United States
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                  FORM 10 QSB/A

                                   (Mark One)

     [XX] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
                              EXCHANGE ACT OF 1934

                For the quarterly period ended SEPTEMBER 30, 2005

                                       or

    [__] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
                              EXCHANGE ACT OF 1934

                        Commission File Number: 333 33134

                            HYBRID FUEL SYSTEMS, INC.
                            ------------------------
             (Exact name of registrant as specified in its charter)

            GEORGIA                                      58  2267238
            -------                                      -----------
  (State  or  other  jurisdiction  of                 (I.R.S. Employer
   incorporation  or  organization)                 Identificaiton  No.)



                    12409 TELECOM DRIVE, TAMPA, FLORIDA 33637
                    -----------------------------------------
               (Address of principal executive offices) (Zip Code)

                                 (813) 979 9222
                                 --------------
              (Registrant's telephone number, including area code)

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  [XX]  No  [__]

Indicate  by  check  mark  whether  the  registrant  is an accelerated filer (as
defined  in  Rule  12b  2  of  the  Exchange  Act).  Yes  [__]  No  [XX]

     APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE
                              PRECEDING FIVE YEARS:

Indicate  by  check  mark  whether  the  registrant  has filed all documents and
reports  required  to  be  filed  by  Sections 12, 13 or 15(d) of the Securities
Exchange  Act  of 1934 subsequent to the distribution of securities under a plan
confirmed  by  a  court.  Yes  [__]  No  [__]

                      APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate  the  number  of  shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date. At August 23, 2005, the Company
had  42,215  Series  A  Preferred  Shares  and 195,209 Series B Preferred Shares
outstanding  and  101,006,954 of its $0.001 par value common shares outstanding.


<PAGE>

                               HYBRID FUEL SYSTEMS
                              Report on Form 10QSB
                     for the period ended September 30, 2005

                                     PART I

Item  1  -  Financial  Statements

     Consolidated  Balance  Sheet  for the nine month period ended September 30,
2005  and  the  annual  period  ended  December  31,  2004

     Statement  of  Operations  for  the  three  and  nine  month  periods ended
September  30,  2005  and  2004

     Statement  of  Cash  Flows  for  the  three  and  nine  month periods ended
September  30,  2005  and  2004

     Notes  to  Financial  Statements5-9

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

Item  3  -  Controls  and  Procedures

                                     PART II

     Item  1.  Legal  Proceedings

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

     Item  3.  Defaults  Upon  Senior  Securities

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

     Item  5.  Other  Information

     Item  6.  Exhibits


<TABLE>
<CAPTION>

                            HYBRID FUEL SYSTEMS, INC.
                           CONSOLIDATED BALANCE SHEET
      For the Nine Months Period Ended September 30, 2005 (unaudited) and
                annual period ended December 31, 2004 (audited)


<S>                                                  <C>                   <C>
                                                     September 30, 2005    December 31, 2004
                                                     --------------------  -------------------
ASSETS                                                   (unaudited)            (audited)
Current Assets
---------------------------------------------------
Cash. . . . . . . . . . . . . . . . . . . . . . . .  $             9,343   $            2,025
Accounts Receivable, net. . . . . . . . . . . . . .  $           273,770   $           27,005
Prepaid expenses and deposits . . . . . . . . . . .  $           105,688   $            7,845
Inventory . . . . . . . . . . . . . . . . . . . . .  $           152,385   $           36,623
                                                     --------------------  -------------------
Total current assets. . . . . . . . . . . . . . . .  $           541,186   $           73,498
                                                     --------------------  -------------------
Property, plant & equipment, net. . . . . . . . . .  $           353,423   $            8,507
Goodwill. . . . . . . . . . . . . . . . . . . . . .  $         4,133,484   $                -
                                                     --------------------  -------------------
Total assets. . . . . . . . . . . . . . . . . . . .  $         5,028,093   $           82,005
                                                     --------------------  -------------------
LIABILITIES
Current Liabilities
---------------------------------------------------
Accounts payable. . . . . . . . . . . . . . . . . .  $           404,168   $          120,980
Accounts payable in settlement. . . . . . . . . . .  $            81,956   $          121,956
Debt in litigation. . . . . . . . . . . . . . . . .  $           109,868   $          109,868
Advanced Deposits . . . . . . . . . . . . . . . . .  $           123,564   $
Due to related parties. . . . . . . . . . . . . . .  $           752,752   $           26,063
Notes payable - Coppermark Bank . . . . . . . . . .  $           270,182   $                -
Notes payable - current portion . . . . . . . . . .  $           300,000   $                -
Notes payable Discount on Debt. . . . . . . . . . .  $          (225,000)  $                -
Debts in default. . . . . . . . . . . . . . . . . .  $           113,963   $          123,272
Convertible debt in default . . . . . . . . . . . .  $            78,200   $           78,200
Sales and payroll taxes payable . . . . . . . . . .  $            95,681   $          130,094
Other current liabilities . . . . . . . . . . . . .  $            76,154   $           42,825
                                                     --------------------  -------------------
Total current liabilities . . . . . . . . . . . . .  $         2,181,488   $          753,258
                                                     --------------------  -------------------
Long-Term Liabilities
Notes payable - Long Term . . . . . . . . . . . . .  $            300,000   $               -
Discount on debt                                     $           (225,000)  $               -
                                                     --------------------  -------------------
Total long-term liabilities                          $             75,000   $               -
                                                                           -------------------

Total liabilities . . . . . . . . . . . . . . . . .  $         2,256,488   $          753,258

Shareholders' Deficit
---------------------------------------------------
Preferred Stock A - (.01 par value) 42,215 shares .  $               422   $              422
authorized; 42215 issued (liquidation
preference $8,021)
Preferred stock B - (.01 par value) 954,563 shares.  $             1,952   $            1,952
authorized; 195,209 shares issued (liquidation
 Preference $0.09
Common stock (.001 par value) 150,000,000 shares. .  $           101,422   $           65,510
authorized; 101,422,065 and 65,509,843 shares
outstanding, respectively
Additional paid-in capital. . . . . . . . . . . . .  $        15,256,542   $        8,677,270
Deferred Compensation . . . . . . . . . . . . . . .  $          (275,000)  $         (500,000)
Accumulated Deficit . . . . . . . . . . . . . . . .  $       (12,313,733)  $       (8,916,407)
                                                     --------------------  -------------------
Total shareholders' deficit . . . . . . . . . . . .  $         2,771,605   $          671,253
                                                     --------------------  -------------------
Total Liabilities and Shareholders' Deficit . . . .  $         5,028,093   $           82,005
                                                     ====================  ===================


</TABLE>



<TABLE>
<CAPTION>


                            HYBRID FUEL SYSTEMS, INC.
                            STATEMENT OF OPERATIONS
  For the Three and Nine Months Ended September 30, 2004 and 2005 (unaudited)


<S>                                  <C>             <C>             <C>            <C>


                                     THREE MONTHS    THREE MONTHS    NINE MONTHS    NINE MONTHS
                                     ENDED           ENDED           ENDED          ENDED
                                            30-SEP          30-SEP         30-SEP         30-SEP
                                              2005            2004           2005           2004
                                     --------------  --------------  -------------  -------------
Revenue . . . . . . . . . . . . . .  $     224,298   $      33,418   $    278,035   $    122,589
Cost of sales . . . . . . . . . . .       (219,001)        (22,737)      (248,008)      ( 50,846)
                                     --------------  --------------  -------------  -------------
Gross Profit. . . . . . . . . . . .  $       5,297   $      10,681   $     30,027   $     71,743

Expenses
Professional & Consulting Fees. . .  $     218,514   $      77,774   $    624,398   $    201,427
Research & Development. . . . . . .  $      18,168   $       2,751   $     98,022   $    680,492
Compensation. . . . . . . . . . . .  $     295,710   $     542,128   $    867,214   $     52,489
Other Operating Expenses. . . . . .  $     123,456   $      42,401   $    266,438   $    124,264
                                     --------------  --------------  -------------  -------------
Total Operating Expenses. . . . . .  $     655,848   $     665,054   $  1,856,072   $  1,058,672

Loss from Operations. . . . . . . .  $    (650,551)  $    (654,373)  $ (1,826,045)  $   (986,929)
                                     --------------  --------------  -------------  -------------
Interest Expense. . . . . . . . . .  $     763,353   $     636,953   $  1,571,199   $    645,965
Settlements . . . . . . . . . . . .  $               $      (5,289)                 $     (5,289)
                                     --------------  --------------  -------------  -------------
Loss from Other Expenses. . . . . .  $    (763,353)  $    (631,664)  $ (1,571,199)  $   (640,676)
                                     --------------  --------------  -------------  -------------

Net Loss. . . . . . . . . . . . . .  $  (1,413,904)  $  (1,286,037)  $ (3,397,244)  $ (1,627,605)

Basic and diluted loss per share. .  $       (0.02)  $       (0.06)  $      (0.04)  $      (0.11)

Basic and diluted weighted average.
Number of common shares outstanding     93,683,058      20,490,389     86,095,715     14,939,227
</TABLE>


<TABLE>
<CAPTION>


                            HYBRID FUEL SYSTEMS, INC.
                            STATEMENT OF CASH FLOWS
  For the Three and Nine Months Ended September 30, 2004 and 2005 (unaudited)


<S>                                                    <C>            <C>
                                                       NINE MONTHS    NINE MONTHS
                                                       ENDED          ENDED
                                                       SEP 30,        SEP 30,
                                                               2005           2004
                                                       -------------  -------------
Cash flows from operating activities
Net Loss. . . . . . . . . . . . . . . . . . . . . . .  $ (3,397,244)  $ (1,627,605)
Adjustments to reconcile net income to
   net cash provided (used) by operating activities)
     Common stock issued for services . . . . . . . .       206,000
     Depreciation . . . . . . . . . . . . . . . . . .        16,857          7,212
     Amortization of Deferred Compensation. . . . . .       225,000         25,000
     Amortization of debt discount. . . . . . . . . .     1,527,957        640,000
     Common stock issued for legal services                                 18,000
     Common stock issued for compensation                                  431,439

Change in operating assets and liabilities
Accounts Receivable . . . . . . . . . . . . . . . . .      (111,870)       (21,594)
Inventory . . . . . . . . . . . . . . . . . . . . . .       (68,330)       (13,429)
Accounts Payable. . . . . . . . . . . . . . . . . . .       145,711        (13,462)
Accrued expenses & other current liabilities. . . . .       (93,701)       (96,056)
                                                       -------------  -------------

Net Cash Provided (used) by operating activities. . .    (1,549,620)      (650,495)

Cash flows from Investing Activities
     Purchase of Equipment. . . . . . . . . . . . . .      (243,841)
     Investment in DRV. . . . . . . . . . . . . . . .      (200,000)             -
                                                       -------------  -------------

Net cash provided (used) by investing activities. . .      (443,841)

Cash flows from Financing Activities
     Loans from Related Parties . . . . . . . . . . .     1,469,094        600,600
     Proceeds from sale of common stock                                     50,000
     Proceeds from exercise of warrants . . . . . . .           150
     Payments on accounts payable in settlement . . .       (40,000)
     Proceeds from notes payable. . . . . . . . . . .       600,000
     Payments on Notes Payable. . . . . . . . . . . .       (28,465)             -
                                                       -------------  -------------

Net cash provided (used) by financing activities. . .     2,000,779        650,600
                                                       -------------  -------------

Net increase (decrease) in cash and cash equivalents.         7,318            105
Beginning cash and cash equivalents . . . . . . . . .         2,025              6
                                                       -------------  -------------

Ending cash and cash equivalents. . . . . . . . . . .  $      9,343   $        111




Supplement disclosure of cash flow information
Cash paid during the year for interest. . . . . . . .  $     20,063   $      2,751

Non cash financing activities
 Expiration of redeemable securities. . . . . . . . .  $    530,000   $          -


</TABLE>



                            HYBRID FUEL SYSTEMS, INC.
                     Notes to Unaudited Financial Statements
 for the three and nine month periods ended September 30, 2005 and September 30,
                                      2004

NOTE  1  -  BASIS  OF  PRESENTATION

     The  accompanying  unaudited  consolidated  financial  statements have been
prepared  in  accordance  with U.S. generally accepted accounting principles for
interim  financial  information  and  with  the  instruction  to Form 10-QSB and
Article  10  of  Regulation  S-X.  Accordingly,  they  do not include all of the
information  and  footnotes  required  by  U.S.  generally  accepted  accounting
principles  for  complete  consolidated  financial statements. In the opinion of
management,  all  adjustments  (consisting  only  of those of a normal recurring
nature)  considered  necessary  for  a  fair  presentation  have  been included.
Operating  results for the three and nine month periods ended September 30, 2005
and  2004 are not necessarily indicative of the results that may be expected for
the  year  ending  December  31,  2005.  For  further  information, refer to the
consolidated financial statements and footnotes included in the Company's Form -
10KSB  as  of  and for the year ended December 2004 as filed with the Securities
and  Exchange  Commission.


NOTE  2  -  SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES

Hybrid  Fuel  Systems,  Inc.  (the  "Company")  is a small-scale manufacturer of
systems  which  convert  mobile  gasoline  and  diesel  engines  to  operate  on
alternative  fuels  such  as  natural  gas  and  propane.

Cash  and  Cash  Equivalents

     For  purposes  of  the  statement  of cash flows, the Company considers all
highly liquid debt instruments purchased with a maturity of three months or less
to  be  cash  equivalents.

Accounts  Receivable

     Accounts receivable, are stated at estimated net realizable value. Accounts
receivable  are  comprised  of  balances  due  from  customers.  In  determining
collectibility, historical trends are evaluated and specific customer issues are
reviewed  to  arrive  at  appropriate  allowances.

Inventories

     Inventories,  are stated at the lower of cost or market. Cost is determined
using  the  first-in,  first-out  method. Inventories consist of component parts
used  in  the manufacture and assembly of retrofit systems for the conversion of
gasoline  and  diesel  engines  to  non-petroleum based fuels such as compressed
natural  gas.

Property,  Plant  and  Equipment

     Depreciation  is  provided  for  using the straight-line method, in amounts
sufficient  to  relate  the  cost of depreciable assets to operations over their
estimated  service  lives  (asset  categories  range  from  two to seven years).
Leasehold  improvements  are  amortized  using the straight-line method over the
lives  of  the  respective  leases  or  the  service  lives of the improvements,
whichever  is  shorter. Leased equipment under capital leases is amortized using
the  straight-line  method  over  the lives of the respective leases or over the
service  lives  of  the  assets  for  those  leases  that substantially transfer
ownership.  Accelerated  methods  are  used  for  tax  depreciation.

Impairment  of  Assets

     The  Company's  policy  is  to  evaluate whether there has been a permanent
impairment  in  the value of long-lived assets, certain identifiable intangibles
and  goodwill  when  certain  events  have  taken  place  that indicate that the
remaining  balance  may  not  be  recoverable.  When  factors  indicate that the
intangible  assets should be evaluated for possible impairment, the Company uses
an estimate of related undiscounted cash flows. A deficiency in these cash flows
relative  to  the carrying amounts is an indication of the need for a write-down
due to impairment. The impairment write-down would be the difference between the
carrying  amounts  and  the fair value of these assets. Losses on impairment are
recognized  by a charge to earnings. Factors considered in the valuation include
current  operating  results,  trends  and  anticipated  undiscounted future cash
flows.

Income  Taxes

     The  Company  utilizes  the  guidance  provided  by  Statement of Financial
Accounting  Standards No. 109, Accounting for Income Taxes (SFAS 109). Under the
liability  method specified by SFAS 109, deferred tax assets and liabilities are
determined based on the difference between the financial statement and tax bases
of  assets and liabilities as measured by the enacted tax rates which will be in
effect  when  these  differences  reverse. Deferred tax expense is the result of
changes  in  deferred  tax  assets  and  liabilities.  Valuation  allowances are
provided if necessary to reduce deferred tax assets to the amount expected to be
realized.


Earnings  (Loss)  Per  Common  Share

     Earnings  (loss)  per  share  are  computed  using  the  basic  and diluted
calculations  on  the face of the statement of operations. Basic earnings (loss)
per  share  are calculated by dividing net income (loss) by the weighted average
number  of  shares  of common stock outstanding for the period. Diluted earnings
(loss)  per  share  is  calculated by dividing net income (loss) by the weighted
average  number  of  shares of common stock outstanding for the period, adjusted
for  the  dilutive  effect of common stock equivalents, using the treasury stock
method.  The  warrants  outstanding  were  determined  to  be  antidilutive  and
therefore  do  not  affect  earnings  per  share.

Use  of  Estimates

     The  preparation  of  financial  statements  in  conformity  with generally
accepted  accounting  principles,  requires  management  to  make  estimates and
assumptions  that  affect  the  reported  amounts  of assets and liabilities and
disclosures  of  contingent  assets  and  liabilities,  as  well as the reported
amounts  of  revenues and expenses for the period then ended. The actual outcome
of  the estimates could differ from the estimates made in the preparation of the
financial  statements.

Revenue  Recognition

     Revenues  are  recognized  when the merchandise is shipped to the customer,
which  is  when  title  and  risk  of  loss  has  passed  to  the  customer.

Stock  Based  Compensation

     The  Company  has  adopted  the disclosure-only provisions of SFAS No. 123,
Accounting for Stock Based Compensation, but applies Accounting Principles Board
Opinion  No.  25 and related interpretations in accounting for options issued to
employees.  Under  Opinion  No.  25,  the  intrinsic method is used to determine
compensation  expense  when  the  fair  market  value  of  the stock exceeds the
exercise  price  on the date of grant. As of the date of this report, no options
had  been  granted under the plan and therefore no compensation expense has been
recognized.

Research  and  Development  Costs

     The  Company charges research and development costs to expense as incurred.

Fair  Value  of  Financial  Instruments

     The  Company,  in  estimating  its  fair  value  disclosures  for financial
instruments,  uses  the  following  methods  and  assumptions:

Cash,  Accounts  Receivable,  Accounts  Payable  and  Accrued  Expenses:

     The  carrying  amounts  reported  in  the  balance sheet for cash, accounts
receivable,  accounts  payable and accrued expenses approximate their fair value
due  to  their  relatively  short  maturity.

Long-Term  Obligations:

     The  fair  value  of  the  Company's  fixed-rate  long-term  obligations is
estimated  using  discounted  cash flow analyses, based on the Company's current
incremental  borrowing  rates  for  similar  types  of  borrowing  arrangements.

Restatement  of  comparative  financial  information

     White  Knight  (WK) has provided financing to the Company starting with the
last  quarter  of  2003.  The  financing  is  to be repaid in common shares at a
conversion rate of $0.04 per share. The conversion rate was set at the time that
the  Company's  stock  was  trading  at  $0.03  per  share,  in  December  2003.

     Since  the  financing  includes an embedded conversion feature, the Company
has  restated  the  comparative financial statements for the amortization of the
resulting  debt  discount for the quarters ended September 30, 2004, pursuant to
EITF  00-27 and EITF 98-5. The debt has no stated redemption date therefore, the
discount  is  amortized  at the time of the advances using the average price per
share  of  the  common stock for the quarter within which the advances were made
versus  the  conversion  price or $0.04 per share. Previously, it was determined
that  the  instrument  was a financial derivative pursuant to EITF 00-19 and FAS
133  which  basically  required  valuation,  but not interest expense treatment.

Concentrations

     During  the  quarter  ending  September  30,  2005  the  Company  had  one
significant  Vendor.  Eco  Fuel  Systems  which  makes up approximately 34.7% of
purchases  for  the  third  quarter.


NOTE  3  -  DEBT  IN  DEFAULT

     The  Company did not meet the original payment terms on the note payable to
Peachtree National Bank through June 30, 2005. On April 1, 2005, we paid $20,000
to  begin a payment plan with Peachtree National Bank which requires us to remit
approximately  $10,000 a month until the debt is fully repaid. During June 2005,
we  reached  agreement  with  Peachtree National Bank to pay off the outstanding
amount  of  approximately  $69,000  upon receipt of the proceeds from the second
traunch  of  financing.

NOTE  4  -  COMMITMENTS  AND  CONTINGENCIES

     The  Company is delinquent in the payment of payroll and state sales taxes.
The  Company  is  currently  following  payment  schedules,  developed  after
negotiations  with  the  taxing  authorities.  Amounts in arrears for delinquent
taxes,  along  with  estimated  penalties  and  interest  assessed by the taxing
authorities  are  as  follows,  as  of  September  30,  2005  and  2004.


<TABLE>
<CAPTION>



<S>                      <C>      <C>

                            2005      2004
                         -------  --------

Payroll and sales taxes  $71,897  $142,058
Penalties and interest.   21,896    60,881
                         -------  --------

Total . . . . . . . . .  $93,793  $202,939
</TABLE>


     During June, 2004, the Company entered a negotiated settlement with the IRS
and  began  making monthly payments including an initial payment of $15,000 plus
$5,000  a  month  through  such  date  as  the  obligation  is  repaid  in full.




NOTE  5  -  SHAREHOLDERS'  EQUITY

Preferred  Stock

     Effective  February  1,  2002,  the  Company  designated  999,779 shares of
previously  undesignated  preferred stock as Series A Preferred Stock, for which
45,216  shares  are  authorized and Series B Preferred Stock, for 954,563 shares
are  authorized.

     Series  A  Preferred  Stock is convertible, at the option of the holder, at
any  time,  into  shares of the Company's common stock as determined by dividing
$.19  by  a  conversion  price determined on the date the related certificate is
surrendered.  The  conversion  price  is  subject  to periodic adjustment and is
initially  established  at  $.01632.  Series  A Preferred Stock is automatically
convertible  into  shares  of  the  Company's  common  stock  upon  (i) the date
specified  by  vote or written consent or agreement of holders of at least three
quarters  of  the  shares  of  Series  A Preferred outstanding, or (ii) upon the
closing  of  the  sale  of  the  company's  common  stock  in a firm commitment,
underwritten  public  offering  registered under the Securities Act in which the
Company  receives gross proceeds of no less than $20 million. Series A Preferred
Stock  has  a  liquidation  preference  of  the greater of $.19 per share or the
amount  that  such  share would be entitled to upon liquidation or distribution.
The  Series  A  Preferred  Stock has voting rights, except as to the election of
debtors,  equal  to the number of shares of common stock into which the Series A
Preferred  Stock  is  convertible.  The Series A preferred Stockholders have the
right  to  elect  one  director  of  the  Company.

     Series B Preferred Stock is convertible, at the option of the holder at any
time,  into  shares  of the Company's common stock as determined by dividing the
lower  of  $.09  or  the  price  per  share  paid  by the holder of the Series B
Preferred  Stock  by  a  conversion  price  determined  on  the date the related
certificate  is  surrendered.  The  conversion  price  is  subject  to  periodic
adjustment  and is initially established at $.00773. Series B Preferred Stock is
automatically convertible into shares of the Company's common stock upon (i) the
date  specified  by  vote or written consent or agreement of holders of at least
three  quarters  of  the shares of Series B Preferred Stock outstanding, or (ii)
upon  the  closing  of  the sale of Company's common stock in a firm commitment,
underwritten  public  offering  registered under the Securities Act in which the
Company  receives gross proceeds of no less than $20 Million. Series B Preferred
Stock  has  a  liquidation  preference  of  the greater of $.09 per share or the
amount  that  such  share would be entitled to upon liquidation or distribution.
The  Series  B  Preferred  Stock has voting rights, except as to the election of
directors, equal to the number of shares of common stock into which the Series B
Preferred  Stock  is  convertible.  The Series B Preferred Stockholders have the
right  to  elect  one  director  of  the  Company.

NOTE  6  -  RELATED  PARTY

     The  Company  receives  financing from White Knight SST, Inc. (WK). WK is a
major  stockholder  and  has  officers who serve in management positions for the
Company.  Per  our agreement with WK, any funding provided by WK is to be repaid
in  common  shares  of  stock  at  a  conversion  price  of $0.04 per share. The
conversion price was agreed upon in December, 2003, when the Company's stock was
at  $0.03  per  share.

     During  the  quarter  ended September 30, 2005, $242,000 of the outstanding
debt  due  to WK had been converted into common stock. Through the quarter ended
September  30,  2005,  WK  advanced  a  total of approximately $1,400,000 to the
Company.

     Due  to  the convertible nature of the advances, the Company has calculated
the  embedded  conversion  benefit  for each period of advances of financing and
recorded  a  debt  discount  applicable  to that period, in accordance with EITF
00-27  and  EITF 98-5. For the nine months ended September 30, 2005, the Company
calculated  the  intrinsic value between the per share conversion price of $0.04
and  the  average  stocks  closing  price  for  the quarter. The calculated debt
discount  exceeded the current period advances and therefore, in accordance with
EITF 00-27, was limited to the actual debt financing received. Since there is no
stated  redemption  date,  the  Company  amortized  a  total  debt  discount  of
approximately  $  1,400,000  for the nine months ended September 30, 2005, which
represented  the  debt  financing  received  from  WK  during  that  period.

     The  Company  also has an employment agreement with WK to provide executive
management  services to the Company. WK's two principal executive officers serve
as  the  Company's  President,  CEO, Director and as Chairman of the Board for a
period  two  years.  Compensation  is  paid  exclusively through the issuance of
restricted common stock equal to a cash value of $25,000 per month total for the
services  of  both executives. The common stock issued pursuant to the agreement
vests  on a quarterly basis in advance. During the year ended December 31, 2004,
the Company issued approximately 12,000,000 shares of common stock for the total
$600,000  compensation  due.  As of December 31, 2004, the Company had amortized
$100,000 of the deferred related party compensation to compensation expense. For
the  nine  months  ended  September 30, 2005, the Company amortized $ 225,000 of
deferred  related  party  compensation  related  to  this  amount.

NOTE  7  -  DEBT  FINANCING

     On  April  1,  2005,  we  held our first closing pursuant to a Subscription
Agreement  we  entered  into with several accredited investors dated as of March
31,  2005,  pursuant  to which the investors subscribed to purchase an aggregate
principal  amount  of  $1,200,000  in  secured convertible promissory notes, and
Class  A  common  stock  purchase warrants which would be issued on each closing
date  assuming  full  conversion  of  the  convertible notes issued on each such
closing  date. We issued the aforementioned securities to the investors pursuant
to  Rule 506 of Regulation D as promulgated under the Securities Act of 1933, as
amended  (the  "Act"),  and/or  Section  4(2)  of  the  Act.

     $600,000  of  the  purchase  price  was  paid to us by the investors on the
initial closing date of April 1, 2005 and $600,000 of the purchase price will be
paid  to us pursuant to the second closing, which will take place on the 5th day
after  the  actual  effectiveness  of  the  registration  statement which we are
required  to  file  with  the Securities and Exchange Commission registering the
shares  of our common stock, par value $.001 per share, issuable upon conversion
of  the  convertible  notes  and  exercise  of  the  warrants.

     The  convertible  notes  bear  simple  interest at rate equal to the "prime
rate"  as  published  in  the  Wall Street Journal from time to time plus 3% per
annum,  provided  however that the interest shall not be less than 8% per annum.
Interest is calculated on the basis of a 360 day year and is payable monthly, in
arrears  commencing  on  August 1, 2005. The principal amount of the convertible
notes  shall  be  amortized  over  a two-year period with payments commencing on
August  1,  2005.  Each investor shall have the right to convert the convertible
notes  after  the  date  of issuance and at any time, until paid in full, at the
election  of the investor into fully paid and nonassessable shares of our common
stock  at  a  conversion  price  of  $0.55  per  share.  The conversion price is
adjustable  in  the  event  of  any  stock  split  or reverse stock split, stock
dividend,  reclassification  of  common  stock,  recapitalization,  merger  or
consolidation.  In  addition, the conversion price of the convertible notes will
be  adjusted  in  the  event that we spin off or otherwise divest ourselves of a
material  part  of our business or operations or dispose all or a portion of our
assets.  The convertible notes are secured by all of our assets, pursuant to the
terms of a Security Agreement, dated as of March 31, 2005 between us and Barbara
Mittman, who is acting as collateral agent pursuant to the terms of a collateral
agent  agreement  dated  as  of  March  31,  2005.

     We  issued an aggregate of 1,636,364 Class A common stock purchase warrants
to  the  investors  and  will issue an additional 1,636,364 Class A common stock
purchase  warrants  at  the second closing. The Class A warrants are exercisable
until five years from the initial closing date at an exercise price equal to the
lower of $0.81 per share or 101% of the closing bid price of our common stock on
the  last  trading  day preceding the initial closing. The exercise price of the
Class  A  warrants  will  be adjusted in the event of any stock split or reverse
stock split, stock dividend, reclassification of common stock, recapitalization,
merger or consolidation. In addition, the exercise price of the warrants will be
adjusted  in  the  event  that  we  spin  off or otherwise divest ourselves of a
material  part  of our business or operations or dispose all or a portion of our
assets.

     Due to there being detachable warrants and a beneficial convertible feature
of the note as of June 30, 2005, the Company has recorded a discount to the debt
in  the  amount of $600,000 and will record an additional $600,000 debt discount
when the Company receives the additional $600,000 of funding, in accordance with
EITF  Issue  No.  98-5  "Accounting  For  Convertible Securities With Beneficial
Conversion  Features  or  Contingently  Adjustable  Conversion Ratios", and EITF
00-27  "Application  of EITF Issue No. 98-5 To Certain Convertible Instruments".
The  value  of the detachable warrants was determined to be $1,945,594 (assuming
both  draws  were  made on the financing) using the Black Scholes option pricing
model  with  a  volatility  of 234.42 % and risk free interest rate of 4.13%. In
accordance  with EITF 00-27,when the calculated value of the detachable warrants
exceeds  the  amount  of  the debt, the discount is limited to the amount of the
debt.  Since  the  debt is $1,200,000, the discount associated with the warrants
would  be  limited  to  that  amount. In the calculation of the warrants and the
embedded  conversion feature the warrants are to be calculated first, the entire
discount  is  being  allocated  to  the  warrants since that exceeds the maximum
discount  allowed.  Therefore,  there  is  no  allocation of the discount to the
embedded conversion feature of the debt. The discount of $1,200,000 will then be
amortized  over  the  life  of  the  debt  which  is  twenty  eight  months  or
approximately  $43,000 per month. As of September 30th 2005 the company received
$600,000  of  the  $1,200,000  where the company amortized $150,000 for the nine
months  ended.

     We  filed  a  registration  statement  registering the shares of our common
stock  issuable  upon  conversion  of  the convertible notes and exercise of the
Class  A  warrants  on  May  10,  2005  and  we  are obligated to cause it to be
effective  within 90 days after the initial closing date or approximately August
1,  2005.  If  we  do  not  meet  the  aforementioned  filing  and effectiveness
deadlines,  we shall pay to each investor an amount equal to 1% for the first 30
days  or  part thereof of the pendency of such non-registration event and 2% for
each  30  days  or  part  thereof, thereafter of the purchase price of the notes
remaining  unconverted  and  purchase  price  of  the shares of our common stock
issued  upon  conversion  of  the  notes.

     The  above  descriptions  of the convertible note, the Class A common stock
purchase warrants, the Subscription Agreement and the Security Agreement are not
complete  and are qualified in their entirety by the full text of such documents
which  are  included  as  exhibits  to  our Form 8-K Report filed April 5, 2005.

NOTE  8  -  ACQUISITION  OF  DRV  ENERGY

     On  August  11,  2005  Hybrid Fuel Systems completed the closing of a Share
Exchange  Agreement  (the  "Agreement")  with  DRV  Energy,  Inc.,  an  Oklahoma
corporation  ("DRV")  and the sole shareholder of DRV, Sheri Vanhooser (the "DRV
Shareholder") that was entered into on June 29, 2005. Hybrid issued an aggregate
of  11,612,903  unregistered  shares  of HYFS common stock, par value $0.001 per
share,  and  payment of $400,000 in cash with $200,000 of such payment due at or
prior  to the closing date and $200,000 due payable January 1, 2006. Pursuant to
the  Agreement, we ac quired all of the outstanding equity stock of DRV from the
DRV  Shareholder.

     DRV  Energy,  Inc., an Oklahoma corporation ("DRV") was formed November 30,
1994  to engage in the alternative fuels industry through the sales and services
of  vehicle  conversion  system.  DRV  is  a  small  volume  manufacturer of EPA
Certified  bi-fuel  and  dedicated  natural  gas  and propane turnkey conversion
systems.  DRV  Energy  also  has  a  full  service alternative fuels center with
slow/fast  fill  stations  as  well  as  compressor installation and maintenance
capabilities


<TABLE>
<CAPTION>



<S>                <C>                     <C>                     <C>
                   Hybrid Fuel Systems     DRV Energy              Proforma
                    1/1/2005 - 9/30/2005    1/1/2005 - 6/30/2005   Combined Results
                   ----------------------  ----------------------  ------------------
Revenue . . . . .  $             278,035   $             584,031   $         862,066
-----------------  ----------------------  ----------------------  ------------------
Net Income (Loss)  $          (3,397,244)  $             (92,682)  $      (3,489,926)
-----------------  ----------------------  ----------------------  ------------------
EPS . . . . . . .  $               (0.04)  $               (1.85)  $           (0.04)
-----------------  ----------------------
</TABLE>

                                       20

NOTE  9  -  MANAGEMENT  PLANS

     The accompanying financial statements have been prepared in conformity with
accounting  principles generally accepted in the United States of America, which
contemplates  continuation  of  Hybrid  Fuel  systems,  Inc.  (HYFS)  as a going
concern.  However,  HFS  has sustained operating losses in recent years. Further
for  the  nine months ended September 30, 2005, HFS had negative working capital
of  approximately  (1,640,304)  and  a  net loss of (3,397,244). The Company has
incurred  losses  in  previous  years  resulting  in  an  accumulated deficit of
approximately  (12,313,733).  These  factors  raise  substantial doubt about the
ability  of  Hybrid  Fuel  Systems,  Inc.  to  continue  as  a  going  concern.

     Included  in (HYFS) net loss of (3,397,244) for the nine months ending 2005
includes  a  non  cash loss of approximately $1,527,957 for amortization of debt
discount  for  the  embedded  beneficial conversion feature on the related party
convertible  note  for White Knight and the Debt Financing Agreement with Alpha.

     However,  in  addition  to  the  financial  support  provided  by  White
Knight,during  November, 2005, the Company secured a $5,000,000 equity line with
Dutchess  Advisors LLC. The details of the financing transaction are embodied in
a  recent  Form  8-k.

NOTE  7  -  SUBSEQUENT  EVENTS

-     During  September,  we  completed  the build-out of our 12,000 square foot
facility  in PeachTree City Georgia including two state-of-the-art engine rooms.
We  are  now  installing, calibrating and activating our Horiba emission testing
equipment  slated  for  completion  at  the  end  of  the  fourth  quarter.

-     During  the third quarter, we received our second development order from a
major  domestic  OEM  for use in Thailand.  The OEM has shipped a vehicle to our
PeachTree  City development facilities and we developed an electronic conversion
system  for their light weight diesel vehicle.  We shipped a beta version of our
system  to  Thailand  during  July  and  during  September, the OEM ordered four
additional  systems  which had been further developed.  We anticipate entering a
formal  development  agreement  with  this OEM during the fourth quarter 2005 or
first  quarter  2006.

-     During  July  a China-based OEM shipped a bus engine to our PeachTree City
development  facility.  We  anticipate  completing development of the mechanical
system during November 2005 after which we will hand-deliver a prototype version
of  the  new  system  during  late  November,  early  December  2005.

-     During  September,  we  received EPA certifications for an additional four
engine  families

-     During  November,  we  closed  with  Dutchess  Fund  to provide a $340,000
Converible  Loan  and  a  $5,000,000  equity  line.

-     During  October,  we  executed  a  sub-license  agreement  with  McCooey
Engineering  based  in  the United Kingdom.  Under the terms of the sub-license,
McCooey  shall  have  the  exclusive  rights  to  commercialize  our technology.
McCooey  is  currently  ordering  and  installing  systems  at  the  rate  of
approximately  five  per  month.

-     During  October,  Hybrid guaranteed and combined three short term notes of
DRV's  totaling  $75,604.

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

     This  Report  contains  forward-looking  statements,  within the meaning of
Section  21E  of  the Securities Exchange Act of 1934, as amended, which reflect
our  expectation  or  belief  concerning  future  events  that involve risks and
uncertainties.  Our actions and performance could differ materially from what is
contemplated by the forward-looking statements contained in this Report. Factors
that  might  cause differences from the forward-looking statements include those
referred  to  or  identified  under  "Risk Factors" in our Annual Report on Form
10-KSB  for  the  year  ended  December  31,  2004 and other factors that may be
identified  elsewhere  in  this Report. Reference should be made to such factors
and  all forward-looking statements are qualified in their entirety by the above
cautionary  statements.

     The following discussion and analysis provides information which management
believes  is  relevant  to an assessment and understanding of the results of our
operations and financial condition. The discussion should be read in conjunction
with  the  financial  statements  and  notes  thereto.

Overview

     Hybrid  Fuel  Systems  is  engaged  in  the  automotive aftermarket through
developing and commercializing systems which convert diesel and gasoline engines
to  operate  on  natural gas and propane.  The Company's principal technology is
embodied  in  five  US  Patents  and several foreign patents pending licensed to
Hybrid  on  a  world-wide  exclusive basis.  The Company also resells medium and
light-weight  vehicle conversion systems under an agreement with ECO Fuels, Inc.
and  we  resell and service fuel filling stations.  We have sought to insert our
technology  into  the marketplace through original equipment manufacturers (OEM)
parallel  with  expanding  our  direct-to-consumer  activities.

     We  conduct our operations from locations in Florida, Georgia and Oklahoma.
We  have established a network of trained installation partners in approximately
14  states.  Our  facilities  in Georgia comprise 12,000 square feet in which we
operate  two  fully equipped engine rooms, control room and house various Horiba
emission  testing  equipment.  We  completed  the  build-out of our engine rooms
during  September  2005  and  we  are  engaged  in  finalizing the footprint and
calibration  of  the  Horiba  emission  testing  equipment.

     The  following  discussion  provides  insights  into  our commercialization
progress,  state  of operations and liquidity. In our opinion, we are positioned
to show meaningful revenue growth in the fourth quarter and to enter 2006 in the
most  favorable  position  in  the  life  of  our  Company.

     To  increase  an  understanding  of  our business plan, a summary of recent
industry  changes  is  helpful.  The  domestic  alternative fuels segment of the
automotive aftermarket was primarily born out of the need to comply with EPA and
worldwide mandates relating to emissions discharge. Previously, there was little
or  no  price differential between gas or diesel and natural gas or propane. The
sale  of  systems  similar to our dual fuel approach were sold without regard to
the  economic  consequences  of the buyer. In the course of implementing the EPA
plan,  federal  and state authorities made available financing through grants in
that each grant was designed to seek out technologies which could bring vehicles
into  EPA  compliance.  Since there was no economic factor involved in the sale,
i.e.,  the  product didn't have to promise a return on investment, these systems
were  priced  at rates inconsistent with an economic based sale. As the granting
authority  was  concerned with emissions and not profits, there was no incentive
to offer systems at conventional rates. As a result, conversion systems were not
appealing  to  either  the  OEM  or  the  general  consumer.

     The  pricing  of  fuels worldwide has changed that dynamic and in so doing,
has  resulted  in  a  paradign shift in the economic appeal of our product line.
Typically,  domestic  gas or diesel costs on average $1 to $2 a gallon more than
either natural gas or propane. Worldwide in places like China and South America,
natural gas is even more attractive with price differentials in the $2 to $4 per
gallon  range for natural gas over either diesel or gasoline. For the first time
in the life of our product line, there is a strong economic incentive to convert
a  vehicle.  The fact that natural gas is inherently cleaner to burn than either
diesel  or gasoline is now perceived as an added bonus but not the justification
for  the  purchase.  We  consider  this  a  major industry change that holds the
potential  to  expand  our  market  share.  With  this industry backdrop, we now
briefly  discuss  the progress of our market penetration strategy beginning with
the  OEM.

     To  provide  for  our OEM development activities, we invested approximately
$300,000  into  a  state-of-the-art facility including two fully equipped engine
rooms, a control room and various emission testing equipment.  We completed this
important  facility  during  September  and  have  been  actively developing OEM
systems  since  June  2005.  Presently:

-     We  are developing an electronic system to convert a 2.5L and 3.0L vehicle
to  a dual fuel vehicle for a Thailand-based arm of a domestic OEM.  This client
shipped  a  vehicle  to  our  facility  during  the first quarter of 2005 and we
completed  and delivered a prototype system during July 2005.  During September,
this  client  ordered  four  additional  systems  to  continue  their evaluation
process.  We will hand-deliver and aid in the installation of these four systems
during  the  last  week  November,  first  week  of  December  2005.

-     We  are  developing  a mechanical system to covert a bus/truck engine to a
dual-fuel  engine  for  a  China-based OEM.  In this case, the client shipped an
engine  to our facility in Georgia.  We have developed this system in one of our
development  engine rooms and we anticipate shipping a prototype to China during
late  November,  early  December  2005.

-     We  have  proposed  to  develop  a system at the request of a domestic OEM
primarily  engaged in the manufacturing of buses and recreational vehicles.  The
terms  of  our proposal require the delivery of a bus to our facility in Georgia
and  we  estimate  a  preliminary  development  period  of  four  to  six weeks.

-     Although  not an OEM, we are finalizing a mechanical system for light  and
medium  weight  vehicles  in  Thailand  on  a  behalf of a regional distributor.

     Challenges  that we have met in pursuing our OEM pathway principally relate
to price and to a lessor degree, the bureacratic nature of the large OEM and the
distance between our company and these prospective clients.   Our most promising
near  term  OEM  opportunities  are  in  commercializing  our systems in foreign
markets,  particularly  Thailand  and  China.

-     In  those  markets,  costs  to  produce  items  such  as  our  system  are
substantially  lower  than  the  costs  we  currently  pay  for  domestically
manufactured  parts and components.  If we are unable to reduce the costs of our
system through in-country manufacturing, it is unlikely we can successfully sell
our  system  in  those  markets.  We  are  currently  in discussion with several
manufacturers  in  Thailand  and Malaysia and we are confident our system can be
manufactured  at  competitive  rates  at  those  locations.

-     The process typically engaged by OEM's begins with a technology evaluation
on  an  individual and competitive basis.  As this is a documented procedure, it
typically  must  follow  a  series of steps which can take an extended period of
time.  We  have  no control over this process or the length of time each OEM may
dedicate  to  their  respective  evaluation.

-     The  physical  separation  between  Thailand,  China and our facilities in
Georgia as well as interacting with technicians fluent in a foreign language has
worked  to slow down the pace of development.  While we have not encountered any
serious  complications  based on this geographic separation, what normally would
take  a  day  or  so can extend into a week or longer.  We anticipate that as we
develop  our  foreign  relationships  and  move  from  a development to a vendor
status,  the distance between our companies will not cause a meaningful problem.

     We  are  unable  at  this  time to predict what sales will result from this
developmental  activity.  However,  we  believe  that  any  sales through an OEM
pipeline will provide a strong position from which to expand within that segment
of our marketing strategy.  Our parallel pathway into the marketplace is through
an  expansion  of  our  domestic  direct  commercialization program.  Presently:

-     We  currently  hold  EPA  Certifications  for  five engine platforms which
encompass  approximately  35  specific  vehicle  models.  A complete list of the
vehicle  models which are compatible with our EPA Certified systems is available
through  our  internet  website  at  hybridfuelsystems.com.

-     We  are  completing fleet conversions with the Dallas County School system
and  recently  completed  converting  a  portion  of  a  taxi  fleet in Arizona.

-     We  have  trained  (which  includes  the  sale of a system/conversion of a
vehicle)  to  11  installation  partners  located  in  approximately  14 states.
Against  this  backdrop, we intend to establish a sales office in four to six of
these  markets during 2006.  This coast-to-coast network is an essential part of
our  retail  selling  program.

-     We  have  executed  a sub-license with WITCO Intl.  WITCO Intl is owned by
WITCO  Systems,  a Wisconsin-based company which is the largest Dae Woo forklift
distributor in North America.  WITCO's territory includes China and India and we
are  in  discussions  now  with  WITCO  to expand their license throughout Asia.

-     We  have  executed  a  sub-license  with  McCooey Engineering based in the
United  Kingdom.  McCooey  Engineering,  among  other things, provides all field
service  support for John Deere equipment in the United Kingdom.  We have worked
with  McCooey  for  over  a  year  and  they  are  now installing systems at the
approximate  rate  of  5  per  month.

Challenges  that  we  have  encountered in establishing and expanding our direct
selling  program  include:

-     Availability  of  parts,  particularly the specialized injectors which are
necessary  for  our propane systems.  While we haven't experienced a shortage of
injectors  for  our  CNG systems.  However, we experienced a severe slow down in
the  conversion of the Dallas County School system as our supplier was unable to
purchase  propane injectors.   The back order problem has been solved and we are
receiving injectors once again.  We have also taken this opportunity to evaluate
a  second  injector  which,  once  modified,  will  provide  us a backup source.

-     Sufficient  skilled  labor  to  complete our installations.  While we have
been  able  to  hire  three  additional  qualified  mechanics  for  our Oklahoma
operations,  locating  individuals  skilled  with  mechanics  as well as working
around  compressed  gases  has  worked  to  create  a  modest  backlog  in  our
installation scheduling.  We believe this problem is being aleviated principally
through  establishing  our  coast-to-coast  network  of  qualified  installation
centers  as  well  as  continuing  to  interview  and  hire qualified employees.

     While  we  are  unable at this time to forecast our revenues for the retail
component of our marketing strategy, we are completing a year where we have sold
and  installed  more  systems  than  any previous four year period combined. Our
outlook  for  2006  indicates  we should outperform 2005 on a quarter by quarter
basis.  Further,  we  believe  establishing four to six new sales offices during
2006  will  work  to  substantially  compliment  our  existing  efforts.

Liquidity

     We  believe  the  Company is on track to become profitable during the first
quarter  2006.  If  we  are  correct,  our need for financing will be limited to
capital  improvements  or  product  development.  During  November,  2005,  we
concluded  a  round of financing with Dutchess Fund which, when our registration
is  declared  effective,  provides  up  to  $5,000,000  in equity financing.  We
believe  that our earnings from anticipated revenues together with access to our
equity  line  provides  for  all  our  capital needs for the foreseeable future.

Calculating  the  comparisons  between  our  reporting  periods

     Providing  meaningful  insight  into our product and manufacturing costs as
well  as  expenses  incurred  in  delivering  our technology have been difficult
because  we  have  previously sold our systems at the rate of one or two a month
under  federal  and/or state grants. We have not had the ability for our product
to  take  advantage  of  quantity  discounts  in our raw materials and component
parts.  Further,  our  labor  costs  in  our  present  environment  would appear
unusually  high  given  our  revenues.  However, in order for us to position the
company  to  maximize  opportunities,  we  have  found  it  necessary  to engage
professionals  and  mechanics  in sufficient number to complete the build-out of
our  facility  in  Atlanta  as  well  as  developing  new  systems.

     We  have  attempted  in  the following two sections to provide some insight
into the changes in our financial results on a three month and nine month basis.
However,  given  the factors sited above, we don't believe these comparisons are
indicative  of  our  future  operating  performance.

Three  Months  Ended September 30, 2005 Compared to Three Months Ended September
30,  2004

     Our  current  assets increased 636% from $73,498 at the year ended December
31,  2004  to  $541,186  for the period ended September 30, 2005 and during this
same  period  our  total assets increased by approximately 6031% from $82,005 to
$5,028,093. Total liabilities during this period increased by 200% from $753,258
at  the  year  ended December 31, 2004 to $2,256,488 at September 30, 2005.  Our
Shareholders' Deficit increased during this nine month period from $(671,253) at
the  year  ended  December  31,  2004  to  $(2,771,605)  at  September 30, 2005.

     In  comparing profit and loss during the three month period ended September
30,  2004  and  2005,  our revenue and gross profits increased by 571% and(38%),
respectively  from  $33,418  and $10,681 to $224,299 and $6,619. The increase in
revenues  during  this  period  were  principally  due to our acquisition of DRV
Energy  and  the  EPA  certified  systems which were a part of that acquisition.
Comparing  these  two  periods,  our  operating  expenses decreased to 1% from $
665,054 for the three months period ended September 30, 2004 to $657,141 for the
period  ended  September  30,  2005.  Our  net  loss for the three months period
increased  approximately  10%  from  $(1,286,037)  for  the  three  months ended
September  30,  2004  to $(1,413,903) for the three month period ended September
30,  2005.

Nine Months Ended September 30, 2005 Compared to Nine Months Ended September 30,
2004

     In  comparing  profit and loss during the nine month period ended September
30,  2004  and  2005, our revenue and gross profits increased by 127% and (54%),
respectively  from $122,589 and $71,743 to $278,035 and $33,058. The increase in
revenues  during  this  period  were  principally  due to our acquisition of DRV
Energy  and  the  EPA  certified  systems which were a part of that acquisition.
Comparing  these  two  periods,  our  operating  expenses  increased to 85% from
$1,058,672 for the nine months period ended September 30, 2004 to $1,955,964 for
the  period  ended  September  30, 2005. Our net loss for the nine months period
increased  approximately  109%  from  $(1,627,605)  for  the  three months ended
September  30,  2004  to $(3,397,244) for the three month period ended September
30,  2005.

Certain  expectations  for  2005

     We  believe our dual-fuel technology has immediate market potential outside
of  the  United  States  with  particular  emphasis  on areas with a significant
differential  between  the  cost of diesel and natural gas. We will continue our
primary  objective  to  complete  the  EPA/CARB  verification.

     The  Company  is  also  pursuing  the use of its technology with stationary
diesel  engines  and  on  new  vehicles  manufactured  after  2004.  We are also
exploring  the  use  of  our  technology  in  bio-diesel  and  synthetic  field
applications.

Item  3  Controls  and  Procedures

Evaluation  of  disclosure  controls  and  procedures.

     An  evaluation  was  performed  under  the  supervision  and  with  the
participation  of  our management, including the Chief Executive Officer, of the
effectiveness of the design and operation of our disclosure procedures. Based on
management's  evaluation  as  of the end of the period covered by this Quarterly
Report,  our  principal  executive  and  financial  officer  concluded  that our
disclosure  controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e)
under the Securities Exchange Act of 1934, as amended (the "Exchange Act")) were
sufficiently  effective  to ensure that the information required to be disclosed
by  us  in  the  reports  that  the  we file under the Exchange Act is gathered,
analyzed  and  disclosed  with  adequate  timeliness, accuracy and completeness.

Changes  in  internal  controls.

     There have been no significant changes in our internal controls or in other
factors that could significantly affect these controls subsequent to the date of
the evaluation referred to above, nor were there any significant deficiencies or
material weaknesses in our internal controls. Accordingly, no corrective actions
were  required  or  undertaken.

Item  1  -  legal  Proceedings

     On  November  14,  2003, Ambac International Corporation ("Ambac.") filed a
lawsuit seeking $109,915.60 together with interest at the rate of 15% per annum.
The  suits  stems  from  a contract for delivery of certain parts for use in the
manufacturing  of  our  kits. We maintain the parts were delivered substantially
past  the  date  of  anticipated  delivery and that the parts when received were
defective.  Subsequently  we  filed  a  response  on  December  22,  2003. Ambac
subsequently  made a motion for default judgment because the statutory period to
file  a response was 30 days and our response was filed in 35 days. Further, the
response  was  submitted  by  a "non-attorney." which is alleged to be a further
violation  of  South Carolina civil procedure. Our CFO filed the response during
2003  at  the  direction  of  our  then-Chief  Executive  Officer.

     On  August  3,  2004,  we filed a Motion to Dismiss or, in the Alternative,
Motion  to Compel Arbitration. During October 2004, the Court issued an order to
Compel  Arbitration.  During  October 2005, Ambac notified us of their intent to
schedule  mediation  during  November  2005.  We do not believe the loss of this
litigation  will  have  a material effect on our ability to execute our business
mission.  The full amount of the liability has been recorded as a payable in our
financial  statements  up  through  and  including  September  30,  2005.

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

-     On  July  21,  2005, we issued 166,000 of our common shares to engage Utek
Corporation  as  the  Company's  new  technology  advisor.

-     On  September  5, 2003, we issued an aggregate of 11,752,903 of our common
shares  to  acquire  DRV  Energy.

-     On  July 29, 205 and September 16, 2005, we converted $242,000 of our debt
to  White  Knight  into  6,050,000  of  our  common  shares.


Item  3  -  Defaults  Upon  Senior  Securities

None.

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

None.

Item  5  -  Other  Information

None.


<PAGE>
Item  6.  Exhibits

No.  Description  of  Exhibit

31.1  Chief  Executive  Officer  and  Chief  Financial  Officer  Section  302
Certification

32.1  Chief  Executive  Officer  and  Chief  Financial  Officer  Certification



                                   SIGNATURES

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

                            Hybrid Fuel Systems, Inc.

                               By:/s/ MARK CLANCY
                                 ----------------

                                   Mark Clancy
                            Chief Executive Officer,
                             Chief Financial Officer

Date:  November  21,  2005