SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C. 20549





FORM
10-Q








(Mark
One)





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





For the
quarterly period ended March 31, 2009





OR





[    ]
TRANSITION REPORT UNDER SECTION
13 OF 15(d) OF THE EXCHANGE ACT OF 1934





From the
transition period  ___________ to ____________.





Commission File Number0-53237





DYNARESOURCE,
INC.


(Exact
name of small business issuer as specified in its charter)





Delaware
              
              94-1589426(State
      or other jurisdiction of incorporation or organization)
              
              (IRS
      Employer Identification No.)








222 W LAS
COLINAS BLVD., Suite 744 EAST TOWER, Irving, Texas 75039


(Address
of principal executive offices)





(972)
868-9066


(Issuer's
telephone number)





N/A


(Former
name, former address and former fiscal year, if changed since last
report)





Indicate
by check mark whether the registrant (1) filed all reports required to be filed
by Section 13 or 15(d) of the 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:.  Yes [    ]   No [X
].





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







Large
      Accelerated Filer
            [  ]
            
            Accelerated
      Filer
            [  ]Non-Accelerated
      Filer
            [  ]
            
            Smaller
      Reporting Company
            [X]











Indicate
by a check mark whether the company is a shell company (as defined by Rule 12b-2
of the Exchange Act:  Yes
[    ]   No [ X ].





As of
April 30, 2009, there were 9,073,913 shares of Common Stock of the issuer
outstanding.








TABLE OF
CONTENTS








PART I
FINANCIAL STATEMENTS





Item
      1.
                Financial
      Statements
                2Notes
      to FinancialStatements
                6Item
      2.
                Management's
      Discussion and Analysis or Plan of Operation
                17





PART II
OTHER INFORMATION





Item
      1.
                Legal
      Proceedings
                24Item
      2.
                Changes
      in Securities
                24Item
      3.
                Default
      upon Senior Securities
                24Item
      4.
                Submission
      of Matters to a Vote of Security Holders
                24Item
      5.
                Other
      Information
                24Item
      6.
                Exhibits
      and Reports on Form 8-
                24








2


DYNARESOURCE,
INC.


(An
Exploration Stage Company)


Consolidated
Balance Sheets


March
31, 2009 and December 31, 2008








Mar
      31, 2009
                              (Unaudited)
                            
                            
                            Dec
      31, 2008
                              (Audited)ASSETSCurrent
      Assets:Cash
      and Cash Equivalents
                            
                            $
                            2,309,185
                            
                            
                            $
                            2,339,561Foreign
      Tax Receivable
                            
                            
                            39,611
                            
                            
                            
                            163,289Accounts
      Receivable – Related Party
                            
                            
                            50,225
                            
                            
                            
                            50,225Other
      Current Assets
                            
                            
                            217,596
                            
                            
                            
                            138,773Total
      Current Assets
                            
                            
                            2,616,617
                            
                            
                            
                            2,691,848Fixed
      Assets:Mining
      Camp Equipment and Fixtures (Net of Accumulated Depreciation of $446,995
      and $430,110)
                            
                            
                            381,309
                            
                            
                            
                            386,075Mining
      Properties (Net of Accumulated Amortization of $367,150 and
      $343,696)
                            
                            
                            4,336,217
                            
                            
                            
                            4,359,671Total
      Fixed Assets
                            
                            
                            4,717,526
                            
                            
                            
                            4,745,746Investment
      in Affiliate
                            
                            
                            300,000
                            
                            
                            
                            0Deposits
                            
                            
                            5,788
                            
                            
                            
                            5,788TOTAL
      ASSETS
                            
                            $
                            7,639,931
                            
                            
                            $
                            7,443,382LIABILITIES
      AND EQUITYCurrent
      Liabilities:Accounts
      Payable
                            
                            $
                            47,100
                            
                            
                            $
                            96,970Accrued
      Expenses
                            
                            
                            6,793
                            
                            
                            
                            6,133Total
      Liabilities
                            
                            
                            53,893
                            
                            
                            
                            103,103DynaResource,
      Inc. Stockholders’ Equity:Preferred
      stock, $1.00 par value, 10,000 shares
                              authorized,
      1,000 and 1,000 shares issued and outstanding
                            
                            
                            1,000
                            
                            
                            
                            1,000Common
      stock, $.01 par value, 12,500,000 shares
                              authorized,
      9,073,913 and 9,073,913 shares issued
                              and
      outstanding
                            
                            
                            90,739
                            
                            
                            
                            90,739Preferred
      Rights
                            
                            
                            40,000
                            
                            
                            
                            40,000Additional
      Paid In Capital
                            
                            
                            23,574,071
                            
                            
                            
                            22,774,071Treasury
      Stock
                            
                            
                            (
      47,790
                            )
                            
                            
                            ( 47,790
                            )Common
      Stock Subscription Receivable
                            
                            
                            0
                            
                            
                            
                            ( 125,000
                            )Other
      Comprehensive Income
                            
                            
                            1,985,488
                            
                            
                            
                            1,574,793Accumulated
      Deficit
                            
                            
                            (
      6,002,516
                            )
                            
                            
                            (
      6,002,516
                            )Accumulated
      Deficit  Since Reentering the Development Stage
                            
                            
                            (11,271,395
                            )
                            
                            
                            (10,375,264
                            )Total
      DynaResource, Inc. Stockholders’ Equity
                            
                            
                            8,369,597
                            
                            
                            
                            7,930,033Noncontrolling
      Interest
                            
                            
                            (783,559
                            )
                            
                            
                            (589,754
                            )TOTAL
      EQUITY
                            
                            
                            7,586,038
                            
                            
                            
                            7,340,279TOTAL
      LIABILITIES AND EQUITY
                            
                            $
                            7,639,931
                            
                            
                            $
                            7,443,382


See
accompanying summary of accounting policies and notes to financial
statements.


3


DYNARESOURCE,
INC.


(An
Exploration Stage Company)


Consolidated
Statement of Operations


For
the Three Months Ended March 31, 2009 and 2008


And
Cumulative Since Re-entering the Development Stage (January 1,
2007)


(Un-audited)


CumulativeSince
      Re-enteringDevelopmentThree
      Months Ended
                              
                              
                              StageMar
      31, 2009
                              
                              
                              Mar
      31, 2008
                              
                              
                              (Jan
      1, 2007)REVENUES
                              
                              $
                              0
                              
                              
                              $
                              0
                              
                              
                              $
                              0COST
      OF REVENUE (exclusive of depreciation and amortization shown separately
      below)Exploration
      Costs
                              
                              
                              410,695
                              
                              
                              
                              891,048
                              
                              
                              
                              6,998,971GROSS
      MARGIN
                              
                              
                              (410,695
                              )
                              
                              
                              (891,048
                              )
                              
                              
                              (6,998,971
                              )OPERATING
      EXPENSES:Depreciation
      and Amortization
                              
                              
                              40,339
                              
                              
                              
                              36,598
                              
                              
                              
                              347,736General
      and Administrative
                              
                              
                              375,985
                              
                              
                              
                              183,198
                              
                              
                              
                              2,877,489TOTAL
      OPERATING EXPENSES
                              
                              
                              416,324
                              
                              
                              
                              219,796
                              
                              
                              
                              3,225,225NET
      OPERATING (LOSS)
                              
                              
                              (827,019
                              )
                              
                              
                              (1,110,844
                              )
                              
                              
                              (10,224,196
                              )OTHER
      INCOMEPortfolio
      Income
                              
                              
                              1,838
                              
                              
                              
                              560
                              
                              
                              
                              11,531Other
      Income
                              
                              
                              0
                              
                              
                              
                              0
                              
                              
                              
                              2,104TOTAL
      OTHER INCOME
                              
                              
                              1,838
                              
                              
                              
                              560
                              
                              
                              
                              13,635NET
      INCOME (LOSS) BEFORE INCOME TAXES
                              
                              
                              (825,181
                              )
                              
                              
                              (1,110,284
                              )
                              
                              
                              (10,210,561
                              )Provision
      for Income Taxes (Expense) Benefit
                              
                              
                              0
                              
                              
                              
                              0
                              
                              
                              
                              38,259NET
      LOSS
                              
                              $
                              (825,181
                              )
                              
                              $
                              (1,110,284
                              )
                              
                              $
                              (10,172,302
                              )Net Loss Attributable to Noncontrolling Interest
                              
                              
                              127,616
                              
                              
                              
                              142,405
                              
                              
                              
                              1,062,350NET
      LOSS ATTRIBUTABLE TO DYNARESOURCE, INC. COMMON STOCKHOLDERS
                              
                              
                              (697,565
                              )
                              
                              
                              (967,879
                              )
                              
                              
                              (9,109,952
                              )COMPRENSIVE
      (LOSS)/INCOME:
                                Currency
      Translation Gain (Loss)
                              
                              
                              (264,755
                              )
                              
                              
                              70,492
                              
                              
                              
                              (2,097,810
                              )COMPREHENSIVE
      LOSS BEFORE NONCONTROLLING INTREST
                              
                              $
                              (962,320
                              )
                              
                              $
                              (897,387
                              )
                              
                              $
                              (11,207,762
                              )Comprehensive
      Loss/(Income) Attributable to Noncontrolling
                                Interest
                              
                              
                              66,189
                              
                              
                              
                              0
                              
                              
                              
                              66,189COMPREHENSIVE
      LOSS ATTRIBUTABLE TO DYNARESOURCE, INC. COMMON
STOCKHOLDERS
                              
                              
                              (896,131
                              )
                              
                              
                              (897,387
                              )
                              
                              $
                              (11,141,573
                              )EARNINGS
      PER SHARE, Basic and DilutedWeighted
      Average of Outstanding Shares, Basic and Diluted
                              
                              
                              9,073,913
                              
                              
                              
                              8,276,906Earnings
      (Loss) per Common Share,  Basic and Diluted
                              
                              $
                              ( 0.10
                              )
                              
                              $
                              (
      0.11
                              )


See
accompanying summary of accounting policies and notes to financial
statements.


4


DYNARESOURCE,
INC.


(An
Exploration Stage Company)


Consolidated
Statements of Cash Flows


For
the Three Months Ended March 31, 2009 and 2008


And
Cumulative Since Re-entering the Development Stage (January 1,
2007)


(Un-audited)


Three
      Months Ended
                March
      31, 2009
              
              
              Three
      Months Ended
                March
      31, 2008
              
              
              Cumulative
                Since
      Re-entering
                Development
                Stage
                (Jan
      1, 2007)CASH
      FLOWS FROM OPERATING ACTIVITIESNet
      loss
              
              $
              (825,181
              )
              
              $
              (1,110,284
              )
              
              $
              (10,172,302
              )Adjustments
      to reconcile net deficit to cash used
                by
      operating activities:Issuance
      of Common Stock for Services
              
              
              0
              
              
              
              0
              
              
              
              539,688Issuance
      of Preferred Stock for Services
              
              
              0
              
              
              
              0
              
              
              
              1,000Depreciation
      and Amortization
              
              
              40,339
              
              
              
              36,598
              
              
              
              347,736Loss
      on Disposition of Fixed Assets
              
              
              0
              
              
              
              0
              
              
              
              28,006Change
      in assets and liabilities:Decrease
      in Accounts Receivable
              
              
              0
              
              
              
              13,079
              
              
              
              199,143(Increase)
      in Accounts Receivable – Related Party
              
              
              0
              
              
              
              0
              
              
              
              (50,225
              )Decrease
      in Foreign Tax Receivable
              
              
              123,678
              
              
              
              9,039
              
              
              
              9,593(Increase)
      in Other Current Assets
              
              
              (78,823
              )
              
              
              (89,869
              )
              
              
              (140,505
              )Increase
      in Deposits
              
              
              0
              
              
              
              0
              
              
              
              (5,788
              )(Decrease)
      Increase in Accounts Payable
              
              
              (49,870
              )
              
              
              10,522
              
              
              
              5,696(Decrease)
      Increase in Accrued Expenses
              
              
              660
              
              
              
              0
              
              
              
              (97,343
              )(Decrease)
      in Deferred Tax Liability
              
              
              0
              
              
              
              0
              
              
              
              (38,259
              )CASH
      FLOWS FROM (USED) OPERATING ACTIVITIES
              
              
              (789,197
              )
              
              
              (1,130,915
              )
              
              
              (9,373,560
              )CASH
      FLOWS USED IN INVESTING ACTIVITIESPurchase
      of Fixed Assets
              
              
              (12,119
              )
              
              
              0
              
              
              
              (224,421
              )Investment
      in Affiliate
              
              
              (300,000
              )
              
              
              0
              
              
              
              (300,000
              )CASH
      FLOWS USED IN INVESTING ACTIVITIES
              
              
              (312,119
              )
              
              
              0
              
              
              
              (524,421
              )CASH
      FLOWS FROM FINANCING ACTIVITIESProceeds
      from DynaMexico Earn In
              
              
              800,000
              
              
              
              900,000
              
              
              
              8,643,004Proceeds
      from sale of common stock
              
              
              0
              
              
              
              9,400
              
              
              
              2,832,574Repurchase
      of common stock options
              
              
              0
              
              
              
              0
              
              
              
              (10,000
              )Other
      comprehensive income (loss)
              
              
              410,695
              
              
              
              0
              
              
              
              2,066,348Purchase
      of treasury stock
              
              
              0
              
              
              
              0
              
              
              
              (
      47,790
              )Common
      stock receivable
              
              
              125,000
              
              
              
              0
              
              
              
              0CASH
      FLOWS PROVIDED BY FINANCING ACTIVITIES
              
              
              1,335,695
              
              
              
              909,400
              
              
              
              13,484,136Effect
      of exchange rate on cash
              
              
              (264,755
              )
              
              
              (52,685
              )
              
              
              (2,097,810
              )NET
      INCREASE (DECREASE) IN CASH
              
              
              (30,376
              )
              
              
              (274,200
              )
              
              
              1,488,345Cash,
      beginning of period
              
              
              2,339,561
              
              
              
              2,060,665
              
              
              
              820,840Cash,
      end of period
              
              $
              2,309,185
              
              
              $
              1,786,465
              
              
              $
              2,309,185SUPPLEMENTAL
      CASH FLOW INFORMATIONInterest
      paid
              
              $
              0
              
              
              $
              0
              
              
              $
              0Income
      taxes paid
              
              $
              0
              
              
              $
              0
              
              
              $
              0Non-cash
      dividend of property
              
              $
              0
              
              
              $
              0
              
              
              $
              129,822





See
accompanying summary of accounting policies and notes to financial
statements.


5




DYNARESOURCE,
INC.


(An
Exploration Stage Company)


Notes
to the Consolidated Financial Statements


March
31, 2009


(Unaudited)





NOTE
1 – NATURE OF ACTIVITIES AND SIGNIFICANT ACCOUNTING POLICIES





Nature of Activities,
History and Organization:





DynaResource,
Inc. (The “Company”) was organized September 28, 1937, as a California
corporation under the name of West Coast Mines, Inc.  In 1998, the
Company re-domiciled to Delaware and changed its name to DynaResource,
Inc.  The Company is in the business of acquiring, investing in, and
developing precious metal properties, and the production of precious
metals.





In 2000,
the Company formed a wholly owned subsidiary, DynaResource de Mexico S.A. de
C.V. chartered in Mexico (“DynaMexico”).  This Company was formed to
acquire, invest in and develop resource properties in Mexico.  In
2005, the Company formed DynaResource Operaciones de San Jose De Gracia S.A. de
C.V. (“DynaOperaciones”) and acquired effective control of Mineras de
DynaResource S.A. de C.V. (formerly Minera Finesterre, S.A. de C.V.)
(“MinerasDyna”).  The Company owns 25% of Mineras and acquired
effective control of Mineras by acquiring the option to purchase the remaining
75% of the Shares of Mineras for seventy five pesos (approximately $7.00 in
United States dollars), as of December 31, 2007.   The Agreement
also provided that the other shareholders relinquish and forfeit any and all
rights, interests and claims in and to the Corporation and in or to any of the
rights or assets owned or controlled by the Corporation.  The Option
expires at January 6, 2010.   The results of Mineras are
consolidated with those of the Company.





In
January 2008, the Company transferred 15% of the ownership of DynaMexico to
Goldgroup Resources Inc., (“Goldgroup”) in exchange for a $3,000,000 cash
contribution and exploration expenditures at the San Jose de Gracia property
(“SJG”), and in August 2008, the Company transferred an additional 10% of the
ownership of DynaMexico to Goldgroup in exchange for an additional $3,000,000
cash and exploration expenditures (See Note 5 below).  Through March
31, 2009, Goldgroup has contributed $8,968,009 to DynaMexico, and it currently
owns 25% of DynaMexico.





The
Company produced approximately $7,000,000 in revenues from production activities
during the years ended December 31, 2003 through 2006, and suspended this
activity voluntarily to concentrate its efforts on exploration and development.
In accordance with that decision, as of January 1, 2007, the Company reentered
the Exploration Stage and has presented its cumulative results since reentering
the Exploration Stage, in accordance with Statement of Financial Accounting
Standard (“SFAS”) No. 7, “Accounting and Reporting by
Development Stage Enterprises,”  and will continue this
presentation until it again has revenues from operations.





Unaudited Interim Financial
Statements:





The
accompanying unaudited interim financial statements have been prepared in
accordance with accounting principles generally accepted in the United States
and applicable Securities and Exchange Commission (“SEC”) regulations for
interim financial information. These financial statements are unaudited and, in
the opinion of management, include all adjustments (consisting of normal
recurring accruals) necessary to present fairly the balance sheets, statements
of operations and statements of cash flows for the periods presented in
accordance with accounting principles generally accepted in the United States.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with accounting principles generally accepted
in the United States have been condensed or omitted pursuant to SEC rules and
regulations. It is presumed that users of this interim financial information
have read or have access to the audited financial statements and footnote
disclosure for the preceding fiscal year contained in the on Form 10 that was
effective on July 15, 2008.   Operating results for the interim
periods presented are not necessarily indicative of the results that may be
expected for the year ending December 31, 2009.






6







Significant Accounting
Policies:





The
Company’s management selects accounting principles generally accepted in the
United States of America and adopts methods for their
application.  The application of accounting principles requires the
estimating, matching and timing of revenue and expense. It is also necessary for
management to determine, measure, and allocate resources and obligations within
the financial process according to those principles.  The accounting
policies used conform to generally accepted accounting principles which have
been consistently applied in the preparation of these financial
statements.





The
financial statements and notes are representations of the Company’s management
which is responsible for their integrity and objectivity. Management further
acknowledges that it is solely responsible for adopting sound accounting
practices, establishing and maintaining a system of internal accounting control
and preventing and detecting fraud.  The Company's system of
internal  accounting control is designed to assure, among other items,
that  1) recorded  transactions  are
valid;  2) valid  transactions  are
recorded;  and  3)
transactions  are  recorded in the proper  period
in a timely  manner to produce financial  statements which
present fairly the financial  condition,  results of
operations  and cash  flows of
the  Company  for
the  respective  periods  being
presented.





Management
believes that all adjustments necessary for a fair statement of the results of
the three months ended March 31, 2009and 2008 have been
made.





Basis of
Presentation:





The
Company prepares its Financial Statements on the accrual basis of accounting in
conformity with accounting principles generally accepted in the United
States.





Principles of
Consolidation:





The
financial statements include the accounts of DynaResource, Inc. as well as
DynaResource de Mexico, S.A. de C.V., DynaResource Operaciones S.A. de C.V. and
Mineras de DynaResource S.A. de C.V.  All significant inter-company
transactions have been eliminated.     All amounts are
presented in U.S. Dollars unless otherwise stated.





Foreign Currency
Translation:





The
subsidiary’s functional currency is the U.S. dollar. As a result, the financial
statements of the subsidiary have been re-measured from Mexican pesos into U.S.
dollars using (i) current exchange rates for monetary asset and liability
accounts, (ii) historical exchange rates for nonmonetary asset and liability
accounts, (iii) historical exchange rates for revenues and expenses associated
with nonmonetary assets and liabilities and (iv) the weighted average exchange
rate of the reporting period for all other revenues and expenses. In addition,
foreign currency transaction gains and losses resulting from U.S. dollar
denominated transactions are eliminated. The resulting re-measured gain or loss
is recorded in other comprehensive (loss) income.





The
financial statements of the subsidiary should not be construed as
representations that Mexican pesos have been, could have been or may in the
future be converted into U.S. dollars at such rates or any other
rates.





Relevant
exchange rates used in the preparation of the financial statements for the
subsidiary are as follows for the three months ended March 31, 2009 (Mexican
pesos per one U.S. dollar):





March 31, 2009Current
      exchange rate
                Pesos.
                
                
                14.4369Weighted
      average exchange rate for the three months ended
                Pesos.
                
                
                14.3819





Cash and Cash
Equivalents:





The
Company considers all highly liquid debt instruments with a maturity of three
months or less to be cash equivalents.  At times, cash balances may be
in excess of the FDIC insurance limits.  The carrying amount
approximates fair market value.








7







Accounts Receivable and
Allowance for Doubtful Accounts:





The
allowance reserve for accounts receivable is recorded when receivables are
considered to be doubtful of collection.  No allowance has been
established as all receivables were deemed to be fully collectible.


Foreign Tax
Receivable:





Foreign
Tax Receivable (IVA) is comprised of recoverable value-added taxes charged by
the Mexican government on goods and services rendered.  Under certain
circumstances, these taxes are recoverable by filing a tax
return.  Amounts paid for IVA are tracked and held as receivables
until the funds are remitted.  The total amount of IVA receivable as
of March 31, 2009 and 2008 were $ 39,611 and $ 163,289,
respectively.





Inventory:





As the
Company ceased production in 2006, there is no inventory, as of March 31, 2009
and December 31, 2008.





Fixed
Assets:





Fixed
assets are carried at cost.  Depreciation is provided over each
asset’s estimated useful life.  Upon retirement and disposal, the
asset cost and related accumulated depreciation are removed from the accounts
and any resulting gain or loss is included in the determination of the net
income.  Expenditures for geological and engineering studies,
maintenance and claim renewals are charged to expense when
incurred.  Additions and significant improvements are capitalized and
depreciated.





Mining
Properties:





The
Company is an ‘Exploration Stage’ company as defined in “SEC Industry Guide
7”.  Mining properties consist of 34 concessions at the San
Jose de Gracia property the basis of which are deferred until the properties are
brought into production, at which time they will be amortized on the unit of
production method based on estimated recoverable reserves.  If it is
determined that the deferred costs related to a property are not recoverable
over its productive life, those costs will be written down to fair value as a
charge to operations in the period in which the determination is made. The
amounts at which mineral properties and the related deferred costs are recorded
do not necessarily reflect present or future values.




The
recoverability of the book value of each property will be assessed annually for
indicators of impairment such as adverse changes to any of the
following:




·
            estimated
      recoverable ounces of gold, silver or other precious
    minerals;


·
            estimated
      future commodity prices;


·
            estimated
      expected future operating costs, capital expenditures and
      reclamation    expenditures




A
write-down to fair value will be recorded when the expected future cash flow is
less than the net book value of the property or when events or changes in the
property indicate that carrying amounts are not recoverable.  This analysis
will be completed as needed, and at least annually.  As of the date of
this filing no events have occurred that would require write-down of any
assets.




Exploration,
development, direct field costs and administrative costs are expensed in the
period incurred.




The
carrying amounts of the mining concessions are reviewed at each calendar year
end to determine whether there is any indication of impairment. If such
indication of impairment exists, the asset’s recoverable amount will be reduced
to its estimated fair value. As of December 31, 2008 and no indications of
impairment existed.





Use of
Estimates:





In order
to prepare financial statements in conformity with accounting principles
generally accepted in the United States, management must make estimates,
judgments and assumptions that affect the amounts reported in the Financial
Statements and determines whether contingent assets and liabilities, if any, are
disclosed in the financial statements.  The ultimate resolution of
issues requiring these estimates and assumptions could differ significantly from
resolution currently anticipated by management and on which the financial
statements are based.








8







Revenue
Recognition:





The
Company recognizes revenue when persuasive evidence of an arrangement exists,
delivery or service has occurred, the sale price is fixed or determinable and
receipt of payment is probable.


Revenues
earned from the sale of precious metal concentrates are recognized as the title
to the material is passed to the buyer upon delivery.





Earnings (Loss) per Common
Share:





“Earnings
(loss) per share” is calculated in accordance with SFAS No. 128, “Earnings per Share.” The
weighted average number of common shares outstanding during each period is used
to compute basic earnings (loss) per share.  “Diluted earnings per share”
is computed using the weighted average number of shares and potentially dilutive
common shares outstanding.   Dilutive potential common shares are
additional common shares assumed to be exercised.    
Potentially dilutive common shares consist of stock options and are excluded
from the diluted earnings per share computation in periods where the Company has
incurred a net loss, as their effect would be considered
anti-dilutive.





As the
Company incurred a net loss during the three months ended March 31, 2009 and
2008, the basic and diluted loss per common share is the same.   As
discussed in Note 8, and as of March 31, 2009, the Company had 1,809,244 stock
options outstanding that could potentially have a dilutive effect on basic
earnings per share in the future, including 650,000 shares that would have been
considered dilutive if the Company had not incurred a net loss.  As of
March 31, 2008, the Company had 2,789,328 stock options outstanding that could
potentially have a dilutive effect on basic earnings per share in the future,
including 2,181,236 shares that would have been considered dilutive if the
Company had not incurred a net loss.





Comprehensive
Income:





SFAS No.
130 “Reporting Comprehensive Income”, establishes standards for reporting and
display of comprehensive income and its components in a full set of general
purpose financial statements.    The Company’s comprehensive
income consists of net income and other comprehensive income (loss), consisting
of unrealized net gains and losses on the translation of the assets and
liabilities of its foreign operations.





Recently Issued Accounting
Pronouncements:





The
Company  does not
expect  the  adoption  of  recently  issued  accounting
pronouncements  to have a significant  impact on the
Company’s  results of  operations, financial position or
cash flow.  See Note 12 for a discussion of new accounting
pronouncements.





Fair Value of Financial
Instruments:





In
accordance with the reporting requirements of SFAS No. 177, Disclosures About Fair Value of
Financial Instruments, the Company calculates the fair value of its
assets and liabilities which qualify as financial instruments under this
statement and includes this additional information in the notes to the financial
statements when the fair value is different than the carrying value of those
financial instruments.  As of March 31, 2009 the Company did not have
any financial instruments other than cash and cash equivalents.











9





NOTE 2 – FIXED
ASSETS





Fixed
assets are stated at cost and consist of the following at March 31,
2009:





Mining
      camp equipment and fixtures
                
                $
                546,636Transportation
      equipment
                
                
                133,517Lab
      equipment
                
                
                14,306Machinery
      and equipment
                
                
                16,175Office
      furniture and fixtures
                
                
                81,972Office
      equipment
                
                
                3,448Computer
      equipment
                
                
                32,250Sub-total
                
                $
                828,304Less:
      Accumulated depreciation
                
                
                (446,995
                )Total
                
                $
                381,309





Depreciation
has been provided over each asset’s estimated useful
life.  Depreciation expense was $16,885 and $6,598 for the three
months ended March 31, 2009 and 2008 respectively,








NOTE 3 – MINING
PROPERTIES





Mining
properties consist of the following at March 31, 2009:





San
      Jose de Gracia:Mining
      concessions
                
                $
                4,703,367Less:
      Accumulated amortization
                
                
                (367,150
                )Total
                
                $
                4,336,217





Amortization
expense was $23,454 and $30,000 for the three months ended March 31, 2009 and
2008, respectively.








NOTE 4 – INCOME
TAXES





During
the year ended December 31, 2007, the Company adopted Financial Accounting
Standards Board (“FASB”) Interpretation No. 48, “Accounting for Uncertainty in
Income Taxes” (“FIN 48”), which supplements SFAS No. 109, “Accounting for Income
Taxes”, (“SFAS No. 109”) by defining the confidence level that a tax
position must meet in order to be recognized in the financial
statements.   The Interpretation requires that the tax effects of
a position be recognized only it if is “more-likely-than-not” to be sustained
based solely on its technical merits as of the reporting date.  The
more-likely-than-not threshold represents a positive assertion by management
that a company is entitled to the economic benefits of a tax
position.  If a tax position is not considered more-likely-than-not to
be sustained based solely on its technical merits, no benefits of the tax
position are to be recognized.  Moreover, the more-likely-than-not
threshold must continue to be met in each reporting period to support continued
recognition of a benefit.  With the adoption of FIN 48, companies are
required to adjust their financial statements to reflect only those tax
positions that are more-likely-than-not to be sustained.  Any
necessary adjustment would be recorded directly to retained earnings and
reported as a change in accounting principle.





The
Company’s deferred income taxes reflect the net tax effects of (a) temporary
differences between the carrying amounts of assets and liabilities for financial
reporting purposes and the amounts used for income tax reporting purposes, and
(b) net operating loss carry forwards.  For Federal income tax
purposes, the Company uses the cash basis of accounting, whereas the accrual
basis is used for financial reporting purposes.  In addition, certain
assets are charged to expense when acquired under Section 179 of the Internal
Revenue Code for income tax purposes.





The
Company provided a full valuation allowance on the net deferred tax asset,
consisting primarily of net operating loss carry forward, because management has
determined that it is more-likely-than-not that the Company will not earn income
sufficient to realize the deferred tax assets during the carry forward
period.








10






The
cumulative tax effect at the expected tax rate of 34% (blended for U.S. and
Mexico) of significant items comprising the Company’s net deferred tax amounts
as of March 31, 2009 are as follows:




March 31, 2009Net
      deferred tax assets attributable to:Prior
      years
              
              $
              2,263,977Tax
      benefit (liability) for current year
              
              
              327,189Total
      Deferred Tax Benefit
              
              
              2,591,166Valuation
      Allowance
              
              
              (2,591,166
              )Net
      Deferred Tax Benefit
              
              $
              0





The
realization of deferred tax benefits is contingent upon future earnings and is
fully reserved at March 31, 2009.








NOTE 5 – MATERIAL
AGREEMENTS





Concessions and Interest
related to the San Jose de Gracia Property:





In March
2000, The Company entered into agreements to complete the acquisition and
consolidation of 100% of the San Jose de Gracia Property and related mining
interests.  Pursuant to these agreements, the Mining Concessions and
related interests comprising the San Jose de Gracia property were transferred to
the Company.





In March
2005, the Company issued 115,000 common shares; received a cash payment of
$15,000; and accepted a mutual release from the vending parties; to complete the
acquisition agreements.





Financing/Sale of
Stock:





On
September 1, 2006 the Company signed a “Stock Purchase and Earn In Agreement”
(“Earn In”) between:  DynaResource, Inc. (“DynaResource”) and
DynaResource de Mexico S.A. de C.V. (“DynaMexico”), (“Seller”); and Goldgroup
Resources, Inc., of Vancouver, British Columbia (“Goldgroup”), (“Buyer”), and
Together, (“the Parties”).





The Earn
In provides for the sale of up to fifty per cent (50%) of the total outstanding
shares of DynaMexico, the wholly owned subsidiary of DynaResource, and the owner
of the San Jose de Gracia District in northern Sinaloa Mexico (“SJG”); in
exchange for the total cash contributions to DynaMexico, and expenditures
related to the development of the SJG, in the amount of $18,000,000 by
Goldgroup; contributed in four (4) phases, as set forth below:





Phase
            On
      or before
            Amount
      of Funds to be deposited to DynaMexico
              (For
      SJG Expenditures)
            Interest
      Earned (by Goldgroup in DynaMexico)
            Cumulative
      Interest Earned (by Goldgroup in DynaMexico)1.
            June
      15, 2007
            $1,000,000
            0%
            0%;  Completed2.
            March
      15, 2008
            $2,000,000
            15%
            15%;  Completed3.
            September
      15, 2009
            $3,000,000
            10%
            25%;  Completed4.
            March
      15, 2011
            $12,000,000
            25%
            50%








Pursuant to the Earn In
Agreement:





·
            DynaResource
      attached the “SJG Title Opinion”, compiled by Urias Romero Y Asociados,
      Abraham Urias, Mazatlan, Sinaloa, with attachments and schedules;
      describing the status and position of DynaMexico and affiliates in Mexico,
      and confirming the ownership and status of the Mining Concessions
      comprising the SJG District in Sinaloa,
Mexico;








11







·
            DynaResource
      attached its audited, consolidated financial statements at December 31,
      2005;





·
            The
      Parties agree to a revised setting of the Board of Directors of
      DynaMexico, to:





a)
            Two
      (2) members of DynaResource; K.D. Diepholz, Chairman/CEO of DynaResource
      as President; and, Charles E. Smith; CFO of
  DynaResource;





b)
            One
      (1) member of Goldgroup; Keith Piggott, CEO of
  Goldgroup.





·
            A
      Management Committee was formed to approve budgets and expenditures
      pursuant to the Earn In.  The setting of the Management
      Committee is:





a)
            Two
      (2) members of Goldgroup; Keith Piggott, CEO of Goldgroup as
      Chairman;  and, John Sutherland, CFO of
    Goldgroup;





b)
            One
      (1) member of DynaResource; K.D. Diepholz, Chairman/CEO of
      DynaResource;





c)
            Members
      of the Management Committee may be changed as subsequently
      agreed.





·
            The
      Parties agree to cooperate to develop the SJG Property, in the best
      interests of the Project.








Phases 1, 2 and 3 of Earn In
Completed:





Activities
related to the exploration and development of SJG are being conducted by
DynaMexico, through contract to the operating subsidiary of DynaResource, Inc.
in Mexico, Mineras de DynaResource SA de CV. (“MinerasDyna”); with the
management of personnel being contracted by MinerasDyna through to the personnel
management subsidiary, DynaResource Operaciones, SA de CV
(“DynaOperaciones”).





On
December 28, 2007 Goldgroup completed Phase II of the Earn In Agreement, through
the contributions of Capital of $3,368,088 to DynaMexico and the expenditures
related to the exploration of SJG of 27,063,453 Mexican pesos, with the
remainder held in cash in DynaMexico, In January 2008, 15% of the Shares of
DynaMexico were transferred to Goldgroup.





On July
16, 2008, the Goldgroup completed Phase III of the Earn In Agreement through
total contributions of capital under the Earn In Agreement of $6,118,009 with
total expenditures related to the exploration of SJG of $57,252,898 Mexican
pesos, with the remainder held in cash in DynaMexico, In January 2008, 15% of
the Shares of DynaMexico were transferred to Goldgroup.  In August
2008, an additional 10% of the Shares of DynaMexico were transferred to
Goldgroup, so that Goldgroup now owns 25% of DynaMexico.





Continuing
with Phase IV exploration activities, as of March 31, 2009 the Company reported
total deposits to DynaMexico by Goldgroup in excess of $8,968,000 USD, with
total expenditures through DynaMexico of approximately 84,108,175 Mexican
pesos.





MATERIAL AGREEMENT
(MOU):





In order
to clarify and confirm the operating structure at SJG, DynaResource, Inc.,
DynaResource de Mexico, and Goldgroup Resources Inc. (the Parties to the Earn In
/ Option Agreement;  and “the Parties”) entered into a “Memorandum of
Understanding”, (the “MOU”), dated July 29, 2008 (See “MOU”).  The MOU
provides for:





·
            Mineras
      de DynaResource is the exclusive operating entity at SJG, pursuant to the
      operating agreement with DynaResource de
Mexico;





·
            DynaResource
      de Mexico owns the SJG 100%, and all Data and information pursuant
      thereto;  any information disseminated regarding SJG must be
      disclosed as from DynaResource de
Mexico;








12





·
            The
      SJG Management Committee is not a legal entity and has no authority or
      ability to sign contracts or incur obligations or liabilities to
      DynaMexico, Mineras, or
DynaOperaciones;





·
            The
      SJG Management Committee does not have the authority to act for or
      represent DynaMexico, Mineras, Operaciones, or the SJG
      Property;





·
            All
      personnel must be employed or contracted through Mineras or Operaciones
      and be accountable to the employing / contracting
  entity;








NOTE 6 – RELATED PARTY
TRANSACTIONS





In the
three months ended March 31, 2009 and 2008, the Company paid $130,722 and $-0-
respectively to Dynacap Group, Ltd. (an entity controlled by officers of the
Company) for consulting and other fees.





In
addition, the Company issued common stock to the following related
parties:





Three
      months ended March 31, 2009
              
              
              Year
      ended December 31, 2008Consultants
              
              $
              0
              
              
              $
              238,442Totals
              
              $
              0
              
              
              $
              238,442








NOTE 7 – INVESTMENT IN
AFFILIATE





In March
2009, the Company invested $ 300,000 in DynaResource Nevada, Inc., a Nevada
Corporation, with one operating subsidiary in Mexico, DynaNevada de Mexico, SA
de CV.  The terms of the investment provide for a “Convertible Loan”,
repayable at 5 % interest over a 3 year period, and convertible at the Company’s
option into Common Stock of DynaResource Nevada, Inc. at $ .50 /
Share.  DynaResource Nevada, Inc. is a related entity, and through its
subsidiary in Mexico, has entered into an Option agreement with Grupo Mexico
(IMMSA) in Mexico, for the exploration and development of approximately 3,000
hectares in the State of San Luis Potosi.








NOTE 8 – STOCKHOLDERS’
EQUITY





Preferred
Stock





The
Company is authorized to issue 10,000 preferred shares at a par value of $1.00
per share.  These shares have full voting rights.  In
October 2007, the Company issued 1,000 shares of Preferred A shares to its
CEO.  These shares have the right to elect a majority of the Board of
Directors.  There were 1,000 and 1,000 shares outstanding at March 31,
2009 and December 31, 2008, respectively.





Common
Stock





The
Company is authorized to issue 12,500,000 common share stocks at a par value of
$0.01 per share.  These shares have full voting rights.  At
March 31, 2009 and at December 31, 2008, there were 9,073,913 shares
outstanding.





Preferred
Rights





The
Company issued “Preferred Rights” and received $158,500 in 2003 and $626,250 in
2002, for the rights to percentages of revenues generated from the San Jose de
Gracia Pilot Production Plant.  This has been reflected as “Preferred
Rights” in stockholders’ equity.  As of December 31, 2004, $558,312
was repaid, leaving a balance of $226,188.  As of December 31, 2005,
$186,188 has been repaid, leaving a balance of $40,000. At March 31, 2009 the
balance remains at $40,000.








13







Treasury
Stock





Treasury
stock is accounted for by the cost method.  The Company may from time
to time purchase and resell its own common stock.  Treasury stock
activity is presented in the consolidated statement of stockholders’
equity.





Options and
Warrants





There are
1,809,244 options outstanding at March 31, 2009.





·
            529,152
      options entitle the holder to purchase one share of the Company’s common
      stock at a price of $3.75 per share. The options expire November 15,
      2009.  24,000 options have been exercised since
      issuance.





·
            240,917
      Options entitle the holder to purchase one share of the Company’s common
      stock at a price of $5.00 per share. The options expire November 15,
      2009.  No options were exercised or cancelled since
      issuance.





·
            150,000
      options entitle the holder to purchase one share of the Company’s common
      stock at a price of $2.50 per share. The options expire November 15,
      2009.  No options were exercised or cancelled since
      issuance.





·
            500,000
      options entitle the holder to purchase one share of the Company’s common
      stock at a price of $2.50 per share. The options expire November 15,
      2009.  No options were exercised or cancelled since
      issuance.





·
            365,295
      options entitle the holder to purchase one share of the Company’s common
      stock at a price of $5.00 per share.  The options expire
      November 15, 2009. No options were exercised or cancelled since
      issuance.





·
            23,880
      options entitle the holder to purchase one share of the Company’s common
      stock at a price of $10.00 per share and expire November 15,
      2009.   No options were exercised or cancelled since
      issuance.





·
            The
      Company’s stock price was $2.65 at March 31, 2009. The Company had 650,000
      options outstanding that would have been considered dilutive if the
      Company had not incurred a net
loss.








NOTE 9 – NONCONTROLLING
INTEREST





The
Company’s Noncontrolling Interest recorded in the unaudited consolidated
financial statements relates to a 25% interest in DynaResource de Mexico, S.A.
de C.V. not owned by the Company at March 31, 2009, and 15%  interest
of DynaResource de Mexico, S.A. de C.V. not owned by the Company at March 31,
2008.




Changes
in Noncontrolling Interest for the three months ended March 31, 2009 and
2008 was as follows:




For
      the Three Months
                                              Ended
      March 31,2009
                                            
                                            
                                            
                                            2008Beginning
      balance
                                            $
                                            (589,754
                                            )
                                            
                                            $
                                            0
                                            )Operating
      income (loss)
                                            
                                            (127,616
                                            )
                                            
                                            
                                            (142,405
                                            )Other
      comprehensive income (loss)
                                            
                                            (66,189
                                            )
                                            
                                            
                                            0Ending
      balance
                                            $
                                            $(783,559
                                            )
                                            
                                            $
                                            (142,405
                                            )









14




The
Company began allocating a portion of other comprehensive income (loss) to the
noncontrolling interest with the adoption of FASB 160 as of January 1,
2009.





NOTE 10 – EMPLOYEE BENEFIT
PLANS





There is
currently no qualified or non-qualified employee pension, profit sharing, stock
option, or other plans authorized for any class of employees.








NOTE 11 – COMMITMENTS AND
CONTINGENGIES





Three (3)
additional mining concessions in Mexico were applied for, and at the time that
title of these concessions are completed to DynaMexico, would extend the SJG
District by approximately 95,000 Hectares.





For all
concessions, the Company is required to pay taxes in order to maintain the
concessions.  In 2008, the Company paid $933,684 Mexican pesos
(approximately $83,589 in US dollars) in taxes for all mining concessions
held.  Additionally, the Company is required to incur a minimum amount
of expenditures each year for all concessions held.  The minimum
expenditures are calculated based upon the land area, as well as the age of the
concessions.  Amounts spent in excess of the minimum may be carried
forward indefinitely over the life of the concessions, and are adjusted annually
for inflation.   For the year ended December 31, 2007, the
minimum expenditure was $2,921,236 pesos (approximately $267,500 in US dollars);
and the total expenditures that can be carried forward was $92,022,517 Mexican
pesos (approximately $6,677,977 US dollars).  For 2008, the Company
incurred expenditures of $48,953,168 Mexican pesos which will increase the
estimated amount   the Company may carry forward to approximately
$138,104,700 Mexican Pesos (approximately $10,022,112 US dollars) as of December
31, 2008.  The minimum expenditure for 2009 has not yet been
determined, but is anticipated to be consistent with 2008, as adjusted for
inflation.   Based on Management’s business plans, they do not
anticipate any issues in meeting the minimum annual expenditures for the
concessions, and it retains sufficient carry forward amounts to cover over 20
years of the minimum expenditure (as calculated at the 2008 minimum, adjusted
for annual inflation of 4%).








NOTE 12 – RECENT ACCOUNTING
PRONOUCEMENTS





In June
2003, the Securities and Exchange Commission (“SEC”) adopted final rules under
Section 404 of the Sarbanes-Oxley Act of 2002 (“Section 404 (b)”), as amended by
SEC Release No. 33-8760 on December 15, 2006.  Commencing with the
Company’s Annual Report for the year ending December 31, 2008, the Company is
required to include a report of management on the Company’s internal control
over financial reporting.  The internal control report must include a
statement of management’s responsibility for establishing and maintaining
adequate internal control over financial reporting for the Company; of
management’s assessment of the effectiveness of the Company’s internal control
over financial reporting as of its year-end and of the framework used by
management to evaluate the effectiveness of the Company’s internal control over
financial reporting.





In June
2008, the SEC approved a one year extension of the compliance data for smaller
public companies to meet the Section 404 (b) auditor attestation requirement of
the Sarbanes-Oxley Act regarding the Company’s internal control over financial
reporting on whether it believes that the Company has maintained, in all
material respects, effective internal control over financial
reporting.





In 2008,
the FASB issued the following guidance:








15







-
            SFAS No. 161:“Disclosures about Derivative
      Instruments and Hedging Activities”





-
            SFAS No. 162:  “The
      Hierarchy of Generally Accepted Accounting
    Principles”





-
            SFAS No.
      163:  “Accounting for Financial Guarantee Insurance
      Contracts”





Management
has reviewed these new standards and believes that they will have no material
impact on the financial statements of the Company.








NOTE 13 – FAIR VALUE OF FINANCIAL
      INSTRUMENTS





In
September 2006, the FASB issued SFAS 157, Fair Value Measurement. SFAS
157 defines fair value, establishes a framework for measuring fair value in
generally accepted accounting principles and expands disclosures about fair
value measurements. SFAS 157 was effective for our financial assets and
liabilities on January 1, 2008. The FASB delayed the effective date of SFAS
157 for all non-financial assets and non-financial liabilities, except those
that are recognized or disclosed at fair value in the financial statements on a
recurring basis (at least annually) to fiscal years beginning after
November 15, 2008.





SFAS
157’s valuation techniques are based on observable and unobservable inputs.
Observable inputs reflect readily obtainable data from independent sources,
while unobservable inputs reflect our market assumptions. The Standard
classifies these inputs into the following hierarchy:





·
            Level 1 Inputs – Quoted
      prices for identical instruments in active
  markets.





·
            Level 2 Inputs – Quoted
      prices for similar instruments in active markets; quoted prices for
      identical or similar instruments in markets that are not active; and
      model-derived valuations whose inputs are observable or whose significant
      value drivers are observable.





·
            Level 3 Inputs –
      Instruments with primarily unobservable value
  drivers.





As of
March 31, 2009, the Company had no financial instruments with Level 1, Level 2
or Level 3 Inputs.





16


Item
2.  MANAGEMENT’S DISCUSSION AND ANALYSIS





This
report contains forward looking statements within the meaning of Section 27A of
the Securities Act of 1933, as amended and Section 21E of the Securities
Exchange Act of 1934, as amended. The Company’s actual results could differ
materially from those set forth on the forward looking statements as a result of
the risks set forth in the Company’s filings with the Securities and Exchange
Commission, general economic conditions, and changes in the assumptions used in
making such forward looking statements.





General





The
Company’s majority owned subsidiary, DynaResource de Mexico, S.A. de C.V.
(“DynaMexico”), owns 100% of the mineral concessions related interest to the San
Jose de Gracia mining property covering approximately 99,500 hectares located in
and around San Jose de Gracia, Sinaloa State, Mexico (“SJG”). SJG is located on
the west side of the Sierra Madre Mountains, approximately 100 kilometers inland
from Guamuchil and approximately 200 kilometers north of Mazatlan,
Sinaloa.





The SJG
is a High-Grade Mineralized System which reports historical production of + 1 M.
Oz. AU, from a series of underground workings.  DynaMexico is focused
on the exploration of this vein-hosted, near surface, and + 400 hundred M. Down
– Dip Gold Potential, that occurs within fault breccia veins; and has been
traced on surface and underground over a 15 Sq. Km. area.





Prior Drilling and
Exploration Activity / SJG




A drill
program was conducted at SJG in 1997 - 1998 by Golden Hemlock Explorations,
Ltd., a prior partner at SJG. Approximately 6,172 meters drilling was completed
in 63 core drill holes. Significant intercepts, including bonanza grades,
outlined Down Dip potential of the Northeast section (150 Meter NE to SW extent
of the Drilling) of the Los Hilos to Tres Amigos Trend.  And, Drill Hole
97-63 confirmed down dip and extension at the Palos Chinos Area of
SJG.




Surface
and underground sampling in 1999 - 2000 conducted by the Company confirmed high
grades in historic workings and surface exposures throughout the SJG district
and project area.  These high grades outline the presence of ore shoots
developed within the veins.  The ore shoots appear to be controlled by
dilational jogs and/or vein intersections. A total of 544 samples were collected
in 1999-2000, and assayed an average 6.51 grams/ton gold.





Acquisition and
Consolidation / SJG





In 2000,
the Company formed DynaMexico to acquire, invest in, explore and develop mining
concessions in Mexico, and to acquire the ownership and interests related to San
Jose de Gracia.  In March 2000, the Company and DynaMexico entered
into agreements to acquire and consolidate 100% of the San Jose de Gracia
Property. The Company agreed to issue 2,493,271 Shares in exchange for the
complete acquisition of the SJG and all related interest, and subject to the
complete transfer of all mining concessions.





After
resolving ownership and title issues related to SJG, the number of shares to be
issued to the prior owners of SJG was reduced to 115,000 shares from 2,493,271.
(Note:  The 115,000 shares were issued in 2006, when all matters
related to the acquisition, transfer, and consolidation, of the SJG district,
were resolved.





Recent Pilot Production
Activity





During
the period 2003 through 2006, DynaMexico conducted mining and production
activities at SJG.  The small scale Pilot mining and production
activities at SJG consisted of improvements to an existing mill, including the
installation of a gravity / flotation processing circuit, and initial test runs
with tailings were completed in 2002.  Actual mining at the high grade San
Pablo area of the SJG property commenced in March 2003.  DynaMexico
produced 18,250 Oz. gold from Mid 2003 to June 2006; from mined tonnage of
42,500 tons, at an average grade of approximately 20 g/t.  Production
costs were reported at approx. < $ 175. / Oz. in this pilot production
operation.





During
the period of production at SJG, the Company recognized it would be necessary to
conduct large scale exploration activities in order to define and confirm
commercial ore bodies.










17





Recent Financing
Activity





As gold
prices continued to appreciate into 2006, exploration financing opportunities
increased and the Company negotiated and entered into the “Earn In / Option
agreement with Goldgroup Resources, Inc., Vancouver, BC., dated September 1,
2006.  The Terms of the Earn In / Option agreement provides for $ 18
M. USD financing over four Phases, and exploration expenditures at SJG, by
Goldgroup to DynaMexico, in exchange for Goldgroup’s earning of 50 % of the
Shares of DynaMexico, while also providing for the involvement of proven
industry professionals in the SJG project.  (See Material Agreements;
Earn In / Option Agreement.)





Exploration / Drilling
Activity conducted Pursuant to the Earn In Agreement





·
            In
      Phase I of the Earn In Agreement,  approximately 3,400 meters
      drilling was accomplished in 22 core drill holes (SJG 07-01 to SJG 07-22);
      as well as geochemical sampling and mapping, and data consolidation into
      Surpac Software.





·
            In
      Phase II of the Earn In Agreement, approximately 5,500 meters was
      completed in 23 core drill holes (SJG 07-23 to
  07-45).





·
            In
      Phase III of the Earn In Agreement, approximately 15,150 meters was
      completed in 56 core drill holes (SJG 08-46 to SJG
  08-101).





Phase IV
drilling continues at SJG.  Through December 31, 2008, approximately
5,950 meters have been completed in 25 core drill holes (through SJG 08-126). At
December 31, 2008, a total of 30,000 meters drilling has been completed in 126
core drill holes, financed pursuant to the Earn In Agreement. A Drill Intercepts
Summary File, describing the intercepts of all core drill holes, and including
the previous drilling results of 1997-1998 can be viewed on the website of the
SEC at:





http://sec.gov/Archives/edgar/data/1111741/000112178109000078/ex99three.htm





Company Summary of Drilling
Results





The
drilling results obtained to date confirm the extension of mineralization, down
dip of historical workings at SJG, with confirmation of high grade gold (as
measured in grams per ton) which are consistent with historical and recent
production. Specifically, San Pablo, Tres Amigos, La Purisima, and La Union
areas have reported significant results.  (Note Drill Summary file
referred to above.)  Phase 4 drilling will be targeted at Tres Amigos,
San Pablo, La Prieta, La Union and La Purisima.





Company Interpretations and
Estimates





In some
areas of SJG, topography has prevented the drilling of holes on conventional 50
M. Spacing.  In some areas, the distance between drilled holes is +
100 M.  In these areas, the company is considering the building of new
roads in order to complete in-fill drill holes.  Nonetheless, the
Company has interpreted the results of drilling activity, and considering the
recent production activity as well; and it has calculated manually an estimate
of the mineable resource at SJG.  This manually calculated estimate
includes Oz. Au at the areas of:  San Pablo, Tres Amigos, Palos
Chinos, La Union, and La Purisima; by assuming grade and width averaging between
drill holes.





Block Model in
Surpac





While the
company has completed its manual calculation and internal interpretation of the
resource at SJG defined by drilling and production to date;  the
company also is in process of building the block model of resources defined and
inferred at SJG using Surpac, (Gemcom) software.  The Company will
continue this Surpac modeling work as additional drill programs are planned and
completed.








18





Technical Report of
Resources





In
2009-10, the Company expects to commission a 43-101 compliant report of the ore
“resources” defined by drilling at SJG. The Company expects this 43-101
technical report to confirm its internal work with the Block model in Surpac at
SJG, and also to confirm consistency with the company’s interpretation and
estimates.   However, additional drilling and in-fill drill holes
may be necessary in order to confirm consistency of grade and width between
drill holes.





Mineable “Ore” at San Jose
de Gracia





The
Company believes it has outlined mineable Gold deposits from drilling activity;
at San Pablo, Tres Amigos, and Palos Chinos areas of SJG.  Further
drilling is expected to outline additional mineable ore at these target areas,
while mineable ore deposits are also expected to be defined at La Purisima, La
Prieta, and La Union.  Other areas at SJG indicate clear potential to
develop ore deposits as well.





Feasibility
Study





Considering
the results of the recent production operation, and the results of the drilling
activity to date; and considering the Block model in Surpac being developed; and
considering the Company’s manual estimate of resource at SJG;  the
Company projects a + 100,000 Oz. gold per year production operation at SJG in
the future.  At the completion of the Earn In Agreement, and at the
completion of the drilling programs funded pursuant to the Terms of the Earn In
Agreement, the Company expects to complete a Feasibility Study to define the
full scale production plans at SJG.





Structure of Company /
Operations





Activities
in Mexico are conducted by DynaMexico, through Contract to the operating
subsidiary of DynaResource, Inc. in Mexico, Mineras de DynaResource SA de CV.
(“MinerasDyna”); with the Management of Personnel being contracted by
MinerasDyna through to the personnel management subsidiary, DynaResource
Operaciones, SA de CV (“DynaOperaciones”).  DynaResource, Inc.
Management continues to manage the 3 subsidiaries in Mexico; while Chairman /
CEO K.D. Diepholz is the President of each of the 3 companies.





Competitive
Advantage





The
Company, through its subsidiaries, has been conducting business in Mexico since
March 2000.   During this period the Company believes it has
structured its subsidiaries strategically, and during which time the Company has
retained key personnel and developed key relationships.  The Company
believes its experience and accomplishments in Mexico gives it a competitive
advantage, even though many competitors may be larger and have more capital
resources.





FIRST QUARTER
2009





Magnetic and IP
Surveys





In
January 2009, MinerasDyna contracted an Engineering firm in Tucson, AZ., to
conduct Magnetic IP surveys throughout the SJG district; covering an area of
approximately 15 Sq. Km.  Analysis and reports are expected in May,
2009.





Structural
Geologist





In
February 2009, DynaOperaciones retained a geological consultant, with prior
experience in Mexico, to analyze SJG with regard to structure. Analysis and
reports are expected in May, 2009.








19







Drilling
Programs





Future
drilling programs at SJG will be planned and conducted considering the results
of the magnetic and IP surveys, and in consideration of the analysis and advice
of the structural geologist. The Company expects continued drilling in order to
expand resources at San Pablo, Tres Amigos, Palos Chinos, La Union, La Purisima,
and La Prieta. And, the company expects extensions to mineralization in all
directions and down dip from the main target areas.




Capital contributions and
Expenditures to Earn In





Goldgroup
contributed $ 800,000. USD in the first quarter ended March 31, 2009, bringing
the total capital contributions pursuant to the Earn In Agreement to $ 8,968,000
USD.  Exploration expenditures were $ 379,377 USD in the quarter
ending March 31, 2009, bringing the total expenditures pursuant to the Earn In
Agreement of $ 7,953,235.





Investment in
Affiliate





In March
2009, the Company invested $ 300,000 in DynaResource Nevada, Inc., a Nevada
Corporation, with one operating subsidiary in Mexico, DynaNevada de Mexico, SA.
de CV.   The terms of the investment provide for a “Convertible Loan”,
repayable at 5 % interest over a 3 year period, and convertible at the Company’s
option into Common Stock of DynaResource Nevada, Inc. at $ .50 /
Share.  DynaResource Nevada, Inc. is a related entity, and through its
subsidiary in Mexico, has entered into an Option agreement with Grupo Mexico
(IMMSA) in Mexico, for the exploration and development of approximately 3,000
hectares in the State of San Luis Potosi.





Competition





The
Company DynaMexico retains 100 % of the rights to concessions over the area of
the San Jose de Gracia property and currently sees no competition for mining on
the lands covered by those concessions.  In general, if the DynaMexico
Company were to re-start production activities, the sale of any product would be
subject to global market prices for gold and other products; which prices
fluctuate daily,   The Company was successful in selling gold
concentrates produced from SJG in prior years; and the Company expects willing
buyers in the future.  Actual prices received by DynaMexico would
depend upon these global market prices, less processing charges and any
deductions.





POTENTIAL
RISKS





Funding from Goldgroup
Resources Inc.





Funding
for the exploration activity at SJG is primarily due to the Capital
contributions to DynaMexico from Goldgroup Resources Inc. There is no certainty
that this funding will continue or that the Earn In / Option Agreement will be
completed.  Should the funding of Goldgroup cease, the Company would
be required to fund further exploration work through its own capital reserves,
or to obtain alternate financing sources.  Any alternate funding
sources could result in additional dilution to shareholders.





Potential Conflicts with
Shareholder of DynaMexico (Non-Controlling Interest Holder):





While the
Company believes it has negotiated and authorized proper agreements for the
financing and exploration of SJG, there exist potential conflicts with Goldgroup
Resources Inc.  Goldgroup carries the majority of seats on the SJG
Management Committee, which is charged with responsibility of approving the
budgets and approving technical plans to the SJG Project.  At the Same
time, MinerasDyna has been named at the exclusive operator of the SJG Project,
and MinerasDyna is managed by officers of DynaResource.  Also,
DynaResource carries a majority of the seats on the Board of Directors of
DynaMexico, and also carries 100 % of the Seats on the Boards of MinerasDyna and
100 % of the Seats of the Board of DynaOperaciones.  Mr. K.D.
Diepholz, chairman and CEO of DynaResource, Inc. and Mr. Charles E. Smith, CFO
of DynaResource, Inc. are the President and Secretary respectively for
DynaMexico, MinerasDyna, and DynaOperaciones.  Inherent in the
structure of Ownership and Operation of the SJG Project is the potential for
conflicts that would materially affect operations.






20







Mineable
Resource:





There is
no certainty that the exploration activity at SJG would result in the definition
of a mineable resource at SJG.  While the company believes there is
already in place sufficient quantities of mineable ore at SJG to supply a
commercial production operation; there is no certainty that the Company’s
opinion will be proven correct.  If a mineable resource is not
confirmed at SJG, the Company’s investment at SJG could be at risk.





Company Interpretations and
Estimates




There can be no assurance that
the company’s interpretations or estimates will be proven correct, or that
future results will be consistent with past results.




Feasibility
Study





There can
be no assurance that the company will be able to complete a successful
feasibility at the SJG project.  If the company is not successful in
its plan to complete the feasibility, the company’s investment at SJG could be
at risk. Further, if the company is not able to complete a commercial
feasibility study, it may not be successful in obtaining funding for production
activities.




50 % of the Interest In and
Revenue from DynaResource de Mexico May be Owned by Goldgroup Resources
Inc.





Goldgroup
has completed Phases I, II, and III of the Earn In / Option Agreement, and as a
result has been transferred 25 % of the Shares and ownership of DynaResource de
Mexico.  Should Goldgroup complete Phase IV of the Earn In / Option
Agreement (through the contribution and expenditure of an additional $ 10 M
USD.); Goldgroup would receive an additional 25 % of the shares and ownership of
DynaResource de Mexico (Total of 50 %).  In such case DynaResource,
Inc. and its shareholders will only retain 50 % of the shares and ownership of
DynaResource de Mexico.  Investors in the Company’s shares should be
aware that any benefits to be derived from the ownership of DynaResource de
Mexico would be shared 50 % with Goldgroup.





Employees





The
Company has four employees in its corporate office in Dallas, Texas, three of
which are officers, and employs approximately thirty persons through
subsidiaries in Mexico.





Governmental Regulation and
Environmental Matters





Environmental
laws that impact our operations include those relating to air quality, solid
waste management and water quality. These laws are complex and subject to
frequent change. They impose strict liability in some cases without regard to
negligence or fault. Sanctions for noncompliance may include revocation of
permits, corrective action orders, administrative or civil penalties and
criminal prosecution. Some environmental laws provide for joint and several
strict liabilities for remediation of spills and releases of hazardous
substances. In addition, businesses may be subject to claims alleging personal
injury or property damage as a result of alleged exposure to hazardous
substances, as well as damage to natural resources. These laws also may expose
us to liability for the conduct of or conditions caused by others, or for acts
that complied with all applicable laws when performed. However, we have and
continue to maintain excellent relations with the government authorities by
compliance with the laws and communication with them concerning environmental
matters.








RESULTS
FOR THE QUARTER ENDED March 31, 2009





REVENUE.  Revenue
for the three months ended March 31, 2009 and the three months ended March 31,
2008 was $0 because the company ceased its production activities in 2006 in
order to focus its efforts on exploration and drilling activity for the purpose
of defining commercial ore resources. The funds for current exploration activity
are contributed by Goldgroup Resources, Inc., pursuant to the  Earn-In
Agreement,  as described  in this 10-Q (See Earn In and
Option Agreement / Material Agreements).








21







COST OF
EXPLORATION. EXPLORATION COSTS were $410,695 and $891,048 for the three months
ended March 31, 2009 and 2008 respectively.  The decrease in costs was
due to the decrease in drilling activity while waiting for the results of survey
studies, and for the analysis of structural geologists.





OPERATING
EXPENSES. Total operating expenses for the three months ended March 31, 2009,
were $416,324 compared to expenses for the three months ended March 31, 2008 of
$219,796. The above expenses include depreciation amounts of $40,339 and $36,598
for the three months ended March 31, 2009 and 2008, respectively. The increase
in operating expense is predominantly due to non-recurring items which reduced
expenses in the three months ended March 31, 2008 by $69,000 and a non-recurring
charge in the three months ended March 31, 2009 of $110,000. In addition to
these non recurring items, professional fees increased by $30,000, and payroll
expenses increased by $15,0000 in the period ending March 31, 2009.


OTHER
INCOME (EXPENSE). Other income of interest earned for the three months ended
March 31, 2009 was $1,838 compared to the same period ended March 31, 2008 of
$560.





NET
INCOME (LOSS). Net loss for the three months ended March 31, 2009 was $825,181
compared to net loss for the three months ended March 31, 2008 of $1,110,284.
The decrease in net loss is due to the decrease in drilling activity and
exploration costs in 2009 over 2008.





NON-CONTROLLING
INTEREST. The non-controlling interest portion of our net loss for the three
months ended March 31, 2009 was $127,616 compared to $142,405 for the three
months ended March 31, 2008.   This is due to the company’s
reporting a smaller loss than in 2008 and therefore a smaller portion allocated
to our minority interest holder.





COMPREHENSIVE
(LOSS). Comprehensive loss includes the company’s net loss plus the currency
translation gain (loss) for the period which was $(264,755) for the three months
ended March 31, 2009 compared to $70,492 for the same period ended March 31,
2008.   For the three months ended March 31, 2009, the Company
allocated $66,189 of the Company’s currency translation loss to the
noncontrolling interest.





LIQUIDITY
AND CAPITAL RESOURCES. The Company has sufficient capital on hand to fund
overhead operations for the next two years.   Goldgroup is
funding the exploration activities at SJG in accordance with the Earn-In
Agreement.  In December, 2008, Goldgroup advised the Company that they
have funds on hand to complete their option under the Earn-In
Agreement.








Item
4.  Controls and Procedures





Evaluation of Disclosure
Controls and Procedures





The
company carried out an evaluation of the effectiveness of the design and
operation of its disclosure controls and procedures (as defined in Exchange Act
Rules 13a-15(e) and 15d-15(e)) as of March 31, 2009.  This
evaluation was accomplished under the supervision and with the participation of
our chief executive officer / principal executive officer, and chief financial
officer / principal financial officer who concluded that the company’s
disclosure controls and procedures are effective to ensure that all material
information required to be filed in the quarterly report on Form 10-Q has been
made known to them.





For
purposes of this section, the term disclosure controls and procedures means
controls and other procedures of an issuer that are designed to ensure that
information required to be disclosed by the issuer in the reports that it files
or submits under the Act (15 U.S.C. 78a et seg.) is recorded, processed,
summarized and reported, within the time periods specified in the Commission’s
rules and forms.  Disclosure, controls and procedures include, without
limitation, controls and procedures designed to ensure that information required
to be disclosed by in our reports filed under the Securities Exchange Act of
1934, as amended (the "Act") is accumulated and communicated to the issuer's
management, including its principal executive and principal financial officers,
or persons performing similar functions, as appropriate to allow timely
decisions regarding required disclosure.








22







Based
upon an evaluation conducted for the period ended March 31, 2009, our Chief
Executive Officer and Chief Financial Officer as of March 31, 2009, and as of
the date of this Report, have concluded that as of the end of the period covered
by this report, we have identified no material weakness in our internal
controls.





Corporate
expenses are paid by officers of the Company.  However, the current
number of transactions incurred by the Company does not justify additional
accounting staff to be retained.





Management’s Report on
Internal Control Over Financial Reporting





Management
of the Company is responsible for establishing and maintaining adequate internal
control over financial reporting, as such term is defined in
Rules 13a-15(f) and 15d-15(f) of the Exchange Act. Our internal control
system was designed to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external
purposes, in accordance with generally accepted accounting principles in the
United States of America.  Our internal control over financial
reporting includes those policies and procedures that (i) pertain to the
maintenance records that, in reasonable detail, accurately and fairly reflect
the transactions and dispositions of the assets of the Company; (ii) provide
reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with accounting principles
generally accepted in the United States of America, and that receipts and
expenditures of the Company are being made only in accordance with
authorizations of management of the Company; and (iii) provide reasonable
assurance regarding prevention or timely detection of unauthorized acquisition,
use, or disposition of the Company’s assets that could have a material effect on
the financial statements.





Projections
of any evaluation of effectiveness to future periods are subject to the risk
that controls may become inadequate due to change in conditions, or that the
degree of compliance with the policies or procedures may
deteriorate.





Our
management conducted an evaluation of the effectiveness of our internal control
over financial reporting using the criteria set forth by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO) in Internal
Control—Integrated Framework at March 31, 2009.   Based on its
evaluation, our management concluded that, as of March 31, 2009, our internal
control over financial reporting was effective.





This
quarterly report does not include an attestation report of the Company’s
registered public accounting firm regarding internal control over financial
reporting.  Management’s report was not subject to the attestation by the
Company’s registered public accounting firm pursuant to temporary rules of the
SEC that permit the Company to provide only management’s report in this
quarterly  report.





Changes in Internal Controls
over Financial Reporting





The
Company has not made any changes in its internal controls over financial
reporting that occurred during the period covered by this report on Form
10-Q that has materially affected, or is reasonably likely to materially
affect, its internal control over financial reporting.


23


PART
II





Item No.
1, - Not Applicable.





Item
2.


None





Items No.
3, 4, 5 - Not Applicable.





Item No.
6 - Exhibits and Reports on Form 8-K





(a)  None





(b)   Exhibits








Exhibit
Number;  Name of Exhibit





31.1           Certification
of Chief Executive Officer, pursuant to Rule 13a-14(a) of the Exchange Act, as
enacted by Section 302 of the Sarbanes-Oxley Act of 2002.





31.2           Certification
of Chief Financial Officer, pursuant to Rule 13a-14(a) of the Exchange Act, as
enacted by Section 302 of the Sarbanes-Oxley Act of 2002.





32.1           Certification
of Chief Executive Officer and Chief Financial Officer, pursuant to 18 United
States Code Section 1350, as enacted by Section 906 of the Sarbanes-Oxley Act of
2002.











SIGNATURES





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





DynaResource,
Inc.





By /s/  K.W. (“K.D.”)
Diepholz





K.W.
(“K.D.”) Diepholz, Chairman / CEO





Date: May
12, 2009


24