U.S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   Form 10-QSB

                             Quarterly Report Under
                       the Securities Exchange Act of 1934

                      For Quarter Ended: September 30 2006

                         Commission File Number: 0-28031

                             PACIFIC FUEL CELL CORP.
                             -----------------------
        (Exact name of small business issuer as specified in its charter)

                                     Nevada
                                     ------
         (State or other jurisdiction of incorporation or organization)

                                   80-0043875
                                   ----------
                        (IRS Employer Identification No.)

                               131 N. Tustin Ave.
                                    Suite 100
                                   Tustin, CA
                                   ----------
                    (Address of principal place of business)

                                      92780
                                      -----
                                   (Zip Code)

                                 (714) 564-1693
                                 --------------
                           (Issuer's Telephone Number)

Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the Securities Exchange Act of 1934 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: Yes
  X     No       .
-----      -----

The number of shares of the  registrant's  only class of common stock issued and
outstanding as of November 13, 2006, was 69,095,396 shares.

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

<PAGE>

                                     PART I

ITEM 1.  FINANCIAL STATEMENTS.

                            PACIFIC FUEL CELL CORP.
                          (A DEVELOPMENT STAGE COMPANY)
                           CONSOLIDATED BALANCE SHEET
                               SEPTEMBER 30, 2006
                                   (UNAUDITED)

                                     ASSETS

CURRENT ASSETS
  Cash                                                              $   318,072
  Prepaid expenses                                                        1,273
                                                                    -----------
                      Total current assets                              319,345
                                                                    -----------

 Property and equipment, net                                             36,076
                                                                    -----------

Other Assets
  Rent security deposit                                                   3,059
  Deposit on equipment                                                  101,239
                                                                    -----------
                                                                        104,298
                                                                    -----------

                                                                    $   459,719
                                                                    ===========


                      LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
  Accounts payable                                                  $   202,699
                                                                    -----------
                      Total current liabilities                         202,699
                                                                    -----------

STOCKHOLDERS' EQUITY
  Preferred stock, $0.01 par value,
     1,000,000 shares authorized, none outstanding                           --
  Common stock, $0.001 par value, 200,000,000
    shares authorized, 69,095,396 shares issued and outstanding          69,095
  Additional paid in capital                                          3,041,117
  (Deficit) accumulated during the development stage                 (2,853,192)
                                                                    -----------
                                                                        395,020
                                                                    -----------

                                                                    $   459,719
                                                                    ===========

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

                                       2

<PAGE>
<TABLE>
                            PACIFIC FUEL CELL CORP.
                          (A DEVELOPMENT STAGE COMPANY)
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)

<CAPTION>
                                                                                                                   FOR THE PERIOD
                                                           THREE MONTHS ENDED            NINE MONTHS ENDED           MAY 5, 1998
                                                      SEPTEMBER 30   SEPTEMBER 30   SEPTEMBER 30   SEPTEMBER 30    (INCEPTION) TO
                                                          2006           2005           2006           2005      SEPTEMBER 30, 2006
                                                      ------------   ------------   ------------   ------------  ------------------
<S>                                                   <C>            <C>            <C>            <C>           <C>
REVENUE
  Sales                                               $         --   $        811   $         --   $     52,076  $           71,988
  Grants                                                        --             --             --             --              99,901
                                                      ------------   ------------   ------------   ------------  ------------------
                                                                --            811             --         52,076             171,889
                                                      ------------   ------------   ------------   ------------  ------------------
COSTS AND EXPENSES
  Cost of goods sold                                           930            936          1,411         60,400              83,698
  General and administrative                               207,925         51,925        317,821        119,249           1,280,570
  Research and development                                 (35,395)        16,197         50,229        101,465             300,556
  General and administrative - stock compensation               --             --             --         20,000             312,800
  Amortization                                                  --             37             --             --              12,064
  Services contributed to capital                            1,500          1,500          4,500          4,500              16,500
  Loss on extinguishment of debentures                          --             --             --             --              16,706
  Loss on asset impairment                                      --             --             --             --             510,667
  Loss on disposal of property and equipment                    --             --             --             --               3,391
                                                      ------------   ------------   ------------   ------------  ------------------
                                                           174,960         70,595        373,961        305,614           2,536,952
                                                      ------------   ------------   ------------   ------------  ------------------

OPERATING (LOSS)                                          (174,960)       (69,784)      (373,961)      (253,538)         (2,365,063)
                                                      ------------   ------------   ------------   ------------  ------------------
OTHER INCOME (EXPENSE)
  Change in value of derivative instruments, net                --        (27,208)            --             --            (460,498)
  Interest income                                              513            894            811          2,838               7,321
  Interest expense                                            (143)        (4,565)          (375)          (149)            (66,709)
  Foreign currency transaction gain (loss)                      --             --             --             --                (168)
  Other                                                         --             --             --             --              (1,175)
                                                      ------------   ------------   ------------   ------------  ------------------
                                                               370        (30,879)           436          2,689            (521,229)
                                                      ------------   ------------   ------------   ------------  ------------------

NET (LOSS) BEFORE EXTRAORDINARY ITEM                      (174,590)      (100,663)      (373,525)      (250,849)         (2,886,292)

EXTRAORDINARY ITEM, Gain on forgiveness
   of debt, net of income taxes of $12,070                      --             --             --             --              23,430
                                                      ------------   ------------   ------------   ------------  ------------------

NET (LOSS) BEFORE INCOME TAX EXPENSE (BENEFIT)            (174,590)      (100,663)      (373,525)      (250,849)         (2,862,862)

INCOME TAX EXPENSE (BENEFIT)                                 2,400             --          2,400             --              (9,670)
                                                      ------------   ------------   ------------   ------------  ------------------

NET (LOSS)                                            $   (176,990)  $   (100,663)  $   (375,925)  $   (250,849) $       (2,853,192)
                                                      ============   ============   ============   ============  ==================

PER SHARE INFORMATION:

WEIGHTED AVERAGE SHARES OUTSTANDING -
        BASIC AND DILUTED                               68,175,559     66,626,900     67,182,365     66,626,900
                                                      ============   ============   ============   ============
NET (LOSS) PER COMMON SHARE (BASIC & DILUTED)
         (Loss) from operations                       $      (0.00)  $      (0.00)  $      (0.01)  $      (0.00)
         Extraordinary item                           $      (0.00)  $      (0.00)  $      (0.00)  $      (0.00)
                                                      ------------   ------------   ------------   ------------
                                                      $      (0.00)  $      (0.00)  $      (0.01)  $      (0.00)
                                                      ============   ============   =============  ============
</TABLE>

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

                                       3

<PAGE>

<TABLE>
                            PACIFIC FUEL CELL CORP.
                          (A DEVELOPMENT STAGE COMPANY)
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)

<CAPTION>
                                                                                                        FOR THE PERIOD
                                                                             NINE MONTHS ENDED            MAY 5, 1998
                                                                         SEPTEMBER 30  SEPTEMBER 30     (INCEPTION) TO
                                                                             2006          2005       SEPTEMBER 30, 2006
                                                                          ----------    ----------    ------------------
<S>                                                                       <C>           <C>           <C>
OPERATING ACTIVITIES
                              Net cash (used in) operating activities     $ (186,558)   $ (209,836)   $         (999,159)
                                                                          ----------    ----------    ------------------

INVESTING ACTIVITIES
  Purchase of fixed assets                                                        --       (46,997)              (59,599)
  Cash received in purchase of Cellfoods                                          --            --                16,898
  Deposit on equipment                                                            --        44,761              (101,239)
  Investment in mineral claims                                                    --            --                (5,000)
                                                                          ----------    ----------    ------------------
                              Net cash (used in) investing activities             --        (2,236)             (148,940)
                                                                          ----------    ----------    ------------------

FINANCING ACTIVITIES
  Proceeds from loan payable - related parties                                    --            --               285,462
  Payments on loans payable - shareholders                                        --            --               (11,083)
  Deferred debenture costs                                                        --            --              (136,000)
  Convertible redeemable debentures                                               --            --               776,855
  Payments on loan payable - related parties                                      --            --               (60,000)
  Proceeds from stock sales, net of issuance costs                           338,500         5,000               610,937
                                                                          ----------    ----------    ------------------
                              Net cash provided by financing activities      338,500         5,000             1,466,171
                                                                          ----------    ----------    ------------------

                                  Net increase (decrease) in cash            151,942      (207,072)              318,072

CASH AT BEGINNING OF PERIOD                                                  166,130       645,535                    --
                                                                          ----------    ----------    ------------------

CASH AT END OF PERIOD                                                     $  318,072    $  438,463    $          318,072
                                                                          ==========    ==========    ==================

</TABLE>

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

                                       4

<PAGE>


                             PACIFIC FUEL CELL CORP.
                          (A DEVELOPMENT STAGE COMPANY)
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2006
                                   (UNAUDITED)

Note 1.  Basis of Presentation

The accompanying  unaudited consolidated financial statements have been prepared
in accordance with accounting principles generally accepted in the United States
of America for  interim  financial  information.  They do not include all of the
information and footnotes required by accounting  principles  generally accepted
in the United  States of  America  for  complete  financial  statements.  In the
opinion of management,  all  adjustments,  consisting  only of normal  recurring
adjustments, considered necessary for a fair presentation, have been included in
the  accompanying  unaudited  financial  statements.  Operating  results for the
periods  presented  are not  necessarily  indicative  of the results that may be
expected  for the full year.  For further  information,  refer to the  financial
statements  and notes  thereto,  included  in the  Company's  Form  10-KSB as of
December 31, 2005, and for the years ended December 31, 2005 and 2004.


Note 2.  Going Concern

The  accompanying  financial  statements  have been prepared in conformity  with
accounting principles generally accepted in the United States of America,  which
contemplates  continuation  of the Company as a going  concern.  The Company has
incurred  losses since inception of $2,853,192 and is reliant on raising capital
to initiate its business plan,  and has no revenue  generating  operations.  The
Company is exploring  options to expand  operations and raise  additional  funds
through equity and debt financing,  however,  the Company has no commitment from
any party to provide  additional  capital  and there is no  assurance  that such
funding will be available when needed,  or if available,  that its terms will be
favorable or acceptable to the Company.

The financial  statements do not include any adjustments to reflect the possible
future effects on the recoverability and classification of assets or the amounts
and classification of liabilities that may result from the possible inability of
the Company to continue as a going concern.


Note 3.  Earnings Per Share

The Company  calculates  net income (loss) per share as required by Statement of
Financial  Accounting  Standard 128, "Earnings per Share." Basic earnings (loss)
per share is calculated  by dividing net income  (loss) by the weighted  average
number of common shares outstanding for the period.  Diluted earnings (loss) per
share is calculated by dividing net income (loss) by the weighted average number
of common shares and dilutive common stock equivalents outstanding.

                                        5

<PAGE>

During the periods presented,  common stock equivalents were not considered,  as
their effect would be anti-dilutive.


Note 4.  Research and Development

On August  21,  2002 the  Company  entered  into a one-year  agreement  with the
University of California  (the  "University")  to develop a commercially  viable
fuel cell.  The Company and the  University  entered into an agreement to extend
the  completion  date to February 29, 2004.  On May 4, 2004,  the  agreement was
further extended through April 30, 2007.

On October 13, 2006, an amendment was executed  requiring  payments of $135,876,
of which  $50,229 was recorded in the prior  period.  The  payments  come due as
follows: $50,229 on or before October 14, 2006; $50,252 on or before January 31,
2007; and $35,395 on or before  February 28, 2007.  Prior to the amendment,  the
Company had also recorded amounts due to the University of $35,395.  This amount
was  reversed in the quarter  ended  September  30, 2006 and will be  recognized
during the period it becomes due and payable.


Note 5.  Merger Agreement

Effective May 14, 2004, the Company,  Cellfoods Corporation  ("Cellfoods") and a
wholly-owned   subsidiary  of  the  Company,   PFCE  Acquisition  Corp.  ("Sub")
consummated  an  Agreement  and Plan of Merger,  whereby Sub was merged with and
into Cellfoods.  All of the Cellfoods' issued and outstanding common shares were
exchanged for 6,100 shares of the Company's  $.001 par value common stock,  at a
conversion ratio of .01 to 1, as a tax-free  reorganization  pursuant to Section
365(a) of the Internal Revenue Code. The shares were issued at their fair market
value of $2,562,  which has been charged to operations as purchased research and
development during 2004.  Cellfoods has had minimal activity to date. On May 25,
2005 the Company's  Board of Directors  approved the spin-off of Cellfoods,  but
the applicable  registration statement has been placed on hold as of the date of
this filing.


Note 6.  Common Stock

In May 2004, the Company issued  30,000,000  shares of its  unrestricted  common
stock in connection  with the merger  discussed above in Note 5. The shares were
held in escrow and 26,992,462 shares were rescinded in February 2006.

During the three months ended  September  30, 2006,  the Company sold  2,417,858
shares of its restricted  stock at a price of $.14 per share,  for cash proceeds
of $338,500.

                                        6

<PAGE>

Note 7.  Consulting Agreements

In  October  2006,  the  Company's  Board of  Directors  approved  two  separate
consulting agreements whereby it agreed (i) to issue up to 500,000 shares of its
common stock, valued at $138,000, in exchange for the production of a video that
was  part  of the  Company's  participation  in a  panel  discussion  on CNBC in
September  2006 and the purchase of television  time; and (ii) 200,000 shares of
its  restricted  common stock in exchange for  consulting  services  relating to
manufacturing, financial public relations and business development services.

Accordingly,  the Company has recorded  $138,000 in accounts payable and general
and  administrative  expense  for the  agreement  first  indicated.  The  second
agreement,  valued at $60,000,  will be recorded as deferred stock  compensation
and recognized ratably over twelve months.

Note 8.  Officer Bonus

During the quarter ended  September  30, 2006,  the Company paid its President a
cash bonus of $15,000.




































                                        7

<PAGE>

ITEM 2. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

     The following  discussion  should be read in conjunction with our unaudited
financial  statements and notes thereto included herein. In connection with, and
because we desire to take  advantage  of, the "safe  harbor"  provisions  of the
Private  Securities  Litigation Reform Act of 1995, we caution readers regarding
certain forward looking statements in the following  discussion and elsewhere in
this report and in any other statement made by, or on our behalf, whether or not
in future filings with the Securities and Exchange  Commission.  Forward-looking
statements are statements not based on historical  information  and which relate
to future  operations,  strategies,  financial  results  or other  developments.
Forward looking  statements are necessarily based upon estimates and assumptions
that are inherently  subject to significant  business,  economic and competitive
uncertainties and  contingencies,  many of which are beyond our control and many
of which,  with  respect to future  business  decisions,  are subject to change.
These  uncertainties and contingencies can affect actual results and could cause
actual results to differ materially from those expressed in any  forward-looking
statements  made by, or on, our behalf.  We disclaim  any  obligation  to update
forward-looking statements.

Results of Operations

     Comparison  of Results  of  Operations  for the  nine-month  periods  ended
September 30, 2006 and 2005

     During the nine month period ended  September 30, 2006, we did not generate
any revenues,  compared to revenues of $52,076  generated  during the nine month
period ended  September 30, 2005,  all of which were  generated by operations of
our wholly owned subsidiary,  Cellfoods  Corporation  ("Cellfoods").  During the
nine month  period ended  September  30,  2006,  we incurred  costs and expenses
totaling  $373,961,  including  $50,229 in research  and  development  costs and
$317,821 in general and administrative expense. In September 2006, we incurred a
liability  in the  amount  of  $138,000  for the  production  of a video and the
purchase of  television  time which is  included  in general and  administrative
expense. It is expected this liability will be paid with up to 500,000 shares of
the  Company's  common stock.  During the nine month period ended  September 30,
2005,  our costs and  expenses  were  relatively  consistent  with the  expenses
incurred  except as noted in the nine month period ended  September 30, 2006, as
we incurred costs and expenses of $305,614,  including  $101,465 in research and
development costs and $119,249 in general and administrative expense, except for
a charge of $20,000  relevant to the fair market value of stock  options that we
previously had issued to a consultant that was exercised during this period. The
decrease of $51,236 in research  and  development  costs  during the  nine-month
period ended September 30, 2006, were attributable to decreased  activities with
UCR.

                                       8

<PAGE>

     As a result,  we  incurred a net loss of  ($237,925)  during the nine month
period ended  September 30, 2006,  compared to a net loss of ($250,849)  for the
similar period ended September 30, 2005.

     Comparison  of Results of  Operations  for the  three-month  periods  ended
September 30, 2006 and 2005

     During the three month period ended September 30, 2006, we did not generate
any  revenues,  compared to revenues  of $811  generated  during the three month
period ended  September  30,  2005,  all of which were  generated by  Cellfoods'
operations.  During the three month period ended September 30, 2006, we incurred
costs and  expenses  totaling  $36,960,  including  a credit of  $35,395  to our
previously  incurred  research and  development  costs with the  University  and
$69,925 in general and administrative expense.

     On  October  13,  2006,  an  amendment  was  executed  with the  University
requiring  payments of  $135,876,  of which  $50,229  was  recorded in the prior
period. The payments come due as follows: $50,229 on or before October 14, 2006;
$50,252 on or before  January 31,  2007;  and $35,395 on or before  February 28,
2007. Prior to the amendment,  we also recorded amounts due to the University of
$35,395.  This amount was reversed in the three months ended September 30, 2006,
and will be recognized during the period it becomes due and payable.

     During the three months ended  September  30, 2006, we paid a cash bonus of
$15,000 to our President and Chief Executive Officer. We incurred a liability in
the  amount  of  $138,000  for the  production  of a video and the  purchase  of
television time which is included in general and administrative  expense.  It is
expected  that  this  liability  will be paid with up to  500,000  shares of the
Company's common stock. In addition, other than as noted, during the three month
period  ended  September  30,  2005,  our costs  and  expenses  were  relatively
consistent with the expenses  incurred in the three month period ended September
30, 2006, as we incurred  $69,925 in other general and  administrative  expense.
The decrease in research and  development  costs during the  three-month  period
ended September 30, 2006, were attributable to decreased activities with UCR.

     As a result,  we  incurred  a net loss of  ($176,990)  (less  than $.01 per
share) during the three month period ended September 30, 2006, compared to a net
loss of  ($100,663)  (less  than $.01 per share) for the  similar  period  ended
September 30, 2005.

     Because we did not  generate  revenues  during the nine month  period ended
September 30, 2006, following is our Plan of Operation.

Plan of Operation

     Our  initial  business  plan was to develop and produce low cost fuel cells
for  transportation.  During 2002, we revised our business plan to emphasize the
development  and

                                       9
<PAGE>

production of low cost fuel cells for personal electronics or other applications
requiring small size and longevity of use. We have revised our original business
plan as a result of the costs associated with developing  transportation related
fuel cells, which exceeded our available capital.  We may reinstate the elements
of the original business plan if our current business plan proves successful, of
which there can be no assurance.  As of the date of this Report,  we are focused
on  improving  the  production  capability  of our  nanoMEA,  enhancing  product
performance, reducing product costs, designing market-ready products, developing
volume-manufacturing    capability,   and   building   customer   and   supplier
relationships  and marketing it to potential  customers.  We are also continuing
research to refine and improve our current nanoMEA.

     On  August  21,  2002,  we  entered  into a  one-year  agreement  with  the
University of California  (the  "University")  to develop a commercially  viable
fuel cell.  Under this  agreement,  we advanced the  University  $131,266.  This
agreement was  subsequently  extended through February 29, 2004. On May 4, 2004,
the agreement  was further  extended  through  April 30, 2007.  Pursuant to this
extension,  we had made payments of $50,005 and $37,496, and will be required to
make additional payments in the aggregate amount of $135,876.

     On October 13,  2006,  an  amendment  was  executed  requiring  payments of
$135,876,  of which $50,229 was recorded in the prior period.  The payments come
due as  follows:  $50,229 on or before  October 14,  2006;  $50,252 on or before
January 31,  2007;  and $35,395 on or before  February  28,  2007.  Prior to the
amendment,  we also  recorded  amounts due to the  University  of $35,395.  This
amount was reversed in the three months ended  September  30, 2006,  and will be
recognized during the period it becomes due and payable.

     As a result of the relationship with the University,  on November 10, 2003,
we  announced  that a  research  team  headed  by  Professor  Yushan  Yan of the
University had  successfully  developed a fuel cell using carbon  nanotube-based
electrodes.  As a result of our research  and  development  activities  with the
University,  we  expect  that  the use of  multi-walled  carbon  nanotubes  as a
platinum  support  for proton  exchange  membrane  fuel  cells  will  reduce the
manufacturing  cost of fuel cells through a decreased  use of platinum.  Current
technology  uses  platinum,  a precious  metal,  as the catalyst for hydrogen to
separate into a proton and electron. Since platinum is a high cost metal in very
limited  production,  it is cost  prohibitive,  preventing fuel cells from being
economically  viable  even at high volume  production.  Our  proposed  method of
producing  fuel cells is expected to minimize or eliminate  the use of platinum.
We expect to produce low cost fuel cells at high volume production levels.

     On September 22, 2005, we announced  that we completed the prototype of our
proprietary   nanostructured   Membrane  Electrode  Assembly  ("nanoMEA"),   and
thereafter  began  looking for partners for nanoMEA  production.  The new carbon
nanomaterial  based MEAs have shown excellent  performance for both hydrogen and
methanol fuel cells.  For example,  this technology uses 75% less platinum while
exceeding  the  performance  of current  state of the art MEAs for methanol fuel
cells. The carbon  nanomaterials are used as the support of platinum or

                                       10
<PAGE>

platinum alloy catalysts.  Another major advantage of these carbon nanomaterials
is their higher corrosion resistance and thus longer lifetime than carbon black.

     On November 3, 2005,  we  announced  that we had entered  into an agreement
with  Bourns,   Inc.   ("Bourns")   to  scale-up  our  new  process  for  making
electro-catalyst and nanoMEA products to commercial scale. Bourns, headquartered
in  Riverside,  California,  has been a  manufacturer  of  electronics  industry
components  for  over 50  years.  Their  products  are  used by
the  industrial,  automotive,  telecommunications,  audio/visual,  aerospace and
other  electronic  industries.  On March  16,  2006,  we  announced  that we had
delivered  production scale prototype nanoMEAs to an undisclosed  customer.  The
delivered  prototypes were produced in conjunction with Bourns. The Bourns team,
working  with our  scientific  staff,  successfully  engineered  our  innovative
process for making nanoMEA's to commercial scale.  Based upon the success of our
development  efforts,  we are currently  engaged in  discussions  with Bourns to
increase the scope and intensity of our collaborative  efforts.  However,  as of
the date of this  Report,  the  terms of a  definitive  agreement  have not been
reached.  As of the  date  of this  Report,  we are  focused  on  improving  the
production capability of our nanoMEA and marketing it to potential customers. We
are also continuing research to refine and improve our current nanoMEA.

     On August  24th to August  26th,  we  participated  in the EMTEC  Fuel Cell
Group's 2nd MEA  Manufacturing  Symposium as a sponsor.  We are also involved in
discussions regarding possible joint ventures with other organizations, which as
of the  date  of  this  report  have  not  been  successfully  concluded  and no
assurances can be provided that we will successfully conclude such transactions.

LIQUIDITY AND CAPITAL RESOURCES

     At September 30, 2006, we had $318,072 in cash. We had $202,699 in accounts
payable.

     In July 2004,  we received  notice that we had been  selected by the United
States  Department  of  Energy  for a Phase I STTR  (Small  Business  Technology
Transfer)  grant.  The initial  grant in the amount of $100,000 was awarded,  of
which $99,901 was received in December  2004. We intend to apply for  additional
grant  money  from the  United  States  government,  as well as other  potential
sources,  in the future.  There are no assurances that our applications  will be
approved.  Applications have been submitted where we would be a subcontractor to
various entities such as UCR and Los Alamos National Laboratories.  We expect to
know the results of these applications by year-end 2006.

     On August 4, 2006, we closed a private offering of restricted shares of our
Common Stock (the "Shares").  We received  proceeds of $338,500 from the sale of
2,417,858  Shares  ($0.14  per  share).  The  Shares  were sold to a total of 17
investors, including 2 "accredited investors" as that term is defined under Rule
501(a) of  Regulation D as  promulgated  under the  Securities  Act of 1933,  as
amended.

                                       11
<PAGE>


     As a result of our obtaining  additional equity capital, we believe that we
currently have  sufficient  funds  available for us to continue to implement our
business plan for the next 12 months.  However, we estimate that we will require
an  additional  $2.5  million  in  additional  debt or equity  capital  to fully
implement our business  plan in the future and there are no  assurances  that we
will be able to raise this  capital  when  needed.  However,  while there are no
definitive  agreements in place as of the date of this Report,  we are currently
engaged in various discussions with interested parties to provide these funds or
otherwise enter into a strategic alliance to provide such funding. The inability
to obtain  sufficient  funds  from  external  sources  when  needed  will have a
material adverse affect on our results of operations and financial condition.

TRENDS

     Since our  announcement of the successful  development of a carbon nanotube
support base fuel cell  electrode  in November  2003,  we have been  receiving a
significant amount of attention from the investment community.  Stock volume has
increased and we have received  indications  of interest from  investors.  There
have also been significant  hits on our web site from investment  firms. In this
regard,  while there are no  assurances,  we are hopeful that we will be able to
raise  approximately  $2.5 million in additional funding in order to allow us to
produce  and  demonstrate  to fuel  cell  manufacturers  a  commercially  viable
prototype.  See "Liquidity and Capital  Resources,"  above.  We are currently in
preliminary discussions with entities that have told us they can raise funds for
us. However, there can be no assurance that any investment will materialize.  We
also  expect  that our new  laboratory  will  continue  to  function as a hub to
attract  additional  researchers from the University of California at Riverside,
which is on the path to become a leader in the nano-technology field. We believe
that there are many potential useful applications of nano-technology that can be
expected in the immediate future,  including fuel cells and flat panel displays.
Also at this laboratory,  functional  prototypes will be made before bringing in
manufacturers. Our plan is to have the manufacturers inspect the prototype, once
completed,  in order to generate their own test production  unit. If successful,
manufacturing  can  commence  producing  products  in  quantity  in less than 12
months. We foresee the initial  application to be a battery replacement for cell
phones,  mobile notebook  computers/laptops  and other applicable  applications.
This segment is known as the micro fuel cell  market.  We expect that these fuel
cells will eventually be produced like modular computer chips and components.

     We are also  preparing to  participate  in a significant  effort to receive
additional government funding.  However, there can be no assurance that any such
funding will materialize.

     We  believe  that the  reason  that the fuel  cell  market  is not  rapidly
expanding at this time is due to high manufacturing costs and lack of successful
applications.  We believe that a robust fuel cell market is  inevitable,  due to
the  advantages  of low  pollution and  independence  from fossil  fuels.  Major
automobile,  industrial  and power  supply  companies  are  heavily  involved in
research  and  development  activities  of fuel  cell  technology  and many have
announced prototypes and commercial models.  However, there has not been a major
commercial breakthrough, which we attribute to the high cost of the products and
the lack of consumer  proven  reliability.  While no

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assurances  can be  provided,  once the  problem of high costs is  resolved,  we
expect the micro fuel cell market to increase significantly.

INFLATION

     Although our operations are influenced by general economic  conditions,  we
do not believe that inflation had a material affect on our results of operations
during the nine-month period ended September 30 2006.

ITEM 3.  CONTROLS AND PROCEDURES

     Within 90 days prior to the date of filing of this quarterly report on Form
10-QSB,   we  carried  out  an  evaluation,   under  supervision  and  with  the
participation of our management, including our CEO and CFO, of the effectiveness
of the design and operation of our disclosure  controls and procedures  pursuant
to  Exchange  Act Rule  13a-14.  Based  upon  that  evaluation,  our CEO and CFO
concluded  that our  disclosure  controls and procedures are effective in timely
alerting them to material  information relating to us required to be included in
our periodic SEC filings. Subsequent to the date of that evaluation,  there have
been  no  changes  in  internal   controls  or  in  other   factors  that  could
significantly affect internal controls, nor were any corrective actions required
with regard to significant deficiencies and material weaknesses.

                           PART II. OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS - None

ITEM 2.  CHANGES IN SECURITIES.

     On August 4, 2006, we closed a private offering of restricted shares of our
Common Stock (the "Shares").  We received  proceeds of $338,500 from the sale of
2,417,858  Shares  ($0.14  per  share).  The  Shares  were sold to a total of 17
investors, including 2 "accredited investors" as that term is defined under Rule
501(a) of  Regulation D as  promulgated  under the  Securities  Act of 1933,  as
amended.

Subsequent Event

     In October  2006,  our Board of Directors  approved a consulting  agreement
with ABM Group,  LLC ("ABM")  whereby we agreed to issue  200,000  shares of our
"restricted"  common stock in exchange for ABM  providing us with  manufacturing
consultation, financial public relations and business development services.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES - None


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ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS -

         None

ITEM 5.  OTHER INFORMATION - None

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K -

     (a) Exhibits

         10.3. Amendment to Agreement between the Company and the University of
               CA at Riverside

         10.4  Consulting Agreement between the Company and ABM Group, LLC

         10.5  Agreement between the Company and Granite Investor Group

         31.1  Certification of Chief Executive Officer Pursuant to Section 302
               of the Sarbanes-Oxley Act of 2002.

         31.2  Certification of Chief Financial Officer Pursuant to Section 302
               of the Sarbanes-Oxley Act of 2002.

         32.1  Certification of Chief Executive Officer Pursuant to Section 906
               of the Sarbanes-Oxley Act of 2002.

         32.2  Certification of Chief Financial Officer Pursuant to Section 906
               of the Sarbanes-Oxley Act of 2002.

     (b) Reports on Form 8-K.

     On August 9, 2006,  we filed a report on Form 8-K,  advising that on August
4, 2006, we closed a private  offering of restricted  shares of our Common Stock
(the  "Shares").  We received  proceeds of $338,500  from the sale of  2,417,858
Shares  ($0.14  per  share).  The Shares  were sold to a total of 17  investors,
including 2 "accredited  investors" as that term is defined under Rule 501(a) of
Regulation D as promulgated  under the  Securities  Act of 1933, as amended.  We
relied  upon  the  exemption  from  registration  provided  by  Regulation  D as
promulgated  under  the  Securities  Act of 1933,  as  amended,  to issue  these
securities.  Our management had a pre-existing relationship with these investors
and we did  not  engage  in any  solicitation  or  general  advertising  in this
offering.


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                                   SIGNATURES


     Pursuant to the  requirements  of Section 12 of the Securities and Exchange
Act of 1934,  the  Registrant  has duly  caused  this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

                                        PACIFIC FUEL CELL CORP.
                                        (Registrant)

                                        Dated: November 14, 2006


                                        By:  s/ Ken Inouye
                                           -------------------------------------
                                           Ken Inouye, Secretary & Treasurer






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