##### Table of Contents

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington D.C. 20549



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FORM 10-QSB



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

For the quarterly period ended June 30, 2007



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

For the transition period from , 200, to
, 200:

Commission File Number

000-2801



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DYNAMIC RESPONSE GROUP, INC

(Exact Name of Registrant as Specified in Charter)



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|                                                               |  |                                        
|-------------------------------------------------------------- |  | ---------------------------------------
|Florida                                                        |  | 52-2369185                             
|(State or Other Jurisdiction of Incorporation or Organization) |  | (I.R.S. Employer Identification Number)

4770 Biscayne Boulevard, Suite 1400, Miami, FL, 33179

(Address of Principal Executive Offices)

305-576-6889

(Registrants Telephone Number)

Copies of communications to:

Kimberly L. Graus, Esq.

4949 SR 64 East, PMB #141, Bradenton, Florida 34208

Telephone: 941/747-5290 Facsimile: 866/640-6858



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Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act during the past 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.    x  YES ̈NO

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

There were 81,111,234 shares of the Registrants $.001 par value common stock outstanding as of August 14, 2007.

Transitional Small Business Format (check one)    Yes ̈NO  x



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##### Table of Contents

Dynamic Response Group, Inc.

Contents



|                               |  |                                                                                |  |   
|------------------------------ |  | ------------------------------------------------------------------------------ |  | --
|Part I  Financial Information |  | 1                                                                             
|                               |  |                                                                               
|Item 1.                        |  | Financial Statements                                                           |  | 2 
|                               |  |                                                                               
|Item 2.                        |  | Managements Discussion & Analysis of Financial Condition or Plan of Operation |  | 10
|                               |  |                                                                               
|Item 3.                        |  | Controls and Procedures                                                        |  | 13
|                               | 
|Part II  Other Information    |  |                                                                               
|                               |  |                                                                               
|Item 1.                        |  | Legal Proceedings                                                              |  | 14
|                               |  |                                                                               
|Item 2.                        |  | Changes in Securities                                                          |  | 14
|                               |  |                                                                               
|Item 3.                        |  | Defaults Upon Senior Securities                                                |  | 14
|                               |  |                                                                               
|Item 4.                        |  | Submission of Matters to a Vote of Security Holders                            |  | 14
|                               |  |                                                                               
|Item 5.                        |  | Other Matters                                                                  |  | 14
|                               |  |                                                                               
|Item 6.                        |  | Exhibits                                                                       |  | 14
|                               | 
|Signatures                     |  | 15                                                                            



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##### Table of Contents

PART IFINANCIAL INFORMATION

Statements in this Form 10-QSB Quarterly Report may be forward-looking
statements. Forward-looking statements include, but are not limited to, statements that express our intentions, beliefs, expectations, strategies, predictions or any other statements relating to our future activities or other future events or
conditions. These statements are based on our current expectations, estimates and projections about our business based, in part, on assumptions made by our management. These assumptions are not guarantees of future performance and involve risks,
uncertainties and assumptions that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in the forward-looking statements due to numerous factors, including those risks discussed
in this Form 10-QSB Quarterly Report, under Managements Discussion and Analysis of Financial Condition or Plan of Operation and in other documents which we file with the Securities and Exchange Commission.

In addition, such statements could be affected by risks and uncertainties related to our financial condition, factors that affect our industry, market and customer
acceptance, changes in technology, fluctuations in our quarterly results, our ability to continue and manage our growth, liquidity and other capital resource issues, competition, fulfillment of contractual obligations by other parties and general
economic conditions. Any forward-looking statements speak only as of the date on which they are made, and we do not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date of this Form
10-QSB Quarterly Report, except as required by law. Operating results for the quarter ended June 30, 2007 are not necessarily indicative of the results that can be expected for the year ended December 31, 2007.



1



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##### Table of Contents

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

Financial Statements

DYNAMIC RESPONSE GROUP, INC.

f/k/a YOUTH ENHANCEMENT SYSTEMS, INC.

CONSOLIDATED BALANCE SHEET

June 30, 2007

(Unaudited)



|                                                                                                 |  |   |             |  
|------------------------------------------------------------------------------------------------ |  | - | ----------- | -
|ASSETS                                                                                           |  |   |             |  
|Current Assets:                                                                                  |  |   |             |  
|Cash                                                                                             |  | $ | 96,097      |  
|Accounts receivable                                                                              |  |   | 1,089,269   |  
|Inventory                                                                                        |  |   | 350,213     |  
|Other current assets                                                                             |  |   | 85,482      |  
|                                                                                                 |  |   |             |  
|Total current assets                                                                             |  |   | 1,621,061   |  
|                                                                                                 | 
|Intangible assets                                                                                |  |   | 1,190,150   |  
|Restricted cash                                                                                  |  |   | 10,000      |  
|Other assets                                                                                     |  |   | 30,459      |  
|                                                                                                 |  |   |             |  
|Total assets                                                                                     |  | $ | 2,851,670   |  
|                                                                                                 |  |   |             |  
|LIABILITIES AND STOCKHOLDERS DEFICIT                                                            |  |   |             |  
|                                                                                                 | 
|Current Liabilities:                                                                             |  |   |             |  
|Accounts payable and accrued expenses                                                            |  | $ | 2,450,664   |  
|Convertible promissory notes                                                                     |  |   | 2,147,983   |  
|                                                                                                 |  |   |             |  
|Total current liabilities                                                                        |  |   | 4,598,647   |  
|                                                                                                 | 
|Commitments and contingencies                                                                    |  |   |             |  
|                                                                                                 | 
|Stockholders Deficit:                                                                           |  |   |             |  
|Common stock; $.0001 par value, 100,000,000 shares authorized, 81,111,234 issued and outstanding |  |   | 8,111       |  
|Additional paid-in capital                                                                       |  |   | 12,421,873  |  
|Accumulated deficit                                                                              |  |   | (14,176,961 | )
|                                                                                                 |  |   |             |  
|Total stockholders deficit                                                                      |  |   | (1,746,977  | )
|                                                                                                 |  |   |             |  
|Total liabilities and stockholders deficit                                                      |  | $ | 2,851,670   |  
|                                                                                                 |  |   |             |  

See accompanying notes to financial statements.



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DYNAMIC RESPONSE GROUP, INC.

f/k/a YOUTH ENHANCEMENT SYSTEMS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)



|                                                 |  |                                    |            |   |                                  |   |            |      |  |   |            |   |  |   |            |  
|------------------------------------------------ |  | ---------------------------------- | ---------- | - | -------------------------------- | - | ---------- | ---- |  | - | ---------- | - |  | - | ---------- | -
|                                                 |  | For the three Months EndedJune 30, |            |   | For the Six Months EndedJune 30, |  
|                                                 |  | 2007                               |            |   | 2006                             |   |            | 2007 |  |   | 2006       |  
|Gross revenues                                   |  | $                                  | 3,589,252  |   |                                  | $ | 2,399,581  |      |  | $ | 7,942,155  |   |  | $ | 4,431,074  |  
|Sales returns and allowances                     |  |                                    | 864,460    |   |                                  |   | 283,488    |      |  |   | 2,480,788  |   |  |   | 659,232    |  
|                                                 |  |                                    |            |   |                                  |   |            |      |  |   |            |   |  |   |            |  
|Net revenues                                     |  |                                    | 2,724,792  |   |                                  |   | 2,116,093  |      |  |   | 5,461,367  |   |  |   | 3,771,842  |  
|                                                 |  |                                    |            |  
|Cost of revenues                                 |  |                                    | 391,788    |   |                                  |   | 329,687    |      |  |   | 596,444    |   |  |   | 519,940    |  
|                                                 |  |                                    |            |   |                                  |   |            |      |  |   |            |   |  |   |            |  
|Gross profit                                     |  |                                    | 2,333,004  |   |                                  |   | 1,786,406  |      |  |   | 4,864,923  |   |  |   | 3,251,902  |  
|                                                 |  |                                    |            |  
|Operating expenses:                              |  |                                    |            |   |                                  |   |            |      |  |   |            |   |  |   |            |  
|Selling, general and administrative              |  |                                    | 2,958,071  |   |                                  |   | 2,268,668  |      |  |   | 5,322,773  |   |  |   | 4,504,451  |  
|                                                 |  |                                    |            |   |                                  |   |            |      |  |   |            |   |  |   |            |  
|Total operating expenses                         |  |                                    | 2,958,071  |   |                                  |   | 2,268,668  |      |  |   | 5,322,773  |   |  |   | 4,504,451  |  
|                                                 |  |                                    |            |   |                                  |   |            |      |  |   |            |   |  |   |            |  
|Loss from operations                             |  |                                    | (625,067   | ) |                                  |   | (482,262   | )    |  |   | (457,850   | ) |  |   | (1,252,549 | )
|                                                 |  |                                    |            |   |                                  |   |            |      |  |   |            |   |  |   |            |  
|Other income (expense):                          |  |                                    |            |   |                                  |   |            |      |  |   |            |   |  |   |            |  
|Other income                                     |  |                                    | 2,977      |   |                                  |   | 324        |      |  |   | 12,932     |   |  |   | 504        |  
|Interest expense                                 |  |                                    | (64,557    | ) |                                  |   | (88,689    | )    |  |   | (169,542   | ) |  |   | (129,630   | )
|                                                 |  |                                    |            |   |                                  |   |            |      |  |   |            |   |  |   |            |  
|                                                 |  |                                    | (61,580    | ) |                                  |   | (88,365    | )    |  |   | (156,610   | ) |  |   | (129,126   | )
|                                                 |  |                                    |            |   |                                  |   |            |      |  |   |            |   |  |   |            |  
|Loss before income taxes                         |  | $                                  | (686,647   | ) |                                  | $ | (570,627   | )    |  | $ | (614,460   | ) |  | $ | (1,381,675 | )
|                                                 |  |                                    |            |   |                                  |   |            |      |  |   |            |   |  |   |            |  
|Provision (benefit) from income taxes            |  |                                    |           |   |                                  |   |           |      |  |   |           |   |  |   |           |  
|                                                 |  |                                    |            |  
|Net Loss                                         |  | $                                  | (686,647   | ) |                                  | $ | (570,627   | )    |  | $ | (614,460   | ) |  | $ | (1,381,675 | )
|                                                 |  |                                    |            |   |                                  |   |            |      |  |   |            |   |  |   |            |  
|Basic weighted average common shares outstanding |  |                                    | 76,852,082 |   |                                  |   | 56,361,837 |      |  |   | 73,233,466 |   |  |   | 52,645,640 |  
|                                                 |  |                                    |            |   |                                  |   |            |      |  |   |            |   |  |   |            |  
|Basic earnings (loss) per share                  |  | $                                  | (0.01      | ) |                                  | $ | (0.01      | )    |  | $ | (0.01      | ) |  | $ | (0.03      | )
|                                                 |  |                                    |            |   |                                  |   |            |      |  |   |            |   |  |   |            |  

See the accompanying notes to financial statements.



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DYNAMIC RESPONSE GROUP, INC.

f/k/a YOUTH ENHANCEMENT SYSTEMS, INC.

STATEMENT OF CASH FLOWS

(Unaudited)



|                                                                           |  |                                  |          |   |      |   |            |  
|-------------------------------------------------------------------------- |  | -------------------------------- | -------- | - | ---- | - | ---------- | -
|                                                                           |  | For the Six Months EndedJune 30, |         
|                                                                           |  | 2007                             |          |   | 2006 |  
|Cash flows from operating activities:                                      |  |                                  |          |   |      |   |            |  
|Net Loss                                                                   |  | $                                | (614,460 | ) |      | $ | (1,381,675 | )
|Adjustments to reconcile net loss to net cash used in operating activities |  |                                  |          |   |      |   |            |  
|Depreciation                                                               |  |                                  |         |   |      |   | 3,625      |  
|Changes in assets and liabilities:                                         |  |                                  |          |   |      |   |            |  
|Accounts receivable                                                        |  |                                  | (53,467  | ) |      |   | (67,197    | )
|Inventory                                                                  |  |                                  | (89,378  | ) |      |   | 18,800     |  
|Prepaid expenses and other asset                                           |  |                                  | (11,864  | ) |      |   | (18,409    | )
|Other assets                                                               |  |                                  | (7,294   | ) |      |   |           |  
|Accounts payable and accrued expenses                                      |  |                                  | (143,784 | ) |      |   | 605,976    |  
|Accrued interest on notes payable to related party                         |  |                                  |         |   |      |   | 43,151     |  
|Merger intent deposit                                                      |  |                                  |         |   |      |   | 200,000    |  
|                                                                           |  |                                  |          |   |      |   |            |  
|Net cash used in operating activities                                      |  |                                  | (920,247 | ) |      |   | (595,729   | )
|                                                                           |  |                                  |          |   |      |   |            |  
|Cash flows used in investing activity:                                     |  |                                  |          |   |      |   |            |  
|Payments toward patent agreement                                           |  |                                  | (112,500 | ) |      |   | (150,000   | )
|                                                                           |  |                                  |          |   |      |   |            |  
|Net cash used in investing activity                                        |  |                                  | (112,500 | ) |      |   | (150,000   | )
|                                                                           |  |                                  |          |   |      |   |            |  
|Cash flows from financing activities:                                      |  |                                  |          |   |      |   |            |  
|Proceeds from shareholder                                                  |  |                                  | 283,740  |   |      |   | 96,999     |  
|Repayment of related party loans                                           |  |                                  |         |   |      |   | (80,000    | )
|Repayment of investment                                                    |  |                                  | (20,000  | ) |      |   |           |  
|Repayment of promissory note                                               |  |                                  | (100,000 | ) |      |   | (100,000   | )
|Proceeds from issuance of convertible promissory notes                     |  |                                  | 600,983  |   |      |   | 410,000    |  
|Payments of financing fees                                                 |  |                                  |         |   |      |   |            |  
|                                                                           |  |                                  |          |   |      |   |            |  
|Net cash provided by financing activities                                  |  |                                  | 764,723  |   |      |   | 326,999    |  
|                                                                           |  |                                 
|Net decrease in cash                                                       |  |                                  | (268,024 | ) |      |   | (418,730   | )
|                                                                           |  |                                 
|Cash, beginning of year                                                    |  |                                  | 364,121  |   |      |   | 724,168    |  
|                                                                           |  |                                  |          |   |      |   |            |  
|Cash, end of year                                                          |  | $                                | 96,097   |   |      | $ | 305,438    |  
|                                                                           |  |                                  |          |   |      |   |            |  
|Supplemental disclosures of cash flow information:                         |  |                                  |          |   |      |   |            |  
|Cash paid for taxes                                                        |  | $                                |         |   |      | $ |           |  
|                                                                           |  |                                  |          |   |      |   |            |  
|Cash paid for interest                                                     |  | $                                |         |   |      | $ |           |  
|                                                                           |  |                                  |          |   |      |   |            |  

See accompanying notes to financial statements.



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DYNAMIC RESPONSE GROUPS, INC.

f/k/a YOUTH ENHANCEMENT SYSTEMS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2007

NOTE 1 - NATURE OF BUSINESS

Dynamic Response Group, Inc., f/k/a Youth Enhancement Systems, Inc. (Company) was incorporated in the State of Florida in 2002. The Company and its subsidiaries develop, manufacture, and market beauty and body enhancement products
worldwide. The Company maintains its production facility and headquarters in Miami, Florida.

NOTE 2 - BASIS OF PRESENTATION AND CONSOLIDATION

The accompanying consolidated financial statements include the results of operations of all subsidiaries over which the Company holds a 100% interest.
The results of operations of these companies are accounted for using the consolidated method of accounting. All material inter-company accounts and transactions have been eliminated.

NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Interim reporting

While the information presented in the accompanying interim three and six months financial statements is unaudited, it includes all adjustments, which are, in the opinion
of management, necessary to present fairly the financial position, results of operations and cash flows for the interim periods presented in accordance with accounting principles generally accepted in the United States of America. These interim
financial statements follow the same accounting policies and methods of their application as the December 31, 2006 annual financial statements of the Company. All adjustments are of a normal recurring nature. It is suggested that these interim
financial statements be read in conjunction with the Companys December 31, 2006s annual financial statements.

Operating results for the
three and six months ended June 30, 2007 are not necessarily indicative of the results that can be expected for the year ended December 31, 2007.

Use of estimates

In preparing financial statements in conformity with accounting principles generally accepted in the United States,
management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the
reporting period. Actual results will differ from those estimates. Significant estimates during the periods include the provision for doubtful accounts, provision for product returns, evaluation of obsolete inventory, and the useful life of
long-term assets, such as property, plant and equipment.

Revenue recognition

The Company recognizes product revenue, net of estimated sales discounts and returns and allowances, in accordance with Staff Accounting Bulletin (SAB) No. 104, Revenue Recognition in Financial
Statements which established that revenue can be recognized when persuasive evidence of an arrangement exists, the product has been shipped, all significant contractual obligations



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DYNAMIC RESPONSE GROUPS, INC.

f/k/a YOUTH ENHANCEMENT SYSTEMS, INC.

NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS

June 30, 2007



have been satisfied, the fee is fixed or determinable and collection is reasonably assured. In addition, the Company recognizes product revenue in accordance
with Statement of Financial Accounting Standard (SFAS) No. 48 Revenue Recognition When Right of Return Exists. This statement requires that in order to recognize revenue at the point of sale when the buyer has a return privilege,
the amount of future returns must be reasonably estimable by the seller company.

Fair value of financial instruments

The carrying amounts of financial instruments, including cash, accounts receivable, lines of credit and accounts payable and accrued expenses approximate fair value at
June 30, 2007 because of the relatively short maturity of the instruments. The carrying value of long-term debt and convertible promissory notes approximate fair value at June 30, 2007 based upon terms available for companies under similar
arrangements.

Cash and cash equivalents

The Company
considers all highly liquid debt securities purchased with original or remaining maturities of three months or less to be cash equivalents. The carrying value of cash equivalents approximates fair value.

Restricted cash

In accordance with Accounting Review Board (ARB)
No. 43, Chapter 3A Current Assets and Current Liabilities, cash which is restricted as to withdrawal is considered to be a noncurrent asset. Restricted cash consists of a reserve for credit card processing of approximately $10,000,
which the Company holds in a separate escrow account as required by its third party inventory fulfillment center. This amount is included in other assets.

Accounts receivable

Accounts receivable are reported at net realizable value. The Company has established an allowance for doubtful
accounts based upon factors pertaining to the credit risk of specific customers, historical trends, and other information. Delinquent accounts are written-off when it is determined that the amounts are uncollectible. At June 30, 2007, the
provision for doubtful accounts and allowance for product returns was $100,068.

Inventories

Inventories consist of finished goods and are stated at the lower of cost or market, with cost being determined by the first-in, first-out (FIFO) method. The Company
writes down its inventory for estimated obsolescence or unmarketable inventory equal to the difference between the cost of inventory and the estimated market value based upon assumptions about future demand and market conditions. The Company writes
down inventory during the period in which such products are considered no longer effective.



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DYNAMIC RESPONSE GROUPS, INC.

f/k/a YOUTH ENHANCEMENT SYSTEMS, INC.

NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS

June 30, 2007



Property and equipment

Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation is recorded on the straight-line basis over the estimated useful lives of the assets, which range from three to ten years. Normal
maintenance and repairs of property and equipment are expensed as incurred while renewals, betterments and major repairs that materially extend the useful life of property and equipment are capitalized. Upon retirement or disposition of property and
equipment, the asset and related accumulated depreciation or amortization is removed from the accounts and any resulting gain or loss is charged to operations.

Intangible assets

The Company accounts for intangible assets in accordance with SFAS 142. Generally, intangible assets with indefinite
lives, and goodwill, are no longer amortized; they are carried at lower of cost or market and subject to annual impairment evaluation, or interim impairment evaluation if an interim triggering event occurs, using a new fair market value method.
Intangible assets with finite lives are amortized over those lives, with no stipulated maximum, and an impairment test is performed only when a triggering event occurs. Such assets are amortized on a straight-line basis over the estimated useful
life of the asset.

Intangible assets consist of license payments made in accordance with an agreement to purchase the formula and patent used in the
Companys primary product. The Company considers the patent to have an indefinite life.

Income taxes

The Company uses the liability method for income taxes as required by SFAS No. 109 Accounting for Income Taxes. Under this method, deferred tax assets
and liabilities are determined based on differences between financial reporting and tax basis of assets and liabilities. Deferred tax assets and liabilities are measured using enacted tax rates and laws that will be in effect when the differences
are expected to reverse. Valuation allowances are established when it is more likely than not that the deferred tax assets will not be realized.

Shipping and handling costs

Shipping and handling costs are included as selling, general and administrative expense, in accordance with
guidance established by the Emerging Issues Task Force (EITF) No. 00-10, Accounting for Shipping and Handling Costs. EITF 00-10 permits companies to adopt a policy of including shipping and handling costs in cost of sales or other income
statement line items.

Advertising

Advertising costs
are expensed as incurred and included in selling general and administrative expenses in the accompanying consolidated statements of operations. The Company incurred advertising expenses of $ 1,895,670 and $2,345,766 as of June 30, 2007 and
2006, respectively.



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DYNAMIC RESPONSE GROUPS, INC.

f/k/a YOUTH ENHANCEMENT SYSTEMS, INC.

NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS

June 30, 2007



Income (loss) per share

The Company presents basic income (loss) per share and diluted earnings per share in accordance with the provisions of SFAS No. 128 Earnings per Share.

Under SFAS 128, basic net loss per share is computed by dividing the net loss for the year by the weighted average number of common shares outstanding during the year. Diluted net loss per share is computed by
dividing the net loss for the year by the weighted average number of common shares and common share equivalents outstanding during the year.

Provision
for Returns

In the normal course of business, the Company does not provide stock-balancing or price protection rights to its distributors; however, on
a non-recurring basis, the Company has accepted product returns. Management establishes provisions for estimated returns concurrently with the recognition of revenue. The provisions are established based upon consideration of a variety of factors,
including, among other things, recent and historical return rates for both specific distributors and projected economic conditions.

Concentration of
credit risks

The Company is subject to concentrations of credit risk primarily from cash and cash equivalents and accounts receivable. The Company
maintains accounts with financial institutions, which at times exceeds the insured Federal Deposit Insurance Corporation limit of $100,000. The Company minimizes its credit risks associated with cash by periodically evaluating the credit quality of
its primary financial institutions. The Companys accounts receivables are due from the individuals in which it markets its products. The Company does not require collateral to secure its accounts receivables. No customers accounted for more
than 10% of its net accounts receivables.

Product concentration risk

Although the Company offers multiple products, approximately 68% of the revenue generated is derived from the sale of Procede, a hair thickening product.

Supplier concentration risk

One of the Companys suppliers procures the formula which is used in manufacturing
substantially all of the Companys products. The agreement with this supplier terminates in March 2011. The Company cannot guarantee that it will be able to renew such agreement on acceptable terms, or if unable to renew the agreement, that it
will secure the procurement of such formula from other suppliers on similar terms, if at all.



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DYNAMIC RESPONSE GROUPS, INC.

f/k/a YOUTH ENHANCEMENT SYSTEMS, INC.

NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS

June 30, 2007



NOTE 4 - CONVERTIBLE PROMISSORY NOTES

The Company has extended the initial maturity dates of convertible promissory notes issued in 2005 and 2006. These convertible promissory notes allow for conversion to common stock prior to maturity date or repayment
of principal plus interest on the date of maturity, which was one year from the date of issuance. After extension, the notes will now mature between late 2007 and early 2008. The convertible promissory notes totaled $2,147,983 at the end of
June 30, 2007.



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##### Table of Contents



|Item 2. | Managements Discussion and Analysis or Plan of Operation
|------- | ---------------------------------------------------------

THIS FILING CONTAINS FORWARD-LOOKING STATEMENTS. THE WORDS ANTICIPATED, BELIEVE, EXPECT, PLAN, INTEND, SEEK, ESTIMATE, PROJECT,
WILL, COULD, MAY, AND SIMILAR EXPRESSIONS ARE INTENDED TO IDENTIFY FORWARD-LOOKING STATEMENTS. THESE STATEMENTS INCLUDE, AMONG OTHERS, INFORMATION REGARDING FUTURE OPERATIONS, FUTURE CAPITAL EXPENDITURES, AND
FUTURE NET CASH FLOW. SUCH STATEMENTS REFLECT THE COMPANYS CURRENT VIEWS WITH RESPECT TO FUTURE EVENTS AND FINANCIAL PERFORMANCE AND INVOLVE RISKS AND UNCERTAINTIES, INCLUDING, WITHOUT LIMITATION, GENERAL ECONOMIC AND BUSINESS CONDITIONS,
CHANGES IN FOREIGN, POLITICAL, SOCIAL, AND ECONOMIC CONDITIONS, REGULATORY INITIATIVES AND COMPLIANCE WITH GOVERNMENTAL REGULATIONS, THE ABILITY TO ACHIEVE FURTHER MARKET PENETRATION AND ADDITIONAL CUSTOMERS, AND VARIOUS OTHER MATTERS, MANY OF WHICH
ARE BEYOND THE COMPANYS CONTROL. SHOULD ONE OR MORE OF THESE RISKS OR UNCERTAINTIES OCCUR, OR SHOULD UNDERLYING ASSUMPTIONS PROVE TO BE INCORRECT, ACTUAL RESULTS MAY VARY MATERIALLY AND ADVERSELY FROM THOSE ANTICIPATED, BELIEVED, ESTIMATED, OR
OTHERWISE INDICATED. CONSEQUENTLY, ALL OF THE FORWARD-LOOKING STATEMENTS MADE IN THIS FILING ARE QUALIFIED BY THESE CAUTIONARY STATEMENTS AND THERE CAN BE NO ASSURANCE OF THE ACTUAL RESULTS OR DEVELOPMENTS.

The following discussion and analysis of our financial condition and plan of operations should be read in conjunction with our financial statements and
related notes appearing elsewhere herein. This discussion and analysis contains forward-looking statements including information about possible or assumed results of our financial conditions, operations, plans, objectives and performance that
involve risk, uncertainties and assumptions. The actual results may differ materially from those anticipated in such forward-looking statements. For example, when we indicate that we expect to increase our product sales and potentially establish
additional license relationships, these are forward-looking statements. The words expect, anticipate, estimate or similar expressions are also used to indicate forward-looking statements.

OVERVIEW OF THE COMPANY

Dynamic Response Group, Inc., (DRG) is
engaged in the business of Electronic & Multi Media Retailing (print, radio, television and the internet). The Company considers itself an emerging leader in the use of direct response transactional television programming,
known as infomercials, to market consumer products. The Companys advertising plan is slated bring its products into more than 370 million households in 70 countries worldwide.

On March 5, 2007, Youth Enhancement Systems, Inc. changed its name to Dynamic Response
Group, Inc., by filing its Articles of Amendment with the Florida Secretary of State. The Companys fiscal year ends December 31stof each
year. During the last three fiscal years, we have not been subject to the reporting requirements of the Exchange Act of 1934, as amended. As such, we did not file any filings with the Securities and Exchange Commission, until February 13, 2007
when the Company filed its 10SB becoming a fully reporting company. The Company then filed its 15c2-11 with the NASD, and now lists its shares on the Over-the-Counter-Bulletin-Board.



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Managements Discussion and Analysis of Financial Condition and Results of Operations

THREE MONTH PERIOD ENDED JUNE 30, 2007

COMPARED TO JUNE 30, 2006

Gross Revenues and Costs of Operations

Gross revenues. Gross revenues increased from $ 2,399,581 for the three month period ended June 30, 2006 to $ 3,589,252 for the three month period ended June 30, 2007, an increase of $1,189,671
primarily as a result of the revenues resulting from the introduction of the Clean Between Machine product in late 2006, continued growth of ProCede and the addition of NASCAR Members Club.

Selling, general and administrative expenses.Selling, general and administrative expenses increased from $ 2,268,668 for the three month period ended
June 30, 2006 to $ 2,958,071 for the three month period ended June 30, 2007, an increase of $ 689,403 primarily as a result of the introduction to the market of the NASCAR Members Club.

Net Income (Loss).Net loss increased from $ 570,627 for the three month period ended June 30, 2006 to a net loss of $ 686,647 for the three month period
ended June 30, 2007. The increase in loss is mainly attributed the start up costs and promotion of the NASCAR Members Club brand.

Current
Assets

Cash. Cash decreased from $ 122,655 at March 31, 2007 to $ 96,097 at June 30, 2007, a decrease of $ 26,558.

Accounts Receivable.Accounts Receivable increased from $ 918,170 at March 31, 2007 to $ 1,089,269 at June 30, 2007, an increase of $ 171,099.

Inventories. Inventories decreased from $ 423,496 at March 31, 2007 to $ 350,213 at June 30, 2007, a decrease of $ 73,283, primarily as a
result of internal planning based on historical seasonal sales decrease of the ProCede product. DRTV sales in the second quarter sales generally are slower industry wide due to less television viewing across the country as families spend more time
out of doors.

Intangible and other assets. Intangible and other assets increased from $ 1,229,146 at March 31, 2007 to $ 1,230,609 at
June 30, 2007, an increase of $ 1,463 primarily as a result of the payments for the ProCede patent.

Liabilities

Accounts payable and accrued expenses.Accounts payable and accrued expenses increased from $ 2,182,156 at March 31, 2007 to $ 2,450,664 at June 30,
2007, an increase of $ 268,508.

Promissory note. Promissory notes decreased from $ 47,500 at March 31, 2007 to $0 at June 30, 2007.



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Convertible promissory notes. Convertible promissory notes increased from $1,847,983 at March 31, 2007 to
$2,147,983 at June 30, 2007.

Liquidity and Capital Resources

Our marketing strategy is to identify and secure an exclusive distribution agreement with unique, consumer-driven, innovative products that provide
solutions to known consumer buying patterns. We then offer these retail products to consumers through electronic media using broadcast, cable, satellite television and the Internet. Our programming is transmitted by satellite to cable television
systems, direct broadcast satellite systems, television broadcasting stations, print, radio and the Internet across the United States and European Countries. Revenues are generated from the sales of merchandise we offer through our programming. We
focus on presenting consumer products at attractive prices that can leverage the visual appeal of television, including our main product offerings, Proceed, a hair thickening product, The Clean Between Machine, a dental hygiene product, Back Yard
Drills with Bill Parcell, an instructional DVD, NASCAR Members Club, a membership club for NASCAR fans. We have also recently added to our fall lineup of product offerings and are currently testing RIDDEX, a pest control system which as returned
favorable numbers, Turbo Cooker, a all-in-one cooking system. Turbo Cooker was once a very successful show on the air and we have negotiated a long term contract to take it back to the market. We plan to begin testing in the next few weeks.

We consistently analyze new products that we are considering offering to the market each week. Once we decide on a product, the test
marketing and direct response mix has been accomplished, we will publicly release the information; until that time, such information remains confidential and will not be released due to competition. We also intend to continue to promote our current
product mix, focusing on our product brands in the international market place. We expect this expanding distribution channel to increase sales further in the last two quarters of 2007.

We may raise additional funds in order to grow our market share. If we are (i) unable to grow our business or improve our operating cash flows as
expected, (ii) unable to raise additional funds through private placement sales of our common stock, or (iii) unable to borrow additional funds, then we may not be able to continue to grow sales at the same pace as 2006 and the first two
quarters of 2007. There can be no assurance that additional financing will be available when needed or, if available, that it will be on terms favorable to us and our stockholders. If we are not successful in generating sufficient cash flows from
operations, or in raising additional capital when required in sufficient amounts and on terms acceptable to us, these failures would have a material adverse effect on our business, results of operations and financial condition. If additional funds
are raised through the issuance of equity securities, the percentage ownership of our current shareholders would be diluted. Our condensed consolidated financial statements do not include any adjustments that may result from the outcome of these
uncertainties.

Discussion of Current Status

This quarter we are reporting a loss due to our investment in the NASCAR Members Club. This loss was created by the reduction of media dollars spent on marketing products such as ProCede and Clean Between
Machine. We are a formula driven marketing company. Historically, over the past twenty-four months, we have generated approximately 2.5 gross sales dollars for



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every dollar spent in media. When we spend less money on media, we achieve a correspondingly smaller gross sales number. When we spend more, we see a
corresponding increase. It is formula that is scalable and predictable. This is exactly what happened in the second quarter, which is traditionally our slowest sales quarter. Our sales decrease in ProCede was simply a function of the reallocation of
funds that we normally would have spent on ProCede to generate that historical 2.5 to 1 ratio. The first quarter, we spent $1.123 million in media; second quarter approximately $773,000. The reason for this drop in spending and corresponding
decrease in gross sales is the investment in the NASCAR business which we believe will ultimately yield a great deal of profitability and top line revenue in years to come.

We made the decision to forego a quarter of profitability in ProCede in order to establish a long term opportunity to grow our revenues exponentially
through a long term relationship with NASCAR that would come only through an investment this quarter. Our investment in the NASCAR business we believe will pay off, as we are now negotiating and finalizing a long term deal.

Now that the NASCAR development program is completed, we have reallocated our media dollars back to ProCede, and we are now back to our first
quarter media spending. Because we are formula driven, we are predictably running at first quarter numbers, ProCede and Clean Between Machine for July sales alone are $1,649,000.

OFF-BALANCE SHEET ARRANGEMENTS

We do not have any off-balance sheet arrangements that have or are
reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.



|Item 3. | Controls and Procedures
|------- | -----------------------

Under the supervision and
with the participation of our Management, including our Principal Executive Officer and Principal Accounting Officer, we conducted an evaluation of the effectiveness of the design and operations of 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) as of the end of the period covered by this report. Based on this evaluation, our Principal Executive Officer and Principal
Accounting Officer concluded that our financial disclosure controls and procedures were effective so as to timely identify, correct and disclose information required to be included in our Securities and Exchange Commission (SEC) reports
due to the Companys limited internal resources and lack of ability to have multiple levels of transaction review. Through the use of external consultants and the audit process, management believes that the financial statements and other
information presented herewith are materially correct.

There have been no significant changes in the Companys internal control over
financial reporting or, to our knowledge, in other factors that could significantly affect the Companys internal controls over financial reporting subsequent to the evaluation date.



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PART IIOTHER INFORMATION



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

As of the date of this Quarterly Report, neither
we nor any of our officers or directors is involved in any litigation either as plaintiffs or defendants. As of this date, there is not any threatened or pending litigation against us or any of our officers or directors.



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

During
the three month period ended June 30, 2007, there was no modification of any instruments defining the rights of holders of the Companys common stock and no limitation or qualification of the rights evidenced by the Companys common
stock as a result of the issuance of any other class of securities or the modification thereof.



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

There have been no defaults in any
material payments during the covered period.



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

During the
three month period ended June 30, 2007, the Company did not submit any matters to a vote of its security holders other than the name change.



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

On May 4, 2007, Richard M.
Muller joined the Board of Directors of the Company. Mr. Muller has had health complications and feels it is in the best interest of the Company to resign at this time. He has agreed to stay on in an advisory position if needed by the Company
management.



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



|     |  |                                                                                                     
|---- |  | ----------------------------------------------------------------------------------------------------
|31.1 |  | Chief Executive Officer Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002     
|     | 
|31.2 |  | Principal Accounting Officer Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|     | 
|32.1 |  | Chief Executive Officer Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002     
|     | 
|32.2 |  | Principal Accounting Officer Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002



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SIGNATURES

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



|                       |  |                              |  |                                                          
|---------------------- |  | ---------------------------- |  | ---------------------------------------------------------
|                       |  | DYNAMIC RESPONSE GROUP, INC.
|                       |  |                             
|Dated: August 14, 2007 |  | By:                          |  | /s/ Melissa K. Rice                                      
|                       |  |                              |  | Chief Executive Officer (Principal Executive Officer) and
|                       |  |                             
|Dated: August 14, 2007 |  | By:                          |  | /s/ David Genzler                                        
|                       |  |                              |  | David Genzler, Principal Accounting Officer              



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Exhibit Index





|            |  |                                                                                                     
|----------- |  | ----------------------------------------------------------------------------------------------------
|Exhibit No. |  | Description                                                                                         
|31.1        |  | Chief Executive Officer Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002     
|            | 
|31.2        |  | Principal Accounting Officer Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|            | 
|32.1        |  | Chief Executive Officer Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002     
|            | 
|32.2        |  | Principal Accounting Officer Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002