**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**Washington
      D.C. 20549**




**FORM
      10-Q**


(Mark
      One)




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





For
      the
      quarterly period ended September
      30, 2008





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





For
      the
      transition period from _________________ to _________________




Commission
      File No.: 000-49672




**THE
      BLACKHAWK FUND**


(Exact
      name of registrant as specified in its charter)





**Nevada**
            
            **88-0408213**(State or other jurisdiction of
              incorporation or organization)
            
            (I.R.S. Employer
              Identification No.)





**1802 N. Carson
      Street, Suite 212-3018**


**Carson
      City, NV 89701**


**** (Address
      of principal executive offices)





Issuer’s
      telephone number: **(775)
      887-0670**




**___________________**




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




Indicate
      by check mark whether the registrant is a large 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.




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




Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2 of the Exchange Act). Yes  ̈ No x




**APPLICABLE
      ONLY TO CORPORATE ISSUERS**




As
      of
      November 13, 2008, 562,293,791 shares of our common stock were
      outstanding.











**ITEM
      1 – CONDENSED FINANCIAL STATEMENTS**





**THE
      BLACKHAWK FUND**


**BALANCE
      SHEET**





**(unaudited)****September 30,**
            
            **December 31,****2008**
            
            **2007**ASSETSCash
            
            $
            2,343
            
            
            2,381Prepaid
                financing costs
            
            
            23,911
            
            
            24,533Total
                current assets
            
            
            26,254
            
            
            26,914Fixed
                Assets-net
            
            
            —
            
            
            5,055Property
                - held-for-sale/prepaid financing costs
            
            
            1,774,900
            
            
            1,774,900TOTAL
                ASSETS
            
            $
            1,801,154
            
            $
            1,806,869LIABILITIES
                AND STOCKHOLDERS’ DEFICITLIABILITIESAccounts
                payable and accrued liabilities
            
            $
            94,090
            
            $
            4,240Note
                Payable
            
            
            843,199
            
            
            22,000Notes
                payable-related party
            
            
            47,876
            
            
            827,828Total
                current liabilities
            
            
            985,165
            
            
            854,068Long
                term liabilityNote
                payable
            
            
            1,936,000
            
            
            1,936,000Total
                Liabilities
            
            
            2,921,165
            
            
            2,790,068Commitments
                and contingencies
            
            
            —
            
            
            —STOCKHOLDERS’
                DEFICITPreferred
                stock, $0.001 par value:Series
                A, authorized 500,000, 500,000 issued and outstanding
            
            
            500
            
            
            —Series
                B, authorized 10,000,000, 10,000,000 issued and
                outstanding
            
            
            10,000
            
            
            10,000Series
                C, authorized 20,000,000, 10,000,000 issued and
                outstanding
            
            
            10,000
            
            
            10,000Common
                Stock,$0.001 par value, 4,000,000,000 shares authorized, 562,293,791
                and
                341,193,791 shares issued and outstanding at September 30, 2008 and
                December 31, 2007, respectively
            
            
            562,294
            
            
            341,194Common
                Stock B, $0.001 par value 150,000,000 authorized, 30,000,000 issued
                and
                outstanding
            
            
            30,000
            
            
            30,000Additional
                Paid in Capital
            
            
            36,585,416
            
            
            36,252,318Common
                Stock Subscribed
            
            
            —
            
            
            (223,862
            )Retained
                Deficit
            
            
            (38,318,221
            )
            
            (37,402,849
            )Total
                Stockholders’ Deficit
            
            
            (1,120,011
            )
            
            (983,199
            )TOTAL
                LIABILITIES AND STOCKHOLDERS’ DEFICIT
            
            $
            1,801,154
            
            $
            1,806,869





See
      accompanying notes to financial statements.


2


**THE
      BLACKHAWK FUND**


**STATEMENTS
      OF OPERATIONS**


**Three
      and Nine Months Ended September 30, 2008 and 2007**


**(unaudited)**





**Three Months Ended September 30,**
            
            **Nine Months Ended September 30,****2008**
            
            **2007**
            
            **2008**
            
            **2007**Revenues
            
            $
            6,000
            
            
            38,145
            
            
            25,765
            
            
            313,073Cost
                of Sales
            
            
            —
            
            
            17,072
            
            
            —
            
            
            251,303Gross
                Profit
            
            
            6,000
            
            
            21,073
            
            
            25,765
            
            
            61,770**OPERATING
                EXPENSES**General
                & Administrative
            
            
            32,851
            
            
            525,705
            
            
            204,597
            
            
            695,681Stock
                for Services
            
            
            —
            
            
            28,900
            
            
            92,300
            
            
            1,322,836Interest
                Expense
            
            
            51,045
            
            
            43,975
            
            
            644,240
            
            
            126,996Total
                Expenses
            
            
            83,896
            
            
            224,376
            
            
            941,137
            
            
            2,145,513**NET
                LOSS**
            
            $
            (77,896
            )
            
            (577,507
            )
            $
            (915,372
            )
            
            (2,083,743
            )Basic
                and Diluted Net Income (Loss) Per Common Share
            
            $
            (0.00
            )
            
            (0.00
            )
            $
            (0.00
            )
            
            (0.01
            )Weighted
                Average Number of Shares Outstanding
            
            
            562,293,791
            
            
            219,960,457
            
            
            488,593,791
            
            
            160,980,728




See
      accompanying notes to financial statements.


3





**THE
      BLACKHAWK FUND**


**STATEMENTS
      OF CASH FLOWS**


**Nine
      Months Ended September 30, 2008 and 2007**


**(unaudited)**





**September 30,**
            
            **September 30,****2008**
            
            **2007****Cash Flows
                From Operating Activities**Net
                Loss
            
            $
            (915.372
            )
            $
            (2,083,743
            )Adjustments
                  to reconcile net income (loss) to net cash provided by (used in)
                  operating
                  activities:Depreciation
            
            
            505
            
            
            505Stock
                Issued for Services/option expense
            
            
            92,300
            
            
            1,322,836Stock
                Issued for Interest Expense (Financing)
            
            
            500,000
            
            
            —Changes
                in:Other
                assets (increase)
            
            
            642
            
            
            (45,648
            )Increase
                (Decrease) in Accounts Payable
            
            
            89,850
            
            
            103,031Net
                cash used in operating activities
            
            
            (232,075
            )
            
            (703,019
            )Cash
                Flows From Investing Activities:Sale
                (Purchase) of Assets
            
            
            4,550
            
            
            (88,365
            )Net
                cash provided by (used in) investing activities
            
            
            4,550
            
            
            (88,365
            )Cash
                Flows From Financing Activities:Proceeds
                from stock issuances/subscriptions
            
            
            186,260
            
            
            182,566Proceeds
                from stock sales
            
            
            —
            
            
            10,000Payments
                on notes payable - related party
            
            
            (37,324
            )
            
            —Proceeds
                from notes payable - related party
            
            
            78,551
            
            
            607,296Net
                cash provided by financing activities
            
            
            227,487
            
            
            799,862Net
                Change in Cash
            
            
            (38
            )
            
            8,478Cash
                Beginning of Period
            
            
            2,381
            
            
            11,748Cash
                End of Period
            
            
            2,343
            
            
            20,226Supplemental
                disclosures:Cash
                paid for:Interest
            
            $
            99,549
            
            $
            91,812Income
                Taxes
            
            $
            —
            
            $
            —




See
      accompanying notes to financial statements.


4


**THE
      BLACKHAWK FUND**


**NOTES
      TO FINANCIAL STATEMENTS**


**(Unaudited)**





**NOTE
      1 - BASIS OF PRESENTATION**





The
      accompanying unaudited interim financial statements of The Blackhawk Fund
      ("Blackhawk" or the "Company") have been prepared in accordance with accounting
      principles generally accepted in the United States of America and the rules
      of
      the Securities and Exchange Commission ("SEC"), and should be read in
      conjunction with the audited financial statements and notes thereto contained
      in
      Blackhawk's Annual Report filed with the SEC on Form 10-KSB. In the opinion
      of
      management, all adjustments, consisting of normal recurring adjustments,
      necessary for a fair presentation of financial position and the results of
      operations for the interim periods presented have been reflected herein. The
      results of operations for interim periods are not necessarily indicative of
      the
      results to be expected for the full year. Notes to the financial statements
      which would substantially duplicate the disclosure contained in the audited
      financial statements for 2007 as reported in the 10-KSB have been
      omitted.





**NOTE
      2 - STOCK BASED COMPENSATION**





Prior
      to
      January 1, 2006 we accounted for stock based compensation under Statement of
      Financial Accounting Standards No. 123 Accounting for Stock-Based Compensation
      (FAS 123). As permitted under this standard, compensation cost was recognized
      using the intrinsic value method described in Accounting Principles Board
      Opinion No. 25, Accounting for Stock Issued to Employees (APB 25). Effective
      January 1, 2006, the Company has adopted Statement of Financial Accounting
      Standards No. 123 (Revised 2004), Share-Based Payment (FAS 123R) and applied
      the
      provisions of the Securities and Exchange Commission Staff Accounting Bulletin
      No. 107 using the modified-prospective transition method. Prior periods were
      not
      restated to reflect the impact of adopting the new standard. As a result of
      the
      adoption of FAS 123R, stock-based compensation expense recognized during the
      nine months ended September 30, 2008 includes compensation expense for all
      share-based payments granted on or prior to, but not yet vested as of December
      31, 2006, based on the grant date fair value estimated in accordance with the
      original provisions of FAS 123, and compensation cost for all share-based
      payments granted on or subsequent to January 1, 2006, based on the grant date
      fair value estimated in accordance with the provisions of FAS 123R.





Beginning
      on January 1, 2006, any future excess tax benefits derived from the exercise
      of
      stock options will be recorded prospectively and reported as cash flows from
      financing activities in accordance with FAS 123R.





During
      the nine months ended September 30, 2008 the Company recorded stock based
      consulting expense of $92,300, as determined under FASB 123R..





**NOTE
      3 - PROPERTY - HELD FOR SALE/FIXED ASSETS**





In
      late
      March 2006, the Company purchased a condominium located in Carlsbad, California
      for $625,083. The Company intends to renovate and sell the condo. Since the
      Company intends to sell the condominium upon completion of the planned
      renovations, it has been designated as "held-for-sale". Therefore it will be
      carried at the lower cost or fair value (net of expected sales costs) during
      the
      renovation period and will not be depreciated. Major improvements and
      renovations are capitalized.





In
      June
      of 2006, the Company entered into a joint venture agreement to renovate and
      then
      sell a residential home located in Oceanside, California. The Company is a
      50%
      joint venture partner, but has the right to exercise control. The Company is
      100% responsible for improvement costs, with these costs to be reimbursed upon
      sale and any remaining profits split 50/50. The Company has valued the house
      at
      the original value of the liability assumed of $1,000,000. As the intention
      on
      this property is identical described above the description related to "held
      for
      sale" no depreciation applies. The Company has capitalized improvements on
      this
      property of $149,817.





**NOTE
      4 - COMMON STOCK**





During
      the nine months ended September 30, 2008, the company issued 221,100,000 shares
      of common stock under its stock option plan resulting in an expense of $92,300
      and cash received $186,260.


5





**NOTE
      5-PREFERRED STOCK**





**Series
      A Preferred Stock**





On
      April
      24, 2008, the Company withdrew its certificate of designation establishing
      the
      Company’s Series A Preferred Stock and filed a new certificate of designation
      for 500,000 shares of Series A Preferred Stock, par value $0.001 per share.
      Anytime after October 24, 2008, the Series A Preferred Stock is convertible
      based upon the average of the per shares market value of the Company’s common
      stock during the 20 trading days immediately preceding a conversion date. In
      addition, upon the consummation of a bona fide sale third party sale by the
      Company of its securities resulting in gross proceeds of at least $1,000,000,
      the Series A Preferred Stock will automatically convert into the securities
      being sold in such offering. The Series A Preferred Stock has no voting rights,
      dividend rights, liquidation preference, redemption rights, or preemptive
      rights.





On
      April
      24, 2008, the Company issued 500,000 shares of the newly designated Series
      A
      Preferred Stock as part of a financing transaction. See Note 6. The Company
      has
      valued the convertible shares using the Black-Scholes model and has recognized
      a
      financing expense equivalent to the stated value of the Series A Preferred
      Stock
      of $500,000.





**Series
      B Preferred Stock**





On
      April
      24, 2008, the Company amended the certificate of designation establishing the
      Company’s Series B Preferred Stock. Pursuant to this amendment, the Company’s
      Series B Preferred Stock now contains on limitation on conversions such that
      no
      holder of Series B Preferred Stock can convert such shares into the Company’s
      common stock if such conversion would result in the holder owning in excess
      of
      4.99% of the Company’s issued and outstanding common stock.





**Series
      C Preferred Stock**





On
      April
      24, 2008, the Company amended the certificate of designation for its Series
      C
      Preferred Stock. Pursuant to the Amendment, on all matters submitted to a vote
      of the holders of the common stock, including, without limitation, the election
      of directors, a holder of shares of the Series C Preferred Stock shall be
      entitled to the number of votes on such matters equal to the product of (a)
      the
      number of shares of the Series C Preferred Stock held by such holder, (b) the
      number of issued and outstanding shares of the Company’s common stock, on a
      fully-diluted basis, as of the record date for the vote, or, if no such record
      date is established, as of the date such vote is taken or any written consent
      of
      stockholders is solicited, and (c) 0.0000002.





**NOTE
      6 – NOTES PAYABLE/MORTGAGES PAYABLE**





In
      conjunction with the purchase of the condominium described in Note 3 above,
      the
      Company executed a 30-year adjustable rate promissory note for $496,000. The
      initial interest rate on the note is 7.875%. Pursuant to the terms of the note,
      the Company is required to make interest-only payments for the first 10 years
      (first 120 payments). The initial monthly payments were $3,225 and have since
      been reduced to $2,273. The note payable is personally guaranteed by the
      Company’s former president.  The
      note
      payable is personally guaranteed by the Company’s president. This note is
      arrears at September 30, 2008.





In
      conjunction with the joint venture property described in Note 3 above, the
      Company refinanced this note in July 2007 and assumed a 50% interest and
      corresponding promissory note debt of $1,440,000. Terms indicate that the first
      note is for $1,120,000 over 30 years, with interest only payments required
      for
      the first 10 years. The second note is carried for $320,000 with interest at
      9.875% over 30 years, with interest only payments required for the first 10
      years. Monthly amounts are presently $9,983. Both of the above notes are
      classified as long term notes payable. This amount is in arrears at September
      30, 2008.





On
      April
      24, 2008, the Company issued, and the formerly related party accepted, a
      subordinated secured non-recourse note in the principal amount of $841,828,
      due
      December 31, 2008. The current balance on this note is $843,199. See Note
      8.


6


On
      April
      24, 2008, the Company and Terminus, Inc., as co-issuers, issued and sold to
      a
      single accredited investor: (i) a $550,000 12% secured promissory note and
      (ii)
      500,000 shares of the Company’s Series A Preferred Stock. To secure payment of
      the note, Terminus pledged the 10,000,000 shares of the Company’s Series C
      Preferred Stock. The Company is considered a guarantor of the note, and
      accordingly, has treated the note as a contingent liability.





**NOTE
      7- CONTINGENT LIABILITY**





On
      April
      24, 2008, the Company and Terminus, Inc. as co-issuers, issued and sold to
      a
      single accredited investor (1) a $550,000 12% secured promissory note and (2)
      500,000 shares of the Company’s Series A Preferred Stock. To secure payment of
      the note Terminus pledged the 10,000,000 shares of the company’s Series C
      Preferred Stock. The Company is considered a guarantor of the note, and
      accordingly, has treated the note as a contingent liability.





**NOTE
      8-RELATED PARTY TRANSACTIONS**





At
      March
      31, 2008, the Company was indebted to a formerly related party for $801,616.
      Interest had been imputed at 6% per year. On April 24, 2008, the Company issued,
      and the formerly related party accepted, a subordinated secured non-recourse
      note in the principal amount of $841,828, due October 24, 2008. The note is
      secured by the real estate described in Note 3 above, but is subordinated to
      the
      notes described above. The lender’s recovery for default on payment of this note
      is limited to limited solely to the real estate described above. The current
      balance on this note is $843,199.





At
      September 30, 2008, Terminus, Inc. the holder of the Company’s Series C
      Preferred Stock, has loaned the company approximately $45,596. The loan is
      payable upon demand with interest at 12%. Interest added to this loan is $2,280
      at September 30, 2008.





During
      the nine months ended September 30, 2008, the Company made payments totaling
      $65,000 to entities controlled by the former CEO and CFO for consulting
      services.





**NOTE
      9-GOING CONCERN**





The
      Company has incurred significant losses, has a negative capital, and negative
      current ratio. These factors, among others indicate that the Company may not
      be
      able to continue as a going concern. No adjustments have been made to the
      carrying value of assets and liabilities should the company not continue as
      a
      going concern.


7


**ITEM
      2 – MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
      OPERATIONS.**





The
      following discussion and analysis should be read in conjunction with our
      financial statements and related notes included in this report. This report
      contains “forward-looking statements” within the meaning of the Private
      Securities Litigation Reform Act of 1995. The statements contained in this
      report that are not historic in nature, particularly those that utilize
      terminology such as “may,” “will,” “should,” “expects,” “anticipates,”
“estimates,” “believes,” or “plans” or comparable terminology are
      forward-looking statements based on current expectations and assumptions.
      Various risks and uncertainties could cause actual results to differ materially
      from those expressed in forward-looking statements. Please refer to the Risk
      Factors section of our Annual Report on Form 10-KSB for a description of these
      risks and uncertainties.





All
      forward-looking statements in this document are based on information currently
      available to us as of the date of this report, and we assume no obligation
      to
      update any forward-looking statements. Forward-looking statements involve known
      and unknown risks, uncertainties and other factors that may cause the actual
      results to differ materially from any future results, performance or
      achievements expressed or implied by such forward-looking
      statements.





**General**





The
      Blackhawk Fund acquires and redevelops residential and commercial real estate
      for investment. Once we acquire a property, we redevelop and refurbish the
      properties, seeking to enhance the value of the properties. Once a property
      is
      refurbished, we seek to generate revenue by rental of the property, and we
      also
      seek to resell the properties if market conditions permit. We currently hold
      two
      properties in our real estate portfolio.





Historically,
      we have also operated a media and television production division. In this
      division, we have sought to manage and implement proprietary media properties,
      including cable television shows, infomercials, online video magazines, and
      DVDs. However, as discussed below, management has determined that the ongoing
      media and television production operations are not viable, and accordingly
      has
      determined to discontinue the media and television production
      operations.





**Change
      of Control and Change in Management**





On
      April
      24, 2008, we entered into a stock purchase agreement with Terminus, Inc. and
      Palomar Enterprises, Inc. pursuant to which Terminus purchased 10,000,000 shares
      of our Series C Preferred Stock from Palomar for $363,000. As a result, the
      sale
      of the Series C Preferred Stock by Palomar to Terminus effectively transferred
      Palomar’s control of our company to Terminus.





Concurrently,
      Steve Bonenberger resigned as our President and Chief Executive Officer, and
      Brent Fouch resigned as our Secretary and Chief Financial Officer. In connection
      therewith, the board of directors increased the number of authorized directors
      from two to three and appointed Frank Marshik to fill the newly created vacancy
      on the board. The board of directors then appointed Mr. Marshik as our
      President, Chief Financial Officer, and Secretary. Thereafter, Mr. Bonenberger
      and Mr. Fouch resigned as directors. Mr. Marshik, as the sole remaining
      director, appointed Terry Ross to fill one of the two vacancies resulting from
      these resignations.





On
      August
      19, 2008, the board of directors reduced the number of authorized directors
      from
      three (3) to one (1). Concurrently therewith, Terry Ross resigned as a director.
      Mr. Ross’ resignation was not due to any disagreements with The Blackhawk Fund
      on matters relating to its operations, policies, and practices.





**Plan
      of Operation**





Our
      new
      management determined that our company has incurred operating and net losses
      in
      each of the last two fiscal years, had a working capital deficit as of the
      end
      of the latest fiscal year and as of the latest fiscal quarter, and has a large
      accumulated deficit. Accordingly, new management has commenced an analysis
      of
      each of our two business lines to determine the viability of each line during
      the second and third quarters of 2008. Within each line of business, management
      has evaluated and is evaluating historical and projected costs in running the
      line, existing and potential revenue streams, and the availability of additional
      capital for expansion of the business line. In particular, with respect to
      the
      real estate business, management is evaluating our current real estate portfolio
      in light of current market conditions, both in the real estate markets and
      the
      credit markets. Upon completion of the analysis, management will determine
      whether to seek to expand the business line or to discontinue or divest of
      the
      division.


8





As
      of the
      date of this report, management has determined that, based on its analysis
      of
      the foregoing factors, the media and television production operations are not
      viable. Accordingly, management has determined to discontinue the media and
      television production operations. Management is continuing the evaluation of
      our
      real estate business, the existing real estate portfolio valuations, the
      existing and potential rental possibilities, the current market values, and
      the
      existing financing arrangements. In addition, in light of the distress in the
      real estate markets, management is looking at potential real estate acquisition
      opportunities that, if consummated, would increase and diversify our real estate
      portfolio. Management is also considering diversifying into additional lines
      of
      business. In all cases, management may seek to form one or more partnerships,
      enter into one or more joint ventures, or conduct one or more strategic
      acquisitions.





**Critical
      Accounting Policies**





The
      discussion and analysis of our financial conditions and results of operations
      is
      based upon our consolidated financial statements, which have been prepared
      in
      accordance with generally accepted accounting principles in the United States.
      The preparation of financial statements requires managers to make estimates
      and
      disclosures on the date of the financial statements. On an on-going basis,
      we
      evaluate our estimates, including, but not limited to, those related to revenue
      recognition. We use authoritative pronouncements, historical experience, and
      other assumptions as the basis for making judgments. Actual results could differ
      from those estimates. We believe the following critical accounting policies
      affect our more significant judgments and estimates in the preparation of our
      consolidated financial statements. A summary of our critical accounting policies
      can be found in the notes to our annual financial statements included our Form
      10-KSB for the year ended December 31, 2007.





**Results
      of Operations**





*Basis
      of Presentation*





The
      following table sets forth, for the periods indicated, certain unaudited
      selected financial data:





Three Months Ended
            
            None Months EndedSeptember 30,
            
            September 30,2008
            
            2007
            
            2008
            
            2007Revenues
            
            $
            6,000
            
            $
            38,145
            
            $
            25,765
            
            $
            313,073Costs
                of Sales
            
            
            —
            
            
            17,072
            
            
            —
            
            
            251,303General
                and administrative
            
            
            32,851
            
            
            525,705
            
            
            204,597
            
            
            695,681Stock
                for services
            
            
            —
            
            
            28,900
            
            
            92,300
            
            
            1,322,836Interest
                Expense
            
            
            51,045
            
            
            43,975
            
            
            644,240
            
            
            126,996Operating
                income (loss)
            
            $
            (77,896
            )
            $
            (577,507
            )
            $
            (915,372
            )
            $
            (2,083,743
            )





**Comparison
      of the three months ended September 30, 2008 and 2007**





**Net
      sales.** ** Our
      revenues were $6,000 for the three months ended September 30, 2008, as compared
      to $38,145 for the three months ended September 30, 2007. This decrease resulted
      from lower demand for our media products and services which resulted in our
      decision to cease our media operations. The decrease also resulted from a lack
      of sales of any real estate properties held for development. Our revenues were
      generated from rental income from our real estate properties.





**Cost
      of Sales.** Our
      costs of sales were $0 for the three months ended September 30, 2008, as
      compared to $17,072 for the three months ended September 30, 2007, all of which
      resulted from our media operations.


9





**General
      and administrative.** General
      and administrative expenses increased to $32,851 for the three months ended
      September 30, 2008 from $525,705 for the three months ended September 30, 2007.





**Stock/Options
      for Services.** Expenses
      resulting from the issuance of our common stock and options to purchase our
      common stock decreased to $0 for the first three months ended September 30,
      2008
      from $28,900 for the comparable period in the prior fiscal year. This decrease
      resulted from a significant reduction in shares and options issued for services
      in the third quarter of 2008 as compared to the third quarter of
      2007.





**Interest.** Interest
      expense increased to $51,045 for the three months ended September 30, 2008
      from
      $43,975 for the three months ended September 30, 2007. This increase resulted
      primarily from the issuance of 500,000 shares of Series A Preferred Stock,
      valued at $500,000, in connection with our change of control
      financing.





**Net
      loss.** We
      incurred an operating loss of $77,896 for the three months ended September
      30,
      2008, compared to a net loss of $577,507 for the three months ended September
      30,2007. The decrease in net loss resulted primarily from the decrease in
      expenses associated with cessation of media department.





**Comparison
      of the nine months ended September 30, 2008 and 2007**





**Net
      sales.** ** Our
      revenues were $25,765 for the nine months ended September 30, 2008, as compared
      to $313,073 for the nine months ended September 30, 2007. This decrease resulted
      from lower demand for our media products and services which resulted in our
      decision to cease our media operations. The decrease also resulted from a lack
      of sales of any real estate properties held for development. Our revenues were
      generated from rental income from our real estate properties and revenues from
      our former media operations.





**Cost
      of Sales.** Costs of
      sales were $0 for the nine months ended September 30, 2008, as compared to
      $251,303 for the nine months ended September 30, 2007, all of which resulted
      from our media operations.





**General
      and administrative.** General
      and administrative expenses decreased to $204,597 for the nine months ended
      September 30, 2008 from $695,681 for the nine months ended September 30, 2007.





**Stock/Options
      for Services.** Expenses
      resulting from the issuance of our common stock and options to purchase our
      common stock decreased to $92,300 for the first nine months ended September
      30,
      2008 from $1,322,836 for the comparable period in the prior fiscal year. This
      decrease resulted from a significant reduction in shares and options issued
      for
      services in the first three quarters of 2008 as compared to the first three
      quarters of 2007.





**Interest.** Interest
      expense increased to $644,240 for the nine months ended September 30, 2008
      from
      $126,996 for the nine months ended September 30, 2007. This increase resulted
      primarily from the issuance of 500,000 shares of Series A Preferred Stock,
      valued at $500,000, in connection with our change of control
      financing.





**Net
      loss.** We
      incurred an operating loss of $915,372 for the nine months ended September
      30,
      2008, compared to a net loss of $2,083,743 for the nine months ended September
      30, 2007. The reduction in net loss resulted primarily from a significant
      reduction in shares and options issued for services in the first three quarters
      of 2008 as compared to the first three quarters of 2007. The reduction was
      offset by the issuance of 500,000 shares of Series A Preferred Stock, valued
      at
      $500,000, in connection with our change of control financing





**Liquidity
      and Capital Resources**





We
      have
      financed our operations, debt service, and capital requirements through cash
      flows generated from operations and through issuance of debt and equity
      securities. Our working capital deficit at September 30, 2008 was $958,911,
      and
      we had cash of $2,343 as of September 30, 2008.




We
      used
      $232,075 of net cash in operating activities for the nine months ended September
      30, 2008, compared to using $703,019 in the nine months ended September 30,
      2007. The net loss of $915,372 was offset by non-cash expenses of $505 in
      depreciation and amortization, $92,300 of stock and options issued for services,
      $500,000 of stock issued for interest in connection with the change in control
      financing, an increase of $89,850 in accounts payable, and an increase of $640
      in other assets.


10





We
      generated $4,550 net cash flows from investing activities for the nine months
      ended September 30, 2008, whereas we used $88,365 in net cash flows from
      investing activities for the nine months ended September 30, 2007. The cash
      flow
      generated from investing activities related to the disposition of certain
      equipment.





Net
      cash
      flows provided by financing activities were $227,487 for the nine months ended
      September 30, 2008, compared to net cash flows provided by financing activities
      of $799,862 for the nine months ended September 30, 2007. This increase in
      net
      cash provided by financing activities is due to proceeds from the exercise
      of
      stock options and receipt of stock subscriptions of $186,260 and proceeds from
      related party notes payable of $78,551. These cash flows were offset by
      repayment of $37,324 of related party debt.





**Capital
      Requirements**





Our
      financial statements for the fiscal year ended December 31, 2007 state that
      we
      have incurred significant losses, have a negative capital, and a negative
      current ratio. These factors, among others indicate that we may not be able
      to
      continue as a going concern. We believe that, as of the date of this report,
      in
      order to fund our plan of operations over the next 12 months, we will need
      to
      fund its operations out of cash flows generated from operations, from the
      borrowing of money, and from the sale of additional securities. It is possible
      that we will be unable to obtain sufficient additional capital through the
      borrowing of money or the sale of our securities as needed.





Part
      of
      our growth strategy may include diversifying into additional lines of business,
      forming one or more partnerships, entering into one or more joint ventures,
      or
      conducting one or more strategic acquisitions, which may require us to raise
      additional capital. We do not currently have binding agreements or
      understandings to acquire any other companies.





We
      intend
      to retain any future earnings to pay our debts, finance the operation and
      expansion of our business and any necessary capital expenditures, and for
      general corporate purposes.





**Off-Balance
      Sheet Arrangements**





On
      April
      24, 2008, the Company and Terminus, Inc., as co-issuers, issued and sold to
      a
      single accredited investor: (i) a $550,000 12% secured promissory note and
      (ii)
      500,000 shares of the Company’s Series A Preferred Stock. To secure payment of
      the note, Terminus pledged the 10,000,000 shares of the Company’s Series C
      Preferred Stock. The Company is considered a guarantor of the note, and
      accordingly, has treated the note as a contingent liability. In the event that
      Terminus defaults on the note, the Company will become unconditionally liable
      for repayment of all principal and interest then due under the note and will
      incur an expense for the full amount of all such principal and interest. The
      purpose of the Company’s guarantee of the note was to facilitate the change in
      control transaction.





**ITEM
      3 – QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
      RISK**





Not
      applicable. ****


11


**ITEM
      4 – CONTROLS AND PROCEDURES**





We
      maintain disclosure controls and procedures that are designed to ensure that
      information required to be disclosed in our reports that we file under the
      Securities Exchange Act of 1934, as amended, is recorded, processed, summarized,
      and reported within the time periods specified in the Securities and Exchange
      Commission’s rules and forms, and that such information is accumulated and
      communicated to our management, including our Chief Executive Officer and Chief
      Financial Officer, as appropriate, to allow timely decisions regarding required
      disclosure based on the definition of “disclosure controls and procedures” in
      Rule 13a-15(e). In designing and evaluating the disclosure controls and
      procedures, our management recognized that any controls and procedures, no
      matter how well designed and operated, can provide only reasonable assurance
      of
      achieving the desired control objectives, and management necessarily was
      required to apply its judgment in evaluating the cost-benefit relationship
      of
      possible controls and procedures.




At
      the
      end of the period covered by this Quarterly Report on Form 10-Q, we carried
      out
      an evaluation, under the supervision and with the participation of our former
      management, including our former Chief Executive Officer and former Chief
      Financial Officer, of the effectiveness of the design and operation of our
      disclosure controls and procedures. Based on the foregoing, our former Chief
      Executive Officer and our former Chief Financial Officer concluded that our
      disclosure controls and procedures were effective to ensure that all material
      information required to be disclosed in this Quarterly Report on Form 10-Q
      has
      been made known to them in a timely fashion. ****





Our
      former Chief Executive Officer and former Chief Financial Officer have also
      evaluated whether any change in our internal controls occurred during the last
      fiscal quarter and have concluded that there were no material changes in our
      internal controls or in other factors that occurred during the last fiscal
      quarter that has materially affected, or is reasonably likely to materially
      affect, these controls.





**PART
      II: OTHER INFORMATION**




**ITEM
      1 – LEGAL PROCEEDINGS**





None.





**ITEM
      2 – CHANGES IN SECURITIES**





None.




**ITEM
      3 – DEFAULT UPON SENIOR SECURITIES**





(a)  None.





**ITEM
      4 – SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS**





None.





**ITEM
      5 –  OTHER
      INFORMATION**




(a)
            On
                August 19, 2008, the board of directors reduced the number of authorized
                directors from three (3) to one (1). Concurrently therewith, Terry
                Ross
                resigned as a director. Mr. Ross’ resignation was not due to any
                disagreements with The Blackhawk Fund on matters relating to its
                operations, policies, and
                practices.





(b)
            None.


12





**ITEM
      6 - EXHIBITS**





ItemNo.
            
            Description
            
            Method
                of Filing31.1
            
            Certification
                of Frank Marshik pursuant to Rule 13a-14(a)
            
            Filed
                herewith.32.1
            
            Chief
                Executive Officer and Chief Financial Officer Certification pursuant
                o 18
                U.S.C. § 1350 adopted pursuant to Section 906 of the Sarbanes Oxley Act of
                2002
            
            Filed
                herewith.





**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.





THE
                BLACKHAWK FUNDNovember
                13, 2008
            /s/
                Frank MarshikFrank
                MarshikPresident(Principal
                Executive Officer and Principal
              Accounting
                Officer)


13