---

**UNITED STATES
  SECURITIES AND EXCHANGE COMMISSION**
  Washington, D.C. 20549

FORM 10-QSB

(Mark One) [ X ]Quarterly Report Pursuant To Section 13 Or 15(d) Of The Securities
  Exchange Act Of 1934

For the quarterly period ended December 31, 2005

[ ] Transition Report Under Section 13 Or 15(d) Of The Securities
  Exchange Act Of 1934

For the transition period ________to ________

COMMISSION FILE NUMBER000-51152

DIGITAL ECOSYSTEMS CORP. (Name of small business
issuer in its charter)

|NEVADA                                                               | 98-0431245                          
|-------------------------------------------------------------------- | ------------------------------------
|(State or other jurisdiction of incorporation
      or organization) | (I.R.S. Employer Identification No.)

|1313 East Maple Street, Suite 223        |           
|---------------------------------------- | ----------
|Bellingham, WA                           | 98225     
|(Address of principal executive offices) | (Zip Code)

(360) 685-4240 Issuer's telephone number

Not ApplicableFormer name, former address and former fiscal year, if changed since last
  report

Check whether the issuer (1) filed all reports required to be
filed by Section 13 or 15(d) of the Exchange Act during the past twelve months
(or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past 90
days. Yes [ X ]No [ ]

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

State the number of shares outstanding of each of the issuer's
classes of common equity, as of the latest practicable date: As of February
15, 2006, the Registrant had 28,700,000 shares of common stock issued and
outstanding.

Transitional Small Business Disclosure Format (check one): Yes [
] No [X]

---

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

The accompanying unaudited financial statements have been
prepared in accordance with the instructions to Form 10-QSB and Item 310(b) of
Regulation S-B, and, therefore, do not include all information and footnotes
necessary for a complete presentation of financial position, results of
operations, cash flows, and stockholders' equity in conformity with accounting
principles generally accepted in the United States of America. In the opinion of
management, all adjustments considered necessary for a fair presentation of the
results of operations and financial position have been included and all such
adjustments are of a normal recurring nature. Operating results for the
quarterly period ended December 31, 2005 are not necessarily indicative of the
results that can be expected for the year ending March 31, 2006.

As used in this Quarterly Report, the terms "we", "us", "our",
and Digital mean Digital Ecosystems Corp. unless otherwise indicated. All
dollar amounts in this Quarterly Report are in U.S. dollars unless otherwise
stated.

2

---

|DIGITAL ECOSYSTEMS CORP.          
|----------------------------------
|(A Development Stage Company)     
|                                  
|                                  
|THIRD QUARTER FINANCIAL STATEMENTS
|                                  
|                                  
|DECEMBER 31, 2005                 
|(Unaudited)                       
|(Stated in U.S. Dollars)          

F-1

---

|DIGITAL ECOSYSTEMS CORP.     
|-----------------------------
|(A Development Stage Company)
|                             
|BALANCE SHEETS               
|(Unaudited)                  
|(Stated in U.S. Dollars)     

|                                                                 |   | DECEMBER 31 |   |   | MARCH 31 |  
|---------------------------------------------------------------- | - | ----------- | - | - | -------- | -
|                                                                 |   | 2005        |   |   | 2005     |  
|                                                                 |   |             |   |   |          |  
|ASSETS                                                           |   |             |   |   |          |  
|                                                                 |   |             |   |   |          |  
|Current                                                          |   |             |   |   |          |  
|Cash                                                             | $ | 52,520      |   | $ | 4,014    |  
|Prepaid expense                                                  |   | 19,964      |   |   | -        |  
|                                                                 |   |             |   |   |          |  
|                                                                 | $ | 72,484      |   | $ | 4,014    |  
|                                                                 |   |             |   |   |          |  
|LIABILITIES                                                      |   |             |   |   |          |  
|                                                                 |   |             |   |   |          |  
|Current                                                          |   |             |   |   |          |  
|Accounts payable and accrued liabilities                         | $ | 8,914       |   | $ | 26,932   |  
|Due to related party                                             |   | 10,100      |   |   | 1,000    |  
|Notes payable                                                    |   | 203,518     |   |   | -        |  
|                                                                 |   | 222,532     |   |   | 27,932   |  
|                                                                 |   |             |   |   |          |  
|STOCKHOLDERS DEFICIENCY                                         |   |             |   |   |          |  
|                                                                 |   |             |   |   |          |  
|Capital Stock                                                    |   |             |   |   |          |  
|Authorized:                                                      |   |             |   |   |          |  
|1,000,000,000 voting common stock with a par value of            |   |             |   |   |          |  
|$0.001 per share                                                 |   |             |   |   |          |  
|100,000,000 preferred stock with a par value of $0.001
      per |   |             |   |   |          |  
|share                                                            |   |             |   |   |          |  
|                                                                 |   |             |   |   |          |  
|Issued and outstanding                                           |   |             |   |   |          |  
|28,700,000 common shares at December 31, 2005                    |   | 28,700      |   |   | 91,200   |  
|91,200,000 common shares at March 31, 2005                       |   |             |   |   |          |  
|                                                                 |   |             |   |   |          |  
|Additional paid-in capital                                       |   | 130,767     |   |   | 50,267   |  
|                                                                 |   |             |   |   |          |  
|Deficit Accumulated During The Development Stage                 |   | (309,515    | ) |   | (165,385 | )
|                                                                 |   | (150,048    | ) |   | (23,918  | )
|                                                                 |   |             |   |   |          |  
|                                                                 | $ | 72,484      |   | $ | 4,014    |  

The accompanying notes are an integral part of these financial
  statements

F-2

---

|DIGITAL ECOSYSTEMS CORP.     
|-----------------------------
|(A Development Stage Company)
|                             
|STATEMENTS OF OPERATIONS     
|(Unaudited)                  
|(Stated in U.S. Dollars)     

|                           |   |                    |   |   |                   |   |   |             |   |   |           |   |   | CUMULATIVE   |  
|-------------------------- | - | ------------------ | - | - | ----------------- | - | - | ----------- | - | - | --------- | - | - | ------------ | -
|                           |   |                    |   |   |                   |   |   |             |   |   |           |   |   | PERIOD FROM  |  
|                           |   |                    |   |   |                   |   |   |             |   |   |           |   |   | INCEPTION ON |  
|                           |   |                    |   |   |                   |   |   |             |   |   |           |   |   | FEBRUARY 21  |  
|                           |   | THREE MONTHS ENDED |   |   | NINE MONTHS ENDED |   |   | 2002 TO     |  
|                           |   | DECEMBER 31        |   |   | DECEMBER 31       |   |   | DECEMBER 31 |  
|                           |   | 2005               |   |   | 2004              |   |   | 2005        |   |   | 2004      |   |   | 2005         |  
|                           |   |                    |   |   |                   |   |   |             |   |   |           |   |   |              |  
|Revenue                    | $ | -                  |   | $ | -                 |   | $ | -           |   | $ | -         |   | $ | -            |  
|                           |   |                    |   |   |                   |   |   |             |   |   |           |   |   |              |  
|Expenses                   |   |                    |   |   |                   |   |   |             |   |   |           |   |   |              |  
|Consulting  Officers and  |   |                    |   |   |                   |   |   |             |   |   |           |   |   |              |  
|directors                  |   | 6,000              |   |   | -                 |   |   | 18,000      |   |   | -         |   |   | 62,700       |  
|Management fees            |   | 30,000             |   |   | -                 |   |   | 35,000      |   |   | -         |   |   | 35,000       |  
|Consulting 
      Website |   |                    |   |   |                   |   |   |             |   |   |           |   |   |              |  
|development                |   | -                  |   |   | -                 |   |   | -           |   |   | -         |   |   | 10,094       |  
|Consulting 
      Other   |   | 33,292             |   |   | 6,299             |   |   | 33,292      |   |   | 18,299    |   |   | 56,238       |  
|Marketing Management       |   | 40,500             |   |   | -                 |   |   | 40,500      |   |   | -         |   |   | 40,500       |  
|Office and miscellaneous   |   | 5,580              |   |   | 5,820             |   |   | 8,060       |   |   | 7,729     |   |   | 17,300       |  
|Professional fees          |   | 3,849              |   |   | 17,730            |   |   | 23,939      |   |   | 34,548    |   |   | 97,544       |  
|Research                   |   | 1,036              |   |   | -                 |   |   | 1,036       |   |   | -         |   |   | 1,036        |  
|Rent                       |   | 710                |   |   | -                 |   |   | 710         |   |   | -         |   |   | 7,815        |  
|Telephone                  |   | 309                |   |   | 112               |   |   | 522         |   |   | 256       |   |   | 1,352        |  
|Foreign exchange           |   | 90                 |   |   | (4,298            | ) |   | 58          |   |   | (4,298    | ) |   | (3,757       | )
|Transfer agent             |   | -                  |   |   | -                 |   |   | 186         |   |   | -         |   |   | 866          |  
|                           |   |                    |   |   |                   |   |   |             |   |   |           |   |   |              |  
|Loss Before The Under      |   |                    |   |   |                   |   |   |             |   |   |           |   |   |              |  
|Noted                      |   | (121,366           | ) |   | (25,663           | ) |   | (161,303    | ) |   | (56,534   | ) |   | (326,688     | )
|                           |   |                    |   |   |                   |   |   |             |   |   |           |   |   |              |  
|Gain On Extinguishment of  |   |                    |   |   |                   |   |   |             |   |   |           |   |   |              |  
|Debt                       |   | 17,173             |   |   | -                 |   |   | 17,173      |   |   | -         |   |   | 17,173       |  
|                           |   |                    |   |   |                   |   |   |             |   |   |           |   |   |              |  
|Loss For The Periods       | $ | (104,193           | ) | $ | (25,663           | ) | $ | (144,130    | ) | $ | (56,534   | ) | $ | (309,515     | )
|                           |   |                    |   |   |                   |   |   |             |   |   |           |   |   |              |  
|                           |   |                    |   |   |                   |   |   |             |   |   |           |   |   |              |  
|Loss Per Share Basic      | $ | (0.00              | ) | $ | (0.00             | ) | $ | (0.00       | ) | $ | (0.01     | ) |   |              |  
|                           |   |                    |   |   |                   |   |   |             |   |   |           |   |   |              |  
|                           |   |                    |   |   |                   |   |   |             |   |   |           |   |   |              |  
|Weighted Average Number    |   |                    |   |   |                   |   |   |             |   |   |           |   |   |              |  
|Of Shares Outstanding      |   | 28,700,000         |   |   | 9,120,000         |   |   | 66,881,818  |   |   | 8,941,818 |   |   |              |  

The accompanying notes are an integral part of these financial
  statements

F-3

---

|DIGITAL ECOSYSTEMS CORP.)    
|-----------------------------
|(A Development Stage Company)
|                             
|STATEMENTS OF CASH FLOWS     
|(Unaudited)                  
|(Stated in U.S. Dollars)     

|                                   |   |                    |   |   |                   |   |   |             |   |   |         |   |   | CUMULATIVE   |  
|---------------------------------- | - | ------------------ | - | - | ----------------- | - | - | ----------- | - | - | ------- | - | - | ------------ | -
|                                   |   |                    |   |   |                   |   |   |             |   |   |         |   |   | PERIOD FROM  |  
|                                   |   |                    |   |   |                   |   |   |             |   |   |         |   |   | INCEPTION ON |  
|                                   |   |                    |   |   |                   |   |   |             |   |   |         |   |   | FEBRUARY 21  |  
|                                   |   | THREE MONTHS ENDED |   |   | NINE MONTHS ENDED |   |   | 2002 TO     |  
|                                   |   | DECEMBER 31        |   |   | DECEMBER 31       |   |   | DECEMBER 31 |  
|                                   |   | 2005               |   |   | 2004              |   |   | 2005        |   |   | 2004    |   |   | 2005         |  
|                                   |   |                    |   |   |                   |   |   |             |   |   |         |   |   |              |  
|Cash Flows From                    |   |                    |   |   |                   |   |   |             |   |   |         |   |   |              |  
|Operating Activities               |   |                    |   |   |                   |   |   |             |   |   |         |   |   |              |  
|Loss for
      the periods         | $ | (104,193           | ) | $ | (25,663           | ) | $ | (144,130    | ) | $ | (56,534 | ) | $ | (309,515     | )
|                                   |   |                    |   |   |                   |   |   |             |   |   |         |   |   |              |  
|Adjustments
      to reconcile net |   |                    |   |   |                   |   |   |             |   |   |         |   |   |              |  
|loss to net
      cash used in     |   |                    |   |   |                   |   |   |             |   |   |         |   |   |              |  
|operating
      activities         |   |                    |   |   |                   |   |   |             |   |   |         |   |   |              |  
|Non-cash services from             |   |                    |   |   |                   |   |   |             |   |   |         |   |   |              |  
|officers                           |   | 6,000              |   |   | 6,000             |   |   | 18,000      |   |   | 18,000  |   |   | 62,700       |  
|Changes in non-cash working        |   |                    |   |   |                   |   |   |             |   |   |         |   |   |              |  
|capital
      items:               |   |                    |   |   |                   |   |   |             |   |   |         |   |   |              |  
|Decrease in accounts               |   |                    |   |   |                   |   |   |             |   |   |         |   |   |              |  
|receivable                         |   | -                  |   |   | -                 |   |   | -           |   |   | 1,134   |   |   | -            |  
|Increase in prepaid                |   | (19,964            | ) |   | -                 |   |   | (19,964     | ) |   | -       |   |   | (19,964      | )
|expense                            |   |                    |   |   |                   |   |   |             |   |   |         |   |   |              |  
|Increase (Decrease) in due         |   |                    |   |   |                   |   |   |             |   |   |         |   |   |              |  
|to related party                   |   | (12,073            | ) |   | -                 |   |   | 9,100       |   |   | -       |   |   | 10,100       |  
|Increase (Decrease) in             |   |                    |   |   |                   |   |   |             |   |   |         |   |   |              |  
|accounts payable and               |   |                    |   |   |                   |   |   |             |   |   |         |   |   |              |  
|accrued liabilities                |   | (12,432            | ) |   | 8,662             |   |   | (18,018     | ) |   | 13,490  |   |   | 8,914        |  
|                                   |   | (142,662           | ) |   | (11,001           | ) |   | (155,012    | ) |   | (23,910 | ) |   | (247,765     | )
|                                   |   |                    |   |   |                   |   |   |             |   |   |         |   |   |              |  
|Cash Flows From Financing          |   |                    |   |   |                   |   |   |             |   |   |         |   |   |              |  
|Activities                         |   |                    |   |   |                   |   |   |             |   |   |         |   |   |              |  
|Loan payable                       |   | (8,424             | ) |   | -                 |   |   | -           |   |   | -       |   |   | -            |  
|Notes payable                      |   | 203,518            |   |   | -                 |   |   | 203,518     |   |   | -       |   |   | 203,518      |  
|Proceeds
      from issuance       |   |                    |   |   |                   |   |   |             |   |   |         |   |   |              |  
|of common stock                    |   | -                  |   |   | -                 |   |   | -           |   |   | 37,569  |   |   | 96,767       |  
|                                   |   | 195,094            |   |   | -                 |   |   | 203,518     |   |   | 37,569  |   |   | 300,285      |  
|                                   |   |                    |   |   |                   |   |   |             |   |   |         |   |   |              |  
|Net Increase (Decrease) In         |   |                    |   |   |                   |   |   |             |   |   |         |   |   |              |  
|Cash                               |   | 52,432             |   |   | (11,001           | ) |   | 48,506      |   |   | 13,659  |   |   | 52,520       |  
|                                   |   |                    |   |   |                   |   |   |             |   |   |         |   |   |              |  
|Cash, Beginning Of Period          |   | 88                 |   |   | 46,643            |   |   | 4,014       |   |   | 21,983  |   |   | -            |  
|                                   |   |                    |   |   |                   |   |   |             |   |   |         |   |   |              |  
|Cash, End Of Period                | $ | 52,520             |   | $ | 35,642            |   | $ | 52,520      |   | $ | 35,642  |   | $ | 52,520       |  

The accompanying notes are an integral part of these financial
  statements

F-4

---

|DIGITAL ECOSYSTEMS CORP.                                            
|--------------------------------------------------------------------
|(A Development Stage Company)                                       
|                                                                    
|STATEMENT OF STOCKHOLDERS EQUITY (DEFICIENCY)                      
|                                                                    
|PERIOD FROM INCEPTION, FEBRUARY 21, 2002, TO DECEMBER
      31, 2005
|(Unaudited)                                                         
|(Stated in U.S. Dollars)                                            

|                                |  |             |   |   |         |   |   |            |   |   |               |   |   | DEFICIT         |   |   |          |  
|------------------------------- |  | ----------- | - | - | ------- | - | - | ---------- | - | - | ------------- | - | - | --------------- | - | - | -------- | -
|                                |  |             |   |   |         |   |   |            |   |   |               |   |   | ACCUMULATED     |   |   |          |  
|                                |  | NUMBER      |   |   |         |   |   | ADDITIONAL |   |   | STOCK         |   |   | DURING THE      |   |   |          |  
|                                |  | OF          |   |   |         |   |   | PAID-IN    |   |   | SUBSCRIPTIONS |   |   | **DEVELOPMENT** |   |   |          |  
|                                |  | SHARES      |   |   | AMOUNT  |   |   | CAPITAL    |   |   | RECEIVED      |   |   | STAGE           |   |   | TOTAL    |  
|                                |  |             |   |   |         |   |   |            |   |   |               |   |   |                 |   |   |          |  
|Common stock issued for cash    |  | 15,000,000  |   | $ | 15,000  |   | $ | (13,500    | ) | $ | -             |   | $ | -               |   | $ | 1,500    |  
|Net loss for the period         |  | -           |   |   | -       |   |   | -          |   |   | -             |   |   | (1,770          | ) |   | (1,770   | )
|                                |  |             |   |   |         |   |   |            |   |   |               |   |   |                 |   |   |          |  
|Balance, March 31, 2002         |  | 15,000,000  |   |   | 15,000  |   |   | (13,500    | ) |   | -             |   |   | (1,770          | ) |   | (270     | )
|                                |  |             |   |   |         |   |   |            |   |   |               |   |   |                 |   |   |          |  
|Common stock issued for cash    |  | 50,000,000  |   |   | 50,000  |   |   | (45,000    | ) |   | -             |   |   | -               |   |   | 5,000    |  
|Cash received for stock         |  |             |   |   |         |   |   |            |   |   |               |   |   |                 |   |   |          |  
|subscriptions                   |  | -           |   |   | -       |   |   | -          |   |   | 31,200        |   |   | -               |   |   | 31,200   |  
|Non-cash services from officers |  |             |   |   |         |   |   |            |   |   |               |   |   |                 |   |   |          |  
|and directors                   |  | -           |   |   | -       |   |   | 9,900      |   |   | -             |   |   | -               |   |   | 9,900    |  
|Net loss for the year           |  | -           |   |   | -       |   |   | -          |   |   | -             |   |   | (20,484         | ) |   | (20,484  | )
|                                |  |             |   |   |         |   |   |            |   |   |               |   |   |                 |   |   |          |  
|Balance, March 31, 2003         |  | 65,000,000  |   |   | 65,000  |   |   | (48,600    | ) |   | 31,200        |   |   | (22,254         | ) |   | 25,346   |  
|                                |  |             |   |   |         |   |   |            |   |   |               |   |   |                 |   |   |          |  
|Common stock issued for cash    |  | 16,200,000  |   |   | 16,200  |   |   | 36,498     |   |   | (31,200       | ) |   | -               |   |   | 21,498   |  
|Non-cash services from officers |  |             |   |   |         |   |   |            |   |   |               |   |   |                 |   |   |          |  
|and directors                   |  | -           |   |   | -       |   |   | 10,800     |   |   | -             |   |   | -               |   |   | 10,800   |  
|Net loss for the year           |  | -           |   |   | -       |   |   | -          |   |   | -             |   |   | (39,527         | ) |   | (39,527  | )
|                                |  |             |   |   |         |   |   |            |   |   |               |   |   |                 |   |   |          |  
|Balance, March 31, 2004         |  | 81,200,000  |   |   | 81,200  |   |   | (1,302     | ) |   | -             |   |   | (61,781         | ) |   | 18,117   |  
|                                |  |             |   |   |         |   |   |            |   |   |               |   |   |                 |   |   |          |  
|Common stock issued for cash    |  | 10,000,000  |   |   | 10,000  |   |   | 27,569     |   |   | -             |   |   | -               |   |   | 37,569   |  
|Non-cash services from officers |  |             |   |   |         |   |   |            |   |   |               |   |   |                 |   |   |          |  
|and directors                   |  | -           |   |   | -       |   |   | 24,000     |   |   | -             |   |   | -               |   |   | 24,000   |  
|Net loss for the year           |  | -           |   |   | -       |   |   | -          |   |   | -             |   |   | (103,604        | ) |   | (103,604 | )
|                                |  |             |   |   |         |   |   |            |   |   |               |   |   |                 |   |   |          |  
|Balance, March 31, 2005         |  | 91,200,000  |   |   | 91,200  |   |   | 50,267     |   |   | -             |   |   | (165,385        | ) |   | (23,918  | )
|                                |  |             |   |   |         |   |   |            |   |   |               |   |   |                 |   |   |          |  
|Non-cash services from officers |  |             |   |   |         |   |   |            |   |   |               |   |   |                 |   |   |          |  
|and directors                   |  | -           |   |   | -       |   |   | 18,000     |   |   | -             |   |   | -               |   |   | 18,000   |  
|                                |  |             |   |   |         |   |   |            |   |   |               |   |   |                 |   |   |          |  
|Cancellation of 62,500,000      |  |             |   |   |         |   |   |            |   |   |               |   |   |                 |   |   |          |  
|common shares                   |  | (62,500,000 | ) |   | (62,500 | ) |   | 62,500     |   |   | -             |   |   | -               |   |   | -        |  
|                                |  |             |   |   |         |   |   |            |   |   |               |   |   |                 |   |   |          |  
|Net loss for the period         |  | -           |   |   | -       |   |   | -          |   |   | -             |   |   | (144,130        | ) |   | (144,130 | )
|                                |  |             |   |   |         |   |   |            |   |   |               |   |   |                 |   |   |          |  
|Balance, December 31, 2005      |  | 28,700,000  |   | $ | 28,700  |   | $ | 130,767    |   | $ | -             |   | $ | (309,515        | ) | $ | (150,048 | )

The accompanying notes are an integral part of these financial
  statements

F-5

---

|DIGITAL ECOSYSTEMS CORP.     
|-----------------------------
|(A Development Stage Company)
|                             
|NOTES TO FINANCIAL STATEMENTS
|                             
|DECEMBER 31, 2005            
|(Unaudited)                  
|(Stated in U.S. Dollars)     

|1. | ORGANIZATION AND BASIS OF PRESENTATION
|-- | --------------------------------------
|   |                                       
|   | a)                                    
|   |                                       
|   |                                       
|   |                                       
|   |                                       
|   |                                       
|   |                                       
|   |                                       
|   | b)                                    
|   |                                       
|   |                                       

F-6

---

|DIGITAL ECOSYSTEMS CORP.     
|-----------------------------
|(A Development Stage Company)
|                             
|NOTES TO FINANCIAL STATEMENTS
|                             
|DECEMBER 31, 2005            
|(Unaudited)                  
|(Stated in U.S. Dollars)     

|1. | ORGANIZATION AND BASIS OF PRESENTATION(Continued)
|-- | -------------------------------------------------
|   |                                                  
|   | b)                                               
|   |                                                  
|   |                                                  
|   |                                                  
|   |                                                  
|   |                                                  
|2. | RELATED PARTY TRANSACTIONS                       
|   |                                                  
|   | a)                                               
|   |                                                  
|   |                                                  
|   |                                                  
|   |                                                  

F-7

---

|DIGITAL ECOSYSTEMS CORP.     
|-----------------------------
|(A Development Stage Company)
|                             
|NOTES TO FINANCIAL STATEMENTS
|                             
|DECEMBER 31, 2005            
|(Unaudited)                  
|(Stated in U.S. Dollars)     

|2. | RELATED PARTY TRANSACTIONS(Continued)                                                                                                                                                                                                     
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                           
|   | b)                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                           
|3. | NOTES PAYABLE                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                           
|   | a)                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                           
|   | b)                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                           
|4. | CAPITAL STOCK                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                           
|   | From inception on February 21, 2002 to March
        31, 2002, the Company issued 15,000,000 common shares in exchange for
        cash proceeds of $1,500.                                                                               
|   |                                                                                                                                                                                                                                           
|   | During the year ended March 31, 2003, the
        Company issued 50,000,000 common shares, in exchange for cash proceeds
        of $5,000. It also received $31,200 for stock subscriptions for shares
        issued the following year.
|   |                                                                                                                                                                                                                                           
|   | During the year ended March 31, 2004, the
        Company issued 16,200,000 common shares in exchange for cash proceeds
        of $52,698 including the $31,200 received for share subscriptions in 2003.                                

F-8

---

|DIGITAL ECOSYSTEMS CORP.     
|-----------------------------
|(A Development Stage Company)
|                             
|NOTES TO FINANCIAL STATEMENTS
|                             
|DECEMBER 31, 2005            
|(Unaudited)                  
|(Stated in U.S. Dollars)     

|4. | CAPITAL STOCK(Continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | During the year ended March 31, 2005, the
        Company issued 10,000,000 common shares in exchange for cash proceeds
        of $37,569.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | In the second quarter ended September 30,
        2005, the Companys Board of Directors approved 10:1 forward stock
        split. As a result of the stock split, an additional 82,080,000 shares
        of common stock were issued.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | In the second quarter ended September 30,
        2005, the Company cancelled 62,500,000 shares of common stock and they
        were returned back to the Companys treasury for no proceeds.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|5. | COMMITMENTS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|6. | SUBSEQUENT EVENT                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   | On February 10, 2006, the Company entered
        into a definitive Share Exchange Agreement with GSL Energy Corporation
        (GSL), a Maryland Corporation, and MABio Materials Corporation,
        a Maryland corporation, and MAB Resources LLC, a Delaware limited liability
        company (collectively, the GSL Shareholders), for the purpose
        of acquiring at least 80% of the issued and outstanding common shares
        of GSL. Pursuant to the terms of the agreement and subject to closing,
        100,000,000 common shares of GSL held by the GSL Shareholders will be
        converted, on a one for one basis, into shares of the Companys common
        stock. Further, the Company will assume the obligations of GSL to issue
        additional shares of the common stock of GSL pursuant to options issued
        under GSLs stock option plan, certain agreements entered into by
        GSL, and GSLs convertible debentures and convertible notes outstanding.

F-9

---

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF
OPERATION.

Cautionary Statement Regarding Forward-Looking Statements

Certain statements contained in this Quarterly Report
constitute "forward-looking statements". These statements, identified by words
such as plan, "anticipate," "believe," "estimate," "should," "expect" and
similar expressions include our expectations and objectives regarding our future
financial position, operating results and business strategy. These statements
reflect the current views of management with respect to future events and are
subject to risks, uncertainties and other factors that may cause our actual
results, performance or achievements, or industry results, to be materially
different from those described in the forward-looking statements. Such risks and
uncertainties include those set forth under the caption "Management's Discussion
and Analysis or Plan of Operation" and elsewhere in this Quarterly Report. We do
not intend to update the forward-looking information to reflect actual results
or changes in the factors affecting such forward-looking information. We advise
you to carefully review the reports and documents we file from time to time with
the Securities and Exchange Commission (the SEC), particularly our Annual
Reports on Form 10-KSB and our Current Reports on Form 8-K.

INTRODUCTION

We are a development stage company in the business of
developing and operating an internet based drinking water information and order
service (the Water Business). Our plan of operation, subject to the completion
of our transaction with GSL Energy Corporation, is to develop a comprehensive
one-stop-shop source of water and water information and to become established as
a significant industry distributor. On February 10, 2005 we entered into a
definitive agreement with GSL Energy Corporation ("GSL"), a Maryland
corporation, for the purpose of acquiring at least 80% of the issued and
outstanding shares of GSL. Pursuant to the terms of the agreement and subject to
closing, 100,000,000 shares of GSLs issued and outstanding common stock held by
certain of GSLs stockholders will be converted on a one for one basis into
shares of Digitals common stock (the Exchange), and Digital will assume the
obligations of GSL to issue additional shares of the common stock of GSL. Upon
closing of the Exchange, we will own and operate the assets of GSL and change
our business to that of GSL.

We have not earned any revenues to date, and from inception to
December 31, 2005, we have suffered cumulative losses in the amount of $309,515.
Closing of the Exchange is subject to a number of conditions and there is no
assurance that the transaction with GSL will be completed.

Recent Corporate Developments

Since the completion of our last fiscal quarter ended September
30, 2005, we have experienced the following corporate developments:

|1. | We entered into a stock exchange agreement with GSL
      Energy Corporation, MABio Materials Corporation and MAB Resources LLC for
      the purpose of acquiring at least 80% of the issued and outstanding shares
      of GSL. Pursuant to the terms of the agreement and subject to closing,
      100,000,000 shares of GSLs issued and outstanding common stock held by
      certain of GSLs stockholders will be converted on a one for one basis
      into shares of Digitals common stock, and Digital will assume the
      obligations of GSL to issue additional shares of the common stock of GSL
      pursuant to options issued under GSLs stock option plan, certain
      agreements entered into by GSL, and GSLs convertible debentures and
      convertible notes outstanding. GSL presently has 103,241,000 shares of its
      common stock issued and outstanding, and has options, convertible
      debentures and convertible notes outstanding to acquire additional shares
      of the common stock of GSL. Upon closing of the transaction, Digital will
      own and operate the assets of GSL and change its business to that of GSL.
      Closing of the Exchange is subject to a number of conditions, including
      the following: (i)
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

3

---

|   | satisfactory completion of due diligence by both parties;
      and (ii) delivery of financial statements of GSL required under securities
      laws.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|2. | On February 2, 2006, we entered into a loan agreement (the
        Loan Agreement) with Carnavon Trust Reg., a Liechtenstein
        domiciled discretionary trust, (Carnavon) of Aeulestrasse
        5, FL-9490 Vaduz, Liechtenstein, pursuant to which we received a loan
        of $50,000. The loan accrues interest at a rate of twelve percent (12%)
        per annum and is for a term of one year. At the option of Carnavon, the
        loan or any portion thereof, may be converted into shares of Digital during
        the term of the loan agreement or upon maturity, at a price per share
        equal to the closing price of the our shares on the OTC Bulletin Board
        on the day preceding notice from Carnavon of its intention to convert.
        Prior to entering the Loan Agreement with Carnavon, we received from Carnavon
        a loan of $100,000 on December 5, 2005 and a loan $100,000 on October
        11, 2005, respectively, on terms identical to those of the Loan Agreement.                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|3. | On January 3, 2006, Allan D. Laird was appointed as a
      member of our Board of Directors. Mr. Laird has extensive international
      oil and gas industry experience and is an expert in unconventional gas
      reservoirs. He is presently providing engineering and business development
      services to Falcon Oil & Gas Ltd. of Colorado, an oil and gas resource
      company listed on the TSX Venture Exchange. Prior to that, Mr. Laird was
      Executive Vice President of Ledge Resources, a private oil and gas company
      in Alberta. He also contributed significantly to the efforts by Ultra
      Petroleum on the Basin Centered Gas Accumulation (BCGA) project in the
      Green River Basin of Wyoming. Mr. Laird is the former President and
      Director of Gemini Energy Corp. and was also the President and a Director
      of Rapid Technology Corp. He graduated from Queens University with a
      B.Sc. in Mining Engineering in 1980 and is a Registered Professional
      Engineer in the Province of Alberta.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|4. | During our third fiscal quarter ended December 31, 2005
      we entered into a Letter of Intent (the LOI) dated November 18, 2005, as
      amended December 30, 2005, with GSL Energy Corporation, for the purpose of
      acquiring at least 80% of the issued and outstanding shares of GSL.
      Pursuant to the terms of the LOI, subject to the entry into a definitive
      agreement between the parties, each share of GSLs issued and outstanding
      common stock was to be converted into one share of Digitals common stock
      (the Exchange). The LOI was non-binding except as to the following
      provisions: (i) the parties agreed to pay their own costs associated with
      the LOI and the transactions contemplated therein, (ii) and Digital agreed
      not to enter into other negotiations for the merger or purchase of Digital
      during the term of the LOI.                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|5. | On December 13, 2005, we entered into a Research
      Distribution Agreement (the Distribution Agreement) with Taglich
      Brothers, Inc. (Taglich) of 405 Lexington Avenue, 51st Floor, New York,
      NY, USA, 10174, pursuant to which Taglich agreed to provide us with
      internet posted research report and quarterly updates in addition to the
      dissemination of such research reports to investors that subscribe to the
      Taglich website database. The Distribution Agreement commenced on December
      13, 2005 and continues for an initial one-year term until December 13,
      2006 and thereafter on a month to month basis at the option of Digital. In
      consideration of the foregoing, we agreed to pay to Taglich $21,000 in US
      funds for the initial one year term and thereafter, should we choose to
      continue on a month to month basis, a fee in the amount of $1,750 per
      month.                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|6. | We entered into a Marketing Management Services Contract
      (the Marketing Agreement) with Chorus Marketing (Chorus) dated October
      15, 2005. Pursuant to the terms of the Marketing Agreement, we agreed to
      pay Chorus $5,000 per month in consideration of which Chorus agreed to act
      as our representative and oversee the coordination of marketing
      initiatives on our behalf including: brand identity, website design and
      development, investor information packages, copywriting, editing and
      proofing and news release dissemination services. We further agreed to
      reimburse Chorus for all disbursements reasonably incurred by Chorus for
      the purpose of providing                                                                                                                                                                                                                                                                                                                                

4

---

|   | the consulting services to us. The Marketing Agreement is
      for a term of one year and expires on October 16, 2006.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|7. | We entered into a consulting agreement with Beneficial
      Designs, Inc. (BDI) dated October 1, 2005 (the Consulting Agreement),
      pursuant to which BDI agreed to provide Digital with certain marketing and
      investor relations services in consideration of which we are to pay
      $10,000 per month to BDI. We further agreed to reimburse BDI for all
      disbursements reasonably incurred by BDI for the purpose of providing the
      consulting services to Digital. The Consulting Agreement commenced October
      1, 2005 and terminates on October 31, 2006. The Consulting Agreement may
      be terminated by either party on 30 days written notice with the exception
      that during the first 90 day probationary period of the Consulting
      Agreement we may at our option terminate the Consulting
  Agreement.

Stock Exchange Agreement with GSL Energy Corporation

During our third fiscal quarter ended December 31, 2005 we
entered into a Letter of Intent (the LOI) dated November 18, 2005, as amended
December 30, 2005, with GSL Energy Corporation, for the purpose of acquiring at
least 80% of the issued and outstanding shares of GSL. Pursuant to the terms of
the LOI, subject to the entry into a definitive agreement between the parties,
each share of GSLs issued and outstanding common stock was to be converted into
one share of Digitals common stock. The LOI was non-binding except as to the
following provisions: (i) the parties agreed to pay their own costs associated
with the LOI and the transactions contemplated therein, (ii) and Digital agreed
not to enter into other negotiations for the merger or purchase of Digital
during the term of the LOI.

On February 10, 2006 Digital entered into a Stock Exchange Agreement
  (the “Exchange Agreement”) with GSL Energy Corporation, MABio Materials
  Corporation and MAB Resources LLC for the purpose of acquiring at least 80%
  of the issued and outstanding shares of GSL. Pursuant to the terms of the agreement
  and subject to closing, 100,000,000 shares of GSL’s issued and outstanding
  common stock held by certain of GSL’s stockholders will be converted on
  a one for one basis into shares of Digital’s common stock (the “Exchange”),
  and Digital will assume the obligations of GSL to issue additional shares of
  the common stock of GSL pursuant to options issued under GSL’s stock option
  plan, certain agreements entered into by GSL, and GSL’s convertible debentures
  and convertible notes outstanding.

Closing of the Exchange is subject to a number of conditions
including the following:

| | (i)   | From the date of the execution of the Exchange Agreement,
      Digital carry out its business in the ordinary course consistent with past
      practice and is not permitted without the consent of GSL, to: enter into
      other agreements, modify its incorporating documents, declare or pay any
      dividends, sell or lease or encumber its assets, issue, deliver or sell
      any of its shares, incur any additional indebtedness, grant severance or
      termination pay to directors, officers or employees, commence a lawsuit,
      make any changes in respect of its taxes, and discharge any liabilities or
      claims other than in the ordinary course of business;
| | ----- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | (ii)  | Digital’s total liabilities must not exceed $275,000
        plus any amounts accrued, but unpaid, under its material agreements, from
        the date of the Exchange Agreement until the closing date;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | (iii) | GSL having delivered to Digital financial statements
      required under applicable regulations of the SEC; and                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | (iv)  | Satisfactory completion of due diligence of each of the
      parties to the Exchange Agreement.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

5

---

GSL presently has 103,241,000 shares of its common stock issued
  and outstanding, and has options, convertible debentures and convertible notes
  outstanding to acquire additional shares of the common stock of GSL. Upon closing
  of the Exchange, Digital will own and operate the assets of GSL and change its
  business to that of GSL. There is no assurance that the Exchange transaction
  will be completed.

GSL is an oil and gas exploration company that was formed in
  June, 2005 and that has acquired primarily unconventional undeveloped oil and
  natural gas prospects in North America and Australia.

The foregoing summary is qualified in its entirety by reference
  to the Exchange Agreement which is filed as Exhibit 10.8 to this Quarterly Report
  and the LOI which is filed as an exhibit to Digitals Current Reports on
  Form 8-K filed with the Securities and Exchange Commission on November 25, 2005
  and January 4, 2006.

Water Business

Our Water Business is intended to serve customers through a
website that directs regional sales to the local area affiliate and coordinates
sales and distribution. We intend to aggregate contacts in the water industry to
provide the most comprehensive catalog of water products and bring them to
communities in North America with plans to expand globally. The products we
intend to offer cover a range from:

|(a) | Bottled water applications;                                                                              
|--- | ---------------------------------------------------------------------------------------------------------
|(b) | Information and reports on the water industry;
  and                                                     
|(c) | A community based website whereby people can educate
      themselves about water and the water industry.

Our objective is to provide the consumer and researcher with
current information about bottled water. By offering a comprehensive
one-stop-shop source of water and water information, we hope to become
established as a significant industry distributor. The opportunity exists now
because the convergence of widespread consumer access to the internet and
inexpensive and robust web technology has made it feasible to offer information
at low cost.

Subject to the closing of our transaction with GSL, our
business plan is to use our website to earn revenues from the following sources:

| | (a) | Reselling  private label reselling agreements;                                    
| | --- | -----------------------------------------------------------------------------------
| | (b) | Establishing additional affiliations to capture
      advertising revenue; and     
| | (c) | Sale of products and all e-commerce transactions
      originating from our website

We have not earned any revenues to date. Subject to the closing
of our transaction with GSL, we plan to use our website to earn revenues from
advertising, sales of products and all e-commerce transactions originating from
our website. We do not anticipate earning revenues until such time as we
complete the marketing, promotion and development of our website.

PLAN OF OPERATION

We have not earned any revenues to date, and from inception to
December 31, 2005, we have suffered cumulative losses in the amount of
$309,515.

Subject to the closing of our transaction with GSL and our
ability to obtain additional financing, the

6

---

following are the highlights our milestones and objectives for
developing and marketing our website over the next twelve months:

Milestones
      and Objectives
      Anticipated Costs
      Time Frame1. Complete web site development,
      hosting, working capital.
      $5,000
      1 month2. Complete beta testing of web site
      $5,000
      1 month3. Registering
      vendors/vendees       contacting and signing up
      related parties.
      $1,000
      4 - 6 months4. Building an experienced
      advisory board       recruiting key, seasoned
      personnel.
      $2,000
      6 - 8 months5. Developing key industry
      relationships       building out web portal with
      related industry groups.
      $1,000
      9 - 12 months6. Build relationships
      with key players in industry       attend trade shows,
      join industry organizations.
      $2,000
      9 - 12 months7. Develop private water
      label distribution       secure relationship with
      water supplier, label supplier, expand sales mission.
      $2,000
      4 - 6 months8. Implement marketing and
      advertising campaign.
      $12,000
      9 - 12 monthsTOTAL
      $30,000
      -


We anticipate that we will spend approximately $207,000 over
the next twelve months on the following expenses:

Category
      Planned Expenditures over the Next
        Twelve Months 
        (US$)Professional Fees
    $15,000Office Expenses
    $12,000Consulting Fees
    $180,000TOTAL
    $207,000


As of the fiscal quarter ended December 31, 2005, we had a cash
balance of $52,520. We presently do not have sufficient cash on hand to fund our
proposed expenditures for the next twelve months, and will require additional
financing to pursue our stated plan of operation. As a result, we have not made
any significant progress in pursuing our plan of operation since the completion
of our fiscal year ended March 31, 2005. Further marketing and development work
on our website, also will require additional funding in the event that our
current cash on hand is insufficient for any additional work proposed.

We anticipate that additional funding will be in the form of
equity financing from the sale of our common stock. However, we cannot provide
investors with any assurance that we will be able to raise sufficient funding
from the sale of our common stock to fund additional expenditures. The risky
nature of this enterprise and lack of tangible assets places debt financing
beyond the credit-worthiness required by most banks or typical investors of
corporate debt until such time as we generate revenues from our website
operations. We do not have any arrangements in place for any future equity
financing.

7

---

Revenues

We have not earned any revenues to date, and from inception to
December 31, 2005, we have suffered cumulative losses in the amount of
$309,515.

LIQUIDITY AND FINANCIAL CONDITION

Working Capital

|                          |                            |                         | Percentage           
|------------------------- | -------------------------- | ----------------------- | ---------------------
|                          | At December
      31, 2005 | At March
      31, 2005 | Increase / (Decrease)
|Current Assets            | $72,484                    | $4,014                  | 1,705.7%             
|Current Liabilities       | $222,532                   | $27,932                 | 696.7%               
|Working Capital (Deficit) | $(150,048)                 | $(23,918)               | (527.3)%             

Cash Flows

|                                                    | Nine Months Ended December 31
|--------------------------------------------------- | -----------------------------
|                                                    | 2005                         
|Cash Flows From Operating Activities                | $(155,012)                   
|Cash Flows From Financing Activities                | $203,518                     
|Net Increase (Decrease) in Cash During
      Period | $48,506                      

The decreases in our working capital surplus at December 31,
  2005 from our year ended March 31, 2005, and the increases in our cash used
  during the periods ended on December 31, 2005, from the comparable periods of
  the preceding fiscal year are primarily a result of the increase in our professional
  fees relating to our transaction with GSL.

Our former president and director made payments on behalf of
Digital to suppliers in the amount of $17,173. These amounts were advanced
without interest and were due on demand. On November 1, 2005, our former
president and director forgave the entire amount owing from us. As of December
31, 2005, G. Leigh Lyons, our current president and a director, is owed an
amount of $10,100 for consulting services rendered. This amount bears no
interest and is repayable on demand. We have also received non-cash services
from two officers and directors of Digital. Accordingly, consulting services
have been recorded in the amount of $18,000 and additional paid-in capital on
our financial statements accompanying this quarterly report have been increased
by the corresponding amount.

Loan Agreements with Carnavon Trust Reg.

On February 2, 2006, we entered into a loan agreement (the “Loan
  Agreement”) with Carnavon Trust Reg., a Liechtenstein domiciled discretionary
  trust, (“Carnavon”) of Aeulestrasse 5, FL-9490 Vaduz, Liechtenstein,
  pursuant to which we received a loan of $50,000. The loan accrues interest at
  a rate of twelve percent (12%) per annum and is for a term of one year. At the
  option of Carnavon, the loan or any portion thereof, may be converted into shares
  of Digital during the term of the loan agreement or upon maturity, at a price
  per share equal to the closing price of the our shares on the OTC Bulletin Board
  on the day preceding notice from Carnavon of its intention to convert. Prior
  to entering the Loan Agreement with Carnavon, we received from Carnavon a loan
  of $100,000 on December 5, 2005 and a loan of $100,000 on October 11, 2005,
  respectively, on terms identical to those of the Loan Agreement.

8

---

Future Financings

From inception to December 31, 2005, we have suffered
cumulative losses in the amount of $309,515. We expect to continue to incur
substantial losses as we continue the development of our business.

Since our inception, we have funded operations through common
stock issuances, related party loans, and the support of creditors in order to
meet our strategic objectives. Our management believes that sufficient funding
will be available to meet our business objectives and working capital needs and
are currently evaluating several financing options. However, there can be no
assurance that we will be able to obtain sufficient funds to continue the
development of and, if successful, to earn revenues from the operation of, our
website. As a result of the foregoing, our independent auditors believe there
exists a substantial doubt about our ability to continue as a going concern.

OFF-BALANCE SHEET ARRANGEMENTS

We have no off-balance sheet arrangements that have or are
reasonably likely to have a current or future effect on our financial condition,
changes in financial condition, revenues or expenses, results of operations,
liquidity, capital expenditures or capital resources.

CRITICAL ACCOUNTING POLICIES

We have identified certain accounting policies, described
below, that are the most important to the portrayal of our current financial
condition and results of operations.

Estimates

The preparation of our financial statements in conformity with
United States generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities as of the date
of the balance sheet and revenues and expenses for the reporting period. Actual
results in future periods could be different from these estimates made.

Start-Up and Development Costs

Since inception, certain expenditures have been incurred
primarily for product development, business development, market development and
financing purposes. While these expenditures are intended to benefit future
periods, we follow the accounting policy of expensing as incurred those
expenditures not identified with specific projects or financing activities.

Comprehensive Income (Loss)

SFAS No. 130 establishes standards for reporting comprehensive
income (loss) and its components in financial statements. Comprehensive loss, as
defined, includes all changes in equity (net assets) during a period from
non-owner sources. To date, we have not had any significant transactions that
are required to be reported in other comprehensive income (loss).

9

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RISKS AND UNCERTAINTIES

An investment in our common stock involves a high degree of
risk. You should carefully consider the risks described below and the other
information in this prospectus before investing in our common stock. If any of
the following risks occur, our business, operating results and financial
condition could be seriously harmed. The trading price of our common stock, when
and if we trade at a later date, could decline due to any of these risks, and
you may lose all or part of your investment.

We Have Yet To Attain Profitable Operations And Because We
Will Need Additional Financing To Fund The Development Of Our Website, Our
Accountants Believe There Is Substantial Doubt About Our Ability To Continue As
A Going Concern.

We have incurred a net loss of $309,515 for the period from
inception to December 31, 2005, and have earned no revenues to date. Our future
is dependent upon future profitable operations from our business. These factors
raise substantial doubt that we will be able to continue as a going concern. We
have cash in the amount of $52,520 as of December 31, 2005. Our total
expenditures over the next twelve months are anticipated to be approximately
$207,000, the majority of which is due to consulting fees and expenditures
related to general, legal, accounting and administrative expenses as a result of
our becoming a reporting issuer under the Exchange Act. We presently do not have
sufficient cash on hand to fund our proposed expenditures for the next twelve
months and will require additional financing. Further marketing and development
work on our website will also require additional funding in the event that our
cash on hand is insufficient for any additional work proposed.

Our financial statements included with this Quarterly Report
have been prepared assuming that we will continue as a going concern. If we are
not able to earn revenues, then we may not be able to continue as a going
concern and our financial condition and business prospects will be adversely
affected. These factors raise substantial doubt that we will be able to continue
as a going concern and adversely affect our ability to obtain additional
financing.

Our Short Operating History Makes our Business Difficult To
Evaluate, Accordingly, We Have A Limited Operating History Upon Which To Base An
Evaluation Of Our Business And Prospects.

We have a limited operating history upon which to base an
evaluation of our business and prospects. Our business and prospects must be
considered in light of the risks, expenses and difficulties frequently
encountered by companies in their early stage of development, particularly
companies in new and rapidly evolving markets such as electronic commerce. These
risks include: the initial completion of a developed product, the demand for the
companys product, the companys ability to adapt to rapid technological change,
the level of product and price competition, the companys success in setting up
and expanding distribution channels and whether the company can develop and
market new products and control costs.

To address these risks, we must successfully implement our
business plan and marketing strategies. We may not successfully implement all or
any of our business strategies or successfully address the risks and
uncertainties that we encounter.

We Have No Revenues, Accordingly, There Is No Assurance That
We Will Be Able To Generate Revenues From Sales Commissions And Advertising Or
That The Revenues Generated Will Exceed The Operating Costs Of Our Business.

Our business and marketing strategy contemplates that we will
earn a substantial portion of our revenues from sales commissions and
advertising. We have no history of earning revenues and there is no assurance
that we will be able to generate revenues from sales commissions and advertising
or that the revenues

10

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generated will exceed the operating costs of our business.
Customers may not accept our website as an acceptable source of water supply
services.

Operating Results Are Difficult To Predict, With The Result
That We May Not Achieve Profitability And Our Business May Fail.

Our future financial results are uncertain due to a number of
factors, many of which are outside our control. These factors include:

| | (1) | Our ability to successfully market our Website and the
      Water Business;                                                                        
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------
| | (2) | Our ability to generate revenue through the Website and
      the Water Business;                                                                   
| | (3) | The timing, cost and availability of services on Websites
      comparable to ours and other non- web services;                                     
| | (4) | The amount and timing of costs relating to expansion of
      our operations;                                                                       
| | (5) | The announcement or introduction of competing websites
      and products of competitors;                                                           
| | (6) | General economic conditions and economic conditions
      specific to the internet and electronic commerce; and                                     
| | (7) | Our ability to transition the business from the Water
      Business to the Oil and Gas Business, should we determine to pursue that
      strategy.

These factors could negatively impact on our financial results,
with the result that we may not achieve profitability and our business may fail.

We Will Require Additional Financing And May Not Be Able To
Continue Operations If Additional Financing Is Not Obtained.

As of December 31, 2005, we had cash in the amount of $52,520.
Our total expenditures over the next twelve months are anticipated to be
approximately $207,000 the majority of which is due to consulting fees and
general, legal, accounting and administrative expenses associated with our
becoming a reporting issuer under the Exchange Act. Further marketing and
development work on our Website will require additional funding in the event
that our current cash on hand is insufficient for any additional work proposed.
After the twelve month period, we will require additional financing for any
operational expenses and to pursue our plan of operation. We have no agreements
for additional financing and there can be no assurance that additional funding
will be available to us on acceptable terms in order to enable us to complete
our plan of operation.

Recognition Of The Website Is Essential To Growth Of The
Water Business, If We Are Unsuccessful In Building Strong Recognition Of The
Website, Then We May Not Be Able To Achieve Revenues.

We believe that the successful marketing, development and
promotion of our website is critical to our success in attracting customers.
Furthermore, we believe that the importance of customer awareness will increase
as low barriers to entry encourage the proliferation of websites. If we are
unsuccessful in building strong recognition of our website, then we may not be
able to achieve revenues. Our website is intended to be marketed through various
techniques including: search engine placement, opt-in newsletters, links, cross
branding and banner ads. Supplier candidates are expected to be identified for
each geographic region we have targeted. Candidates for supply or representation
agreements are expected to be bottled water companies. Alliances are intended to
be formed with local companies in the bottled industry in each area. A similar
process is intended to be followed in each region as we expand. The marketing
and promotion efforts contemplated by us may not be successful in creating
business awareness of the website or in enabling us to achieve revenues.

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We Will Rely On Our Internet Service Provider For The
Operation Of Our Business, If The Quality Of Products And Services Provided By
Our Internet Service Provider Falls Below A Satisfactory Standard, Our Business
Could Be Harmed.

Our current state of technology involves utilizing commercially
available licensed technology to operate our web portal, through Kekko
Enterprises Inc., the host and monitor of our Website and our internet service
provider. The hosting is run through a server called Hayasa Networks at
www.hayasa.com. The server is co-located in Kelowna, British Columbia and
connected to large local providers including SHAW BigPipe, TELUS Business
Internet services and other smaller local providers in the area.

We depend on our internet service provider for the following:

| | (1) | we do not own a gateway onto the internet, but instead
      rely on an internet service provider to connect the Website to the
      internet; and
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                    
| | (2) | the Website depends on operating system, database, and
      server software that has been developed, produced by third
  parties.                 

We are not substantially dependent on any third party. We have
no formal agreements with our internet service provider and do not anticipate
any difficulty in locating another internet service provider in the event we
experience any disruption in service. However, if we are unable to locate
another internet service provider within a sufficient amount of time, or if the
quality of products and services provided by such third parties falls below a
satisfactory standard, our business could be harmed. A disruption in service,
whether due to internal technical or external factors, could result in customer
dissatisfaction and loss of credibility. Also, our loss of or inability to
maintain or obtain upgrades to certain licensed technology could result in
delays in developing our systems until equivalent technology could be identified
or developed, and integrated.

We Depend On Recruiting And Retaining Qualified Personnel
And The Inability To Do So Would Seriously Harm Our Business.

Our success is dependent in part on the services of certain key
management personnel, including G. Leigh Lyons, our sole director and officer.
We presently do not have any formal or written agreements with our key
management personnel providing services to us. The experience of our management
is an important factor contributing to our success and growth and the loss of
our management could have a material adverse effect on our company. Our future
success also depends on our attracting, retaining and motivating highly skilled
personnel and we may be unable to retain our key personnel or attract,
assimilate or retain other highly qualified personnel in the future.

We may also experience difficulty in hiring and retaining
highly skilled consultants with appropriate qualifications. Because of the
technical nature of our products and services and the market in which we
compete, our success depends on the continued services of our current executive
officers and our ability to attract and retain qualified personnel in the
information technology industry. Competition for qualified personnel in the
information technology industry is intense. Even if we invest significant
resources to recruit, train and retain qualified personnel, we may not be
successful in our efforts.

A Disruption In Our Hosting Services, Whether Due To
Internal Technical Or External Factors, Could Result In Customer Dissatisfaction
And Loss Of Credibility.

Substantially all of our communications software and hardware
and computer hardware is expected to be hosted at a remote facility in
Vancouver, British Columbia. The hosts systems are vulnerable to damage from
earthquake, fire, floods, power loss, telecommunications failures, break-ins and
similar events. Despite the hosts implementation of network security measures,
its servers may also be vulnerable to computer

12

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viruses, physical or electronic break-ins, attempts by third
parties deliberately to exceed the capacity of the hosts systems and similar
disruptive problems. A disruption in service, whether due to internal technical
or external factors, could result in customer dissatisfaction and loss of
credibility. We do not have property and business interruption insurance to
compensate for losses that may occur resulting from such problems.

We May Not Be Able To Protect Our Proprietary Rights, And
Our Inability Or Failure To Do So Could Result In Loss Of Competitive And
Commercial Advantages That We Hold.

Our performance and ability to compete are dependent to a
significant degree on our ability to protect and enforce our intellectual
property rights. Presently our intellectual property consists of our domain name
www.digitalecosystems.com and our trade name Digital Ecosystems.

We may not be able to protect our proprietary rights, and our
inability or failure to do so could result in loss of competitive and commercial
advantages that we hold. Additionally, we may choose to litigate to protect our
intellectual property rights, which could result in a significant cost of
resources and money. We cannot assure success in any such litigation that we
might undertake.

Because We Are Significantly Smaller And Less Established
Than A Majority Of Our Competitors, We May Lack The Financial Resources
Necessary To Compete Effectively And Sustain Profitability.

We operate in competitive, fragmented industries and compete
for clients with a variety of larger and smaller companies that offer similar
products and services. Many of these competitors are more established, offer
more products, services and features, have a greater number of clients,
locations, and employees, and also have significantly greater financial,
technical, marketing, public relations, name recognition, and other resources
than we have. While our objective is to continue to develop our Website, we
currently or potentially compete with a variety of competitors involved in
providing services via the internet. These competitors include:

| | (1) | http://www.culligan.com/       
| | --- | -------------------------------
| | (2) | http://www.pentawater.com/     
| | (3) | http://www.waternet.com/       
| | (4) | http://www.lakotawater.com/    
| | (5) | http://www.purewaterinc.com/   
| | (6) | http://www.bottledwaterweb.com/
| | (7) | http://www.allwater.com/       

There are a number of web based water sites that offer similar
content and services to us. They are, however, usually concerned with either
contextual education such as current events related to the water industry, and
or they sell only one particular product. We intend to aggregate a considerable
line of products both in the bottled water sector and in the preparation of
clean water with filters, reverse osmosis or desalination products.

Increased competition may result in the reduction in
advertising fees, the reduction of use of the Website and the inability of our
company to generate acceptance of the Website. Each of these factors would
likely result in increased operating costs and the inability to generate
revenues, any one of which could materially adversely affect our business,
results of operations and financial condition. Many of our current and potential
competitors have significantly greater financial, marketing, customer support,
technical and other resources than us. As a result, such competitors may be able
to attract potential users away from the Website, and they may be able to
respond more quickly to changes in customer preferences or to devote greater
resources to the development and promotion of their websites than we can.

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Because Our Stock Is A Penny Stock, Stockholders Will Be
More Limited In Their Ability To Sell Their Stock.

The shares of our common stock constitute penny stocks under
the Exchange Act. The shares will remain classified as a penny stock for the
foreseeable future. The classification as a penny stock makes it more difficult
for a broker/dealer to sell the stock into a secondary market, which makes it
more difficult for a purchaser to liquidate his or her investment. Any
broker/dealer engaged by the purchaser for the purpose of selling his or her
shares will be subject to rules 15g-1 through 15g-10 of the Exchange Act. Rather
than having to comply with these rules, some broker-dealers will refuse to
attempt to sell a penny stock.

The "penny stock" rules adopted by the SEC under the Exchange
Act subjects the sale of the shares of our common stock to certain regulations
which impose sales practice requirements on broker/dealers. For example,
brokers/dealers selling such securities must, prior to effecting the
transaction, provide their customers with a document that discloses the risks of
investing in such securities.

Legal remedies, which may be available to you as an investor in
"penny stocks", are as follows:

|(a) | if "penny stock" is sold to you in violation of your
      rights listed above, or other federal or states securities laws, you may
      be able to cancel your purchase and get your money back.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                   
|(b) | if the stocks are sold in a fraudulent manner, you may be
      able to sue the persons and firms that caused the fraud for
  damages.                                                            
|    |                                                                                                                                                                                                   
|(c) | if you have signed an arbitration agreement, however, you
      may have to pursue your claim through arbitration.                                                                                

If the person purchasing the securities is someone other than
an accredited investor or an established customer of the broker/dealer, the
broker/dealer must also approve the potential customer's account by obtaining
information concerning the customer's financial situation, investment experience
and investment objectives. The broker/dealer must also make a determination
whether the transaction is suitable for the customer and whether the customer
has sufficient knowledge and experience in financial matters to be reasonably
expected to be capable of evaluating the risk of transactions in such
securities. Accordingly, the SEC's rules may limit the number of potential
purchasers of the shares of our common stock.

ITEM 3. CONTROLS AND PROCEDURES.

Evaluation Of Disclosure Controls And Procedures

As of the end of the period covered by this report, our
management carried out an evaluation, under the supervision and with the
participation of our principal executive officer and principal financial
officer, of the effectiveness of the design and operation of our disclosure
controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the
Exchange Act). Based on this evaluation, our principal executive officer and
principal financial officer has concluded that our disclosure controls and
procedures are, as of the date covered by this Quarterly Report, effective to
ensure that the information required to be disclosed by us in the reports that
we file or submit under the Exchange Act is recorded, processed, summarized and
reported within the time periods specified in the SEC rules and forms.

Changes In Internal Controls Over Financial Reporting

In connection with the evaluation of our internal controls
during our last fiscal quarter, our principal executive officer and principal
financial officer has determined that there have been no changes to our

14

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internal controls over financial reporting that has materially
affected, or is reasonably likely to materially affect, our internal controls
over financial reporting.

15

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PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

None.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF
PROCEEDS.

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.

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

|Exhibit Number | Description of Exhibits                                                                                                                                                                                 
|-------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
|3.1            | Articles of Incorporation.(1)                                                                                                                                                                           
|3.2            | Certificate of Change to Authorized Capital Pursuant to NRS
      78.209.(3)                                                                                                                            
|3.3            | Bylaws, as amended.(1)                                                                                                                                                                                  
|4.1            | Form of Share Certificate.(1)                                                                                                                                                                           
|10.1           | Business Consultant Agreement dated October 1, 2005.(4)                                                                                                                                                 
|10.2           | Marketing Management Contract dated October 15, 2005.(4)                                                                                                                                                
|10.3           | Loan Agreement dated for reference October 11, 2005
      between Carnavon Trust Reg. and Digital Ecosystems Corp.(5)                                                                                   
|
|10.4           | Letter of Intent dated November 18, 2005 between
      GSL Energy Corporation and Digital Ecosystems Corp. (6)                                                                                          
|
|10.5           | Amendment to Letter of Intent dated November 18,
      2005 between GSL Energy Corporation and Digital Ecosystems Corp.(7)                                                                              
|
|10.6           | Loan Agreement dated for
      reference December 5, 2006 between Carnavon Trust Reg. and Digital Ecosystems
      Corp.                                                                                
|
|10.7           | Loan Agreement dated for
      reference February 2, 2006 between Carnavon Trust Reg. and Digital Ecosystems
      Corp.                                                                                
|
|10.8           | Stock Exchange Agreement
      dated February 10, 2006 between Digital Ecosystems Corp., GSL Energy Corporation,
      MABio Materials Corporation and MAB Resources LLC                                
|
|14.1           | Code of Ethics.(2)                                                                                                                                                                                      
|31.1           | Certification of Principal
      Executive Officer and Principal Financial Officer pursuant to Section 302
      of the Sarbanes-Oxley Act of 2002.                                                     
|
|32.1           | Certification of Principal
      Executive Officer and Principal Financial Officer pursuant to 18 U.S.C.
      Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act
      of 2002.
|

Notes

|(1) | Filed with the SEC as an exhibit to our Registration
      Statement on Form SB-2 originally filed on September 16, 2004, as
      amended.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------
|(2) | Filed with the SEC as an exhibit to our Annual Report on
      Form 10-KSB filed on July 13, 2005.                                         
|(3) | Filed with the SEC as an exhibit to our Current Report on
      Form 8-K filed on September 20, 2005.                                      
|(4) | Filed with the SEC as an exhibit to our Current Report on
      Form 8-K filed on October 28, 2005.                                        
|(5) | Filed with the SEC as an exhibit to our Quarterly Report
      on Form 10-QSB filed on November 21, 2005.                                  
|(6) | Filed with the SEC as an exhibit to our Current Report on
      Form 8-K filed on November 25, 2005.                                       
|(7) | Filed with the SEC as an exhibit to our Current Report on
      Form 8-K filed on January 4, 2006.                                         

17

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REPORTS ON FORM 8-K

The following Current Reports on Form 8-K were filed since the
beginning of the quarterly period ended December 31, 2005:

Date of Report
        on Form 8-K (YYYY/MM/D D)
      Date of Filing
        with the SEC (YYYY/MM/D D)
      Description of the Form 8-K2005/10/01
      2005/10/28
      Item 1.01 - Entry Into Consulting Agreement and Entry
        Into Marketing Agreement.2005/11/18
      2005/11/25
      Item 1.01 - Entry Into Material Definitive
        Agreement - Letter of Intent dated November 18, 2005 with GSL Energy Corporation.2005/12/30
      2006/01/04
      Item 1.01 - Entry Into Material Definitive
        Agreement  Amendment to Letter of Intent with GSL Energy Corporation;
        
        Item 7.01 - Regulation F-D Disclosure 
      postponement of special meeting.2006/01/03
      2006/01/10
      Item 5.02 - Appointment of Allan Laird as additional
        Director.


18

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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 ECOSYSTEMS CORP.                           
|----- | ----------------- |  | --- | ---------------------------------------------------
|      |                   |  |     |                                                    
|      |                   |  |     |                                                    
|      |                   |  |     |                                                    
|Date: | February 16, 2006 |  | By: | */s/
      G. Leigh Lyons*                         
|      |                   |  |     | G. LEIGH LYONS                                     
|      |                   |  |     | President, Secretary, Treasurer,                   
|      |                   |  |     | Chief Executive Officer and Chief Financial Officer
|      |                   |  |     | Director                                           
|      |                   |  |     | (Principal Executive Officer)                      
|      |                   |  |     | (Principal Accounting Officer)                     

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