned operating subsidiaries are the borrowers under the Credit Facility. The Credit Facility is
guaranteed by DDi Corp. and all of its subsidiaries that are not borrowers under the Credit Facility. The Credit Facility is collateralized by the accounts receivable, inventories and other tangible and intangible personal property (other than
property, plant and equipment) of the borrowers, and by a pledge of the stock of the Companys subsidiaries, and expires in March 2010. Revolving credit advances under the Credit Facility bear interest at the prime rate (3.25% at June 30,
2009). The Company can elect to have any new revolving credit advances, or convert any outstanding revolving credit advances, in excess of $1.0 million and in increments of $500,000, made as a LIBOR-based loan with a term of one, two, or three
months at a rate of LIBOR plus 1.5%. The Credit Facility contains customary covenants including financial covenants regarding the Companys fixed charge ratios and capital expenditures if Liquidity, as defined in the agreement, falls below a
certain threshold. Through June 30, 2009, Liquidity has been above the financial covenant measurement threshold since obtaining the Credit Facility. There are also negative covenants regarding incurrence of additional debt, liquidation, merger
or asset sales or changes in the Companys business. The Credit Facility restricts the Companys ability to pay cash dividends on its common stock and restricts its subsidiaries ability to pay dividends to the Company without the
lenders consent. As of June 30, 2009, the Company was in compliance with all required covenants.

The available borrowing
capacity under the Credit Facility was approximately $13.3 million as of June 30, 2009 and no amounts were outstanding.

NOTE 4. LONG-TERM
DEBT

The Company has a term loan mortgage on its Ohio facility. The loan is secured by the Ohio facilitys real property. The note
matures in April 2015, bears interest at LIBOR plus 1.5%, and has monthly principal payments of approximately $20,000 plus accrued interest. At June 30, 2009 and December 31, 2008, the effective interest rate of the term loan was 1.82% and
2.93%, respectively, and the principal balance was $1.4 million and $1.5 million, respectively.



5



---

##### Table of Contents

DDi Corp.

Notes to Condensed Consolidated Financial Statements

(Unaudited)



NOTE 5. PRODUCT WARRANTY

The Company records warranty expense at the time revenue is recognized and maintains a warranty accrual for estimated future warranty obligations based upon the relationship between historical sales volumes and
anticipated costs. Factors that affect the warranty liability include the number of units sold, historical and anticipated rates of warranty claims and the estimated cost of repair. Management assesses the adequacy of the warranty accrual each
quarter. To date, actual warranty claims and costs have been consistent with the Companys estimates. The changes in the Companys warranty accrual were as follows (in thousands):



|                                    |  |                            |        |   |                          |   |        |      |  |   |        |   |  |   |        |  
|----------------------------------- |  | -------------------------- | ------ | - | ------------------------ | - | ------ | ---- |  | - | ------ | - |  | - | ------ | -
|                                    |  | Three Months EndedJune 30, |        |   | Six Months EndedJune 30, |  
|                                    |  | 2009                       |        |   | 2008                     |   |        | 2009 |  |   | 2008   |  
|Beginning balance                   |  | $                          | 790    |   |                          | $ | 746    |      |  | $ | 805    |   |  | $ | 750    |  
|Warranties issued during the period |  |                            | 1,001  |   |                          |   | 1,277  |      |  |   | 2,128  |   |  |   | 2,059  |  
|Warranty expenditures               |  |                            | (1,014 | ) |                          |   | (1,183 | )    |  |   | (2,156 | ) |  |   | (1,969 | )
|                                    |  |                            |        |   |                          |   |        |      |  |   |        |   |  |   |        |  
|Ending balance                      |  | $                          | 777    |   |                          | $ | 840    |      |  | $ | 777    |   |  | $ | 840    |  
|                                    |  |                            |        |   |                          |   |        |      |  |   |        |   |  |   |        |  

NOTE 6. INCOME TAXES

The Company adopted the provisions of FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes-an interpretation of FASB Statement No. 109(FIN 48), on January 1, 2007.
The Company had $1.0 million and $921,000 of total gross unrecognized tax benefits at June 30, 2009 and December 31, 2008, respectively. If recognized in future periods there would be a favorable affect of $1.0 million to the effective tax
rate. Management anticipates a decrease of approximately $600,000 in the tax contingency reserve during the remainder of 2009. This anticipated decrease has two primary components: (i) approximately $285,000 due to statute expirations and
(ii) approximately $334,000 associated with settlements.

The Company files income tax returns in the U.S. federal jurisdiction,
various state jurisdictions and Canada. The Company has substantially concluded all U.S. federal income tax matters for years through 2004. Canadian income tax matters have been examined through 2004 with 2005 through 2007 currently under
examination by the Canadian Revenue Agency. State jurisdictions that remain subject to examination range from 2002 to 2008.

The
Companys effective income tax rate differs from the U.S. federal statutory tax rate of 35% primarily as a result of the mix of earnings between tax jurisdictions, research and development credits, state income taxes and its continuous
evaluation of the realization of its deferred tax assets and uncertain tax positions.

Effective January 1, 2009, due to the adoption
of SFAS No. 141(revised 2007), Business Combinations,any reduction of the U.S. valuation allowance that was related to net deferred tax assets that were in existence as of applying fresh-start accounting and any adjustments to uncertain
tax positions for years prior to the Companys emergence from bankruptcy in 2003 will now be recognized as a U.S. tax benefit as opposed to a reduction of goodwill and additional-paid-in capital as was done in the past.

NOTE 7. STOCK-BASED COMPENSATION

Stock Options

During the three months ended June 30, 2009, 135,000 stock options were granted to Company directors and a key employee with a
grant date fair value of $1.38 per option. The options granted to Company directors fully vest after one year from the date of grant and the options granted to the key employee vest over three years in equal installments commencing one year after
the date of grant. As of June 30, 2009, the total compensation cost related to all outstanding non-vested stock options not yet recognized was $790,000, net of estimated forfeitures. This cost will be amortized on a straight-line basis over the
remaining weighted-average period of approximately 1.1 years.

Restricted Stock

There were no grants of restricted stock during the three and six months ended June 30, 2009. As of this date, the total compensation cost related to
all outstanding non-vested restricted stock awards not yet recognized was $1.5 million, net of estimated forfeitures. This cost will be amortized on a straight-line basis over the remaining weighted-average period of approximately 2.1 years.



6



---

##### Table of Contents

DDi Corp.

Notes to Condensed Consolidated Financial Statements

(Unaudited)



Stock-based Compensation Expense

The following table sets forth expense related to stock-based compensation (in thousands):



|                                    |  |                            |     |                          |   |      |  |      |       |  |   |      
|----------------------------------- |  | -------------------------- | --- | ------------------------ | - | ---- |  | ---- | ----- |  | - | -----
|                                    |  | Three Months EndedJune 30, |     | Six Months EndedJune 30,
|                                    |  | 2009                       |     | 2008                     |   | 2009 |  | 2008
|Non-cash compensation expense:      |  |                            |     |                          |   |      |  |      |       |  |   |      
|Cost of goods sold                  |  | $                          | 135 |                          | $ | 113  |  | $    | 274   |  | $ | 242  
|Sales and marketing expenses        |  |                            | 92  |                          |   | 70   |  |      | 180   |  |   | 140  
|General and administrative expenses |  |                            | 290 |                          |   | 468  |  |      | 683   |  |   | 919  
|                                    |  |                            |     |                          |   |      |  |      |       |  |   |      
|Total non-cash compensation expense |  | $                          | 517 |                          | $ | 651  |  | $    | 1,137 |  | $ | 1,301
|                                    |  |                            |     |                          |   |      |  |      |       |  |   |      

NOTE 8. STOCK REPURCHASE PROGRAM

The Companys Board of Directors (the Board) previously authorized a common stock repurchase program of up to 3,000,000 shares of the
Companys common stock in the open market at prevailing market prices or in privately-negotiated transactions. In February 2009, the Board amended the stock repurchase program to increase the amount of shares of common stock authorized to be
repurchased by up to an additional $10 million worth of shares. The stock repurchase program is subject to applicable legal and regulatory requirements and obtaining the consent of the lender of the Companys Credit Facility. If the Company is
unable to obtain the lenders consent, it would be restricted from repurchasing the additional $10 million worth of shares authorized. The stock repurchase authorization does not have an expiration date, and the stock repurchase program may be
modified or discontinued at any time. The Company will continue to review the value in repurchasing shares after considering its cash levels and operating needs as well as other uses for its cash that could create greater shareholder value.

No shares were repurchased during the six months ended June 30, 2009. As of June 30, 2009, the Company had repurchased a total
of 2,946,986 shares since the inception of the program.

NOTE 9. SEGMENT REPORTING

Based on evaluation of the Companys financial information, management believes that the Company operates in one reportable segment related to the
design, development, manufacture and test of complex PCBs. Since early 2005, the Company has operated primarily in one geographical area, North America. Revenues are attributed to the country in which the customer buying the product is located.

The following table summarizes net sales by geographic area (in thousands):



|                 |  |                            |        |                          |   |        |  |      |        |  |   |       
|---------------- |  | -------------------------- | ------ | ------------------------ | - | ------ |  | ---- | ------ |  | - | ------
|                 |  | Three Months EndedJune 30, |        | Six Months EndedJune 30,
|                 |  | 2009                       |        | 2008                     |   | 2009   |  | 2008
|Net sales:       |  |                            |        |                          |   |        |  |      |        |  |   |       
|North America(1) |  | $                          | 34,851 |                          | $ | 46,163 |  | $    | 71,251 |  | $ | 89,869
|Asia             |  |                            | 1,744  |                          |   | 4,582  |  |      | 3,818  |  |   | 7,838 
|Other            |  |                            | 582    |                          |   | 443    |  |      | 1,383  |  |   | 833   
|                 |  |                            |        |                          |   |        |  |      |        |  |   |       
|Total            |  | $                          | 37,177 |                          | $ | 51,188 |  | $    | 76,452 |  | $ | 98,540
|                 |  |                            |        |                          |   |        |  |      |        |  |   |       



|(1) | The majority of sales in North America are
to customers located in the United States.
|--- | -------------------------------------------------------------------------------------



7



---

##### Table of Contents

DDi Corp.

Notes to Condensed Consolidated Financial Statements

(Unaudited)



NOTE 10. NET INCOME PER SHARE

Effective January 1, 2009, the Company adopted FASB Staff Position 03-6-1, Determining Whether Instruments Granted in Share-Based Payment Transactions are Participating Securities (FSP EITF
03-6-1). Under FSP EITF 03-6-1, unvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are participating securities and shall be included in the computation of
earnings per share pursuant to the two-class method as described in SFAS No. 128, Earnings Per Share.The Companys adoption of FSP EITF 03-6-1 had no material impact on its consolidated financial statements.

Basic net income per share is computed by dividing the net income for the period by the weighted-average number of common shares outstanding during the
period. Diluted net income per share is computed by dividing the net income for the period by the weighted-average number of common and common equivalent shares outstanding during the period, if dilutive. The dilutive effect of outstanding options
and restricted stock is reflected in diluted earnings per share by application of the treasury stock method, which includes consideration of share-based compensation required under SFAS No. 123R, Share-Based Payment.

The following table sets forth the calculation of basic and diluted net income per share (in thousands, except per share amounts):



|                                                              |  |                            |        |                          |   |        |  |      |        |  |   |       
|------------------------------------------------------------- |  | -------------------------- | ------ | ------------------------ | - | ------ |  | ---- | ------ |  | - | ------
|                                                              |  | Three Months EndedJune 30, |        | Six Months EndedJune 30,
|                                                              |  | 2009                       |        | 2008                     |   | 2009   |  | 2008
|Weighted-average shares of common stock outstanding - basic   |  |                            | 19,715 |                          |   | 21,303 |  |      | 19,715 |  |   | 21,646
|Weighted common stock equivalents                             |  |                            | 88     |                          |   | 23     |  |      | 57     |  |   | 13    
|                                                              |  |                            |        |                          |   |        |  |      |        |  |   |       
|Weighted-average shares of common stock outstanding - diluted |  |                            | 19,803 |                          |   | 21,326 |  |      | 19,772 |  |   | 21,659
|                                                              |  |                            |        |                          |   |        |  |      |        |  |   |       
|Net income                                                    |  | $                          | 434    |                          | $ | 1,507  |  | $    | 947    |  | $ | 2,225 
|                                                              |  |                            |        |                          |   |        |  |      |        |  |   |       
|Net income per share - basic and diluted                      |  | $                          | 0.02   |                          | $ | 0.07   |  | $    | 0.05   |  | $ | 0.10  
|                                                              |  |                            |        |                          |   |        |  |      |        |  |   |       

For the three and six months ended June 30, 2009, common shares issuable upon exercise of
outstanding stock options and vesting of restricted stock of 2,630,856 and 2,662,185, respectively, were excluded from the diluted net income per share calculation as their impact would have been anti-dilutive.

For the three and six months ended June 30, 2008, common shares issuable upon exercise of outstanding stock options and the vesting of restricted
stock of 2,263,510 and 2,271,954, respectively, were excluded from the diluted net income per share calculation as their impact would have been anti-dilutive.

NOTE 11. COMPREHENSIVE INCOME

SFAS No. 130, Reporting Comprehensive Income, establishes requirements for
reporting and disclosure of comprehensive income and its components. Comprehensive income includes unrealized holding gains and losses and other items that have previously been excluded from net income and reflected instead in stockholders
equity. The following table summarizes the Companys comprehensive income (in thousands):



|                                         |  |                            |     |                          |   |       |  |      |       |  |   |       |  
|---------------------------------------- |  | -------------------------- | --- | ------------------------ | - | ----- |  | ---- | ----- |  | - | ----- | -
|                                         |  | Three Months EndedJune 30, |     | Six Months EndedJune 30, |  
|                                         |  | 2009                       |     | 2008                     |   | 2009  |  | 2008 |      
|Net income                               |  | $                          | 434 |                          | $ | 1,507 |  | $    | 947   |  | $ | 2,225 |  
|Other comprehensive income:              |  |                            |     |                          |   |       |  |      |       |  |   |       |  
|Foreign currency translation adjustments |  |                            | 366 |                          |   | 29    |  |      | 266   |  |   | (42   | )
|                                         |  |                            |     |                          |   |       |  |      |       |  |   |       |  
|Comprehensive income                     |  | $                          | 800 |                          | $ | 1,536 |  | $    | 1,213 |  | $ | 2,183 |  
|                                         |  |                            |     |                          |   |       |  |      |       |  |   |       |  

NOTE 12. FAIR VALUE MEASUREMENTS

On January 1, 2008, the Company adopted the provision of SFAS No. 157, Fair Value Measurements(SFAS 157), for applying fair
value measurements to assets and liabilities reported in the financial statements at fair value on a recurring basis. SFAS 157 establishes a valuation hierarchy for disclosure of the inputs to valuation used to measure fair value. This hierarchy
prioritizes the inputs into three broad levels as follows:

Level 1: Quoted market prices in active markets for identical assets or
liabilities.



8



---

##### Table of Contents

DDi Corp.

Notes to Condensed Consolidated Financial Statements

(Unaudited)



Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data.

Level 3: Unobservable inputs that are not corroborated by market data.

A financial assets or liabilitys classification within the hierarchy is determined based on the lowest level input that is significant to the
fair value measurement. As of June 30, 2009, the Companys financial assets and financial liabilities that were measured at fair value on a recurring basis were comprised solely of money market deposits. The Company invests excess cash
from its cash depository accounts in highly liquid money market accounts and reflects these amounts within cash and cash equivalents on the consolidated balance sheet at a net value of 1:1 for each dollar invested.

The fair value of the Companys cash equivalents was $21.4 million and $16.3 million as of June 30, 2009 and December 31, 2008,
respectively, and was based on quoted prices in active markets for identical assets (Level 1 input).

Effective January 1, 2009, the
Company adopted SFAS 157 for all nonfinancial assets and liabilities that are measured at fair value on a non-recurring basis, such as identifiable intangible assets. The adoption of SFAS 157 for nonfinancial assets and liabilities that are measured
at fair value on a non-recurring basis did not impact the Companys financial position or results of operations for the three and six months ended June 30, 2009, and the Company does not expect the adoption to have a material impact on the
amounts reported in its consolidated financial statements in future periods.

NOTE 13. COMMITMENTS AND CONTINGENCIES

Litigation

The Company is involved from time
to time in litigation concerning claims arising out of the Companys operations in the normal course of business. Management does not believe any current legal claims or litigation as of June 30, 2009 will have a material adverse effect on
the Companys financial condition, results of operations or cash flows, and the Company has not recorded any loss contingencies at June 30, 2009.

Leases

On May 1, 2009, Dynamic Details, Inc., the Companys wholly-owned operating subsidiary, entered
into agreements with the Swenson Family Limited Partnership and EMC Associates, L.P. to amend the real property leases covering the Companys Anaheim manufacturing facility and corporate headquarters. The amendments extend the lease terms for
the premises until September 30, 2012. The leases cover approximately 90,000 square feet, with an aggregate rent of approximately $59,000 per month beginning October 1, 2009.



9



---

##### Table of Contents

|Item 2. | Managements Discussion and Analysis of Financial Condition and Results of Operations.
|------- | --------------------------------------------------------------------------------------

The following is a discussion of the financial condition and results of operations for our fiscal quarter and year to date period ended June 30, 2009. As used herein, the Company, we,
us, or our means DDi Corp. and its wholly-owned subsidiaries. This discussion and analysis should be read in conjunction with Managements Discussion and Analysis of Financial Condition and Results of Operations set
forth in DDi Corp.s Annual Report on Form 10-K for the year ended December 31, 2008.

Some of the statements in this section contain
forward-looking statements regarding our assumptions, projections, expectations, targets, intentions or beliefs about future events, which involve risks and uncertainties. All statements other than statements of historical facts included in this
section relating to expectation of future financial performance, continued growth, changes in economic conditions or capital markets and changes in customer usage patterns and preferences, are forward-looking statements. In some cases, you can
identify forward-looking statements by terms such as may, will, should, expect, plan, intend, forecast, anticipate, believe, estimate, predict, potential, continue or the negative of these terms or other comparable terminology. The forward-looking
statements contained in this section involve known and unknown risks, uncertainties and situations that may cause our or our industrys actual results, level of activity, performance or achievements to be materially different from any future
results, levels of activity, performance or achievements expressed or implied by these statements. Factors that might cause actual events or results to differ materially from those indicated by these forward-looking statements may include the
matters listed under Risk Factors in Item 1A in our Annual Report on Form 10-K for the fiscal year ended December 31, 2008 including, but not limited to, changes in general economic conditions in the markets in which we may
compete and fluctuations in demand in the electronics industry; increased competition; increased costs; our ability to retain key members of management; our ability to address changes to environmental laws and regulations; risks associated with
acquisitions; adverse state, federal or foreign legislation or regulation or adverse determinations by regulators; and other factors identified from time to time in our filings with the U.S. Securities and Exchange Commission (SEC).

Any forward-looking statement speaks only as of the date on which such statement is made, and, except as required by law, we undertake no obligation to
update any forward-looking statement to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of unanticipated events. New factors emerge from time to time, and it is not possible for management
to predict all such factors.

Our Company

We provide time-critical, technologically-advanced printed circuit board (PCB) engineering and manufacturing services. We specialize in engineering and fabricating complex multi-layer PCBs on a quick-turn basis, with lead
times as short as 24 hours, and on manufacturing products with high levels of complexity and reliability with low-to-moderate production volumes. We have approximately 1,000 PCB customers in various market segments including communications,
computing, military/aerospace, industrial electronics, instrumentation, medical, and high-durability commercial markets. Our customers include both original equipment manufacturers (OEMs), electronic manufacturing services providers, and
military/aerospace companies. With such a broad customer base and approximately 40 to 50 new PCB designs tooled per day, we have accumulated significant process and engineering expertise. Our core strength is developing innovative, high-performance
solutions for customers during the engineering, test and launch phases of their new electronic product development. Our entire organization is focused on rapidly and reliably filling complex customer orders and building long-term customer
relationships. Our engineering capabilities and manufacturing facilities located in the United States and Canada, together with our suppliers in Asia, enable us to respond to time-critical orders and technology challenges for our customers.

Industry Overview

Printed circuit
boards are a fundamental component of virtually all electronic equipment. A PCB is comprised of layers of laminate and copper and contains patterns of electrical circuitry to connect electronic components. The level of PCB complexity is determined
by several characteristics, including size, layer count, density, materials and functionality. High-end commercial and military/aerospace equipment manufacturers require complex PCBs fabricated with higher layer counts, greater density and advanced
materials, and demand highly complex and sophisticated manufacturing capabilities. By contrast, other PCBs, such as those used in non-wireless consumer electronic products, are generally less complex and have less sophisticated manufacturing
requirements.



10



---

##### Table of Contents

We see several significant trends within the PCB manufacturing industry, including:



| |  |  | Short product life cycles for electronics.Rapid advances in technology are significantly shortening product life-cycles and placing increased pressure
on OEMs to develop new products in shorter periods of time. In response to these pressures, OEMs look to PCB manufacturers to offer design and engineering support and quick-turn manufacturing services to reduce time to market. Many OEMs, in an
effort to increase electronic supply chain efficiency, work with a small number of technically qualified suppliers that have sophisticated manufacturing expertise and are able to offer a broad range of PCB products.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Increasing complexity of electronic equipment.OEMs are continually designing more complex and higher performance electronic equipment, which requires
sophisticated PCBs that accommodate higher signal speeds and frequencies and increased component densities and operating temperatures. In turn, OEMs rely on PCB manufacturers that can provide advanced engineering and manufacturing services early in
the new product development cycle. OEMs are also requiring more lead-free materials and other green products which add to the complexity of the materials utilized in the manufacturing of PCBs.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Increasing demand for military and aerospace products.The military/aerospace market is characterized by time-consuming and complex certification processes,
long product life cycles, and a unique combination of demand for leading-edge technology with extremely high reliability and durability. An increased focus on incorporating technology in products for reconnaissance and intelligence combined with
continued spending on military communications, aerospace, and weapons systems applications are anticipated to drive steady end-market growth. Success in the military/aerospace market is generally achieved only after manufacturers demonstrate the
long-term ability to pass extensive OEM and government certification processes, numerous product inspections, audits for quality and performance, and extensive administrative requirements associated with participation in government programs. Export
controls represent a barrier to entry for international competition as they restrict the overseas export of defense-related materials, services, and sensitive technologies that are associated with government programs. In addition, the complexity of
the end products serves as a barrier to entry to potential new suppliers.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Increased demand volatility in commercial end-markets.As a result of the continued downturn in the global economy, demand for PCBs from the commercial
sector, including the communications, computing, industrial electronics, and instrumentation markets, continues to be volatile. Companies operating in these industries, including existing or potential DDi customers, are experiencing deterioration in
their businesses, which in turn may cause them to delay or cancel orders from PCB manufacturers. It is still unclear when this downward trend will begin to abate but, until it does, continued demand volatility and softness in the commercial
end-markets is expected.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Shifting of high volume production to Asia.Asian-based PCB manufacturers have been able to capitalize on lower labor costs and to increase their market
share in the production of PCBs used in higher-volume consumer electronics applications, such as personal computers and cell phones. Asian-based manufacturers have generally been unable to meet the lead time requirements for the production of
complex PCBs on a quick-turn basis.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Results of Operations for the Three Months Ended June 30, 2009 Compared to the Three Months
Ended June 30, 2008

The following tables set forth select data from our Condensed Consolidated Statements of Operations (in
thousands):



|                                          |  |                            |        |   |          |   |        |          |  |   |         |   |  |       |   
|----------------------------------------- |  | -------------------------- | ------ | - | -------- | - | ------ | -------- |  | - | ------- | - |  | ----- | --
|                                          |  | Three Months EndedJune 30, |        |   | $ Change |   |        | % Change | 
|                                          |  | 2009                       |        |   | 2008     |   |        |         
|Net sales                                 |  | $                          | 37,177 |   |          | $ | 51,188 |          |  | $ | (14,011 | ) |  | (27.4 | )%
|Cost of goods sold                        |  |                            | 30,498 |   |          |   | 40,815 |          |  |   | (10,317 | ) |  | (25.3 | )%
|                                          |  |                            |        |   |          |   |        |          |  |   |         |   |  |       |   
|Gross profit                              |  |                            | 6,679  |   |          |   | 10,373 |          |  |   | (3,694  | ) |  | (35.6 | )%
|Gross profit as a percentage of net sales |  |                            | 18.0   | % |          |   | 20.3   | %        |  |   |         |   |  |       |   



11



---

##### Table of Contents

Net Sales

Net sales are derived from the engineering and manufacture of complex, technologically-advanced multi-layer PCBs.

Net sales
decreased $14.0 million, or 27.4%, for the second quarter of 2009 compared to the second quarter of 2008. The decrease in net sales was primarily due to a decline in customer demand related to general economic conditions. While net sales decreased
in a number of our markets, we experienced continued growth in the military/aerospace market, and this market grew as a percentage of total net sales to approximately 33% for the second quarter of 2009 compared to approximately 19% for the second
quarter of 2008.

Gross Profit

Gross
profit for the second quarter of 2009 was $6.7 million, or 18.0% of net sales, compared to $10.4 million, or 20.3% of net sales, for the same period in 2008. The decrease in gross profit was primarily due to less efficient absorption of fixed costs
on lower net sales.

Non-cash Compensation Expense



|                                    |  |                            |     |      |   |    
|----------------------------------- |  | -------------------------- | --- | ---- | - | ---
|                                    |  | Three Months EndedJune 30,
|                                    |  | 2009                       |     | 2008
|Non-cash compensation expense:      |  |                            |     |      |   |    
|Cost of goods sold                  |  | $                          | 135 |      | $ | 113
|Sales and marketing expenses        |  |                            | 92  |      |   | 70 
|General and administrative expenses |  |                            | 290 |      |   | 468
|                                    |  |                            |     |      |   |    
|Total non-cash compensation expense |  | $                          | 517 |      | $ | 651
|                                    |  |                            |     |      |   |    

Non-cash compensation expense related to stock awards was recorded in accordance with the fair
value recognition provisions of Statement of Financial Accounting Standards (SFAS) No. 123R, Share-Based Payment (SFAS 123R).

Sales and Marketing Expenses



|                             |  |                            |       |   |          |   |       |          |  |   |      |   |  |       |   
|---------------------------- |  | -------------------------- | ----- | - | -------- | - | ----- | -------- |  | - | ---- | - |  | ----- | --
|                             |  | Three Months EndedJune 30, |       |   | $ Change |   |       | % Change | 
|                             |  | 2009                       |       |   | 2008     |   |       |         
|Sales and marketing expenses |  | $                          | 2,829 |   |          | $ | 3,192 |          |  | $ | (363 | ) |  | (11.4 | )%
|Percentage of net sales      |  |                            | 7.6   | % |          |   | 6.2   | %        |  |   |      |   |  |       |   

Sales and marketing expenses decreased by $363,000, or 11.4%, for the second quarter of 2009
compared to the second quarter of 2008. The dollar decrease was primarily due to lower commissions and management incentives on reduced sales levels. The increase in sales and marketing expenses as a percentage of net sales was primarily due to the
lower sales levels.

General and Administrative Expenses



|                                    |  |                            |       |   |          |   |       |          |  |   |      |   |  |       |   
|----------------------------------- |  | -------------------------- | ----- | - | -------- | - | ----- | -------- |  | - | ---- | - |  | ----- | --
|                                    |  | Three Months EndedJune 30, |       |   | $ Change |   |       | % Change | 
|                                    |  | 2009                       |       |   | 2008     |   |       |         
|General and administrative expenses |  | $                          | 2,835 |   |          | $ | 3,332 |          |  | $ | (497 | ) |  | (14.9 | )%
|Percentage of net sales             |  |                            | 7.6   | % |          |   | 6.5   | %        |  |   |      |   |  |       |   

General and administrative expenses decreased by $497,000, or 14.9%, for the second quarter of
2009 compared to the second quarter of 2008. The dollar decrease was primarily due to lower compensation expense driven by continued streamlining and centralization of administrative functions, as well as lower non-cash compensation expense and
management incentives. The increase in general and administrative expenses as a percentage of net sales was primarily due to the lower sales levels.



12



---

##### Table of Contents

Amortization of Intangible Assets

Amortization of intangible assets in 2009 relates to customer relationships identified in connection with the acquisition of Sovereign Circuits, Inc. in the fourth quarter of 2006. These intangibles are being
amortized over their estimated useful life of five years resulting in $190,000 of amortization expense per quarter through October 2011. The decrease in amortization expense from $1.3 million in the second quarter of 2008 is due to the customer
relationships identified during the allocation of the reorganized value of the Company subsequent to our emergence from bankruptcy in December 2003 becoming fully amortized in the fourth quarter of 2008.

Restructuring and Other Related Charges

The
restructuring and other related charges in the second quarter of 2008 of $82,000 were the result of the fees and expenses related to litigation with the landlord of two buildings in connection with the closing of our Arizona facility in 2005. We
completed remediation of the Arizona facility (encompassing three separate buildings) and exited the last building in the third quarter of 2006 but had continued expenses related to the litigation through its resolution in December 2008.

Interest Expense

Interest expense consists of
amortization of debt issuance costs, fees related to our asset-based revolving credit facility (the Credit Facility), interest on our note payable on our Ohio facility, and interest expense associated with long-term leases. Interest
expense was essentially flat at $197,000 for the second quarter of 2009 compared to $191,000 for the same period in 2008.

Interest Income

Interest income earned on our cash balances decreased by $24,000 to $52,000 for the second quarter of 2009 from $76,000 for the same
period in 2008. Although the Company maintained higher average cash balances during the second quarter of 2009 compared to the same period in 2008, reduced interest rates resulted in an overall reduction in interest income.

Other Expense (Income), Net

Net other expense
(income) consists of foreign exchange transaction gains or losses related to our Canadian operations and other miscellaneous non-operating items. For the second quarter of 2009, net other expense was $121,000 compared to net other income of $26,000
in the second quarter of 2008 and was primarily related to the decrease in the average exchange rate in 2009 of the Canadian dollar to the U.S. dollar compared to 2008.

Income Tax Expense

Income tax expense for the second quarter of 2009 was $125,000, or 22.4% of
pre-tax income, compared to $831,000, or 35.5% of pre-tax income, for the same period in 2008. The decrease in income tax expense was primarily due to lower pre-tax income. Our effective income tax rate differs from the U.S. federal statutory tax
rate of 35% primarily as a result of the mix of earnings between tax jurisdictions, research and development credits, state income taxes and our continuous evaluation of the realization of our deferred tax assets and uncertain tax positions.

Effective January 1, 2009, due to the adoption of SFAS No. 141(revised 2007), Business Combinations(SFAS
141R), any reduction of the U.S. valuation allowance that was related to net deferred tax assets that were in existence as of applying fresh-start accounting and any adjustments to uncertain tax positions for years prior to our emergence from
bankruptcy in 2003 will now be recognized as a U.S. tax benefit as opposed to a reduction of goodwill and additional-paid-in capital as was done in the past.



13



---

##### Table of Contents

Results of Operations for the Six Months Ended June 30, 2009 Compared to the Six months Ended June 30, 2008

The following tables set forth select data from our Condensed Consolidated Statement of Operations (in thousands):



|                                          |  |                          |        |   |          |   |        |          |  |   |         |   |  |       |   
|----------------------------------------- |  | ------------------------ | ------ | - | -------- | - | ------ | -------- |  | - | ------- | - |  | ----- | --
|                                          |  | Six Months EndedJune 30, |        |   | $ Change |   |        | % Change | 
|                                          |  | 2009                     |        |   | 2008     |   |        |         
|Net sales                                 |  | $                        | 76,452 |   |          | $ | 98,540 |          |  | $ | (22,088 | ) |  | (22.4 | )%
|Cost of goods sold                        |  |                          | 62,513 |   |          |   | 78,424 |          |  |   | (15,911 | ) |  | (20.3 | )%
|                                          |  |                          |        |   |          |   |        |          |  |   |         |   |  |       |   
|Gross profit                              |  |                          | 13,939 |   |          |   | 20,116 |          |  |   | (6,177  | ) |  | (30.7 | )%
|Gross profit as a percentage of net sales |  |                          | 18.2   | % |          |   | 20.4   | %        |  |   |         |   |  |       |   

Net Sales

Net sales decreased $22.1 million, or 22.4%, for the six months ended June 30, 2009 compared to the same period in 2008. The decrease in net sales was primarily due to a decline in customer demand related to
general economic conditions. While net sales decreased in a number of our markets, we experienced continued growth in the military/aerospace market, and this market grew as a percentage of total net sales to approximately 33% for the six months
ended June 30, 2009 compared to approximately 16% for the same period in 2008.

Gross Profit

Gross profit for the six months ended June 30, 2009 was $13.9 million, or 18.2% of net sales, compared to $20.1 million, or 20.4% of net sales for
the same period in 2008. The decrease in gross profit was primarily due to less efficient absorption of fixed costs on lower net sales.

Non-cash
Compensation Expense



|                                    |  |                          |       |      |   |      
|----------------------------------- |  | ------------------------ | ----- | ---- | - | -----
|                                    |  | Six Months EndedJune 30,
|                                    |  | 2009                     |       | 2008
|Non-cash compensation expense:      |  |                          |       |      |   |      
|Cost of goods sold                  |  | $                        | 274   |      | $ | 242  
|Sales and marketing expenses        |  |                          | 180   |      |   | 140  
|General and administrative expenses |  |                          | 683   |      |   | 919  
|                                    |  |                          |       |      |   |      
|Total non-cash compensation expense |  | $                        | 1,137 |      | $ | 1,301
|                                    |  |                          |       |      |   |      

Non-cash compensation expense related to stock awards was recorded in accordance with the fair
value recognition provisions of SFAS 123R.

Sales and Marketing Expenses



|                             |  |                          |       |   |          |   |       |          |  |   |      |   |  |       |   
|---------------------------- |  | ------------------------ | ----- | - | -------- | - | ----- | -------- |  | - | ---- | - |  | ----- | --
|                             |  | Six Months EndedJune 30, |       |   | $ Change |   |       | % Change | 
|                             |  | 2009                     |       |   | 2008     |   |       |         
|Sales and marketing expenses |  | $                        | 5,734 |   |          | $ | 6,468 |          |  | $ | (734 | ) |  | (11.3 | )%
|Percentage of net sales      |  |                          | 7.5   | % |          |   | 6.6   | %        |  |   |      |   |  |       |   

Sales and marketing expenses decreased by $734,000, or 11.3%, for the six months ended
June 30, 2009 compared to the same period in 2008. The dollar decrease was primarily due to lower commissions as a result of the reduction in sales levels. The increase in sales and marketing expenses as a percentage of net sales was primarily
due to the lower sales levels.



14



---

##### Table of Contents

General and Administrative Expenses



|                                    |  |                          |       |   |          |   |       |          |  |   |      |   |  |       |   
|----------------------------------- |  | ------------------------ | ----- | - | -------- | - | ----- | -------- |  | - | ---- | - |  | ----- | --
|                                    |  | Six Months EndedJune 30, |       |   | $ Change |   |       | % Change | 
|                                    |  | 2009                     |       |   | 2008     |   |       |         
|General and administrative expenses |  | $                        | 6,259 |   |          | $ | 7,170 |          |  | $ | (911 | ) |  | (12.7 | )%
|Percentage of net sales             |  |                          | 8.2   | % |          |   | 7.3   | %        |  |   |      |   |  |       |   

Total general and administrative expenses decreased by $911,000, or 12.7%, for the six months
ended June 30, 2009 compared to the six months ended June 30, 2008. The decrease in general and administrative expenses was primarily attributable to lower compensation expense driven by continued streamlining and centralization of
administrative functions, as well as lower non-cash compensation and management incentives.

Amortization of Intangible Assets

Amortization of intangible assets in 2009 relates to customer relationships identified in connection with the acquisition of Sovereign Circuits, Inc. in
the fourth quarter of 2006. These intangibles are being amortized over their estimated useful life of five years resulting in $190,000 of amortization expense per quarter through October 2011. The decrease in amortization expense from $2.7 million
in the first half of 2008 is due to the customer relationships identified during the allocation of the reorganized value of the Company subsequent to our emergence from bankruptcy in December 2003 becoming fully amortized in the fourth quarter of
2008.

Restructuring and Other Related Charges

The restructuring and other related charges in the first half of 2008 of $267,000 were the result of the fees and expenses related to litigation with the landlord of two buildings in connection with the closing of our Arizona facility in
2005. We completed remediation of the Arizona facility (encompassing three separate buildings) and exited the last building in the third quarter of 2006 but had continued expenses related to the litigation through its resolution in December 2008.

Interest Expense

Interest expense
consists of amortization of debt issuance costs, fees related to our Credit Facility, interest on the note payable on our Ohio facility, and interest expense associated with long-term leases. Interest expense was $395,000 for the six months ended
June 30, 2009, essentially flat compared to expense of $386,000 for the same period in 2008.

Interest Income

Interest income earned on our cash balances decreased to $108,000 for the first six months of 2009 from $232,000 for the same period in 2008. Although the
Company maintained higher average cash balances during the first half of 2009 compared to the same period in 2008, reduced interest rates resulted in an overall reduction in interest income.

Other Expense (Income), Net

Net other expense
(income) consists of foreign exchange transaction gains or losses related to our Canadian operations and other miscellaneous non-operating items. For the six months ended June 30, 2009, net other expense was $76,000 compared to net other income
of $113,000 for the same period in 2008 and was primarily impacted by the decrease in the average exchange rate of the Canadian dollar to the U.S. dollar.

Income Tax Expense

Income tax expense for the six months ended June 30, 2009 was $256,000, or 21.3% of pre-tax income,
compared to $1.3 million, or 36.3% of pre-tax income, for the six months ended June 30, 2008. The decrease in income tax expense was primarily due to lower pre-tax income. Our effective income tax rate differs from the U.S. federal statutory
tax rate of 35% primarily as a result of the mix of earnings between tax jurisdictions, research and development credits, state income taxes and our continuous evaluation of the realization of our deferred tax assets and uncertain tax positions.



15



---

##### Table of Contents

Effective January 1, 2009, due to the adoption of SFAS 141R, any reduction of the U.S. valuation
allowance that was related to net deferred tax assets that were in existence as of applying fresh-start accounting and any adjustments to uncertain tax positions for years prior to our emergence from bankruptcy in 2003 will now be recognized as a
U.S. tax benefit as opposed to a reduction of goodwill or additional-paid-in capital as was done in the past.

Liquidity and Capital Resources



|                                                      |  |                        |           |                  |   |          
|----------------------------------------------------- |  | ---------------------- | --------- | ---------------- | - | ---------
|                                                      |  | June 30,2009           |           | December 31,2008
|                                                      |  | (Dollars in thousands)
|Working capital                                       |  | $                      | 41,964    |                  | $ | 37,682   
|Current ratio (current assets to current liabilities) |  |                        | 3.6 : 1.0 |                  |   | 2.7 : 1.0
|Cash and cash equivalents                             |  | $                      | 23,941    |                  | $ | 20,081   
|Short-term borrowings                                 |  | $                      |          |                  | $ |         
|Long-term debt, including current portion             |  | $                      | 1,394     |                  | $ | 1,516    

As of June 30, 2009, we had total cash and cash equivalents of $23.9 million. Management
defines cash and cash equivalents as highly liquid deposits with original maturities of 90 days or less when purchased. We maintain cash and cash equivalents at certain financial institutions in excess of amounts insured by federal agencies.
However, management does not believe this concentration subjects the Company to any unusual financial risk beyond the normal risk associated with commercial banking relationships. We frequently monitor the third-party depository institutions that
hold our cash and cash equivalents. Our emphasis is primarily on safety of principal and secondarily on maximizing yield on those funds.

Our working capital, current ratio and cash and cash equivalents increased from December 31, 2008 primarily due to cash generated from operations partially offset by our investments in capital equipment during the first six months of
2009.

Our principal sources of liquidity to fund ongoing operations have been existing cash on hand, cash generated from operations and,
if needed, our Credit Facility, along with proceeds from various equity offerings and asset sales. We believe that our current cash balance, in combination with net cash expected to be generated from operations and the availability of our Credit
Facility, will fund ongoing operations for at least the next twelve months. In the event that we require additional funding during the next twelve months, we will attempt to raise capital through either debt or equity arrangements. We cannot provide
assurance that the required capital would be available on acceptable terms, if at all, or that any financing activity would not be dilutive to our current stockholders.

Revolving Credit Facility

Availability under our $25 million revolving Credit Facility with General
Electric Capital Corporation is based on various liquidity and borrowing base tests including our eligible accounts receivable and inventories. Our wholly-owned operating subsidiaries are the borrowers under the Credit Facility. The Credit Facility
is guaranteed by DDi Corp. and all of its subsidiaries that are not borrowers under the Credit Facility. The Credit Facility is collateralized by the accounts receivable, inventories and other tangible and intangible personal property (other than
property, plant and equipment) of the borrowers, and by a pledge of the stock of our subsidiaries, and expires in March 2010. Revolving credit advances under the Credit Facility bear interest at the prime rate (3.25% at June 30, 2009). We can
elect to have any new revolving credit advances, or convert any outstanding revolving credit advances, in excess of $1.0 million and in increments of $500,000, made as a LIBOR-based loan with a term of one, two, or three months at a rate of
LIBOR plus 1.5%. The Credit Facility contains customary covenants including financial covenants regarding our fixed charge ratios and capital expenditures if Liquidity, as defined in the agreement, falls below a certain threshold. Through
June 30, 2009, Liquidity has been above the financial covenant measurement threshold since obtaining the Credit Facility. There are also negative covenants regarding incurrence of additional debt, liquidation, merger or asset sales or changes
in our business. The Credit Facility restricts our ability to pay cash dividends on our common stock and restricts our subsidiaries ability to pay dividends to us without the lenders consent. At June 30, 2009, we were in compliance
with all required covenants.



16



---

##### Table of Contents

As of June 30, 2009, there were no amounts outstanding and the borrowing capacity under the Credit
Facility was approximately $13.3 million.

Stock Repurchase Program

Our Board of Directors (the Board) previously authorized a common stock repurchase program of up to 3,000,000 shares of our common stock in the open market at prevailing market prices or in
privately-negotiated transactions. In February 2009, the Board amended the stock repurchase program to increase the amount of shares of common stock authorized to be repurchased by up to an additional $10 million worth of shares. The stock
repurchase program is subject to applicable legal and regulatory requirements and obtaining the consent of the lender for our Credit Facility. If we are unable to obtain the lenders consent, we would be restricted from repurchasing the
additional $10 million worth of shares authorized. The stock repurchase authorization does not have an expiration date, and the stock repurchase program may be modified or discontinued at any time. We will continue to review the value in
repurchasing shares after considering our cash levels and operating needs as well as other uses for our cash that could create greater shareholder value.

No shares were repurchased during the quarter ended June 30, 2009. As of June 30, 2009, we had repurchased a total of 2,946,986 shares since the inception of the program.

Consolidated Cash Flows

The following table
summarizes our statements of cash flows for the six months ended June 30, 2009 and 2008 (in thousands):



|                                                     |  |                          |        |   |      |   |        |  
|---------------------------------------------------- |  | ------------------------ | ------ | - | ---- | - | ------ | -
|                                                     |  | Six Months EndedJune 30, |       
|                                                     |  | 2009                     |        |   | 2008 |  
|Net cash provided by (used in):                      |  |                          |        |   |      |   |        |  
|Operating activities                                 |  | $                        | 6,349  |   |      | $ | 8,283  |  
|Investing activities                                 |  |                          | (2,271 | ) |      |   | (5,209 | )
|Financing activities                                 |  |                          | (122   | ) |      |   | (5,911 | )
|Effect of exchange rates on cash                     |  |                          | (96    | ) |      |   | 180    |  
|                                                     |  |                          |        |   |      |   |        |  
|Net increase (decrease) in cash and cash equivalents |  | $                        | 3,860  |   |      | $ | (2,657 | )
|                                                     |  |                          |        |   |      |   |        |  

Net cash provided by operating activities represents net income adjusted for non-cash charges and
working capital changes. The $1.9 million decrease in net cash provided by operating activities for the six months ended June 30, 2009 compared to the same period in 2008 was primarily due to our reduced revenue and production levels in the
first six months of 2009 as well as decreases in accounts payable and accrued expenses as a result of the timing of payments made.

The
$2.9 million decrease in net cash used in investing activities for the six months ended June 30, 2009 compared to the same period in 2008 was primarily due to a decrease in capital equipment investments during the first half of 2009.

The $5.8 million decrease in net cash used in financing activities for the six months ended June 30, 2009 compared to the same period
in 2008 was primarily due to no repurchases of our common stock during the first half of 2009.

Critical Accounting Policies and Use of Estimates

The condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the
United States which require us to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and revenues and expenses during the periods reported. Actual results
could differ from those estimates. Information with respect to our critical accounting policies which we believe could have the most significant effect on our reported results and require subjective or complex judgments by management is contained on
pages 25 to 27 in Item 7, Managements Discussion and Analysis of Financial Condition and Results of Operations, of the Companys Annual Report on Form 10-K for the year ended December 31, 2008. We believe that at June 30,
2009 there had been no material changes to this information.



17



---

##### Table of Contents

Recent Accounting Pronouncements

In June 2009, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standard (SFAS) No. 168, The FASB Accounting Standards Codification and the
Hierarchy of Generally Accepted Accounting Principles, a replacement of FASB Statement No. 162(SFAS 168). SFAS 168 establishes the FASB Accounting Standards Codification as the source of authoritative accounting principles
recognized by the FASB to be applied by nongovernmental entities in the preparation of financial statements in conformity with U.S. GAAP. SFAS 168 is effective for interim and annual periods ending after September 15, 2009. SFAS 168 does not
change U.S. GAAP and will not have a material impact on our condensed consolidated financial statements.

In May 2009, the FASB
issued SFAS No. 165, Subsequent Events (SFAS 165). SFAS 165 establishes general standards of accounting for and disclosures of events that occur after the balance sheet date but before financial statements are issued or are
available to be issued. Among other things, SFAS 165 requires the disclosure of the date through which an entity has evaluated subsequent events and the basis for that date. We adopted the new disclosure requirements in our June 30, 2009
condensed consolidated financial statements.

In April 2009, the Financial Accounting Standards Board (FASB) issued
FASB Staff Position FAS 107-1 and APB 28-1, Interim Disclosures about Fair Value of Financial Instruments (FSP FAS 107-1 and APB 28-1). FSP FAS 107-1 and APB 28-1 requires fair value disclosures in both interim as well as annual
financial statements in order to provide more timely information about the effects of current market conditions on financial instruments. Our adoption of the provisions of FSP FAS 107-1 and APB 28-1 effective June 30, 2009 had no impact on our
condensed consolidated financial statements.



|Item 3. | Quantitative and Qualitative Disclosures About Market Risk.
|------- | -----------------------------------------------------------

Interest Rate Risk

Advances under our Credit Facility bear interest at the prime rate (3.25% at June 30, 2009) or can
be converted to LIBOR-based loans at a rate of LIBOR plus 1.5%. If the prime rate, or LIBOR rate for LIBOR-based loans, increased, thereby increasing our effective borrowing rate by the same amount, cash interest expense related to the Credit
Facility would increase dependent on any outstanding borrowings. There have been no borrowings on the Credit Facility since 2006.

Foreign Currency
Exchange Risk

A portion of the sales and expenses of our Canadian operations are transacted in Canadian dollars, which is deemed to be
the functional currency for our Canadian entity. Thus, assets and liabilities are translated to U.S. dollars at period-end exchange rates in effect. Sales and expenses are translated to U.S. dollars using an average monthly exchange rate.
Translation adjustments are included in accumulated other comprehensive income in stockholders equity, except for translation adjustments related to an intercompany note denominated in Canadian dollars between our U.S. entity and our Canadian
entity. Settlement of the note is planned in the foreseeable future; therefore, currency adjustments are included in determining net income (loss) for the period in accordance with SFAS No. 52, Foreign Currency Translation, and could
have a material impact on results of operations and cash flows in the event of significant currency fluctuations. Gains and losses on foreign currency transactions are included in operations. We have foreign currency translation risk equal to our
net investment in those operations. We do not use forward exchange contracts to hedge exposures to foreign currency denominated transactions and do not utilize any other derivative financial instruments for trading or speculative purposes.



|Item 4. | Controls and Procedures.
|------- | ------------------------

Evaluation of Disclosure Controls and
Procedures

Our Chief Executive Officer and Chief Financial Officer have concluded, based on their evaluation as of the end of the
period covered by this report, that our disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) under the Securities Exchange Act of 1934, as amended (the Exchange Act)) are effective to ensure that all information
required to be disclosed by us in the reports filed or submitted by us under the Exchange Act is recorded, processed, summarized and reported within the time periods



18



---

##### Table of Contents

specified in the rules and forms of the U.S. Securities and Exchange Commission (the SEC), and include controls and procedures designed to ensure
that information required to be disclosed by us in such reports is accumulated and communicated to our management, including the Chief Executive Officer and the Chief Financial Officer, as appropriate, and allow timely decisions regarding required
disclosure.

Changes in Internal Controls

No change in our internal control over financial reporting occurred during the quarter ended June 30, 2009 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.



19



---

##### Table of Contents

PART II  OTHER INFORMATION



|Item 1. | Legal Proceedings
|------- | -----------------

Reference is made to our Annual
Report on Form 10-K for the period ended December 31, 2008 for a summary of our previously reported legal proceedings. Since the date of the Annual Report on Form 10-K for the fiscal year ended December 31, 2008, there have been no
material developments in previously reported legal proceedings.



|Item 1A. | Risk Factors
|-------- | ------------

There have been no material changes
from the risk factors as previously disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2008.



|Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds
|------- | -----------------------------------------------------------

None.



|Item 3. | Defaults Upon Senior Securities
|------- | -------------------------------

None.



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

The Annual Meeting of the Stockholders of DDi Corp. was held on May 12, 2009 for the purpose of electing seven directors to the Board of Directors. Each of the incumbent directors, Robert J. Amman, Jay B. Hunt, Andrew E. Lietz, Bryant
R. Riley, Steven C. Schlepp, Carl Vertuca, Jr. and Mikel H. Williams were elected by a plurality vote to serve as directors of the Company for a new term of one year and until their respective successors are elected and qualified. The tabulation of
votes cast for the election of Messrs. Amman, Hunt, Lietz, Riley, Schlepp, Vertuca and Williams was as follows:



|                  |  |            |  |               
|----------------- |  | ---------- |  | --------------
|                  |  | Votes For  |  | Votes Withheld
|Robert J. Amman   |  | 15,456,706 |  | 41,945        
|Jay B. Hunt       |  | 15,456,678 |  | 41,973        
|Andrew E. Lietz   |  | 15,456,678 |  | 41,973        
|Bryant R. Riley   |  | 15,456,706 |  | 41,945        
|Steven C. Schlepp |  | 15,456,706 |  | 41,945        
|Carl Vertuca, Jr. |  | 15,390,398 |  | 108,253       
|Mikel H. Williams |  | 15,456,701 |  | 41,950        



|Item 5. | Other Information
|------- | -----------------

On May 1, 2009, Dynamic
Details, Inc., the Companys wholly-owned operating subsidiary, entered into agreements with the Swenson Family Limited Partnership and EMC Associates, L.P. to amend the real property leases covering the Companys Anaheim manufacturing
facility and corporate headquarters. The amendments extend the lease terms for the premises until September 30, 2012. The leases cover approximately 90,000 square feet, with an aggregate rent of approximately $59,000 per month beginning
October 1, 2009.



20



---

##### Table of Contents

|Item 6. | Exhibits
|------- | --------

The exhibits listed below are hereby
filed with the SEC as part of this Quarterly Report on Form 10-Q. Certain of the following exhibits have been previously filed with the SEC pursuant to the requirements of the Securities Act or the Exchange Act. Such exhibits are identified in the
chart to the right of the Exhibit and are incorporated herein by reference.



|        |  |                                                                                                                                                            |  |               |  |                           |  |              |  |         |  |           
|------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------- |  | ------------------------- |  | ------------ |  | ------- |  | ----------
|        |  |                                                                                                                                                            |  |               |  | Incorporated by Reference
|Exhibit |  | Description                                                                                                                                                |  | FiledHerewith |  | Form                      |  | PeriodEnding |  | Exhibit |  | FilingDate
|        |  |                                                                                                                                                            |  |               |  |                          
|3.1     |  | Amended and Restated Certificate of Incorporation of DDi Corp.                                                                                             |  |               |  | 8-K                       |  |              |  | 3.1     |  | 12/13/2003
|        |  |                                                                                                                                                            |  |               |  |                          
|3.2     |  | Amended and Restated Bylaws of DDi Corp.                                                                                                                   |  |               |  | 10-Q                      |  | 6/30/2005    |  | 3.4     |  | 8/09/2005 
|        |  |                                                                                                                                                            |  |               |  |                          
|10.1    |  | Amendment No. 5 to Real Property Master Lease Agreement dated May 1, 2009 between The Swenson Family Limited Partnership and Dynamic Details, Incorporated |  | X             |  |                           |  |              |  |         |  |           
|        |  |                                                                                                                                                            |  |               |  |                          
|10.2    |  | Second Amendment to Lease Agreement dated May 1, 2009 between EMC Associates, L.P. and Dynamic Details Incorporated                                        |  | X             |  |                           |  |              |  |         |  |           
|        |  |                                                                                                                                                            |  |               |  |                          
|10.3    |  | Second Amendment to Lease Agreement dated May 1, 2009 between EMC Associates, L.P. and Dynamic Details Incorporated                                        |  | X             |  |                           |  |              |  |         |  |           
|        |  |                                                                                                                                                            |  |               |  |                          
|10.4    |  | Second Amendment to Lease Agreement dated May 1, 2009 between EMC Associates, L.P. and Dynamic Details Incorporated                                        |  | X             |  |                           |  |              |  |         |  |           
|        |  |                                                                                                                                                            |  |               |  |                          
|31.1    |  | Certification of Chief Executive Officer of DDi Corp., Pursuant to Rule 13a-14 of the Securities Exchange Act                                              |  | X             |  |                           |  |              |  |         |  |           
|        |  |                                                                                                                                                            |  |               |  |                          
|31.2    |  | Certification of Chief Financial Officer of DDi Corp., Pursuant to Rule 13a-14 of the Securities Exchange Act                                              |  | X             |  |                           |  |              |  |         |  |           
|        |  |                                                                                                                                                            |  |               |  |                          
|32.1    |  | Certification of Chief Executive Officer of DDi Corp., Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                                           |  | X             |  |                           |  |              |  |         |  |           
|        |  |                                                                                                                                                            |  |               |  |                          
|32.2    |  | Certification of Chief Financial Officer of DDi Corp., Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                                           |  | X             |  |                           |  |              |  |         |  |           



21



---

##### Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, DDi Corp. has duly caused this report to be signed on its behalf by the undersigned, thereto duly authorized.



|                    |  |  |  |           |  |                                      
|------------------- |  |  |  | --------- |  | -------------------------------------
|                    |  |  |  | DDi Corp.
|                    |  |  | 
|Date: July 31, 2009 |  |  |  |           |  | /s/ MIKEL H. WILLIAMS                
|                    |  |  |  |           |  | Mikel H. Williams                    
|                    |  |  |  |           |  | President and Chief Executive Officer



|                    |  |  |  |  |  |                        
|------------------- |  |  |  |  |  | -----------------------
|                    |  |  | 
|Date: July 31, 2009 |  |  |  |  |  | /s/ SALLY L. EDWARDS   
|                    |  |  |  |  |  | Sally L. Edwards       
|                    |  |  |  |  |  | Chief Financial Officer



22