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, 2005


                                       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 April 30, 2005


    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, 2005 and December 31, 2004.....................................3

         Condensed Consolidated Statements of Income - Three months ended March 31, 2005 and 2004.........................4

         Condensed Consolidated Statements of Shareholders' Equity and Comprehensive Income -
           Three months ended March 31, 2005 and 2004.....................................................................5

         Condensed Consolidated Statements of Cash Flows - Three months ended March 31, 2005 and 2004.....................6

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

Item 2.  Management's Discussion and Analysis or Plan of Operation.....................................................9-14

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 .......................................................................................................15
</TABLE>





<PAGE>

                             DEKALB BANKSHARES, INC.

                      Condensed Consolidated Balance Sheets

PART I - FINANCIAL INFORMATION

Item 1 - Financial Statements
<TABLE>
<CAPTION>
                                                                                                 March 31,             December 31,
                                                                                                     2005                  2004
                                                                                                     ----                  ----
                                                                                                 (Unaudited)
Assets
<S>                                                                                          <C>                       <C>
   Cash and cash equivalents:
     Cash and due from banks ...................................................             $    518,398              $    567,773
     Federal funds sold ........................................................                1,570,000                 3,175,000
     Other interest bearing deposits ...........................................                   76,902                    61,793
                                                                                             ------------              ------------
       Total cash and cash equivalents .........................................                2,165,300                 3,804,566
                                                                                             ------------              ------------
   Time deposits with other banks ..............................................                  313,494                   313,494
Investment securities:
   Securities available-for-sale ...............................................                9,713,750                 9,594,385
   Nonmarketable equity securities .............................................                  527,194                   474,813
                                                                                             ------------              ------------
       Total investment securities .............................................               10,240,944                10,069,198
                                                                                             ------------              ------------
Loans receivable ...............................................................               29,431,402                26,643,037
   Less allowance for loan losses ..............................................                 (289,997)                 (266,478)
                                                                                             ------------              ------------
       Loans, net ..............................................................               29,141,405                26,376,559
   Premises and equipment, net .................................................                1,397,551                 1,411,412
   Accrued interest receivable .................................................                  149,750                   150,875
   Other assets ................................................................                  508,478                   433,673
                                                                                             ------------              ------------
       Total assets ............................................................             $ 43,916,922              $ 42,559,777
                                                                                             ============              ============
Liabilities
   Deposits
     Noninterest-bearing transaction accounts ..................................             $  3,813,790              $  2,788,768
     Interest-bearing transaction accounts .....................................                4,005,191                 3,449,845
     Savings ...................................................................                3,646,783                 3,812,952
     Time deposits $100,000 and over ...........................................               12,146,892                12,771,447
     Other time deposits .......................................................                5,526,460                 5,487,366
                                                                                             ------------              ------------
       Total deposits ..........................................................               29,139,116                28,310,378
   Securities sold under agreements to repurchase ..............................                3,000,000                 3,000,000
   Advances from Federal Home Loan Bank ........................................                6,500,000                 5,900,000
   Accrued interest payable ....................................................                   63,575                   120,117
   Other liabilities ...........................................................                   67,782                    36,887
                                                                                             ------------              ------------
       Total liabilities .......................................................               38,770,473                37,367,382
                                                                                             ------------              ------------
Shareholders' equity
   Common stock, no par value; 20,000,000 shares
     authorized, 610,139 shares issued and outstanding .........................                5,877,597                 5,877,597
   Retained earnings (deficit) .................................................                 (619,939)                 (644,608)
   Accumulated other comprehensive income (loss) ...............................                 (111,209)                  (40,594)
                                                                                             ------------              ------------
       Total shareholders' equity ..............................................                5,146,449                 5,192,395
                                                                                             ------------              ------------
       Total liabilities and shareholders' equity ..............................             $ 43,916,922              $ 42,559,777
                                                                                             ============              ============
</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,
                                                                                                                 ---------
                                                                                                         2005                  2004
                                                                                                         ----                  ----
Interest income
<S>                                                                                                  <C>                    <C>
   Loans, including fees .............................................................               $445,944               $342,804
   Investment securities, taxable ....................................................                 92,077                 84,911
   FHLB interest and dividends .......................................................                  4,065                  2,154
   Federal funds sold ................................................................                 11,122                  4,304
   Time deposits with other banks ....................................................                  1,627                  1,999
                                                                                                     --------               --------
       Total .........................................................................                554,835                436,172
                                                                                                     --------               --------
Interest expense
   Time deposits $100,000 and over ...................................................                 76,181                 44,143
   Other deposits ....................................................................                 49,532                 41,011
   Other interest expense ............................................................                 65,085                 39,025
                                                                                                     --------               --------
       Total .........................................................................                190,798                124,179
                                                                                                     --------               --------
Net interest income ..................................................................                364,037                311,993
Provision for loan losses ............................................................                 22,500                 17,500
                                                                                                     --------               --------
Net interest income after provision for loan losses ..................................                341,537                294,493
                                                                                                     --------               --------
Other operating income
   Service charges on deposit accounts ...............................................                 31,105                 31,915
   Residential mortgage origination fees .............................................                 56,159                 18,332
   Other service charges, commissions and fees .......................................                 10,696                  7,059
                                                                                                     --------               --------
       Total .........................................................................                 97,960                 57,306
                                                                                                     --------               --------
Other operating expenses
   Salaries and employee benefits ....................................................                215,658                161,830
   Occupancy expense .................................................................                 21,233                 20,759
   Furniture and equipment expense ...................................................                 12,429                 11,481
   Other operating expenses ..........................................................                150,606                127,961
                                                                                                     --------               --------
       Total .........................................................................                399,926                322,031
                                                                                                     --------               --------
Income before income taxes ...........................................................                 39,571                 29,768
Income tax expense ...................................................................                 14,902                 11,261
                                                                                                     --------               --------
Net income ...........................................................................               $ 24,669               $ 18,507
                                                                                                     ========               ========
Earnings per share
Basic earnings per share .............................................................                   $.04                   $.03
</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, 2005 and 2004
                                   (Unaudited)


<TABLE>
<CAPTION>
                                                                                                      Accumulated
                                                        Common Stock                Retained            Other
                                                        ------------                 Earnings       Comprehensive
                                                  Shares            Amount          (Deficit)           Income            Total
                                                  ------            ------          ---------           ------            -----
<S>                                              <C>            <C>                <C>                <C>               <C>
Balance, December 31, 2003 ...........           609,060        $ 5,866,807        $  (732,329)       $   (22,632)      $ 5,111,846

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

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

Balance, December 31, 2004 ...........           610,139        $ 5,877,597        $  (644,608)       $   (40,594)       $5,192,395

Net income for the period                                                               24,669                               24,669

Other comprehensive
  income (loss),
  net of tax of $41,472 ..............                                                                    (70,615)          (70,615)
                                                                                                                        -----------

Comprehensive income (loss) ..........                                                                                      (45,946)
                                                 -------        -----------        -----------        -----------       -----------

Balance, March 31, 2005 ..............           610,139        $ 5,877,597        $  (619,939)       $  (111,209)      $ 5,146,449
                                                 =======        ===========        ===========        ===========       ===========
</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,
                                                                                                                 ---------
                                                                                                         2005                 2004
                                                                                                         ----                 ----
Cash flows from operating activities
<S>                                                                                                 <C>                 <C>
   Net income ..............................................................................        $    24,669         $    18,507
   Adjustments to reconcile net income to net cash
     provided (used) by operating activities
       Provision for loan losses ...........................................................             22,500              17,500
       Depreciation and amortization expense ...............................................             29,414              30,254
       Gain on sale of securities ..........................................................                  -                   -
       Accretion and premium amortization ..................................................              4,781               4,277
       Deferred income tax provision (benefit) .............................................             13,487              10,748
       (Increase) decrease in interest receivable ..........................................              1,125              (9,410)
       Increase (decrease) in interest payable .............................................            (56,542)              2,551
       (Increase) decrease in other assets .................................................            (88,292)                 12
       Increase in other liabilities .......................................................             30,895              24,351
                                                                                                    -----------         -----------
         Net cash provided (used) by operating activities ..................................            (17,963)             98,790
                                                                                                    -----------         -----------
Cash flows from investing activities
   Net increase in loans made to customers .................................................         (2,787,346)           (502,842)
   Purchases of securities available-for-sale ..............................................           (745,298)         (3,564,984)
   Sales/calls or maturities of securities available-for-sale ..............................                  -             969,784
   Payments received on mortgage backed securities .........................................            550,537             325,522
   Sale (purchase) of Federal Home Loan Bank stock .........................................            (46,100)             20,000
   Purchase of Community Financial Service, Inc. stock .....................................             (6,281)           (143,212)
   Purchases of premises and equipment .....................................................            (15,553)             (5,582)
   Purchases of time deposits with other banks .............................................                  -              (1,494)
                                                                                                    -----------         -----------
         Net cash used by investing activities .............................................         (3,050,041)         (2,902,808)
                                                                                                    -----------         -----------
Cash flows from financing activities
   Net increase in demand deposits, interest-bearing transaction
     accounts and savings accounts .........................................................          1,414,199             187,894
   Net increase (decrease) in certificates of deposit and other time deposits ..............           (585,461)            332,632
   Increase in advances from the Federal Home Loan Bank ....................................            600,000                   -
   Increase in securities sold under agreements to repurchase ..............................                  -           3,000,000
                                                                                                    -----------         -----------

         Net cash provided by financing activities .........................................          1,428,738           3,520,526
                                                                                                    -----------         -----------
Net increase (decrease) in cash and cash equivalents .......................................         (1,639,266)            716,508
Cash and cash equivalents, beginning .......................................................          3,804,566           2,269,695
                                                                                                    -----------         -----------
Cash and cash equivalents, end .............................................................        $ 2,165,300         $ 2,986,203
                                                                                                    ===========         ===========
Cash paid during the period for:
   Interest ................................................................................        $   247,340         $   121,628
   Income taxes ............................................................................              2,509               1,257
</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 2004 Annual Report on Form 10-KSB. The financial  statements as
of March 31, 2005 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, 2004 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 for the year ended  December 31,
2004 filed with the Securities and Exchange Commission.

Note 2 - Recently Issued Accounting Pronouncements

The following is a summary of recent  authoritative  pronouncements  that affect
accounting, reporting, and disclosure of financial information by the Company:

In December  2004,  the FASB issued SFAS No. 123  (revised  2004),  "Share-Based
Payment"  ("SFAS  No.  123(R)").  Statement  No.123(R)  covers  a wide  range of
share-based compensation arrangements including share options,  restricted share
plans,  performance-based  awards, share appreciation rights, and employee share
purchase plans.  SFAS No. 123(R) will require  companies to measure all employee
stock-based  compensation  awards  using a fair value  method  and  record  such
expense in its  financial  statements.  In  addition,  the  adoption of SFAS No.
123(R) requires  additional  accounting and disclosure related to the income tax
and cash flow effects resulting from share-based payment arrangements.  SFAS No.
123(R) is effective for small business issuers  beginning with the first interim
or annual  reporting  period of a company's  first  fiscal year  beginning on or
after December 15, 2005.

In April 2005,  the  Securities  and Exchange  Commission's  Office of the Chief
Accountant and its Division of Corporation Finance has released Staff Accounting
Bulletin  (SAB) No.107 to provide  guidance  regarding the  application  of FASB
Statement  No.123  (revised  2004),   Share-Based   Payment.  SAB  107  provides
interpretive guidance related to the interaction between Statement No.123(R) and
certain SEC rules and  regulations,  as well as the staff's views  regarding the
valuation of share-based payment arrangements for public companies. SAB 107 also
reminds  public  companies of the  importance  of including  disclosures  within
filings made with the SEC relating to the  accounting  for  share-based  payment
transactions,  particularly  during the transition to Statement  No.123(R).  The
Company is currently  evaluating the impact that the adoption of SFAS No. 123(R)
will have on its financial  position,  results of operations and cash flows. The
cumulative  effect of adoption,  if any, will be measured and  recognized in the
statement of income on the date of adoption.

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  the  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  on  quantitative  and
qualitative  disclosures.  The  disclosure  requirements  of EITF  No.  03-1 are
effective for annual financial statements for fiscal years ending after June 15,
2004. The effective date for the measurement  and  recognition  guidance of EITF
No. 03-1 has been delayed.  The FASB staff has issued a proposed  Board-directed
FASB Staff Position ("FSP"), FSP EITF 03-1-a,  "Implementation  Guidance for the
Application  of Paragraph 16 of Issue No.  03-1." The proposed FSP would provide
implementation guidance with respect to debt securities that are impaired solely
due   to   interest    rates   and/or   sector    spreads   and   analyzed   for
other-than-temporary   impairment   under  the   measurement   and   recognition
requirements  of  EITF  No.  03-1.  The  delay  of the  effective  date  for the
measurement  and  recognition  requirements  of EITF No. 03-1 will be superseded
concurrent  with the final issuance of FSP EITF 03-1-a.  Adopting the disclosure
provisions of EITF No. 03-1 did not have any 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>
                                                                                         Three Months Ended March 31,
                                                                                         ----------------------------
                                                                                           2005                  2004
                                                                                           ----                  ----
<S>                                                                                       <C>                  <C>
Net income, as reported ...................................................               $24,669              $18,507
Deduct: Total stock-based employee
  compensation expense determined
  under fair value based method
  for all awards, net of related tax effects ..............................                     -               (4,414)
                                                                                          -------              -------

Pro forma net income ......................................................               $24,669              $14,093
                                                                                          =======              =======

Earnings per share:
  Basic - as reported .....................................................               $   .04              $   .03
                                                                                          =======              =======
  Basic - pro forma .......................................................               $   .04              $   .02
                                                                                          =======              =======

  Diluted - as reported ...................................................               $   .04              $   .03
                                                                                          =======              =======
  Diluted - pro forma .....................................................               $   .04              $   .02
                                                                                          =======              =======
</TABLE>

Note 4 - Earnings Per Share

A reconciliation  of the numerators and denominators used to calculate basic and
diluted  earnings  per share for the three  months ended March 31, 2005 and 2004
are as follows:

<TABLE>
<CAPTION>
                                                                                           Three Months Ended March 31, 2005
                                                                                           ---------------------------------
                                                                                     Income             Shares           Per Share
                                                                                  (Numerator)       (Denominator)         Amount
                                                                                  -----------       -------------         ------
<S>                                                                                 <C>              <C>                   <C>
Basic earnings per share
  Income available to common shareholders ...........................               $24,669          610,139               $.04
                                                                                                                           ====
Effect of dilutive securities
  Stock options .....................................................                                  4,000
                                                                                    -------          -------
Diluted earnings per share
  Income available to common shareholders
    plus assumed conversions ........................................               $24,669          614,139               $.04
                                                                                    =======          =======               ====
</TABLE>







                                       8
<PAGE>

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

Note 4 - Earnings Per Share - continued
<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              $0.03
                                                                                                                         =====
Effect of dilutive securities
  Stock options .......................................................              -                    -
                                                                               -------              -------
Diluted earnings per share
  Income available to common shareholders
    plus assumed conversions ..........................................        $18,507              609,060              $0.03
                                                                               =======              =======              =====
</TABLE>

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 three  month  periods  ended March 31, 2005 and
2004:

<TABLE>
<CAPTION>
                                                                                 Pre-tax             (Expense)           Net-of-tax
                                                                                  Amount              Benefit              Amount
                                                                                  ------              -------              ------
<S>                                                                            <C>                     <C>                 <C>
For the Three Months Ended March 31, 2005
  Unrealized gains (losses) on securities
    available-for-sale ............................................            $(112,087)              $41,472             $(70,615)
  Plus - reclassification adjustment for gains
    (losses) realized in net income ...............................                    -                     -                    -
                                                                               ---------             ---------            ---------
  Net unrealized gains (losses) on securities .....................             (112,087)               41,472              (70,615)
                                                                               ---------             ---------            ---------
  Other comprehensive income ......................................            $(112,087)              $41,472             $(70,615)
                                                                               =========             =========            =========
</TABLE>
<TABLE>
<CAPTION>
                                                                                 Pre-tax           (Expense)           Net-of-tax
                                                                                  Amount            Benefit              Amount
                                                                                  ------            -------              ------
<S>                                                                              <C>                 <C>                  <C>
For the Three Months Ended March 31, 2004
  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
                                                                                 ========            ========             ========
</TABLE>

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

The following is a discussion  of our  financial  condition as of March 31, 2005
compared to December  31,  2004,  and the  results of  operations  for the three
months  ended  March  31,  2005 and  2004.  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 2004 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.

                                       9
<PAGE>
                             DEKALB BANKSHARES, INC.

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

Results of Operations

Net Interest Income

For the three  months  ended March 31,  2005,  net  interest  income,  the major
component of our net income, was $364,037,  as compared to $311,993 for the same
period in 2004, an increase of $52,044. The improvements in the 2005 period were
primarily  attributable  to  increased  volume as we continued to build our loan
portfolio. The average rate paid on interest-bearing  liabilities increased from
1.64% for the three  months  ended March 31, 2004 to 2.22% for the three  months
ended March 31, 2005, while the average rate realized on interest-earning assets
increased from 5.17% to 5.49%, for the same periods.

The  net  interest  spread  and  net  interest  margin  were  3.27%  and  3.60%,
respectively, for the three month period ended March 31, 2005, compared to 3.53%
and 3.70% for the three month period ended March 31, 2004.

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, 2005 and the same period
in 2004,  the  provision  was $22,500 and $17,500,  respectively.  There were no
nonperforming  loans at March 31, 2005 and  $251,089 in  nonperforming  loans at
March 31, 2004.  No loans have been  criticized  or  classified  as of March 31,
2005. Based on present  information,  management believes the allowance for loan
losses is adequate at March 31, 2005 to meet presently known and inherent losses
in the loan portfolio. The allowance for loan losses was 0.99% of total loans at
March 31, 2005.  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 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.

Noninterest Income

Total  noninterest  income for the quarter ended March 31, 2005 was $97,960,  an
increase  of $40,654,  compared  to $57,306  for the same  period in 2004.  This
increase  is  primarily  the result of an  increase  of  $37,827 in  residential
mortgage  origination  fees during the quarter  ended March 31, 2005 compared to
the quarter ended March 31, 2004.  Other service  charges,  commissions and fees
increased $3,637 from $7,059 for the quarter ended March 31, 2004 to $10,696 for
the quarter  ended March 31, 2005.  This increase is the result of the continued
growth of the bank and services offered to our customer base.

Noninterest Expense

Total  noninterest  expense  for the  three  months  ended  March  31,  2005 was
$399,926,  an increase of $77,895, when compared to the same period in 2004. The
primary  component of noninterest  expense is salaries and benefits,  which were
$215,658  and  $161,830  for the three  months  ended  March 31,  2005 and 2004,
respectively.  This increase is a result of additional employees hired since the
March  2004  quarter  to  support  the  growth  of the  bank and  normal  salary
increases. Other operating expenses increased from $127,961 for the three months
ended March 31, 2004 to $150,606 for the three months ended March 31, 2005,  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, 2005 was $24,669
after the  recognition  of an income tax expense of $14,902 for the period.  The
net income for the same period in 2004 was $18,507 after the  recognition  of an
income tax expense of $11,261.


                                       10
<PAGE>

                             DEKALB BANKSHARES, INC.


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

Assets and Liabilities

During the first three months of 2005,  total assets  increased  $1,357,145,  or
3.19%,  when  compared to December  31, 2004.  The primary  growth in assets was
composed of an increase in loans  receivable of  $2,788,365,  or 10.47%,  and an
increase in investment  securities of $171,746.  Deposits increased $828,738 and
advances from the Federal Home Loan Bank of Atlanta  increased  $600,000  during
the first three months of 2005.

Investment Securities

Investment  securities  totaled  $10,240,944  at March  31,  2005,  compared  to
$10,069,198  at  December  31,  2004.  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
$377,700 as of March 31, 2005, and stock in Community Financial  Services,  Inc.
which totaled $149,494 as of March 31, 2005.

Loans

Gross loans increased  $2,788,365  during the three months ended March 31, 2005.
The largest  increase in loans was in residential  1-4 family loans secured by a
real estate mortgage,  which increased $1,182,888 to $11,211,965 as of March 31,
2005. Balances within the major loans receivable categories as of March 31, 2005
and December 31, 2004 were as follows:

                                                      March 31,     December 31,
                                                       2004              2004
                                                       ----              ----
Mortgage loans on real estate:
  Residential 1-4 family ...................       $11,211,965       $10,336,516
  Commercial ...............................         9,339,271         8,622,253
  Construction .............................         4,567,708         3,360,552
  Second mortgages .........................            97,990            99,595
  Equity lines of credit ...................         2,288,464         1,880,511
                                                   -----------       -----------
    Total mortgage loans ...................        27,505,398        24,299,427
Commercial and industrial ..................           982,420         1,141,832
Consumer and other .........................           943,584         1,201,778
                                                   -----------       -----------
    Total gross loans ......................       $29,431,402       $26,643,037
                                                   ===========       ===========


Risk Elements in the Loan Portfolio

Transactions  in the allowance for loan losses for the quarters  ended March 31,
2005 and 2004 are summarized below:

<TABLE>
<CAPTION>
                                                                                              March 31,                  March 31,
                                                                                                2005                       2004
                                                                                                ----                       ----
<S>                                                                                        <C>                        <C>
Balance, January 1 ..........................................................              $    266,478               $    305,000
Provision for loan losses for the period ....................................                    22,500                     17,500
Net loans (charged-off) recovered for the period ............................                     1,019                    (18,792)
                                                                                           ------------               ------------
Balance, end of period ......................................................              $    289,997               $    303,708
                                                                                           ============               ============
Gross loans outstanding, end of period ......................................              $ 29,431,402               $ 22,108,199
                                                                                           ============               ============
Allowance for loan losses to loans outstanding ..............................                      0.99%                      1.37%
</TABLE>

There were no loans in nonaccrual  status at March 31, 2005. There were no loans
past due ninety days or more and still  accruing  interest  and no  restructured
loans at March 31, 2005. There were $251,089 loans in nonaccrual loans status at
March 31,  2004.  There  were no loans  past due  ninety  days or more and still
accruing interest, or restructured loans at March 31, 2004.


                                       11
<PAGE>
                             DEKALB BANKSHARES, INC.


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

Deposits

Total deposits increased $828,738 or 2.93% from December 31, 2004 to $29,139,116
at March 31, 2005.  The largest  increase was in  non-interest  bearing  deposit
accounts,  which  increased  $1,025,022,  or 36.76%,  to $3,813,790 at March 31,
2005. Expressed in percentages,  time deposits over $100,000 decreased 4.89% and
all other interest-bearing deposits increased 3.36%.

Balances  within the major deposit  categories as of March 31, 2005 and December
31, 2004 are as follows:
<TABLE>
<CAPTION>
                                                                                               March 31,                December 31,
                                                                                                 2005                       2004
                                                                                                 ----                       ----
<S>                                                                                          <C>                         <C>
Noninterest-bearing transaction accounts ...................................                 $ 3,813,790                 $ 2,788,768
Interest-bearing transaction accounts ......................................                   4,005,191                   3,449,845
Savings ....................................................................                   3,646,783                   3,812,952
Time deposits $100,000 and over ............................................                  12,146,892                  12,771,447
Other time deposits ........................................................                   5,526,460                   5,487,366
                                                                                             -----------                 -----------
    Total deposits .........................................................                 $29,139,116                 $28,310,378
                                                                                             ===========                 ===========
</TABLE>

Advances from the Federal Home Loan Bank

Advances  from the Federal  Home Loan Bank  totaled  $6,500,000  as of March 31,
2005,  compared to  $5,900,000  as of December  31,  2004.  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 2.97% as of March 31, 2005. Another advance totaling
$1,000,000  has a fixed  interest rate of 2.47% and matures  August 26, 2005. We
also  borrowed  $3,600,000  under the daily rate credit  program  with a rate of
3.13% as of March 31, 2005 that is subject to change daily.

Securities Sold Under Agreements to Repurchase

We sold securities under an agreement 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

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,
2005, the Company's  primary  sources of liquidity  included  federal funds sold
totaling $1,570,000 and securities  available-for-sale  totaling $9,713,750. The
Company also has lines of credit available with correspondent  banks to purchase
federal funds  totaling  $1,400,000 at March 31, 2005. 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
$8,783,384 of which the Company had borrowed $6,500,000 at March 31, 2005.

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, 2004 as
filed in our 2004 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.

                                       12
<PAGE>
                             DEKALB BANKSHARES, INC.


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

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 2004  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 decreased  $45,946 to $5,146,449 at March 31, 2005.
This is the  result of net  income  for the  period of  $24,669  and a  negative
adjustment of $70,615 for the unrealized loss 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%. For the Company and the Bank,  Tier 1 capital  consists
of  common  stockholders'  equity,  excluding  the  unrealized  gain  or loss on
securities available-for-sale,  minus certain intangible assets. For the Company
and the Bank,  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 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 March 31, 2005:

Shareholders' equity ..........................................     $ 5,129,645
Plus - unrealized losses on available-for-sale securities .....         111,208
                                                                    -----------
Tier 1 capital ................................................       5,240,853
Plus - allowance for loan losses(1) ...........................         289,997
                                                                    -----------
Total capital .................................................     $ 5,530,850
                                                                    ===========
Risk-weighted assets ..........................................     $30,362,000
                                                                    ===========
Risk-based capital ratios
  Tier 1 capital (to risk-weighted assets) ....................           17.26%
  Total capital (to risk-weighted assets) .....................           18.22%
  Tier 1 capital (to total average assets) ....................           12.26%


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

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, 2005,
the Company had issued  commitments  to extend credit of $5,900,136  and standby
letters  of  credit of  $98,030  through  various  types of  commercial  lending
arrangements. Approximately $3,411,201 of these commitments to extend credit had
variable rates.


                                       13

<PAGE>





                             DEKALB BANKSHARES, INC.

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

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, 2005.

<TABLE>
<CAPTION>
                                                                   After One    After Three
                                                        Within      Through       Through       Within      Greater
                                                          One        Three        Twelve          One         Than
(Dollars in thousands)                                   Month       Months       Months         Year       One Year        Total
                                                         -----       ------       ------         ----       --------        -----
<S>                                                     <C>          <C>          <C>            <C>          <C>          <C>
Unused commitments to extend credit .............       $   37       $  121       $  2,820       $2,978       $2,922       $5,900
Standby letters of credit .......................           15            -              -           15           83           98
                                                        ------       ------       --------       ------       ------       ------
    Totals ......................................       $   52       $  121       $   2820       $2,993       $3,005       $5,998
                                                        ======       ======       ========       ======       ======       ======
</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 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 control over financial
reporting.




                                       14
<PAGE>


                             DEKALB BANKSHARES, INC.

Part II - Other Information

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

On April 4, 2005, the Company held its annual meeting of  shareholders  at which
the  shareholders:  (1) elected four 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, 2005.  The votes cast with respect to
each matter were as follows:

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

     D. Edward Baxley                   411,874                   1,600
     David R. Blakely                   411,874                   1,600
     James D. King                      411,874                   1,600
     Dr. Paul Joseph, Jr.               411,874                   1,600

2. Ratification of appointment of Elliott Davis, LLC

       For                          Against                     Abstain
       ---                          -------                     -------

       411,074                      1,350                        1,050


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.




                                       15
<PAGE>


                             DEKALB BANKSHARES, INC.

                                    SIGNATURE

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




                                         By: s/William C. Bochette
                                             -----------------------------------
                                             William C. Bochette, III
                                             Chief Executive Officer, President,
                                             and Chief Financial Officer
Date:  May 11, 2005





                                       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