U.S. 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 March 31, 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.

       609,060 shares of common stock, no par value, as of April 30, 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 - March 31, 2004 and December 31, 2003.....................................3

         Condensed Consolidated Statements of Income - Three months ended March 31, 2004 and, 2003........................4

         Condensed Consolidated Statements of Shareholders' Equity and Comprehensive Income -
           Three months ended March 31, 2004 and 2003.....................................................................5

         Condensed Consolidated Statements of Cash Flows - Three months ended March 31, 2004 and 2003.....................6

Notes to Condensed Consolidated Financial Statements....................................................................7-9

Item 2.  Management's Discussion and Analysis or Plan of Operation....................................................10-14

Item 3.  Controls and Procedures.........................................................................................14

PART II - OTHER INFORMATION

Item 4.  Submission of Matters to a Vote of Security Holders.............................................................15

Item 6.  Exhibits and Reports on Form 8-K................................................................................15

         (a) Exhibits....................................................................................................15

         (b) Reports on Form 8-K.........................................................................................15
</TABLE>



<PAGE>
                             DEKALB BANKSHARES, INC.

                      Condensed Consolidated Balance Sheets

PART I - FINANCIAL INFORMATION

Item 1 - Financial Statements
<TABLE>
<CAPTION>
                                                                                               March 31,               December 31,
                                                                                                 2004                     2003
                                                                                                 ----                     ----
                                                                                              (Unaudited)
Assets
<S>                                                                                          <C>                       <C>
   Cash and cash equivalents:
     Cash and due from banks ...................................................             $    974,203              $    867,695
     Federal funds sold ........................................................                2,012,000                 1,402,000
                                                                                             ------------              ------------
       Total cash and cash equivalents .........................................                2,986,203                 2,269,695
                                                                                             ------------              ------------
   Time deposits with other banks ..............................................                  311,572                   310,078
   Securities available-for-sale ...............................................                9,255,480                 6,938,632
   Nonmarketable equity securities .............................................                  343,213                   220,000
                                                                                             ------------              ------------
       Total investment securities .............................................                9,598,693                 7,158,632
                                                                                             ------------              ------------
   Loans receivable ............................................................               22,108,199                21,624,149
   Less allowance for loan losses ..............................................                 (303,708)                 (305,000)
                                                                                             ------------              ------------
       Loans, net ..............................................................               21,804,491                21,319,149
   Premises and equipment, net .................................................                1,385,530                 1,410,202
   Accrued interest receivable .................................................                  121,227                   111,817
   Other assets ................................................................                  445,084                   455,844
                                                                                             ------------              ------------
       Total assets ............................................................             $ 36,652,800              $ 33,035,417
                                                                                             ============              ============
Liabilities
   Deposits
     Noninterest-bearing transaction accounts ..................................             $  2,176,673              $  2,314,452
     Interest-bearing transaction accounts .....................................                3,133,228                 2,901,206
     Savings ...................................................................                3,796,010                 3,702,360
     Time deposits $100,000 and over ...........................................               10,327,492                10,085,481
     Other time deposits .......................................................                4,933,663                 4,843,043
                                                                                             ------------              ------------
                                                                                               24,367,066                23,846,542
   Advances from Federal Home Loan Bank ........................................                4,000,000                 4,000,000
   Securities sold under agreements to repurchase ..............................                3,000,000                         -
   Accrued interest payable ....................................................                   40,344                    37,793
   Other liabilities ...........................................................                   63,589                    39,236
                                                                                             ------------              ------------
       Total liabilities .......................................................               31,470,999                27,923,571
                                                                                             ------------              ------------
Shareholders' equity
   Common stock, no par value; 20,000,000 shares
     authorized, 609,060 shares issued and outstanding .........................                5,866,807                 5,866,807
   Retained earnings (deficit) .................................................                 (713,822)                 (732,329)
   Accumulated other comprehensive income (loss) ...............................                   28,816                   (22,632)
                                                                                             ------------              ------------
       Total shareholders' equity ..............................................                5,181,801                 5,111,846
                                                                                             ------------              ------------
       Total liabilities and shareholders' equity ..............................             $ 36,652,800              $ 33,035,417
                                                                                             ============              ============
</TABLE>

See notes to consolidated financial statements.



                                       3
<PAGE>

                             DEKALB BANKSHARES, INC.

                   Condensed Consolidated Statements of Income
                                   (Unaudited)


<TABLE>
<CAPTION>
                                                                                                       For the three months ended
                                                                                                                March 31,
                                                                                                                ---------
                                                                                                     2004                     2003
                                                                                                     ----                     ----
Interest income
<S>                                                                                               <C>                     <C>
   Loans, including fees ..........................................................               $ 342,804               $ 311,204
   Investment securities, taxable .................................................                  84,911                  41,184
   FHLB interest and dividends ....................................................                   2,154                     783
   Federal funds sold .............................................................                   4,304                   3,427
   Time deposits with other banks .................................................                   1,999                   1,375
                                                                                                  ---------               ---------
       Total ......................................................................                 436,172                 357,973
                                                                                                  ---------               ---------
Interest expense
   Time deposits $100,000 and over ................................................                  44,143                  35,541
   Other deposits .................................................................                  41,011                  50,275
   Other interest expense .........................................................                  39,025                  23,133
                                                                                                  ---------               ---------
       Total ......................................................................                 124,179                 108,949
                                                                                                  ---------               ---------
Net interest income ...............................................................                 311,993                 249,024
Provision for loan losses .........................................................                  17,500                  27,500
                                                                                                  ---------               ---------
Net interest income after provision for loan losses ...............................                 294,493                 221,524
                                                                                                  ---------               ---------
Other operating income
   Service charges on deposit accounts ............................................                  31,915                  26,075
   Gain on sales of securities available for sale .................................                       -                  24,019
   Residential mortgage origination fees ..........................................                  18,332                  24,741
   Other service charges, commissions and fees ....................................                   7,059                   5,111
                                                                                                  ---------               ---------
       Total ......................................................................                  57,306                  79,946
                                                                                                  ---------               ---------
Other operating expenses
   Salaries and employee benefits .................................................                 161,830                 170,091
   Occupancy expense ..............................................................                  20,759                  18,831
   Furniture and equipment expense ................................................                  11,481                  12,194
   Other operating expenses .......................................................                 127,961                 113,299
                                                                                                  ---------               ---------
       Total ......................................................................                 322,031                 314,415
                                                                                                  ---------               ---------
Income (loss) before income taxes .................................................                  29,768                 (12,945)
Income tax expense (benefit) ......................................................                  11,261                  (4,745)
                                                                                                  ---------               ---------
Net income (loss) .................................................................               $  18,507               $  (8,200)
                                                                                                  =========               =========
Earnings (loss) per share
Basic earnings per share ..........................................................               $     .03               $    (.01)
</TABLE>

See notes to consolidated financial statements.




                                       4
<PAGE>

                             DEKALB BANKSHARES, INC.

          Condensed Consolidated Statement of Shareholders' Equity and
    Comprehensive Income for the three months ended March 31, 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 (loss)
  for the period ..................................                                       (8,200)                            (8,200)

Other
  comprehensive
  income (loss),
  net of tax of $11,079 ...........................                                                        (18,864)         (18,864)
                                                                                                                      --------------

Comprehensive
  income (loss) ...................................                                                                         (27,064)
                                                      -------    --------------    -------------    --------------    -------------

Balance,
  March 31, 2003 ..................................   609,060    $    5,866,807    $    (790,612)   $       32,202    $   5,108,397
                                                      =======    ==============    =============    ==============    =============

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

Net income ........................................                                       18,507                             18,507
  for the period

Other
  comprehensive
  income (loss),
  net of tax of $30,215 ...........................                                                         51,448           51,448
                                                                                                                      -------------

Comprehensive
  income (loss) ...................................                                                                          69,955
                                                      -------    --------------    -------------    --------------    -------------

Balance,
  March 31, 2004 ..................................   609,060    $    5,866,807    $    (713,822)   $       28,816    $   5,181,801
                                                      =======    ==============    =============    ==============    =============
</TABLE>

See notes to consolidated financial statements.





                                       5
<PAGE>

                             DEKALB BANKSHARES, INC.

                 Condensed Consolidated Statements of Cash Flows
                                   (Unaudited)


<TABLE>
<CAPTION>
                                                                                                      For the three months ended
                                                                                                               March 31,
                                                                                                               ---------
                                                                                                     2004                  2003
                                                                                                     ----                  ----
Cash flows from operating activities
<S>                                                                                              <C>                    <C>
   Net income (loss) .................................................................           $    18,507            $    (8,200)
   Adjustments to reconcile net income to net cash
     provided by operating activities
       Provision for loan losses .....................................................                17,500                 27,500
       Depreciation and amortization expense .........................................                30,254                 31,666
       Gain on sale of securities ....................................................                     -                (24,019)
       Accretion and premium amortization ............................................                 4,277                  3,962
       Deferred income tax provision (benefit) .......................................                10,748                 (5,151)
       (Increase) decrease in interest receivable ....................................                (9,410)                 2,787
       Increase (decrease) in interest payable .......................................                 2,551                    381
       (Increase) decrease in other assets ...........................................                    12                (18,427)
       Increase in other liabilities .................................................                24,351                  8,433
                                                                                                 -----------            -----------
         Net cash provided by operating activities ...................................                98,790                 18,932
                                                                                                 -----------            -----------
Cash flows from investing activities
   Net increase in loans made to customers ...........................................              (502,842)            (2,136,021)
   Purchases of securities available-for-sale ........................................            (3,564,984)                     -
   Sales/calls or maturities of securities available-for-sale ........................               969,784                956,527
   Payments received on mortgage backed securities ...................................               325,522                252,913
   Sale (purchase) of Federal Home Loan Bank stock ...................................                20,000                (25,000)
   Purchase of Community Financial Services, Inc. stock ..............................              (143,212)                     -
   Purchases of premises and equipment ...............................................                (5,582)                     -
   Purchases of time deposits with other banks .......................................                (1,494)                     -
                                                                                                 -----------            -----------
         Net cash used by investing activities .......................................            (2,902,808)              (951,581)
                                                                                                 -----------            -----------
Cash flows from financing activities
   Net increase in demand deposits, interest-bearing transaction
     accounts and savings accounts ...................................................               187,894                161,652
   Net increase in certificates of deposit and other time deposits ...................               332,632                696,611
   Increase in advances from the Federal Home Loan Bank ..............................                     -                500,000
   Increase in securities sold under agreements to repurchase ........................             3,000,000                      -
   Issuance of common stock, net of direct costs .....................................                     -                500,000
                                                                                                 -----------            -----------
         Net cash provided by financing activities ...................................             3,520,526              1,358,263
                                                                                                 -----------            -----------
Net increase in cash and cash equivalents ............................................               716,508                425,614
Cash and cash equivalents, beginning .................................................             2,269,695              2,758,871
                                                                                                 -----------            -----------
Cash and cash equivalents, end .......................................................           $ 2,986,203            $ 3,184,485
                                                                                                 ===========            ===========
Cash paid during the period for:
   Interest ..........................................................................           $   121,628            $   109,330
</TABLE>


See notes to 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 our 2003 Annual Report on Form 10-KSB. The financial  statements as
of March 31, 2004 are  unaudited  and, in our opinion,  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. For further information,
refer  to the  financial  statements  and  the  notes  included  in  the  DeKalb
Bankshares,  Inc.  Annual  Report on Form 10-KSB filed with the  Securities  and
Exchange Commission.


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 March 31, 2004.

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.


Note 3 - Earnings Per Share

A reconciliation  of the numerators and denominators used to calculate basic and
diluted  earnings per share for the three month periods ended March 31, 2004 and
2003 are as follows:

<TABLE>
<CAPTION>
                                                                                Three Months Ended March 31, 2004
                                                                     ----------------------------------------------------
                                                                         Income             Shares           Per Share
                                                                       (Numerator)      (Denominator)           Amount
                                                                     -------------      -------------       -------------
<S>                                                                  <C>                    <C>              <C>
     Basic earnings per share
       Income available to common shareholders ..................    $      18,507          609,060          $         .03
                                                                                                             =============
     Effect of dilutive securities
       Stock options ............................................                                -
                                                                     -------------          -------
     Diluted earnings per share
       Income available to common shareholders
         plus assumed conversions ...............................    $      18,507          609,060          $         .03
                                                                     =============          =======          =============


<CAPTION>
                                                                                Three Months Ended March 31, 2003
                                                                     ----------------------------------------------------
                                                                         Income             Shares            Per Share
                                                                       (Numerator)      (Denominator)           Amount
                                                                     -------------      -------------       -------------
     Basic earnings per share
<S>                                                                  <C>                   <C>               <C>
       Income available to common shareholders ..................    $      (8,200)        609,060          $      (0.01)
                                                                                                            ============
     Effect of dilutive securities
       Stock options ............................................               -               -
                                                                     -------------         -------
     Diluted earnings per share
       Income available to common shareholders
         plus assumed conversions ...............................    $      (8,200)        609,060          $      (0.01)
                                                                     =============         =======          ============
</TABLE>


                                       7
<PAGE>

                             DEKALB BANKSHARES, INC.

Note 4 - 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 three  month  periods  ended March 31, 2004 and
2003:

<TABLE>
<CAPTION>
                                                                       Pre-tax           (Expense)          Net-of-tax
                                                                        Amount            Benefit              Amount
                                                                     -------------      -------------       -------------
     For the Three Months Ended March 31, 2004
<S>                                                                  <C>                <C>                 <C>
       Unrealized gains (losses) on securities
         available-for-sale .....................................    $      81,663      $     (30,215)      $      51,448
       Plus - reclassification adjustment for gains
         (losses) realized in net income                                        -                  -                   -
                                                                     -------------      -------------       -------------
       Net unrealized gains (losses) on securities ..............           81,663            (30,215)             51,448
                                                                     -------------      --------------      -------------
       Other comprehensive income ...............................    $      81,663      $     (30,215)      $      51,448
                                                                     =============      ==============      =============

<CAPTION>
                                                                       Pre-tax           (Expense)          Net-of-tax
                                                                        Amount            Benefit              Amount
                                                                     -------------      -------------       -------------
     For the Three Months Ended March 31, 2003
<S>                                                                  <C>                <C>                 <C>
       Unrealized gains (losses) on securities
         available-for-sale .....................................    $     (53,962)     $      19,966       $     (33,996)
       Plus - reclassification adjustment for gains
         (losses) realized in net income ........................           24,019             (8,887)             15,132
                                                                     -------------      -------------       -------------
       Net unrealized gains (losses) on securities ..............          (29,943)            11,079             (18,864)
                                                                     -------------      -------------       -------------
       Other comprehensive income ...............................    $     (29,943)     $      11,079       $     (18,864)
                                                                     =============      =============       =============
</TABLE>





                                       8
<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 March 31, 2004
compared to December  31,  2003,  and the  results of  operations  for the three
months  ended  March  31,  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,  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," 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 three  months  ended March 31,  2004,  net  interest  income,  the major
component of our net income, was $311,993,  as compared to $249,024 for the same
period in 2003, an increase of $62,969. The improvements in the 2004 period were
primarily  attributable  to  increased  volume as we continued to build our loan
portfolio. The average rate paid on interest-bearing  liabilities decreased from
2.34% for the three  months  ended March 31, 2003 to 1.64% for the three  months
ended March 31, 2004, while the average rate realized on interest-earning assets
decreased from 6.20% to 5.17%, for the same period.

The  net  interest  spread  and  net  interest  margin  were  3.53%  and  3.38%,
respectively, for the three month period ended March 31, 2004, compared to 3.86%
and 4.31% for the three month period ended March 31, 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 three months ended March 31, 2004 and the same period
in 2003,  the  provision  was  $17,500  and  $27,500,  respectively.  There were
$251,089 in nonperforming  loans at March 31, 2004 and no nonperforming loans at
March 31, 2003. $251,089 in loans have been criticized or classified as of March
31, 2004. Based on present information, we believe the allowance for loan losses
is adequate at March 31, 2004 to meet presently known and inherent losses in the
loan portfolio.  The allowance for loan losses was 1.37% of total loans at March
31, 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.  We maintain 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. Our judgment about the adequacy of the allowance is based upon a number
of assumptions about future events, which we believe 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 our net
income and, possibly, our capital.



                                       9
<PAGE>

                             DEKALB BANKSHARES, INC.

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

Noninterest Income

Total  noninterest  income for the quarter  ended March 31, 2004 was $57,306,  a
decrease  of $22,640,  compared  to $79,946  for the same  period in 2003.  This
decrease is  primarily  the result of there being no gain on sale of  investment
securities during the quarter ended March 31, 2004 compared to a $24,019 gain on
sale of investment  securities during the quarter ended March 31, 2003.  Service
charges on deposit accounts  increased $5,840 from $26,075 for the quarter ended
March 31, 2003 to $31,915 for the quarter ended March 31, 2004. This increase is
the result of an increase in the number of deposit accounts during the period.

Noninterest Expense

Total  noninterest  expense  for the  three  months  ended  March  31,  2004 was
$322,031,  an increase of $7,616,  when compared to the same period in 2003. The
primary  component of noninterest  expense is salaries and benefits,  which were
$161,830  and  $170,091  for the three  months  ended  March 31,  2004 and 2003,
respectively.  Other  operating  expenses  increased from $113,299 for the three
months  ended March 31, 2003 to $127,961  for the three  months  ended March 31,
2004,  due to an increase  in other  expenses  necessary  to support the overall
growth of the Company.

Net Income

The  Company's  net income for the three months ended March 31, 2004 was $18,507
after the  recognition  of an income tax expense of $11,261 for the period.  The
net loss for the same  period in 2003 was  $8,200  after the  recognition  of an
income tax benefit of $4,745.

Assets and Liabilities

During the first three months of 2004,  total assets  increased  $3,617,383,  or
10.95%,  when  compared to December 31, 2003.  The primary  growth in assets was
composed of an increase  in  securities  available  for sale of  $2,316,848,  or
33.39%.  Loans  receivable  increased by $484,050  when compared to December 31,
2003. Deposits increased $520,524 during the first three months of 2004. We also
entered  into a  leveraged  transaction  with The Bankers  Bank to borrow  funds
through securities sold under agreements to repurchase totaling  $3,000,000.  We
then invested these funds in a mortgage-backed security.

Investment Securities

Investment  securities  totaled  $9,598,693  at  March  31,  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
$200,000  of March  31,  2004,  and stock in The  Bankers  Bank,  which  totaled
$143,213 as of March 31, 2004. As discussed  earlier,  we purchased a $3,000,000
security as part of a leveraged transaction.



                                       10
<PAGE>


                             DEKALB BANKSHARES, INC.


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

Loans

Gross loans increased $484,050 during the three months ended March 31, 2004. The
largest  increase in loans was in residential 1-4 family loans secured by a real
estate  mortgage,  which increased  $406,477 to $9,256,284 as of March 31, 2004.
Balances within the major loans  receivable  categories as of March 31, 2004 and
December 31, 2003 were as follows:

<TABLE>
<CAPTION>
                                                                                            March 31,                   December 31,
                                                                                              2004                          2003
                                                                                              ----                          ----
 Mortgage loans on real estate
<S>           <C>                                                                          <C>                           <C>
  Residential 1-4 family ...............................................                   $ 9,256,284                   $ 8,849,807
  Commercial ...........................................................                     7,119,895                     7,038,179
  Construction .........................................................                     1,346,607                     1,162,574
  Second mortgages .....................................................                       104,238                       105,743
  Equity lines of credit ...............................................                     1,491,854                     1,359,870
                                                                                           -----------                   -----------
    Total mortgage loans ...............................................                    19,318,878                    18,516,173
Commercial and industrial ..............................................                     1,758,286                     1,831,844
Consumer and other .....................................................                     1,031,035                     1,276,132
                                                                                           -----------                   -----------
    Total gross loans ..................................................                   $22,108,199                   $21,624,149
                                                                                           ===========                   ===========
</TABLE>

Risk Elements in the Loan Portfolio

Transactions  in the allowance for loan losses for the quarters  ended March 31,
2004 and 2003 are summarized below:

<TABLE>
<CAPTION>
                                                                                              March 31,                  March 31,
                                                                                                2004                       2003
                                                                                                ----                       ----
<S>                                                                                        <C>                         <C>
Balance, January 1 ..........................................................              $    305,000                $    245,000
Provision for loan losses for the period ....................................                    17,500                      27,500
Net loans (charged-off) recovered for the period ............................                   (18,792)                          -
                                                                                           ------------                ------------
Balance, end of period ......................................................              $    303,708                $    272,500
                                                                                           ============                ============
Gross loans outstanding, end of period ......................................              $ 22,108,199                $ 18,755,816
                                                                                           ============                ============
Allowance for loan losses to loans outstanding ..............................                      1.37%                       1.45%
</TABLE>

There were $251,089 loans in nonaccrual  status at March 31, 2004. There were no
loans  past  due  ninety  days  or  more  and  still  accruing  interest  and no
restructured  loans at March 31, 2004. There were no nonaccrual  loans, no loans
past due ninety days or more and still accruing interest,  or restructured loans
at March 31, 2003.





                                       11
<PAGE>

                             DEKALB BANKSHARES, INC.

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

Deposits

Total deposits increased $520,524 or 2.18% from December 31, 2003 to $24,367,066
at March 31, 2004. The largest increase was in time deposits  $100,000 and over,
which  increased  $242,011,  or 2.4%, to  $10,327,492  at March 31, 2004.  These
deposits are  generally  more  sensitive  to changes in interest  rates and are,
therefore,  considered less stable than core deposits. Expressed in percentages,
noninterest-bearing  deposits  decreased  5.95% and all  other  interest-bearing
deposits increased 1.75%.

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

<TABLE>
<CAPTION>
                                                                                           March 31,         December 31,
                                                                                             2004                2003
                                                                                        -------------       -------------
<S>                                                                                     <C>                 <C>
     Noninterest-bearing transaction accounts .....................................     $   2,176,673       $   2,314,452
     Interest-bearing transaction accounts ........................................         3,133,228           2,901,206
     Savings ......................................................................         3,796,010           3,702,360
     Time deposits $100,000 and over ..............................................        10,327,492          10,085,481
     Other time deposits ..........................................................         4,933,663           4,843,043
                                                                                        -------------       -------------
         Total deposits ...........................................................     $  24,367,066       $  23,846,542
                                                                                        =============       =============
</TABLE>

Advances from the Federal Home Loan Bank

Advances  from the Federal Home Loan Bank totaled  $4,000,000  at March 31, 2004
and  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. A second  advance of  $1,000,000  was
entered  into on July 23,  2002 with a rate of  interest 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  interest  rate of 1.27% and can be
converted  by the  Federal  Home Loan  Bank of  Atlanta  on March  10,  2004 and
thereafter  until  maturity  on  March  10,  2006.  The  Company  also  borrowed
$2,100,000  under the daily rate credit program with a rate of 1.25% as of March
31, 2004 that is subject to change daily.

Securities Sold Under Agreements to Repurchase

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

Liquidity

The Company meets its liquidity  needs 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 March 31,
2004, the Company's  primary  sources of liquidity  included  federal funds sold
totaling $2,012,000 and securities  available-for-sale  totaling $9,255,480. The
Company also has lines of credit available with correspondent  banks to purchase
federal funds  totaling  $1,900,000 at March 31, 2004. In addition,  The Company
also has borrowing  capacity  available  through the Federal Home Loan Bank. The
Company's  availability  to borrow funds from the Federal Home Loan Bank totaled
$7,330,560 of which the Company had borrowed $4,000,000 at March 31, 2004.




                                       12
<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  consolidated  financial  statements 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 the  historical  experience of our management in
the banking industry 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 the discussion in
this  report on Form  10-QSB and in our  2003Annual  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  $69,955 to $5,181,801 at March 31, 2004.
This is the  result of net  income  for the  period of  $18,507  and a  positive
adjustment of $28,816 for the unrealized gain on securities available for sale.

The Company and the Bank are subject to various regulatory capital  requirements
administered  by  the  Federal   Reserve  and  the  federal  banking   agencies.
Quantitative  measures  established  by  regulation to ensure  capital  adequacy
require  us 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 consists of common stockholders' equity,
excluding the unrealized  gain or loss on securities  available-for-sale,  minus
certain  intangible  assets.  Tier 2 capital  consists of 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  22.64%  for Tier 1 and  23.89% 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 Company's  risk-based  capital at March 31,
2004:

Shareholders' equity ..........................................     $ 5,174,844
Less - unrealized gains on available-for-sale securities ......          28,816
                                                                    -----------
Tier 1 capital ................................................       5,146,028
Plus - allowance for loan losses(1) ...........................         284,000
                                                                    -----------
Total capital .................................................     $ 5,430,028
                                                                    ===========
Risk-weighted assets ..........................................     $22,729,000
                                                                    ===========
Risk-based capital ratios
  Tier 1 capital (to risk-weighted assets) ....................           23.89%
  Total capital (to risk-weighted assets) .....................           22.64%
  Tier 1 capital (to total average assets) ....................           14.55%


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


                                       13
<PAGE>

                             DEKALB BANKSHARES, INC.

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

Off-Balance Sheet Risk

Through its operations,  the Company has made contractual  commitments to extend
credit in the ordinary course of its business activities.  These commitments are
legally  binding  agreements  to  lend  money  to  The  Company's  customers  at
predetermined  interest rates for a specified period of time. At March 31, 2004,
the Company had issued  commitments  to extend credit of $3,743,211  and standby
letters  of  credit of  $32,373  through  various  types of  commercial  lending
arrangements. Approximately $1,827,000 of these commitments to extend credit had
variable rates.

The  following  table sets forth the  length of time until  maturity  for unused
commitments to extend credit and standby letters of credit at March 31, 2004.

<TABLE>
<CAPTION>
                                                                After One     After Three
                                                    Within       Through        Through         Within      Greater
                                                     One          Three         Twelve           One          Than
                                                    Month         Months        Months           Year        One Year         Total
                                                    -----         ------        ------           ----        --------         -----
 (Dollars in thousands)
<S>                                                <C>            <C>            <C>            <C>            <C>            <C>
Unused commitments to
  extend credit ..........................         $  131         $  343         $  447         $  921         $2,822         $3,743
Standby letters  of
  credit .................................              -              -              -              -             32             32
                                                   ------         ------         ------         ------         ------         ------
    Totals ...............................         $  131         $  343         $  447         $  921         $2,854         $3,775
                                                   ======         ======         ======         ======         ======         ======
</TABLE>

Based on historical  experience,  many of the  commitments and letters of credit
will expire unfunded.  Accordingly,  the amounts shown in the table above do not
necessarily reflect the Company's need for funds in the periods shown.

The Company evaluates each customer's credit worthiness on a case-by-case basis.
The amount of  collateral  obtained,  if deemed  necessary  by the Company  upon
extension  of  credit,  is  based  on its  credit  evaluation  of the  borrower.
Collateral  varies but may include  accounts  receivable,  inventory,  property,
plant and equipment, commercial and residential real estate.

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 the effectiveness
of such  controls and  procedures,  as of the end of the period  covered by this
quarterly report, was adequate.

No disclosure is required under 17 C.F.R. Section 228.308(c).




                                       14
<PAGE>

                             DEKALB BANKSHARES, INC.

Part II - Other Information

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

On March 31, 2004, the Company held its annual meeting of  shareholders at which
the  shareholders:  (1) elected three  directors to each serve a one-year  term,
three directors to each serve a two-year term, and three directors to each serve
a three-year  term; and (2) ratified  appointment of Elliott Davis,  LLC, as the
Company's  independent  auditors for the year ended December 31, 2004. The votes
cast with respect to each matter were as follows:

1.       Election of Directors:
                                                For                    Withheld
                                                ---                    --------

     Anne duPont Shirley                      344,067                     100
     Roderick M. Todd, Jr.                    339,067                   5,100
     John C. West, Jr.                        344,167                       0
     William C. Bochette, III                 344,167                       0
     Daniel D. Riddick                        343,867                     300
     Sylvia U. Wood                           343,167                   1,000
     D. Edward Baxley                         344,167                       0
     David R. Blakely                         344,067                     100
     James D. King                            344,167                       0

2.       Ratification of appointment of Elliott Davis, LLC

       For                          Against                           Abstain

       344,167                      1,200                              1,050


Item 6. Exhibits and Reports on Form 8-K

(a)  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.

(b)  Reports on Form 8-K - No reports on Form 8-K were filed  during the quarter
ended March 31, 2004




                                       15
<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:  May 12, 2004





                                       16
<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.




                                       17