**UNITED STATES   SECURITIES  AND EXCHANGECOMMISSION**Washington, D.C. 20549

**FORM 10-Q**

 [X]   Quarterly Report Pursuant toSection 13 or 15(d) of the Securities Exchange Act of 1934 for the quarterlyperiod ended **October 31, 2010**

 [  ]   Transition Report Pursuant toSection 13 or 15(d) of the Securities Exchange Act of 1934 for the transitionperiod from _____ to _____

Commission File Number:  **000-52827**

**OMNICITY CORP.**  (Exact name of registrant as specified inits charter)

| **Nevada**                                                                          |  **98-0512569**                 |
|-------------------------------------------------------------------------------------|--------------------------------------|
| (State or other jurisdiction of  incorporation or organization)                     | (I.R.S. Employer Identification No.) |
|                                                                                |                                 |
| **807 S State Rd****3, Rushville, Indiana, U.S.A.**                                 | **46173**                            |
| (Address of Principal Executive Offices)                                            | (Zip Code)                           |
|                                                                                |                                 |
| **(765) 570-4221**                                                                  |
| (Registrant’s telephone number, including  area code)                         |
|                                                                                |                                 |
| **N/A**                                                                             |
| (Former name, former address and former  fiscal year, if changed since last report) |

Indicate by check mark whetherthe registrant (1) has filed all reports required to be filed by Section 13 or15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (orfor 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 [   ]

Indicateby check mark whether the registrant has submitted electronically and posted onits corporate Web site, if any, every Interactive Data File required to besubmitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of thischapter) during the preceding 12 months (or for such shorter period that theregistrant was required to submit and post such files). Yes [   ]    No [   ]

Indicate by check mark whetherthe registrant is a large accelerated filer, an accelerated filer, anon-accelerated filer, or a smaller reporting company. See definitions of“large accelerated filer,” “accelerated filer,” and “smaller reporting company”in Rule 12b-2 of the Exchange Act. (Check one):

| Large  accelerated filer [   ]           | Accelerated  filer                    [   ] |
|----------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------|
| Non-accelerated  filer   [   ] | Smaller  reporting company [X]                                                                                                                  |
| (Do not check  if a smaller reporting company)     |                                                                                                                                            |

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

Indicate the number of sharesoutstanding of each of the issuer’s classes of common equity as of the latestpracticable date: As of December 15, 2010, there were 43,745,414 shares ofcommon stock, par value $0.001, outstanding.

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PART I - FINANCIAL INFORMATION

**Item 1. Financial Statements.**

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Omnicity Corp.   Consolidated Balance Sheets   As at October 31, 2010 (Unaudited) and July31, 2010 

|                                                                                                                                                                                                                                                                                                                                                                                 |   | October 31, 2010      $  |   |   | July 31, 2010      $  |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------|--------|--------|----------------------------|--------|
|                                                                   Assets |   |                          |   |   |                       |   |
|                                                                                                                                                                                                                                                                                                                                                                                 |   |                          |   |   |                       |   |
| Current Assets:                                                                                                                                                                                                                                                                                                                                                                      |   |                          |   |   |                       |   |
| Cash                                                                                                                                                                                                                                                                                                                                                                                 |   | 1,246                         |   |   | 39,405                     |   |
| Accounts receivable, net                                                                                                                                                                                                                                                                                                                                                             |   | 283,870                       |   |   | 273,387                    |   |
| Prepaid expenses and deposits                                                                                                                                                                                                                                                                                                                                                        |   | 4,722                         |   |   | 14,409                     |   |
|                                                                                                                                                                                                                                                                                                                                                                                 |   |                          |   |   |                       |   |
| Total Current Assets                                                                                                                                                                                                                                                                                                                                                                 |   | 289,838                       |   |   | 327,201                    |   |
|                                                                                                                                                                                                                                                                                                                                                                                 |   |                          |   |   |                       |   |
| Property and Equipment (Note 3)                                                                                                                                                                                                                                                                                                                                                      |   | 2,454,197                     |   |   | 2,425,092                  |   |
| Deposits and Other Assets      (Note 4)                                                                                                                                                                                                                                                                                                                                              |   | 125,094                       |   |   | 125,094                    |   |
| Customers’ Relationships      (Note 5)                                                                                                                                                                                                                                                                                                                                         |   | 2,882,523                     |   |   | 2,973,713                  |   |
|                                                                                                                                                                                                                                                                                                                                                                                 |   |                          |   |   |                       |   |
| Total Assets                                                                                                                                                                                                                                                                                                                                                                         |   | 5,751,652                     |   |   | 5,851,100                  |   |
|                                                                                                                                                                                                                                                                                                                                                                                 |   |                          |   |   |                       |   |
| Liabilities and Stockholders' Deficit                                                                                                                                                                                                                                                                                                                                                |   |                          |   |   |                       |   |
|                                                                                                                                                                                                                                                                                                                                                                                 |   |                          |   |   |                       |   |
| Current Liabilities:                                                                                                                                                                                                                                                                                                                                                                 |   |                          |   |   |                       |   |
| Accounts payable                                                                                                                                                                                                                                                                                                                                                                     |   | 1,325,327                     |   |   | 1,267,413                  |   |
| Accrued liabilities (Note 6)                                                                                                                                                                                                                                                                                                                                                         |   | 492,651                       |   |   | 398,410                    |   |
| Short-term notes payable (Note 7)                                                                                                                                                                                                                                                                                                                                                    |   | 1,096,805                     |   |   | 942,050                    |   |
| Current portion of long-term debt (Note 8)                                                                                                                                                                                                                                                                                                                                           |   | 1,441,333                     |   |   | 1,455,137                  |   |
| Current portion of capital lease      obligations (Note 12)                                                                                                                                                                                                                                                                                                                          |   | 56,654                        |   |   | 74,569                     |   |
|                                                                                                                                                                                                                                                                                                                                                                                 |   |                          |   |   |                       |   |
| Total Current Liabilities                                                                                                                                                                                                                                                                                                                                                            |   | 4,412,770                     |   |   | 4,137,579                  |   |
|                                                                                                                                                                                                                                                                                                                                                                                 |   |                          |   |   |                       |   |
| Capital Lease Obligations (Note 12)                                                                                                                                                                                                                                                                                                                                                  |   | 22,586                        |   |   | 25,929                     |   |
| Long-term Debt (Note 8)                                                                                                                                                                                                                                                                                                                                                              |   | 2,930,577                     |   |   | 2,931,844                  |   |
|                                                                                                                                                                                                                                                                                                                                                                                 |   |                          |   |   |                       |   |
| Total Liabilities                                                                                                                                                                                                                                                                                                                                                                    |   | 7,365,933                     |   |   | 7,095,352                  |   |
|                                                                                                                                                                                                                                                                                                                                                                                 |   |                          |   |   |                       |   |
| Nature of Operations and Continuance of Business (Note 1)                                                                                                                                                                                                                                                                                                                            |   |                          |   |   |                       |   |
| Legal Proceedings (Note 13)                                                                                                                                                                                                                                                                                                                                                          |   |                          |   |   |                       |   |
|                                                                                                                                                                                                                                                                                                                                                                                 |   |                          |   |   |                       |   |
|  Stockholders' Deficit:                                                                                                                                                                                                                                                                                                                                                         |   |                          |   |   |                       |   |
|                                                                                                                                                                                                                                                                                                                                                                                 |   |                          |   |   |                       |   |
| Common Stock, par value $.001, 1,540,000,000 shares      authorized, 43,745,414 and 43,445,418 issued and outstanding, respectively      (Note 10)                                                                                                                                                                                                                                   |   | 43,745                        |   |   | 43,445                     |   |
| Common Stock Subscribed and/or Reserved (Note 11)                                                                                                                                                                                                                                                                                                                                    |   | 232,500                       |   |   | 232,500                    |   |
| Additional Paid-in Capital                                                                                                                                                                                                                                                                                                                                                           |   | 8,679,851                     |   |   | 8,650,151                  |   |
| Deficit                                                                                                                                                                                                                                                                                                                                                                              |   | (10,570,375                   | )      |   | (10,170,348                | )      |
|                                                                                                                                                                                                                                                                                                                                                                                 |   |                          |   |   |                       |   |
| Total Stockholders' Deficit                                                                                                                                                                                                                                                                                                                                                          |   | (1,614,279                    | )      |   | (1,244,252                 | )      |
|                                                                                                                                                                                                                                                                                                                                                                                 |   |                          |   |   |                       |   |
| Total Liabilities and Stockholders'      Deficit                                                                                                                                                                                                                                                                                                                                     |   | 5,751,653                     |   |   | 5,851,100                  |   |

(See accompanying notes to these  consolidated financial statements)
Consolidated Statements of Operations   For the Three Months Ended October 31,  2010 and 2009   (Unaudited) 

|                                                               | $      | 2010       |   | $      | 2009       |   |
|--------------------------------------------------------------------|--------|------------|--------|--------|------------|--------|
|                                                               |   |       |   |   |       |   |
| Sales, net                                                         |   | 1,261,861  |   |   | 617,000    |   |
|                                                               |   |       |   |   |       |   |
| Expenses:                                                          |   |       |   |   |       |   |
| Service costs                                                      |   | 87,905     |   |   | 14,098     |   |
| Plant and signal delivery                                          |   | 439,036    |   |   | 338,270    |   |
| Marketing and sales                                                |   | 1,762      |   |   | 2,276      |   |
| General and administration                                         |   | 171,421    |   |   | 293,694    |   |
| Salaries and benefits                                              |   | 523,302    |   |   | 410,835    |   |
| Depreciation and amortization                                      |   | 315,677    |   |   | 170,258    |   |
|                                                               |   |       |   |   |       |   |
| Total Expenses                                                     |   | (1,539,103 | )      |   | (1,229,431 | )      |
|                                                               |   |       |   |   |       |   |
| Loss from Operations                                               |   | (277,242   | )      |   | (612,431   | )      |
|                                                               |   |       |   |   |       |   |
| Other Income (Expense):                                            |   |       |   |   |       |   |
| Other income                                                       |   | 603        |   |   | 46,728     |   |
| Gain on sale of assets, net                                        |   | 5,500      |   |   | -          |   |
| Financing expense                                                  |   | (10,505    | )      |   | -          |   |
| Interest                                                      |   | (118,303   | )      |   | (78,433    | )      |
|                                                               |   |       |   |   |       |   |
| Total Other Income (Expense)                                       |   | (122,785   | )      |   | (31,705    | )      |
|                                                               |   |       |   |   |       |   |
| Net Loss                                                           |   | (400,027   | )      |   | (644,136   | )      |
|                                                               |   |       |   |   |       |   |
| Net Loss per Share – Basic and Diluted                       |   | (.01       | )      |   | (.02       | )      |
|                                                               |   |       |   |   |       |   |
| Weighted Average Shares Outstanding –      Basic and Diluted |   | 43,279,000 |   |   | 38,256,000 |   |

 (See accompanying notes  to these consolidated financial statements)

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 Omnicity Corp.   Consolidated Statements of Cash Flows   For the Three Months Ended October 31,  2010 and 2009   (Unaudited) 

|                                                                             | $      | 2010     |   | $      | 2009      |   |
|----------------------------------------------------------------------------------|--------|----------|--------|--------|-----------|--------|
|                                                                             |   |     |   |   |      |   |
| Cash flows from (to) operating      activities:                                  |   |     |   |   |      |   |
| Net loss                                                                         |   | (400,027 | )      |   | (644,136  | )      |
| Adjustments to reconcile net      loss to net cash used in operating activities: |   |     |   |   |      |   |
| Depreciation and amortization                                                    |   | 315,677  |   |   | 170,258   |   |
|    Interest expense accreted                                           |   | 26,680   |   |   | -         |   |
|    Expenses settled with      equity                                   |   | 30,000   |   |   | -         |   |
|    Interest and expenses      capitalized to long-term debt            |   | 12,851   |   |   | -         |   |
| (Increase) decrease in:                                                          |   |     |   |   |      |   |
| Accounts and other receivable                                                    |   | (10,483  | )      |   | 13,227    |   |
| Prepaid expenses                                                                 |   | 9,687    |   |   | 108,883   |   |
| Increase (decrease) in:                                                          |   |     |   |   |      |   |
| Accounts payable and accrued      liabilities                                    |   | 152,848  |   |   | 63,675    |   |
|                                                                             |   |     |   |   |      |   |
| Net cash from (used in) operating      activities                                |   | 137,233  |   |   | (288,093  | )      |
|                                                                             |   |     |   |   |      |   |
| Cash flows from (to) investing      activities:                                  |   |     |   |   |      |   |
| Increase in deposits                                                             |   | -        |   |   | (4,007    | )      |
| Increase in cost of      customers’ relationships                          |   | (30,827  | )      |   | -         |   |
| Acquisition of property and      equipment                                       |   | (222,765 | )      |   | (122,405  | )      |
|                                                                             |   |     |   |   |      |   |
| Net cash used in investing activities                                            |   | (253,592 | )      |   | (126,412  | )      |
|                                                                             |   |     |   |   |      |   |
| Cash flows from (to) financing      activities:                                  |   |     |   |   |      |   |
| Proceeds from short-term      notes                                              |   | 165,000  |   |   | 148,871   |   |
| Repayment of short-term notes                                                    |   | (10,938  | )      |   | (63,307   | )      |
| Related party repayment      (advance)                                           |   | -        |   |   | (4,100    | )      |
| Proceeds from long-term debt                                                     |   | -        |   |   | 37,399    |   |
| Repayment of long-term debt      and capital lease obligations                   |   | (75,862  | )      |   | (123,529  | )      |
| Proceeds from common stock subscriptions                                         |   | -        |   |   | 1,020,000 |   |
|                                                                             |   |     |   |   |      |   |
| Net cash provided by financing      activities                                   |   | 78,200   |   |   | 1,015,334 |   |
|                                                                             |   |     |   |   |      |   |
| (Decrease) increase in cash                                                      |   | (38,159  | )      |   | 600,829   |   |
| Cash, beginning of  period                                                  |   | 39,405   |   |   | 159,119   |   |
|                                                                             |   |     |   |   |      |   |
| Cash, end of period                                                              |   | 1,246    |   |   | 759,948   |   |
|                                                                             |   |     |   |   |      |   |
| Supplemental cash flow information:                                              |   |     |   |   |      |   |
| Cash paid for interest                                                           |   | 51,202   |   |   | 48,433    |   |
| Cash paid for income taxes                                                       |   | -        |   |   | -         |   |
|                                                                             |   |     |   |   |      |   |
| Supplemental      disclosure of non-cash investing and financing activities:     |   |     |   |   |      |   |
| Warrants issued pursuant to a      financing arrangement                         |   | -        |   |   | 63,132    |   |

(See accompanying notes to these consolidated  financial statements)

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Omnicity Corp.  Notes to the Consolidated  Financial Statements 

1.    Nature of Operations and Continuance  of Business

On February 17, 2009, the Company acquired all of the  issued and outstanding shares of Omnicity, Incorporated. Omnicity, Incorporated  (incorporated on August 13, 2003) provides broadband access, including advanced  services of voice, video and data, in un-served and underserved small and rural  markets and is planning to be a consolidator of rural market broadband  nationwide. 

These  financial statements have been prepared on a going concern basis, which implies  the Company will continue to realize its assets and discharge its liabilities  in the normal course of business. The Company has generated substantial  revenues but has sustained losses since inception and has never paid any  dividends and is unlikely to pay dividends in the immediate or foreseeable  future. The continuation of the Company as a going concern is dependent upon  the ability of the Company to obtain necessary debt and/or equity financing to  fund its growth strategy, pay debt when due, to continue operations, and to attain profitability.****As at October 31, 2010, the  Company had a working capital deficit of 4,122,932 and a stockholders’ deficit  of $1,614,279. All of these factors combined raises substantial doubt regarding  the Company’s ability to continue as a going concern. These financial statements do not include any adjustments to the  recoverability and classification of recorded asset amounts and classification  of liabilities that might be necessary should the Company be unable to continue  as a going concern.

Although the Company is operationally cash  flow positive as at October 31, 2010, the Company must continue to address its  liquidity and working capital issues. The Company continues to raise additional  capital through the issuance of short-term and long-term debt and equity to  private investors to maintain its aggressive acquisition strategy, increase its  organic growth and to repay principal and interest when due. Management  believes this additional capital and the expanded customer base through  acquisitions and organic growth will provide the Company the opportunity to  increase its operational cash flow and ultimately to be profitable over the  next twelve months.

2.    Significant Accounting Policies 

*Interim Unaudited Financial  Statements*

These interim  unaudited consolidated financial statements have been prepared in accordance  with accounting principles generally accepted in the United States for interim  financial information and with the instructions for SEC Form 10-Q. They do  not include all of the information and footnotes required by generally accepted  accounting principles for complete financial statements. Therefore, these  financial statements should be read in conjunction with the Company’s audited  financial statements and notes thereto for the years ended July 31, 2010 and  2009 included in the Company’s Form 10K filed on November 17, 2010 with the  SEC. The consolidated financial statements included herein are unaudited;  however, they contain all normal recurring accruals and adjustments that, in  the opinion of management, are necessary to present fairly the Company’s  financial position at October 31, 2010, and the results of its operations for  the three months ended October 31, 2010 and 2009 and the results of its cash  flows for the three months ended October 31, 2010 and 2009. The results of  operations for the three months ended October 31, 2010 are not necessarily  indicative of the results to be expected for future quarters or the full year. 

*Use of Estimates*

The preparation of  financial statements in accordance with United States generally accepted  accounting principles requires management to make estimates and assumptions  that affect the reported amounts of assets and liabilities at the date of the  financial statements and the reported amounts of revenue and expenses in the  reporting period. The Company regularly evaluates estimates and assumptions  related to the useful life and recoverability of long-lived assets, stock-based  compensation, and deferred income tax asset valuation allowances. The Company  bases its estimates and assumptions on current facts, historical experience and  various other factors that it believes to be reasonable under the  circumstances, the results of which form the basis for making judgments about  the carrying values of assets and liabilities and the accrual of costs and  expenses that are not readily apparent from other sources. The actual results  experienced by the Company may differ materially and adversely from the  Company’s estimates. To the extent there are material differences between the  estimates and the actual results, future results of operations will be  affected. 

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*Fair Value*

The Company’s financial instruments consist  principally of notes payable and convertible debentures.   Notes  payable and convertible debentures are financial liabilities with carrying  values that approximate fair value.  The Company determines the fair  value of notes payable and convertible debentures based on the effective yields  of similar obligations. The Company believes all of the financial instruments’  recorded values approximate fair market value because of their nature and  respective durations. 

The Company complies with the provisions of ASC 820, *“Fair  Value Measurements and Disclosures”* (“ASC 820”), previously referred to as  SFAS No. 157.  ASC 820 defines fair value, establishes a framework  for measuring fair value and expands disclosures about fair value measurements  required under other accounting pronouncements. ASC 820-10-35, *“Fair Value    Measurements and Disclosures - Subsequent Measurement”* (“ASC 820-10-35”),  clarifies that fair value is an exit price, representing the amount that would  be received from the sale of an asset or paid to transfer a liability in an  orderly transaction between market participants. ASC 820-10-35 also requires  that a fair value measurement reflect the assumptions market participants would  use in pricing an asset or liability based on the best information available.  Assumptions include the risks inherent in a particular valuation technique  (such as a pricing model) and/or the risks inherent in the inputs to the  model.  The Company also follows ASC 825 *“Interim Disclosures about    Fair Value of Financial Instruments”*, previously referred to as FAS 107-1  to expand required disclosures. 

ASC 820-10-35 establishes a fair value hierarchy that  prioritizes the inputs to valuation techniques used to measure fair value. The  hierarchy gives the highest priority to unadjusted quoted prices in active  markets for identical assets or liabilities (level 1 measurement) and the  lowest priority to unobservable inputs (level 3 measurements). The three levels  of the fair value hierarchy under ASC 820-10-35 are described below: 

Level 1 - Valuations based on quoted prices in  active markets for identical assets or liabilities that an entity has the  ability to access.

Level 2 - Valuations based on quoted prices for  similar assets or liabilities, quoted prices for identical assets or  liabilities in markets that are not active, or other inputs that are observable  or can be corroborated by observable data for substantially the full term of  the assets or liabilities.

Level 3 - Valuations based on inputs that are  supported by little or no market activity and that are significant to the fair  value of the assets or liabilities.

*Property and Equipment*

Property and equipment is stated at cost,  less accumulated depreciation based on estimated useful lives utilizing the  straight-line method. The Company capitalizes costs associated with the  construction of new transmission facilities. Capitalized construction costs  include materials, labor and interest. The Company’s methodology for  capitalization of internal construction labor and internal and contracted third  party installation costs (including materials) utilizes actual costs. Materials  and external labor costs associated with construction activities are  capitalized based on amounts invoiced to the Company by third parties.

Computers and wireless  equipment also consists of spare equipment and supplies not put in use such as  radios, antennas, cable and wire and is stated at the lower of cost (first-in,  first-out basis) or market.  The spare electronic equipment is maintained to  provide replacement parts when and if needed in a short time period to provide  minimal service disruption to customers in the event of a parts failure and to  install new customers’ premises equipment timely when ordered. Spare equipment  and supplies are not depreciated until put into use.  

Improvements that extend asset lives are capitalized. Other  repairs and maintenance costs are charged to operations as incurred. Estimated  useful lives for property and equipment are as follows:

| Description                     | Life          |
|---------------------------------|---------------|
|                            |          |
| Computer and wireless equipment |  3 years |
| Towers and infrastructures      |  5 years |
| Furniture and fixtures          |  7 years |
| Vehicles                        |  5 years |
| Software                        |  3 years |

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The Company periodically evaluates the useful lives of  its property and equipment. The Company’s property  and equipment is reviewed for impairment whenever events or changes in  circumstances indicate that the carrying amount of an asset may not be  recoverable. Recoverability is measured by comparison of the carrying amount to  the future net undiscounted cash flows expected to be generated by the related  assets. If such assets are considered to be impaired, the impairment to be  recognized is measured by the amount the carrying value exceeds the fair market  value of the assets. No impairment was recorded at October 31, 2010 or July 31,  2010.

*Customers’ Relationships*

Customers’ relationships represent the value  attributed to customers’ relationships acquired in asset acquisitions and are  amortized over a 7-year period.

*Long-lived Assets*

The Company evaluates property and equipment and amortizable intangible  assets for impairment whenever current events and circumstances indicate the  carrying amounts may not be recoverable. The evaluation of long-lived assets  for impairment requires a high degree of judgment and involves the use of  significant estimates and assumptions. If the carrying amount is greater than  the expected future undiscounted cash flows to be generated, the Company  recognizes an impairment loss equal to the excess, if any, of the carrying value  over the fair value of the asset. The Company generally measures fair value  based upon the present value of estimated future net cash flows of an asset  group over its remaining useful life.

*Revenue Recognition*

The Company charges a recurring  subscription fee for providing wireless broadband services to its subscribers. Revenue from service is recognized as monthly services are rendered in accordance with  individual customer arrangements. Credit risk is managed by  disconnecting services to customers whose accounts are delinquent for a  specified number of days. Consistent with SFAS No. 51, installation  revenue obtained from the connection of subscribers to the system is recognized  in the period installation services are provided to the extent of related direct  selling costs. Any remaining amount is deferred and recognized over the  estimated average period that customers are expected to remain connected to the  system. From time to time, the Company enters into  barter arrangements whereby it provides certain customers with wireless  broadband services in exchange for use of towers and equipment owned by  customers. Revenue and expenses recorded under barter arrangements was $31,674  (2009  - $22,554).

*Basic and Diluted Net Income (Loss) Per  Share*

Basic loss per share is computed by  dividing net loss by the weighted average number of common shares outstanding  for the year. Diluted loss per share is computed by dividing net loss by the  weighted average number of common shares outstanding plus common stock  equivalents (if dilutive) related to stock options and warrants for each year.  There were no stock options or common equivalent shares outstanding at October  31, 2010 and 2009 that have been included in dilutive loss per share  calculation as the effects would have been anti-dilutive. Total potentially  dilutive common shares, relating to stock purchase warrants issuable in the  future, as at October 31, 2010 totals 10,666,730 including 5,614,929 common  shares issuable on the exercise of warrants, 4,285,714 common shares issuable  if the $1,500,000 convertible debenture is converted into common shares at  $0.35 per share and 766,087 common shares to be issued in connection with the  completion of two asset purchase agreements. 

3.    Property and Equipment

Property and equipment consists of the following:

|                                                  |   | October 31, 2010      $  |   |   | July 31, 2010      $  |   |
|-------------------------------------------------------|--------|-------------------------------|--------|--------|----------------------------|--------|
|                                                  |   |                          |   |   |                       |   |
| Computer and wireless equipment                       |   | 1,190,047                     |   |   | 1,094,215                  |   |
| Tower equipment, infrastructures and      house drops |   | 1,546,614                     |   |   | 1,441,707                  |   |
| Fiber build-out and test equipment                    |   | 142,560                       |   |   | 121,601                    |   |
| Furniture and fixtures                                |   | 75,075                        |   |   | 74,562                     |   |
| Vehicles                                              |   | 168,629                       |   |   | 168,629                    |   |
| Software                                              |   | 78,841                        |   |   | 78,841                     |   |
|                                                  |   |                          |   |   |                       |   |
|                                                  |   | 3,201,766                     |   |   | 2,979,555                  |   |
| Less: accumulated depreciation                        |   | (1,155,255                    | )      |   | (961,595                   | )      |
|                                                  |   |                          |   |   |                       |   |
|                                                  |   | 2,046,511                     |   |   | 2,017,960                  |   |
| Land                                                  |   | 15,553                        |   |   | 15,000                     |   |
| Network replacement parts not put in use              |   | 392,132                       |   |   | 392,132                    |   |
|                                                  |   |                          |   |   |                       |   |
| Property and equipment, net                           |   | 2,454,196                     |   |   | 2,425,092                  |   |

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4.    Deposits and Other Assets

Deposits and other assets consist of the following:

|                     |   | October 31, 2010      $ |   |   | July 31, 2010      $ |   |
|--------------------------|--------|-------------------------|--------|--------|----------------------|--------|
|                     |   |                    |   |   |                 |   |
| Operating lease deposits |   | 86,682                  |   |   | 86,682               |   |
| Other long-term deposits |   | 38,412                  |   |   | 38,412               |   |
|                     |   |                    |   |   |                 |   |
|                     |   | 125,094                 |   |   | 125,094              |   |

5.    Customers’ Relationships           

The carrying value of customers’ relationships  acquired consists of:

|                                |   | October 31, 2010      $  |   |   | July 31, 2010      $  |   |
|-------------------------------------|--------|-------------------------------|--------|--------|----------------------------|--------|
|                                |   |                          |   |   |                       |   |
| Capitalized value                   |   | 3,436,993                     |   |   | 3,406,167                  |   |
| Less: accumulated amortization      |   | (554,470                      | )      |   | (432,454                   | )      |
|                                |   |                          |   |   |                       |   |
| Customers’ relationships, net |   | 2,882,523                     |   |   | 2,973,713                  |   |

6.    Accrued Liabilities

|                                                  |   | October 31, 2010      $  |   |   | July 31, 2010      $  |   |
|-------------------------------------------------------|--------|-------------------------------|--------|--------|----------------------------|--------|
|                                                  |   |                          |   |   |                       |   |
| Accrued interest                                      |   | 242,445                       |   |   | 184,838                    |   |
| Payroll and severance liabilities                     |   | 212,777                       |   |   | 177,090                    |   |
| Real property and sales taxes and other      accruals |   | 37,429                        |   |   | 36,482                     |   |
|                                                  |   |                          |   |   |                       |   |
|                                                  |   | 492,651                       |   |   | 398,410                    |   |

7.    Short-term Notes Payable

|                                                                                                                                                                                                                                                         |   | October 31, 2010      $  |   |   | July 31, 2010      $  |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------|--------|--------|----------------------------|--------|
|                                                                                                                                                                                                                                                         |   |                          |   |   |                       |   |
| Notes payable, due on demand, unsecured      and bearing interest at rates between 8% and 9.5% per annum (a $20,000 note      does not bear interest).                                                                                                       |   | 330,000                       |   |   | 340,000                    |   |
|                                                                                                                                                                                                                                                         |   |                          |   |   |                       |   |
| Notes payable to the Chairman of the      Board of the Company and a company beneficially owned bearing interest at 8%      per annum.                                                                                                                       |   | 49,755                        |   |   | 35,000                     |   |
|                                                                                                                                                                                                                                                         |   |                          |   |   |                       |   |
| Notes payable due to a director and a company controlled      by a director. A $150,000 note is due January 1, 2011, unsecured and bearing      interest at 9% per annum with interest payable quarterly. A note for $50,000      has no terms of repayment. |   | 200,000                       |   |   | 150,000                    |   |
|                                                                                                                                                                                                                                                         |   |                          |   |   |                       |   |
| Notes payable due to a director, unsecured, $30,000      note due on March 27, 2011 and bearing interest at 8% per annum. A note for      $100,000 has no terms of repayment and is due on demand.                                                           |   | 130,000                       |   |   | 30,000                     |   |
|                                                                                                                                                                                                                                                         |   |                          |   |   |                       |   |
| Vendor Note, unsecured and bearing interest at 5%      per annum. See Note 15 for legal proceedings.                                                                                                                                                         |   | 326,000                       |   |   | 326,000                    |   |
|                                                                                                                                                                                                                                                         |   |                          |   |   |                       |   |
| Vendor Note,      unsecured, bearing interest at 5% and repayable in 4 quarterly instalments of      $2,762 plus interest with first payment due September 28, 2010.                                                                                         |   | 11,050                        |   |   | 11,050                     |   |
|                                                                                                                                                                                                                                                         |   |                          |   |   |                       |   |
| Vendor Note,      unsecured, non-interest bearing and due on August 20, 2010. See Note 13 for      legal proceedings.                                                                                                                                        |   | 50,000                        |   |   | 50,000                     |   |
|                                                                                                                                                                                                                                                         |   |                          |   |   |                       |   |
|                                                                                                                                                                                                                                                         |   | 1,096,805                     |   |   | 942,050                    |   |

----

8.    Long-term Debt

|                                                                                                                                                                                                                                                                                                                                                               |   | October 31, 2010      $  |   |   | July 31, 2010      $  |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------|--------|--------|----------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                               |   |                          |   |   |                       |   |
| Notes payable to Jay County Development      Corporation. Non-interest bearing, repayable monthly based on the number of      subscribers in Jay County, Indiana. Collateralized by certain equipment      located in Jay County. Principal is currently repayable at $500 per month.                                                                              |   | 290,911                       |   |   | 291,411                    |   |
|                                                                                                                                                                                                                                                                                                                                                               |   |                          |   |   |                       |   |
| Notes payable to Wabash Rural Electric      Membership Cooperative (“Wabash”). Six separate notes were renewed pursuant      to a Memorandum of Understanding effective September 24, 2009. Interest rates      are between 5.7% and 7.45% annually and are collateralized by certain      equipment in Wabash County, Indiana.                        |   | 599,038                       |   |   | 590,247                    |   |
|                                                                                                                                                                                                                                                                                                                                           |   |                          |   |   |                       |   |
| Note payable to Muncie Industrial      Revolving Loan Fund Board. Repayable in monthly instalments of principal and      interest of $4,570, matures on December 13, 2011, at which time the loan will      be reviewed by Muncie’s Board of Directors. This note is collateralized by      certain equipment in Muncie County and Delaware County, Indiana. |   | 249,225                       |   |   | 249,225                    |   |
|                                                                                                                                                                                                                                                                                                                                                               |   |                          |   |   |                       |   |
| Note payable to Star Financial Bank. Interest is      paid monthly at 8.6% per annum. This note was due February 1, 2010. This loan      is collateralized by certain equipment and is guaranteed by the State of Indiana as to 80% of the loan.                                                                                                                   |   | 179,749                       |   |   | 187,846                    |   |
|                                                                                                                                                                                                                                                                                                                                                               |   |                          |   |   |                       |   |
| Unsecured notes payable to the Chairman of the      Company, the son of the Chairman of the Company and to companies controlled      by the Chairman. (See Note 9 (d) for repayments over the next five years).                                                                                                                                                    |   | 198,925                       |   |   | 210,755                    |   |
|                                                                                                                                                                                                                                                                                                                                                               |   |                          |   |   |                       |   |
| Convertible 8% debenture having a face value of      $1,500,000 issued to a director including warrants to acquire up to 1,500,000      common shares at $0.50 per share expiring December 24, 2014. The debenture is      convertible into common shares at a price of $0.35 per common share up to      December 24, 2014.                                       |   | 927,369                       |   |   | 900,689                    |   |
|                                                                                                                                                                                                                                                                                                                                                               |   |                          |   |   |                       |   |
| Unsecured notes payable to a director of      the Company, interest only at 8% and maturing April 2012.                                                                                                                                                                                                                                                            |   | 470,000                       |   |   | 470,000                    |   |
|                                                                                                                                                                                                                                                                                                                                                               |   |                          |   |   |                       |   |
| Unsecured notes payable to a director of      the Company. Repayable in monthly instalments of principal and interest      totalling $4,613. Interest is 10% per annum.                                                                                                                                                                                            |   | 48,594                        |   |   | 59,644                     |   |
|                                                                                                                                                                                                                                                                                                                                                               |   |                          |   |   |                       |   |
| Debentures, 8% interest paid quarterly      of which $20,000 is due to a director of the Company. Various maturities      between January, 2011 and June, 2012.                                                                                                                                                                                                    |   | 190,000                       |   |   | 190,000                    |   |
|                                                                                                                                                                                                                                                                                                                                                               |   |                          |   |   |                       |   |
| Unsecured vendor and investor notes      payable with monthly or quarterly payments of principal and interest ranging      from 5% to 10%. (See Note 13 for two long-term vendor notes that are subject      to legal proceedings).                                                                                                                                |   | 1,218,098                     |   |   | 1,237,164                  |   |
|                                                                                                                                                                                                                                                                                                                                                               |   |                          |   |   |                       |   |
| Total                                                                                                                                                                                                                                                                                                                                                              |   | 4,371,909                     |   |   | 4,386,981                  |   |
| Less: current portion                                                                                                                                                                                                                                                                                                                                              |   | 1,441,333                     |   |   | 1,455,137                  |   |
|                                                                                                                                                                                                                                                                                                                                                               |   |                          |   |   |                       |   |
| Long-term portion                                                                                                                                                                                                                                                                                                                                                  |   | 2,930,576                     |   |   | 2,931,844                  |   |

Long-term debt principal repayments  due over the next five years are as follows:

|   |   |      |   |   |       |   |   |      |   |
|--------|--------|-----------|--------|--------|------------|--------|--------|-----------|--------|
| Year   |   | $         |   |   | Year       |   |   | $         |   |
|   |   |      |   |   |       |   |   |      |   |
| 2011   |   | 1,441,333 |   |   | 2014       |   |   | 166,898   |   |
| 2012   |   | 1,114,789 |   |   | 2015       |   |   | 1,050,895 |   |
| 2013   |   | 184,971   |   |   | Thereafter |   |   | 409,289   |   |

----

9.  Related Party Transactions  and Balances

a)      The Company’s capital  lease obligations relate to assets leased from the Chairman of the Company or a  company beneficially owned by the Chairman of the Company, totalling $48,087  (July 31, 2010 - $58,186 (See Note 12).  

b)     Unsecured notes payable to the  Chairman of the Company and the son of the Chairman of the Company and to  companies controlled by the Chairman, total $248,680 (July 31, 2010 - $245,755). 

10.  Common Stock

a)     The Company issued 299,996 common shares at  $0.15 per share to settle an amount owing of $30,000 pursuant to a Services  Agreement dated June 29, 2010;

b)     The Company is committed to  issue 766,087 common shares pursuant to two completed asset purchase agreements  to settle $232,500 of common share commitments. 

11.  Warrants and Other  Potentially Dilutive Securities               

As at October 31, 2010 the Company has  common share purchase warrants issued and outstanding to purchase up to  5,614,929 common shares at an average exercise price of $.50 per common share  having an average remaining life of 2.29 years as follows:

|      | Exercise         Price      |        Expiry Date |
|-----------|----------------------------------------------------------------|-------------------------|
| #         | $                                                              |                    |
|      |                                                           |                    |
| 1,199,408 | .50                                                            | May 8, 2011             |
| 100,000   | .50                                                            | June 24, 2011           |
| 4,287     | .50                                                            | September 17, 2011      |
| 2,000,000 | .50                                                            | November 10, 2011       |
| 139,420   | .50                                                            | November 13, 2011       |
| 155,556   | .45                                                            | December 1, 2011        |
| 77,569    | .51                                                            | February 17, 2019       |
| 184,914   | .58                                                            | March 27, 2019          |
| 139,490   | .56                                                            | July 14, 2019           |
| 114,285   | .50                                                            | April 29, 2011          |
| 1,500,000 | .50                                                            | December 24, 2014       |
|      |                                                           |                    |
| 5,614,929 |                                                           |                    |
|      |                                                           |                    |

Pursuant to an 8% convertible  debenture having a face value of $1,500,000, interest payable quarterly, the  Company has reserved up to 4,285,714 common shares to be issued upon conversion  at $0.35 per share.

The Company is committed to  issue 766,087 common shares pursuant to two completed asset purchase agreements  to settle $232,500 of common share commitments. These shares will be issued  upon receipt of required documents from the vendors.

12.   Lease Obligations

Future minimum lease payments for equipment acquired under  non-cancellable capital leases and operating leases with initial terms of more  than one year are as follows:

 The principal portion of capital lease obligations is to be repaid  as follows: 

|                                             |   | Capital      Leases |   |   | Operating      Leases |   |
|--------------------------------------------------|--------|---------------------|--------|--------|-----------------------|--------|
| Year ending July 31,                             |   | $                   |   |   | $                     |   |
|                                             |   |                |   |   |                  |   |
| 2011                                             |   | 62,760              |   |   | 375,963               |   |
| 2012                                             |   | 17,829              |   |   | 195,673               |   |
| 2013                                             |   | 6,814               |   |   | -                     |   |
|                                             |   |                |   |   |                  |   |
| Total minimum lease payments                     |   | 87,403              |   |   |                  |   |
|                                             |   |                |   |   |                  |   |
| Less: amounts representing interest              |   | 8,163               |   |   |                  |   |
|                                             |   |                |   |   |                  |   |
| Present value of net minimum lease      payments |   | 79,240              |   |   |                  |   |
| Less: current portion                            |   | 56,654              |   |   |                  |   |
|                                             |   |                |   |   |                  |   |
| Long-term capital lease obligations              |   | 22,586              |   |   |                  |   |

----

|   |   | $      |   |
|--------|--------|--------|--------|
|   |   |   |   |
| 2011   |   | 56,654 |   |
| 2012   |   | 16,089 |   |
| 2013   |   | 6,497  |   |

13.  Legal Proceedings

The Company has been served with two Complaints filed with the Rush  Circuit Court in the State of Indiana dated August 25, 2010 and September 1,  2010 and one Complaint filed with the Holmes County Court in the State of Ohio dated September 16, 2010. The plaintiffs have made claims against the Company for  failure to make required instalment payments that were due pursuant to  promissory notes. The Company has recorded all debt relating to these claims as  current liabilities under current portion of long-term debt. On September 14,  2010 the Company filed an Appearance and Notice of Extension of Time to answer  the Complaints. On November 8, 2010 the Company filed an Answer and  Counterclaim with the Holmes County Court. This Answer and Counterclaim  includes counterclaims for various damages, including punitive damages,  suffered by the Company and also seeks an injunction. Also on November 8, 2010  the Company filed an Answer to one of the Rush Circuit Court Complaints and is  in the process of filing the second Answer. As the Company has recorded all amounts  owing as current liabilities the Company expects to receive favourable outcomes  on all three legal proceedings mentioned above. 

----

 

**Item 2. Management’sDiscussion and Analysis of Financial Condition and Results of Operations.**

**FORWARD LOOKING STATEMENTS**

This report contains forward-looking statements thatinvolve risks and uncertainties.  Any statements contained herein that are notstatements of historical fact may be deemed to be forward-looking statements. In some cases, you can identify forward-looking statements by terminology suchas “may”, “will”, “should”, “expect”, “plan”, “intend”, “anticipate”,“believe”, “estimate”, “predict”, “potential” or “continue”, the negative ofsuch terms or other comparable terminology.  In evaluating these statements,you should consider various factors, including the assumptions, risks anduncertainties outlined in this report under “Risk Factors”.  These factors orany of them may cause our actual results to differ materially from anyforward-looking statement made in this report.  Forward-looking statements inthis report include, among others, statements regarding:

- our capital needs; 
-  business plans; and 
- expectations. 

While these forward-looking statements, and anyassumptions upon which they are based, are made in good faith and reflect ourcurrent judgment regarding future events, our actual results will likely vary,sometimes materially, from any estimates, predictions, projections, assumptionsor other future performance suggested herein.  Some of the risks andassumptions include:

- our need for additional    financing; 
-  our limited operating    history; 
- our history of    operating losses; 
-  the competitive environment    in which we operate; 
- changes in governmental    regulation and administrative practices; 
-  our dependence on key    personnel; 
- conflicts of interest    of our directors and officers; 
- our ability to fully    implement our business plan; 
-  our ability to    effectively manage our growth; and 
- other regulatory,    legislative and judicial developments.

We advise the reader that these cautionary remarksexpressly qualify in their entirety all forward-looking statements attributableto us or persons acting on our behalf.  Important factors that you should alsoconsider, include, but are not limited to, the factors discussed under “RiskFactors” in this report.

The forward-looking statements in thisreport are made as of the date of this report and we do not intend or undertaketo update any of the forward-looking statements to conform these statements toactual results, except as required by applicable law, including the securitieslaws of the United States. 

**REFERENCES**

As used in this quarterly report: (i) the terms “we”,“us”, “our”, “Omnicity” and the “Company” mean Omnicity Corp.; (ii) “SEC”refers to the Securities and Exchange Commission; (iii) “Securities Act” refersto the United States  *Securities Act of 1933*, as amended; (iv) “ExchangeAct” refers to the United States *Securities Exchange Act of 1934*, asamended; and (v) all dollar amounts refer to United States dollars unlessotherwise indicated.

----

**Plan of Operations**

Our business plan is to be a rural wireless internetservice provider in the United States through a consolidation strategy andorganic growth of all acquired business units and to partner with REMCs, Telcosand local governments for nationwide marketing. We also plan to partner withregional and national telecommunication companies for the delivery of voice servicesand complete negotiations and logistics of DirecTV resell agreements. Wefurther plan to partner with local governments to provide essential services,including mobile internet for emergency mobile communications, fire and policeand to establish new utility applications such as automated meter reading. Weplan to bring WISP based services to rural America through three distinctmarket channels: (1) Telco and Electric partnerships, (2) strategicacquisitions and (3) local government and private enterprise partnerships.

Utilizing our relationship with the REMCs and"value added" institutional services and facilities we provide formunicipalities and local governments, we plan to organize and consolidatewithin the rural broadband market initially in Indiana and then in theMidwestern United States and ultimately nationwide. Collaborations with boththe REMCs and municipalities may act as effective barriers for competition andprovide additional sources of revenue and customer service for the REMCs andmunicipalities as well as income and cash flow for our company. The bundling ofbroadband services, including internet, voice, and video, in partnership withrural electric and/or municipal services provides an opportunity to imbed,cross promote, and extend services in collaboration with these institutionalproviders.

**Our plan of operations for the next twelve months is  to:**

**Future Financing Requirements**

- develop and expand, through organic growth, the    subscriber base through our sales and marketing programs, to increase our    number of  sales teams in the field, and to launch new marketing    initiatives tailored to specific markets;
- acquire, and transition into our operations    assets of competing WISP operators and expand our network in Indiana , Ohio, and other states, and continue expansion into all of Midwest USA by identifying strategic regional acquisitions;
- launch the next generation of WiMax equipment in    all new builds and in all rebuild opportunities to standardize Omnicity    networks with carrier grade deployments; 
- increase operational cash flow to over $250,000    per month and build a liquidity floor under operations of $200,000 minimum    by  July 31, 2011; 
- continue to partner with Rural Electric    Membership Cooperatives "REMCs", local and State governments,    Rural Telcos and Original Equipment Manufacturers "OEMs" to    efficiently and cost effectively expand our network across rural America;    and
- develop and expand our service offerings to    become a total broadband solution including VOIP and video.

At October 31, 2010, we had cash of $1,000 and aworking capital deficit of $4,123,000.  A total of $165,000 was loaned to the Companyby related parties during the three months ended October 31, 2010. We estimatethat approximately $6 million will be required during the remainder of the yearended July 31, 2011 to finance our short-term working capital deficit and tofinance the expansion of, and the addition of subscribers through acquisitionto, our existing and to be acquired network infrastructures. A total of $1million will be required for working capital purposes, $1.5 million for organicgrowth and $3.5 million for acquisitions. Upon closing our second largeacquisition in Ohio at the end of March, 2010, and with a reduction ofemployees, we became operationally cash flow positive and will require noadditional funds to finance operational deficits. We will continue to seek acombination of equity and long-term debt financing as well as other traditionalcash flow and asset backed financing to meet our financing needs and to reduceour overall cost of capital. Additionally, in order to accelerate our growthrate and to finance general corporate activities, we may supplement ourexisting sources of funds with financing arrangements at the operating systemlevel or through additional borrowings, joint ventures or other off balancesheet arrangements. As a further capital resource, we may sell or lease certainwireless rights or assets from our portfolio as appropriate opportunitiesbecome available. However, there can be no assurance that we will be able toobtain any additional financing, on acceptable terms or at all.

**Current Financing Arrangements**

We are currentlyin negotiations to raise $1 million to $3 million under a capital lease programwith private investors to fund our acquisitions and organic growth. We expectto close this financing by December 31, 2010. We are also in negotiations toraise $2.5 million in equity with private investors. In addition to theproposed equity injection of $2.5 million, expected to complete by December 31,2010, a commitment for three additional tranches of $2. 5 million, $7.5 millionin total, will be made. These additional financings will be in the form ofconvertible debentures to be funded when the Company needs the funds.

----

We will continue to seek traditional cash flow andasset backed financing to supplement our efforts discussed above and to reduceour overall cost of capital. Additionally, in order to accelerate our growthrate and to finance general corporate activities, we may supplement ourexisting sources of funds with financing arrangements at the operating systemlevel or through additional borrowings, joint ventures or other off balancesheet arrangements. As a further capital resource, we may sell or lease certainwireless rights or assets from our portfolio as appropriate opportunitiesbecome available. However, there can be no assurance that we will be able toobtain any additional financing, on acceptable terms or at all.

**Results of Operations**

**Three months ended October 31, 2010****and 2009**

The following table sets forth certain financialinformation relating to the Company for the three months ended October 31, 2010(“2010”) and October 31, 2009 (“2009”). The financial information presented hasbeen rounded to the nearest thousand $ and is derived from the unauditedinterim consolidated financial statements included under Item 1 in this Form10-Q. 

|                                          |   | Three Months Ended October 31, 2010  $ |   |   |    Three Months Ended October 31, 2009   $    |   |
|-----------------------------------------------|--------|----------------------------------------|--------|--------|--------------------------------------------------------------|--------|
|                                          |   |                                   |   |   |                                                         |   |
| Sales, net                                    |   | 1,262,000                              |   |   | 617,000                                                      |   |
|                                          |   |                                   |   |   |                                                         |   |
| Expenses:                                     |   |                                   |   |   |                                                         |   |
| Service costs                                 |   | 88,000                                 |   |   | 14,000                                                       |   |
| Plant and signal  delivery                    |   | 439,000                                |   |   | 338,000                                                      |   |
| Marketing and  sales                          |   | 2,000                                  |   |   | 2,000                                                        |   |
| General and  administration                   |   | 171,000                                |   |   | 294,000                                                      |   |
| Salaries and  benefits                        |   | 523,000                                |   |   | 411,000                                                      |   |
| Depreciation and  amortization                |   | 316,000                                |   |   | 170,000                                                      |   |
|                                          |   |                                   |   |   |                                                         |   |
| Total Expenses                                |   | 1,539,000                              |   |   | 1,229,000                                                    |   |
|                                          |   |                                   |   |   |                                                         |   |
| Loss from Operations                          |   | (277,000                               | )      |   | (612,000                                                     | )      |
|                                          |   |                                   |   |   |                                                         |   |
| Other Income (Expense):                       |   |                                   |   |   |                                                         |   |
| Other income                                  |   | 1,000                                  |   |   | 47,000                                                       |   |
| Gain on sale of  assets, net                  |   | 5,000                                  |   |   | -                                                            |   |
| Financing expense                             |   | (11,000                                | )      |   | -                                                            |   |
| Interest expense                              |   | (118,000                               | )      |   | (79,000                                                      | )      |
|                                          |   |                                   |   |   |                                                         |   |
| Total Other Income (Expense)                  |   | (123,000                               | )      |   | (32,000                                                      | )      |
|                                          |   |                                   |   |   |                                                         |   |
| Net Loss                                      |   | (400,000                               | )      |   | (644,000                                                     | )      |
|                                          |   |                                   |   |   |                                                         |   |
| Net Loss per Share – Basic  and Diluted |   | (.01                                   | )      |   | (.02                                                         | )      |
|                                          |   |                                   |   |   |                                                         |   |

The followingdiscussion should be read in conjunction with the unaudited interimconsolidated financial statements (including the notes thereto) included underItem 1 in this Form 10-Q.

***Revenues***

The Company's revenues for 2010 increased by $645,000to $1,262,000 (2009 - $617,000) an increase of 105%. These significantincreases were achieved mainly through our Lightspeed and BrightChoice Ohio acquisitions and through organic growth. The number of subscribers stayed constant at11,500 during the three months ended October 31, 2010. This subscriber countdoes not differentiate a subscriber, for example, one school, hospital orbusiness subscriber is counted as one subscriber. On an equivalent subscriberunit basis we stayed constant at 12,350 during the three months ended October31, 2010. This is important to note because going forward the Company will beadding schools, hospitals and business accounts at an accelerated rate. TheCompany receives revenue mainly from monthly service and modem rental feescollected from its subscribers. The Company’s installation revenue, whilerepresenting 6% of revenues currently, is expected to increase rapidly as wecomplete current financing arrangements and, as a result, we expand ourmarketing efforts. The Company also receives web hosting fees, fiberconstruction project fees and late fees which together represent less than 1%of total revenue. The Company expects revenues to increase rapidly as a resultof organic growth, planned acquisitions and increase in average revenue perunit (“ARPU”). 

----

***Operational Expenses***

Operational expenses include service costs, plant andsignal delivery, marketing and sales, general and administration and salariesand benefits, stock based compensation and depreciation and amortization.

**Service costs** include the cost of billing and collection, the costof buying DSL service and the cost of providing Lifeline and satellite servicesin Ohio. During 2010, service costs increased by $74,000 to $88,000 (2009 - $14,000).This increase was due mainly to the acquisition of Bright Choice, Inc. in Ohio. Approximately two-thirds of Bright Choice revenue comes from satellite and Lifelineservices which started in April, 2010. The increase also comes from an increasein the number of customers accounts offset by a decrease in the cost ofcollection. 

**Plant and signal delivery** expenses include the rental of towers, the cost ofinternet transmission (“backhaul”) the cost of installing equipment on thetowers and at customers’ premises (“housedrops”) and the operating lease costsof housedrop or tower equipment. We currently have a portfolio of transmissionrights covering 452 tower sites located principally in Indiana and Ohio. These markets represent approximately 434,000 households, approximately 369,000 ofwhich are believed to be serviceable by line-of-sight transmissions fromOmnicity antenna locations. During 2010, plant and signal delivery expensesincreased by $101,000 to $439,000 (2009 - $338,000), an increase of 30%. Theincrease in revenues was 105% during this period. As subscribers are added tothe network the incremental cost of providing our signal to that subscriber islower. This increase was due mainly to the increase in the number of towersunder rental arrangements, the amount of backhaul needed to service theincrease in subscribers, the increase in tower and customer premises equipmentbeing leased pursuant to operating lease arrangements and the increase incustomer installations. Plant and signal delivery costs per customer willsignificantly decrease as the Company populates its towers with customers. TheCompany, on average, has a penetration of approximately 4% of homes passedwhereas the minimum target penetration is at least 20% (>74,000 subscribers)which is the penetration rate in the Wabash REMC coverage area.

**Marketing and sales** expenses include REMC fees, advertising andpreparation of marketing materials. During 2010, marketing and sales expenses stayedconstant at $2,000. Marketing and sales expenses are expected to significantlyincrease during 2011 as the Company increases its marketing plan tosignificantly increase organic growth. The Company now has four full-time salespeople, which costs are included in salaries and benefits. 

**General and administration** expenses include professional fees (legal, audit,accounting and outside professional consulting), investor relations consultingfees, office expenses (including rent, property tax, utilities, telephone andinsurance), travel and automobile, software fees and fees associated with latepayments and bank charges. During 2010, general and administration expenses decreasedby $122,000 to $171,000 (2009 - $294,000), a decrease of 42%. Travel andautomobile expenses decreased by $7,000 to $13,000 (2009 - $20,000); feesassociated with late payments and bank charges increased by $7,000 to $21,000(2009 - $14,000); telephone costs increased by $7,000 to $28,000 (2009 -$21,000); rent increased by $6,000 to $26,000 (2009 - $20,000); investorrelations expenses decreased by $105,000 to $5,000 (2009 - $110,000) andprofessional fees decreased by $20,000 to $14,000 (2009 - $34,000). General andadministration expenses are not expected to increase significantly in 2011 inrelation to increased revenue. As the Company grows, general and administrationexpenses become significantly lower on a percentage of revenue basis. 

**Salaries and benefits** for 2010 have increased by $112,000 to $523,000 (2009- $411,000) an increase of 27% while revenue increased by 105%. This increaseis mainly due to the additional costs associated with hiring of senior andmiddle management to oversee the acquisition, marketing, financial reporting andoperations teams. Our staff has been rationalized during the quarter ended July31, 2010 and staffing levels have remained constant at 49 full-time employeesas at October 31, 2010. The Company does not expect to increase its number ofemployees significantly during 2011, except for certain key people to bebrought on as a result of acquisitions and increasing the number of marketingteams we have in current and new regions brought on through acquisitions.Installations are now contracted out to an independent contractor. The Companycontinues to upgrade its employees as better trained personnel become availablethrough acquisitions. 

**Depreciation and amortization** for 2010 increased by $145,000 to $316,000(2009 - $170,000). This increase was attributed to an increase in amortizationof customers’ relationships of $53,000 to $122,000 (2009 - $69,000) and anincrease in depreciation of our network system, automobiles, software andoffice equipment of $92,000 to $193,000 (2009 - $101,000). 

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***Other Income and Expense***

**Interest expense** for 2010 increased by $40,000 to $118,000 (2009 - $78,000).The increase was a result of increased short-term and long-term debt levels.Interest expense will increase in 2010 as the Company plans to finance aportion of its growth through the issuance of debt instruments. The Companywill also issue short-term and long-term notes as part consideration of plannedacquisitions. 

**Financing expenses** are costs associated with consultants hired to secureadditional debt and/or equity financing for the Company. Once equity financingis secured the related cost will reduce the proceeds of the equity instrumentissued. Financing expense for 2010 increased by $11,000 to $11,000 (2009 - $nil).The increase was a result of the Company hiring financial consultants to assistthe Company in raising capital.

***Net Loss***

The net loss for 2010 decreased by $244,000 to $400,000(2009 - $644,000). This decrease in loss was due to the 105% increase inrevenues while expenses increased at a lower rate and will continue to increaseat an incrementally lower rate, as a percentage of revenue, as we expandthrough acquisitions and organic growth. To highlight this trend our firstquarter earnings before interest, income taxes, depreciation and amortization(“EBITDA”) was positive $40,000 as compared to a negative $17,000 fourthquarter 2010. 

**Liquidity and Capital Resources**

The Company completed its acquisition of Omnicity,Incorporated on February 17, 2009. Prior to this the Company was a dormantearly exploration stage company with no operations. Since then, the Company'sacquisition and transition teams have acquired and folded in ten WISP'sincreasing its subscriber base from 1,800 to 11,500 as at October 31, 2010. Seediscussion under “Revenues” above for our increase in cash flow from ourcustomers.   

|                         |   | October 31, 2010 |   |   | July 31, 2010 |   |
|------------------------------|--------|------------------|--------|--------|---------------|--------|
|                         |   | $                |   |   | $             |   |
|                         |   |             |   |   |          |   |
| Cash                         |   | 1,000            |   |   | 39,000        |   |
| Working Capital (Deficiency) |   | (4,123,000       | )      |   | (3,810,000    | )      |
| Total Assets                 |   | 5,752,000        |   |   | 5,851,000     |   |
| Total Liabilities            |   | 7,366,000        |   |   | 7,095,000     |   |
| Stockholders’ Deficit  |   | (1,614,000       | )      |   | (1,244,000    | )      |

**Cash to Operating Activities**

During 2010, operating activities generated cash of $137,000(2009 – used cash of $288,000). Our loss for 2010 was $400,000 (2009 - $644,000),which included: a non-cash outlay for interest expense accreted of $27,000(2009 - $nil); expenses settled with equity or debt $43,000 (2009 - $nil);depreciation and amortization of $316,000 (2009 - $170,000); for a net cashoutflow of $15,000 (2009 - $474,000) before changes in working capital items.Our accounts receivable have increased by $10,000 (2009 – decreased by $13,000)due to our increase in customer base in Indiana during 2009 and Indiana and   Ohio during 2010. Prepaid expenses decreased by $9,000 (2009 – $109,000). Ouraccounts payable and accrued liabilities have increased by $153,000 (2009 - $64,000)due to our operations being partially financed by our creditors. We plan todecrease our reliance on creditor support as we secure additional financing. 

**Cash to  Investing Activities**

Our business is a capital intensive business. Sinceinception, the Company has expended funds to lease or otherwise acquiretransmission site rights in various locations and markets, to construct theexisting network tower infrastructures and house drops to the customers’premises and to finance initial operating losses. The Company intends to expandthe existing systems and launch additional wireless systems and will requireadditional funds. The Company estimates that a launch by it of a wirelessinternet provider system in a typical new tower location will involve theexpenditures for wireless internet system transmission equipment andincremental installation costs per subscriber for customer premise equipment.As a result of these costs, operating losses are likely to be incurred by asystem during the roll-out period.

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During 2010, investing activities used net cash of $254,000(2009 - $126,000). We acquired tower and customers’ premises equipment totalling$223,000 (2009 - $122,000). We increased our cost of customers’ relationshipsby $31,000 (2009 - $nil). 

**Cash from  Financing Activities**

During 2010,financing activities provided cash of $78,000 (2009 - $1,015,000). Proceeds of nil(2009 - $1,020,000) was received from common stock subscriptions. During 2010,proceeds of $165,000 (2009 - $149,000) were received from short-term loans and$nil (2009 - $37,000) from long-term debt. We repaid $87,000 (2009 - $191,000)of short-term debt, long-term debt and capital lease obligations. 

**Item3.  Quantitative and Qualitative Disclosures About Market Risk.**

  Not required  because we are a smaller reporting company.

**Item 4.  Controls and Procedures.**

Greg Jarman our principal executive officerand Don Prest, our principal financial officer, have concluded that our disclosurecontrols and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under theExchange Act) were not effective as of the end of the period covered by thisreport, based on their evaluation of these controls and procedures required byparagraph (b) of Rules 13a-15 and 15d-15, due to the deficiencies in ourinternal control over financial reporting as described below.  

Our management is responsible forestablishing and maintaining adequate internal control over financialreporting, as defined in Rules 13a-15(f) under the Exchange Act.

Themanagement of the Company assessed the effectiveness of the Company’s internalcontrol over financial reporting based on the criteria for effective internalcontrol over financial reporting established in Internal Control—IntegratedFramework issued by the Committee of Sponsoring Organizations of the TreadwayCommission (“COSO”) and SEC guidance on conducting such assessments.  Based onthis assessment, management determined that, during the quarter ended October31, 2010, our internal controls and procedures were not effective to detect theinappropriate application of US GAAP rules, as more fully described below. This was due to deficiencies in the design or operation of the Company’sinternal control that adversely affected the Company’s internal controls andthat may be considered to be material weaknesses.  

Managementidentified the following material weaknesses in internal control over financialreporting:

1.       The Company has limited segregation of duties which is not consistent with good internal control procedures.

2.       The Company does not have a written internal control procedurals manual which outlines the duties and reporting requirements of the Directors and any staff to be hired in the future.  This lack of a written internal control procedurals manual does not meet the requirements of the SEC or good internal controls. 

Management believes that thematerial weaknesses set forth in items 1 and 2 above did not have an affect onthe Company’s financial results. 

Managementwill continue to monitor and evaluate the effectiveness of the Company’sinternal controls and procedures and its internal controls over financialreporting on an ongoing basis and are committed to taking further action andimplementing additional enhancements or improvements, as necessary and as fundsallow.

**Changes in Internal Control  over Financial Reporting**

There were no changes to our internalcontrol over financial reporting that occurred during the quarter ended October31, 2010 that have materially affected, or are reasonably likely to materiallyaffect, our internal control over financial reporting. 

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**PART II -OTHER INFORMATION**

**Item 1. Legal Proceedings.**

The Company has been served with aComplaints filed with the Rush Circuit Court in the State of Indiana datedAugust 25, 2010. The plaintiff has made claims against the Company for failureto make required instalment payments that were due pursuant to promissorynotes. The Company has recorded all debt relating to this claim as a currentliability. On September 14, 2010 the Company filed an Appearance and Notice ofExtension of Time to answer the Complaint. On November 8, 2010 the Companyfiled an Answer to this Complaint. This Answer denied certain allegations dueto breach by the vendor of the Asset Purchase Agreement entered into. TheCompany expects to receive a favourable outcome.  

The Company has been served with a Complaint filed with the RushCircuit Court in the State of Indiana dated September 1, 2010. The plaintiffhas made claims against the Company for failure to make required instalmentpayments that were due pursuant to promissory notes. The Company has recordedall debt relating to this claim as a current liability. On September 14, 2010the Company filed an Appearance and Notice of Extension of Time to answer theComplaints. The Company is in the process of filing an Answer to this Complaintwhich will include a denial of certain allegations due to breach by the vendorof the Asset Purchase Agreement and expects to receive a favourable outcome.

The Company has been servedwith a Complaint filed with the Holmes County Court in the State of Ohio dated September 16, 2010.  The plaintiff has made claims against the Company forfailure to make required instalment payments that were due pursuant topromissory notes. The Company has recorded all debt relating to this claim as acurrent liability. On November 8, 2010 the Company filed an Answer andCounterclaim with the Holmes County Court. This Answer and Counterclaimincludes counterclaims for various damages, including punitive damages,suffered by the Company and also seeks an injunction. The Company expects toreceive a favourable outcome.

**Item 1A. Risk Factors.**

  Not required because we are a  smaller reporting company.

**Item 2.   Unregistered  Sales of Equity Securities.**

On August 16 and October 31,2010 we issued an aggregate of 299,996 common shares to three individuals pursuantto an Agreement for services rendered.  We relied on exemptions fromregistration under the Securities Act provided by Rule 506 for U.S. accredited investors. 

**Item  3.  Defaults Upon Senior Securities**

  Not required because  we are a smaller reporting company. 

**Item 4. (Removed and Reserved).**

**Item 5.  OtherInformation.**

None.

**Item 6.                   Exhibits**

  The following exhibits are  included with this Quarterly Report on Form 10-Q: 

| **Exhibit  Number** | **Description of Exhibit**                                                                           |
|---------------------|------------------------------------------------------------------------------------------------------|
|                |                                                                                                 |
| 31.1                | Rule 13a-14(a)/15(d)-14(a)  Certification of Principal Executive Officer                             |
|                |                                                                                                 |
| 31.2                | Rule 13a-14(a)/15(d)-14(a) Certification  of Principal Financial Officer                             |
|                |                                                                                                 |
| 32.1                | 18 U.S.C. Section 1350 Certification of  Principal Executive Officer and Principal Financial Officer |

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**SIGNATURES**

In accordance with the requirements of the Securities ExchangeAct of 1934, the registrant has duly caused this report to be signed on itsbehalf by the undersigned thereunto duly authorized.

|           | **OMNICITY  CORP.**                                                                                                                                                                                                                            |
|-----------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| By:  |  */s/ Greg Jarman      *    Greg Jarman  Chief Executive Officer and a Director   (Principal Executive Officer)   Date:  December 15, 2010                                                        |
|      |  * *                                                                                                                                                                                                                                 |
|      |  */s/ Don Prest         *  Don Prest  Chief Financial Officer and a Director   (Principal Financial Officer and Principal Accounting Officer)   Date:  December 15, 2010  * * |

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