UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549  Form 10-Q  XQUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2008  ___ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ____ to ____   DIGITAL NETWORK ALLIANCE INTERNATIONAL, INC. (Name of small business in its charter)  Delaware0-5000252-2175896(State or other jurisdiction of incorporation)(Commission File Number)(IRS Employer Identification No.)Room 1101, 11/F,
Shanghai Industrial Investment Building,
48-62 Hennessy Road,
Wanchai, HK.(Address of Principal Executive Office)  Issuer's telephone number:  852-3104-9012  Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  [ X ] Yes   [ ] No Indicate by check mark whether the registrant is a 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 [ ]  (Do not check if a smaller reporting company)Smaller reporting company [ X ] Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).         [  ] Yes   [X] No As of September 30, 2008 the Issuer had 11,600,003 shares of common stock issued and outstanding.  - 1 -   PART 1 - FINANCIAL INFORMATION ITEM 1.  FINANCIAL STATEMENTS (a)   The unaudited financial statements of Digital Network Alliance International, Inc. (hereinafter referred to as Digital, the Registrant, or the Company) included herein were prepared, without audit, pursuant to rules and regulations of the Securities and Exchange Commission.  Because certain information and notes normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America were condensed or omitted pursuant to such rules and regulations, these financial statements should be read in conjunction with the financial statements and notes thereto included in the audited financial statements of the Company as included in the Company's Form 10-KSB, and all amendments thereto, for the fiscal year ended December 31, 2007.    DIGITAL NETWORK ALLIANCE INTERNATIONAL, INC.  UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS  FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2008  INDEX TO FINANCIAL STATEMENTS  PAGEConsolidated balance sheets3Consolidated statements of operations and comprehensive loss4-5Consolidated statements of cash flows6Notes to unaudited consolidated financial statements7-12               - 2 -    DIGITAL NETWORK ALLIANCE INTERNATIONAL, INC.CONSOLIDATED BALANCE SHEETSSeptember 30,December 31,20082007Assets(Audited)Current assets:Cash and cash equivalents$           1,132$           1,741Trade accounts receivable, net-18,155Prepayment deposits25,62836,016Total current assets26,76055,912Plant and equipment, net19,83333,209Total assets$         46,593$         89,121Liabilities and Stockholders' DeficitCurrent liabilities:Trade accounts payable$       383,104$       395,215Accrued expenses13,16014,058Payable to stockholder392,678336,425Deposits16,57515,126Income taxes payable610603Total current liabilities806,127761,427Stockholders' Deficit:Common stock - Par value $.001; authorized 200,000,000shares authorized, 11,600,003 sharesissued and outstanding11,60011,100Additional paid in capital2,331,6402,282,140Accumulated deficit(3,108,683)(2,971,579)Accumulated other comprehensive income5,9096,033Total stockholders' deficit(759,534)(672,306)Total liabilities and stockholders' deficit$         46,593$         89,121The accompanying notes are an integral part of these financial statements  - 3 -    DIGITAL NETWORK ALLIANCE INTERNATIONAL, INC.CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSSThree  months ended September 30,20082007(Unaudited)(Unaudited)Sales revenues$30,845$96,495Cost of goods sold2,40259,790Gross profit28,44336,705Operating expensesDepreciation2,0576,585Distribution and selling expenses4627,741General and administrative expenses90,11362,956Total operating expenses92,63277,282Net operating loss(64,189)(40,577)Other income (expense)Other-5,005Total other income-5,005Net loss before income tax(64,189)(35,572)Taxes--Net loss(64,189)(35,572)Foreign currency translation adjustment5861,554Comprehensive loss$(63,603)$(34,018)Net loss per common share$(0.01)$(0.00)Weighted average common shares outstanding$11,600,000$11,100,000The accompanying notes are an integral part of these financial statements   - 4 -    DIGITAL NETWORK ALLIANCE INTERNATIONAL, INC.CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSSNine months ended September 30,20082007(Unaudited)(Unaudited)Sales revenues$60,543$400,009Cost of goods sold24,338226,457Gross profit36,205173,552Operating expensesDepreciation6,17219,661Distribution and selling expenses8,07213,118General and administrative expenses209,756277,303Total operating expenses224,000310,082Net operating loss(187,795)(136,530)Other income (expense)Other50,69111,418Total other income50,69111,418Net loss before income tax and discontinued operation(137,104)(125,112)Taxes--Net loss before discontinued operation(137,104)(125,112)Income (loss) from discontinued operation-2,086Gain on sale of discontinued subsidiary-57,872Net loss$(137,104)$(65,154)Foreign currency translation adjustment(124)Comprehensive loss$(137,228)$(65,154)Net loss per common share$(0.01)$(0.00)Weighted average common shares outstanding$11,266,667$11,100,000    The accompanying notes are an integral part of these financial statements   - 5 -    DIGITAL NETWORK ALLIANCE INTERNATIONAL, INC.CONSOLIDATED STATEMENTS OF CASH FLOWSNine months ended September 30,20082007(Unaudited)(Unaudited)Operating activities:Net (loss) profit$       (137,104)$       (65,154)Adjustments to reconcile net lossto net cash used in operating activities:Depreciation and amortization13,37621,160Gain on sale of discontinued subsidiary-(57,872)Impairment loss on bad and doubtful debts-46,601Stock based compensation to directors15,000-Stock based compensation to a professional35,000Changes in operating assets and liabilities:Trade accounts receivable18,15537,238Prepaid expenses and other assets10,388307Trade accounts payable(12,111)(39,767)Accrued expenses(898)(11,358)Deposits1,449(29,561)Net cash used in operating activities(56,745)(98,406)Investing activities:
Purchase of plant and equipment, net-(799)Disposal of subsidiaries-243Net cash used in investing activities-(556)Financing activities:Proceeds from stockholder loan56,25327,179Net cash provided by financing activities56,25327,179Effect of rate changes on cash(117)(3,606)(Decrease)/Increase in cash and cash equivalents(609)(75,389)Cash and cash equivalents, beginning of year1,74190,264Cash and cash equivalents, end of year$           1,132$         14,875Cash paid for interest$                  -$                  -Cash paid for income taxes$                  -$                  - The accompanying notes are an integral part of these financial statements  - 6 -   DIGITAL NETWORK ALLIANCE INTERNATIONAL, INC. NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS  1. NATURE OF OPERATIONS  Digital Network Alliance International, Inc. (the Company) was incorporated on August 20, 1997 in the State of Delaware as Sheffield Products, Inc. On August 13, 2004 the Company acquired all of the outstanding stock of Digital Network Alliance Holdings (BVI) Inc., a British Virgin Islands Corporation (Digital BVI) in exchange for stock of the Company. On November 30, 2004 the Company changed its name to Digital Network Alliance International, Inc. The consolidated results of operations are primarily those of Digital BVI and its consolidated subsidiaries.  The principal activities of the consolidated company are that of provision of voice termination, satellite and broadband Internet services throughout the Asia Pacific region, including Hong Kong, Singapore, Indonesia and Mongolia.  The financial statements have been prepared on the basis that the Company will continue as a going concern, which contemplates the realization and satisfaction of liabilities and commitments in the normal course of business. At September 30, 2008, the Company had an accumulated deficit of $(3,108,683) and working capital of $46,593. Operations to date have been primarily financed by equity transactions. As a result, the Company's future operations are dependent upon the identification and successful completion of permanent equity financing and ultimately, the achievement of profitable operations. These financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts nor to amounts and classification of liabilities that may be necessary should it be unable to continue as a going concern.  On September 23, 2008, we entered into an Agreement for Share Exchange with Linking Target Limited, a British Virgin Islands corporation (LTL), and the individual shareholder of LTL, pursuant to which we acquired 1 share of LTL, representing 100% of its issued and outstanding common stock, in exchange for the issuance of 48,399,997 shares of our common stock.  As a result of completion of the share exchange transaction, LTL became our wholly-owned subsidiary.  2.  BASIS OF PRESENTATION  The accompanying consolidated financial statements include those of the Company and its wholly owned subsidiaries; Digital BVI, Digital Network Alliance (S) Pte. Ltd. (Digital S) and Digital Network Alliance (HK) Limited (Digital HK), as well as its 70% owned subsidiary DNA Financial Systems Inc. BVI (Financial BVI). The accounts of Financial BVI include its 100% owned subsidiary DNA Financial Systems (HK), Limited (Financial HK). Digital BVI incorporated in British Virgin Islands on June 4, 2005, Digital S incorporated in the Republic of Singapore on October 19, 2001, and Digital HK incorporated in Hong Kong on November 12, 2001. Financial BVI incorporated in British Virgin Islands on March 15, 2005 for the purpose of holding Financial HK, which incorporated in Hong Kong on April 1, 2005.  The accompanying consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States of America (US GAAP). This basis differs from that used in the statutory accounts of the Company, which were prepared in accordance with the accounting principles and relevant financial regulations applicable to enterprises in Singapore and Hong Kong. All necessary intercompany transactions and balances have been eliminated in consolidation, and all necessary adjustments have been made to present the consolidated financial statements in accordance with US GAAP.  The consolidated statements of operations have been adjusted to reflect the discontinuation of operations performed by our subsidiary, Financial BVI.  Financial BVI was sold on March 2, 2007.  - 7 -    3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES  Quarterly Financial Statements  The accompanying unaudited financial statements have been prepared in accordance with the instructions to Form 10-Q but do not include all of the information and footnotes required by generally accepted accounting principles and should, therefore, be read in conjunction with the Companys 2007 financial statements in Form 10-KSB.  These statements do include all normal recurring adjustments which the Company believes necessary for a fair presentation of the statements.  The interim operating results are not necessarily indicative of the results for a full year.  Economic and Political Risks  The Company faces a number of risks and challenges as a result of having primary operations and markets in the PRC. Changing political climates in the PRC could have a significant effect on the Companys business.  Cash and Cash Equivalents  For purposes of the statements of cash flows, cash and cash equivalents includes cash on hand and demand deposits held by banks. None of the Companys deposits are insured by the Federal Deposit Insurance Corporation or any other entity of the U.S. government.  Trade Accounts Receivable  Trade accounts receivable are recognized and carried at original invoice amount less an allowance for any uncollectible amounts. An estimate for doubtful accounts is made when collection of the full amount becomes questionable. At September 30, 2008 and September 30, 2007 the allowance for doubtful accounts totalled $0.  Plant and Equipment  Plant and equipment are carried at cost less accumulated depreciation. Depreciation is computed using the straight-line method over the useful lives of the assets. Major renewals and betterments are capitalized and depreciated; maintenance and repairs that do not extend the life of the respective assets are charged to expense as incurred.  Upon disposal of assets, the cost and related accumulated depreciation are removed from the accounts and any gain or loss is included in income.  Depreciation related to property and equipment used in production is reported in cost of sales.  Property and equipment are depreciated over their estimated useful lives as follows:  Computer equipment2 yearsOffice equipment4 yearsNetwork equipment3 years  Long-term assets of the Company are reviewed annually to assess whether the carrying value has become impaired, according to the guidelines established in Statement of Accounting Standards (SFAS) No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets. The Company also evaluates the periods of depreciation to determine whether subsequent events and circumstances warrant revised estimates of useful lives. No impairment of assets was recorded in the periods reported.   - 8 -   Deposits  The Company commonly receives payments of deposit in advance for circuits and voice termination services to be provided to customers. Those deposits are recognized into income in accordance with the Companys revenue recognition policy, as stated below.  Revenue Recognition  Revenue from provision of voice termination, satellite and broadband Internet services is recognized as earned when customers are invoiced for monthly services they have received in accordance with the service contracts. At that time the Company considers the earnings process to be complete and collectability to be reasonably assured.  Advertising Expenses  Advertising costs will be expensed when and if incurred. The Company has incurred no advertising expenses to date.  Retirement Benefits  The Company has a defined contribution benefit plan. The Companys contributions are discretionary. For the period ended September 30, 2008, the contribution made by Digital Network Alliance amounted to $2,566.  Foreign Currency and Comprehensive Income  The accompanying consolidated financial statements are presented in United States (US) dollars. The functional currency is the Singapore dollar (S$) and Hong Kong dollar (HK$). The consolidated financial statements are translated into US dollars from S$ and HK$ at year-end exchange rates for assets and liabilities, and weighted average exchange rates for revenues and expenses. Capital accounts are translated at their historical exchange rates when the capital transactions occurred.  Taxes  Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to reverse. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the statement of operations in the period that includes the enactment date. A valuation allowance is provided for deferred tax assets if it is more likely than not these items will either expire before the Company is able to realize their benefits, or that future deductibility is uncertain.  Estimates  The preparation of consolidated financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates.  Loss Per Share Basic loss per common share ("LPS") is calculated by dividing net loss by the weighted average number of common shares outstanding during the year. Diluted earnings per common share are  - 9 -   calculated by adjusting the weighted average outstanding shares, assuming conversion of all potentially dilutive securities, such as stock options and warrants.  The Company had no potentially dilutive securities outstanding at September 30, 2008.  4. DISPOSAL OF SUBSIDIARY  During the year ended December 31, 2007, the Company disposed of its entire interests in DNA Financial Systems Inc. The net liabilities of the subsidiaries at the date of disposal were as follows:  USDNet assets disposed of:Fixed assets$  4,029Cash and bank balance12,578Accounts receivable1,708Deposits and prepayment3,205Due to Fellow Subsidiary(46,594)Accounts payable(12,638)Accruals(1,282)Deposit received(6,057)(45,051)Gain on disposal of interest in subsidiaries57,872Consideration12,821Satisfied by:Cash consideration received$  12,821Net cash inflow arising on disposal:Cash received12,821Cash and bank balance disposed of(12,578)243  The subsidiaries disposed of during the year did not make any significant contribution to the results and cash flows of the Company during the period prior to the disposals.  5. STOCK BASED COMPENSATION  During the three months ended September 30, 2008, the Company issued 150,000 shares of common stocks at its market fair value of $0.1 per share to 3 directors for their past service and they have resigned on May 12, 2008. The Company also issued 350,000 shares of common stocks at its market fair value of $0.1 per share to Brean Murray Carret & Co for the service rendered.  6. BUSINESS MERGER   On September 23, 2008, the Company entered into a share exchange agreement with Linking Target Limited, a British Virgin Islands corporation (LTL). Pursuant to the share exchange agreement, the Company issued an aggregate amount of 48,399,997 shares of its common stock in exchange for 100% equity interest in LTL. Upon the completion, LTL survived the merger and became the wholly-  - 10 -   owned subsidiary of the Company. LTL stockholders retained, in the aggregate, 48,399,997 shares of the common stock of the Company, which represents approximately 80.67% of the issued and outstanding shares of the Company, in connection with the merger.  The Board of Directors approved the share issuance in September 2008 and the shares were issued in October 2008.  This transaction is accounted for as a reverse acquisition under the purchase method of accounting whereby LTL is considered to be the accounting acquirer as its shareholders have obtained control of the Company after the share exchange. Accordingly, the merger of LTL into the Company should be recorded as a recapitalization of LTL, LTL being treated as the continuing entities. The share exchange agreement is considered to be treated as a recapitalization and not as a business combination; therefore, no pro forma information is disclosed. Thus, LTL is the continuing entity for financial reporting purposes and its audited financial statement and its combined historical financial statement of the Company will be filed on Form 8-K no later than 71 calendar days after the date that the initial report on Form 8-K.  7. NEW ACCOUNTING PRONOUNCEMENTS  In December 2007, the Financial Accounting Standards Board (FASB) issued SFAS No. 141(R), Business Combinations (SFAS 141(R)) and SFAS No. 160, Accounting and Reporting of Noncontrolling Interests in Consolidated Financial Statements  an amendment of ARB No. 51 (SFAS 160). These standards will significantly change the accounting and reporting for business combination transactions and noncontrolling (minority) interests in financial statements, including capitalizing at the acquisition date the fair value of acquired in process research and development projects, and remeasuring and writing down these assets, if necessary, in subsequent periods during their development. The new standards will be applied prospectively for business combinations that occur for the Company on or after April 1, 2009, except that presentation and disclosure requirements of SFAS 160 regarding minority interests shall be applied retrospectively. The Company does not currently believe that adoption will have a material impact on its results of operations, financial position or cash flows.  In December 2007, the FASB ratified EITF No. 07-1, Accounting for Collaborative Agreements (EITF 07-1). EITF 07-1 provides guidance regarding financial statement presentation and disclosure of collaborative arrangements, as defined, which includes arrangements the Company has entered into regarding development and commercialization of products. EITF 07-1 is effective for the Company as of April 1, 2009. The Company has not yet completed its evaluation of EITF 07-1, but does not currently believe that adoption will have a material impact on its results of operations, financial position or cash flows.  In March 2008, the FASB issued SFAS No. 161, "Disclosures about Derivative Instruments and Hedging Activities  an amendment of FASB Statement No. 133"("SFAS 161"). SFAS 161 changes the disclosure requirements for derivative instruments and hedging activities by requiring entities to provide enhanced disclosures about (i) how and why an entity uses derivative instruments, (ii) how derivative instruments and related hedged items are accounted for under SFAS 133, "Accounting for Derivative Instruments and Hedging Activities" and its related interpretations, and (iii) how derivative instruments and related hedged items affect an entity's financial position, financial performance, and cash flows. SFAS 161 is effective for the Company on January 1, 2009 and will only impact future disclosures about the Company's derivative instruments and hedging activities.  In May 2008, the FASB issued FASB Staff Position No. APB 14-1, "Accounting for Convertible Debt Instruments That May Be Settled in Cash upon Conversion (Including Partial Cash Settlement)" ("FSP APB 14-1"). FSP APB 14-1 specifies that issuers of such instruments should separately account for the liability and equity components in a manner that will reflect the entity's nonconvertible debt borrowing rate when interest cost is recognized in subsequent periods. FSP APB 14-1 is effective for  - 11 -   financial statements issued for fiscal years beginning after December 15, 2008. The adoption of FSP APB 14-1 will increase the annual interest expense that the Company recognizes on its $500 million 2.875% Senior Convertible Notes from an annual yield of approximately 2.875 percent to an annual yield equivalent to a nonconvertible debt borrowing. The adoption of FSP APB 14-1 will also result in the reclassification of the estimated issuance date fair value of the 2.875% Senior Convertible Notes conversion privilege from long-term debt to shareholders' equity in the Company's consolidated balance sheet. The Company does not expect that the adoption of FSP APB 14-1 will have a significant impact on the Company's financial statements.  In May 2008, the FASB issued SFAS No. 162 "The Hierarchy of Generally Accepted Accounting Principles" ("SFAS 162"). SFAS 162 identifies the sources of accounting principles and the framework for selecting the principles to be used in the preparation of financial statements presented in conformity with generally accepted accounting principles in the United States ("GAAP"). SFAS 162 is effective 60 days following the United States Securities and Exchange Commission's ("SEC") approval of the Public Company Accounting Oversight Board amendments to AU Section 411, " The Meaning of Present Fairly in Conformity With Generally Accepted Accounting Principles." The Company does not expect that the adoption of SFAS 162 will have a significant impact on the Company's financial statements.  In June 2008, the FASB issued FASB Staff Position No. EITF 03-6-1 "Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities" ("FSP EITF 03-6-1"), which addresses whether instruments granted in share-based payment transactions are participating securities prior to vesting and, therefore, need to be included in the net income allocation in computing basic net income per share under the two class method prescribed under SFAS 128, "Earnings per Share". FSP 03-6-1 is effective for financial statements issued for fiscal years beginning after December 15, 2008 and, to the extent applicable, must be applied retrospectively by adjusting all prior-period net income per share data to conform to the provisions of the standard. The adoption of FSP EITF 03-6-1 is not expected to have a material effect on the Company's net income per share calculations.                            - 12 -   ITEM 2.  MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION  DISCLAIMER REGARDING FORWARD-LOOKING STATEMENTS  CERTAIN STATEMENTS IN THIS REPORT, INCLUDING STATEMENTS IN THE FOLLOWING DISCUSSION, WHICH ARE NOT STATEMENTS OF HISTORICAL FACT, ARE WHAT ARE KNOWN AS FORWARD-LOOKING STATEMENTS, WHICH ARE BASICALLY STATEMENTS ABOUT THE FUTURE.  FOR THAT REASON, THESE STATEMENTS INVOLVE RISK AND UNCERTAINTY SINCE NO ONE CAN ACCURATELY PREDICT THE FUTURE.  WORDS SUCH AS PLANS, INTENDS,  HOPES, SEEKS, ANTICIPATES, EXPECTS, AND THE LIKE, OFTEN IDENTIFY SUCH FORWARD-LOOKING STATEMENTS, BUT ARE NOT THE ONLY INDICATION THAT A STATEMENT IS A FORWARD-LOOKING STATEMENT.  SUCH FORWARD-LOOKING STATEMENTS INCLUDE STATEMENTS CONCERNING OUR PLANS AND OBJECTIVES WITH RESPECT TO THE PRESENT AND FUTURE OPERATIONS OF THE COMPANY, AND STATEMENTS WHICH EXPRESS OR IMPLY THAT SUCH PRESENT AND FUTURE OPERATIONS WILL OR MAY PRODUCE REVENUES, INCOME OR PROFITS.  NUMEROUS FACTORS AND FUTURE EVENTS COULD CAUSE THE COMPANY TO CHANGE SUCH PLANS AND OBJECTIVES, OR FAIL TO SUCCESSFULLY IMPLEMENT SUCH PLANS OR ACHIEVE SUCH OBJECTIVES, OR CAUSE SUCH PRESENT AND FUTURE OPERATIONS TO FAIL TO PRODUCE REVENUES, INCOME OR PROFITS. WE CAUTION YOU NOT TO PLACE UNDUE RELIANCE ON THESE FORWARD-LOOKING STATEMENTS.  ALTHOUGH WE BASE THESE FORWARD-LOOKING STATEMENTS ON OUR EXPECTATIONS, ASSUMPTIONS, AND PROJECTIONS ABOUT FUTURE EVENTS, ACTUAL EVENTS AND RESULTS MAY DIFFER MATERIALLY, AND OUR EXPECTATIONS, ASSUMPTIONS, AND PROJECTIONS MAY PROVE TO BE INACCURATE. THE FORWARD-LOOKING STATEMENTS SPEAK ONLY AS OF THE DATE HEREOF, AND WE EXPRESSLY DISCLAIM ANY OBLIGATION TO PUBLICLY RELEASE THE RESULTS OF ANY REVISIONS TO THESE FORWARD-LOOKING STATEMENTS TO REFLECT EVENTS OR CIRCUMSTANCES AFTER THE DATE OF THIS FILING.  OVERVIEW  Digital Network Alliance International, Inc. (hereinafter We, Our, the Company, or Digital) was incorporated under the laws of the State of Delaware on August 19, 1997, under the name of Sheffield Products, Inc. We changed our name to Digital Network Alliance International, Inc. on November 30, 2004.  The Company does not directly carry on any business operations. All of its business operations are carried on through our operating subsidiaries.  As of September 30, 2008 the Companys business operations related exclusively to the provision of broadband internet services.  The Companys operating subsidiaries are Digital Network Alliance (S) Pte Ltd., a Singapore corporation (DNA Singapore) and Digital Network Alliance (HK) Ltd., a Hong Kong corporation (DNA Hong Kong). DNA Singapore and DNA Hong Kong perform identical business activities of providing satellite Internet connections to customers in the Asia Pacific Region, and providing managed broadband services to commercial office buildings and apartment buildings in Hong Kong and Singapore. DNA Singapore manages business activities in Singapore and Indonesia.  DNA Hong Kong conducts and manages the business activities in Hong Kong and Mongolia.  Additionally, on September 23, 2008, the Company entered into a share exchange agreement with Linking Target Limited, a British Virgin Islands corporation (LTL). Pursuant to the share exchange agreement, the Company issued an aggregate amount of 48,399,997 shares of its common stock in exchange for 100% equity interest in LTL. Upon the completion of the share exchange LTL became a wholly-owned subsidiary of the Company. LTL stockholders received, in the aggregate, 48,399,997 shares of the common stock of the Company, which represents approximately 80.67% of the issued and outstanding shares of the Company, in connection with the share exchange transaction.  The Board of Directors approved the share issuance in September 2008 and the shares were issued in October 2008, subsequent to the period ended September 30, 2008.   - 13 -   LTL was founded in British Virgin Islands on January 23, 2008.  On August 1, 2008, LTL entered into an Exclusive Cooperation Agreement with China Construction Guaranty, Inc. (CCG), a corporation incorporated in the Peoples Republic of China which is engaged in the business of the construction and employees guaranty.  Pursuant to the agreement between CCG and LTL, the parties have agreed, among other things, that LTL will provide various services to CCG, including consulting services, training services, human resources for business development and other related services.  As a result of the Companys acquisition of LTL there will be a change in the business operations of the Company in the next quarter.  As a result of the Companys acquisition, the Company will terminate its business operations relating to its telecommunications network services and will begin offering consulting services, training services, human resources for business development and other related services through its wholly-owned subsidiary, LTL.  Our plan of operations for the fiscal year ending December 31, 2008, and the subsequent twelve (12) months, includes the termination of the Companys telecommunication network services and commencement of business operations through LTL. The extent to which we will be able to commence new operations will be dependent, to a large extent, on the availability of working capital generated by the Companys new subsidiary LTL.  Since there is no assurance that working capital will be available to us from either subsidiarys business operations, or other sources, there is also no assurance regarding the extent to which we will be able to implement our plan of operations within the foreseeable future.  The Company may pursue acquisitions of other companies or technologies.  However, the Company has not currently entered into any negotiations or agreements to acquire any business.  RESULTS OF OPERATIONS  The following discussion concerning the results of operation, liquidity and capital resources of Digital Network Alliance International, Inc. (the Company), is based solely upon the business operations that are carried on by the Companys operating subsidiaries for the three and nine month interim periods ended September 30, 2008 and 2007.  Three Months Ended September 30, 2008 as Compared to Three Months Ended September 30, 2007  Revenue. During the three months ended September 30, 2008, the Company had revenue in the amount of $30,845, as compared to revenue in the amount of $96,495 for the three months ended September 30, 2007, a decrease of $65,650, or approximately 68%.  The primary reason for the decrease in revenue experienced by the Company during the three months ended September 30, 2008, as compared to the three months ended September 30, 2007, was the fact that during the three months ended September 2008, the Company was not able to generate any revenue from its satellite operations or its voice termination services; its revenue was limited to income from generated by it broadband business operations. During this period, given the current market conditions, the Company only conducted broadband business operations.  Cost of Goods Sold. Cost of goods sold for the three months ended September 30, 2008 was $2,402, as compared to $59,790 for the three months ended September 30, 2007.  The decrease of $57,388, or 96% was due to the fact that the revenue generated by the Company for the three months ended September 30, 2008 was limited exclusively to income from its broadband operations.  Gross Profit.During the three months period ended September 30, 2008, the Company had gross profit of $28,443, as compared to gross profit of $36,705 for the three months ended September 30, 2008, a decrease of $8,262.  The decrease in gross profit is attributable to the fact that the Company experienced a decline in revenue during the period ended September 30, 2008 as a result of the zero income in the Companys business operations relating to its satellite operations and voice termination services.   - 14 -   Operating Expenses. Operating expenses for the 3 months ended September 30, 2008 totalled $92,632 compared to $77,282 in the same period ended 2007.  The increase of $15,350, or 20%, was primarily due to the increase in salaries and rentals by $15,350.  Net loss. For the three months period ended September 30, 2008, the Company experienced a net loss of $64,189, as compared to a net loss of $35,572 for the 3 months ended September 30, 2007.  The increased net loss experienced by the Company of $28,617 was primarily attributable to the facts that the Company experienced both an increase in gross loss, and an increase in operating expenses.  Nine Months Ended September 30, 2008 as Compared to the Nine Months Ended September 30, 2007.  Revenue.  During the nine months that ended September 30, 2008, the Company had revenue in the amount of $60,543, as compared to revenue of $400,009 for the nine months ended September 30, 2007, a decrease of $339,466 or approximately 85%.  The reason for the decrease in the Companys revenue from the nine months ended September 30, 2007, as compared to nine months ended September 30, 2008 was due to the fact that the Company faced increased competition from its competitors who were able to offer the Companys customers competitively priced products.  During this period, the Company experienced increased competition in all segments of its business, particularly its satellite business.  The increased competition and resulting drop in its satellite business were due to the fact that telecommunications operators in South East Asia (the Region) have been aggressively installing fibre optic communication systems infrastructure within the Region, generally referred to as fibre solutions, which has provided a greater amount of internet bandwidth supply at lower prices.  As a result of the lower prices, a portion of the Companys customers ceased using the Companys services and have switched to fibre solutions to meet their internet needs.  This increased competition resulted in a decline in the Companys revenue.  Specifically, the Company experienced a drop of $266,392 and $73,074 in satellite income and broadband income respectively from the nine months ended September 2008 compared to the same period in 2007.  Additionally, the Company experienced a zero income relating to voice termination business and satellite income during that same period.  Cost of Goods Sold. Cost of goods sold for the nine months ended September 30, 2008 was $24,338, as compared to $226,457 for the period ended September 30, 2007, a decrease of $202,119 or 89%.  The decrease in the cost of goods sold was due to the fact that the Company generated less revenue during the period ended September 30, 2008 as compared to the period ended September 30, 2007. The decrease was primarily due to a drop in broadband cost and bandwith cost by $20,827 and $175,340 respectively.  We also experienced the drop in the cost of equipment, cost of voice termination and the depreciation of network equipment.  Gross Profit.  During the period ended September 30, 2007 the Company had gross profit of $36,205, as compared to gross profit of $173,552 for the nine months ended September 30, 2007, a decrease of $137,.347, or approximately 42%.  The decrease in gross profit experienced by the Company was the result of declining revenues experienced by the Company in both its satellite and broadband businesses.  Operating Expenses. Operating expenses for the period ended September 30, 2008 totalled $224,000, as compared to $310,082 in the same period ended 2007.  The decrease of $86,082, or 28%, was primarily due to decreases in: i) bad debt by $46,601; ii) salaries by $14,944; iii) rental by $11,850; iv) professional fees by $10,961; and v) others expenses by 1,726.  Net loss.  For the period ended September 30, 2008, the Company experienced a net loss of ($137,104), as compared to a net loss of ($65,154) for the period ended September 30, 2007.  The decrease in the net loss experienced by the Company of $71,950 was mainly due to the significant drop in revenue.  - 15 -    LIQUIDITY AND CAPITAL RESOURCES  As of September 30, 2008, our unaudited balance sheet reflects that we have cash and cash equivalents of $1,132, as compared to cash and cash equivalents of $1,741 for the fiscal year ended December 31, 2007.  As of September 30, 2008, our unaudited balance sheet reflects that we have total current assets of $26,760 and total assets of $46,593, as compared to total current assets of $55,912 and total assets of $89,121 for the fiscal year ended December 31, 2007. The decrease of $42,528  in our total assets was primarily attributable to the decreases experienced by the Company in accounts receivables and  prepayment deposits. There were no accounts receivables as at September 30, 2008.  Additionally, as of September 30, 2008 our unaudited balance sheet reflects that we have  total current liabilities of $806,127, and total and shareholders deficit of $(759,534), as compared to total current liabilities of $761,427 and shareholders deficit of $(672,306) for the fiscal year ended December 31, 2007.  The net cash used by operating activities for the period ended September 30, 2008 was $56,745.  The net cash provided by financing activities for the period ended September 30, 2008 was $56,253 from a stockholders loan.  As noted above, as a result of the Companys acquisition of LTL there will be a change in the business operations of the Company in the next quarter.  As a result of the Companys acquisition, the Company will terminate its business operations relating to its telecommunications network services and will begin offering consulting services, training services, human resources for business development and other related services through its wholly owned subsidiary, LTL.  Our plan of operations for the fiscal year ending December 31, 2008, and the subsequent twelve (12) months, includes the termination of the Companys telecommunication network services and commencement of business operations through LTL. The extent to which we will be able to commence new operations will be dependent, to a large extent, on the availability of working capital generated by the Companys new subsidiary LTL.  Since there is no assurance that working capital will be available to us from either subsidiarys business operations, or other sources, there is also no assurance regarding the extent to which we will be able to implement our plan of operations within the foreseeable future.  The Company may pursue acquisitions of other companies or technologies.  However, the Company has not currently entered into any negotiations or agreements to acquire any business.  OFF BALANCE SHEET ARRANGEMENTS  The Company does not have any off-balance sheet arrangements.  ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.  Not Applicable  ITEM 4T. CONTROLS AND PROCEDURES.  Disclosure Controls and Procedures  The Securities and Exchange Commission defines the term disclosure controls and procedures to mean a company's controls and other procedures of an issuer that are designed to ensure that information required to be disclosed in the reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange 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 an issuer in the reports that it files or submits under the Securities Exchange Act of 1934 is accumulated and communicated to the issuers management, including its principal executive and principal financial officers, or persons performing similar functions, as  - 16 -   appropriate to allow timely decisions regarding required disclosure.  The Company maintains such a system of controls and procedures in an effort to ensure that all information which it is required to disclose in the reports it files under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified under the SEC's rules and forms and that information required to be disclosed is accumulated and communicated to principal executive and principal financial officers to allow timely decisions regarding disclosure.  As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our chief executive officer and chief financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures.  Based on this evaluation, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures are designed to provide reasonable assurance of achieving the objectives of timely alerting them to material information required to be included in our periodic SEC reports and of ensuring that such information is recorded, processed, summarized and reported within the time periods specified.  Our chief executive officer and chief financial officer also concluded that our disclosure controls and procedures were effective as of the end of the period covered by this report to provide reasonable assurance of the achievement of these objectives.  Changes in Internal Control over Financial Reporting  There was no change in the Company's internal control over financial reporting during the period ended September 30, 2008, that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.  PART II - OTHER INFORMATION  ITEM 1. LEGAL PROCEEDINGS.  None.  ITEM 1A. RISK FACTORS. Not Applicable. ITEM2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.  ISTERED SALES OF EQUITY SECURPROCEEDS None.  ITEM 3. DEFAULTS UPON SENIOR SECURITIES.  None.  ITEM 4.SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.  None.  ITEM  5. OTHER INFORMATION.  None.  ITEM 6. EXHIBITS.  (a) The following exhibits are filed herewith:   - 17 -   31.1        Certifications pursuant to Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.  31.2 Certifications pursuant to Rule 13a-14(a) or 15d-14(a) under the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.  32.1 Certifications pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.  32.2 Certifications pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.  SIGNATURES  In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.  DIGITAL NETWORK ALLIANCE INTERNATIONAL, INC.  /s/ Chan Chi Fai, President and Chief Operations Officer  Date: Nov 13, 2008   /s/ Eppie Wong, Chief Financial Officer and Director  Date: Nov 13, 2008    - 18 -