UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                   FORM 10-KSB
(Mark  One)

[X]     ANNUAL  REPORT  UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
        OF  1934

                   For the fiscal year ended February 29, 2004

[ ]     TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
        ACT  OF  1934
                     For  the  transition  period          to

                         Commission file number 0-50107
                              DAYBREAK MINES, INC.
                 (Name of small business issuer in its charter)

              WASHINGTON                                91-0626366
   (State or other jurisdiction                     (I.R.S. Employer
   of incorporation or organization)               Identification No.)

      805  Mullan  Ave.;  P.O.  Box  370,  Osburn,  Idaho      83849
      (Address  of  principal  executive  offices)     (Zip  code)

         Issuer's telephone number, including area code:  (208) 556-1139

         Securities registered under Section 12(b) of the Exchange Act:
                                      None

         Securities registered under Section 12(g) of the Exchange Act:
                    Common Stock, par value $0.001 per share

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 12 months (or for such shorter
period  that the registrant was required to file such reports), and (2) has been
subject  to  such  filing  requirements  for  the  past  90  days.
Yes     X          No
                   --

Check  if there is no disclosure of delinquent filers in response to Item 405 of
Regulation  S-B  contained  in this form and no disclosure will be contained, to
the  best  of  registrant's  knowledge,  in  definitive  proxy  or  information
statements  incorporated  by  reference  in  Part III of this Form 10-KSB or any
amendment  to  this  Form  10-KSB.  [X]

The  registrant's  revenues  for  its  most  recent  fiscal  year  were  $0.

The  aggregate  market  value  of  the  voting  and  non-voting  stock  held  by
non-affiliates of the registrant, based on the average bid and ask price of $.08
on  April  28,  2004,  as  reported  by  the  Over the Counter "Pink Sheets" was
$744,884.

At  April  28,  2004, the registrant had 18,119,419 outstanding shares of $0.001
par  value  common  stock.


<PAGE>

                                TABLE OF CONTENTS

                                     PART I
<TABLE>
<CAPTION>


<S>                    <C>                                              <C>
ITEM 1.    DESCRIPTION OF BUSINESS                                       3


ITEM 2.    DESCRIPTION OF PROPERTIES                                     6


ITEM 3.    LEGAL PROCEEDINGS                                             6

ITEM 4.    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS           6

                                    PART II

ITEM 5.    MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS      7

ITEM 6.    MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS    7

ITEM 7.    FINANCIAL STATEMENTS                                         12

ITEM 8.    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
           AND FINANCIAL DISCLOSURE                                     24

ITEM 8A    CONTROLS AND PROCEDURES                                      24

                                   PART III

ITEM 9.    DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS,
           COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT.           25

ITEM 10.   EXECUTIVE COMPENSATION                                       25

ITEM 11.   SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
           AND MANAGEMENT                                               26

ITEM 12.   CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS               27

ITEM 13.   EXHIBITS AND REPORTS ON FORM 8-K                             28

ITEM 14.   PRINCIPLE ACCOUNTANT FEES AND SERVICES                       28

SIGNATURES                                                              35

CERTIFICATIONS                                                          36


</TABLE>


                              2

<PAGE>

                                     PART I

ITEM  1.  DESCRIPTION  OF  BUSINESS

GENERAL

Matters  discussed  in  this document may constitute forward-looking statements.
The  Private  Securities  Litigation  Reform  Act  of  1995 provides safe harbor
protections  for  forward-looking  statements in order to encourage companies to
provide  prospective  information  about  their  businesses.  Forward-looking
statements  include  statements concerning plans, objectives, goals, strategies,
future  events  or performance, and underlying assumptions and other statements,
which  are  other  than  statements  of  historical  facts.

Daybreak  Mines, Inc. desires to take advantage of the safe harbor provisions of
the  Private  Securities  Litigation  Reform  Act  of 1995 and is including this
cautionary  statement  in  connection  with  this  safe harbor legislation. This
document  and  any  other written or oral statements made by us or on our behalf
may  include  forward-looking  statements,  which reflect our current views with
respect  to  future  events  and  financial  performance.  The  words "believe,"
"expect,"  "anticipate,"  "intends,"  "estimates,"  "forecast,"  "project"  and
similar  expressions  identify  forward-looking  statements.

The  forward-looking  statements  in  this  document  are  based  upon  various
assumptions,  many  of  which  are  based,  in  turn,  upon further assumptions,
including  without  limitation,  management's discussion and analysis or plan of
operations  and  elsewhere  in  this  report.  Although  we  believe  that these
assumptions  were  reasonable  when made, these statements are not guarantees of
future  performance  and  are  subject to certain risks, uncertainties and other
factors,  some  of  which  are  beyond our control, are difficult to predict and
could  cause  actual  results  to  differ  materially  from  those  expressed or
forecasted in the forward-looking statements. Readers are cautioned not to place
undue  reliance  on  these  forward-looking  statements,  which  reflect  our
management's  view  only  as  of  the  date  of  this  report.

HISTORY

Daybreak Mines, Inc. (hereinafter "the Company") was incorporated under the laws
of  the  State of Washington on March 11, 1955. The Company was originally named
Daybreak  Uranium,  Inc.  The Company was organized primarily for the purpose of
exploring  for, acquiring and developing mineral properties with a potential for
production.  The  Company  was  engaged  in  small scale open pit uranium mining
operations  in  the mid to late 1950s in Spokane County, Washington. By the late
1950s  the  Company  had  ceased to be a producing mining company and thereafter
engaged  in  mineral  exploration. In the 1960s the Company expanded its mineral
property  holdings  to  include  silver  mineral properties in the Coeur d'Alene
Mining  District.  To reflect the diversity of its mineral holdings, the Company
changed  its  name  to  Daybreak  Mines,  Inc. in 1967. The Company's subsequent
efforts  in  the  acquisition, exploration and development of potentially viable
and commercial properties were unsuccessful. We have conducted no active mineral
exploration or other active business operations since 1970. During this time our
activities  have  been confined to annual assessment and maintenance work on our
Idaho  mineral  properties  and  other  general and administrative functions. We
currently hold the mineral rights to approximately 340 acres in Shoshone County,
Idaho.  There  are no known proven or probable ore reserves on our property. The
Company does not intend to conduct any exploration activities on the property in
Shoshone  County.  It  is  the  Company's intention to lease or sell its mineral
rights  in  the  property.  Our offices are located at 805 Mullan Ave., P.O. Box
370,  Osburn,  ID,  83849.
                                             3
<PAGE>


HISTORY  (CONTINUED)

Due  to  depressed  prices  for  precious  metals,  lack of a financable mineral
exploration  property  and  the  general  consensus that it would not be able to
finance  any  mineral  exploration  properties  it  might  acquire, the Board of
Directors  of  the  Company  decided  in 2001 not to pursue any further business
operations  in  the  natural  resources  sector  and to implement a new business
direction  for the Company as described in "Management's Discussion and Analysis
or  Plan  of  Operation."

In  September  2001 the Board of Directors authorized a private placement of the
Company's  common  Stock to raise $55,000. The proceeds were utilized to pay for
legal  and  accounting fees associated with the preparation and filing of a Form
10SB  registration  Statement, to pay ongoing expenses related to complying with
the  reporting  requirements  of  the  Securities  Exchange  Act  of 1934, (i.e.
preparation  of  audited  financial statements and periodic reports) and working
capital.  An  additional  private  placement  was  conducted in 2003 to raise an
additional  $25,000.  The  proceeds  of  the  offering  will  be utilized to pay
expenses  relating  to  the  Company's  ongoing reporting requirements under the
Securities  Exchange  Act  of  1934.

RISK  FACTORS

The  Company's  business  is  subject  to  numerous  risk factors, including the
following:

Independent  Certified  Public  Accountants'  Opinion  -  Going  Concern
------------------------------------------------------------------------

The  Company's  financial  statements  for the years ended February 29, 2004 and
February  28,  2002,  were audited by the Company's independent certified public
accountants,  whose  report  includes  an explanatory paragraph stating that the
financial  statements have been prepared assuming the Company will continue as a
going  concern  and  that  the Company has incurred significant operating losses
that  raise  substantial doubt about its ability to continue as a going concern.

No  Revenue  and  Minimal  Assets
---------------------------------

The  Company has had no revenues or earnings from operations. The Company has no
significant  assets or financial resources. The Company will, in all likelihood,
sustain  operating  expenses  without corresponding revenues, at least until the
consummation  of  a business combination. This may result in our incurring a net
operating  loss  which  will  increase  continuously  until  we can consummate a
business  combination  with  a  profitable  business  opportunity.  There  is no
assurance that we can identify such a business opportunity and consummate such a
business  combination.

Speculative  Nature  of  Company's  Proposed  Operations
--------------------------------------------------------

The  success of the Company's proposed plan of operation will depend, to a great
extent,  on the operations, financial condition and management of the identified
business  opportunity.  While  management  intends to seek business combinations
with  entities having established operating histories, there can be no assurance
that  the  Company  will  be  successful  in  locating  candidates  meeting such
criteria.  In  the  event  that the Company completes a business combination, of
which there can be no assurance, the success of operations may be dependent upon
management  of  the  successor  firm  or venture partner firm and numerous other
factors  beyond  the  Company's  control.
                                        4


<PAGE>


Scarcity  of  and  Competition  for  Business  Opportunities  and  Combinations
-------------------------------------------------------------------------------

The  Company  is  and  will  continue  to be an insignificant participant in the
business  of seeking mergers with, joint ventures with and acquisitions of small
private  entities.  A  large  number  of established and well-financed entities,
including  venture  capital  firms,  are  active  in mergers and acquisitions of
companies  which  may  be  desirable  target  candidates for us. Nearly all such
entities have significantly greater financial resources, technical expertise and
managerial capabilities than Daybreak Mines, Inc. and, consequently, the Company
will  be  at  a  competitive  disadvantage  in  identifying  possible  business
opportunities  and successfully completing a business combination. Moreover, the
Company  will  also  compete  in  seeking  merger or acquisition candidates with
numerous  other  small  public  companies.

Continued  Management  Control,  Limited  Time  Availability
------------------------------------------------------------

While  seeking  a  business  combination,  management anticipates devoting up to
twenty  hours  per  month to the business of the Company. The Company's officers
have not entered into written employment agreements with the Company and are not
expected  to  do  so in the foreseeable future. The Company has not obtained key
man  life  insurance  on  any  of its officers or directors. Notwithstanding the
combined  limited  experience  and  time  commitment  of management, loss of the
services  of  any of these individuals would adversely affect development of the
Company's  business  and  its  likelihood  of  continuing  operations.

Conflicts  of  Interest  -  General
-----------------------------------

The  Company's  officers  and  directors  participate in other business ventures
which  compete  directly  with the Company. Additional conflicts of interest and
non-arms  length  transactions  may  also  arise  in the future in the event the
Company's  officers or directors are involved in the management of any firm with
which  the  Company  transacts  business.

Lack  of  Market  Research  or  Marketing  Organization
-------------------------------------------------------

The Company has neither conducted, nor have others made available to it, results
of  market  research  indicating  that market demand exists for the transactions
contemplated by the Company. Even in the event demand is identified for a merger
or  acquisition  contemplated  by the Company, there is no assurance the Company
will  be  successful  in  completing  any  such  business  combination.

Probable  Change  in  Control  and  Management
----------------------------------------------

A  business  combination  involving the issuance of the Company's stock will, in
all  likelihood,  result  in  shareholders  of  a  private  company  obtaining a
controlling  interest  in  the  Company.  The resulting change in control of the
Company  will  likely  result  in  removal  of  one or more present officers and
directors and a corresponding reduction in or elimination of their participation
in  the  future  affairs  of  the  Company.

Reduction  of  Percentage  Share  Ownership  Following  Business  Combination
-----------------------------------------------------------------------------

The  Company's  primary  plan  of operation is based upon a business combination
with  a  private  concern  which, in all likelihood, would result in the Company
issuing  securities  to  shareholders  of  such private company. The issuance of
previously  authorized  and unissued common stock of the Company would result in
reduction  in percentage of shares owned by present and prospective shareholders
of the Company and would most likely result in a change in control or management
of  the  Company.

                              5
<PAGE>

Requirement  of  Audited  Financial  Statements  May  Disqualify  Business
--------------------------------------------------------------------------
Opportunities
-------------

Management  of the Company believes that any potential business opportunity must
provide  audited  financial statements for review, and for the protection of all
parties  to  the  business  combination.  One  or  more  attractive  business
opportunities  may  choose  to  forego the possibility of a business combination
with  the  Company,  rather  than  incur  the expenses associated with preparing
audited  financial  statements.

Employees
---------

The  Company has no paid employees. None of the Company's executive officers are
employed  by  the  Company.  Management  services are provided on an "as needed"
basis without compensation, generally less than five hours per week. The Company
has  no  oral  or  written contracts for services with any member of management.

There  is  no  preliminary  agreement  or  understanding  existing  or  under
contemplation by the Company (or any person acting on its behalf) concerning any
aspect  of the Company's operations pursuant to which any person would be hired,
compensated  or  paid  a  finder's  fee.

ITEM  2.  DESCRIPTION  OF  PROPERTIES

The  Company  currently  holds  the mineral rights to approximately 340 acres in
Shoshone  County,  Idaho.  There are no known proven or probable ore reserves on
this  property. The Company has conducted no active mineral exploration or other
active  business  operations  since  1970.

The  Company  presently operates from office space provided on a rent-free basis
by  the  president  of  the  Company.  In  the  event  that  this  space becomes
unavailable  in  the future, the Company will seek to lease office space from an
unaffiliated  party  at  prevailing  competitive  rates.

ITEM  3.  LEGAL  PROCEEDINGS

None

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

None











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                                            6
<PAGE>


                                     PART II

ITEM  5.  MARKET  FOR  COMMON  EQUITY  AND  RELATED  STOCKHOLDER  MATTERS

The  Common Stock of the Company is traded in the over the counter market on the
Pink  Sheets under the symbol "DBRM". The following table shows the high and low
closing  sales  prices  for  the  Common  Stock  for  each  fiscal quarter since
commencing  with  the  fiscal  year  starting  on  March 1, 2001. The quotations
reflect inter-dealer prices, without retail mark-up, mark-down or commission and
may  not  represent  actual  transactions.
<TABLE>
<CAPTION>


<S>                 <C>           <C>
Fiscal Year Ending      High Closing  Low Closing
------------------     ------------- ------------

February 28, 2003
First Quarter. . .           .06          .05
Second Quarter . .           .07          .06
Third Quarter. . .           .08          .07
Fourth Quarter . .           .08          .07


Fiscal Year Ending  High Closing  Low Closing

February 29, 2004
First Quarter. . .           .05          .04
Second Quarter . .           .08          .05
Third Quarter. . .           .07          .05
Fourth Quarter . .           .10          .07
</TABLE>




The Company has not declared or paid cash dividends or made distributions in the
past,  and  the  Company  does not anticipate that it will pay cash dividends or
make  distributions  in  the  foreseeable  future.

ITEM  6.     MANAGEMENT'S  DISCUSSION  AND  ANALYSIS  OR  PLAN  OF  OPERATIONS

GENERAL
-------

Certain  matters discussed are forward-looking statements that involve risks and
uncertainties  including  changing  market  conditions  and  the  regulatory
environment  and  other  risks.  Actual results may differ materially from those
projected.  These forward-looking statements represent the Company's judgment as
of  the  date  of  this  filing.  The  Company disclaims, however, any intent or
obligation  to  update  these  forward-looking  statements.





          [The balance of this page has been intentionally left blank.]


                                  7
<PAGE>


PLAN  OF  OPERATION.

We  intend to seek to acquire the assets or shares of an entity actively engaged
in  business  in exchange for our securities. We have no particular acquisitions
in  mind  and  have  not  entered  into  any  negotiations  regarding  such  an
acquisition.  None  of  our  officers,  directors,  promoters or affiliates have
engaged in any preliminary contact or discussions with any representative of any
other  company  regarding the possibility of an acquisition or merger between us
and  such  other company as of the date of this registration statement. While we
will attempt to obtain audited financial statements of a target entity, there is
no assurance that such audited financial statements will be available. The Board
of  Directors  does  intend  to obtain certain assurances of value of the target
entity's  assets  prior  to  consummating  such  a  transaction,  with  further
assurances  that an audited statement would be provided within seventy-five days
after  closing  of  such  a  transaction.  We  have  no full time employees. Our
officers  have  agreed  to  allocate  a  portion of their time to our activities
without  compensation.  Management  anticipates  that  our  business plan can be
implemented  by  an  officer  devoting an aggregate of approximately 5 hours per
week to our business affairs. Consequently, conflicts of interest may arise with
respect  to  the  limited  time  commitment  by  such officers. In addition, our
officers and directors may, in the future, become involved with other companies,
which  have  a business purpose similar to that of ours. As a result, additional
conflicts  of  interest  may  arise  in  the  future.

We  are filing this registration statement under the Exchange Act on a voluntary
basis  because  management  believes  that  our  primary  attraction as a merger
partner  or  acquisition vehicle will be our status as an SEC reporting company.
Any  business  combination  or  transaction  will likely result in a significant
issuance  of  shares  and  substantial  dilution  to  our  present stockholders.

GENERAL  BUSINESS  PLAN.

Our purpose is to seek, investigate and, if such investigation warrants, acquire
an  interest  in  a  business  opportunity  which  desires to seek the perceived
advantages  of  an Exchange Act registered corporation. We will not restrict our
search  to  any specific business, industry, or geographical location and we may
participate  in a business venture of virtually any kind or nature. However, the
Board  of  Directors  has adopted a resolution that prohibits any acquisition or
merger  with  a business or company in which the Company's promoters, management
or  their  affiliates  or  associates  directly  or indirectly have an ownership
interest.  Because there is no legal prohibition against such transactions, this
policy  could be rescinded by the Board of Directors if it deemed such action to
be  in  the  best  interest of the shareholders. This discussion of the proposed
business  is  purposefully  general  and  is  not meant to be restrictive of our
virtually  unlimited  discretion to search for and enter into potential business
opportunities.  Management  anticipates  that  it will be able to participate in
only  one  potential business venture because we have nominal assets and limited
financial  resources.  This  lack  of  diversification  should  be  considered a
substantial  risk  to  our  shareholders because it will not permit us to offset
potential  losses  from  one  venture  against gains from another. We may seek a
business  opportunity with entities which have recently commenced operations, or
that wish to utilize the public marketplace in order to raise additional capital
in  order  to  expand  into new products or markets, to develop a new product or
service, or for other corporate purposes. The primary method we will use to find
potential  merger  or  acquisition  candidates  will  be  to  periodically  run
classified ads in the Wall Street Journal seeking companies which are looking to
merge  with  a  public  shell.  We  anticipate  that the selection of a business
opportunity  in which to participate will be complex and extremely risky. Due to
general  economic  conditions,  rapid  technological advances being made in some
industries  and  shortages  of available capital, management believes that there
are  numerous  firms  seeking  the  perceived  benefits of a publicly registered
corporation.

                                  8
<PAGE>

GENERAL  BUSINESS  PLAN.  (CONTINUED)

Such perceived benefits may include facilitating or improving the terms on which
additional  equity  financing  may  be sought, providing liquidity for incentive
stock options or similar benefits to key employees, providing liquidity (subject
to  restrictions of applicable statutes) for all shareholders and other factors.
Business  opportunities  may  be  available  in many different industries and at
various  stages  of  development, all of which will make the task of comparative
investigation  and  analysis  of such business opportunities extremely difficult
and  complex.  We have, and will continue to have, minimal capital with which to
provide  the owners of business opportunities with any significant cash or other
assets.  However,  management  believes  we  will  be  able  to  offer owners of
acquisition  candidates  the  opportunity  to  acquire  a  controlling ownership
interest  in  a  publicly registered company without incurring the cost and time
required  to  conduct  an  initial  Public  Offering. The owners of the business
opportunities  will,  however,  incur  significant legal and accounting costs in
connection  with  the acquisition of a business opportunity, including the costs
of  preparing Form 8-K's, 10-K's or 10-KSB's, agreements and related reports and
documents.  The  Securities  Exchange  Act  of 1934 (the "34 Act"), specifically
requires  that  any  merger  or acquisition candidate comply with all applicable
reporting  requirements, which include providing audited financial statements to
be  included  within the numerous filings relevant to complying with the 34 Act.
The  analysis  of new business opportunities will be undertaken by, or under the
supervision  of,  our  officers  and  directors,  none of whom is a professional
business  analyst.  Management intends to concentrate on identifying preliminary
prospective business opportunities which may be brought to its attention through
present associations of our officers or through advertising our availability for
acquisition.  In  analyzing  prospective business opportunities, management will
consider  such  matters  as  the  available  technical, financial and managerial
resources;  working  capital  and  other  financial  requirements;  history  of
operations,  if  any;  prospects  for the future; nature of present and expected
competition;  the  quality  and  experience  of management services which may be
available  and the depth of that management; the potential for further research,
development, or exploration; specific risk factors not now foreseeable but which
then  may  be  anticipated  to impact our proposed activities; the potential for
growth  or expansion; the potential for profit; the perceived public recognition
or  acceptance  of products, services, or trades; name identification; and other
relevant  factors.  We  will  not  acquire  or  merge with any company for which
audited  financial  statements cannot be obtained within the time frame required
by  federal securities laws. Our management, while not especially experienced in
matters relating to our new business, will rely primarily upon their own efforts
to  accomplish  our  business purposes. There are no arrangements, agreements or
understandings  between  non-management  shareholders and management under which
non-management  shareholders  may  directly  or  indirectly  participate  in  or
influence  the  management  of  the  Company's affairs. There is no agreement or
understanding that non-management shareholders will exercise their voting rights
to continue to elect the current directors to the Company's board. The Company's
officers,  directors  or  affiliates have not used any particular consultants or
advisors  on  a  regular  basis  and  there  is no intention that any particular
consultant  or  advisor  will  be  hired by the Company in the future. It is not
anticipated  that  any  outside  consultants  or  advisors, other than our legal
counsel  and  accountants,  will  be  utilized  by us to effectuate our business
purposes  described  herein. However, if we do retain such an outside consultant
or  advisor,  any  cash fee earned by such party will be paid by the prospective
merger/acquisition  candidate,  as we have limited cash assets with which to pay
such  obligation.  There  have been no discussions, understandings, contracts or
agreements  with any outside consultants and none are anticipated in the future.
The  Directors  have adopted a resolution prohibiting the Company from borrowing
funds  and  using  the  proceeds  therefrom  to  make  payments to the Company's
promoters,  management  or  their affiliates or associates. In no event will any
consultant or finders' fees be paid to any member of the Company's management or
any  of the Company's principal shareholders. We will not restrict our search to
any  specific industry, but may acquire a venture which is in its preliminary or

                           9
<PAGE>

GENERAL  BUSINESS  PLAN.  (CONTINUED)

development stage, which is already in operation, or in essentially any stage of
its corporate life. It is impossible to predict, at this time, the status of any
business  in which we may become engaged, in that such business may need to seek
additional  capital,  may desire to have its shares publicly traded, or may seek
other  perceived  advantages  which  we  may offer. However, we do not intend to
obtain  funds  in  one  or  more  private  placements,  public offerings or loan
transactions to finance the operation of any acquired business opportunity until
such  time as we have successfully consummated such a merger or acquisition. All
transactions  in  securities  affected in connection with the Company's business
model  will  be effected by a registered broker-dealer. There are no preliminary
agreements  or understandings between the Company and its officers and directors
or  affiliates  or lending institutions with respect to any loan agreements. The
Company  will  not  enter  into any loan transactions to loan money to or borrow
money  from  any  prospective  merger  or  acquisition  candidates  or  to  an
unaffiliated  third  party. We also have no plans to conduct any offerings under
Regulation  S.

ACQUISITION  OF  OPPORTUNITIES.

In implementing a structure for a particular business acquisition, we may become
a  party to a merger, consolidation, reorganization, joint venture, or licensing
agreement  with  another  corporation  or  entity.  We may also acquire stock or
assets  of  an  existing  business.  On the consummation of a transaction, it is
probable  that  our  present  management  and  shareholders will no longer be in
control. In addition, our directors may, as part of the terms of the acquisition
transaction,  resign  and  be  replaced  by  new directors without a vote of our
shareholders.  It  is  anticipated  that  any  securities  issued  in  any  such
reorganization  would  be  issued  in  reliance upon exemption from registration
under  applicable  federal  and  state  securities  laws. In some circumstances,
however,  as  a  negotiated element of the transaction, we may agree to register
all  or  a  part  of  such  securities  immediately  after  the  transaction  is
consummated  or  at  specified times thereafter. If such registration occurs, of
which  there  can be no assurance, it will be undertaken by the surviving entity
after  we  have  successfully  consummated a merger or acquisition and we are no
longer considered a "shell" company. Until such time as this occurs, we will not
attempt  to  register  any  additional  securities.  The issuance of substantial
additional securities and their potential sale into any trading market which may
develop  in  our  securities  may  have  a depressive effect on the value of our
securities  in  the  future. While the actual terms of a transaction to which we
may  be  a party cannot be predicted, it may be expected that the parties to the
business  transaction  will find it desirable to avoid the creation of a taxable
event  and  thereby  structure  the  acquisition  in  a  so-called  "tax-free"
reorganization  under  Sections  368a  or  351 of the Internal Revenue Code (the
"Code").  With  respect  to  any merger or acquisition, negotiations with target
company  management  is expected to focus on the percentage of our company which
target  company  shareholders  would  acquire  in  exchange  for  all  of  their
shareholdings  in  the  target  company. Depending upon, among other things, the
target  company's  assets  and  liabilities,  our  shareholders  will  hold  a
substantially  lesser  percentage  ownership  interest  following  any merger or
acquisition. The percentage ownership may be subject to significant reduction in
the  event  we  acquire  a target company with substantial assets. Any merger or
acquisition effected by us can be expected to have a significant dilative effect
on  the  percentage of shares held by our then-shareholders. We will participate
in  a  business  opportunity  only  after  the  negotiation  and  execution  of
appropriate  written agreements. Although the terms of such agreements cannot be
predicted,  generally such agreements will require some specific representations
and  warranties  by  all  of the parties thereto, will specify certain events of
default,  will  detail  the  terms  of  closing and the conditions which must be
satisfied  by  each of the parties prior to and after such closing, will outline
the  manner  of bearing costs, including costs associated with our attorneys and
accountants,  will  set forth remedies on default and will include miscellaneous
other terms. As stated hereinabove, we will not acquire or merge with any entity
that

                                     10
<PAGE>

ACQUISITION  OF  OPPORTUNITIES.  (CONTINUED)

cannot  provide  independent  audited  financial  statements within a reasonable
period  of  time  after  closing  of  the  proposed transaction. We intend to be
subject to all of the reporting requirements included in the 34 Act. Included in
these requirements is our affirmative duty to file independent audited financial
statements  as part of our Form 8-K to be filed with the Securities and Exchange
Commission  upon consummation of a merger or acquisition, as well as our audited
financial  statements  included in our annual report on Form 10-K (or 10-KSB, as
applicable).  If such audited financial statements are not available at closing,
or  within  time  parameters  necessary  to  insure  our  compliance  with  the
requirements  of  the 34 Act, or if the audited financial statements provided do
not  conform  to the representations made by the candidate to be acquired in the
closing  documents,  the  closing  documents  may  provide  that  the  proposed
transaction  will  be  voidable,  at  the  discretion of our present management.

FINANCING

The  Company  believes  it  that  can  satisfy  its  cash  requirements  for the
foreseeable future and has no plans to raise additional funds in the next twelve
months.  Management  has  no  plans  to  seek  loan  financing.

EMPLOYEES

The  Company  does  not expect any significant change in the number of employees
unless  or  until  such  time  as  it  acquires  a  business  opportunity.








          [The balance of this page has been intentionally left blank.]
                                  11

<PAGE>

ITEM  7.     FINANCIAL  STATEMENTS

                                                             DeCoria, Maichel
                                                             &  Teague P.S.





REPORT  OF  INDEPENDENT  CERTIFIED  PUBLIC  ACCOUNTANTS

Board  of  Directors
Daybreak  Mines,  Inc.


We  have  audited  the accompanying balance sheets of Daybreak Mines, Inc. ("the
Company")  for  the years ended February 29, 2004 and February 28, 2003, and the
related  statements  of operations, stockholders' equity, and cash flows for the
years  then  ended.  These  financial  statements  are the responsibility of the
Company's  management.  Our  responsibility  is  to  express an opinion on these
financial  statements  based  on  our  audits.

We conducted our audits in accordance with auditing standards generally accepted
in  the  United  States  of  America.  Those  standards require that we plan and
perform  the  audit  to  obtain reasonable assurance about whether the financial
statements  are free of material misstatement. An audit includes examining, on a
test  basis,  evidence  supporting  the amounts and disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made  by  management,  as well as evaluating the overall
financial  statement  presentation.  We  believe  that  our  audits  provide  a
reasonable  basis  for  our  opinion.

In  our  opinion,  the financial statements referred to above present fairly, in
all  material  respects,  the financial position of Daybreak Mines, Inc. for the
years  ended  February  29,  2004  and February 28, 2003, and the results of its
operations  and  its  cash  flows  for  the years then ended, in conformity with
accounting  principles  generally  accepted  in  the  United  States of America.

The  accompanying  financial  statements  have  been  prepared assuming that the
Company  will  continue  as  a  going  concern.  As  discussed  in Note 1 to the
financial  statements,  the  Company's  operating losses raise substantial doubt
about  its  ability  to continue as a going concern. The financial statements do
not  include  any  adjustments  that  might  result  from  the  outcome  of this
uncertainty.

DeCoria,  Maichel  &  Teague  P.S.

/s/:DeCoria, Maichel & Teague P.S.

Spokane,  Washington
April  8,  2004

                                      12

<PAGE>




                              DAYBREAK MINES, INC.
                                TABLE OF CONTENTS



<TABLE>
<CAPTION>


<S>                                                  <C>




Balance Sheets, February 29, 2004 and February 28, 2003                                        14


Statements of Operations for the years ended February 29, 2004 and February 28, 2003           15


Statements of Changes in Stockholders' Equity
for the years ended February 29, 2004 and February 28, 2003                                    16


Statements of Cash Flows for the years ended February 29, 2004 and February 28, 2003           17


Notes to Financial Statements                                                             18 - 23




</TABLE>




                                             13



<PAGE>

DAYBREAK  MINES,  INC.
BALANCE  SHEETS
February  29,  2004  and  February  28,  2003




<TABLE>
<CAPTION>


                                      ASSETS

<S>                                                        <C>         <C>
                                                                2004        2003
CURRENT ASSETS
     Cash . . . . . . . . . . . . . . . . . . . . . . . .  $  20,141   $   9,965
     Accounts receivable. . . . . . . . . . . . . . . . .        930
     Prepaid expense. . . . . . . . . . . . . . . . . . .        361
          Total current assets. . . . . . . . . . . . . .     21,432       9,965
                                                           ----------  ----------

     Marketable securities. . . . . . . . . . . . . . . .      8,675       2,595
                                                           ----------  ---------

          Total assets. . . . . . . . . . . . . . . . . .  $  30,107   $  12,560
                                                           =========   =========

                     LIABILITIES AND STOCKHOLDERS' EQUITY


CURRENT LIABILITIES
     Accounts payable . . . . . . . . . . . . . . . . . .  $       -   $     750
                                                           ----------  ----------

          Total liabilities . . . . . . . . . . . . . . .          -         750
                                                           ----------  ----------
STOCKHOLDERS' EQUITY
     Preferred stock, $0.001 par value; 10,000,000
          shares authorized, none issued and outstanding
     Common stock, $0.001 par value; 200,000,000
          shares authorized, 18,199,419 and 16,949,419
          issued and outstanding, respectively. . . . . .     18,199      16,949
     Additional paid-in capital . . . . . . . . . . . . .    709,997     689,789
     Accumulated deficit. . . . . . . . . . . . . . . . .   (709,764)   (697,523)
     Accumulated other comprehensive income . . . . . . .      8,675       2,595
                                                            --------   ----------
               Total stockholders' equity . . . . . . . .     30,107      11,810
                                                           ----------  ----------

               Total liabilities and stockholders' equity  $  30,107   $  12,560
                                                           =========   =========

</TABLE>


    The accompanying notes are an integral part of these financial statements
                                   14

<PAGE>

DAYBREAK  MINES,  INC.
STATEMENTS  OF  OPERATIONS  AND  COMPREHENSIVE  LOSS
For  the  years  ended  February  29,  2004  and  February  28,  2003

<TABLE>
<CAPTION>


<S>                                                             <C>           <C>
                                                                  2004     2003

OPERATING EXPENSES
     General and administrative expenses                  $    12,821   $    25,176
                                                               12,821        25,176
                                                           ----------   ------------

OTHER (INCOME) EXPENSE
     Interest income                                              (55)         (241)
     Realized gain on marketable securities                    (3,525)            -
                                                           -----------   -----------
                                                               (3,307)         (241)
                                                           -----------   -----------

NET LOSS                                                  $     9,241   $    24,935
                                                          ===========   ============

OTHER COMPREHENSIVE (INCOME) LOSS
     Unrealized gain in marketable securities, net
          of reclassification adjustments for gain
          Included in net income                          $     6,080   $    (2,595)
                                                          -----------   -----------

COMPREHENSIVE LOSS                                        $     3,161   $    22,340
                                                          ===========   ===========

NET LOSS PER COMMON SHARE . . . . . . . . . . . . . .     $    Nil      $    Nil
                                                          ===========   ===========


WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING - BASIC     17,586,405    16,949,419
                                                         ===========    ==========
</TABLE>



    The accompanying notes are an integral part of these financial statements

                                                15

<PAGE>

DAYBREAK  MINES,  INC.
STATEMENTS  OF  CHANGES  IN  STOCKHOLDERS'  EQUITY
For  the  years  ended  February  29,  2004  and  February  28,  2003


<TABLE>
<CAPTION>


     OTHER
                                                                  ADDITIONAL     ACCUMULATED   COMPREHENSIVE
                                   SHARES           AMOUNT     PAID-IN  CAPITAL     DEFICIT        INCOME      TOTAL

<S>                         <C>           <C>        <C>       <C>         <C>      <C>
Balance, February 28, 2002       16,949,419        $  6,949        $689,789        $(672,588)                 $34,150

Unrealized gain in
marketable securities. . .                                                                    $     2,595       2,595

Net loss . . . . . . . . .                                                           (24,935)                 (24,935)
                              ------------        --------        ---------        ---------  -----------    ---------
Balance, February 28, 2003      16,949,419          16,949          689,789         (697,523)       2,595      11,810
                              ------------        --------        ---------        ---------  -----------    ---------

Issuance of common stock,
net of offering costs. . .       1,250,000           1,250           20,208                                    21,458

Unrealized gain in
marketable securities, net                                                                          6,080       6,080

Net loss . . . . . . . . .                                                           (9,241)                   (9,241)
                               ------------       ---------      ----------        ---------  -----------    ---------

Balance, February 29, 2004       18,199,419       $ 18,199         $709,997       $(706,764)      $ 8,675      $30,107
                               ============       =========      ==========       ==========  ===========    =========

</TABLE>



    The accompanying notes are an integral part of these financial statements

                                          16

<PAGE>


DAYBREAK  MINES,  INC.
STATEMENTS  OF  CASH  FLOWS
For  the  years  ended  February  29,  2004  and  February  28,  2003


<TABLE>
<CAPTION>


                                                              2004        2003
<S>                                                            <C>        <C>
CASH FLOWS FROM OPERATING ACTIVITIES
               Net loss. . . . . . . . . . . . . . . . . .  $ (9,241)  $(24,935)
     Adjustments to reconcile net loss to net cash used
          by operating activities:
               Realized gain on sale of marketable equity
                 securities. . . . . . . . . . . . . . . .    (3,525)
     Change in:
          Accounts payable . . . . . . . . . . . . . . . .      (750)       650
          Related party payables . . . . . . . . . . . . .                  (78)
                                                            ---------  --------
               Net cash flows used by operating activities   (13,516)   (24,363)
                                                            ---------  ---------

CASH FLOWS FROM INVESTING ACTIVITIES
     Cash provided by sale of marketable equity
        securities . . . . . . . . . . . . . . . . . . . .     2,234
                                                            ---------  ---------
               Net cash provided by investing activities .     2,234
                                                            ---------  ---------

CASH FLOWS FROM FINANCING ACTIVITIES
     Proceeds from sale of common stock, net . . . . . . .    21,458
                                                            ---------  ---------
               Net cash provided by financing activities .    21,458
                                                            ---------  ---------

NET INCREASE (DECREASE) IN CASH. . . . . . . . . . . . . .    10,176    (24,363)
                                                            ---------  ---------

CASH AT BEGINNING OF YEAR. . . . . . . . . . . . . . . . .     9,965     34,328
                                                            --------   ---------

CASH AT END OF YEAR. . . . . . . . . . . . . . . . . . . .  $ 20,141   $  9,965
                                                            ========   ========

SUPPLEMENTAL NONCASH INVESTING ACTIVITIES
     Account receivable and prepaid expense realized
          from sale of marketable equity securities. . . .  $  1,291
                                                            ========


</TABLE>







    The accompanying notes are an integral part of these financial statements
                                         17
<PAGE>

DAYBREAK  MINES,  INC.
NOTES  TO  FINANCIAL  STATEMENTS

1.     DESCRIPTION  OF  BUSINESS

Daybreak  Mines, Inc. is a Washington Corporation that was incorporated on March
11,  1955. The Company was organized to explore for, acquire and develop mineral
properties  in  the  Western  United  States.  During the past several years the
Company's  activities  have  been  confined to annual assessment and maintenance
work  on  its  Idaho  mineral  properties  and  other general and administrative
functions.

The Company has incurred losses over the past several years and has no recurring
source  of revenue. These conditions raise substantial doubt as to the Company's
ability  to continue as a going concern. Management's plans for the continuation
of  the  Company  as  a going concern include financing the Company's operations
through  sales  of its unregistered common stock and the eventual acquisition of
an entity with profitable business operations. There are no assurances, however,
with  respect  to the future success of these plans. The financial statements do
not  contain any adjustments, which might be necessary, if the Company is unable
to  continue  as  a  going  concern.

Unless  otherwise  indicated,  amounts  provided in these notes to the financial
statements  pertain  to  continuing  operations.

2.     SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES

Use  of  Estimates
------------------

The  preparation  of  the  financial  statements  in  conformity with accounting
principles  generally  accepted  in  the  United  States  of  America  requires
management to make estimates and assumptions that affect the amounts reported in
the  financial  statements  and  accompanying notes. Actual results could differ
from  those  estimates.

Income  Taxes
-------------

Income taxes are recognized in accordance with Statement of Financial Accounting
Standards  No.  109,  "Accounting for Income Taxes," whereby deferred income tax
liabilities  or  assets  at  the end of each period are determined using the tax
rate  expected  to be in effect when the taxes are actually paid or recovered. A
valuation  allowance is recognized on deferred tax assets when it is more likely
than  not that some or all of these deferred tax assets will not be realized. At
February  29,  2004  and  February  28,  2003,  the  Company had recorded no net
deferred  tax assets or liabilities and recognized no income tax provision as it
had  no  taxable  income  for  the  years  then  ended.

Impaired  Asset  Policy
-----------------------

The  Company  periodically  reviews  its  long-lived  assets  when applicable to
determine  if  any  events  or  changes  in  circumstances have transpired which
indicate  that  the  carrying  value  of  its assets may not be recoverable. The
Company  determines  impairment  by comparing the undiscounted future cash flows
estimated  to  be  generated by its assets to their respective carrying amounts.

                                           18
<PAGE>

DAYBREAK  MINES,  INC.
NOTES  TO  FINANCIAL  STATEMENTS

2.     SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES,  CONTINUED:

Net  Loss  Per  Share
---------------------

Statement  of  Financial  Accounting  Standards  No.  128, "Earnings per Share,"
requires  dual  presentation of basic earnings per share ("EPS") and diluted EPS
on  the  face  of  all income statements issued after December 15, 1997, for all
entities  with  complex  capital structures. Basic EPS is computed as net income
divided  by  the  weighted  average  number  of  both  classes  of common shares
outstanding  for  the  period.  Diluted EPS reflects the potential dilution that
could occur from common stock equivalents such as common shares issuable through
stock  options,  warrants and other convertible securities. At February 29, 2004
and  February 28, 2003, the Company had no outstanding common stock equivalents,
and  only  basic  EPS  is  reported  for  the  years  then  ended.

Reclassifications
-----------------

Certain  reclassifications have been made to conform to prior years' data to the
current  presentation.  These  reclassifications  had  no  effect  on  reported
earnings.

Fair  Values  of  Financial  Instruments
----------------------------------------

The amounts of financial instruments including cash, account receivable, prepaid
expenses and accounts payable, approximated their fair values as of February 29,
2004  and  February  28,  2003.

Environmental  Matters
----------------------

The  Company  currently  owns  mineral  property interests on certain public and
private lands in Idaho on which it has explored for commercial mineral deposits.
In  prior  years,  the Company held mineral property interests in California and
Washington.  The  Company  and  its  properties  have  been and are subject to a
variety  of  federal  and state regulations governing land use and environmental
matters. The Company's management believes it has been in substantial compliance
with  all  such  regulations, and is unaware of any pending action or proceeding
relating  to  regulatory matters that would affect the financial position of the
Company.

Investments
-----------

Marketable equity securities consist of various micro-cap equity securities, and
are  categorized  as  non  current  and available for sale and carried at quoted
market value. Realized gains and losses on the sale of securities are recognized
on  a specific identification basis. Unrealized gains and losses are included as
a  component  of  accumulated other comprehensive income or loss, net of related
deferred income taxes, if applicable, unless a permanent impairment in value has
occurred,  which  is  then charged to operations. During the year ended February
29,  2004,  the  Company's  investments  experienced an unrealized gain, net of
reclassification  adjustments  for  gains  included  in  net  income  of $6,080.

                                        19
<PAGE>

DAYBREAK  MINES,  INC.
NOTES  TO  FINANCIAL  STATEMENTS

2.     SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES,  CONTINUED:

Investments,  Continued:
------------------------

The gain increased the Company's investment in marketable securities from $2,595
at  February  28,  2003  to  $8,675  at February 29, 2004. During the year ended
February  28,  2003  the  Company's  investments in marketable equity securities
experienced  an  unrealized  gain  of  $2,595.

New  Accounting  Pronouncements
-------------------------------

In  April 2002, the FASB issued SFAS No. 145, "Rescission of SFAS Statements No.
4,  44,  and  64,  Amendment  of  SFAS  No. 13, and Technical Corrections." This
statement  culminates  the  current  requirements  that gains and losses on debt
extinguishment  must  be  classified  as  extraordinary  items  in  the  income
statement.  Instead,  such  gains and losses will be classified as extraordinary
items  only  if they are deemed to be unusual and infrequent, in accordance with
the  current  GAAP criteria for extraordinary classifications. In addition, SFAS
No.  145  eliminates  an  inconsistency  in  lease  accounting by requiring that
modifications  of  capital  leases  that result in reclassification as operating
leases  be  accounted  for consistent with sales-leaseback accounting rules. The
statement  also  contains  other  nonsubstantive  corrections  to  authoritative
accounting literature. The rescission of SFAS No. 4 is effective in fiscal years
beginning  after  May  15, 2002. The amendment and technical corrections of SFAS
No.  13  are  effective for transactions occurring after May 15, 2002. All other
provisions  of  SFAS No. 145 are effective for financial statements issued on or
after  May  15,  2002.  SFAS  No.  145  has no impact on the Company's financial
statements.

In  June  2002,  the  FASB issued SFAS No. 146, "Accounting for Costs Associated
with  Exit or Disposal Activities," which addresses accounting for restructuring
and  similar  costs.  SFAS  No.  146  supersedes  previous  accounting guidance,
principally  Emerging  Issues  Task  Force Issue No. 94-3. SFAS No. 146 requires
that  the  liability  for  costs associated with an exit or disposal activity be
recognized  when  the  liability is incurred. SFAS No. 146 also establishes that
the  liability  should  initially  be  measured  and  recorded  at  fair  value.
Accordingly  SFAS  No.  146  may  affect  the  timing  of  recognizing  future
restructuring costs as well as the amount recognized. The provisions of SFAS 146
are  effective for exit or disposal activities that are initiated after December
31,  2002.  SFAS  No.  146  has no impact on the Company's financial statements.

In August 2002, the FASB issued SFAS No. 147, "Acquisitions of Certain Financial
Institutions."  SFAS No. 147 removes acquisitions of financial institutions from
the  scope of SFAS No. 72 and FASB Interpretation No. 9, and requires that those
transactions  be accounted for in accordance with SFAS No. 141 and SFAS No. 142.
In addition, SFAS No. 147 amends SFAS No. 144, to include in its scope long-term
customer-relationship  intangible  assets  of  financial  institutions.  The
provisions of SFAS No. 147 are generally effective October 1, 2002. SFAS No. 147
has  no  impact  on  the  Company's  financial  statements.

In  October  2002,  the  FASB  issued  SFAS  No.  147,  "Acquisitions of Certain
Financial  Institutions-an  amendment of FASB Statements No. 72 and 144 and FASB
Interpretation  No.  9."  SFAS  No. 147 has no impact on the Company's financial
statements.

                                         20
<PAGE>

DAYBREAK  MINES,  INC.
NOTES  TO  FINANCIAL  STATEMENTS

2.     SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES,  CONTINUED:

New  Accounting  Pronouncements,  Continued:
--------------------------------------------

In  November  2002,  the  FASB  issued  FASB Interpretation No. 45, "Guarantor's
Accounting  for  Disclosure  Requirements  for  Guarantees,  Including  Indirect
Guarantees  of  Indebtedness of Others, an interpretation of FASB Statements No.
5,  57  and  107  and  rescission  of  FASB Interpretation No. 34, Disclosure of
Indirect  Guarantees of Indebtedness of Others" ("FIN 45"). FIN 45 clarifies the
requirements  for  a  guarantor's  accounting  for  and  disclosure  of  certain
guarantees issued and outstanding. It also requires a guarantor to recognize, at
the  inception  of a guarantee, a liability for the fair value of the obligation
undertaken  in  issuing  the  guarantee.  This  interpretation also incorporates
without  reconsideration  the  guidance  in FASB Interpretation No. 34, which is
being superseded. The adoption of FIN 45 has no material effect on the Company's
financial  statements.

In November 2002, the Emerging Issues Task Force ("EITF") reached a consensus on
EITF  00-21,  "Revenue  Arrangements with Multiple Deliverables," related to the
timing  of  revenue  recognition  for arrangements in which goods or services or
both  are delivered separately in a bundled sales arrangement. The EITF requires
that  when  the  deliverables  included in this type of arrangement meet certain
criteria  they  should  be  accounted  for  separately  as  separate  units  of
accounting.  This  consensus is effective prospectively for arrangements entered
into  in  fiscal periods beginning after June 15, 2003. EITF 00-21 will not have
an impact upon initial adoption and is not expected to have a material impact on
the  Company's  results  of  operations,  financial  position  and  cash  flows.

In  December  2002,  the  FASB  issued SFAS No. 148, "Accounting for Stock-Based
Compensation,  Transition  and  Disclosure,  an  amendment of FASB Statement No.
123." SFAS No. 148 provides alternative methods of transition for an entity that
voluntarily changes to the fair value based method of accounting for stock-based
employee  compensation. It also amends the disclosure provisions of SFAS No. 123
to  require  prominent disclosure about the effects of reported net income of an
entity's  accounting  policy  decisions  with  respect  to  stock-based employee
compensation.  Finally,  this  Statement  amends  APB  Opinion  No.  28, Interim
Financial  Reporting,  to  require  disclosure  about  those  effects in interim
financial  information.  The  amendments  to  SFAS  No.  123,  which  provides
alternative  methods of transition for an entity that voluntarily changes to the
fair  value  based method of accounting for stock-based employee compensation is
effective  for  financial  statements for fiscal years ending after December 15,
2002. The amendment to SFAS No. 123 relating to disclosures and the amendment to
Opinion  28  is  effective  for financial reports containing condensed financial
statements  for  interim  periods  beginning after December 15, 2002. Management
does  not  intend  to adopt the fair value accounting provisions of SFAS No. 123
and  currently  believes  that  the  adoption  of  SFAS  No. 148 will not have a
material  impact  on  the  Company's  financial  statements.


                                    21
<PAGE>



DAYBREAK  MINES,  INC.
NOTES  TO  FINANCIAL  STATEMENTS

2.     SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES,  CONTINUED:

New  Accounting  Pronouncements,  Continued:
--------------------------------------------

In  April  2003,  the  FASB  issued SFAS No. 149, "Amendment of Statement 133 on
Derivative  Instruments  and  Hedging  Activities."  This  standard  amends  and
clarifies  the  accounting  for  derivative  instruments,  including  certain
derivative instruments embedded in other contracts, and hedging activities under
SFAS  No.  133,  "Accounting for Derivative Instruments and Hedging Activities."
This statement is effective prospectively for contracts entered into or modified
after  June  30,  2003,  and for hedging relationships designated after June 30,
2003.  SFAS  No.  149  will  not have an impact upon initial adoption and is not
expected  to  have  a  material  effect  on the Company's results of operations,
financial  position  and  cash  flows.

In  May  2003,  the  FASB issued SFAS No. 150, "Accounting for Certain Financial
Instruments  with  Characteristics of both Liabilities and Equity." SFAS No. 150
establishes  standards  for  the  classification  and  measurement  of  certain
financial  instruments  with characteristics of both liabilities and equity. The
requirements  of  SFAS  No.  150  become effective for the Company for financial
instruments  entered  into  or  modified  after  May 31, 2003, and otherwise are
effective  at the beginning of the first interim period beginning after June 15,
2003.  The  Company  has  evaluated  the impact of SFAS No. 150 to determine the
effect  it  may  have  on  its results of operations, financial position or cash
flows  and  has concluded that the adoption of this statement is not expected to
have  a  material  effect  on  the  Company's  financial  position or results of
operations.

3.     MINERAL  PROPERTIES

At  February  29,  2004  and February 28, 2003, the Company's mineral properties
consisted  of  approximately  340  acres of unpatented mining claims and mineral
rights  on  privately  deeded  lands  located  in  Shoshone  County  Idaho.  The
properties  contain  no known economical mineral resources. In 1999, the Company
reduced  the  carrying  value  of  its  mineral  properties  to  zero.

4.     INCOME  TAXES

Income  taxes  are  recognized  in  accordance  with  FASB  Statement  No.  109,
"Accounting for Income Taxes," whereby deferred income tax liabilities or assets
at  the  end  of each period are determined using the tax rate expected to be in
effect  when  the taxes are actually paid or recovered. A valuation allowance is
recognized  on  deferred tax assets when it is more likely than not that some or
all  of  these  deferred  tax  assets  will not be realized. The Company has not
recorded an income tax provision as it has no taxable income. The Company has no
net  operating  loss  carryforwards for income tax purposes and accounts for its
operating  expenses  as capitalized deferred development costs on its income tax
returns. At February 29, 2004 and February 28, 2003, the Company had no deferred
tax  assets  or  liabilities.

                                       22
<PAGE>



DAYBREAK  MINES,  INC.
NOTES  TO  FINANCIAL  STATEMENTS

5.     STOCKHOLDERS'  EQUITY

Common  Stock
-------------

The  Company  has  one class of common stock outstanding with 200,000,000 shares
authorized  for  issue. The common stock has a par value of $0.001 per share and
is  non-assessable.

Preferred  Stock
----------------

The  Company  is  authorized  to  issue of up to 10,000,000 shares of $0.001 par
value  preferred stock. At February 29, 2004 and February 28, 2003, no shares of
preferred  stock  were  issued  or  outstanding.

Private  Placement
------------------

In August of 2003, the Company offered shares of its common stock for sale, in a
private  placement,  to  certain  accredited  investors. The offering, which was
exempt  from  registration under the Securities Act of 1933 ("the Act") pursuant
to Section 4(2) of the Act and Rule 506 of Regulation D, resulted in the sale of
1,250,000 shares of the Company's unregistered common stock for $0.02 per share,
or  $25,000. Net proceeds of $21,458 from the offering were used to fund general
and  administrative  activities and investigate potential business opportunities
with  other  entities.

                                                23

<PAGE>

ITEM  8.     CHANGES  IN  AND  DISAGREEMENTS  WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

None

ITEM  8A.    CONTROLS  AND  PROCEDURES

Based  on a recent evaluation as of the end of the period covered by this Annual
Report  on Form 10-KSB, the Company's President has concluded that the Company's
disclosure  controls and procedures (as defined in the Exchange Act Rules 13a-14
and  15d-14)  are  effective  in  timely  alerting  them to material information
relating  to  the  Company required to be included in the Company's periodic SEC
filings.  There  have  been  no  significant  changes  in the Company's internal
controls  or  in other factors that could significantly affect internal controls
subsequent  to  the  date  the  Company  carried  out  its  evaluation.

                                    PART III

ITEM  9.     DIRECTORS,  EXECUTIVE  OFFICERS,  PROMOTERS  AND  CONTROL  PERSONS,
COMPLIANCE  WITH
                    SECTION  16(A)  OF  THE  EXCHANGE  ACT

Identification  of  Directors  and  Executive  Officers  are  as  follows:

The following information is provided with respect to each executive officer and
director  of  the  Company  as  of  April  28,  2004:
<TABLE>
<CAPTION>


<S>                  <C>  <C>
Name. . . . . . . .  Age  Office with the Company


Dale B. Lavigne . .   73  President and Director
-------------------  ---  --------------------------------

Ronald D. Lavigne .   50  Vice President and Director

Thomas C. Kilbourne   53  Secretary/Treasurer and Director

Lewis J. Lavigne. .   79  Director
</TABLE>



Dale  B. Lavigne is the President and a Director of the Company. Mr. Lavigne has
been  a  director  of  the  Company for more than 30 years and has served as the
Company's  President for more than 15 years. Dale Lavigne has been a Director of
the  Company  since  January  1983.  Mr. Lavigne has been a director of Daybreak
Mining Company for more than 30 years and has served as Daybreak's President for
more  than  15  years.  Mr.  Lavigne  receives no compensation for serving as an
officer  or  director  of  Daybreak.  Mr.  Lavigne's prior experience with shell
companies is related to mineral exploration companies which became inactive. Mr.
Lavigne  has  been  a  director of Aberdeen Idaho Mining Company since 1883. Mr.
Lavigne owns 55,000 shares of Aberdeen Idaho common Stock (approximately .006%).
Mr Lavigne receives no compensation for serving as a director of Aberdeen Idaho.
Mr.  Lavigne was a director, but not a stockholder of Idaho Montana Silver Mines
at  the  time controlling interest was sold in February 2000. The company is now
called  Grant  Douglas  Acquisition Corp. The stock has been reverse split 1:55.
There  is  no current market for the stock. Mr. Lavigne received no compensation
in  connection  with  the acquisition of the company. Mr. Lavigne was a director
but  not  a  stockholder of Capitol Silver Mines Inc. Control of the Company was
acquired  by  Internet Culinary in June 1999. The stock was subsequently reverse
split  1:50.  There  is  no  current  market  for  the  stock.
                                                24

<PAGE>

ITEM  9.     DIRECTORS,  EXECUTIVE  OFFICERS,  PROMOTERS  AND  CONTROL  PERSONS,
COMPLIANCE  WITH SECTION  16(A)  OF  THE  EXCHANGE  ACT  (CONTINUED)

compensation  in connection with the acquisition of the company. Mr. Lavigne was
a  director  of Princeton Mining Company. In May 2001 control of the company was
acquired by Lifestyle Innovations. The stock was subsequently reverse split 1:7.
Mr Lavigne owned 10,400 shares of the company which he sold for an average price
of  $0.60  per  share.  The stock is currently traded at approximately $5.45 per
share.  Mr.  Lavigne received no compensation in connection with the acquisition
of  the  company.  Mr.  Lavigne  was a director of Silver Ramona. Control of the
company was acquired by Achievement Tech Holding in May 2000. The stock has been
reverse  split  1:3.82. The stock is currently traded at approximately $0.03 per
share.  Mr. Lavigne has sold no shares of the company's stock and currently owns
22,849  shares  of  the company's stock. Mr. Lavigne received no compensation in
connection  with  the  acquisition  of  control  of  the  company.

Mr.  Lavigne  graduated  from  the  University  of Montana with a B.S. Degree in
Pharmacy. For the past 47 years Mr. Lavigne has been the Chairman and a Director
of the Osburn Drug Company, Inc., a 4-store chain of drug stores in North Idaho.
Mr.  Lavigne  is  also  a  Director  and  Officer of Metropolitan Mines, Inc., a
reporting  publicly-held,  inactive  mineral exploration company. Mr. Lavigne is
the  former

Chairman  of  the  First  National  Bank  of North Idaho; a former member of the
Gonzaga  University  Board  of  Regents;  past  President  of  the Silver Valley
Economic Development Committee and a current member of the Governor's Task Force
on  Rural  Idaho.

Ronald  D.  Lavigne  is  the  Vice-President  and a Director of the Company. Mr.
Lavigne  has  been  Vice President and a Director of the Company since 2000. Mr.
Lavigne  is  graduated  from  the  University  of  Montana with a B.S. Degree in
Pharmacy.  Mr.  Lavigne  is  the  President  and  a  Director of the Osburn Drug
Company.  Mr.  Lavigne  is  also  a director and officer of various other public
non-reporting  inactive  mineral  exploration  companies  The  term  "public
non-reporting" refers to the fact that the company has a history of being traded
in  the  over-the-counter  market  with  public information available under Rule
15c2-11  of the Securities Exchange Act of 1934 as opposed to a company which is
required  to  file  periodic  reports under the Securities Exchange Act of 1934.

Thomas  C.  Kilbourne  is the Secretary-Treasurer and a Director of the Company.
Mr.  Kilbourne  has  been  an  officer  of the Company since February 2001 and a
Director  of  the  Company  since January 2000. Mr. Kilbourne graduated from the
University of Montana with a B.S, Degree in Business Administration and Finance.
Mr.  Kilbourne has been the Chief Financial Officer and a Director of the Osburn
Drug  Company  since 1999. Prior to that time he had been the General Manager of
Tabor's/Modern  Drug  Company  in  Wallace,  Idaho  since  1980.

Lewis  J. Lavigne is the Assistant Secretary, Assistant Treasurer and a Director
of  the  Company. Mr. Lavigne has been a Director of the Company for the past 15
years  and  served  as  the Company's Secretary and Treasurer from approximately
1985  until 2000. Since 1981 Mr. Lavigne has been an officer and Director of the
Osburn  Drug Company, Inc. Mr. Lavigne is also a director and officer of various
other  public  non-reporting  inactive  mineral  exploration  companies.

ITEM  10.  EXECUTIVE  COMPENSATION

No  officer  receives  any  compensation  for  services rendered to the Company.
Directors receive no annual compensation nor attendance fees for serving in such
capacity.

                              25
<PAGE>

ITEM  11.  SECURITY  OWNERSHIP  OF  CERTAIN  BENEFICIAL  OWNERS  AND  MANAGEMENT

The  information  on beneficial ownership in the table and the footnotes thereto
is  based upon the Company's records and, in the case of holders of more than 5%
of  the Company's stock, the most recent Forms 3 and 4 filed by each such person
or  entity  and  information  supplied  to the Company by such person or entity.
Unless  otherwise  indicated,  to  the  Company's knowledge each person has sole
voting  power  and  sole  investment  power  with  respect  to the shares shown.

SECURITY  OWNERSHIP  OF  CERTAIN  BENEFICIAL  OWNERS

As of the close of business on April 28, 2004, based on information available to
the Company, the following persons own beneficially more than 5% of any class of
the  outstanding  voting  securities  of  Daybreak  Mines,  Inc.
<TABLE>
<CAPTION>


<S>                    <C>                                   <C>                                        <C>

Title of Class. . . .  Name and Address of                                               Amount and Nature           Percent
                        Beneficial Owner                                                  of Beneficial               Class (1)
                                                                                            Ownership

                       Terrence J. Dunne
Common. . . . . . . .  601 W. Main Ave., Ste. 1017
Stock . . . . . . . .  Spokane, WA 99201                                                     3,350,000               18.41%

                       Robert W. O'Brien
Common. . . . . . .    1511 S. Riegel Court
Stock . . . . . . . .  Spokane, WA 99212                                                     3,350,000               18.41%
</TABLE>



(1)Percent  of  ownership  is  based  upon  18,199,419  shares  of  common stock
outstanding  on  April  28,  2004.

                                       26


<PAGE>

SECURITY  OWNERSHIP  OF  MANAGEMENT  AS  OF  APRIL  28,  2004

The  following  table  sets  forth  certain  information  as  of  April 28, 2004
regarding  the  number  and  percentage of shares of common stock of the Company
beneficially  owned  by  each director, each of the named executive officers and
directors  and  officers  as  a  group.
<TABLE>
<CAPTION>

<S>                              <C>                                        <C>                        <C>
Title of Class. . . .       Name and Address of                          Amount and Nature           Percent
                              Beneficial Owner                             of Beneficial              Class (1)
                                                                             Ownership

                             Dale B. Lavigne
Common                       P.O. Box A
Stock                        Osburn, ID 83849                              743,425                           4.08%

                             Ronald D. Lavigne
Common                       21 Sunset Avenue
Stock                        Silverton, ID 83867                           403,000                           2.21%

                             Thomas C. Kilbourne
Common                       P.O. Box 953
Stock                        Osburn, ID 83849                              403,000                           2.21%

                             Lewis J. Lavigne
Common                       HC-01 Box 188
Stock                        Marler St. Montgomery Gulch
                             Kellogg, ID 83837                             558,950(2)                        3.07%

Common                       All Directors and Officers
Stock                        As a Group
                            (4 Individuals)                              2,108,375                          11.59%
                                                                        ===========
</TABLE>



(1)Percent  of  ownership  is  based  upon  18,199,419  shares  of  common stock
outstanding  on  April  28,  2004.

(2)Includes  2,200  shares  of  stock  held  by  Mr.  Lavigne's  children.

Committees  of  the  Board  of Directors. We do not have a compensation or audit
committee  or  a nominating committee. The board of directors as a whole acts as
the  compensation,  audit,  and  the  nominating  committee.

Compliance  with  Section 16(a) of the Exchange Act. Our officers, directors and
persons  owning  more than 10% of our common stock are obligated to file reports
of  ownership  and  changes  in  ownership  with  the  Securities  and  Exchange
Commission  under  Section  16(a)  of the Securities Exchange Act of 1934. These
persons  are  also  required by the regulation to furnish copies of all of these
reports  to  us, as they are filed. During fiscal the fiscal year ended February
29,  2004.  During  fiscal  year  ended  February 29, 2004; certain officers and
directors  owning  more  than  10%  stock were delinquent in their Section 16(a)
filings.  These  reports  were  filed  in the first quarter ending May 31, 2004.

Code  Of  Ethics.  The  Company has adopted a Code of Ethics that applies to the
Company's  executive  officers. The Company will provide, without charge, a copy
of  the  Code  of  Ethics  on the written request of any person addressed to the
Company  at,  Daybreak  Mines,  Inc.  805 Mullen Ave.; P.O. Box 370, Osburn, ID,
83849.  The  Company  does  not  presently  have  a  website.

                                     27
<PAGE>

ITEM  12.  CERTAIN  RELATIONSHIPS  AND  RELATED  TRANSACTIONS

The Company has funded the majority of its operating activities by advances from
related  parties throughout much of its history. The related parties, to a large
extent,  have been business entities owned or controlled by Dale B. Lavigne, the
Company's  president  and  a director. The advances have not been subject to any
specific  repayment  terms  and  are  payable  on demand There have been on such
advances  for  the  fiscal  years  ended February 29, 2004 or February 28, 2003.

ITEM  13.  EXHIBITS  AND  REPORTS  ON  FORM  8-K

(a)     The  following  Exhibits  are  filed  as  part  of  the  report:

(3)(i)     Articles  of  Incorporation.  (1)
(3)(ii)    Bylaws.  (1)
(13)       Annual  report  to  security  holders,  Form 10Q or quarterly report
           to security  holders.  (1)
(15)       Code  of  Ethics  (Pages  29-34)
(31)       Rule  13a-14(a)/15d-14(a)  Certifications
(31)(i)    Certification  of  Dale  B.  Lavigne
(31)(ii)   Certification  of  Thomas  C.  Kilbourne
(31)       Section  1350  Certifications
(32)(i)    Certification  of  Dale  B.  Lavigne
(32)(ii)   Certification  of  Thomas  C.  Kilbourne
(99)       Additional  Exhibits.

      (1)  Incorporated  by  reference  to  previous  filing

(b)     No  reports  have  been filed on Form 8-K during the last fiscal quarter
covered  by  this  report.

ITEM  14.     PRINCIPAL  ACCOUNTANT  FEES  AND  SERVICES

The  Company's  board  of  directors  reviews and approves audit and permissible
non-audit  services  performed by DeCoria, Maichel & Teague P.S., as well as the
fees  charged by DeCoria, Maichel & Teague P.S. for such services. In its review
of  non-audit service fees and its appointment of DeCoria, Maichel & Teague P.S.
as  the  Company's  independent  accountants,  the board of directors considered
whether  the  provision of such services is compatible with maintaining DeCoria,
Maichel  &  Teague  P.S.  independence.  All  of  the services provided and fees
charged  by DeCoria, Maichel & Teague P.S. in 2003 and 2004 were pre-approved by
the  board  of  directors.

Audit  Fees

The  aggregate  fees  billed for professional services rendered by the Company's
principal  accountant for the audit of the Company's annual financial statements
for  the  fiscal  years  ended  February  29, 2004 and February 28, 2003 and the
reviews  of  the  financial  statements  included  in the Company's Forms 10QSBs
during  those  fiscal  years  were  $11,770  and  $9,000  respectively.

                                   28

<PAGE>




ITEM  14.     PRINCIPAL  ACCOUNTANT  FEES  AND  SERVICES  (CONTINUED)

Audit  Related  Fees

The  Company incurred no fees during the last two fiscal years for assurance and
related  services  by  the  Company's  principal accountant that were reasonably
related  to  the  performance  of the audit or review of the Company's financial
statements.

Tax  Fees

The  Company  incurred no fees during the last two fiscal years for professional
services  rendered by the Company's principal accountant for tax compliance, tax
advice  and  tax  planning.

All  Other  Fees

The Company incurred no other fees during the last two fiscal years for products
and  services  rendered  by  the  Company's  principal  accountant.

SUPPLEMENTAL  INFORMATION TO BE FURNISHED WITH REPORTS FILED PURSUANT TO SECTION
15(D)  OF  THE  EXCHANGE  ACT  BY  NON-REPORTING  ISSUERS

Not  Applicable

                      29

<PAGE>
                                   Exhibit 15
                              Daybreak Mines, Inc.

                                 CODE OF ETHICS



INTRODUCTION

"Quality  and  Integrity"  has  been a part of Daybreak Mines, Inc. (hereinafter
called  the  Company)  since  its inception. Truthfulness, honesty, fairness, to
each  other,  our Company, and to our investors, customers and suppliers are the
ethical  standards,  by which we live and work. Each person who is an officer or
director  of  the  Company  is a Company "associate" and has a responsibility to
deal ethically in all aspects of the Company's business and to comply fully with
all  laws,  regulations,  and  Company  policies.  Anyone who is employed by the
Company is expected to assume the responsibility for applying these standards of
ethical conduct. When in doubt any future employees will have the responsibility
to  seek  clarification  from  the  appropriate  Company  representative.  (See
Disclosure,  Guidance  and  Approvals  below).

Each  director,  officer  and employee of the Company is required to comply with
this  Code  of  Ethics.


                              CONFLICTS OF INTEREST

A  CONFLICT  OF  INTEREST EXISTS WHEN AN INDIVIDUAL'S PRIVATE INTEREST CONFLICTS
WITH  THE INTERESTS OF THE COMPANY.  WHEN AN INDIVIDUAL'S LOYALTY TO THE COMPANY
AND  CONDUCT OF RESPONSIBILITIES AND DUTIES TOWARDS THE COMPANY IS PREJUDICED BY
ACTUAL  OR  POTENTIAL BENEFIT FROM ANOTHER SOURCE A CONFLICT OF INTEREST EXISTS.

We  are  confident of the individual loyalty and honesty of our associates. Good
relations  with  investors,  customers  and  suppliers  and the integrity of our
associates  are  critical  sources  of  goodwill and absolutely necessary to our
success. Associates should never be in a position where their personal interests
or  third  parties  inappropriately influence their judgment on Company matters.

No  associate  should  be  subject,  or even reasonably appear to be subject to,
influences,  interests or relationships that conflict with the best interests of
the  Company.  This means avoiding any activity that might compromise or seem to
compromise  the  integrity  of  the Company or the associate. An associate shall
avoid  conflicts  of  interests  in connection with the conduct of the Company's
business  except  as  expressly  permitted  by  this  Code.

Common  Sources  of  Conflicts.

Although  it  is  impossible  to  prepare  a  list  of all potential conflict of
interest  situations,  conflicts of interest generally arise in four situations:

-INTEREST  OF  ASSOCIATE  -  When an associate, a member of the associate's
family  or  a trust in which the associate is involved, has a significant direct
or  indirect  financial  interest  in,  or obligation to, an actual or potential
competitor,  supplier,  lender,  service  provider  or  customer of the Company.

-INTEREST  OF  RELATIVE  - When an associate conducts business on behalf of
the  Company with a supplier or customer of whom a relative by blood or marriage
is  a  principal,  partner,  shareholder,  officer,  employee or representative.

                                    30
<PAGE>

-GIFTS  -  When an associate, a member of the employee's household, a trust
in  which  the employee is involved, or any other person or entity designated by
the  employee,  accepts  gifts,  credits, payments, services or anything else of
more  than  token  or  nominal  value  from  an  actual or potential competitor,
supplier  or  customer.

-MISUSE  OF INFORMATION - When employee misuses information obtained in the
course  of  employment.

Specific  Examples.
-------------------

While it is not possible to describe every situation, it is useful to consider a
few  examples  in  which  clear conflicts of interest are present so that ground
rules  can  be  established:

-POSITION  OF  INFLUENCE  - If an associate or a member of that associate's
family  has a significant financial or other beneficial interest in an actual or
potential  supplier  or customer, the associate may not, without full disclosure
and specific written clearance by appropriate Company representatives, influence
decisions  with  respect  to  business  with  such  supplier  or  customer. Such
positions  include  situations  where  associates  create  specifications  for
suppliers'  raw  materials,  products  or services; recommend, evaluate, test or
approve  such  raw  materials,  products  or  services;  or  participate  in the
selection  of,  or  negotiating  arrangements  with,  suppliers.

-OTHER  POSITIONS  -  It  is  expressly  acceptable for individuals of this
Company  to  serve  as  officers  and  directors  of  other  companies  at their
discretion.

Advance  Disclosure.
-------------------

Because  conflicts of interest have the potential of serious abuse, all conflict
of  interest  circumstances  affecting  any associate should be disclosed to the
appropriate Company representative. While transactions affected by a conflict of
interest  must  generally  be avoided, there may be times when such transactions
are  nevertheless  fair and appropriate and in the Company's best interest. When
an associate believes a potential transaction that may be affected by a conflict
of  interest  should  nevertheless  be  pursued, they must disclose all material
terms  of  the  proposed  matter  to  the  appropriate Company representative in
advance.  No  such transaction may be pursued, however, unless it is approved in
advance  by  the  appropriate, duly authorized and disinterested officers of the
Company,  the  board  of  directors  or  an  appropriate  committee  thereof.

                                 LAWFUL CONDUCT

All associates shall carry on the business of the Company in compliance with all
applicable  laws.  Without  limiting  this  obligation, the following conduct is
prohibited:

-Employee  theft,  fraud,  embezzlement,  misappropriation,  or any form of
wrongful  conversion  of  property  belonging  to  the  Corporation  or  another
employee.

-Any  act  of  fraud, deception or intentional misrepresentation against or
involving  the  Corporation,  an  investor,  a customer, a supplier or any other
party.

-Any  act  of  bribery,  including  a  promise,  offer  or gift of money or
anything  of  value  made  or  offered  by  an  employee  to:

1.     A  government  official  or  someone  acting  for  the  government;  or

2.     A  person  employed  by, or acting on behalf of, an investor, a customer,
supplier  or other organization, with which the Corporation does business or has
prospective  business,  (except in the case of certain permitted gifts described
below).

                                       31
<PAGE>

-The  destruction or alteration of Corporation records in order to falsify,
conceal or misrepresent information for any purpose including any motivation to:

1.  Avoid  criticism for errors of judgment or to conceal failure to follow a
supervisor's  instructions.

2.  Show  a  performance  record  better than, or different from, performance
actually  achieved.

3.  Misrepresent  the  employee's  performance,  activities,  or  other
transactions,  or  those  of  another  employee.

-Political  contributions  of  money,  services,  or  other property of the
Corporation  that  are  in violation of the law when the contributions are made.

-Violations  of securities laws rules or regulations, including concealment
of  information  required  to be disclosed in filings the Corporation makes with
the  Securities  and  Exchange  Commission.


                                      GIFTS


Associates and their families generally shall not solicit or accept gifts, fees,
bequests,  services  or  entertainment  from  investors, customers, suppliers or
prospective  customers. A gift is regarded as any type of gratuity, favor, loan,
legacy,  fee,  compensation,  or  anything of monetary value. All such gifts are
prohibited  except:

-Business  entertainment  and  other  courtesies  such  as  meals, sporting
events,  and the like, that involves no more than ordinary amenities, and can be
properly  reciprocated by the employee and charged as a business expense. Lavish
or  extravagant  entertainment,  such  as  weekend  trips,  etc.,  should not be
accepted  unless  full  reimbursement  is  made  by  the recipient to the donor.

-Gifts  received  because of kinship, marriage, or social relationships and
not  because  of  any  business  relationship.

-Unsolicited  advertising  or  promotional  materials  that are made widely
available.

-Customer  or  supplier  paid  travel  or  lodging  where  the  trip  has a
legitimate  business purpose. An appropriate Company representative must approve
any  such  trips  in  advance  in  writing.

-Fees  or  other  compensation  received  from  an  organization  in  which
membership or an official position is held, subject to prior written approval by
an  appropriate  Company  representative.

Associates  who believe that acceptance of a permitted gift might make them feel
obligated and therefore improperly influenced in the performance of their duties
should not accept it, or turn it over to the Company. Associates, who are unsure
whether a gift is a violation of the law and the Code, should seek guidance from
an  appropriate  Company  representative.

Likewise, no associate of the Company or members of his or her family may extend
a  gift  to any existing or prospective investor, customer or supplier that will
not  meet  these  same  criteria.


                                       32
<PAGE>



MISUSE  OF  INFORMATION

No  information  obtained  as  a  result  of  employment or association with the
Company  may  be  used for personal profit or as the basis for a "tip" to others
unless  the Company has made such information generally available to the public,
This is true whether or not direct injury to the Company appears to be involved.
The requirement is not limited to transactions relating to the Company stock but
also  applies  to  securities of any other company and includes any situation in
which  information  may  be  used  as  the  basis  for unfair bargaining with an
outsider.  The public disclosure of confidential data and trade secrets relating
to  our  business  can  have  a  material  adverse  effect on the Company and is
prohibited.

CORPORATE OPPORTUNITIES. A CORPORATE OPPORTUNITY IS AN OPPORTUNITY USEFUL TO THE
COMPANY  THAT  IS DISCOVERED THROUGH THE USE OF COMPANY PROPERTY, OPPORTUNITY OR
POSITION  AS  A  COMPANY  ASSOCIATE.

Associates  are  prohibited  from taking corporate opportunities for themselves.
When  an  associate  uses corporate property, corporate information or corporate
position  for  personal  gain,  he or she is taking a corporate opportunity. You
must  use  corporate  opportunities  only  for advancing the legitimate business
interests  of  the  Company.

COMPLETE  TRUTHFUL  AND  FULL  DISCLOSURES  IN  PUBLIC  FILINGS

The  Company's  filings  made under the Securities Exchange Act of 1934, such as
quarterly  and  annual reports and proxy statements, are to contain all required
disclosures.  All  such  filings  shall  provide required information in a full,
fair, accurate, timely, and understandable manner. The Company has procedures in
place  to achieve these goals with respect to securities reports and shareholder
communications.  Any employee who has concerns about the accuracy or adequacy of
disclosures  being made in these documents should feel free to contact the Chief
Financial  Officer.  No  employee shall engage in any conduct with the intent of
impairing  the  Company's  compliance  with  this  provision.

                               ACCOUNTING MATTERS

The Company's financial statements and books and records on which they are based
must  accurately  reflect  all  corporate  transactions.  All  receipts  and
disbursements  of corporate funds shall be promptly and properly recorded on the
Company's  books.  The Company's records must disclose the nature and purpose of
the  transactions.  The Company's investors, creditors and other decision makers
rely  on  its  records  and  have  a  right  to  information which is timely and
accurate.

-All  employees  shall cooperate fully with the independent auditors of the
Company  and  under  no  circumstances  withhold  any  information  from  them.

-A  director, officer or employee may not maintain the Company's accounting
or other records, or cause them to be maintained, in such a way that they do not
reflect  the true nature of transactions, account balances or other matters with
clarity  and  completeness.

-A  director,  officer  or  employee  may  not establish for any purpose an
unauthorized, undisclosed, or unrecorded fund or asset account involving Company
assets.

-A  director,  officer  or  employee  may  not  allow  transactions with an
investor, supplier, agent, or customer to be structured or recorded in a way not
consistent  with  normal  business  practice  or  generally  accepted accounting
principles.

-No false, incomplete, misleading or artificial entries or records shall be
made  on the books or records of the Company or its subsidiaries for any reason.
The  shifting  of  charges  or  costs  to  inappropriate accounts is prohibited.

                                    33
<PAGE>

-No  payment  on  behalf  of the Company shall be made or approved with the
understanding  that it will or might be used for something other than the stated
purposes.

-Undisclosed or unrecorded corporate funds shall not be established for any
purpose,  nor shall the Company funds be placed in any personal or non-corporate
account.

-"Slush  funds"  or similar off-book accounts, where there is no accounting
for  receipts  or  expenditures  on  corporate  books,  are  prohibited.

A system of internal accounting controls shall be maintained which is sufficient
to  provide  reasonable  assurances  that  transactions:

-are  executed  in  accordance  with  management's  authorization.

-are  recorded  in  a  manner  that  permits  preparation  of the Company's
financial statements in conformity with generally accepted accounting principles
and  applicable  regulations.

-are  recorded  so  as to maintain accountability for the Company's assets.
No  officer  or  employee  acting  on  behalf of the Company shall engage in any
activity  that  circumvents  or  seeks  to  circumvent  the Company's systems of
internal  controls.


                       DISCLOSURE, GUIDANCE AND APPROVALS


This  Code  permits  or  requires  associates  in various situations to disclose
certain facts to, and seek guidance or obtain approval from "appropriate Company
representatives".

For  each  associate,  the  "appropriate  Company representative" is as follows:

-     In  the  case  of any non-officer employee, such employee's supervisor. If
such  employee  has  concerns  regarding  the  supervisor's  objectivity  or
independence  with respect to the matter, the appropriate Company representative
is  the  Chief  Financial  Officer.

-     In  the  case  of  any officer or management employee (other than the CEO,
President,  CFO  or  Controller)  the  appropriate Company representative is the
Chief  Financial  Officer.  If  such  employee  has concerns regarding the Chief
Financial  Officer's objectivity or independence with respect to the matter, the
appropriate  Company  representative  is  the  Chief  Executive  Officer  or the
President.

-     In  the  case  of  the  Chief  Executive Officer, the President, the Chief
Financial  Officer  or the Controller, and any director, the appropriate Company
representative  is the Chairman of the Audit Committee of the Board of Directors
or,  if  the  Chairman  so  determines,  the  full  Audit  Committee.

These  are  the  persons  associates should contact to seek guidance, to clarify
issues  and  to  obtain  confirmation  that  a  particular  course of conduct or
transaction is permissible or impermissible under this Code. The Audit Committee
has  adopted  separate procedures for employees to report concerns they may have
regarding financial reporting abuses, illegality or violations of this Code on a
confidential  basis.  The  Company  Corporation Employee Reporting Procedure for
Accounting  and  Auditing  Concerns are circulated periodically and any employee
may  obtain  a  copy  from  the  Chief  Financial  Officer.

                                  34
<PAGE>



                                 CERTIFICATIONS

Employees  may  be  required  periodically to certify their understanding of and
intent  to  comply  with  or  their  past  compliance  with  this  Code.

Any  employee who violates this Code of Ethics is subject to possible suspension
or  other disciplinary action, including discharge. Any employee who assists in,
or  knowingly  fails  to  report,  a  violation  of this Code is also subject to
suspension,  discharge  or other appropriate action. Any employee who suspects a
violation  of these policies (including any material transaction or relationship
that  gives  rise  to  a  conflict  of  interest  which to the knowledge of such
employee  has  not  been disclosed to the appropriate persons) should inform the
appropriate  Company  representatives  by using the Company Corporation Employee
Reporting  Procedure  for  Accounting  and  Auditing  Concerns.

ADOPTED  AND  ACCEPTED  BY  THE  BELOW  SIGNED  DIRECTORS OF DAYBREAK MINES INC.




Signed  this  3rd  day  of  May,  2004








/s/  Dale  B.  Lavigne
----------------------
Dale  Lavigne



/s/  Ronald  D.  Lavigne
------------------------
Ronald  Lavigne



/s/  Thomas  C.  Kilbourne
--------------------------
Thomas  Kilbourne



/s/  Lewis  J.  Lavigne
-----------------------
Lewis  Lavigne


                      35
<PAGE>





                                   SIGNATURES

Pursuant  to the requirements of Section 13 or 15 (d) of the Securities Exchange
Act  of  1934,  the  registrant  has duly caused this report to be signed on its
behalf  by  the  undersigned,  thereunto  duly  authorized.


                                DAYBREAK  MINES,  INC.

                       By:     /s/  Dale  B.  Lavigne
                               ----------------------
                               Dale  B.  Lavigne,  its  President  and
                               Chief  Executive  Officer
                               Date:  May  11,  2004

                       By:     /s/  Thomas  C.  Kilbourne
                               --------------------------
                               Thomas  C.  Kilbourne,  its
                               Principal  Financial  Officer
                               Date:  May  11,  2004

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has  been  signed below by the following persons on behalf of the registrant and
in  the  capacities  and  on  the  dates  indicated.

     By:   /s/  Thomas  C.  Kilbourne
           --------------------------
          Thomas  C.  Kilbourne
          Secretary/Treasurer
          Date:  May  11,  2004

     By:  /s/  Ronald  D.  Lavigne
          ------------------------
          Ronald  D.  Lavigne
          Director
          Date:  May  11,  2004


     By:  /s/  Dale  B.  Lavigne
          ----------------------
          Dale  B.  Lavigne
          Director
          Date:  May  11,  2004

     By:  /s/  Lewis  J.  Lavigne
          -----------------------
          Lewis  J.  Lavigne
          Director
          Date:  May  11,  2004


                                   36
<PAGE>





                                  Exhibit 31.1

                                  CERTIFICATION
I,  Dale  B.  Lavigne,  certify  that:

(1)  I  have  reviewed this annual report on Form 10-KSB of Daybreak Mines, Inc.

(2)  Based on my knowledge, this report does not contain any untrue statement of
a  material  fact  or  omit  to  state  a  material  fact  necessary to make the
statements  made, in light of the circumstances under which such statements were
made,  not  misleading  with  respect  to  the  period  covered  by this report;
(3)  Based  on  my  knowledge,  the  financial  statements,  and other financial
information included in this report, fairly present in all material respects the
financial  condition, results of operations and cash flows of the small business
issuer  as  of,  and  for,  the  periods  presented  in  this  report;
(4)  The  small  business  issuer's  other  certifying  officer(s)  and  I  are
responsible  for establishing and maintaining disclosure controls and procedures
(as  defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control
over  financial  reporting  (as  defined  in  Exchange  Act  Rules 13a-15(f) and
15d-15(f))  for  the  small  business  issuer  and  have:
(a)  Designed such disclosure controls and procedures, or caused such disclosure
controls  and  procedures  to  be designed under our supervision, to ensure that
material  information  relating  to  the  small  business  issuer, including its
consolidated  subsidiaries, is made known to us by others within those entities,
particularly  during  the  period  in  which  this  report  is  being  prepared;
(b)  Designed  such  internal  control  over financial reporting, or caused such
internal  control over financial reporting to be designed under our supervision,
to provide reasonable assurance regarding the reliability of financial reporting
and  the preparation of financial statements for external purposes in accordance
with  generally  accepted  accounting  principles;
(c)  Evaluated  the  effectiveness  of  the  small  business issuer's disclosure
controls  and  procedures and presented in this report our conclusions about the
effectiveness  of  the  disclosure controls and procedures, as of the end of the
period  covered  by  this  report  based  on  such  evaluation;  and
(d)  Disclosed in this report any change in the small business issuer's internal
control  over  financial  reporting  that  occurred  during  the  small business
issuer's  most  recent fiscal quarter (the small business issuer's fourth fiscal
quarter  in  the  case  of an annual report) that has materially affected, or is
reasonably  likely  to  materially  affect, the small business issuer's internal
control  over  financial  reporting;  and
(5)  The  small  business  issuer's  other  certifying  officer(s)  and  I  have
disclosed,  based  on  our  most  recent  evaluation  of  internal  control over
financial  reporting,  to  the  small  business  issuer's auditors and the audit
committee  of  the  small  business  issuer's  board  of  directors  (or persons
performing  the  equivalent  functions):
(a)  All  significant  deficiencies  and  material  weaknesses  in the design or
operation  of  internal  control  over  financial reporting which are reasonably
likely  to  adversely  affect  the  small  business  issuer's ability to record,
process,  summarize  and  report  financial  information;  and
(b)  Any  fraud,  whether  or  not  material,  that involves management or other
employees  who  have  a significant role in the small business issuer's internal
control  over  financial  reporting.

Date:  May  11,  2004
       --------------

/s/  Dale  B.  Lavigne
----------------------
Dale  B.  Lavigne
President  and  Chief  Executive  Officer

                                    37

<PAGE>
                                  Exhibit 31.2

                                  CERTIFICATION

I,  Thomas  Kilbourne,  certify  that:

(1)  I  have  reviewed this annual report on Form 10-KSB of Daybreak Mines, Inc.

(2)  Based on my knowledge, this report does not contain any untrue statement of
a  material  fact  or  omit  to  state  a  material  fact  necessary to make the
statements  made, in light of the circumstances under which such statements were
made,  not  misleading  with  respect  to  the  period  covered  by this report;
(3)  Based  on  my  knowledge,  the  financial  statements,  and other financial
information included in this report, fairly present in all material respects the
financial  condition, results of operations and cash flows of the small business
issuer  as  of,  and  for,  the  periods  presented  in  this  report;
(4)  The  small  business  issuer's  other  certifying  officer(s)  and  I  are
responsible  for establishing and maintaining disclosure controls and procedures
(as  defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control
over  financial  reporting  (as  defined  in  Exchange  Act  Rules 13a-15(f) and
15d-15(f))  for  the  small  business  issuer  and  have:
(a)  Designed such disclosure controls and procedures, or caused such disclosure
controls  and  procedures  to  be designed under our supervision, to ensure that
material  information  relating  to  the  small  business  issuer, including its
consolidated  subsidiaries, is made known to us by others within those entities,
particularly  during  the  period  in  which  this  report  is  being  prepared;
(b)  Designed  such  internal  control  over financial reporting, or caused such
internal  control over financial reporting to be designed under our supervision,
to provide reasonable assurance regarding the reliability of financial reporting
and  the preparation of financial statements for external purposes in accordance
with  generally  accepted  accounting  principles;
(c)  Evaluated  the  effectiveness  of  the  small  business issuer's disclosure
controls  and  procedures and presented in this report our conclusions about the
effectiveness  of  the  disclosure controls and procedures, as of the end of the
period  covered  by  this  report  based  on  such  evaluation;  and
(d)  Disclosed in this report any change in the small business issuer's internal
control  over  financial  reporting  that  occurred  during  the  small business
issuer's  most  recent fiscal quarter (the small business issuer's fourth fiscal
quarter  in  the  case  of an annual report) that has materially affected, or is
reasonably  likely  to  materially  affect, the small business issuer's internal
control  over  financial  reporting;  and
(5)  The  small  business  issuer's  other  certifying  officer(s)  and  I  have
disclosed,  based  on  our  most  recent  evaluation  of  internal  control over
financial  reporting,  to  the  small  business  issuer's auditors and the audit
committee  of  the  small  business  issuer's  board  of  directors  (or persons
performing  the  equivalent  functions):
(a)  All  significant  deficiencies  and  material  weaknesses  in the design or
operation  of  internal  control  over  financial reporting which are reasonably
likely  to  adversely  affect  the  small  business  issuer's ability to record,
process,  summarize  and  report  financial  information;  and
(b)  Any  fraud,  whether  or  not  material,  that involves management or other
employees  who  have  a significant role in the small business issuer's internal
control  over  financial  reporting.

Date:  May  11,  2004
       --------------

/s/  Thomas  Kilbourne
----------------------
Thomas  Kilbourne
Principal  Accounting  Officer
                              38

<PAGE>
                                  Exhibit 32.1

                            CERTIFICATION PURSUANT TO
                             18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In  connection with the Annual Report of Daybreak Mines, Inc. (the "Company") on
Form  10-KSB  for  the  period  ending  February  29,  2004,  as  filed with the
Securities  and  Exchange  Commission on the date hereof (the "Report"), I, Dale
Lavigne,  President and Chief Executive Officer of Daybreak Mines, Inc, certify,
pursuant  to  18  U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley  Act  of  2002,  that:

(1)     The  Report  fully  complies  with  the requirements of Section 13(a) or
15(d)  of  the  Securities  Exchange  Act  of  1934;  and

(2)     The information contained in the Report fairly presents, in all material
respects,  the  financial  condition  and  results of operations of the Company.
1.
Date:  May  11,  2004
       --------------

/s/  Dale  B.  Lavigne
----------------------
Dale  B.  Lavigne
President  and  Chief  Executive  Officer
                           39

<PAGE>

                                  Exhibit 32.2

                            CERTIFICATION PURSUANT TO
                             18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In  connection with the Annual Report of Daybreak Mines, Inc. (the "Company") on
Form  10-KSB  for  the  period  ending  February  29,  2004,  as  filed with the
Securities  and Exchange Commission on the date hereof (the "Report"), I, Thomas
C.  Kilbourne,  Principal  Accounting  Officer of Daybreak Mines, Inc., certify,
pursuant  to  18  U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley  Act  of  2002,  that:

(1)     The  Report  fully  complies  with  the requirements of Section 13(a) or
15(d)  of  the  Securities  Exchange  Act  of  1934;  and

(2)     The information contained in the Report fairly presents, in all material
respects,  the  financial  condition  and  results of operations of the Company.

Date:  May  11,  2004
       --------------
/s/  Thomas  C.  Kilbourne
--------------------------
Thomas  C.  Kilbourne
Principal  Accounting  Officer

                                  40

<PAGE>