SECURITIES AND EXCHANGE COMMISSION
                                WASHINGTON, D.C.

                                   FORM 10-QSB

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

                For the Quarterly Period Ended September 30, 2004

                                       OR

              TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
-------
                       THE SECURITIES EXCHANGE ACT OF 1934

               For the Transition Period from _________to_________

                          Commission File No. 000-50466

                             DEKALB BANKSHARES, INC.
        (Exact name of small business issuer as specified in its charter)

                South Carolina                          61-1444253
         (State or other jurisdiction                (I.R.S. Employer
      of incorporation or organization)            Identification No.)

                             631 West DeKalb Street
                          Camden, South Carolina 29020
                    (Address of principal executive offices)

                                  803.432.7575
                (Issuer's telephone number, including area code)
                ------------------------------------------------

Check  whether  the issuer  (1) has filed all  reports  required  to be filed by
Section 13 or 15(d) of the  Securities  Exchange  Act of 1934 during the past 12
months (or for such shorter period that the registrant was required to file such
reports)  and (2) has been subject to such filing  requirements  for the past 90
days.

                                    YES [X] NO [ ]

State the number of shares outstanding of each of the issuer's classes of common
stock as of the latest practicable date.

      610,139 shares of common stock, no par value, as of October 31, 2004


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




<PAGE>




                             DEKALB BANKSHARES, INC.

                                      INDEX

<TABLE>
<CAPTION>

PART I. FINANCIAL INFORMATION                                                                                      Page No.

Item 1. Financial Statements (Unaudited)

<S>                                                                                                                  <C>
        Condensed Consolidated Balance Sheets - September 30, 2004 and December 31, 2003..................................3

        Condensed Consolidated Statements of Income - Nine months ended September 30, 2004 and 2003
           and Three months ended September 30, 2004 and 2003.............................................................4

        Condensed Consolidated Statements of Shareholders' Equity and Comprehensive Income -
         Nine months ended September 30, 2004 and 2003....................................................................5

        Condensed Consolidated Statements of Cash Flows - Nine months ended September 30, 2004 and 2003...................6

        Notes to Condensed Consolidated Financial Statements...........................................................7-10

        Item 2. Management's Discussion and Analysis or Plan of Operation.............................................11-16

Item 3. Controls and Procedures..........................................................................................17

PART II. OTHER INFORMATION

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds......................................................18

Item 6. Exhibits.........................................................................................................18

             Exhibits....................................................................................................18
</TABLE>





                                       2
<PAGE>

                             DEKALB BANKSHARES, INC.

PART I - FINANCIAL INFORMATION

Item 1 - Financial Statements

                      Condensed Consolidated Balance Sheets

<TABLE>
<CAPTION>
                                                                                                    September 30,      December 31,
                                                                                                        2004               2003
                                                                                                        ----               ----
                                                                                                     (Unaudited)
Assets:
   Cash and cash equivalents:
<S>                                                                                                <C>                 <C>
     Cash and due from banks ...............................................................       $  1,270,725        $    867,695
     Federal funds sold ....................................................................          2,638,000           1,402,000
                                                                                                   ------------        ------------
       Total cash and cash equivalents .....................................................          3,908,725           2,269,695
                                                                                                   ------------        ------------
Time deposits with other banks .............................................................            313,494             310,078
Securities available-for-sale ..............................................................         10,010,763           6,938,632
Nonmarketable equity securities ............................................................            418,212             220,000
                                                                                                   ------------        ------------
                                                                                                     10,428,975           7,158,632
Loans receivable ...........................................................................         24,986,964          21,624,149
   Less allowance for loan losses ..........................................................           (236,302)           (305,000)
                                                                                                   ------------        ------------
       Loans, net ..........................................................................         24,750,662          21,319,149
Premises and equipment, net ................................................................          1,366,827           1,410,202
Accrued interest receivable ................................................................            137,121             111,817
Other assets ...............................................................................            446,360             455,844
                                                                                                   ------------        ------------

       Total assets ........................................................................       $ 41,352,164        $ 33,035,417
                                                                                                   ============        ============

Liabilities
Deposits:
   Noninterest-bearing transaction accounts ................................................       $  2,894,396        $  2,314,452
   Interest-bearing transaction accounts ...................................................          4,046,976           2,901,206
   Savings .................................................................................          4,130,429           3,702,360
   Time deposits $100,000 and over .........................................................         11,998,940          10,085,481
   Other time deposits .....................................................................          5,063,507           4,843,043
                                                                                                   ------------        ------------
                                                                                                     28,134,248          23,846,542
Securities sold under agreements to repurchase .............................................          3,000,000                   -
Advances from Federal Home Loan Bank .......................................................          4,900,000           4,000,000
Accrued interest payable ...................................................................             49,380              37,793
Other liabilities ..........................................................................             81,285              39,236
                                                                                                   ------------        ------------
       Total liabilities ...................................................................         36,164,913          27,923,571
                                                                                                   ------------        ------------

Shareholders' equity
Common stock, no par value;  20,000,000 shares  authorized,  610,139 and 609,060
   shares issued and outstanding at September 30, 2004 and
   December 31, 2003, respectively .........................................................          5,877,597           5,866,807
Retained earnings (deficit) ................................................................           (665,660)           (732,329)
Accumulated other comprehensive loss .......................................................            (24,686)            (22,632)
                                                                                                   ------------        ------------
       Total shareholders' equity ..........................................................          5,187,251           5,111,846
                                                                                                   ------------        ------------

       Total liabilities and shareholders' equity ..........................................       $ 41,352,164        $ 33,035,417
                                                                                                   ============        ============
</TABLE>

            See notes to condensed consolidated financial statements.



                                       3
<PAGE>


                             DEKALB BANKSHARES, INC.
                   Condensed Consolidated Statements of Income
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                         Nine Months Ended                  Three Months Ended
                                                                            September 30,                       September 30,
                                                                            -------------                       -------------
                                                                       2004              2003              2004              2003
                                                                       ----              ----              ----              ----
Interest income:
<S>                                                                 <C>               <C>               <C>               <C>
   Loans, including fees ...................................        $1,106,222        $  995,777        $  395,051        $  348,978
   Investment securities, taxable ..........................           257,502           103,702            90,438            32,954
   FHLB interest and dividends .............................             7,938             9,607             3,498             2,422
   Federal funds sold ......................................            14,621             9,324             5,481             2,028
   Time deposits with other banks ..........................             5,153             3,986             1,538             1,322
                                                                    ----------        ----------        ----------        ----------
       Total ...............................................         1,391,436         1,122,396           496,006           387,704
                                                                    ----------        ----------        ----------        ----------

Interest expense:
   Time deposits $100,000 and over .........................           144,251           102,297            54,293            39,639
   Other deposits ..........................................           126,226           154,245            44,079            46,477
   Other interest expense ..................................           133,507            64,693            50,922            20,071
                                                                    ----------        ----------        ----------        ----------
       Total ...............................................           403,984           321,235           149,294           106,187
                                                                    ----------        ----------        ----------        ----------

Net interest income ........................................           987,452           801,161           346,712           281,517
Provision for loan losses ..................................            76,000            80,000            37,000            29,000
                                                                    ----------        ----------        ----------        ----------
Net interest income after provision for
   loan losses .............................................           911,452           721,161           309,712           252,517
                                                                    ----------        ----------        ----------        ----------

Noninterest income:
   Service charges on deposit accounts .....................           107,914            87,072            34,080            32,568
   Gain on sales of securities available for
     sale ..................................................                 -            41,249                 -            17,230
   Residential mortgage origination fees ...................            64,104           126,310            21,455            58,461
   Other service charges, commissions
     and fees ..............................................            22,180            18,045             7,816             5,646
                                                                    ----------        ----------        ----------        ----------
       Total ...............................................           194,198           272,676            63,351           113,905
                                                                    ----------        ----------        ----------        ----------

Noninterest expenses:
   Salaries and employee benefits ..........................           517,394           472,296           173,493           157,503
   Occupancy expense .......................................            61,834            58,461            21,045            19,623
   Furniture and equipment expense .........................            35,069            37,409            12,041            13,361
   Other operating expenses ................................           385,164           378,334           131,556           138,381
                                                                    ----------        ----------        ----------        ----------
       Total ...............................................           999,461           946,500           338,135           328,868
                                                                    ----------        ----------        ----------        ----------

Income before income taxes .................................           106,189            47,337            34,928            37,554
Income tax expense .........................................            39,520            17,751            13,100            14,083
                                                                    ----------        ----------        ----------        ----------

Net income .................................................        $   66,669        $   29,586        $   21,828        $   23,471
                                                                    ==========        ==========        ==========        ==========

Earnings per share
Basic earnings per share ...................................        $      .11        $      .05        $      .04        $      .04
Diluted earnings per share .................................        $      .11        $      .05        $      .04        $      .04
</TABLE>

            See notes to condensed consolidated financial statements.



                                       4
<PAGE>

                             DEKALB BANKSHARES, INC.
                        Condensed Consolidated Statements
                of Shareholders' Equity and Comprehensive Income
             For the nine months ending September 30, 2004 and 2003
                                   (Unaudited)


<TABLE>
<CAPTION>
                                                                                                        Accumulated
                                                        Common Stock                    Retained           Other
                                                        ------------                    Earnings        Comprehensive
                                                     Shares           Amount           (Deficit)           Income            Total
                                                     ------           ------           ---------           ------            -----
Balance,
<S>                                                  <C>           <C>               <C>               <C>              <C>
   December 31, 2002 ......................          609,060       $ 5,866,807       $  (782,412)      $    51,066      $ 5,135,461

Net income
   for the period .........................                                               29,586                             29,586

Other comprehensive
   income, net of tax $53,992 .............                                                                (91,933)         (91,933)
                                                                                                                        -----------

Comprehensive Income (loss) ...............                                                                                 (62,347)
                                                     -------       -----------       -----------       -----------      -----------

Balance,
   September 30, 2003 .....................          609,060       $ 5,866,807       $  (752,826)      $   (40,867)     $ 5,073,114
                                                     =======       ===========       ===========       ===========      ===========

Balance,
   December 31, 2003 ......................          609,060       $ 5,866,807       $  (732,329)      $   (22,632)     $ 5,111,846

Net income
   for the period .........................                                               66,669                             66,669

Other comprehensive
   income, net of tax $1,206 ..............                                                                 (2,054)          (2,054)
                                                                                                                        -----------

Comprehensive income ......................                                                                                  64,615

Exercise of stock options .................            1,079            10,790                                               10,790
                                                     -------       -----------       -----------       -----------      -----------

Balance,
   September 30, 2004 .....................          610,139       $ 5,877,597       $  (665,660)      $   (24,686)     $ 5,187,251
                                                     =======       ===========       ===========       ===========      ===========
</TABLE>

            See notes to condensed consolidated financial statements.





                                       5
<PAGE>


                             DEKALB BANKSHARES, INC.
                 Condensed Consolidated Statements of Cash Flows
                                   (Unaudited)


<TABLE>
<CAPTION>
                                                                                                           Nine Months Ended
                                                                                                             September 30,
                                                                                                             -------------
                                                                                                       2004                   2003
                                                                                                       ----                   ----
Cash flows from operating activities:
<S>                                                                                              <C>                    <C>
   Net income ........................................................................           $    66,669            $    29,586
   Adjustments to reconcile net income to net cash provided
   by operating activities:
     Provision for loan losses .......................................................                76,000                 80,000
     Depreciation and amortization expense ...........................................                81,461                 95,141
     Gain on sale of securities ......................................................                     -                (41,249)
     Accretion and premium amortization ..............................................                12,678                  5,162
     Deferred income tax provision ...................................................                34,660                 16,044
     (Increase) decrease in interest receivable ......................................               (25,303)                 1,305
     Increase (decrease) in interest payable .........................................                11,587                 (3,466)
     Increase in other assets ........................................................               (25,178)               (27,425)
     Increase in other liabilities ...................................................                42,050                  4,959
                                                                                                 -----------            -----------
       Net cash provided by operating activities .....................................               274,624                160,057
                                                                                                 -----------            -----------
Cash flows from investing activities:
   Net increase in loans made to customers ...........................................            (3,507,513)            (4,601,250)
   Purchases of securities available-for-sale ........................................            (6,076,919)            (5,075,763)
   Sale, calls or maturities of securities available-for-sale ........................             1,501,206              3,059,066
   Payments received on mortgage backed securities ...................................             1,488,850                871,506
   Sale of Federal Home Loan Bank stock ..............................................               (55,000)               (50,000)
   Sale of The Bankers Bank stock ....................................................              (143,212)                     -
   Purchases of premises and equipment ...............................................               (38,086)                (5,871)
   Maturities (purchases) of time deposits with other banks ..........................                (3,416)                 3,267
                                                                                                 -----------            -----------
       Net cash used by investing activities .........................................            (6,834,090)            (5,799,045)
                                                                                                 -----------            -----------
Cash flows from financing activities:
   Exercise of stock options .........................................................                10,790                      -
   Net increase in demand deposits, interest-bearing
     transaction accounts and savings accounts .......................................             2,153,783              1,402,371
   Net increase in certificates of deposit and other time deposits ...................             2,133,923              4,007,354
   Increase in securities sold under agreements to repurchase ........................             3,000,000                      -
   Increase in advances from the Federal Home Loan Bank ..............................               900,000                800,000
                                                                                                 -----------            -----------
     Net cash provided by financing activities .......................................             8,198,496              6,209,725
                                                                                                 -----------            -----------
Net increase in cash and cash equivalents ............................................             1,639,030                570,737
Cash and cash equivalents, beginning .................................................             2,269,695              2,758,871
                                                                                                 -----------            -----------
Cash and cash equivalents, end .......................................................           $ 3,908,725            $ 3,329,608
                                                                                                 ===========            ===========
Cash paid during the period for:
   Interest ..........................................................................           $   392,397            $   324,701
                                                                                                 ===========            ===========
   Taxes .............................................................................           $     1,920            $       540
                                                                                                 ===========            ===========
</TABLE>

            See notes to condensed consolidated financial statements.




                                       6
<PAGE>

                             DEKALB BANKSHARES, INC.
              Notes to Condensed Consolidated Financial Statements
                                   (Unaudited)


Note 1 - Basis of Presentation

The accompanying  financial statements have been prepared in accordance with the
requirements  for  interim  financial  statements  and,  accordingly,  they  are
consolidated and omit  disclosures,  which would  substantially  duplicate those
contained in DeKalb  Bankshares,  Inc.'s 2003 Annual Report on Form 10-KSB.  The
financial  statements as of September 30, 2004 and for the interim periods ended
September  30, 2004 and 2003 are  unaudited  and, in the opinion of  management,
include all adjustments  (consisting of normal recurring adjustments) considered
necessary for a fair presentation.  The financial information as of December 31,
2003 has been derived from the audited financial statements as of that date.

Note 2 - Recently Issued Accounting Pronouncements

No recent authoritative  pronouncements that affect accounting,  reporting,  and
disclosure  of  financial  information  by us have  occurred  during the quarter
ending September 30, 2004, other than the items described below.

In November  2003, the Emerging  Issues Task Force ("EITF")  reached a consensus
that certain  quantitative  and qualitative  disclosures  should be required for
debt and marketable equity  securities  classified as available for sale or held
to maturity under SFAS No. 115 and SFAS No. 124 that are impaired at the balance
sheet  date  but  for  which   other-than-temporary   impairment  has  not  been
recognized.   Accordingly   EITF  issued  EITF  No.   03-1,   "The   Meaning  of
Other-Than-Temporary  Impairment and Its  Application  to Certain  Investments."
This issue  addresses  the meaning of  other-than-temporary  impairment  and its
application  to investments  classified as either  available for sale or held to
maturity  under SFAS No. 115 and  provides  guidance  determining  the amount of
impairment and additional quantitative and qualitative disclosures. The guidance
for  determining  the amount of  impairment  was  scheduled to be effective  for
periods  ending  after  September  15, 2004,  but has been delayed  indefinitely
pending  implementation  guidance by the FASB. The disclosure provisions of EITF
No. 03-1 were  effective  for fiscal  years  ending  after  December  15,  2003.
Adopting the  disclosure  provisions of EITF No. 03-1 did not have any impact on
the Company's financial position or results of operations.

In March 2004, the FASB issued an exposure draft on "Share-Based  Payment".  The
proposed  Statement  addresses  the  accounting  for  transactions  in  which an
enterprise  receives employee services in exchange for (a) equity instruments of
the  enterprise  or (b)  liabilities  that are  based  on the fair  value of the
enterprise's  equity  instruments or that may be settled by the issuance of such
equity  instruments.  This  proposed  Statement  would  eliminate the ability to
account  for  share-based  compensation  transactions  using APB Opinion No. 25,
"Accounting for Stock Issued to Employees",  and generally would require instead
that such transactions be accounted for using a  fair-value-based  method.  This
Statement,  if  approved,  was  scheduled  to be  effective  for awards that are
granted,  modified,  or settled in fiscal years  beginning after a) December 15,
2004 for public entities and nonpublic  entities that used the  fair-value-based
method  of  accounting  under  the  original  provisions  of  Statement  123 for
recognition  or pro forma  disclosure  purposes and b) December 15, 2005 for all
other  nonpublic  entities.  On October 16, 2004, the FASB delayed the effective
date of this proposal by six months and  anticipates it will be effective for by
the third quarter of 2005.  Retrospective  application  of this Statement is not
permitted.  The adoption of this Statement, if approved, could have an impact on
the Company's financial position or results of operations.

Other  accounting  standards  that have been  issued or  proposed by the FASB or
other standards-setting  bodies that do not require adoption until a future date
are not  expected  to  have a  material  impact  on the  consolidated  financial
statements upon adoption.



                                       7
<PAGE>

                             DEKALB BANKSHARES, INC.
              Notes to Condensed Consolidated Financial Statements
                                   (Unaudited)

Note 3 - Stock-Based Compensation

The Company has a stock-based employee  compensation plan which is accounted for
under the recognition and measurement  principles of Accounting Principles Board
("APB") Opinion No. 25, "Accounting for Stock Issued to Employees",  and related
Interpretations.  No stock-based employee  compensation cost is reflected in the
net  income  (loss),  as all stock  options  granted  under  these  plans had an
exercise price equal to the market value of the  underlying  common stock on the
date of grant.  The following table  illustrates the effect on net income (loss)
and  earnings  (losses)  per common share as if the Company had applied the fair
value recognition  provisions of Financial  Accounting  Standards Board ("FASB")
Statement of Financial  Accounting  Standards ("SFAS") No. 123,  "Accounting for
Stock-Based Compensation", to stock-based employee compensation.

<TABLE>
<CAPTION>
                                                                                             Nine Months Ended September 30,
                                                                                             -------------------------------
                                                                                             2004                      2003
                                                                                             ----                      ----
<S>                                                                                        <C>                       <C>
Net income, as reported ....................................................               $   66,669                $  29,586
Deduct: Total stock-based employee
  compensation expense determined
  under fair value based method
  for all awards, net of related tax effects ...............................                   (7,858)                       -
                                                                                           ----------               ----------

Pro forma net income .......................................................               $   58,811                $  29,586
                                                                                           ==========               ==========

Earnings per share:
  Basic - as reported ......................................................               $      .11               $      .05
                                                                                           ==========               ==========
  Basic - pro forma ........................................................               $      .10               $      .05
                                                                                           ==========               ==========

  Diluted - as reported ....................................................               $      .11               $      .05
                                                                                           ==========               ==========
  Diluted - pro forma ......................................................               $      .10               $      .05
                                                                                           ==========               ==========
</TABLE>


<TABLE>
<CAPTION>
                                                                                             Three Months Ended September 30,
                                                                                             --------------------------------
                                                                                              2004                     2003
                                                                                              ----                     ----
<S>                                                                                        <C>                      <C>
Net income, as reported ....................................................               $   21,828               $   23,471
Deduct: Total stock-based employee
  compensation expense determined
  under fair value based method
  for all awards, net of related tax effects ...............................                        -                        -
                                                                                           ----------               ----------

Pro forma net income .......................................................               $   21,828               $   23,471
                                                                                           ==========               ==========

Earnings per share:
  Basic - as reported ......................................................               $      .04               $      .04
                                                                                           ==========               ==========
  Basic - pro forma ........................................................               $      .04               $      .04
                                                                                           ==========               ==========

   Diluted - as reported ...................................................               $      .04               $      .04
                                                                                           ==========               ==========
   Diluted - pro forma .....................................................               $      .04               $      .04
                                                                                           ==========               ==========
</TABLE>



                                       8
<PAGE>


                             DEKALB BANKSHARES, INC.
              Notes to Condensed Consolidated Financial Statements
                                   (Unaudited)

Note 4 - Earnings Per Share

A reconciliation  of the numerators and denominators used to calculate basic and
diluted  earnings  per share for the nine months  ended  September  30, 2004 and
2003, and the three months ended September 30, 2004 and 2003 are as follows:

<TABLE>
<CAPTION>
                                                                                           Nine Months Ended September 30, 2004
                                                                                           ------------------------------------
                                                                                     Income               Shares           Per Share
                                                                                  (Numerator)         (Denominator)          Amount
                                                                                  -----------         -------------          ------
Basic earnings per share
<S>                                                                                 <C>                   <C>                   <C>
  Income available to common shareholders ...........................               $66,669               609,095               $.11
                                                                                                                                ====
Effect of dilutive securities
  Stock options .....................................................                                      1,038
                                                                                    -------               ------
Diluted earnings per share
  Income available to common shareholders
    plus assumed conversions ........................................               $66,669               610,133               $.11
                                                                                    =======               =======               ====


<CAPTION>
                                                                                            Nine Months Ended September 30, 2003
                                                                                            ------------------------------------
                                                                                     Income               Shares           Per Share
                                                                                  (Numerator)          (Denominator)         Amount
                                                                                  -----------          -------------         ------
Basic earnings per share
<S>                                                                                  <C>                  <C>                  <C>
  Income available to common shareholders .............................              $29,586              609,060              $0.05
                                                                                                                               =====
Effect of dilutive securities
  Stock options .......................................................                    -                    -
                                                                                     -------              -------
Diluted earnings per share
  Income available to common shareholders
    plus assumed conversions ..........................................              $29,586              609,060              $0.05
                                                                                     =======              =======              =====


<CAPTION>
                                                                                        Three Months Ended September 30, 2004
                                                                                        -------------------------------------
                                                                                     Income               Shares          Per Share
                                                                                  (Numerator)         (Denominator)         Amount
                                                                                  -----------         -------------         ------
Basic earnings per share
<S>                                                                                 <C>                   <C>                   <C>
  Income available to common shareholders ...........................               $21,828               609,166               $.04
                                                                                                                                ====
Effect of dilutive securities
  Stock options .....................................................                     -                 2,441
                                                                                    -------               -------
Diluted earnings per share
  Income available to common shareholders
    plus assumed conversions ........................................               $21,828               611,607               $.04
                                                                                    =======               =======               ====


<CAPTION>
                                                                                           Three Months Ended September 30, 2003
                                                                                           -------------------------------------
                                                                                     Income              Shares            Per Share
                                                                                   (Numerator)       (Denominator)           Amount
                                                                                   -----------       -------------           ------
Basic earnings per share
<S>                                                                                  <C>                  <C>                  <C>
  Income available to common shareholders .............................              $23,471              609,060              $0.04
                                                                                                                               =====
Effect of dilutive securities
  Stock options .......................................................                    -                    -
                                                                                     -------              -------
Diluted earnings per share
  Income available to common shareholders
    plus assumed conversions ..........................................              $23,471              609,060              $0.04
                                                                                     =======              =======              =====
</TABLE>

                                       9
<PAGE>


                             DEKALB BANKSHARES, INC.
              Notes to Condensed Consolidated Financial Statements
                                   (Unaudited)

Note 5 - Comprehensive Income

Comprehensive  income includes net income and other comprehensive  income, which
is defined as nonowner related  transactions in equity. The following table sets
forth the amounts of other  comprehensive  income  included in equity along with
the related tax effect for the nine month periods  ended  September 30, 2004 and
2003, and for the three months ended September 30, 2004 and 2003:
<TABLE>
<CAPTION>

                                                                                     Pre-Tax           (Expense)        Net-of-tax
                                                                                      Amount             Benefit          Amount
                                                                                      ------             -------          ------
For the Nine Months Ended September 30, 2004:
Unrealized gains (losses) on securities:
<S>                                                                                  <C>                <C>               <C>
   Unrealized holding gains (losses) arising during the period ...................   $(3,260)           $ 1,206           $(2,054)
   Plus: reclassification adjustment for gains (losses)
   realized in net income ........................................................         -                  -                 -
                                                                                     -------            -------           -------
   Net unrealized gains (losses) on securities ...................................    (3,260)             1,206            (2,054)
                                                                                     -------            -------           -------
Other comprehensive income (loss) ................................................   $(3,260)           $ 1,206           $(2,054)
                                                                                     =======            =======           =======

<CAPTION>

                                                                                     Pre-Tax           (Expense)        Net-of-tax
                                                                                      Amount             Benefit          Amount
                                                                                      ------             -------          ------
For the Nine Months Ended September 30, 2003:
Unrealized gains (losses) on securities:
<S>                                                                                  <C>                <C>               <C>
   Unrealized holding gains (losses) arising during the period .............         $(104,676)         $  38,730         $ (65,946)
   Plus: reclassification adjustment for gains (losses)
   realized in net income ..................................................           (41,249)            15,262           (25,987)
                                                                                     ---------          ---------         ---------
   Net unrealized gains (losses) on securities .............................          (145,925)            53,992           (91,933)
                                                                                     ---------          ---------         ---------
Other comprehensive income (loss) ..........................................         $(145,925)         $  53,992         $ (91,933)
                                                                                     =========          =========         =========

<CAPTION>

                                                                                     Pre-Tax           (Expense)        Net-of-tax
                                                                                      Amount             Benefit          Amount
                                                                                      ------             -------          ------
For the Three Months Ended September 30, 2004:
Unrealized gains (losses) on securities:
<S>                                                                                    <C>              <C>               <C>
   Unrealized holding gains (losses) arising during the period .................       $198,086         $(73,292)         $124,794
   Plus: reclassification adjustment for gains (losses)
   realized in net income ......................................................              -                -                 -
                                                                                       --------         --------          --------
   Net unrealized gains (losses) on securities .................................        198,086          (73,292)          124,794
                                                                                       --------         --------          --------
Other comprehensive income (loss) ..............................................       $198,086         $(73,292)         $124,794
                                                                                       ========         ========          ========

<CAPTION>

                                                                                     Pre-Tax           (Expense)        Net-of-tax
                                                                                      Amount             Benefit          Amount
                                                                                      ------             -------          ------
For the Three Months Ended September 30, 2003:
Unrealized gains (losses) on securities:
<S>                                                                                  <C>                <C>               <C>
   Unrealized holding gains (losses) arising during the period .............         $ (98,721)         $  36,527         $ (62,194)
   Plus: reclassification adjustment for gains (losses)
   realized in net income ..................................................           (17,230)             6,375           (10,855)
                                                                                     ---------          ---------         ---------
   Net unrealized gains (losses) on securities .............................          (115,951)            42,902           (73,049)
                                                                                     ---------          ---------         ---------
Other comprehensive income (loss) ..........................................         $(115,951)         $  42,902         $ (73,049)
                                                                                     =========          =========         =========
</TABLE>

Accumulated other comprehensive income consists solely of the unrealized gain on
securities available-for-sale, net of the deferred tax effects.



                                       10
<PAGE>


                             DEKALB BANKSHARES, INC.

Item 2. Management's Discussion and Analysis or Plan of Operation

The  following is a discussion  of our  financial  condition as of September 30,
2004 compared to December 31, 2003,  and the results of operations for the three
and nine months ended  September 30, 2004 and 2003.  This  discussion  should be
read in conjunction with our consolidated  financial statements and accompanying
notes appearing in this report and in conjunction with the financial  statements
and related notes and disclosures in our 2003 Annual Report on Form 10-KSB filed
with  the   Securities   and   Exchange   Commission.   This   report   contains
"forward-looking  statements"  relating to, without limitation,  future economic
performance, plans and objectives of management for future operations,  adequacy
of our allowance for loan losses and projections of revenues and other financial
items  that  are  based  on our  beliefs,  as  well as  assumptions  made by and
information   currently  available  to  us.  The  words  "expect,"   "estimate,"
"anticipate,"  "plan,"  "intend,"  "project,"  and "believe," as well as similar
expressions,  are intended to identify  forward-looking  statements.  Our actual
results may differ materially from the results discussed in the  forward-looking
statements, and the our operating performance each quarter is subject to various
risks and  uncertainties  that are  discussed  in detail in our filings with the
Securities and Exchange Commission.

Results of Operations

Net Interest Income

For the nine months ended  September 30, 2004,  net interest  income,  the major
component of the Company's net income was $987,452, compared to $801,161 for the
same  period in 2003,  an  increase  of  $186,291.  For the three  months  ended
September 30, 2004,  net interest  income was $346,712  compared to $281,517 for
the  comparable  period  of 2003.  The  improvements  in the 2004  periods  were
primarily  attributable  to  increased  loan volume as the Company  continued to
build its loan portfolio,  and to an increase in the investment  portfolio.  The
average rate realized on  interest-earning  assets  decreased from 6.04% for the
nine months ended  September 30, 2003 to 5.29% for the 2004 period.  The average
rate paid on interest-bearing  liabilities  decreased from 2.10% to 1.80% during
this same period. The net interest spread and net interest margin were 3.48% and
3.75%,  respectively  for the nine months ended September 30, 2004,  compared to
3.94% and 4.31% for the nine months ended  September 30, 2003.  The net interest
spread and net  interest  margin were 3.44% and 3.72% for the three months ended
September  30,  2004,  compared  to 3.85% and 4.19% for the three  months  ended
September 30, 2003.


Provision and Allowance for Loan Losses

The  provision  for loan  losses is the  charge to  operating  earnings  that in
management's  judgment is necessary to maintain the allowance for loan losses at
an adequate  level.  For the nine months ended  September 30, 2004 and 2003, the
provision  was $76,000 and  $80,000,  respectively.  For the three  months ended
September  30, 2004 and 2003,  the  provision  for loans  losses was $37,000 and
$29,000,  respectively.  There were no nonperforming loans at September 30, 2004
and $161,765 in nonperforming loans at September 30, 2003. $25,646 in loans have
been  criticized  or  classified  as of  September  30,  2004.  Based on present
information,  management  believes the  allowance for loan losses is adequate at
September  30,  2004 to meet  presently  known and  inherent  losses in the loan
portfolio.  The  allowance  for loan losses is 0.95% of total loans at September
30, 2004.  There are risks  inherent in making all loans,  including  risks with
respect to the period of time over which  loans may be repaid,  risks  resulting
from changes in economic and industry conditions, risks inherent in dealing with
individual borrowers, and, in the case of a collateralized loan, risks resulting
from  uncertainties  about  the  future  value of the  collateral.  The  Company
maintains an allowance for loan losses based on, among other things,  historical
experience,   including  management's  experience  at  other  institutions,   an
evaluation of economic conditions, and regular reviews of delinquencies and loan
portfolio quality.  Management's judgment about the adequacy of the allowance is
based upon a number of assumptions about future events,  which it believes to be
reasonable,  but which may not prove to be accurate.  Thus, there is a risk that
charge-offs in future periods could exceed the allowance for loan losses or that
substantial  additional  increases  in the  allowance  for loan losses  could be
required.  Additions to the allowance for loan losses would result in a decrease
of the Company's net income and, possibly, its capital.



                                       11
<PAGE>


                             DEKALB BANKSHARES, INC.

Item 2. Management's Discussion and Analysis or Plan of Operation - continued

Noninterest Income

Total  noninterest  income for the nine  months  ended  September  30,  2004 was
$194,198  compared to $272,676 for the comparable  period in 2003, a decrease of
$78,478.  The decrease is  attributable  to a reduction in residential  mortgage
origination fees when compared to the previous period,  and the absence of gains
on the  sale of  securities  available  for  sale.  For the  nine  months  ended
September  30, 2004,  fees on  residential  mortgage loan  originations  totaled
$64,104,  compared to $126,310 for the comparable  period in 2003. This decrease
is the result of a reduction  in refinance  activity.  For the nine months ended
September 30, 2004, there were no gains on the sale of securities  available for
sale  compared  to  gains of  $41,249  for the  comparable  2003  period.  Total
noninterest  income for the three months ended  September  30, 2004 was $63,351,
compared to $113,905 for the 2003  period.  The  decrease is  attributable  to a
$37,006  reduction  in  residential  mortgage  origination  fees  and a  $17,230
one-time gain on the sale of securities during the 2003 quarter.

Noninterest Expense

Total  noninterest  expense for the nine  months  ended  September  30, 2004 was
$999,461  compared to $946,500 for the nine months ended  September 30, 2003, an
increase of $52,961.  For the quarter  ended  September  30,  2004,  noninterest
expense was $338,135 an increase of $9,267, over the comparable period of 2003.

The primary  component of  noninterest  expense is salaries and benefits,  which
were $517,394 for the nine months ended  September 30, 2004 compared to $472,296
for the same period in 2003.  Salaries and benefits expense totaled $173,493 and
$157,503 for the three months ended  September 30, 2004 and 2003,  respectively.
Other  operating  expenses were $385,164 for the nine months ended September 30,
2004,  compared to $378,334 for the nine months ended  September 30, 2003.  This
increase is the result of various increases in expenses necessary to support the
growth of the Company.  Other  operating  expenses were $131,556 for the quarter
ended September 30, 2004, compared to $138,381 for the same period in 2003.

Net Income

The  Company's  net income for the nine months ended  September 30, 2004 totaled
$66,669 compared to $29,586 for the comparable 2003 period. The net earnings are
after the  recognition  of an income tax  expense of $39,520 and $17,751 for the
nine months ended  September 30, 2004 and 2003,  respectively.  The net earnings
for the quarter ended  September  30, 2004 were $21,828  compared to $23,471 for
the  quarter  ended  September  30,  2003.  The  net  earnings  were  after  the
recognition  of income tax  expense in the amount of $13,100 and $14,083 for the
three months ended September 30, 2004 and 2003, respectively.

Assets and Liabilities

During the nine month period ended  September 30, 2004,  total assets  increased
$8,316,747,  or 25.18%,  when compared to December 31, 2003. During this period,
gross loans increased  $3,362,815 and total  investments  increased  $3,270,343.
This  increase in assets was funded by a  $4,287,706  increase in deposits and a
$3,900,000 increase in advances and other borrowed money.

Investment Securities

Investment  securities totaled $10,428,975 as of September 30, 2004, compared to
$7,158,632  at  December  31,  2003.  All  investments  in  the  portfolio  were
designated as  available-for-sale  except for nonmarketable  equity  securities,
consisting  of stock in the  Federal  Home Loan Bank of Atlanta,  which  totaled
$275,000,  and  stock in  Community  Financial  Services,  Inc.,  which  totaled
$143,212 as of September 30, 2004.



                                       12
<PAGE>


                             DEKALB BANKSHARES, INC.

Item 2. Management's Discussion and Analysis or Plan of Operation - continued

Loans

Gross loans  increased  $3,362,815  during the nine months ended  September  30,
2004.  The  largest  increase  in loans  was in real  estate  1-4  family  which
increased  $1,239,515 to $10,089,322 as of September 30, 2004.  Balances  within
the major loans receivable  categories as of September 30, 2004 and December 31,
2003 are as follows:

<TABLE>
<CAPTION>
                                                                                          September 30,                 December 31,
                                                                                               2004                        2003
                                                                                               ----                        ----
Mortgage loans on real estate:
<S>                                                                                        <C>                           <C>
   Real estate 1- 4 family .............................................                   $10,089,322                   $ 8,849,807
   Commercial ..........................................................                     7,178,825                     7,038,179
   Construction ........................................................                     2,157,469                     1,162,574
   Second mortgages ....................................................                       101,167                       105,743
   Equity lines of credit ..............................................                     1,635,968                     1,359,870
                                                                                           -----------                   -----------
       Total mortgage loans ............................................                    21,162,751                    18,516,173
Commercial and industrial ..............................................                     2,782,703                     1,831,844
Consumer and other .....................................................                     1,041,510                     1,276,132
                                                                                           -----------                   -----------
       Total gross loans ...............................................                   $24,986,944                   $21,624,149
                                                                                           ===========                   ===========
</TABLE>

Risk Elements in the Loan Portfolio

The following is a summary of the risk elements in the loan portfolio:
<TABLE>
<CAPTION>
                                                                                               September 30,            December 31,
                                                                                                   2004                      2003
                                                                                                   ----                      ----
<S>                                                                                               <C>                       <C>
Loans: Non-accrual ...............................................................                $       -                 $126,765
Accruing loans more than 90 days past due ........................................                $       -                 $      -
Loans identified by internal review mechanism:
   Criticized ....................................................................                $  25,646                 $      -
   Classified ....................................................................                $       -                 $  9,850
</TABLE>

Criticized  loans have  potential  weaknesses  that deserve close  attention and
could, if uncorrected, result in deterioration of the prospects for repayment or
the  Company's   credit  position  at  a  future  date.   Classified  loans  are
inadequately protected by the sound worth and paying capacity of the borrower or
any  collateral  and there is a distinct  possibility  or  probability  that the
Company will sustain a loss if the deficiencies are not corrected.

Activity in the Allowance for Loan Losses is as follows:

<TABLE>
<CAPTION>
                                                                                           September 30,               September 30,
                                                                                               2004                         2003
                                                                                               ----                         ----
<S>                                                                                        <C>                         <C>
Balance, January 1, .........................................................              $    305,000                $    245,000
Provision for loan losses for the period ....................................                    76,000                      80,000
Net loans (charged-off) recovered for the period ............................                  (144,698)                          -
                                                                                           ------------                ------------

Balance, end of period ......................................................              $    236,302                $    325,000
                                                                                           ============                ============

Gross loans outstanding, end of period ......................................              $ 24,986,964                $ 21,221,045
                                                                                           ============                ============

Allowance for loan losses to loans outstanding ..............................                      0.95%                       1.53%
</TABLE>



                                       13
<PAGE>


                             DEKALB BANKSHARES, INC.

Item 2. Management's Discussion and Analysis or Plan of Operation - continued

Deposits

Total  deposits  increased  $4,287,706  or 17.98%,  from  December  31,  2003 to
$28,134,248  at September  30, 2004.  The largest  increase was in time deposits
$100,000 and over which  increased  $1,913,459,  or 18.97%,  to  $11,998,940  at
September 30, 2004.  These  deposits are generally  more sensitive to changes in
interest rates and are,  therefore,  considered  less stable than core deposits.
Noninterest-bearing  deposits increased 25.06% to $2,894,396 as of September 30,
2004.

Balances  within the major  deposit  categories  as of  September  30,  2004 and
December 31, 2003 are as follows:

                                                   September 30,   December 31,
                                                      2004              2003
                                                      ----              ----
Noninterest-bearing transaction accounts .......  $ 2,894,396       $ 2,314,452
Interest-bearing transaction accounts ..........    4,046,976         2,901,206
Savings ........................................    4,130,429         3,702,360
Time deposits $100,000 and over ................   11,998,940        10,085,481
Other time deposits ............................    5,063,507         4,843,043
                                                  -----------       -----------
       Total deposits ..........................  $28,134,248       $23,846,542
                                                  ===========       ===========

Advances from the Federal Home Loan Bank

Advances from the Federal Home Loan Bank totaled  $4,900,000 as of September 30,
2004,  as compared to  $4,000,000  as of December 31, 2003.  One of the advances
totaling  $500,000 is a ten year  convertible  advance with a one year call.  It
currently  has a fixed  interest rate of 3.23% and matures on September 6, 2011.
Another advance of $1,000,000 was entered into on July 23, 2002 with an interest
rate of  3.87%  and a  maturity  date of  July  23,  2012.  This  advance  has a
"knockout"  provision  beginning on July 23, 2003,  that allows the Federal Home
Loan Bank of Atlanta to convert the advance to an adjustable rate advance if the
3 Month LIBOR rate  exceeds  7.00%.  Another  advance  totaling  $400,000 has an
adjustable  interest  rate of 1.86% as of September  30, 2004.  Another  advance
totaling  $1,000,000  has a fixed  interest rate of 2.47% and matures August 26,
2005. We also  borrowed  $2,000,000  under the daily rate credit  program with a
rate of 2.15% as of September 30, 2004 that is subject to change daily.

Securities Sold Under Agreements to Repurchase

We obtained  securities  sold under  agreements to  repurchase  during the first
quarter of 2004 totaling $3,000,000. The agreement has an interest rate of 2.95%
and matures January 20, 2007.

Liquidity

Liquidity needs are met by the Company through cash and short-term  investments,
and scheduled maturities of loans on the asset side and through pricing policies
on the liability side for interest-bearing deposit accounts. As of September 30,
2004, the Company's  primary  sources of liquidity  included  federal funds sold
totaling  $2,638,000  and  un-pledged  securities   available-for-sale  totaling
$350,000 The Company also has lines of credit available with correspondent banks
to purchase  federal  funds  totaling  $1,400,000  at  September  30,  2004.  In
addition,  the Company also has borrowing capacity available through the Federal
Home Loan Bank. As of September,  30, 2004 the Company's ability to borrow funds
from the  Federal  Home Loan Bank  totaled  $8,270,000  of which the Company had
borrowed $4,900,000 as of September 30, 2004.




                                       14
<PAGE>

                             DEKALB BANKSHARES, INC.

Item 2. Management's Discussion and Analysis or Plan of Operation - continued

Critical Accounting Policies

We have adopted  various  accounting  policies  which govern the  application of
accounting principles generally accepted in the United States in the preparation
of our financial statements.  Our significant  accounting policies are described
in the notes to the financial statements of DeKalb Bankshares,  Inc. at December
31, 2003 as filed in our 2003 Annual Report on Form 10-KSB.  Certain  accounting
policies  involve  significant  judgments  and  assumptions  by us which  have a
material  impact on the carrying  value of certain  assets and  liabilities.  We
consider  these  accounting  policies to be critical  accounting  policies.  The
judgments and  assumptions  we use are based on historical  experience and other
factors,  which we believe to be reasonable under the circumstances.  Because of
the nature of the judgments and assumptions we make, actual results could differ
from these  judgments  and estimates  which could have a material  impact on our
carrying values of assets and liabilities and our results of operations.

We believe the  allowance for loan losses is a critical  accounting  policy that
requires the most significant judgments and estimates used in preparation of our
consolidated financial statements.  Refer to the portions of this report and our
2003 Annual Report on Form 10-KSB that address our allowance for loan losses for
a description of our processes and methodology for determining our allowance for
loan losses.

Capital Resources

Total  shareholders'   equity  increased  $75,404  from  December  31,  2003  to
$5,187,250  at  September  30,  2004.  This is the  result of net income for the
period of $66,669,  which was offset by a negative  adjustment of $2,054 for the
unrealized  loss on securities  available for sale,  and $10,790 in common stock
sale proceeds from the exercise of stock options.

The Company and the Bank are subject to various regulatory capital  requirements
administered by the federal banking agencies.  Quantitative measures established
by regulation to ensure capital  adequacy  require the Bank to maintain  minimum
ratios  of  Tier  1  and  total   capital   as  a   percentage   of  assets  and
off-balance-sheet exposures,  adjusted for risk weights ranging from 0% to 100%.
Tier 1 capital of the Bank includes common stockholders'  equity,  excluding the
unrealized  gain  or  loss  on  securities  available-for-sale,   minus  certain
intangible assets. Tier 2 capital includes the allowance for loan losses subject
to certain  limitations.  Total  capital for purposes of  computing  the capital
ratios consists of the sum of Tier 1 and Tier 2 capital.  The regulatory minimum
requirements are 4% for Tier 1 and 8% for total risk-based capital.

We are also  required to maintain  capital at a minimum  level based on adjusted
quarterly  average  assets,  which is known as the leverage  ratio.  The Federal
Reserve  applies its guidelines on a bank only basis for bank holding  companies
with less than $150 million in consolidated assets. Only the strongest banks are
allowed to  maintain  capital at the minimum  requirement  of 3%. All others are
subject to maintaining ratios 1% to 2% above the minimum.

The following table  summarizes the Bank's  risk-based  capital at September 30,
2004:

Shareholders' equity ..........................................   $  5,169,570
Less: unrealized losses on available-for-sale securities ......        (24,686)
                                                                  ------------
Tier 1 capital ................................................      5,194,256
Plus: allowance for loan loss includable in Tier 2 capital(1) .        236,302
                                                                  ------------
Total risk-based capital ......................................   $  5,430,558
                                                                  ============

Risk-weighted assets ..........................................   $ 25,986,000
                                                                  ============

Risk-based capital ratios
   Tier 1 capital (to risk-weighted assets) ...................          19.98%
   Total risk-based capital (to risk-weighted assets) .........          20.89%
   Tier 1 capital (to total average assets) ...................          13.13%

(1) Limited to 1.25% of risk-weighted assets




                                       15
<PAGE>


                             DEKALB BANKSHARES, INC.

Item 2. Management's Discussion and Analysis or Plan of Operation - continued

Off-Balance Sheet Risk

Through the  operations of our Bank,  we have made  contractual  commitments  to
extend  credit  in  the  ordinary  course  of  our  business  activities.  These
commitments  are legally  binding  agreements  to lend money to our customers at
predetermined  interest  rates for  specified  periods of time. At September 30,
2004,  we had issued  commitments  to extend  credit of  $3,369,371  and standby
letters  of credit of  $149,873  through  various  types of  commercial  lending
arrangements.  We evaluate each customer's  credit  worthiness on a case-by-case
basis.  The  amount  of  collateral  obtained,  if deemed  necessary  by us upon
extension  of  credit,  is  based  on our  credit  evaluation  of the  borrower.
Collateral  varies but may include  accounts  receivable,  inventory,  property,
plant and equipment, commercial and residential real estate. Based on historical
experience,  many of the commitments and letters of credit will expire unfunded.
Accordingly, the amounts shown in the table below do not necessarily reflect the
Company's needs for funds in the periods shown. Based on historical  experience,
many of the commitments and letters of credit will expire unfunded. Accordingly,
the amounts  shown in the table below do not  necessarily  reflect the Company's
needs for funds in the periods shown.

<TABLE>
<CAPTION>
                                                                After One     After Three
                                                 Within          Through         Through                       Greater
                                                   One            Three          Twelve         Within           Than
(Dollars in thousands)                            Month           Months          Months        One Year       One Year       Total
                                                  -----           ------          ------        --------       --------       -----
<S>                                            <C>                <C>            <C>            <C>            <C>            <C>
 Unused commitments
   to extend credit ..................         $        -         $  275         $  391         $  666         $3,369         $4,035
Standby letters of
   credit ............................                  -              -            118            118             32            150
                                               ----------         ------         ------         ------         ------         ------
     Total ...........................         $        -         $  275         $  509         $  784         $3,401         $4,185
                                               ==========         ======         ======         ======         ======         ======
</TABLE>





                                       16
<PAGE>


                             DEKALB BANKSHARES, INC.

Item 3. Controls and Procedures

Based  on  the  evaluation  required  by  17  C.F.R.  Section  240.13a-15(b)  or
240.15d-15(b) of the Company's disclosure controls and procedures (as defined in
17  C.F.R.  Sections  240.13a-15(e)  and  240.15d-15(e)),  the  Company's  chief
executive  officer and chief financial  officer concluded that such controls and
procedures,  as of the end of the period covered by this quarterly report,  were
effective.

There  has been no change  in the  Company's  internal  control  over  financial
reporting during the most recent fiscal quarter that has materially affected, or
is reasonably likely to materially  affect,  the Company's internal control over
financial reporting.




                                       17
<PAGE>


                             DEKALB BANKSHARES, INC.

Part II - Other Information

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

During the period ended  September 30, 2004 the Company  issued shares of common
stock to the following  classes of persons upon the exercises of options  issued
pursuant to the Company's  2001 Stock Option Plan.  The  securities  were issued
pursuant to the  exemption  from  registration  provided by Section  4(2) of the
Securities Act of 1933 because the issuance did not involve a public offering.

                                             Number of Shares       Aggregate
     Date Issued     Class of Purchasers          Issued        Exercise Price
     -----------     -------------------          ------        --------------

       09/21/04         Former Employee           1,079          $    10,790

Item 6. Exhibits

     Exhibit 31 - Certification  of Chief Executive  Officer and Chief Financial
     Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

     Exhibit 32 - Certification  of Chief Executive  Officer and Chief Financial
     Officer  pursuant to Section 906 of the  Sarbanes-Oxley  Act of 2002.  This
     exhibit  is not  "filed"  for  purposes  of  Section  18 of the  Securities
     Exchange  Act of 1934 but is instead  furnished  as provided by  applicable
     rules of the Securities and Exchange Commission.








                                       18
<PAGE>


                             DEKALB BANKSHARES, INC.

                                    SIGNATURE

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



                                      s/William C. Bochette, III
                                   By:-----------------------------------------
                                      William C. Bochette, III
                                      Chief Executive Officer, President, and
                                      Chief Financial Officer

Date:  November 11, 2004




                                       19
<PAGE>


                             DEKALB BANKSHARES, INC.

Exhibit Index

31   Certification  of Chief  Executive  Officer  and  Chief  Financial  Officer
     pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32   Certification  of Chief  Executive  Officer  and  Chief  Financial  Officer
     pursuant to Section 906 of the  Sarbanes-Oxley Act of 2002. This exhibit is
     not "filed" for  purposes of Section 18 of the  Securities  Exchange Act of
     1934 but is  instead  furnished  as  provided  by  applicable  rules of the
     Securities and Exchange Commission.




                                       20