SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                 AMENDMENT NO. 1
                                   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 28, 2003

[ ] 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
$0.08 on March 15, 2004, as reported by the Over the Counter "Pink Sheets" was
$751,292.

At March 15, 2004, the registrant had 18,199,519 outstanding shares of $0.001
par  value  common  stock.



<PAGE>

                                TABLE OF CONTENTS
<TABLE>
<CAPTION>


<S>                                       <C>                                             <C>
                                        PART I

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                         6

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

ITEM 7.  FINANCIAL STATEMENTS                                                             7

ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
         ON ACCOUNTING AND FINANCIAL DISCLOSURE                                           7

                                       PART III

ITEM 9.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS, COMPLIANCE WITH
         SECTION 16(a) OF THE EXCHANGE ACT                                                8

ITEM 10. EXECUTIVE COMPENSATION                                                           9

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT                   9

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS                                  10

ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K                                                10

ITEM 14. CONTROLS AND PROCEDURES                                                         11

SIGNATURES                                                                               12

CERTIFICATIONS                                                                           13

FINANCIAL STATEMENTS                                                                 F1-F12




</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>


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 to be utilized to pay
for legal and accounting fees associated with the preparation and filing of this
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 are to 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 28, 2003 and
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

                                     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 February
28,  2001.  The  quotations reflect inter-dealer prices, without retail mark-up,
mark-down  or  commission  and  may  not  represent  actual  transactions.

                                          6
<PAGE>


<TABLE>
<CAPTION>


<S>               <C>           <C>

Fiscal Year. . .  High Closing  Low Closing
----------------  ------------  -----------

2001:
  First Quarter.           .02          .02
  Second Quarter           .02          .02
  Third Quarter.           .04          .02
  Fourth Quarter           .04          .02

2002:
  First Quarter.           .04          .04
  Second Quarter           .04          .04
  Third Quarter.           .04          .04
  Fourth Quarter           .05          .04

2003:
  First Quarter.           .06         . 05
  Second Quarter           .07         . 06
  Third Quarter.           .08          .07
  Fourth Quarter           .08          .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.

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

                                              7
<PAGE>

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 transacations, 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.  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

                                      8
<PAGE>

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 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  effected  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

                                      9
<PAGE>

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 dilutive 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  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
forseeable  future and has no plans to raise additional funds in the next twelve
months.  Management  has  no  plans  to  seek  loan  financing.

                                    10
<PAGE>

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.


ITEM  7.     FINANCIAL  STATEMENTS

The  financial  statements  of  the  registrant are included herein on pages F-1
through  F-12.

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 (including its consolidated subsidiaries) 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.
                                          11

<PAGE>

                                    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  March 15, 2004:
<TABLE>
<CAPTION>


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

Dale B. Lavigne . .   72  President and Director
-------------------  ---  --------------------------------

Ronald D. Lavigne .   49  Vice President and Director

Thomas C. Kilbourne   52  Secretary/Treasurer and Director

Lewis J. Lavigne. .   78  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 Ben 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. Mr. Lavigne received no
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,

                                       12
<PAGE>

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.

ITEM  11.  SECURITY  OWNERSHIP  OF  CERTAIN  BENEFICIAL  OWNERS  AND  MANAGEMENT

A  person  who  directly  or indirectly has shares or voting power or investment
power  with  respect  to  a  security  is  considered  a beneficial owner of the
security.  Voting  power is the power to vote or direct the voting of shares and
investment power is the power to dispose of or direct the disposition of shares.
Shares  as  to  which voting power or investment power may be acquired within 60
days  are  also  considered  as  beneficially  owned.

The  following  tables  set  forth certain information, as of March 15, 2004,
regarding  beneficial ownership of the Company's stock by (1) each person who is
known  to  the  Company  to  own  beneficially  more than 5% of any class of the
Company's  voting  stock,  and  (2)  (a)  each director and each nominee for the
election as a director of the Company, and (b) all current directors and current
executive  officers  of  the  Company  as  a  group.

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

                                            13
<PAGE>

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 March 15, 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 of
                        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  18,199,519  shares  of  common stock
outstanding  on  March 15, 2004.


SECURITY  OWNERSHIP  OF  MANAGEMENT  AS  OF  MARCH 15, 2004

The  following  table  sets  forth  certain  information as of March 15, 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 of
                            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%

                                                14
<PAGE>

                          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                11.58%
                                                               =========
</TABLE>



(1)Percent  of  ownership  is  based  upon  18,199,519  shares  of  common stock
outstanding  on  March 15, 2004.

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

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. At February 28, 2002, the
Company  had  $78 due Mr. Lavigne and entities controlled by him for general and
administrative  costs  paid  on  the  Company's  behalf.

During  the  fiscal  year  ended  February  28,  2002,  certain of the Company's
shareholders paid expenses of approximately $18,000 on the Company's behalf. The
expenses  primarily  related  to  legal fees and administrative costs associated
with  a  private placement of the Company's common stock and an amendment to its
articles  of  incorporation.  The  shareholders  were  reimbursed  from proceeds
received  by  the  Company's  private  placement.

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.  (2)
(14)     Code  of  Ethics
(31)      Rule  13a-14(a)/15d-14(a)  Certifications
(31)(i)     Certification  of  Dale  B.  Lavigne
(31)(ii)  Certification  of  Thomas  C.  Kilbourne
(32)     Section  1350  Certifications
(32)(i)     Certification  of  Dale  B.  Lavigne
(32)(ii)  Certification  of  Thomas  C.  Kilbourne
(99)     Additional  Exhibits.
               (99)(i)  Audit  Committee  Pre-approval  Policies

                                        15
<PAGE>


               (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

     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 28, 2003 and 2002 and the reviews of the
financial  statements included in the Company's Forms 10QSBs during those fiscal
years  were  $7,500  and  $7,475,  respectively.

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




          [The balance of this page has been intentionally left blank.]
                                     16

<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:  March  15,  2004

                                     By: /s/  Thomas  C.  Kilbourne
                                         --------------------------
                                         Thomas  C.  Kilbourne,  its
                                         Principal  Financial  Officer
                                         Date:  March  15,  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:  March  15,  2004

By:     /s/  Ronald  D.  Lavigne
        ------------------------
        Ronald  D.  Lavigne
        Director
        Date:  March  15,  2004

By:     /s/  Dale  B.  Lavigne
        ----------------------
        Dale  B.  Lavigne
        Director
        Date:  March  15,  2004

By:     /s/  Lewis  J.  Lavigne
        -----------------------
        Lewis  J.  Lavigne
        Director
        Date:  March  15,  2004

                                               17

<PAGE>
                                   Exhibit 14

                           DAYBREAK MINES, INC., INC.
                               CODE OF ETHICS FOR
                  PRESIDENT, CEO AND SENIOR FINANCIAL OFFICERS


1.     The  President, CEO and all senior financial officers are responsible for
full,  fair,  accurate,  timely  and  understandable  disclosure in the periodic
reports  required  to  be filed by the Company with the SEC.  Accordingly, it is
the  responsibility  of  the  President,  CEO  and each senior financial officer
promptly  to bring to the attention of the Disclosure Committee (or in the event
that  the  Company  has  not established a Disclosure Committee, to the Board of
Directors)  any  material  information  of which he or she may become aware that
affects  the  disclosures made by the Company in its public filings or otherwise
assist  the  Disclosure  Committee  in  fulfilling  its  responsibilities.

2.     The President, CEO and each senior financial officer shall promptly bring
to  the attention of the Disclosure Committee and the Audit Committee (or in the
event  that  the Company has not established an audit committee, to the Board of
Directors)  any  information  he  or  she  may  have  concerning (a) significant
deficiencies  in  the  design  or  operation  of  internal  controls which could
adversely  affect the company's ability to record, process, summarize and report
financial  data  or  (b)  any  fraud,  whether  or  not  material, that involves
management  or  other  employees  who  have  a significant role in the Company's
financial  reporting,  disclosures  or  internal  controls.

3.     The President, CEO and each senior financial officer shall promptly bring
to  the attention of the General Counsel, President, or the CEO and to the Audit
Committee  any  information he or she may have concerning any actual or apparent
conflicts of interest between personal and professional relationships, involving
any  management  or other employees who have a significant role in the Company's
financial  reporting,  disclosures  or  internal  controls.

4.     The President, CEO and each senior financial officer shall promptly bring
to  the attention of the General Counsel, President, or the CEO and to the Audit
Committee  any  information he or she may have concerning evidence of a material
violation  of  the  securities or other laws, rules or regulations applicable to
the  Company  and  the  operation  of  its business, by the Company or any agent
thereof,  or  of  violation  of  these  procedures.

5.     The  Board of Directors shall determine, or designate appropriate persons
to  determine,  appropriate  actions  to  be taken in the event of violations of
these  procedures  by  the  President,  CEO  or  the  Company's senior financial
officers.  Such  actions shall be reasonably designed to deter wrongdoing and to
promote  accountability  for  adherence  to  these procedures, and shall include
written  notices  to  the individual involved that the Board has determined that
there  has  been a violation, censure by the Board, demotion or re-assignment of
the  individual  involved,  suspension  with  or  without  pay  or  benefits (as
determined  by  the  Board)  and termination of the individual's employment.  In
determining  what  action  is  appropriate  in  a  particular case, the Board of
Directors  or  such  designee  shall take into account all relevant information,
including  the  nature  and  severity  of  the  violation, whether the violation
appears  to  have  been  intentional  or  inadvertent, whether the individual in
question  had  been  advised  prior  to the violation as to the proper course of
action  and  whether  or  not  the  individual  in questions had committed other
violations  in  the  past.

                                     18
<PAGE>


                                  Exhibit 31.1

                                  CERTIFICATION


I,  Dale  B.  Lavigne,  certify  that:

(1)  I have reviewed this annual report on Form 10-KSB/A 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:  March  15,  2004

/s/  Dale  B.  Lavigne
----------------------
Dale  B.  Lavigne
President,  and  Chief  Executive  Officer
                                       19

<PAGE>
                                  Exhibit 31.2

                                  CERTIFICATION

I,  Thomas  Kilbourne,  certify  that:

(1)  I have reviewed this annual report on Form 10-KSB/A 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.

March  15,  2004

/s/  Thomas  Kilbourne
----------------------
Thomas  Kilbourne
Principal  Accounting  Officer
                                         20

<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/A for the period ending February 28, 2003, 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:  March  15,  2004
       ----------------
/s/  Dale  B.  Lavigne
----------------------
Dale  B.  Lavigne
President  and  Chief  Executive  Officer
                                            21

<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/A for the period ending February 28, 2003, 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:  March  15,  2004
       ----------------
/s/  Thomas  C.  Kilbourne
--------------------------
Thomas  C.  Kilbourne
Principal  Accounting  Officer

                                      22

<PAGE>





                                                            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  28,  2003 and 2002, 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  28, 2003 and 2002, 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
May  21,  2003

                                     F-1

<PAGE>



                              DAYBREAK MINES, INC.
                                TABLE OF CONTENTS



<TABLE>
<CAPTION>

<S>                                                                                 <C>



Balance Sheets, February 28, 2003 and 2002                                           F-3


Statements of Operations for the years ended February 28, 2003 and 2002              F-4


Statements of Changes in Stockholders' Equity
for the years ended February 28, 2003 and 2002                                       F-5


Statements of Cash Flows for the years ended February 28, 2003 and 2002              F-6


Notes to Financial Statements                                                   F-7-F-12


</TABLE>





                                                    F-2


<PAGE>

DAYBREAK  MINES,  INC.
BALANCE  SHEETS
February  28,  2003  and  2002


<TABLE>
<CAPTION>


<S>                                                   <C>         <C>
                                         ASSETS

                                                           2003        2002

Current assets:
  Cash . . . . . . . . . . . . . . . . . . . . . . .  $   9,965   $  34,328
                                                      ----------  ----------
    Total current assets . . . . . . . . . . . . . .      9,965      34,328
                                                      ----------  ----------

  Marketable securities. . . . . . . . . . . . . . .      2,595
                                                      ----------
      Total assets . . . . . . . . . . . . . . . . .  $  12,560   $  34,328
                                                      ==========  ==========


                            LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
  Accounts payable . . . . . . . . . . . . . . . . .  $     750   $     100
  Related party payables . .             . . . . . . . . . . . .         78
                                                      ----------  ---------
      Total liabilities. . . . . . . . . . . . . . .        750         178
                                                      ----------  ----------

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, 16,949,419 issued and outstanding. .     16,949      16,949
  Additional paid-in capital . . . . . . . . . . . .    689,789     689,789
  Accumulated deficit. . . . . . . . . . . . . . . .   (697,523)   (672,588)
  Accumulated other comprehensive income . . . . . .      2,595
                                                      ----------   ---------
      Total stockholders' equity . . . . . . . . . .     11,810      34,150
                                                      ----------  ----------
      Total liabilities and stockholders' equity . .  $  12,560   $  34,328
                                                      ==========  ==========


</TABLE>

   The accompanying notes are an integral part of these financial statements.
                                       F-3
<PAGE>


DAYBREAK  MINES,  INC.
STATEMENTS  OF  OPERATIONS  AND  COMPREHENSIVE  LOSS
For  the  years  ended  February  28,  2003  and  2002

<TABLE>
<CAPTION>


                                                 2003         2002

<S>                                               <C>           <C>
Operating expenses:
  Legal expenses . . . . . . . . . . . . .  $     5,001   $    3,888
  General and administrative expenses. . .       20,175        9,485
                                            ------------  -----------
                                                 25,176       13,373
                                            ------------  -----------

Other (income) expense:
  Interest income. . . . . . . . . . . . .         (241)         (65)
                                            ------------  -----------

NET LOSS . . . . . . . . . . . . . . . . .  $    24,935   $   13,308
                                            ============  ===========

Other comprehensive (income) loss
  Unrealized gain in marketable securities  $    (2,595)
                                            ------------  -----------
COMPREHENSIVE LOSS . . . . . . . . . . . .  $    22,340   $   13,308
                                            ============  ===========

Net loss per common share. . . . . . . . .  $       Nil   $      Nil
                                            ============  ===========

Weighted average common
shares outstanding-basic . . . . . . . . .   16,949,419    8,028,871
                                            ============  ===========



</TABLE>

   The accompanying notes are an integral part of these financial statements.
                                       F-4
<PAGE>

DAYBREAK  MINES,  INC.
STATEMENTS  OF  CHANGES  IN  STOCKHOLDERS'  EQUITY
For  the  years  ended  February  28,  2003  and  2002


<TABLE>
<CAPTION>


<S>                                <C>         <C>              <C>            <C>          <C>        <C>
                                                                                           OTHER
                                                            ADDITIONAL      ACCUMULATED COMPREHENSIVE
                                 SHARES      AMOUNT       PAID-IN CAPITAL     DEFICIT      INCOME     TOTAL

Balance, February 28, 2001    5,949,419   $    594,942   $         62,869  $(659,280)                $(1,469)

Reduction in par value
of common stock. . . . . .                    (588,993)           588,993

Issuance of common stock,
net of offering costs. . .   11,000,000         11,000             37,927                             48,927

Net loss . . . . . . . . .                                                   (13,308)                (13,308)
                            ------------  -------------  ----------------   ---------  ------------  --------

Balance, February 28, 2002   16,949,419         16,949            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
                            ============  =============  ================  ==========  ===========    =======


</TABLE>


 The accompanying notes are an integral part of these financial statements.
                                           F-5
<PAGE>

DAYBREAK  MINES,  INC.
STATEMENTS  OF  CASH  FLOWS
For  the  years  ended  February  28,  2003  and  2002



<TABLE>
<CAPTION>


                                                    2003     2002

<S>                                              <C>        <C>
Cash flows from operating activities:
      Net loss. . . . . . . . . . . . . . . . .  $(22,340)  $(13,308)
Adjustment to reconcile net loss to net cash
  used by operating activities:
  Unrealized gain in marketable securities. . .    (2,595)
    Change in:
    Accounts payable. . . . . . . . . . . . . .       650       (488)
    Related party payables. . . . . . . . . . .       (78)      (853)
                                                 ---------  ---------
      Net cash used by operating activities . .   (24,363)   (14,649)
                                                 ---------  ---------

Cash flows from financing activities:
  Proceeds from sale of common stock, net . . .               48,927
                                                 ---------  ---------
      Net cash provided by financing activities               48,927
                                                 ---------  ---------


Net increase (decrease) in cash . . . . . . . .   (24,363)    34,278
                                                 ---------  ---------

Cash, beginning of year . . . . . . . . . . . .    34,328         50
                                                 ---------  ---------

Cash, end of year . . . . . . . . . . . . . . .  $  9,965   $ 34,328
                                                 =========  =========


</TABLE>

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

                                        F-6

<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  28, 2003 and 2002, 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.

                                      F-7
<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 28, 2003
and  2002,  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  carrying amounts of financial instruments including cash, accounts payable,
and  related  party  payables, approximated their fair values as of February 28,
2003  and  2002.

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  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 28, 2003, the Company's investments experienced
an  unrealized  gain  of $2,595.  The gain increased the Company's investment in
marketable  securities  from zero at February 28, 2002 to $2,595 at February 28,
2003.

                                    F-8
<PAGE>

DAYBREAK  MINES,  INC.
NOTES  TO  FINANCIAL  STATEMENTS

2.     SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES,  CONTINUED:

New  Accounting  Pronouncements

In June 2001, the Financial Accounting Standards Board ("FASB") issued Statement
of Financial Accounting Standards No. 141, "Business Combinations," and No. 142,
"Goodwill  and  Other  Intangible  Assets,"  collectively, the Statements. These
statements drastically change the accounting for business combinations, goodwill
and  intangible  assets.  Companies are required to adopt Statement 142 in their
fiscal  year beginning after December 15, 2001. Under SFAS No. 142, goodwill and
intangible  assets  that  have indefinite useful lives will not be amortized but
rather  will  be tested at least annually for impairment. Intangible assets that
have  finite useful lives will continue to be amortized over their useful lives,
but  without the constraint of the 40-year ceiling. The Company adopted SFAS No.
142  on  March  1,  2002,  with  no  impact  to  its  financial  statements.

In  August  2001, the FASB issued SFAS No. 143, "Accounting for Asset Retirement
Obligations."  SFAS  No.  143  addresses  financial accounting and reporting for
obligations associated with the retirement of tangible long-lived assets and the
associated asset retirement costs.  The provisions of SFAS No. 143 are effective
for  fiscal years beginning after June 15, 2002.  The Company presently does not
have  any  asset retirement obligations and does not anticipate that adoption of
this  pronouncement will result in any impact on its reported financial position
or  results  of  operations.

In October 2001, the FASB issued SFAS No. 144, "Accounting for the Impairment or
Disposal of Long-Lived Assets."  SFAS No. 144 addresses financial accounting and
reporting  for  the impairment or disposal of long-lived assets and discontinued
operations.  The  provisions  of SFAS No. 144 are generally effective for fiscal
years  beginning  after  December 15, 2001.  The Company adopted SFAS No. 144 on
March 1, 2002 and the adoption of the pronouncement did not result in any impact
on  its  reported  financial  position  or  results  of  operations.

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.  The Company believes that the adoption of SFAS No.
145  will  not  have a material impact on its results of operations or financial
position.

                                  F-9
<PAGE>

DAYBREAK  MINES,  INC.
NOTES  TO  FINANCIAL  STATEMENTS

2. SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES,  CONTINUED:

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

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. FAS 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. SFAS 146 is effective for
exit  or  disposal  activities  that are initiated after December 31, 2002.  The
Company  believes  that  the  adoption  of SFAS No. 146 will not have a material
impact  on  its  results  of  operations  or  financial  position.

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  will  have  no impact on the Company's
financial  statements.

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.

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 will not have a material effect on the
Company's  financial  statements.
                                          F-10
<PAGE>

DAYBREAK  MINES,  INC.
NOTES  TO  FINANCIAL  STATEMENTS

3.  MINERAL  PROPERTIES

At  February  28,  2003  and 2002, 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 accordance with the provisions of
FASB Statement No. 144, "Accounting for the Impairment or Disposal of Long-Lived
Assets,"  the  Company  reduced  the carrying value of its mineral properties to
zero  during  1999.

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 28, 2003 and 2002, the Company had no deferred tax assets
or  liabilities.

5.  RELATED  PARTY  PAYABLES

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. At February 28, 2002, the
Company  had  $78 due Mr. Lavigne and entities controlled by him for general and
administrative  costs  paid  on  the  Company's  behalf.

During  the  fiscal  year  ended  February  28,  2002,  certain of the Company's
shareholders paid expenses of approximately $18,000 on the Company's behalf. The
expenses  primarily  related  to  legal fees and administrative costs associated
with  a  private placement of the Company's common stock and an amendment to its
articles  of  incorporation (See Note 6).  The shareholders were reimbursed from
proceeds  received  by  the  Company's  private  placement.

                                        F-11

<PAGE>

DAYBREAK  MINES,  INC.
NOTES  TO  FINANCIAL  STATEMENTS

6.     STOCKHOLDERS'  EQUITY

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

Up  until  the fiscal year ended February 28, 2001, the Company had one class of
non-assessable common stock. The common stock had a par value of $0.10 per share
and  6,000,000  shares  were  authorized  for  issue.  On  August  30, 2001, the
Company's  board  of  directors  resolved  to  amend  the  Company's articles of
incorporation  to  increase  the  number of shares of common stock available for
issue  to  200,000,000,  and  to  reduce  the  par value to $0.001 per share. In
September  of 2001, the Company's shareholders affirmatively voted to ratify the
amendments to the articles of incorporation. In connection with the amendment to
the Company's articles of incorporation that reduced the par value of its common
stock,  the  Company  recorded a charge to its common stock account of $588,993,
with  a  corresponding  credit to its additional paid-in capital account, during
the  fiscal  year  ended  February  28,  2002.

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

During  the August 30, 2001, board of directors meeting, a resolution was passed
to amend the Company's articles of incorporation to authorize the issue of up to
10,000,000  shares  of  $0.001  par  value  preferred stock.  The resolution was
subsequently  ratified  by the Company's shareholders.  At February 28, 2003 and
2002,  no  shares  of  preferred  stock  were  issued  or  outstanding.

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

In December of 2001, 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
11,000,000  shares  of  the  Company's  unregistered common stock for $0.005 per
share, or $55,000.  Net proceeds of approximately $49,000 from the offering were
used  to fund general and administrative activities necessary to reestablish the
Company's  compliance  with  securities  regulations  and  investigate potential
business  opportunities  with  other  entities.



                                F-12