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

                                 FORM 10-KSB


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

                    For the fiscal year ended December 31, 2007
                                       or

|_| TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
    OF 1934

           For the transition period from _____________ to ___________

                          Commission file number: 0-49852

                                    DAHUA INC.
-------------------------------------------------------------------------------
                   (Name of small business issuer in its charter)

                 Delaware                                04-3616479
---------------------------------------  -------------------------------------
(State or other jurisdiction of           (I.R.S. Employer Identification No.)
     incorporation or organization)

 19th Floor, Building C, Tianchuangshiyuan, Huizhongbeili
       Chaoyang District, Beijing, China                    100012
------------------------------------------------------------------------------
      (Address of principal executive offices)            (Zip Code)

 Issuer's telephone number:                            86-10-6480-1527
------------------------------------------------------------------------------

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 is not required to file reports pursuant to Section 13
or 15(d) of the Exchange Act. |__|

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 pursuant 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.   |__|

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

Registrant's revenues for the year ended December 31, 2007 were $16,411,672.

The aggregate market value of the voting and non-voting common equity held by
non-affiliates computed by reference to the price at which the common equity
was sold, or the average bid and asked price of such common equity as of a
specified date within the past 60 days: Since there is no trading market for
Registrant's securities, no estimate as to the market value can be given.

The number of shares outstanding of Registrant's common stock as of
December 31, 2007 was 25,000,000.

Transitional Small Business Disclosure Format (Check one): Yes |__| No |X|





                                      DAHUA INC.

                                     FORM 10-KSB
                           For the Year Ended December 31, 2007


PART I

Item 1.   Description of Business......................................       4
Item 2.   Description of Property......................................      13
Item 3.   Legal Proceedings............................................      14
Item 4.   Submission of Matters to a Vote of Security Holders..........      14

PART II

Item 5.   Market for Common Equity and Related Stockholder Matters.....      14
Item 6.   Management's Discussion and Analysis or Plan of Operation....      15
Item 7.   Financial Statements.........................................      27
Item 8.   Changes In and Disagreements with Accountants on
            Accounting and Financial Disclosure........................      40
Item 8A(T)Controls and Procedures......................................      41
Item 8B.  Other Information............................................      43

PART III

Item 9.   Directors, Executive Officers, Promoters and Control Persons;
            Compliance with Section 16(a) of the Exchange Act..........      43
Item 10.  Executive Compensation.......................................      46
Item 11.  Security Ownership of Certain Beneficial Owners and
           Management and Related Stockholder Matters..................      47
Item 12   Certain Relationships and Related Transactions...............      49
Item 13.  Exhibits.....................................................      50
Item 14   Principal Accountant Fees and Services.......................      52

Signatures.............................................................      53









Item 1.   Description of Business

Background

Dahua Inc. (the "Company") was incorporated on March 8, 2002, in the State of
Delaware under the name of Norton Industries Corp. ("Norton") as a blank check
company for the purpose of either merging with or acquiring an operating
company with operating history and assets. In June 2002, the Company filed a
registration statement on Form 10-SB with the Securities and Exchange
Commission ("SEC") in order to become a Section 12(g) registered company under
the Securities Exchange Act of 1934, as amended. The registration statement
became effective on or about August 10, 2002.

From March 8, 2002, to January 30, 2005, Norton conducted virtually no business
other than organizational matters and filings of periodic reports with the SEC
pursuant to the reporting requirements of Securities Exchange Act of 1934, as
amended. The promoters, control persons and affiliates of Norton were
Mr. Jianjun Zhang, Waywood Investments Ltd. ("Waywood"), Comp Hotel
International Ltd. ("Comp Hotel"), and South Sea Petroleum Holdings Ltd. ("South
Sea Petroleum"). Waywood is a small business consulting firm organized in the
British Virgin Islands. Mr. Jianjun Zhang is the sole shareholder of Waywood.
From Norton's inception in March 2002, to February 2003, Waywood owned 100% of
Norton, and Mr. Jianjun Zhang, from March 2002 to January 2005, was the sole
director and officer of Norton. On February 26, 2003, Waywood sold 85%, or
4,250,000 shares, of Norton's capital shares to Comp Hotel for $42,500 in cash.
Comp Hotel is a travel-related service provider operating in Hong Kong, and is
controlled by South Sea Petroleum, a Hong Kong corporation, whose principal
business is the exploration and production of crude oil in Indonesia.

On January 30, 2005, Waywood and Comp Hotel entered into a Share Exchange
Agreement with Bauer Invest Inc. for a reverse acquisition. Pursuant to the
agreement, Waywood and Comp Hotel sold all of their capital stock, or 5,000,000
shares of common stock, to Bauer for retirement in exchange for $100,000 in
cash and 5%, or 1,000,000 shares of Norton's post-merger common stock. To
effectuate the reverse acquisition, Norton issued 19,000,000 shares of its
common shares to 108 shareholders of Bauer in exchange for 100% of shares in
Bauer on a pro rata basis, i.e. the number of shares received by each
shareholder is proportionate to the number of shares he/she had originally owned
in Bauer. Following the transaction, on February 7, 2005, the name of Norton
was changed to Dahua Inc.

Bauer is a holding company, which conducts its business through its 80% owned
subsidiary Beijing Dahua Real Estate Development, Ltd., an operating company
organized in the People's Republic of China ("Dahua Real Estate"). As a result
of the reverse acquisition, Bauer became our wholly owned subsidiary, and the
shareholders of Bauer became our controlling shareholders. This transaction was
accounted for as a recapitalization, rather than a business combination. Under
accounting principles generally accepted in the United States of America, after
completion of this transaction, the Company files prior historical financial
information of Bauer and its subsidiaries for the years prior to the
acquisition on a stand-alone basis. The continuing operations of the Company
will reflect the consolidated operations of Dahua and its subsidiaries.

On May 12, 2005, Dahua Real Estate increased its registered capital, in which
the company increased its investment in Dahua Real Estate by $2,265,600 and the
minority shareholder of Dahua Real Estate increased its investment by $566,265.
Dahua Project Management Group ("Dahua Group") advanced the Company funds to
allow for the increase in investment, which amount was recorded as short-term
loans-related parties. On September 21, 2005, the Company issued, on a pro rata
basis, an aggregate of 4,750,000 shares of its common stock to shareholders of
Dahua Group in exchange for the conversion of the short-term loan ($2,265,600)
to equity shares. In connection with issuance of additional shares, pursuant to
a no-dilution clause of the Share Exchange Agreement dated January 30, 2005 the
Company entered into with Comp Hotel and Waywood, on September 21, 2005, the
Company issued 212,500 and 37,500 shares of our common stock to Comp Hotel and
Waywood, respectively.

Bauer was incorporated on December 10, 2003, under the laws of the British
Virgin Islands. On May 25, 2004, the shareholders of Dahua Group transferred to
Bauer 80% of the capital stock of Dahua Real Estate in exchange for all the
capital stock of Bauer. Dahua Group is a Beijing Municipal Government licensed
construction project supervising business entity in Beijing, China. This
transaction was accounted for as a recapitalization of Dahua Real Estate, rather
than a business combination. Before the stock transfer, the shareholders of
Dahua Group owned 80% of capital stock of Dahua Real Estate, and Beijing Dahua
Bidding Agency owned the remaining 20%. Beijing Dahua Bidding Agency is a
Chinese corporation servicing construction companies in biddings for major
construction projects. After the transfer, the shareholders of Bauer replaced
the shareholders of Dahua Group as holder of 80% of the capital stock of Dahua
Real Estate, while Beijing Dahua Bidding Agency still owns the remaining 20%.
Both Bauer and Dahua Group were owned by the same group of shareholders in the
same proportions prior to the acquisition by Norton.

Prior to the acquisition, other than owning 80% of Dahua Real Estate's capital
stock, Bauer had no operations. Dahua Real Estate was incorporated in China on
September 24, 2001, to engage in the development, construction, and sale of
luxury single-family housing units. Both Norton and Bauer were non-operating
shell companies and incurred minimal costs to acquire Bauer or Dahua Real
Estate, and therefore there was no need for adjustments for any costs incurred
by Norton or Bauer to be "pushed down" in the accounts of Norton, Bauer or Dahua
Real Estate. Dahua Real Estate did not incur any other costs which were required
to be "pushed down" for the completion of the transaction.

The promoters, control persons and affiliates of Bauer Invest, Inc. and Dahua
Real Estate are Mr. Yonglin Du and Dahua Group. Prior to the acquisition, a
group of shareholders owned 100% of Dahua Group, and the same group of the
shareholders owned 100% of Bauer in the same shareholding proportion as they
owned Dahua Group. At present, the same group of shareholders own 95% of Dahua
Inc. Yonglin Du, our CEO and President, also acts as president of Dahua Group
and Bauer. In 2000, Mr. Du founded Dahua Group and has since been its Chairman
of the Board of Directors and Chief Executive Officer. Dahua Group is a Beijing
Municipal Government licensed construction project supervising business entity
which is operating in Beijing, China. Since January 30, 2005, Mr. Du has been
our Chairman of the Board of Directors and Chief Executive Officer.

The Company has not been involved in any bankruptcy, receivership or similar
proceedings.


BUSINESS
--------

The Company, through its 80% owned subsidiary Beijing Dahua Real Estate
Development Ltd. ("Dahua Real Estate"), engages in the business of development,
construction and sale of luxury single-family homes in the northern suburb of
Beijing, China.


Development Projects
--------------------

In July 2003, the Company began to develop its first real estate project. The
project is called the first phase of Dahua Garden (the "First Phase"), which
consists of 76 luxury residential housing units, all of which are single houses
ranging from approximately 2,000 to 5,000 square feet, each with 3-4 bedrooms
with built-in closets and adjacent bathrooms, an open eat-in kitchen, a family
room, a living room, and an attic solarium for indoor sun bathing. Those homes
are within reasonable driving distances from Beijing metropolitan areas. The
project is located at the northern skirt of Beijing, China. The property being
developed sits on a hot spring, spewing 10,000 cubic meters per day providing
every house with hot spring water for baths. The water temperature at the mouth
of the hot spring is over 60 degrees centigrade. The surplus hot spring water
is discharged into the surrounding creeks and ponds, making them unfrozen all
year round.

The average sales price is around 1,500 yuan (approximately $205) per square
foot. The price does not include interior finishing, light fixtures, plumbing
and appliances, which are custom tailored to suit individual tastes and
preferences of the buyer from a menu of options. The average cost for interior
finishing is approximately 200 yuan (approximately $27) per square foot. The
interior finishing can be done by outside contractors of the buyer's choice.

The First Phase is constructed on land licensed from the government of China for
a period of 70 years, which expires on April 27, 2073. The granting of land use
licenses is a common practice in China as all land is government-owned, and, at
present, no option to purchase land has ever been granted. Pursuant to the laws
of China, all land belongs to the government. Regardless of whether real estate
is purchased or sold for residential or business purposes, the purchaser will
receive the ownership license and a permit to only use the land, as opposed to
owning the land. Upon transfer of title of the units to the owners, we will not
have any interest in such units or licensed land.

The construction began in July 2003 and was completed in December 2005. As of
December 31, 2007, 60 units have been sold, 13 units were reserved with clients'
deposits, 2 units were available for sale and one unit was kept by the company.

We are currently in the process of applying with Beijing municipal and Changping
district government agencies for the requisite licenses, permits, and approvals
in order to start our Second Phase of Dahua Garden, which will include 250
units of luxury single-family houses located in Changping District, Beijing,
China, on an approximately 267,000 square-meter site with a community clubhouse,
creeks, ponds, and professionally manicured gardens and landscape. Each will be
3,000 to 5,000 square feet in size to be sold for 4.5 to 6 million yuan, or
approximately $550,000 to $720,000. We will serve as the sole developer of the
project, including construction and sales.

In August 2006, Chinese government issued a number of new rules and regulations
for real estate developers, like us, in an attempt to push down rising house
prices by cutting down luxury single family house constructions and favoring
construction of apartment buildings. Under the government's new policy, (i) no
single family houses can be built, if the construction has not started, without
special construction permits; (ii) All permits previously issued have to be
re-reviewed and re-approved; and (iii) the land previously acquired for luxury
housing construction have to be revalued and sold to the people who offer the
most money for the land in an auction. Because of those new government policies,
we have incurred a long delay for obtaining the consents and approvals to
commence our construction for the second phase of Dahua Garden. On May 9, 2007,
we contacted a Beijing Municipal Government agency, who is responsible for the
issuance of construction permits, for our construction approval time frame
guidance. We were told two weeks later that our construction permit is very much
likely to be issued for two reasons: (1) We have completed our First Phase of
Dahua Garden; and (2) We have acquired for this land for almost ten (10) years.
It is expected that we may obtain our construction approvals by the middle of
2008.

However, there is no assurance that we will obtain those consents and approvals
from the government. If no consents and approvals are obtained, we may have to
cease our Second Phase of single luxury family house operations, and change our
business plan to build apartment buildings.

As of the date of this report, we don't have any current plan or arrangements
for development of apartment buildings.


Home Construction
-----------------

We act as the general contractor for our residential home developments and hire
subcontractors for all construction activities. The use of subcontractors
enables us to reduce our investment in direct labor costs, equipment and
facilities. We generally price our housing only after we have entered into
construction contracts with subcontractors, an approach which improves our
ability to estimate costs accurately.

As the general contractor, we select our subcontractors for construction through
a competitive bidding process. In addition to the bid price, our criteria
include the bidders' experience, reputation, recommendations and references
from other developers. The construction prices are capped and cover all
materials and labor needed to complete the construction under the construction
contract. The bid-winning subcontractor will make advance payments for all
materials and labor. We make payments to the subcontractors over time upon
completion and acceptance of certain phases of construction according to agreed
-upon milestones specified in the construction contract.

Our competitive bidding process includes the following steps: (1) Bid invitation
registration, (2) Bid invitation announcement, (3) Bid submission, (4) Pre-
screening of bidders' qualifications, (5) Purchase of bid document package by
the pre-qualified bidders, (6) Opening bids, (7) Assessment of bids, (8)
Selection and determination of the winning bidder, (9) Notice of award, and
(10) Execution of the construction contract.

To assure quality, construction has been monitored by Beijing Aocheng
Construction Management Ltd. ("Aocheng") and by construction quality control
authorities under the Changping District government. Aocheng is not a related
party. We entered into an agreement with Aocheng on September 24, 2003. The
agreement covered a period from October 15, 2003 to June 20, 2004. The total
management fee was 333,860 yuan, or approximately $40,000, paid in four
installments: (1) 10% within 10 days after the management company staff enters
the construction site; (2) 60% within one week after the roof of the main
building structure is completed; (3) 25% within 14 days after examination and
acceptance of construction; and (4) 5% on the first anniversary of acceptance
of construction. Although the contract has expired, according to Chinese law,
the company in charge of quality control of a construction product bears life-
long responsibility for the quality of such construction. Thus, Aocheng shall
remain responsible for quality assurance of our construction.

As the general contractor, we are responsible for all planning, scheduling and
budgeting operations. There is an on-site superintendent who oversees the
subcontractors. We supervise the construction of our project, coordinate the
activities of subcontractors and suppliers, subject their work to quality and
cost controls and assure compliance with zoning and building codes.

Subcontractors typically are retained on a project-by-project basis to complete
construction at a fixed price. Agreements with our subcontractors are generally
entered into after competitive bidding on an individual basis. We generally
obtain information from prospective subcontractors and suppliers with respect to
their financial conditions and abilities to perform under their agreements prior
to commencement of a formal bidding process. The services performed for us by
subcontractors are generally readily available from a number of qualified
subcontractors.

We use, to the extent feasible, standardized materials in our commercial
construction and homebuilding operations in order to permit efficiencies in
construction and material purchasing that can result in higher margins. Our
subcontractors generally negotiate the purchase of major raw material components
such as concrete, lumber and structural steel. They are responsible for what
they purchase and for what they pay for. Raw materials used in our operations
are generally readily available from a number of sources but prices of such raw
materials may fluctuate due to various factors, including supply and demand.

As the general contractor, we are not subject to any bonding and/or insurance
requirements under Chinese law and common practice in housing construction. We
may suffer heavy or total losses in the event of fire, earthquake or other
disasters.

To date, we have not encountered any problems that would affect the delivery
date of our First Phase units, nor have we experienced a significant increase
in prices of materials.

The First Phase is subject to government inspections prior to transfer of title
to buyers. The purpose of the inspection is to ensure that real estate
developers adhere to government standards of quality and safety.

Other Government regulations that we must adhere to are:

   o   Any structures being constructed must be for residential and commercial
 use;

   o   All structures must be within certain dimensions;

   o   Public infrastructures must be in place, such as electrical and telephone
poles, underground pipe systems;

   o   There must be various safety access routes in case of emergencies such
as fire or earthquake;

   o   Construction must not violate environmental laws in effect; and

   o   Compliance with certain infrastructure standards.

To date we have not violated any of the above-noted regulations.

We typically obtain all necessary development approvals, complete a
satisfactory environmental assessment of the site, secure any necessary
financing and complete other due diligence deemed appropriate by us prior to
becoming obligated to commence the construction.


Acquisition of Land-Use Rights
------------------------------

The residential home development process in China generally consists of three
phases: (1) acquisition of land-use rights; (2) land development and
construction; and (3) sale. The development cycles vary depending on the extent
of the government approvals required, the size of the development, necessary
site preparation, weather conditions and marketing results.

The whole development process for our First Phase is set forth below.

The date enclosed in the parenthesis following each step indicates the date on
which such approval was granted.

  1.  Signing of a land use rights transfer agreement with the owner of such
rights, i.e. Lutuan Village Committee of Beiqijia County, Changping District,
Beijing. Said agreement was then submitted to the Beiqijia County Government for
approval (September 25, 2001).

  2.  Preparation of a 'Proposal of the First Phase of Dahua Low Density
Residential Development Subdivision, which, after approval by Beiqijia County
Government and Changping District Government, was submitted to the Development
and Reconstruction Commission of Beijing Municipal Government for approval
(2001).

  3.  Approval of the Proposal by the Development and Reconstruction Commission
of Beijing Municipal Government after consultation with Beijing Construction
Commission and Planning Commission (June 12, 2002).

  4.  Submission of the Proposal by the Land Resources Bureau of Changping
District to Beijing National Land Resources Bureau to apply for changing the
nature of the proposed construction site from collective-owned land to state-
owned land (November 8, 2002).

  5.  Signing of a "Land Use Rights Transfer Agreement" with Beijing National
Land Resources Bureau and Beijing Housing Administration, making payment of land
use fee, and obtaining the 'National Land Use Permit' (October 20, 2003).

  6.  Submission of a detailed development plan to Beijing Planning Commission
to obtain "Development Planning Permit" and "Development Construction Permit"
(September 4, 2003 and September 28, 2003).

  7.  Upon issuance of the four Permits as set forth above, submission of an
application to Beijing National Land Resource Bureau and Beijing Housing
Administration for the "Residential Housing Pre-sale Permit" (November 2003 and
June 2, 2004).

The above-mentioned Permits are needed for all real estate development projects
in Beijing. Upon issuance of the "Residential Housing Pre-sales Permit", we may
begin to sell housing units to the public. After signing a purchase agreement
with the buyer, the agreement is recorded at the National Land Resource Bureau
and Housing Administration of Changping District, Beijing.


Sales and Marketing
-------------------

Our sales and marketing activities are conducted principally through our sales
employees. They are paid by base salary, plus sales commission, which is 0.3%
of gross sales. We have no single customer that will account for any substantial
portion of our sales revenues.

Our residential homes are targeted toward buyers who desire high quality
property with many attractive features on which to build luxury homes for use as
their primary residences, vacation retreats, retirement residences, or
investments. Our target buyers include upper and middle class Chinese citizens
and foreign nationals working in Beijing and the surrounding area, such as
Shanxi and Hebei provinces, ranging from 30 to 60 years of age, including
private entrepreneurs, senior executives, technology elites, college professors
and self-employed professionals. The foreign nationals are expatriates of
foreign companies based in China. Our strategy for remaining competitive in this
market involves building on our reputation of offering quality homes; using our
own sales offices and personnel; and offering properties with many appealing
features, such as trails, water access, creeks, and attractive views.

We sell our homes through our sales representatives who typically work from
sales offices located in the model homes at the development site. Sales
representatives assist potential buyers by providing them with basic floor
plans, price information, development and construction timetables, preview of
model homes and the selection of options. Our sales representatives are trained
by us and generally have had prior experience selling new homes in the local
market. We also market our homes for sale through direct mailing to an
identified population of prospective buyers and, to a lesser extent, through
other media, including newspapers, television and radio advertising, airplane
advertising, product tie-ins, billboards and other signage. For the years ended
December 31, 2007 and 2006, our advertising expenses were $522,808 and
$1,824,182, respectively.

Homes are sometimes sold prior to or during construction using sales contracts
which are accompanied by cash deposits. After receiving the Residential Housing
Pre-sale Permit issued by the government, we, the developer, are permitted by
government authorities to sell the residential units to be built to the public,
which is common practice in China. Upon execution of a binding purchase
contract between the developer and the buyer, a deposit, ranging from 10% to 20%
of the sales price, is required to be made to the developer, which we use to
construct our residential units. As of December 31, 2007, the balance of our
customer deposits was $4,994,842.

Our sales are made pursuant to a standard sales contract. Subject to particular
contract provisions, we generally permit purchasers to cancel their contractual
obligations in the event mortgage approvals are unobtainable within a specified
period of time and under certain other circumstances, including rescission
rights which may be given under local law. Accordingly, there is possibility
that home buyers, even though they have put down a certain amount of deposit,
turn out choosing not to purchase our housing units which creates an
uncertainty and risk to our results of operations. To date we have two contracts
that have been cancelled.

To assist in the marketing of our homes and to limit our liability for certain
construction defects, we sell our homes subject to a limited warranty that is
provided by our subcontractors. We don't provide any kind of warranty to
homebuyers. Our subcontractors are responsible for the cost to repair major
structural defects, roofing, internal walls, heating, tiling problems, if any,
for a certain period of time, from one to five years. The foregoing repair
costs are limited by our subcontractors' policy to the repair, replacement or
payment of the reasonable cost of repair or replacement of such warranted
items not to exceed an aggregate amount equal to the final sales price of the
home covered by the warranty. Once all homes have been constructed and sold, we
do not have any post-sale obligations.


Home Buyer Financing and Deed Application
-----------------------------------------

We do not provide financing to prospective homebuyers. Approximately 25% of
homebuyers in China currently use their savings or funds from their relatives
to pay for the houses they buy. We are permitted to sell our homes before they
are built. It usually takes 18 to 20 months from ground breaking to completion,
within which the homebuyers make installment payments to the developer. At the
time of completion and delivery, the purchase price will have been paid in
full. After viewing the model units, the potential buyer usually leaves 30,000
yuan, or $4,107, refundable deposit, upon receipt of which we will hold the
unit for that buyer. The potential buyer may withdraw the commitment within two
weeks and receive a full refund of said deposit. The parties may also enter
into a binding contract, and the buyer is required to make a 10% to 20% down
payment at the time of signing. Thereafter, the buyer makes installment payments
every 2 to 3 months until the purchase price is paid in full. The actual payment
terms vary on a case-by-case basis depending on negotiations.

The majority of homebuyers in China need to finance their homes with mortgage
loans from banks. To facilitate their mortgage application, most developers in
China, including us, are involved in the buyers' mortgage application process.
We first initiate negotiations with two banks to obtain a blanket lending
commitment which covers all potential buyers for the homes to be built by us.
If a potential buyer needs financing, we conduct a preliminary screening of the
buyer's creditworthiness. Then we forward the mortgage applications to the banks
for further processing, which usually take 30 to 60 days. Upon approval of the
mortgage extended to each buyer by the banks, the loan proceeds are transferred
directly to our bank account, rather than the buyer's. We have not, and will
not receive any finder's fees or referral fees from the banks.

It is customary in China that developers may, depending on the type of property,
use up to 95% of the loan proceeds so obtained to meet their working capital
needs. The banks require that 5% to 20% of the proceeds be set aside. On our
balance sheets, such loan proceeds are treated as customer deposits. We have
not taken any measure to safeguard customer deposits because currently Chinese
law does not require that such deposits be placed in an escrow or trust account
for safeguarding purpose.

The life of a mortgage loan in China can be up to 30 years. Because our Dahua
Garden project is considered luxury housing, the maximum life of mortgage loans
is 20 years. The mortgage rates, which are flexible in nature, are dictated by
the Chinese central government based on prime commercial lending rates from
time to time. Due to competition among lending institutions, mortgage rates can
be adjusted downward by up to 10%. The mortgage rates currently range from
5.51% to 7.83%, which are applied to primary residence and second home,
respectively.

Unlike the United States, deeds for newly-built homes in China are applied for
by the developer with the government, which owns the land. Upon issuance of the
deeds, the developer distributes the deeds to individual homeowners. In order
to obtain government approval of deeds, the developer must have obtained all
requisite permits and licenses and paid all fees and taxes. Before the actual
issuance of deeds, the ownership of the real property remains with the developer
even if the homes have already been sold. Generally, the developer will wait
until all homes are completed to apply for the deeds in a blanket application,
which takes approximately 40 to 60 days. Before the issuance of deeds, the
title to the homes legally remains with the developer.


Regulation
----------

Real estate development is a highly regulated industry in China, and we are
subject to extensive local, district, municipal and national rules and
regulations regarding permitting, zoning, subdivision, utilities and water
quality. Regulation is carried on by municipal, district, and national
authorities, of which the municipal and district governments have the greatest
regulatory impact. The City of Beijing, in which we operate, has been adopting
increasingly restrictive regulations associated with development activities,
including the adoption of more restrictive ordinances, greater emphasis on land
use planning, pressure to increase the number of low density residential
developments, and heightened public concern aimed at limiting development as a
means to control growth. Such regulation may delay development of our properties
and result in higher developmental and administrative costs.

To engage in the business of real estate development and sale of residential
units in Beijing, China, certain government approval is required. We have
obtained all necessary licenses and permits, which include (i) State-Owned Land
Using License issued by Beijing Land Resources and Residential Housing
Management Bureau; (ii) Constructive Lands Planning License issued by Beijing
Planning Committee; (iii) Constructive Project Construction License issued by
Beijing Construction Committee; (iv) Constructive Project Planning License
issued by Beijing Planning Committee; and (v) Commercial Residential House
Pre-Sales License issued by Beijing Land Resources Bureau and Building
Management Bureau.

To date, we are in material compliance with these laws and regulations.


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

We are subject to China's national and local environmental protection laws.
These laws could hold us liable for the costs of removal and remedy of certain
hazardous substances or wastes released on our property regardless of whether
we were responsible for the presence of hazardous substances. The presence of
hazardous substances, or the failure to properly remedy them, may have a
material adverse effect on our results of operations and financial condition.
As of the date of this prospectus, we are not aware of any material
noncompliance, liability or claim relating to hazardous or toxic substances in
connection with our property and operations. To date, we have not incurred any
costs in complying with environmental laws and regulations. We believe that we
are in material compliance with these laws and regulations.


Patents and Trademarks
----------------------

We do not own any patents or trademarks.


Product Research and Development
--------------------------------

To date we have not conducted any product research and development. We do not
plan to conduct any product research and development activities in the next
twelve months.


Employees
---------

As of December 31, 2007, we had 22 full-time employees. We expect that there
will be no significant changes in the number of employees in the coming twelve
months. None of our employees is represented by trade unions. We consider our
employee relations to be satisfactory.



Item 2.   Description of Property


We do not own any real estate properties other than the residential units we
develop for sale.  Our executive offices are located in an office complex of
approximately 2,000 square feet at 19th Floor, Building C, Tianchuangshiyuan,
Huizhongbeili, Chaoyang District, Beijing, China, 100012. This office space is
provided by Beijing Guohong Dahua Economic Research Center, a member of the
Dahua Group. We have contracted with Beijing Guohong Dahua Economic Research
Center to provide administrative and management services. Included in those
services are the payment of officer salaries and provision of office space and
other shared costs and services. We accrued $74,349 for the year ended December
31, 2006, into short- term loans due to related parties for payment of the
services, which was paid in 2007. We believe that these facilities are adequate
for our current and anticipated needs.


Investment Policies
-------------------

At present we have no established policy with respect to investments on real
estate or interests in real estate. However, we intend that substantially all
of our investments will be residential luxurious single-family houses. The
purpose of such investments will primarily be generating sales revenues. There
are no limitations on the percentage of assets which may be invested in any one
investment or type of investment. Our Board of Directors may set such policy
without a vote of our shareholders. We will not invest in real estate mortgages,
and we will not invest in securities of or interests in real estate investment
trusts, partnership interests, or other persons primarily engaged in real estate
activities.

We do not plan to limit the geographical area in which we may invest, but we
expect that all of our investments will be made in metropolitan Beijing, China.
We have no current plans to form a joint venture or other arrangements with
third parties to engage in real estate development.

We may finance our investments through both public and private secured and
unsecured debt offerings, as well as public and private placements of our equity
securities. The equity securities may include both common and preferred equity
issues. There are currently no restrictions on the amount of debt that we may
incur. Since inception, our operating activities have been mainly financed by
equity capital, an unsecured line of credit provided by Dahua Group, our
affiliate, and purchaser deposits received from our pre-sale of the First Phase
units of Dahua Garden.


Description of Real Estate and Operating Data
---------------------------------------------

Our only real estate project currently being developed is the First Phase of
Dahua Garden, which is located in the northern suburban areas of Beijing, China,
approximately 20 kilometers from the downtown of Beijing. It consists of 76
luxurious residential units, each ranging from 2,000 to 5,000 square feet in
size with 3 to 4 bedrooms. The residential units are constructed on a piece of
land of approximately 30 acres. The construction of all of the units has been
completed and they are being sold to the public. As the developer, we do not
have title to the land, the use of which is licensed from the Chinese government
for a period of 70 years expiring on April 27, 2073, but we own all the
residential units constructed thereon until such units are sold. There are no
material mortgages, liens or other encumbrances against the land or residential
units. Upon conveyance of title to the residential units to the buyer, the land
use rights will be passed to the buyer.

The Second Phase of Dahua Garden development includes 250 homes located on a
267,000 square meter site with community clubhouse, creeks, ponds, and
professionally manicured gardens and landscape. We are currently applying with
the Beijing municipal and local governmental authorities for all the requisite
licenses, permits, and approvals.



Item 3.   Legal Proceedings


There are no legal actions pending against us nor are any legal actions
contemplated by us.



Item 4.   Submission of Matters to a Vote of Security Holders


No matters were submitted to a vote of security holders during the fourth
quarter ended December 31, 2007.




                                     PART II



Item 5.   Market for Common Equity and Related Stockholder Matters


Market Information
------------------

Our common stock has been quoted on the OTC Bulletin Board under the symbol
"DHUA.OB" since December 14, 2007.  Trading in our common stock has been minimal
with limited or sporadic quotations and there is no established public trading
market for our shares.


Holders
-------

As of March 25, 2008, there were 110 holders of record for our common shares.
We have only one class of stock outstanding.


Stock Options, Warrants and Convertible Securities
--------------------------------------------------

We have not granted any stock options or warrants to purchase shares of our
common stock, and we have not issued and do not have any securities outstanding
that may be converted into our common shares or have any rights convertible or
exchangeable into shares of our common stock.


Dividends
---------

We have not paid any dividends since our incorporation and do not anticipate
paying dividends in the foreseeable future. We intend to retain future earnings,
if any, to fund the expansion and growth of our business.

There are no restrictions in our Articles of Incorporation or Bylaws that
prevent us from declaring dividends. The Delaware Revised Statutes, however, do
prohibit us from declaring dividends, after giving effect to the distribution
of the dividend if: (i) we would not be able to pay our debts as they become due
in the usual course of business; or (ii) our total assets would be less than the
sum of our total liabilities plus the amount that would be needed to satisfy
the rights of shareholders who have preferential rights superior to those
receiving the distribution.


Securities Authorized for Issuance under Equity Compensation Plans
------------------------------------------------------------------

We do not have any compensation plan under which equity securities are
authorized for issuance.


Rule 144 Shares
---------------

As of December 31, 2007, there were 25,000,000 shares of common stock issued
and outstanding, of which 17,452,000 shares are "restricted securities", as that
term is defined under Rule 144 of the Securities Act of 1933. Under Rule 144,
such shares can be publicly sold, subject to volume restrictions and certain
restrictions on the manner of sale, commencing one year after their acquisition.

In general, under Rule 144 as currently in effect, any of our affiliates and any
person or persons whose sales are aggregated who has beneficially owned his or
her restricted shares for at least one year, may be entitled to sell in the open
market within any three-month period a number of shares of common stock that
does not exceed the greater of (i) 1% of the then outstanding shares of our
common stock, or (ii) the average weekly trading volume in the common stock
during the four calendar weeks preceding such sale. Sales under Rule 144 are
also affected by limitations on manner of sale, notice requirements, and
availability of current public information about us. Non-affiliates who have
held their restricted shares for one year may be entitled to sell their shares
under Rule 144 without regard to any of the above limitations, provided they
have not been affiliates for the three months preceding such sale.



Item 6.   Management's Discussion and Analysis or Plan of Operation


We were incorporated on March 8, 2002 in the State of Delaware under the name
of Norton Industries Corp. ("Norton") as a blank check company for the purpose
of either merging with or acquiring an operating company with operating history
and assets. From March 8, 2002 to January 30, 2005, Norton had conducted
virtually no business other than organizational matters and the filings of
periodic reports with the SEC pursuant to the reporting requirements of the
Securities Exchange Act of 1934, as amended.

On January 30, 2005, Norton entered into a share exchange agreement, by which
Norton acquired all of the capital shares of Bauer Invest Inc. Bauer is a
holding company, which conducts its business through its 80% owned subsidiary
Beijing Dahua Real Estate Development, Ltd., an operating company organized in
China ("Dahua Real Estate"). As a result of this transaction, Bauer became our
wholly owned subsidiary. This transaction was accounted for as a
recapitalization, rather than a business combination. Under accounting
principles generally accepted in the United States of America, after completion
of this transaction, we filed prior historical financial information of Bauer
and its subsidiaries, on a stand-alone basis, for two years prior to the
acquisition. Our continuing operations reflect the consolidated operations of
Dahua and its subsidiaries.

We, through our subsidiary Beijing Dahua Real Estate Development Ltd., are
engaged in the business of development, construction and sale of luxury
residential single-family homes in Beijing, China. In July 2003, we began to
develop our first real estate project, Dahua Garden (the "First Phase"), which
consists of 76 luxury residential units, all of which are single-family houses
ranging from approximately 2,000 to 5,000 square feet, each with 3 - 4 bedrooms.
The construction site is located at the northern skirt of Beijing, China. The
construction began in July 2003 and was substantially completed in December
2005. As of December 31, 2007, 60 units have been sold, 13 units were reserved
with clients' deposits, 2 units were available for sale and one unit was kept by
the company.

We are currently in the process of applying with Beijing municipal and Changping
district government agencies for the requisite licenses, permits, and approvals
in order to start our Second Phase of Dahua Garden, which will include 250 units
of luxury single-family houses located in Changping District, Beijing, China,
on an approximately 267,000 square-meter site with a community clubhouse,
creeks, ponds, and professionally manicured gardens and landscape. Each will be
3,000 to 5,000 square feet in size to be sold for 4.5 to 6 million yuan, or
approximately $550,000 to $720,000. We will serve as the sole developer of the
project, including construction and sales.

In August 2006, Chinese government issued a number of new rules and regulations
for real estate developers, like us, in an attempt to reduce rising house prices
by restricting luxury single family house constructions and favoring
construction of apartment buildings. Under the government's new policy, (i) no
single family houses can be built, if the construction has not started, without
special construction permits; (ii) All permits previously issued have to be
re-reviewed and re-approved; and (iii) the land previously acquired for luxury
housing construction has to be revalued and sold to the highest bidder  in an
auction. Because of those new government policies, we have incurred a long
delay in obtaining the consents and approvals to commence our construction for
the second phase of Dahua Garden. On May 9, 2007, we contacted the Beijing
Municipal Commission of Urban Planning, the agency which is responsible for the
issuance of construction permits, for our construction approval time frame
guidance. We were told two weeks later that our construction permit is very much
likely to be issued for two reasons: (1) We have completed our First Phase of
Dahua Garden; and (2) We acquired this land almost ten (10) years ago. It is
expected that we may obtain our construction approvals by the middle of 2008.
However, there is no assurance that we will obtain those consents or the
necessary government approvals.  If the consents and approvals are not obtained,
we may have to cease our Second Phase of single luxury family house operations,
and change our business plan to build apartment buildings. As the governmental
policy regarding the auctioning off of land previously acquired for luxury
housing construction is vague, and no specific or detailed outline has been
issued, we are basing our business plan on the assumption that if we do not
receive the permits and licenses required to build luxury housing, we will
instead build apartment buildings. As of the date of this report, we don't have
any current plan or arrangements for the development of apartment buildings. In
the event the situation changes and we believe that there is a likely
possibility of the land being auctioned, we will notify the Commission.


Results of Operations
----------------------

Years Ended December 31, 2007 and 2006
--------------------------------------

Revenues
--------

We began our First Phase of Dahua Garden construction, which consists of 76
luxury residential units, in July 2003. The construction was substantially
completed in December 2005. As of December 31, 2007, we have sold 60 units out
of 76 units.  We recognized sales revenues of $16,411,672 and $11,800,257 from
the sale of our housing units, for the years ended December 31, 2007 and 2006,
respectively.

Cost of Good Sold
-----------------

Cost of good sold consists primarily of land acquisition and development costs,
engineering, infrastructure, capitalized interest, and construction costs. For
the years ended December 31, 2007 and 2006, our cost of good sold was
$12,530,740 and $8,246,159 respectively. We made a provision of $158,624 for
houses which will be sold below cost. As of December 31, 2007, we didn't
recognize the sales revenues of such houses, because they didn't meet the
requirement of revenue recognition. However, the sales prices of such houses
were predetermined. Since the cost per square meter increased in 2007, it is
estimated that the revenues will be lower than the costs when the revenues are
recognized.

Operating Expenses
------------------

For the year ended December 31, 2007, our operating expenses decreased by
$255,171, or 9.6%, to $2,427,069 from $2,682,240 in the prior year, mainly due
to the decrease of the advertising expense, which decreased $1,301,374, or
71.3%. The payroll expense also increased $283,585, or 139.6%. Other general
and administrative expenses increased $695,062, or 109.3%

Net Income
----------

For the year ended December 31, 2007, we had net income of $763,882, or $0.03
per share, as compared with net income of $395,138, or $0.02 per share, for the
year of 2006.


Liquidity and Capital Resources
-------------------------------

Since inception, our operations have been primarily funded by equity capital,
unsecured short-term loans from Dahua Project Management Group ("Dahua Group"),
our affiliate, and customer deposits that we received from our pre-sale of
housing units.

After receiving the Residential Housing Pre-sale Permit issued by the
government, we are permitted to sell the residential units to be built to the
public, which is common practice in China. Upon execution of a binding purchase
contract between the developer and a homebuyer, a deposit and installment
payments are required to be made to the developer, which we use to construct our
residential housing units. As of December 31, 2007, our customer deposit balance
was $4,994,842.

We also borrow from time to time based on a verbal line of credit agreement from
Dahua Group, our affiliate. There was no written line of credit agreement until
June 20, 2005, to recapture the credit arrangement. The funds so borrowed are
unsecured and there is no upper limit on the amount of money that we can borrow
as long as there are funds available and we need it for our operation. The money
we borrow under this arrangement bears interest at an annual rate of 6%,
repayable within 30 days upon demand by the lender. As of December 31, 2007, the
short-term loans due to related parties had balance of $461,421, including
accrued interest of $151,446.

On May 12, 2005, Beijing Dahua Real Estate Development, Ltd, our operating
subsidiary, increased its registered capital, in which Dahua increased its
investment by $2,265,600 and the minority shareholder increased its investment
by $566,265. Dahua Group advanced funds to us to allow for the increase in
investment. On September 21, 2005, we issued 4,750,000 shares to Dahua Group at
the price of $0.477 per share in exchange for the short-term loans Dahua Group
provided. At the same time, according to the Shares Exchange Agreement signed
on January 30, 2005, it is our responsibility to maintain the ownership
percentage held by Comp Hotel International Ltd. ("Comp Hotel") and Waywood
Investments Ltd. ("Waywood"). In this regard, we issued 212,500 shares and
37,500 shares to Comp Hotel and Waywood, respectively. There was no cash inflow
from this issuance. After the capital increase, the subsidiary's registered
capital is $4,036,145, of which we, through Bauer, hold 80% of the shares of
Dahua Real Estate.

As of December 31, 2007, we had cash and cash equivalent balance of $1,893,626.
For the year December 31, 2007, our operating activities provided $2,933,222 of
net cash, largely due to decrease in inventories of $8,015,518. For the year
ended December 31, 2007, the investing activities used $1,289,843 of net cash,
mainly due to increase in property, plant & equipment of $248,546 and increase
in construction in progress of $757,516. For the same period, the financing
activities used $2,224,450 of net cash, which was due to the payments to related
parties.

As of December 31, 2005, our First Phase of Dahua Garden was completed. We are
currently applying with Beijing municipal and Changping district governmental
agencies for all the requisite licenses, permits, and approvals to start our
Second Phase of Dahua Garden. It is estimated that approximately $60.5 million
is needed to complete the Second Phase. In addition to customer deposits, and
short-term loans (line of credit) from Dahua Group, the proceeds generated from
sale of the First Phase will also be used to finance the Second Phase
development. There are no material commitments for capital expenditures.

While there can be no assurance that we will have sufficient funds over the next
twelve months, we believe that funds generated from the sale of our First Phase
of Dahua Garden housing units, purchaser deposits from pre-sale contracts, and
the line of credit provided by our affiliate, Dahua Group, will be adequate to
meet our anticipated operating expenses, capital expenditure and debt
obligations for at least the next twelve months. Nevertheless, our continuing
operating and investing activities may require us to obtain additional sources
of financing. In that case, we may seek financing from institutional investors,
banks, or other sources of financing. There can be no assurance that any
necessary additional financing will be available to us on commercially
reasonable terms, if at all.

Off-balance sheet arrangements
------------------------------

We entered into an agreement with a bank that extended mortgage loans to our
home buyers, whereby we agreed to provide a certain limited guarantee, which
covers the risk before the conveyance of title upon closing. Upon initiating
the loan on behalf of the buyer for the down payment, the bank has withheld a
percentage ranging from 5% to 20% of the loan and deposited such funds into a
segregated account in the bank. At December 31, 2007, the balance of this
separate account was $679,872. Since the Company does not recognize revenue
when its receivables are subject to future subordination, the entire amount that
could become payable to the bank under the limited guarantee is recorded as a
liability on the balance sheet and is included in customer deposits. Please see
Note 6 and Note 7 of Notes to the Financial Statements for details.

Critical Accounting Policies and Estimates
------------------------------------------

Our financial statements have been prepared in accordance with accounting
principles generally accepted in the United States. The preparation of these
financial statements requires us to make estimates and judgments that affect the
reported amounts of assets, liabilities, revenue and expenses, and related
disclosure of contingent assets and liabilities. On an on-going basis, we
evaluate our estimates, which are based on our historical experience and on
various other assumptions that are believed to be reasonable under the
circumstances, the results of which form the basis for making judgments about
the carrying values of assets and liabilities that are not readily apparent from
other sources. Actual results may differ from these estimates under different
assumptions or conditions. We believe that revenue recognition is one of our
more significant judgments and estimates used in the preparation of our
financial statements.

Revenue Recognition
-------------------

The Company recognizes revenue on the sale of a house when the consummation of
a sale is evidenced by: 1) a contractual arrangement that is binding to both
parties; 2) the exchange of all consideration (i.e. the seller has transferred
to the buyer the usual risks and rewards of ownership and the buyer has made
payment in full to the seller); 3) the arrangement of all permanent financing
for which the seller is responsible and; 4) the performance of all conditions
precedent to closing. No revenue is recognized when the Company's receivable is
subject to future subordination, as is the case when the Company guarantees a
bank loan for the period prior to the certification of title transfer.

Inventory Valuation and Related Prepaid Construction Costs
----------------------------------------------------------

The inventories are valued at cost based on the level of completion. No
provision for potential obsolete inventory has been made. Prepaid construction
costs consist of payment to our subcontractors before they provide us services.
Prepaid construction costs were converted into inventory when the
subcontractors finished their work.

At each balance sheet date, we review the carrying amounts of our tangible and
intangible assets to determine whether there is any indication that those assets
have suffered an impairment loss. If any such indication exists, the recoverable
amount of the asset is estimated in order to determine the extent of the
impairment loss (if any). Where it is not possible to estimate the recoverable
amount of an individual asset, the company estimates the recoverable amount of
the cash-generating unit to which the asset belongs.

Recoverable amount is the greater of net selling price and value in use. In
assessing value in use, the estimated future cash flows are discounted to their
present value using a pre-tax discount rate that reflects current market
assessments of the time value of money and the risks specific to the asset.

If the recoverable amount of an asset (or cash-generating units) is estimated
to be less than its carrying amount, the carrying amount of the asset (cash-
generating unit) is reduced to its recoverable amount. An impairment loss is
recognized as an expense immediately.


                                     RISK FACTORS


Investing in shares of our common stock involves a high degree of risk. You
should carefully consider the following risk factors, in addition to the other
information set forth in this report, before you purchase these shares. The
risks and uncertainties described below are those we have identified as
material. If any of the events contemplated by the following discussion of risks
should occur, our business, financial condition and results of operations may
suffer. As a result, the trading price of our common stock could decline and you
could lose part or all of your investment in our common stock.

                      Risks Related to Our Business
                      -----------------------------

WE LACK AN OPERATING HISTORY UPON WHICH AN EVALUATION OF OUR FUTURE SUCCESS OR
FAILURE CAN BE MADE.

We were incorporated in March 2002 as a blank check company for the purpose of
seeking to complete a merger or business acquisition. We conducted virtually no
business until January 30, 2005, when we acquired Bauer Invest Ltd. Bauer is
a holding company, which conducts its business through its 80% owned subsidiary
Beijing Dahua Real Estate Development, Ltd., a private company operating in the
People's Republic of China ("Dahua Real Estate"). Dahua Real Estate was
incorporated on September 24, 2001, to engage in the development and sale of
luxury single-family houses in Beijing, China. The acquisition of Bauer was
accounted for as a recapitalization, rather than a business combination.
Accordingly, the historical operations of Bauer and its subsidiaries were
represented as our historical operations. Our limited operating history makes
it difficult for you to evaluate our business and future prospects.

WE WILL NEED ADDITIONAL FINANCING TO CARRY OUT OUR SECOND PHASE PROJECT. IF WE
ARE UNABLE TO OBTAIN ADDITIONAL FINANCING, WE MAY HAVE TO DELAY THE
IMPLEMENTATION OF OUR SECOND PHASE PROJECT, AND OUR ABILITY TO INCREASE REVENUE
WILL BE MATERIALLY IMPAIRED.

Since inception, we have been dependent on short-term loans and customer
deposits to meet our cash requirements. As of December 31, 2005 we completed
the construction of our First Phase of Dahua Garden project consisting of 76
luxury single-family houses. Of 76 units, 60 houses were sold, 13 houses were
reserved with clients' deposits, 2 houses were available for sale and one unit
was kept by the company. We are currently applying with Beijing municipal and
Changping district governmental agencies for all the requisite licenses,
permits, and approvals to start our Second Phase of Dahua Garden. To date we
have not received any licenses, permits or approvals from governmental
authorities to commence our Second Phase construction. We expect to obtain the
licenses, permits and approvals by the end of 2008. It is estimated that we need
approximately $60.5 million in order to complete our Second Phase project. We
intend to use (i) our proceeds from sales of our First Phase housing units, (ii)
customer deposits from our pre-sale of the housing units in the Second Phase,
and (iii) short-term borrowings from Dahua Group, our affiliate, to finance our
Second Phase of Dahua Garden. At present we do not have any arrangements for
additional financing. If we are unable to obtain additional financing on terms
acceptable to us, we may have to delay or curtail our Second Phase project, and
our ability to increase revenue will be materially impaired.

IF WE RAISE ADDITIONAL CAPITAL THE VALUE OF YOUR INVESTMENT MAY DECREASE.

If we need to raise additional capital to implement or continue operations, we
will likely issue additional equity or convertible debt securities. If we issue
equity or convertible debt securities, the net tangible book value per share
may decrease, the percentage ownership of our current stockholders may be
diluted and such equity securities may have rights, preferences or privileges
senior to or more advantageous than our common stockholders.

WE NEED PERMITS, LICENSES OR APPROVALS FROM GOVERNMENT AUTHORITIES TO BEGIN OUR
CONSTRUCTION OF THE SECOND PHASE PROJECT. IF WE FAIL TO OBTAIN ALL REQUIRED
LICENSES, PERMITS, OR APPROVALS, WE MAY HAVE TO CEASE OUR OPERATIONS.

Before we can develop a property, we must obtain a variety of approvals from
local and municipal governments with respect to such matters as zoning, density,
subdivision, traffic considerations, site planning and environmental issues.
Although there are currently no unfavorable rulings that would have a
significant adverse effect on the development of our proposed Second Phase of
Dahua Garden, there is no assurance that we will be able to obtain all required
licenses, permits, or approvals from government authorities. If we fail to
obtain all required licenses, permits, or approvals, we may have to cease our
operations.

RECENT PRC REGULATIONS RELATING TO CUTTING DOWN LUXURY SINGLE FAMILY HOUSE
CONSTRUCTIONS MAY LIMIT OUR ABILITY TO IMPLEMENT OUR BUSINESS PLAN. IF NO
CONSENTS AND APPROVALS ARE OBTAINED, WE MAY HAVE TO CEASE OUR SECOND PHASE OF
SINGLE LUXURY FAMILY HOUSE OPERATIONS, AND CHANGE OUR BUSINESS PLAN TO BUILD
APARTMENT BUILDINGS.

In August 2006, the Chinese government issued a series of rules and regulations
in an attempt to push down rising house prices in China by cutting down luxury
single family house constructions and supporting construction of apartment
buildings. Under the government's new policy, (i) no single family houses can be
built, if the construction has not started, without special construction
permits. All permits issued previously have to be re-reviewed and re-approved;
and (2) the land previously acquired for luxury housing construction have to be
revalued and sold to the people who offer the most money for the land. Because
of those new government policies, we have incurred a long delay for obtaining
the consents and approvals to commerce our construction for the second phase of
Dahua Garden. In May 2007, we contacted a Beijing Municipal Government agency,
who is responsible for the issuance of construction permits, for construction
approval time frame guidance. We were told that our construction permit is
likely to be issued for the following two reasons: (1) We have completed our
first phase of Dahua Garden; and (2) We have acquired for this land for almost
ten (10) years. We are expected that we can obtain our construction approvals
by the middle of 2008. However, there is no assurance that we will obtain those
consents and approvals from the government. If no consents and approvals are
obtained, we may have to cease our second phase of single luxury family house
operations, and change our business plan to build apartment buildings. As of the
date of this report, we don't have any current plan or arrangements for
development of apartment buildings.

WE HAVE IDENTIFIED MATERIAL WEAKNESSES IN OUR INTERNAL CONTROL OVER FINANCIAL
REPORTING, WHICH COULD CONTINUE TO IMPACT NEGATIVELY OUR ABILITY TO REPORT OUR
RESULTS OF OPERATIONS AND FINANCIAL CONDITION ACCURATELY AND IN A TIMELY
MANNER.

The Company has identified material weaknesses in our internal control over
 financial reporting as of December 31, 2006 and March 31, 2007 because of
material weaknesses identified in management's assessment of the effectiveness
of such internal control as of that dates related to construction interest
accounting. These material weaknesses have resulted in the restatements of our
previously reported financial statements for the quarter ended March 31, 2006.
The Company has taken the necessary actions to remediate the material weakness
identified. These material weaknesses, if not remediated or fail to remediate,
could create an increased risk of misstatement of financial results, which, if
material, may require future restatement thereof. A failure to achieve and
maintain effective internal controls over our financial reporting could result
in the loss of investor confidence in the reliability of our financial
statements, which in turn could harm our business and negatively impact the
market value of our common stock. Moreover, we anticipate that we will incur
considerable costs and devote significant management time and other resources
to comply with Section 404 of the the Sarbanes-Oxley Act and other requirements.

WE ACT AS GENERAL CONTRACTOR ON OUR CONSTRUCTION PROJECTS, AND IF ANY OF OUR
SUBCONTRACTORS SHOULD FAIL TO COMPLETE THEIR JOBS ON TIME, OUR BUSINESS COULD
BE DISRUPTED.

We act as general contractor on our construction projects. We hire unaffiliated
subcontractors to do work for us. In the event that any of our subcontractors
should fail to complete their jobs on time, our business could be disrupted,
which will have an adverse effect on our results of operation and our financial
condition.

WE ARE VULNERABLE TO CONCENTRATION RISKS BECAUSE OUR OPERATIONS ARE EXCLUSIVELY
IN THE BEIJING, CHINA MARKET.

We operate our business in Beijing, China. All of our revenues will be derived
from the sale of our luxury single-family houses in Beijing, China. Although
some of our customers are from the neighboring areas in Beijing, we may not be
able to generate adequate revenue if local business conditions in Beijing change
adversely. These changes may include business downsizing, industry slowdowns,
local oversupply or reduction in demand for real estate properties, and changes
in local governmental policies. Operating exclusively in Beijing exposes us to
greater economic risks than if we operated in several geographic regions. Any
adverse changes in business conditions in Beijing, China, could adversely impact
our financial condition, results of operations and cash flow.

WE DEPEND ON KEY PERSONNEL FOR THE SUCCESS OF OUR BUSINESS. OUR BUSINESS MAY BE
SEVERELY DISRUPTED IF WE LOSE THE SERVICES OF OUR CEO OR FAIL TO SUCCESSFULLY
RECRUIT QUALIFIED MANAGERIAL PERSONNEL HAVING EXPERIENCE IN BUSINESS.

Our success is heavily dependent upon the continued service of Yonglin Du, our
chief executive officer. Mr. Du has valuable personal relationships with
government agencies and executive officers in the industry. A good personal
relationship is sometimes crucial for doing business in China. If Mr. Du is
unable or unwilling to continue in his position, we may not be able to easily
replace him. Loss of his services could delay our applications for construction
permit and land acquisition, and our business may be severely disrupted. We do
not maintain key-man insurance on the life of Mr. Du. In addition, in order to
successfully implement and manage our business plan, we will be dependent upon,
among other things, successfully recruiting qualified managerial personnel
having experience in business. Competition for qualified individuals is intense.
There can be no assurance that we will be able to retain existing employees or
that we will be able to find, attract and retain qualified personnel on
acceptable terms.

OUR OFFICERS AND DIRECTORS ARE SUBJECT TO CONFLICTS OF INTEREST, AND THERE IS A
RISK THAT THEY MAY PLACE THEIR INTERESTS AHEAD OF YOURS.

We believe that our officers and directors will be subject to conflicts of
interest. The conflicts arise from their relationships with our affiliate.
Yonglin Du, our chief executive officer, also serves as president and a director
of Dahua Project Management Group Co. Ltd. ("Dahua Group"), a Beijing Municipal
Government licensed construction project supervising business entity. Hua Meng,
our chief financial officer, and Qinna Zeng, our corporate secretary, are also
employed by Dahua Group. They may have conflicts of interest in allocating time,
services, and functions between us and Dahua Group, in which any of them are or
may become involved. Mr. Du anticipates devoting a minimum of twenty to thirty-
two hours per week of his business hours, and each of Ms. Meng and Ms. Zeng
fifteen to twenty hours of their business hours to our business activities. If
and when the business operations increase and a more extensive time commitment
is needed, they are prepared to devote more time to our affairs, in the event
that becomes necessary.

To ensure that potential conflicts of interest are avoided or declared to us and
to comply with the requirements of the Sarbanes-Oxley Act of 2002, our Board of
Directors, on January 30, 2005, adopted a Code of Business Conduct and Ethics,
among other things, to reduce potential conflicts of interest. Conflicts of
interest must, to the extent possible, be avoided, and any material transaction
or relationship involving a potential conflict of interest must be reviewed and
approved in advance by a majority of the board of directors, or, if required by
law, a majority of disinterested stockholders. No personal loans will be made
to executive officers and directors.

All our transactions with affiliates have been and will be made on terms no less
favorable to us than could have been obtained from unaffiliated third parties.
Our policy is to require that a majority of board members approve all
transactions between us and our officers, directors, principal stockholders and
their affiliates.

WE HAVE NOT CARRIED PROPERTY OR CASUALTY INSURANCE. ANY BUSINESS DISRUPTION,
LITIGATION OR NATURAL DISASTER MIGHT RESULT IN SUBSTANTIAL COSTS AND DIVERSION
OF RESOURCES.

The insurance industry in China is still at an early stage of development.
Insurance companies in China offer limited business insurance products, and do
not, to our knowledge, offer business liability insurance. As a result, we do
not have any business liability insurance coverage for our operations.  Any
business property loss, natural disaster or litigation might result in
substantial costs and diversion of resources.

OUR QUARTERLY OPERATING RESULTS, REVENUES AND EXPENSES MAY FLUCTUATE
SIGNIFICANTLY, WHICH COULD HAVE AN ADVERSE EFFECT ON THE MARKET PRICE OF OUR
COMMON STOCK.

Our operating results, revenues and expenses may fluctuate significantly from
quarter to quarter due to a variety of factors including:

   o   The timing, size and execution of sales contracts and home deliveries;

   o   Lengthy and unpredictable sales cycles;

   o   Changes in our operating expenses; and

   o   Fluctuations in general economic conditions.

We believe that period-to-period comparisons of our results of operations are
 not a good indication of future performance. It is possible that our operating
results will be below your expectations. In that event, the trading price of
our common stock may fall.

MANY OF OUR COMPETITORS ARE SIGNIFICANTLY LARGER THAN WE ARE, AND THEY HAVE
GREATER FINANCIAL RESOURCES AND HAVE MORE EXPERIENCED MANAGERS THAN WE DO.

We are a small company and have little market share in our target market. The
market of residential housing development in Beijing, China, is highly
competitive. We compete with numerous entities, many of which are significantly
larger than we are, and have greater financial resources and have more
experienced managers than we do. As a result, they may be able to respond more
quickly to new or emerging house plans or construction materials and changes in
customer demands or to devote greater resources to the development, promotion
and sale of their products or services than we can. If we cannot compete
effectively, we may never become profitable. Although no one of our competitors
currently dominates or significantly influences the market, they could adversely
affect us.

THE RESIDENTIAL REAL ESTATE DEVELOPMENT INDUSTRY IS A HIGH RISK INDUSTRY. IF
MARKET CONDITIONS CHANGE DRAMATICALLY UNFAVORABLY TO US, WE MAY GO OUT OF
BUSINESS.

The real estate development industry in general, and the residential luxury
real estate development industry in particular, is a high risk industry, subject
to changes in general economic conditions, fluctuating interest rates, and
changing demand for the types of developments being considered. Volatility in
local and regional land use demands, as well as changing supply and demand for
the specific uses for which the real property is being developed, are also
factors in assessing the relative risks of the business. The demand for
residential real estate development is particularly sensitive to changing
interest rates and shifting demographics. Both of these factors affecting the
demand for residential housing are highly unpredictable over both the short-and
long-term. If market conditions change dramatically and unfavorably to us, we
may go out of business.

                Risks Related to Doing Business in China
                ----------------------------------------

POLITICAL AND ECONOMIC POLICIES IN CHINA COULD AFFECT OUR BUSINESS IN
UNPREDICTABLE WAYS.

Substantially all of our assets are located in China and substantially all of
our revenues are expected to derive from our operations in China. Therefore, our
results of operations and prospects are subject, to a significant degree, to
economic and political developments in China. The economy of China differs from
the economies of most developed countries in many respects, including:

    o    The extent of government involvement;

    o    Level of development; and

    o    Allocation of resources.

The economy of China has been in transition from a planned economy to a more
market-oriented economy. Although in recent years the Chinese government has
implemented measures emphasizing the utilization of market forces and the
reduction of state ownership of productive assets, a substantial portion of
productive assets in China is still owned by the Chinese government, which
continues to play a significant role in regulating China's economic development,
setting monetary policy and providing preferential treatment to particular
industries or companies. Political and economic policies in China could affect
our business in unpredictable ways. If there are any unfavorable changes in
government policies, such as government control over capital expenditures,
changes in monetary policy, or changes in planning and zoning policy, we may
experience delays or other problems in obtaining government permits or licenses
to start or complete our projects.

OUR ASSETS, OFFICERS AND DIRECTORS ARE LOCATED OUTSIDE OF THE U.S. IT IS
DIFFICULT TO EFFECT SERVICE OF PROCESS AND ENFORCEMENT OF LEGAL JUDGMENTS UPON
US AND OUR OFFICERS AND DIRECTORS.

Our assets, officers and directors are located in China. As a result, it may be
difficult to effect service of process within the United States and enforce
judgment of the US courts obtained against us and our executive officers and
directors. Particularly, our shareholders may not be able to:

   o      Effect service of process within the United States on us or any of our
executive officers and directors;

   o      Enforce judgments obtained in U.S. courts against us based upon the
civil liability provisions of the U.S. federal securities laws;

   o       Enforce, in a court in China, judgments of U.S. courts based on the
civil liability provisions of the U.S. federal securities laws; and

   o       Bring an original action in a court in China to enforce liabilities
against us or any of our executive officers and directors based upon the U.S.
federal securities laws.

GOVERNMENT CONTROL OF CURRENCY CONVERSION MAY AFFECT OUR ABILITY TO PAY
DIVIDENDS DECLARED, IF ANY, IN FOREIGN CURRENCIES.

It is expected that a substantial portion of our revenues, if any, will be in
"yuan", the national currency of China, which is currently not a freely
convertible currency. A portion of our revenues may have to be converted into
US dollars to make payment of dividends declared, if any, in respect of our
common shares. Under China's existing foreign exchange regulations, we will be
able to pay dividends in foreign currencies without prior approval from the
State Administration of Foreign Exchange of China by complying with certain
procedural requirements. However, the Chinese government may take measures at
its discretion in the future to restrict access to foreign currencies if
foreign currencies become scarce in China. We may not be able to pay dividends
in foreign currencies to our shareholders if the Chinese government restricts
access to foreign currencies for current account transactions.

FLUCTUATIONS IN THE EXCHANGE RATE BETWEEN THE CHINESE CURRENCY AND THE UNITED
STATES DOLLAR MAY BRING DOWN OUR OPERATING INCOME.

The functional currency of our operations in China is "Yuan." Results of our
operations are translated at average exchange rates into United States dollars
for purposes of reporting results. As a result, fluctuations in exchange rates
may adversely affect our expenses and results of operations as well as the
value of our assets and liabilities. On July 21, 2005, the Chinese government
changed its decade-old policy of pegging the value of yuan to the U.S. dollar.
Under the new policy, Yuan is permitted to fluctuate within a narrow and managed
band against a basket of certain foreign currencies. This change in policy has
resulted in an approximately 11.7% appreciation of the yuan against the U.S.
dollar between July 21, 2005 and December 31, 2007. Our revenues and costs are
denominated in yuan, and our financial assets are also denominated in yuan. Any
significant fluctuations in the exchange rate between the yuan and the United
States dollar may bring down our operating income and lower our stock price.
We have no current plans to undertake any hedging activity to minimize exchange
rate fluctuations.


                   Risks Related to Investment in Our Securities
                   ---------------------------------------------

OUR COMMON STOCK IS QUOTED ON THE OVER-THE-COUNTER BULLETIN BOARD WHICH MAY MAKE
IT MORE DIFFICULT FOR STOCKHOLDERS TO SELL THEIR SHARES AND MAY CAUSE THE MARKET
PRICE OF OUR COMMON STOCK TO DECREASE.

Because our common stock is quoted on the OTC Bulletin Board, the liquidity of
our common stock is impaired, not only in the number of shares that are bought
and sold, but also through delays in the timing of transactions, and limited
coverage by security analysts and the news media of us. As a result, prices
for shares of our common stock may be lower than might otherwise prevail if our
common stock was traded on NASDAQ or a national securities exchange, like the
American Stock Exchange.

THERE HAS BEEN LOW VOLUME AND THEREFORE INACTIVE FOR OUR COMMON STOCK, OUR STOCK
PRICE MAY BE VOLATILE OR MAY DECLINE REGARDLESS OF OUR OPERATING PERFORMANCE,
AND YOU MAY NOT BE ABLE TO RESELL YOUR SHARES AT OR ABOVE YOUR STOCK PURCHASE
PRICE.

If you purchase shares of our common stock, you may not be able to resell those
shares at or above your original purchase price. An active or liquid market in
our common stock may not develop or, if it does develop, it may not be
sustainable. The market price of our common stock may fluctuate significantly in
response to numerous factors, many of which are beyond our control.

OUR COMMON STOCK IS DEEMED A PENNY STOCK. AS A RESULT, TRADING OF OUR SHARES IS
SUBJECT TO SPECIAL REQUIREMENTS THAT COULD IMPEDE OUR SHAREHOLDERS' ABILITY TO
RESELL THEIR SHARES.

The shares offered by this prospectus constitute penny stock under the
Securities Exchange Act of 1934 (the "Exchange Act"). The shares will remain
penny stock for the foreseeable future. As defined in Rule 3a51-1 of the
Exchange Act, penny stocks generally are equity securities with a price of less
than $5.00, other than securities registered on certain national securities
exchanges or quoted on the NASDAQ system, provided that current price and volume
information with respect to transactions in such securities is provided by the
exchange or system.

Section 15(g) of the Exchange Act and Rule 15g-2 of the Exchange Act require
broker-dealers dealing in penny stocks to provide potential investors with a
document disclosing the risks of penny stocks and to obtain a manually signed
and dated written receipt of the document before effecting any transaction in
a penny stock for the investor's account. Moreover, Rule 15g-9 of the Exchange
Act requires broker-dealers in penny stocks to approve the account of any
investor for transactions in such stocks before selling any penny stock to that
investor. This procedure requires the broker-dealer to:

    o   Obtain from the investor information concerning his or her financial
situation, investment experience and investment objectives;

    o   Reasonably determine, based on that information, that transactions in
penny stocks are suitable for the investor and that the investor has significant
knowledge and experience to be reasonably capable of evaluating the risks of
penny stock transactions;

    o   Provide the investor with a written statement setting forth the basis
on which the broker-dealer made the determination in (ii) above; and

    o   Receive a signed and dated copy of such statement from such investor,
confirming that it accurately reflects the investor's financial situation,
investment experience and investment objectives.

Compliance with these requirements may make it more difficult for investors in
our common stock to resell the shares to third parties or to otherwise dispose
of them.




Item 7.   Financial Statements



The following report of independent registered public accounting firm and the
consolidated financial statements of the Company are included below:



 Report of Independent Registered Public Accounting Firm..............       29

 Consolidated Balance Sheet...........................................       30

 Consolidated Statements of Operations and Comprehensive Income.......       31

 Consolidated Statements of Cash Flows................................       32

 Consolidated Statements of Changes in Stockholders' Equity...........       33

 Notes to Consolidated Financial Statements...........................       34






                                      Dahua, Inc.

                          Consolidated Financial Statements

                   For the Year Ended December 31, 2007 and 2006



                        Child, Van Wagoner & Bradshaw, PLLC

    A Professional Limited Liability Company of CERTIFIED PUBLIC ACCOUNTANTS
             5296 S. Commerce Dr., Suite 300, Salt Lake City, UT 84107
                   PHONE: (801) 281-4700  FAX: (801) 281-4701



            Report of Independent Registered Public Accounting Firm


To The Board of Directors
Dahua, Inc.
Beijing, Peoples Republic of China

We have audited the accompanying consolidated balance sheet of Dahua, Inc. (the
Company) as of December 31, 2007, and the related consolidated statements of
operations and comprehensive income (loss), changes in stockholders' equity,
and cash flows for the years ended December 31, 2007 and 2006. These
consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States of America). Those standards require
that we plan and perform the audits to obtain reasonable assurance about whether
the consolidated financial statements are free of material misstatement. The
Company is not required to have, nor were we engaged to perform, an audit of its
internal control over financial reporting. Our audits included consideration of
internal control over financial reporting, as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the purpose
of expressing an opinion on the effectiveness of the Company's internal control
over financial reporting. Accordingly, we express no such opinion. An audit
also includes examining, on a test basis, evidence supporting the amounts and
disclosures in the consolidated financial statements, assessing the accounting
principles used and significant estimates made by management, as well as
evaluating basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Dahua, Inc. as of
December 31, 2007, and the results of its operations and its cash flows for the
years ended December 31, 2007 and 2006, in conformity with accounting
principles generally accepted in the United States of America.



/s/ Child, Van Wagoner & Bradshaw, PLLC
---------------------------------------
Child, Van Wagoner & Bradshaw, PLLC
March 11, 2007
Salt Lake City, Utah







                                            DAHUA, INC.
                                    CONSOLIDATED BALANCE SHEET

<TABLE>
<CAPTION>


                                                            December 31,        December 31,
                                 ASSETS                         2007               2006
                                                         ------------------   ---------------

                                                              <c>                 <c>
Current assets
 Cash and cash equivalents........................       $       1,893,626     $    2,338,335
 Inventory (note 4)...............................               6,501,143         13,898,322
 Prepaid expenses.................................                 148,171                  -
                                                         ------------------   ----------------
     Total current assets.........................               8,542,940         16,237,157

Property, plant & equipment
 Computer equipment...............................                  52,816             30,047
 Office equipment.................................                  93,983             74,945
 Telephones.......................................                   3,067              2,871
 Vehicles.........................................                 508,748            278,506
                                                         ------------------   ----------------
 Total property, plant & equipment................                 658,614            386,369
 Accumulated depreciation.........................               (135,119)           (49,490)
                                                         ------------------   ----------------
     Net property, plant and equipment............                 523,495            336,879

Construction in progress (note 5).................                 788,896                  -
Others receivable (note 12).......................                 300,054                  -
Tax prepaid (note 9)..............................                 234,608            267,089
Restricted cash...................................                 679,872            341,672
                                                         ------------------   ----------------

Total assets......................................       $      11,069,865    $    17,182,797
                                                         ==================   ================



                              LIABILITIES AND STOCKHOLDERS' EQUITY


Current liabilities
 Accounts payable.................................        $       236,360      $      404,403
 Customer deposits (note 7).......................              4,994,842           9,576,401
 Short-term loans-related parties (note 6)........                309,975           2,458,461
 Accrued interest-short-term loans, related parties (note 6)      151,446             718,238
 Other accruals...................................                179,470              90,966
                                                         -----------------   ----------------
     Total current liabilities....................              5,872,093          13,248,469

Minority interest in subsidiary...................                972,996             782,025

Stockholders' equity
 Preferred stock: par value $.0001; 20,000,000 shares
  authorized; none issued and outstanding.........                      -                   -
 Common stock: par value $.0001; 80,000,000 shares
  authorized; 25,000,000 issued and outstanding...                  2,500               2,500
 Additional paid in capital.......................              3,130,452           3,130,452
 Retained earnings................................                588,884           (174,998)
 Accumulated other comprehensive income...........                502,940             194,349
                                                         -----------------   ----------------
Total stockholders' equity........................              4,224,776           3,152,303

Total liabilities and stockholders' equity........       $     11,069,865    $     17,182,797
                                                         =================   ================




             See accompanying notes to consolidated financial statements


</TABLE>



                                        DAHUA, INC.
                        CONSOLIDATED STATEMENTS OF OPERATIONS AND
                                    COMPREHENSIVE INCOME



<TABLE>
<CAPTION>




                                                             Year ended
                                                             December 31,
                                              ----------------------------------------
                                                        2007                 2006
                                              -------------------   ------------------

                                                   <c>                  <c>
Revenues
 Sales revenues.........................       $      16,411,672     $      11,800,257
 Cost of goods sold.....................              12,530,740             8,246,159
                                              -------------------    -----------------
Gross profit............................               3,880,932             3,554,098

Expenses
 Advertising............................                 522,808             1,824,182
 Depreciation...........................                  86,562                19,006
 Payroll expense........................                 486,668               203,083
 Other general and administrative.......               1,331,031               635,969
                                               ------------------    ------------------
     Total expenses.....................               2,427,069             2,682,240
                                               ------------------    ------------------

Net income from operations..............               1,453,863               871,858

Other income (expense)
 Interest expense.......................                (49,197)             (237,158)
 Other income...........................                       -                90,981
 Interest income........................                  20,488                11,518
                                               ------------------    ------------------
     Total other expense................                (28,709)             (134,659)

Net income before taxes and minority interest          1,425,154               737,199

Provision for income taxes..............               (470,301)             (243,276)
                                               ------------------    ------------------

Net income before minority interest.....                954,853                493,923

Minority interest in subsidiary income..                190,971                 98,785
                                               ------------------    ------------------
Net income..............................         $      763,882        $       395,138
                                               ==================    ==================

Foreign currency translation adjustment.                308,591                123,666

Comprehensive income....................         $    1,072,473        $       518,804
                                               ==================    ==================


Basic and diluted earnings per share....         $         0.03        $          0.02
                                                =================    ==================

Weighted average common shares outstanding           25,000,000             25,000,000
                                                =================    ==================


              See accompanying notes to consolidated financial statements

</TABLE>




                                            DAHUA, INC.
                                CONSOLIDATED STATEMENTS OF CASH FLOWS



<TABLE>
<CAPTION>
                                                                       Year ended
                                                                       December 31,
                                                           ------------------------------------
                                                                   2007                2006
                                                           -------------------  ---------------

                                                                <c>                <c>
Cash flows from operating activities:
 Net income........................................          $        763,882   $      395,138
 Adjustments to reconcile net income to
  net cash provided by operations:
   Depreciation....................................                    86,562           19,006
   Minority interest...............................                   190,971           98,785
   Loss on sale of property, plant & equipment.....                       573                -
  Changes in operating assets and liabilities:
   Inventory.......................................                 8,015,518        1,509,217
   Tax prepaid.....................................                    48,727        (261,447)
   Accounts payable................................                 (187,912)          301,787
   Customer deposits...............................               (5,028,114)        3,010,239
   Restricted cash.................................                  (302312)           25,569
   Accrued interest................................                 (591,406)          237,158
   Income tax payable..............................                         -        (226,518)
   Prepaid expenses................................                 (142,277)                -
   Other accruals..................................                    79,010           57,067
                                                             -----------------   -------------
       Net cash provided by operations.............                 2,933,222        5,166,001

Cash flows from investing activities:
 Purchases of property, plant & equipment..........                 (248,546)        (316,551)
 Proceeds from sale of property, plant & equipment.                     4,338                -
 Construction in progress..........................                 (757,516)                -
 Others receivable.................................                 (288,119)                -
 Due from related parties..........................                         -           46,339
                                                              ----------------   -------------
       Net cash used in investing activities.......               (1,289,843)        (270,212)

Cash flows from financing activities:
 Payments on loans payable.........................               (2,224,450)      (3,028,524)
                                                              ----------------   -------------
       Net cash used in financing activities.......               (2,224,450)      (3,028,524)

Effect of rate changes on cash.....................                   135,862           54,505
                                                              ----------------   -------------

Increase (decrease) in cash and cash equivalents...                 (445,209)        1,921,770
Cash and cash equivalents, beginning of period.....                 2,338,835          417,065
                                                              ----------------   -------------
Cash and cash equivalents, end of period...........            $    1,893,626    $   2,338,835
                                                              ================   =============

Supplemental disclosures of cash flow information:

 Interest paid in cash.............................            $      657,272    $          -
                                                              ================  ==============
 Income taxes paid in cash.........................            $      590,449    $     339,168
                                                              ================  ==============
 Sales taxes paid in cash..........................            $      815,825    $   1,131,332
                                                              ================  ==============



                      See accompany notes to consolidated financial statements

</TABLE>







                                        DAHUA, INC.
                  CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY


<TABLE>
<CAPTION>


                                                                                              Accumulated
                                                                Additional                      Other
                                   Common         Common         Paid in        Retained     Comprehensive      Total
                                   Shares         Stock          Capital         Deficit        Income          Equity
                              -----------------  ------------  -------------  --------------  ------------- -------------

                                  <c>             <c>           <c>             <c>             <c>          <c>
Balance January 1, 2006          25,000,000      $   2,500     $  3,130,452   $  (570,136)    $    70,683   $   2,633,499

Foreign currency translation              -              -                -              -        123,666         123,666
Net income                                -              -                -        395,138              -         395,138
                              -----------------  ------------  -------------  --------------  ------------- -------------
Balance December 31, 2006        25,000,000      $   2,500     $  3,130,452   $  (174,998)     $  194,349   $   3,152,303

Foreign currency translation              -              -                -              -        308,591         308,591
Net income                                -              -                -        763,882              -         763,882
                              ----------------- -------------  -------------  -------------  -------------- --------------
Balance December 31, 2007        25,000,000      $   2,500     $  3,130,452   $    588,884     $  502,940   $   4,224,776
                              ================= =============  =============  =============  ============== =============



           See accompany notes to consolidated financial statements


</TABLE>







                               DAHUA INC.
                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



1.   Nature of operations

Dahua, Inc. ("Dahua") was incorporated on March 8, 2002 in the State of Delaware
as Norton Industries Corp. ("Norton"). The name was changed to Dahua, Inc. on
February 7, 2005 as result of a reverse acquisition in which Norton acquired all
capital shares of Bauer Invest Inc. ("Bauer").  Incident to the reverse
acquisition the Company paid $100,000 to the previous shareholders of Norton for
shares of stock that were canceled. The acquisition was accounted for as a
reverse merger, as the post acquisition owners and control persons of Dahua are
substantially the same as the pre acquisition owners and control persons of
Bauer and the $100,000 paid to purchase and cancel the previous shares was
treated as an adjustment to paid in capital.

Bauer Invest Inc. was incorporated on December 10, 2003, under the laws of the
Territory of the British Virgin Islands ("BVI"). Bauer has had no operations
other than the acquisition of 80% of Beijing Dahua Real Estate Development, Ltd.
("Subsidiary") on May 25, 2004. The Subsidiary is a corporation established on
September 24, 2001 in the People's Republic of China ("PRC"). The acquisition
was accounted for as a reverse merger, as the post acquisition owners and
control persons of Bauer are substantially the same as the pre-acquisition
owners and control persons of the subsidiary. These financial statements are
essentially those of the Subsidiary with a recapitalization to show the effects
due to the reverse mergers. The consolidated entity is hereafter referred to as
"the Company".

The Company engages in the development of real estate and the sale of commodity
housing. The Company has completed all of the construction on its current
development project and all of the houses are sold or available for sale.

2.   Basis of Presentation

The consolidated financial statements include the accounts of Dahua, Inc., Bauer
Invest, Inc. and Beijing Dahua Real Estate Development, Ltd. All material
intercompany accounts and transactions have been eliminated in consolidation.
The Company records minority interest expense, which reflects the 20% portion of
the earnings of Beijing Dahua Real Estate Development, Ltd. allocable to holders
of the minority interest.

The accompanying consolidated financial statements are prepared in accordance
with accounting principles generally accepted in the United States of America
("US GAAP"). This basis differs from that used in the statutory accounts of the
Company, which were prepared in accordance with the accounting principles and
relevant financial regulations applicable to enterprises in the PRC. All
necessary adjustments have been made to present the financial statements in
accordance with US GAAP.

3.   Summary of Significant Accounting Policies

Economic and Political Risks
----------------------------

The Company faces a number of risks and challenges as a result of having primary
operations and markets in the PRC. Changing political climates in the PRC could
have a significant effect on the Company's business.

Cash and Cash Equivalents
-------------------------

For purposes of the statements of cash flows, cash and cash equivalents includes
cash on hand and demand deposits held by banks. Deposits held in financial
institutions in the PRC are not insured by any government entity or agency.

Trade Accounts Receivable
-------------------------

Trade accounts receivable are recognized and carried at original invoice amount
less an allowance for any uncollectible amounts. An estimate for doubtful
accounts is made when collection of the full amount becomes questionable. The
Company had no trade accounts receivable at December 31, 2007.

Inventories
-----------

Inventories consist primarily of land acquisition and development costs,
engineering, infrastructure, capitalized interest, and construction costs. The
inventories are valued at cost based on the level of completion using the
weighted-average method. The company made a provision of $158,624 for houses
which will be sold below cost, which is included in cost of goods sold. As of
December 31, 2007, the company didn't recognize the sales revenue of such
houses, because they didn't meet the requirement of revenue recognition. However
the sales prices of such houses were predetermined. Since the cost per square
meter increased in 2007, it is estimated that the revenues will be lower than
the costs when the revenues are recognized.

Property, plant & equipment
---------------------------

Property, plant & equipment are carried at cost less accumulated depreciation,
which is computed using the straight-line method over the useful lives of the
assets. Upon disposal of assets, the cost and related accumulated depreciation
are removed from the accounts and any gain or loss is included in income.
Equipment is depreciated over their estimated useful lives as follows:

               Computer equipment             3 years
               Office equipment               7 years
               Vehicles                       7 years

Depreciation expense for the year ended December 31 2007 and 2006 was $86,562
and $19,006, respectively.

Long-term assets of the Company are reviewed annually to assess whether the
carrying value has become impaired, according to the guidelines established in
Statement of Accounting Standards (SFAS) No. 144, "Accounting for the Impairment
or Disposal of Long-Lived Assets." The Company also evaluates the periods of
amortization to determine whether subsequent events and circumstances warrant
revised estimates of useful lives. No impairment of assets was recorded in the
periods reported.

Revenue Recognition
-------------------

The Company recognizes revenue on the sale of a house when the consummation of
a sale is evidenced by: 1) a contractual arrangement that is binding to both
parties; 2) the exchange of all consideration (i.e. the seller has transferred
to the buyer the usual risks and rewards of ownership and the buyer has made
payment in full to the seller); 3) the arrangement of all permanent financing
for which the seller is responsible and; 4) the performance of all conditions
precedent to closing. No revenue is recognized when the Company's receivable is
subject to future subordination, as is the case when the Company guarantees a
bank loan for the period prior to the certification of title transfer.

Advertising Expenses
--------------------

Advertising costs are expensed as incurred.  Advertising expense amounted to
$522,808 and $1,824,182 for the years ended December 31, 2007 and 2006,
respectively.

Foreign Currency and Comprehensive Income
-----------------------------------------

The accompanying consolidated financial statements are presented in United
States ("US") dollars. The functional currency is the Yuan Renminbi ("RMB") of
the PRC. The consolidated financial statements are translated into US dollars
from RMB at period-end exchange rates for assets and liabilities, and weighted
average exchange rates for revenues and expenses. Capital accounts are
translated at their historical exchange rates when the capital transactions
occurred.

During July 2005, China changed its foreign currency exchange policy from a
fixed RMB/US dollar exchange rate into a flexible rate under the control of
China's government.  We used the Closing Rate Method in translation of the
financial statements.

RMB is not freely convertible into the currency of other nations. All such
exchange transactions must take place through authorized institutions. There is
no guarantee the RMB amounts could have been, or could be, converted into US
dollars at rates used in translation.

Taxes
-----

Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
bases. Deferred tax assets and liabilities are measured using enacted tax rates
expected to apply to taxable income in the years in which those temporary
differences are expected to reverse. The effect on deferred tax assets and
liabilities of a change in tax rates is recognized in the statement of
operations in the period that includes the enactment date. A valuation allowance
is provided for deferred tax assets if it is more likely than not these items
will either expire before the Company is able to realize their benefits, or that
future deductibility is uncertain. Nearly all differences in tax bases and
financial statement carrying values are permanent differences. Therefore, the
Company has recorded no deferred tax assets or liabilities.

Estimates
---------

The preparation of consolidated financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosures of contingent assets and liabilities at the date of the consolidated
financial statements and the reported amounts of income and expenses during the
reporting period. Actual results could differ from those estimates.

Earnings per Share
------------------

Basic earnings per common share ("EPS") are calculated by dividing net income by
the weighted average number of common shares outstanding during the year.
Diluted EPS is calculated by adjusting the weighted average outstanding shares,
assuming conversion of all potentially dilutive securities, such as stock
options and warrants. The numerators and denominators used in the computations
of basic and diluted EPS are presented in the following table:
<TABLE>
<CAPTION>

                                                             2007            2006
                                                       --------------  ----------------

                                                         <c>              <c>
NUMERATOR FOR BASIC AND DILUTED EPS
  Net income to common stockholders                     $   763,882        $   395,138

DENOMINATORS FOR BASIC AND DILUTED EPS
  Weighted average shares of common stock outstanding    25,000,000         25,000,000
  Add: dilutive equity securities outstanding                     -                  -
  Denominator for diluted EPS                            25,000,000         25,000,000
                                                        ==============  ==============

      EPS - Basic                                        $     0.03        $      0.02
                                                        ==============  ==============
      EPS - Diluted                                      $     0.03        $      0.02
                                                        ==============  ==============
</TABLE>

The Company had no potentially dilutive securities outstanding at December 31,
2007 and 2006.

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

Certain reclassifications have been made in the 2006 financial statements to
conform with the 2007 presentation.


4.  Inventory

Inventory represents completed houses available for sale at December 31, 2007.
During 2005, the Company completed all of its housing construction. As of
December 31, 2007, 60 units were sold, 13 units were reserved with clients'
deposits, 2 units were available for sale and one unit was kept by the company.


5. Construction in progress

Construction in progress represents the cost of the new building, which the
Company is constructing. The new building will have four stories. The Company
plans to use two stories for its office and administration, and give out the
other two stories (lease free) to the home owner association. The home owner
association will hire a third party to collect usage fee and maintain the
facilities at their cost. As of December 31, 2007, the balance of construction
in progress was $788,896 (including capitalized interest of $17,359).


6. Related Party Transactions

Short-term loans due to related parties had balances of $461,421 and $3,176,699
(including accrued interest) at December 31, 2007 and 2006 respectively.  The
loans carry an annual interest rate of 6 percent and are due on demand. Interest
accrued on the loans was $151,446 and $718,238 for the years ended December 31,
2007 and 2006 respectively. Of the interest amounts, which were accrued for the
year ended December 31, 2007, $17,359 was capitalized as construction in
progress and the remainder was expensed as interest expense.


7.  Customer deposits

Customer deposits consist of down payments received on sales contracts for
houses. When all of the conditions set forth in the Company's revenue
recognition policy are met, the Company will recognize the down payments as
revenue. The aggregate of the customers' deposits was $4,994,842 and $9,576,401
at December 31, 2007 and 2006 respectively. Of the 13 units reserved, 3 unit's
deposits are money received from bank arrangements (see note 8) in the amounts
of $937,765. Accordingly, the bank has liens against these 3 units.


8. Off-Balance Sheet Arrangements

The Company entered into an agreement with two banks that extended mortgage
loans to its home buyers, where the Company agrees to provide a certain limited
guarantee, which covers the risk before the conveyance of title upon closing.
Upon initiating the loan on behalf of the buyer for the down payment, the Bank
has withheld a percentage ranging from 5% to 20% of the loan and deposited such
funds into a segregated account in each bank. At December 31, 2007 and 2006,
the balance of this separate account was $679,872 and $341,672 respectively.
Since the Company does not recognize revenue when its receivables are subject
to future subordination, the entire amount that could become payable to the bank
under the limited guarantee is recorded as a liability on the balance sheet and
is included in customer deposits, as is explained in note 7.


9. Tax

The Company made a provision for sales tax, which totaled $107,524 and $708,016
respectively for the year ended December 31, 2007 and 2006. The sales tax is
calculated on the basis of sales revenues. The provision for sales tax is
included as part of cost of goods sold.

The Company made a provision for income tax, which totaled $470,301 and $243,276
respectively for the years ended December 31, 2007 and 2006. The income tax is
calculated on the basis of the net income before taxes and minority interest.

The Company paid sales tax and income tax in cash, which totaled $815,825 and
$590,449 respectively for the year ended December 31, 2007. The company paid
sales tax and income tax in cash, which totaled $1,131,322 and $339,168
respectively, for the year ended December 31, 2006.


10. Stock

The Company is authorized to issue up to 80,000,000 shares of common stock,
$.0001 par value, and 20,000,000 shares of preferred stock, $.0001 par value per
share. As of December 31, 2007, there were 25,000,000 shares of common stock
issued and outstanding, and no shares of preferred stock were issued and
outstanding.


11. Contingencies

The Company has not, historically, carried any property or casualty insurance.
No amounts have been accrued for any liability that could arise from the lack of
insurance. Management feels the chances of such an obligation arising are
remote.

Deposits in banks in the PRC are not insured by any government entity or agency,
and are consequently exposed to risk of loss. Management believes the
probability of a bank failure, causing loss to the Company, is remote.


12. Others receivable

Others receivable primarily represent loans due from outside parties. As of
December 31, 2007, the balance of others receivable (including accrued interest)
was $300,054.  The loans due from outside parties carry an annual interest rate
of 6 percent and are due within two years.


13.   Leases

The Company leased in 1997 a pound and filled it and leveled up for land
exploitation from an outside party for approximately $32,500.00 per year which
will end in 2047. This lease is for an initial term of 50 years and requires
fixed annual payments. The Company leased a warehouse in 2006 from an outside
party for approximately $65,000.00 per year which will end in 2008. In the year
ended December 31, 2007 the Company paid approximately $171,110 for the lease
payment. These leases contain renewal and right of first refusal options and
require the adherence to certain covenants and conditions. Rental expense is
recognized on the straight-line basis, although rental payments vary over the
lease terms. Future minimum lease payments are as follows:

  Year ending December 31,

      2008                                     $62,000
      2009                                     $32,500
      2010                                     $32,500
      2011                                     $32,500
      2012                                     $32,500
      Thereafter                            $1,137,500
                                           -------------
                                            $1,329,500


14.  Recent Accounting Pronouncements

In December 2007, the Financial Accounting Standards Board ("FASB") issued FASB
Statements No.141 (revised 2007), "Business Combinations" ("FAS 141(R)") and
No. 160, "Noncontrolling Interests in Consolidated Financial Statements" ("FAS
160"). These standards aim to improve, simplify, and converge internationally
the accounting for business combinations and the reporting of noncontrolling
interests in consolidated financial statements. The provisions of FAS 141 (R)
and FAS 160 are effective for the fiscal year beginning June 1, 2009. We are
currently evaluating the provisions of FAS 141(R) and FAS 160.

In February 2007, the FASB issued Statement No. 159, "The Fair Value Option for
Financial Assets and Financial Liabilities - Including an amendment to FASB
Statement No. 115". This statement permits companies to choose to measure many
financial instruments and other items at fair value. The objective is to
improve financial reporting by providing entities with the opportunity to
mitigate volatility in reported earnings caused by measuring related assets and
liabilities differently without having to apply complex hedge accounting
provisions. This Statement is expected to expand the use of fair value
measurement of accounting for financial instruments. This statement applies to
all entities, including not for profit. The fair value option established by
this statement permits all entities to measure eligible items at fair value at
specified election dates. This statement is effective as of the beginning of
an entity's first fiscal year that begins after November 15, 2007. The Company
is currently assessing the impact adoption of SFAS No. 159 will have on its
financial statements.

In December 2006, the FASB issued SFAS No. 157 "Fair Value Measurements" which
defines fair value, establishes a framework for measuring fair value in
generally accepted accounting principles and expands disclosure about fair value
measurements. The statement clarifies that the exchange price is the price in
an orderly transaction between market participants to sell the asset or transfer
the liability in the market in which the reporting entity would transact for the
asset or liability, that is, the principal or most advantageous market for the
asset or liability. It also emphasizes that fair value is a market-based
measurement, not an entity-specific measurement, and that market participant
assumptions include assumptions about risk and effect of a restriction on the
sale or use of an asset. The provisions are effective for fiscal years beginning
after November 15, 2007. The Company is currently assessing the impact of the
statement.



Item 8.   Changes In and Disagreements with Accountants on Accounting and
Financial Disclosure


On or about January 1, 2006, Child, Sullivan & Company, our principal
accountant, changed its accounting practice from a corporation to a professional
limited liability company named Child, Van Wagoner & Bradshaw, PLLC. As this is
viewed as a separate legal entity, we dismissed Child, Sullivan & Company as
principal accountant and engaged Child, Van Wagoner & Bradshaw, PLLC, as our
principal accountant for our fiscal years ending December 31, 2006 and 2007 and
the interim periods for 2006 and 2007. The decision to change principal
accountants was ratified by our Board of Directors.

None of the reports of Child, Sullivan & Company, on our financial statements
for either of the past two years or subsequent interim period contained an
adverse opinion or disclaimer of opinion, or was qualified or modified as to
uncertainty, audit scope or accounting principles.

There were no disagreements between us and Child, Sullivan & Company, for the
previous two fiscal years and interim period up to the date of dismissal on any
 matter of accounting principles or practices, financial statement disclosure,
or auditing scope or procedure, which, if not resolved to the satisfaction of
Child, Sullivan & Company, would have caused them to make reference to the
subject matter of the disagreement in connection with its report. Further,
Child, Sullivan & Company has not advised us that: 1) internal controls
necessary to develop reliable financial statements did not exist; or 2)
information has come to the attention of Child, Sullivan & Company which made it
unwilling to rely upon management's representations, or made it unwilling to be
associated with the financial statements prepared by management; or 3) the scope
of the audit should be expanded significantly, or information has come to the
attention of Child, Sullivan & Company that they have concluded will, or if
further investigated might, materially impact the fairness or reliability of a
previously issued audit report or the underlying financial statements, or the
financial statements issued or to be issued covering the fiscal year ended
December 31, 2007.

Prior to engaging Child, Van Wagoner & Broadshaw, PLLC, we, or anyone on behalf
of us, have not consulted with Child, Van Wagoner & Broadshaw, PLLC. on matters
regarding the application of accounting principles to a specified transaction,
either completed or proposed, or the type of audit opinion that might be
rendered on its financial statements. There was no reportable event as defined
in Item 304(a)(2) of Regulation S-B.


Item 8A(T). Control and Procedure

(a) Evaluation of disclosure controls and procedures.

Management of the Company, including its principal executive officer and
principal financial officer, have evaluated the effectiveness of our disclosure
controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the
Securities Exchange Act of 1934) as of the year ended December 31, 2007, the
period covered by the Annual Report on Form 10-KSB. Based upon that evaluation,
our principal executive officer and principal financial officer have concluded
that the Company' disclosure controls and procedures were effective.

Management's Annual Report on Internal Control over Financial Reporting. We are
responsible for establishing and maintaining adequate internal control over
financial reporting. Our internal control over financial reporting is a process
to provide reasonable assurance regarding the reliability of financial reporting
and the preparation of our financial statements for external reporting purposes
in accordance with United States generally accepted accounting principles.

We assessed the effectiveness of the Company's internal control over financial
reporting as of December 31, 2007 based on the framework in "internal Control
Over Financial Reporting - Guidance for Smaller Public Companies"issued by the
Committee of Sponsoring Organizations of the Treadway Commission. Based on that
assessment, we determined that, as of December 31, 2007, the Company's internal
control over financial reporting is effective, based on those criteria.

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

(b) Changes in internal controls over financial reporting

There has been no change in our internal control over financial reporting that
occurred during our last fiscal quarter that has materially affected or is
reasonably likely to materially affect our internal control over financial
reporting.


Item 8B.  Other Information

There were no events requiring disclosure that had not been made under Form 8K
in the fourth quarter of our fiscal year.



                                     PART III



Item 9.   Directors, Executive Officers, Promoters and Control Persons;
          Compliance with Section 16(a) of the Exchange Act


Directors and Executive Officers
--------------------------------

Each of our directors is elected by the shareholders to a term of one year and
serves until his or her successor is elected and qualified, or until he or she
resigns or is removed from office. Each of our officers is elected by the board
of directors to a term of one year and serves until his or her successor is duly
elected and qualified, or until he or she resigns or is removed from office. The
board of directors has no nominating or compensation committees. The board of
directors does not have an audit committee financial expert.

The name, address, age and position of our officers and directors are set forth
below:


    Name        Age                   Position Held
------------   ----  --------------------------------------------------------
Du Yonglin      66   President, Chief Executive Officer and Director
Wang Wulong     68   Director
Meng Hua        32   Chief Financial Officer
Zeng Qinna      30   Corporate Secretary

The following is a brief description of business experience of each of our
directors and executive officers during the past five years.

Mr. Yonglin Du has been our Chairman, Chief Executive Officer and President
since January 30, 2005.  From 1982 to 2003, Mr. Du held various positions in
China's petroleum and petrochemical industries, including Deputy Director of the
Research Institute of Daqing Oilfield, Head of Petroleum and Petrochemical
Division of the State Planning Commission, Deputy Director of the Energy
Institute of the State Planning Commission, President of Shanghai Petroleum and
Natural Gas Company. In 2000, he founded Dahua Project Management Group Co. Ltd.
("Dahua Group"), of which he has been serving as its Chairman of the Board of
Directors and Chief Executive Officer. Dahua Group is a Beijing Municipal
Government licensed construction project supervising business entity located in
Beijing, China.

Mr. Wulong Wang has been our Director since January 30, 2005. A graduate of
Beijing Post and Telecommunication University, Mr. Wang is a senior engineer and
China's registered Consulting Engineer. He joined China's State Planning
Commission in 1979, and served as its Deputy Chief of Investment Bureau from
1988 to 1992, Chief of Key Construction Bureau from 1992 to 1994, Chief of
Investment Bureau from 1994 to 1995. From 1995 to 2002, Mr. Wang served as the
President of China International Engineering Consulting Co. Limited, and from
2002 to the present as a member of the Expert Committee of China Engineering
Consulting Co. Limited, as well as a member of the Economic Commission of
Chinese National People's Political Consultative Conference.

Ms. Hua Meng has been our Chief Financial Officer since January 30, 2005. She
graduated from the Central University of Finance and Economics of China in July
2003 with a master degree in accounting. Ms. Meng is a Certified Public
Accountant in China. From July 1999 to May 2000, she was employed at Beijing
Baisheng Light Industry Development Co. Ltd. as an accountant. From July 2003
to the present, Ms. Meng has also been chief financial officer of Dahua Project
Management Group Co., Ltd., a Beijing Municipal Government licensed construction
project supervising business entity in Beijing, China.

Ms. Qinna Zeng has been our Corporate Secretary since January 30, 2005. She
graduated from the Central University of Finance and Economics in China in July
2003 with a master degree in finance. From July 1999 to August 2000, Ms. Zeng
worked for the Lichuan Branch of People's Bank of China as a statistician. From
July 2003 to the present, Ms. Zeng has also been corporate secretary of Dahua
Project Management Group Co. Ltd., a Beijing Municipal Government licensed
construction project supervising business entity in Beijing, China.

None of our directors and officers has ever held any position in a reporting
company.


Significant Employees
---------------------

There are no significant employees other than our executive officers.


Family Relationships
--------------------

There are no family relationships among directors or officers.


Involvement in Certain Legal Proceedings
----------------------------------------

During the past five years, none of our officers, directors, promoters or
control persons has had any involvement in any of the following events:

   1.  Any bankruptcy petition filed by or against any business of which such
person was a general partner or executive officer either at the time of the
bankruptcy or within two years prior to that time;

   2.  Any conviction in a criminal proceeding or being subject to a pending
criminal proceeding, excluding traffic violations and other minor offenses;

   3.  Being subject to any order, judgment or decree, not substantially
reversed, suspended or vacated, of any court of competent jurisdiction,
permanently enjoining, barring, suspending or otherwise limiting his involvement
in any type of business, securities or banking business; and/or

   4.  Being found by a court of competent jurisdiction, in a civil action, the
Securities and Exchange Commission or the Commodity Futures Trading Commission
to have violated a federal or state securities or commodities law, and the
judgment has not been reversed, suspended or vacated.


Code of Ethics
--------------

We had adopted a code of ethics that applies to its principal executive officer,
principal financial officer, principal accounting officer or controller, or
persons performing similar functions. A copy of the code of ethics may be
obtained by any person, without charge, who sends a written request to Dahua
Inc. c/o Corporate Secretary, 19th Floor, Building C, Tianchuangshiyuan,
Huizhongbeili, Chaoyang District, Beijing, China, 100012.


Section 16(a) Beneficial Ownership Reporting Compliance
-------------------------------------------------------

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires our
officers and directors, and persons who own more than 10% of a registered class
of our equity securities, to file reports of ownership and changes in ownership
of our equity securities with the Securities and Exchange Commission. Officers,
directors and greater than 10% shareholders are required by the Securities and
Exchange Commission regulations to furnish us with copies of all Section 16(a)
filings. To our knowledge, for the year ended December 31, 2007, based solely
on a review of the copies of such reports furnished to us and representations
by these individuals that no other reports were required during the year ended
December 31, 2007, all Section 16(a) filing requirements applicable to our
directors, officers and greater than 10% beneficial owners have been timely
filed.



Item 10.  Executive Compensation


We have contracted with Beijing Guohong Dahua Economic Research Center, a
related party, to provide administrative and management services.  Included in
those services are the payment of officer salaries and provision of office
space and other shared costs and services. We accrued $74,349 for the year
ending December 31, 2006, which was paid in 2007, into short-term loans due to
related parties for payment of the services.


Summary Compensation Table
--------------------------

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>


-------------------------------------------------------------------------------------------------------
                                                         Non-      Nonquali-
                                                         Equity       fied
                                                        Incentive    Deferred        All
Name and                              Stock    Option     Plan     Compensation    Other
Principal            Salary   Bonus   Awards   Awards  Compensation  Earnings   Compensation    Total
Position      Year    ($)      ($)     ($)      ($)        ($)          ($)        ($)           ($)
------------------------------------------------------------------------------------------------------

            <c>   <c>      <c>     <c>      <c>        <c>         <c>          <c>          <c>
Yonglin Du    2007   27,380     -      -          -         -         -          -            27,380
CEO and       2006   25,086     -      -          -         -         -          -            25,086
President

Hua Meng      2007   8,214     -       -          -         -         -          -             8,214
CFO           2006   7,526     -       -          -         -         -          -             7,526
------------------------------------------------------------------------------------------------------
</TABLE>


(i)  The annual salaries paid Mr. Du were 200,000 yuan, or approximately
$27,380, and Ms. Meng 60,000 yuan, or approximately $8,214, respectively.

At the end of the last completed fiscal year, there were no "most highly
compensated executive officers" as that term is defined in Item 402(a) (2) of
Regulation S-B, and there were no additional individuals for whom disclosure
would have been made in this table but for the fact that the individual was not
serving as our executive officer.


Outstanding Equity Awards at Fiscal Year-End Table
--------------------------------------------------

We do not have any equity incentive plans. No option or stock awards have been
granted to any of our executive officers or directors since our inception.
Pursuant to Item 402(a)(4) of Regulation S-B, the Outstanding Equity Awards at
Fiscal Year-End Table is omitted because there has been no compensation awarded
to, earned by, or paid to any of the named executive officers or directors
required to be reported in that table.


Compensation of Directors
-------------------------

The members of the Board of Directors are not compensated by us for their
service as members of the Board of Directors, but may be reimbursed for
reasonable expenses incurred in connection with attendance of meetings of the
board of directors. There are no arrangements pursuant to which directors are
or will be compensated in the future for any services provided as a director.


Employment Contracts, Termination of Employment, Change-in-Control Arrangements
-------------------------------------------------------------------------------

We have not entered employment agreements with our executive officers. There
are no compensatory plans or arrangements, including payments to be received
from us, with respect to a named executive officer, if such plan or arrangement
would result from the resignation, retirement or any other termination of such
executive officer's employment with us or form a change-in-control of us or a
change in the named executive officer's responsibilities following a change-in-
control.



Item 11.  Security Ownership of Certain Beneficial Owners and Management and
Related Stockholder Matters


Security Ownership of Certain Beneficial Owners
-----------------------------------------------

The following table sets forth certain information regarding the beneficial
ownership of our common stock as of March 28, 2008, each person who is known by
us to own beneficially more than 5% of our outstanding common stock. We have
only one class of securities outstanding. Except as otherwise indicated, we
believe that the beneficial owners of the common stock listed below, based on
information furnished by such owners, have sole investment and voting power with
respect to such shares, subject to community property laws where applicable.

                   Name and Address of     Amount & Nature of
Title of Class     Beneficial Owner        Beneficial Owner    Percent of Class
--------------- ------------------------ ---------------------  ---------------
Common Stock    Yonglin Du                  1,900,000 shares         7.60%
                19th Floor, Building C,
                Tianchuangshiyuan,
                Huizhongbeili,
                Beijing, China, 100012
-------------------------------------------------------------------------------


Security Ownership of Management
--------------------------------

The following table sets forth certain information, as of March 28, 2008, as to
each class of our equity securities beneficially owned by all of our directors
and nominees, each of the named executive officers, and our directors and
executive officers as a group.


                  Name and Address of      Amount & Nature of
Title of Class   Beneficial Owner(1)       Beneficial Owner    Percent of Class
--------------  -----------------------   -------------------  ----------------
Common Stock    Yonglin Du(2)               1,900,000 shares        7.60%
                19th Floor, Building C,
                Tianchuangshiyuan,
                Huizhongbeili,
                Beijing, China, 100012

Common Stock    Qinna Zeng (3)                 72,500 shares         * (4)
                #1712, Courtyard 5,
                Beiyuan Road, Chaoyang District,
                Beijing

Common Stock    Hua Meng (5)                   15,000 shares         *
                # 8104, Courtyard
                11, Anning Zhuang,
                Xisanqi, Haidian District,
                Beijing

Common Stock    Wang Wulong                              Nil         Nil
                c/o Dahua Inc.
                19th Floor, Building C,
                Tianchuangshiyuan,
                Huizhongbeili,
                Beijing, China, 100012

                All officers and directors
                as a group                   1,987,500 shares      7.95%
-------------------------------------------------------------------------------


(1) The persons named above do not have any specified rights to acquire,
within 60 days of the date of this registration statement any options, warrants
or rights and no conversion privileges or other similar obligations exist.

(2) Yonglin Du is our CEO, President and a director.

(3) Qinna Zeng is our Corporate Secretary.

(4) Less than one percent of the total number of shares outstanding.

(5) Hua Meng is our Chief Financial Officer.

We do not have any securities that are convertible into common stock.


Changes in Control
------------------

There are no arrangements that the management is aware of that may result in
changes in control as that term is defined by the provisions of Item 403(c) of
Regulation S-B. There are no provisions within our Articles or Bylaws that would
delay or prevent a change of control.



Item 12   Certain Relationships and Related Transactions


(a) Transactions with Related Persons
---------------------------------

None.


(b) Parents
-----------

None.


(c) Promoters and Control Persons
----------------------------------

Prior to the reverse merger on January 30, 2005, Comp Hotel International Ltd.
("Comp Hotel") and Waywood Investment Ltd. ("Waywood") collectively owned 100%
of capital stock of our predecessor, Norton Industries Corp. On January 30,
2005, Comp Hotel and Waywood entered into a share exchange agreement with Bauer
Invest Inc., a British Virgin Islands corporation ("Bauer"), pursuant to which
Comp Hotel and Waywood sold all outstanding capital shares, or 5,000,000 shares
of common stock of Norton, to Bauer in exchange for $100,000 in cash and 5% of
the post-acquisition shares. As a result, Waywood and Comp Hotel received
150,000 and 850,000 shares, respectively, of our common stock. The numbers of
shares they received were proportionate to the respective numbers of shares they
originally owned in Norton Industries Corp.

Waywood Investment Ltd. ("Waywood") is the sole promoter of our predecessor,
Norton Industries Corp ("Norton"). Waywood is a small business consulting firm
incorporated in the British Virgin Islands. Jianjun Zhang is the sole
shareholder of Waywood. From inception of Norton until the reverse merger of
Norton on January 30, 2005, Mr. Zhang was the sole director and executive
officer of Norton. On February 26, 2003, Waywood entered into a stock purchase
agreement with Comp Hotel International Ltd., a British Virgin Islands
corporation ("Comp Hotel"), pursuant to which Comp Hotel acquired 4,250,000
shares, or 85%, of Norton's common stock from Waywood in exchange for $42,500
in cash. Comp Hotel is a travel-related service provider operating in Hong Kong,
and is controlled by South Sea Petroleum Holdings Limited, a Hong Kong
corporation, whose principal business is the exploration and production of crude
oil in Indonesia. Immediately prior to the date of reverse merger between Bauer
Invest and Norton Industries Corp., Comp Hotel, owned 85%, and Waywood owned
15%, of Norton's issued and outstanding shares, respectively.

In connection with issuance of additional common shares as a result of capital
increase in our subsidiary, pursuant to a no-dilution clause of the Share
Exchange Agreement dated January 30, 2005, on September 21, 2005, we issued
212,500 and 37,500 shares of our common stock to Comp Hotel and Waywood,
respectively.


Related Party Loans
-------------------

Set forth below is a chart of all related party loans (lines of credit) extended
to us as of December 31, 2007:


           Party                       Current Loan Balance        Date
------------------------------------------------------------------------------
Dahua Project Management Group                $     121,240      October 2001
Donghui Du                                            7,266      December 2001
Beijing Dahua Weiye Invest Inc.                     181,469      December 2005
------------------------------------------------------------------------------
                               Total          $     309,975

All the related parties set forth above are parties in which Mr. Yonglin Du, our
president and CEO, holds an executive position. Donghui Du is Mr. Yongling Du's
son.

We entered a written loan agreement with Dahua Project Management Group. Please
see Exhibit 10. 6.  All other loans or lines of credit are extended based on
verbal agreements. All the loans so borrowed are unsecured. The money we borrow
from them bear's interest at an annual rate of 6%, then prevailing market rate,
repayable within 30 days upon demand by lender.


Item 13.  Exhibits

(a) The following exhibits are filed as part of this report.

   Exhibit
   Number                      Description
 ---------  --------------------------------------------------------------------
    2.1       Share Exchange Agreement dated January 30, 2005 between Norton
              Industries Corp. and Bauer Invest, Inc. (Incorporated by reference
              to Current Report on Form 8-K filed on February 1, 2005,
              Commission File No. 0-49852).

    2.2       Share Exchange Agreement dated January 26, 2003 between Norton
              Industries Corp. and Comp Hotel International Ltd. (Incorporated
              by reference to Registration Statement on Form SB-2/A filed on
              November 14, 2005, Commission File No. 333-122622).

    2.3       Share Transfer Agreement dated May 25, 2004 between Bauer Invest,
              Inc. and Dahua Project Management Group Co., Ltd. (Incorporated
              by reference to Registration Statement on Form SB-2/A filed on
              November 14, 2005, Commission File 333-122622).

    3.1      Articles of Incorporation (Incorporated by reference to
             Registration Statement on Form 10-SB filed on June 10, 2002,
             Commission File No. 0-49852).

    3.2      Certificate of Amendment of Articles of Incorporation (Incorporated
             by reference to Registration Statement on Form SB-2 filed on
             February 8, 2005, Commission File No. 333-122622).

    3.3      Bylaws (Incorporated by reference to Registration Statement on Form
             10-SB filed on June 10, 2002 Commission File No. 0-49852).

    4.1      Specimen Stock Certificate (Incorporated by reference to
             Registration Statement on Form 10-SB/A filed on July 29, 2002,
             Commission File No. 0-49852).

   10.1      Land Use Rights Transfer Agreement (Incorporated by reference to
             Registration Statement on Form SB-2/A filed on November 14, 2005,
             Commission File No. 333-122622)

   10.2      Agreement dated September 24, 2003, between Beijing Dahua Real
             Estate and Aocheng Construction Management Ltd. (Incorporated by
             reference to Registration Statement on Form SB-2/A filed on
             November 14, 2005, Commission File No. 333-122622)

   10.3      National Land Use Permit issued on October 20, 2003 (Incorporated
             by reference to Registration Statement on Form SB-2/A filed on
             November 14, 2005, Commission File No. 333-122622)

   10.4      Development Planning Permit issued on September 4, 2003
             (Incorporated by reference to Registration Statement on Form SB-2/A
             filed on November 14, 2005, Commission File No. 333-122622)

   10.5      Development Construction Permit issued on September 28, 2003
             (Incorporated by reference to Registration Statement on Form
             SB-2/A filed on November 14, 2005, Commission File No. 333-122622).

   10.6      Line of Credit Agreement between Beijing Dahua Real Estate and
             Dahua Project Management Group (Incorporated by reference to
             Registration Statement on Form SB-2/A filed on November 14, 2005,
             Commission File No. 333-122622).

  10.7	 Agreement between Beijing Dahua Real Estate Development Ltd. and
             Beijing Dahua Gonghong Economic Research Center dated June 18, 2003
             (Incorporated by reference to Registration Statement on Form SB-2/A
             filed on March 8, 2006, Commission File No. 333-122622).

  10.8	 Agreement between Beijing Dahua Real Estate Development Ltd. and
             Beijing Dahua Gonghong Economic Research Center dated June 2004
             (Incorporated by reference to Registration Statement on Form
             SB-2/A filed on March 8, 2006, Commission File No. 333-122622).

  14.1       Code of Business Conduct and Ethics (Incorporated by reference to
             Registration Statement on Form SB-2 filed on February 8, 2005,
             Commission File No. 333-122622).

    21       Subsidiaries of the Registrant (Incorporated by reference to
             Registration Statement on Form SB-2/A filed on November 14, 2005,
             Commission File No. 333-122622).

  31.1       Section 302 Certification by CEO

  31.2       Section 302 Certification by CFO

  32.1       Section 906 Certification by CEO

  32.2       Section 906 Certification by CFO


Item 14   Principal Accountant Fees and Services

The following is a summary of the fees billed to us by our principal accountants
during the fiscal years ended December 31, 2007 and 2006:


       Fee category            2007             2006
------------------------  --------------   ----------------
Audit fees                    $ 40,000       $   40,000
Audit-related fees                   -                -
Tax fees                             -                -
All other fees                       -                -
-----------------------------------------------------------------
             Total fees       $ 40,000       $   40,000

Audit Fees consists of fees for professional services rendered by our principal
accountants for the audit of our annual financial statements or services that
are normally provided by our principal accountants in connection with statutory
and regulatory filings or engagements.

As of December 31, 2007, we did not have an audit committee. Our Board of
Directors reviewed and pre-approved all audit and non-audit services provided by
Child, Van Wagoner & Bradshaw, PLLC and has determined that the firm's provision
of such services to us during fiscal 2007 is compatible with and did not impair
the independence of Child, Van Wagoner & Bradshaw, PLLC. It is the practice of
our Board of Directors to consider and approve in advance all auditing and non-
auditing services provided to us by our independent auditors in accordance with
the applicable requirements of the Securities and Exchange Commission.





                                   SIGNATURES



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


DAHUA, INC.

Date: March 28, 2008


By: /s/ Yonglin Du
-------------------------------------------------
Yonglin Du, President and Chief Executive Officer
(Principal Executive Officer)



In accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated:


/s/ Yonglin Du                                          March 28, 2008
 ----------------------------------------------      ----------------------
Yonglin Du, President, Chief Executive Officer              Date
and Director
(Principal Executive Officer)


/s/                                                     March 28, 2008
------------------------------------------------     ---------------------
Hua Meng, Chief Financial Officer                            Date
(Principal Financial Officer and Principal
 Accounting Officer)



/s/ Wulong Wang                                          March 28, 2008
------------------------------------------------     ---------------------
Wulong Wang, Director                                          Date