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 September 30, 2003

                                       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 October 31, 2003


   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>
         Consolidated Balance Sheets - September 30, 2003 and December 31, 2002...........................................3

         Consolidated Statements of Income -- Nine months ended September 30, 2003 and 2002
              and Three months ended September 30, 2003 and 2002..........................................................4

         Consolidated Statements of Shareholders' Equity and Comprehensive Income --
           Nine months ended September 30, 2003 and 2002..................................................................5

         Consolidated Statements of Cash Flows -- Nine months ended September 30, 2003 and 2002...........................6

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

Item 2. Management's Discussion and Analysis or Plan of Operation.....................................................11-17

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

PART II. OTHER INFORMATION

Item 6. Exhibits and Reports on Form 8-K.................................................................................18

         (a) Exhibits....................................................................................................18

         (b) Reports on Form 8-K.........................................................................................18
</TABLE>



<PAGE>


6

                             DeKalb Bankshares, Inc.
                           Consolidated Balance Sheets

<TABLE>
<CAPTION>
                                                                                              September 30,             December 31,
                                                                                                  2003                      2002
                                                                                                  ----                      ----
Assets:                                                                                        (Unaudited)
<S>                                                                                          <C>                       <C>
  Cash and cash equivalents:
    Cash and due from banks ....................................................             $  2,368,629              $  2,055,871
    Federal funds sold .........................................................                  960,979                   703,000
                                                                                             ------------              ------------
      Total cash and cash equivalents ..........................................                3,329,608                 2,758,871
                                                                                             ------------              ------------

Time deposits with other banks .................................................                  208,955                   212,222

Securities available-for-sale ..................................................                5,174,996                 4,085,652
Nonmarketable equity securities ................................................                  200,000                   150,000
                                                                                             ------------              ------------
      Total investment securities ..............................................                5,374,996                 4,235,652

Loans receivable ...............................................................               21,221,045                16,619,795
  Less allowance for loan losses ...............................................                 (325,000)                 (245,000)
                                                                                             ------------              ------------
      Loans, net ...............................................................               20,896,045                16,374,795

Premises and equipment, net ....................................................                1,377,711                 1,466,981
Accrued interest receivable ....................................................                  100,067                   101,372
Other assets ...................................................................                  482,034                   468,297
                                                                                             ------------              ------------

      Total assets .............................................................             $ 31,769,416              $ 25,618,190
                                                                                             ============              ============

Liabilities
Deposits:
  Noninterest-bearing transaction accounts .....................................             $  2,562,278              $  2,616,140
  Interest-bearing transaction accounts ........................................                2,679,117                 1,983,726
  Savings ......................................................................                3,249,351                 2,488,509
  Time deposits $100,000 and over ..............................................                8,449,020                 5,720,545
  Other time deposits ..........................................................                5,838,347                 4,559,468
                                                                                             ------------              ------------
                                                                                               22,778,113                17,368,388

Advances from Federal Home Loan Bank ...........................................                3,800,000                 3,000,000
Accrued interest payable .......................................................                   33,962                    37,428
Other liabilities ..............................................................                   84,227                    76,913
                                                                                             ------------              ------------
      Total liabilities ........................................................               26,696,302                20,482,729
                                                                                             ------------              ------------

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) ....................................................                 (752,826)                 (782,412)
Accumulated other comprehensive income (loss) ..................................                  (40,867)                   51,066
                                                                                             ------------              ------------
    Total shareholders' equity .................................................                5,073,114                 5,135,461
                                                                                             ------------              ------------

    Total liabilities and shareholders' equity .................................             $ 31,769,416              $ 25,618,190
                                                                                             ============              ============
</TABLE>


                 See notes to consolidated financial statements.




                                       3
<PAGE>



                             DeKalb Bankshares, Inc.
                        Consolidated Statements of Income
                                   (Unaudited)


<TABLE>
<CAPTION>
                                                                        Nine Months Ended                   Three Months Ended
                                                                           September 30                       September 30,
                                                                           ------------                       -------------
                                                                    2003                 2002           2003                  2002
                                                                    ----                 ----           ----                  ----
Interest income:
<S>                                                               <C>               <C>                <C>               <C>
  Loans, including fees ..................................        $  995,777        $  713,766         $  348,978        $  262,814
  Investment securities, taxable .........................           103,702           118,181             32,954            52,121
  FHLB interest and dividends ............................             9,607            11,874              2,422             5,782
  Federal funds sold .....................................             9,324            20,702              2,028             4,664
  Time deposits with other banks .........................             3,986             6,780              1,322             2,244
                                                                  ----------        ----------         ----------        ----------
    Total ................................................         1,122,396           871,303            387,704           327,625
                                                                  ----------        ----------         ----------        ----------

Interest expense:
  Time deposits $100,000 and over ........................           102,297           103,022             39,639            30,132
  Other deposits .........................................           154,245           166,461             46,477            63,801
  Other interest expense .................................            64,693            31,923             20,071            18,884
                                                                  ----------        ----------         ----------        ----------
    Total ................................................           321,235           301,406            106,187           112,817
                                                                  ----------        ----------         ----------        ----------

Net interest income ......................................           801,161           569,897            281,517           214,808
Provision for loan losses ................................            80,000            72,568             29,000            20,000
                                                                  ----------        ----------         ----------        ----------
Net interest income after provision for
  loan losses ............................................           721,161           497,329            252,517           194,808
                                                                  ----------        ----------         ----------        ----------

Other operating income:
  Service charges on deposit accounts ....................            87,072            49,576             32,568            15,139
  Gain on sales of securities available for
    sale .................................................            41,249             2,109             17,230                 -
  Residential mortgage origination fees ..................           126,310            69,789             58,461            26,566
  Other service charges, commissions
    and fees .............................................            18,045            13,337              5,646             4,867
                                                                  ----------        ----------         ----------        ----------
    Total ................................................           272,676           134,811            113,905            46,572
                                                                  ----------        ----------         ----------        ----------

Other operating expenses:
  Salaries and employee benefits .........................           472,296           466,287            157,503           157,341
  Occupancy expense ......................................            58,461            54,185             19,623            18,398
  Furniture and equipment expense ........................            37,409            36,107             13,361            12,648
  Other operating expenses ...............................           378,334           306,942            138,381           105,064
                                                                  ----------        ----------         ----------        ----------
    Total ................................................           946,500           863,521            328,868           293,451
                                                                  ----------        ----------         ----------        ----------

Income (loss) before income taxes ........................            47,337          (231,381)            37,554           (52,071)
Income tax expense (benefit) .............................            17,751           (83,413)            14,083           (19,266)
                                                                  ----------        ----------         ----------        ----------

Net income (loss) ........................................        $   29,586        $ (147,968)        $   23,471        $  (32,805)
                                                                  ==========        ==========         ==========        ==========

Earnings (loss) per share
Basic earnings (losses) per share ........................        $     0.05        $    (0.24)        $     0.04        $    (0.05)
Diluted earnings (losses) per share ......................        $     0.05        $    (0.24)        $     0.04        $    (0.05)
</TABLE>


                 See notes to consolidated financial statements.




                                       4
<PAGE>



                             DeKalb Bankshares, Inc.
    Consolidated Statements of Shareholders' Equity and Comprehensive Income
             for the nine months ending September 30, 2003 and 2002
                                   (Unaudited)

<TABLE>
<CAPTION>

                                                                                                      Accumulated
                                                       Common Stock                Retained              Other
                                                       ------------                Earnings          Comprehensive
                                                 Shares           Amount           (Deficit)            Income              Total
                                                 ------           ------           ---------            ------              -----
<S>                                             <C>            <C>                <C>                <C>                <C>
Balance,
 December 31, 2001 ..................           609,060        $ 5,866,807        $  (613,138)       $    13,604        $ 5,267,273

Net income (loss)
 for the period .....................                                                (147,968)                             (147,968)

Other comprehensive
income, net of tax $23,472 ...........                                                                     39,968             39,968
                                                                                                                        -----------

Comprehensive
 Income (loss) ......................                 -                  -                  -                  -           (108,000)
                                                -------        -----------        -----------        -----------        -----------

Balance,
    September 30, 2002 ..............           609,060        $ 5,866,807        $  (761,106)       $    53,572        $ 5,159,273
                                                =======        ===========        ===========        ===========        ===========


Balance,
 December 31, 2002 ..................           609,060        $ 5,866,807        $  (782,412)       $    51,066        $ 5,135,461

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

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

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

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



                 See notes to consolidated financial statements.






                                       5
<PAGE>

                             DeKalb Bankshares, Inc.
                      Consolidated Statements of Cash Flows
                                   (Unaudited)



<TABLE>
<CAPTION>
                                                                                                    Nine Months         Nine Months
                                                                                                       Ended               Ended
                                                                                                   September 30,       September 30,
                                                                                                   -------------       -------------
                                                                                                        2003               2002
                                                                                                        ----               ----
Cash flows from operating activities:
<S>                                                                                              <C>                    <C>
  Net income (loss) ..................................................................           $    29,586            $  (147,968)
  Adjustments to reconcile net income to net cash used
   by operating activities:
    Provision for loan losses ........................................................                80,000                 72,568
    Depreciation and amortization expense ............................................                95,141                 90,663
    Gain on sale of securities .......................................................               (41,249)                (2,109)
    Accretion and premium amortization ...............................................                 5,162                  3,205
    Deferred income tax provision (benefit) ..........................................                16,044                (83,413)
    (Increase) decrease in interest receivable .......................................                 1,305                (29,647)
    Increase (decrease) in interest payable ..........................................                (3,466)                 1,108
    Increase in other assets .........................................................               (27,425)               (17,322)
    Increase in other liabilities ....................................................                 4,959                 73,267
                                                                                                 -----------            -----------
      Net cash used by operating activities ..........................................               160,057                (39,648)
                                                                                                 -----------            -----------

Cash flows from investing activities:
  Net increase in loans made to customers ............................................            (4,601,250)            (4,536,776)
  Purchases of securities available-for-sale .........................................            (5,075,763)            (4,350,686)
  Sales/calls or maturities of securities available-for-sale .........................             3,059,066              2,000,000
  Payments received on mortgage backed securities ....................................               871,506                276,776
  Purchase of Federal Home Loan Bank stock ...........................................               (50,000)              (100,000)
  Purchases of premises and equipment ................................................                (5,871)               (36,221)
  Redemption (purchases) of time deposits with other banks ...........................                 3,267                 (1,737)
                                                                                                 -----------            -----------
    Net cash used by investing activities ............................................            (5,799,045)            (6,748,644)
                                                                                                 -----------            -----------

Cash flows from financing activities:
  Net increase in demand deposits, interest-bearing transaction
   accounts and savings accounts .....................................................             1,402,371                926,262
  Net increase in certificates of deposit and other time deposits ....................             4,007,354              3,867,872
  Increase in advances from the Federal Home Loan Bank ...............................               800,000              2,000,000
                                                                                                 -----------            -----------
    Net cash provided by financing activities ........................................             6,209,725              6,794,134
                                                                                                 -----------            -----------

Net increase in cash and cash equivalents ............................................               570,737                  5,842

Cash and cash equivalents, beginning .................................................             2,758,871              2,120,556
                                                                                                 -----------            -----------

Cash and cash equivalents, ending ....................................................           $ 3,329,608            $ 2,126,398
                                                                                                 ===========            ===========

Cash paid during the period for:
  Interest ...........................................................................           $   324,701            $   300,298
  Taxes ..............................................................................           $       540            $         -
</TABLE>

                 See notes to consolidated financialstatements.





                                       6
<PAGE>



                             DeKalb Bankshares, Inc.
                   Notes to Consolidated Financial Statements
                                   (Unaudited)

Note 1 - Basis of Presentation

On  September  30,  2003,  the Bank was  acquired  by its newly  formed  holding
company,  DeKalb  Bankshares,  Inc.  The bank is the only  asset of the  holding
company at September 30, 2003. Amounts previously reported by The Bank of Camden
remain unchanged.  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 The Bank of Camden's  2002 Annual
Report on Form 10-KSB. The financial statements as of September 30, 2003 and for
the interim  periods ended September 30, 2003 and 2002 are unaudited and, in the
opinion of management,  include all adjustments  (consisting of normal recurring
adjustments)  considered  necessary  for  a  fair  presentation.  The  financial
information as of December 31, 2002 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 Bank of Camden's 2002 Annual Report on
Form 10-KSB filed with the Federal Deposit Insurance Corporation.


Note 2 - Earnings Per Share

A reconciliation  of the numerators and denominators used to calculate basic and
diluted  earnings  per share for the nine months  ended  September  30, 2003 and
2002, and the three months ended September 30, 2003 and 2002 are as follows:

<TABLE>
<CAPTION>
                                                                                        Nine Months Ended September 30, 2003
                                                                                        ------------------------------------
                                                                                     Income                Shares         Per Share
                                                                                   (Numerator)         (Denominator)        Amount
                                                                                   -----------         -------------        ------
<S>                                                                                 <C>                   <C>                <C>
Basic earnings per share
Income available to common shareholders .............................               $29,586               609,060            $   .05
                                                                                                                             =======
Effect of dilutive securities
Stock options .......................................................                     -                     -
                                                                                    -------               -------
Diluted earnings per share
Income available to common shareholders
plus assumed conversions ............................................               $29,586               609,060            $   .05
                                                                                    =======               =======            =======
</TABLE>


<TABLE>
<CAPTION>
                                                                                        Nine Months Ended September 30, 2002
                                                                                        ------------------------------------
                                                                                   Income                Shares          Per Share
                                                                                 (Numerator)         (Denominator)         Amount
                                                                                 -----------         -------------         ------
<S>                                                                              <C>                      <C>              <C>
Basic earnings per share
Income available to common shareholders ............................             $(147,968)               609,060          $  (0.24)
                                                                                                                           ========
Effect of dilutive securities
Stock options ......................................................                     -                      -
                                                                                 ---------              ---------
Diluted earnings per share
Income available to common shareholders
plus assumed conversions ...........................................             $(147,968)               609,060          $  (0.24)
                                                                                 =========              =========          ========
</TABLE>



                                       7
<PAGE>



                             DeKalb Bankshares, Inc.
                   Notes to Consolidated Financial Statements
                                   (Unaudited)

Note 2 - Earnings Per Share -- continued

<TABLE>
<CAPTION>
                                                                                        Three Months Ended September 30, 2003
                                                                                        -------------------------------------
                                                                                     Income              Shares            Per Share
                                                                                  (Numerator)         (Denominator)         Amount
                                                                                  -----------         -------------         ------
<S>                                                                                 <C>                   <C>                <C>
Basic earnings per share
Income available to common shareholders .............................               $23,471               609,060            $   .04
                                                                                                                             =======
Effect of dilutive securities
Stock options .......................................................                     -                     -
                                                                                    -------               -------
Diluted earnings per share
Income available to common shareholders
plus assumed conversions ............................................               $23,471               609,060            $   .04
                                                                                    =======               =======            =======
</TABLE>

<TABLE>
<CAPTION>
                                                                                        Three Months Ended September 30, 2002
                                                                                        -------------------------------------
                                                                                     Income              Shares            Per Share
                                                                                  (Numerator)         (Denominator)         Amount
                                                                                  -----------         -------------         ------
<S>                                                                              <C>                     <C>               <C>
Basic earnings per share
Income available to common shareholders ...........................              $(32,805)               609,060           $  (0.05)
                                                                                                                           ========
Effect of dilutive securities
Stock options .....................................................                     -                      -
                                                                                 --------               --------
Diluted earnings per share
Income available to common shareholders
plus assumed conversions ..........................................              $(32,805)               609,060           $  (0.05)
                                                                                 ========               ========           ========
</TABLE>


Note 3 - Comprehensive Income

Comprehensive  income includes net income and other comprehensive  income, which
is defined as nonowner related  transactions in equity. The following table sets
forth the amounts of other  comprehensive  income  included in equity along with
the related tax effect for the nine month periods  ended  September 30, 2003 and
2002, and for the three months ended September 30, 2003 and 2002:

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

Other comprehensive income .................................................         $(145,925)         $  53,992         $ (91,933)
                                                                                     =========          =========         =========
</TABLE>




                                       8
<PAGE>



                             DeKalb Bankshares, Inc.
                   Notes to Consolidated Financial Statements
                                   (Unaudited)

Note 3 - Comprehensive Income -- continued
<TABLE>
<CAPTION>
                                                                                        Pre-tax          (Expense)        Net-of-tax
                                                                                        Amount            Benefit           Amount
                                                                                        ------            -------           ------
For the Nine Months Ended September 30, 2002:
<S>                                                                                    <C>               <C>               <C>
Unrealized gains (losses) on securities available-for-sale ...................         $ 65,549          $(24,252)         $ 41,297
Plus: reclassification adjustment for (gains) losses realized
 in net income ...............................................................           (2,109)              780            (1,329)
                                                                                       --------          --------          --------
Net unrealized gains (losses) on securities ..................................           63,440           (23,472)           39,968
                                                                                       --------          --------          --------

Other comprehensive income ...................................................         $ 63,440          $(23,472)         $ 39,968
                                                                                       ========          ========          ========
</TABLE>


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

Other comprehensive income ................................................         $(115,951)         $  42,902          $ (73,049)
                                                                                    =========          =========          =========
</TABLE>



<TABLE>
<CAPTION>
                                                                                         Pre-tax          (Expense)       Net-of-tax
                                                                                          Amount           Benefit          Amount
                                                                                          ------           -------          ------
For the Three Months Ended September 30, 2002:
<S>                                                                                      <C>              <C>               <C>
Unrealized gains (losses) on securities available-for-sale .....................         $ 37,074         $(13,717)         $ 23,357
Plus: reclassification adjustment for gains (losses) realized
 in net income .................................................................                -                -                 -
                                                                                         --------         --------          --------
Net unrealized gains (losses) on securities ....................................           37,074          (13,717)           23,357
                                                                                         --------         --------          --------

Other comprehensive income .....................................................         $ 37,074         $(13,717)         $ 23,357
                                                                                         ========         ========          ========
</TABLE>


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



                                       9
<PAGE>



                             DeKalb Bankshares, Inc.

                   Notes to Consolidated Financial Statements
                                   (Unaudited)

Note 4 - Formation of Holding Company

On September 30, 2003,  The Bank of Camden  became a wholly owned  subsidiary of
DeKalb Bankshares, Inc. pursuant to a Plan of Exchange entered into on March 27,
2003. According to the Plan of Exchange,  each share of common stock of the Bank
was  exchanged  for one  share of DeKalb  Bankshares,  Inc.  Amounts  previously
reported as The Bank of Camden are unchanged.



                                       10
<PAGE>



                             DeKalb Bankshares, Inc.

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

The  following  is a  discussion  of the  Company's  financial  condition  as of
September 30, 2003 compared to December 31, 2002,  and the results of operations
for the three months ended  September  30, 2003 and 2002 and for the nine months
ended September 30, 2003. This discussion should be read in conjunction with the
financial  statements and related notes and  disclosures in The Bank of Camden's
Annual Report on Form 10-KSB, which was filed with the Federal Deposit Insurance
Corporation.  This report  contains  "forward-looking  statements"  relating to,
without  limitation,  future  economic  performance,  plans  and  objectives  of
management for future operations, adequacy of the allowance for loan losses, and
projections of revenues and other  financial items that are based on the beliefs
of the Company's  management,  as well as  assumptions  made by and  information
currently available to the Company's management. The words "expect," "estimate,"
"anticipate,"  and  "believe," as well as similar  expressions,  are intended to
identify  forward-looking  statements.  The Company's  actual results may differ
materially from the results discussed in the forward-looking statements, and the
Company's  operating  performance  each quarter is subject to various  risks and
uncertainties  that are  discussed  in detail in The Bank of  Camden's  previous
filings with the Federal Deposit Insurance  Corporation and the Company's filing
with the Securities and Exchange Commission.

Results of Operations

Net Interest Income

For the nine months ended  September 30, 2003,  net interest  income,  the major
component of the Company's net income was $801,160, compared to $569,897 for the
same  period in 2002,  an  increase  of  $231,264.  For the three  months  ended
September 30, 2003,  net interest  income was $281,517  compared to $214,808 for
the  comparable  period  of 2002.  The  improvements  in the 2003  periods  were
primarily attributable to increased volume as the Company continued to build its
loan  portfolio,  and to the increase in net interest  margin.  The average rate
realized on  interest-earning  assets  decreased to 6.04% from 6.30%,  while the
average rate paid on interest-bearing  liabilities decreased to 2.10% from 2.82%
for the nine months  ended  September  30, 2003.  The average  rate  realized on
interest-earning  assets  decreased to 5.76% for the quarter ended September 30,
2003,  from 6.39% for the same  quarter in 2002,  while the average rate paid on
interest-bearing  liabilities  decreased  to  1.91%  from  2.79%  for the  above
periods.

The  net  interest  spread  and  net  interest  margin  were  3.94%  and  4.31%,
respectively,  for the nine month  period  ended  September  30,  2003.  The net
interest spread and net interest margin were 3.85% and 4.19%, respectively,  for
the quarter ended September 30, 2003.


Provision and Allowance for Loan Losses

The  provision  for loan  losses is the  charge to  operating  earnings  that in
management's  judgment is necessary to maintain the  allowance for possible loan
losses at an adequate  level.  For the nine months ended  September 30, 2003 and
2002, the provision was $80,000 and $72,568,  respectively. For the three months
ended  September  30, 2003 and 2002,  the provision for loans losses was $29,000
and  $20,000,  respectively.  There  were  $161,765  in  nonperforming  loans at
September 30, 2003 and no nonperforming loans at September 30, 2002. $161,765 in
loans have been  criticized or  classified  as of September  30, 2003.  Based on
present  information,  management  believes  the  allowance  for loan  losses is
adequate at September 30, 2003 to meet  presently  known and inherent  losses in
the loan  portfolio.  The  allowance  for loan losses is 1.53% of total loans at
September  30,  2003.  There are risks  inherent in making all loans,  including
risks with  respect to the period of time over which loans may be repaid,  risks
resulting  from changes in economic and industry  conditions,  risks inherent in
dealing with individual  borrowers,  and, in the case of a collateralized  loan,
risks resulting from uncertainties about the future value of the collateral. The
Company  maintains  an allowance  for loan losses based on, among other  things,
historical experience,  including management's experience at other institutions,
an evaluation of economic  conditions,  and regular reviews of delinquencies and
loan  portfolio  quality.  Management's  judgment  about  the  adequacy  of  the
allowance is based upon a number of assumptions  about future  events,  which it
believes to be reasonable,  but which may not prove to be accurate.  Thus, there
is a risk that charge-offs in future periods could exceed the allowance for loan
losses or that substantial additional increases in the allowance for loan losses
could be required.  Additions to the allowance for loan losses would result in a
decrease of the Company's net income and, possibly, its capital.



                                       11
<PAGE>



                             DeKalb Bankshares, Inc.

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

Noninterest Income

Total  noninterest  income for the nine  months  ended  September  30,  2003 was
$272,676, compared to $134,811 for the comparable period in 2002, an increase of
$137,865.  The  primary  reason  for  the  increase  is a  $56,521  increase  in
residential  mortgage loan origination fees from the nine months ended September
30, 2003 compared to the same period in 2002.  Residential  mortgage origination
fees were  higher due to a larger  volume of loan  originations  during the nine
month period,  the result of historically low mortgage rates.  Also contributing
to an increase in  non-interest  income were gains on the sale of  securities of
$39,140, an increase in service charges on deposits of $37,496,  and an increase
of $4,708 in other  charges and fees from the nine months  ended  September  30,
2003  compared  to the same  period in 2002.  Total  noninterest  income for the
quarter  ended  September  30,  2003 was  $113,905  compared  to $46,572 for the
comparable  period of 2002. This increase is the result of a $17,429 increase in
service charges on deposit accounts,  a $17,230 increase in gains of the sale of
securities, and a $31,895 increase in residential mortgage origination fees from
the three months ended September 30, 2003 compared to the same period in 2002.


Noninterest Expense

Total  noninterest  expense  for the  first  nine  months  of 2003 was  $946,500
compared to $863,521 for the nine months ended September  30,2002 an increase of
$82,979.  For the quarter  ended  September  30, 2003,  noninterest  expense was
$328,868 an increase of $35,417, over the comparable period of 2002.

The primary  component of  noninterest  expense is salaries and benefits,  which
were $472,296 for the nine months ended  September 30, 2003 compared to $466,287
for the same period in 2002.  Salaries and benefits expense totaled $157,503 and
$157,341 for the three months ended  September 30, 2003 and 2002,  respectively.
Other  operating  expenses were $378,334 for the nine months ended September 30,
2003,  compared to $306,942 for the nine months ended September 30, 2002.  Other
operating  expenses  were  $138,381 for the quarter  ended  September  30, 2003,
compared to $105,064 for the same period in 2002. This increase is the result of
various  increases  in expenses  necessary to support the growth of the Company,
primarily item data and item processing expense, and marketing expenses.

Net Income

The  Company's  net income for the nine  months  ended  September  30,  2003 was
$29,586 after an income tax expense of $17,751 for the period. This represents a
$177,554 improvement when compared to a net loss of $147,968 for the nine months
ended  September  30,  2002.  The net loss for the 2002  period  was  after  the
recognition  of an income tax benefit of $83,413.  The  Company's net income for
the quarter  ended  September  30,  2003 was  $23,471  compared to a net loss of
$32,805 for the quarter ended September 30, 2002. The net income for the quarter
ended  September  30,  2003 is after the  recognition  of income tax  expense of
$14,083.  The loss  during the  quarter  ended  September  30, 2002 is after the
recognition of an income tax benefit of $19,266.


Assets and Liabilities

During the first nine months of 2003, total assets increased $6,151,226, or 24%,
when  compared  to  December  31,  2002.  The  primary  growth in assets was the
increase of $4,601,250,  or 27.7%, in loans  receivable.  Investment  securities
also  increased by  $1,139,344  to  $5,374,996  as of September  30, 2003,  when
compared to December 31, 2002.  Deposits  increased by $5,409,725  or 31.1%,  to
$22,778,113  as of September 30, 2003.  The largest  increase in deposits was in
time deposits over $100,000, which increased $2,728,475, or 47.7%, to $8,449,020
as of September 30, 2003. The increase in time deposits over $100,000 is largely
attributable  to $1.7  million in  deposits  from the State  Treasurer  of South
Carolina.  The  remainder  of  the  increase  was  from  local  deposits  and is
considered part of the normal growth of the Company.  Market rates were paid for
these deposits.





                                       12
<PAGE>



                             DeKalb Bankshares, Inc.

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

Investment Securities

Investment  securities  totaled  $5,374,996 at September  30, 2003,  compared to
$4,235,652  at  December  31,  2002.  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 as of September 30, 2003.

Loans

Gross loans  increased  $4,601,250  during the nine months ended  September  30,
2003.  The largest  increase in loans was in  commercial  loans  secured by real
estate which  increased  $1,695,084  to  $7,113,401  as of  September  30, 2003.
Balances within the major loans  receivable  categories as of September 30, 2003
and December 31, 2002 are as follows:

                                                  September 30,     December 31,
                                                      2003              2002
                                                      ----              ----
Mortgage loans on real estate:
  Residential 1-4 family ...................       $ 8,378,752       $ 6,974,936
  Commercial ...............................         7,113,401         5,418,317
  Construction .............................         1,265,430           898,874
  Second mortgages .........................           129,913            26,403
  Equity lines of credit ...................         1,750,643         1,408,531
                                                   -----------       -----------
     Total mortgage loans ..................       $18,638,139       $14,727,061

Commercial and industrial ..................         1,602,999           979,291
Consumer and other .........................           979,907           913,443
                                                   -----------       -----------

    Total gross loans ......................       $21,221,045       $16,619,795
                                                   ===========       ===========

Risk Elements in the Loan Portfolio


The following is a summary of the risk elements in the loan portfolio:

                                                   September 30,   September 30,
                                                        2003            2002
                                                        ----            ----
Loans: Non-accrual ................................   $161,765          $      -

Accruing loans more than 90 days past due .........   $      -          $      -

Loans identified by internal review mechanism:

   Criticized .....................................   $      -          $      -

   Classified .....................................   $161,765          $      -

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



                                       13
<PAGE>



                             DeKalb Bankshares, Inc.

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

Activity in the Allowance for Loan Losses is as follows:

                                                   September 30,   September 30,
                                                       2003            2002
                                                       ----            ----
Balance, January 1, ............................   $    245,000    $    150,000
Provision for loan losses for the period .......   $     80,000          72,568
Net loans (charged-off) recovered for the period              -          (2,568)
                                                   ------------    ------------

Balance, end of period .........................   $    325,000    $    220,000
                                                   ============    ============

Gross loans outstanding, end of period .........   $ 21,221,045    $ 14,860,695
                                                   ============    ============

Allowance for loan losses to loans outstanding .           1.53%           1.48%



Deposits

Total  deposits  increased  $5,409,725  or  31.1%,  from  December  31,  2002 to
$22,778,113  at September  30, 2003.  The largest  increase was in time deposits
$100,000  and over  which  increased  $2,728,475,  or 47.7%,  to  $8,449,020  at
September 30, 2003.  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 2.1% and all
other interest-bearing deposits increased 37.0%.

Balances  within the major  deposit  categories  as of  September  30,  2003 and
December 31, 2002 are as follows:

                                                    September 30,   December 31,
                                                        2003            2002
                                                        ----            ----
Noninterest-bearing transaction accounts .......     $ 2,562,278     $ 2,616,140
Interest-bearing transaction accounts ..........       2,679,117       1,983,726
Savings ........................................       3,249,351       2,488,509
Time deposits $100,000 and over ................       8,449,020       5,720,545
Other time deposits ............................       5,838,347       4,559,468
                                                     -----------     -----------

    Total deposits .............................     $22,778,113     $17,368,388
                                                     ===========     ===========


Advances from the Federal Home Loan Bank

Advances from the Federal Home Loan Bank totaled  $3,800,000 as of September 30,
2003,  as compared to  $3,000,000  as of December 31, 2002.  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
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 had  outstanding  borrowings of  $1,900,000  under the Federal Home
Loan Bank daily rate credit  program  with a rate of 1.30% as of  September  30,
2003 that is subject to change daily.



                                       14
<PAGE>



                             DeKalb Bankshares, Inc.

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

Liquidity

Liquidity needs are met by the Company through cash and short-term  investments,
and scheduled maturities of loans on the asset side and through pricing policies
on the liability side for interest-bearing deposit accounts. As of September 30,
2003, the Company's  primary  sources of liquidity  included  federal funds sold
totaling  $960,979  and  un-pledged   securities   available-for-sale   totaling
$583,592.  The Company  also has lines of credit  available  with  correspondent
banks to purchase  federal funds  totaling  $2,900,000 at September 30, 2003. In
addition,  the Company also has borrowing capacity available through the Federal
Home Loan Bank. As of September,  30, 2003 the Company's ability to borrow funds
from the  Federal  Home Loan Bank  totaled  $6,353,000  of which the Company had
borrowed $3,800,000 as of September 30, 2003.


Critical Accounting Policies

We have adopted  various  accounting  policies  which govern the  application of
accounting principles generally accepted in the United States in the preparation
of our financial statements.  Our significant  accounting policies are described
in the notes to the  financial  statements of The Bank of Camden at December 31,
2002 as filed in our 2002  Annual  Report  on Form  10-KSB.  Certain  accounting
policies  involve  significant  judgments  and  assumptions  by us which  have a
material  impact on the carrying  value of certain  assets and  liabilities.  We
consider  these  accounting  policies to be critical  accounting  policies.  The
judgments and  assumptions  we use are based on historical  experience and other
factors,  which we believe to be reasonable under the circumstances.  Because of
the nature of the judgments and assumptions we make, actual results could differ
from these  judgments  and estimates  which could have a material  impact on our
carrying values of assets and liabilities and our results of operations.

We believe the  allowance for loan losses is a critical  accounting  policy that
requires the most significant judgments and estimates used in preparation of our
consolidated financial statements.  Refer to the portions of this report and our
2002 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  $62,347  from  December  31,  2002  to
$5,073,114  at  September  30,  2003.  This is the  result of net income for the
period of $29,586,  which was offset by a negative adjustment of $91,933 for the
unrealized loss on securities available for sale.

The Bank is subject to various regulatory capital  requirements  administered by
the federal banking agencies. Quantitative measures established by regulation to
ensure capital  adequacy  require the Bank to maintain  minimum ratios of Tier 1
and total  capital as a percentage  of assets and  off-balance-sheet  exposures,
adjusted  for risk weights  ranging from 0% to 100%.  Tier 1 capital of the Bank
consists of common stockholders'  equity,  excluding the unrealized gain or loss
on securities  available-for-sale,  minus certain  intangible assets. The Bank's
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.

The Bank is also  required  to  maintain  capital  at a minimum  level  based on
adjusted  quarterly  average assets,  which is known as the leverage ratio. 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.




                                       15
<PAGE>



                             DeKalb Bankshares, Inc.

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

The following table  summarizes the Bank's  risk-based  capital at September 30,
2003:

Shareholders' equity ........................................     $  5,073,114
Less: unrealized gains on available-for-sale securities .....          (40,867)
                                                                  ------------
Tier 1 capital ..............................................        5,113,981

Plus: allowance for loan losses (1) .........................          267,000
                                                                  ------------
Total capital ...............................................        5,380,981
                                                                  ============

Risk-weighted assets ........................................     $ 21,446,000
                                                                  ============

Risk-based capital ratios
   Tier 1 capital (to risk-weighted assets) .................            23.85%
   Total capital (to risk-weighted assets) ..................            25.09%
   Tier 1 capital (to total average assets) .................            17.32%

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


Off-Balance Sheet Risk

Through the  operations of our Bank,  we have made  contractual  commitments  to
extend  credit  in  the  ordinary  course  of  our  business  activities.  These
commitments  are legally  binding  agreements  to lend money to our customers at
predetermined  interest  rates for  specified  periods of time. At September 30,
2003,  we had issued  commitments  to extend  credit of  $3,201,391  and standby
letters  of credit of  $121,373  through  various  types of  commercial  lending
arrangements.  We evaluate each customer's  credit  worthiness on a case-by-case
basis.  The  amount  of  collateral  obtained,  if deemed  necessary  by us upon
extension  of  credit,  is  based  on our  credit  evaluation  of the  borrower.
Collateral  varies but may include  accounts  receivable,  inventory,  property,
plant and equipment, commercial and residential real estate. Based on historical
experience,  many of the commitments and letters of credit will expire unfunded.
Accordingly, the amounts shown in the table below do not necessarily reflect the
Company's needs for funds in the periods shown. Based on historical  experience,
many of the commitments and letters of credit will expire unfunded. Accordingly,
the amounts  shown in the table below do not  necessarily  reflect the Company's
needs for funds in the periods shown.


<TABLE>
<CAPTION>
                                                            After One    After Three
                                              Within         Through        Through                        Greater
                                                 One           Three         Twelve         Within           Than
(Dollars in thousands)                         Month          Months         Months        One Year        One Year         Total
                                            -----------     -----------    -----------     ----------     -----------    -----------
<S>                                         <C>             <C>            <C>             <C>            <C>            <C>
Unused commitments
   to extend credit .....................   $         -     $       257    $       481     $      738     $     2,463    $     3,201
Standby letters of
   credit ...............................             -              10             79             89              32            121
                                            -----------     -----------    -----------     ----------     ------------   -----------
     Total ..............................   $         -     $       267    $       560     $      827     $     2,495    $     3,322
                                            ===========     ===========    ===========     ==========     ===========    ===========

</TABLE>


                                       16
<PAGE>



                             DeKalb Bankshares, Inc.

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

Recently Issued Accounting Standards

In December  2002,  the FASB issued SFAS No. 148,  "Accounting  for  Stock-based
Compensation  - Transition and  Disclosure",  an amendment of FASB Statement No.
123, "Accounting for Stock-Based  Compensation",  to provide alternative methods
of  transition  for a  voluntary  change  to the  fair  value  based  method  of
accounting for stock-based employee  compensation.  SFAS No. 148 also amends the
disclosure provisions of SFAS No. 123 and Accounting Pronouncement Board ("APB")
Opinion No. 28,  "Interim  Financial  Reporting",  to require  disclosure in the
summary  of  significant  accounting  policies  of the  effects  of an  entity's
accounting policy with respect to stock-based employee  compensation on reported
net income and  earnings per share in annual and interim  financial  statements.
While SFAS No. 148 does not amend SFAS No. 123 to require  companies  to account
for  employee  stock  options  using  the  fair  value  method,  the  disclosure
provisions  of SFAS No. 148 are  applicable to all  companies  with  stock-based
employee compensation,  regardless of whether they account for that compensation
using the fair value method of SFAS No. 123 or the intrinsic value method of APB
Opinion  No.  25.  The  provisions  of SFAS No.  148 are  effective  for  annual
financial  statements  for fiscal years ending after  December 15, 2003, and for
financial reports containing  condensed financial statements for interim periods
beginning after December 15, 2002. We have adopted the disclosure  provisions of
SFAS No.  148,  which had no  impact on our  financial  condition  or  operating
results.

In April 2003,  the FASB issued SFAS No. 149,  "Amendment  of  Statement  133 on
Derivative  Instruments  and  Hedging  Activities."  SFAS  No.  149  amends  and
clarifies  accounting for derivative  instruments,  including certain derivative
instruments  embedded in other contracts and loan commitments that relate to the
origination of mortgage loans held for sale,  and for hedging  activities  under
SFAS No. 133. SFAS No. 149 is generally  effective for contracts entered into or
modified  after  June 30,  2003.  The  adoption  of SFAS No.  149 did not have a
material impact on our financial condition or operating results.

In May 2003,  the FASB issued SFAS No. 150,  "Accounting  for Certain  Financial
Instruments with  Characteristics  of both Liabilities and Equity." SFAS No. 150
establishes  standards  for  how  an  issuer  classifies  and  measures  certain
financial  instruments with  characteristics  of both liabilities and equity. It
requires that an issuer classify a financial instrument that is within its scope
as a liability (or an asset in some  circumstances).  Many of those  instruments
were previously  classified as equity.  SFAS No. 150 is generally  effective for
financial instruments entered into or modified after May 31, 2003, and otherwise
is effective at the beginning of the first interim period  beginning  after June
15,  2003.  The  adoption of SFAS No. 150 did not have a material  impact on our
financial condition or operating results.

In June 2003, the American  Institute of Certified  Public  Accountants  (AICPA)
issued an exposure draft of a proposed  Statement of Position (SOP),  "Allowance
for Credit  Losses." The proposed SOP addresses the  recognition and measurement
by creditors of the allowance for credit  losses  related to all loans,  as that
term is defined in SFAS No. 114,  "Accounting  by Creditors for  Impairment of a
Loan." The proposed SOP provides that the  allowance for credit losses  reported
on a  creditor's  balance  sheet  should  consist  only of (1) a  component  for
individual  loan impairment  recognized and measured  pursuant to FASB Statement
No. 114 and (2) one or more components of collective loan impairment  recognized
pursuant to FASB Statement No. 5, "Accounting for  Contingencies",  and measured
in  accordance  with the guidance in the proposed  SOP.  The  provisions  of the
proposed  SOP would be  effective  for  financial  statements  for fiscal  years
beginning  after  December 15, 2003,  with earlier  application  permitted.  The
effect  of  initially  applying  the  provisions  of the  proposed  SOP would be
reported as a change in accounting estimate. Comments on the exposure draft were
due by September  19, 2003. We have not  determined  the effect on our financial
condition or operating results related to the adoption of this proposed SOP, but
such effect would most likely be material.

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).



                                       17
<PAGE>



                             DeKalb Bankshares, Inc.

Part II - Other Information

Item 6. Exhibits and Reports on Form 8-K

(a)  Exhibits:

      Exhibit 31 - Certification  of Principal  Executive  Officer and Principal
                   Financial Officer required by Rule 13a-14(a).

      Exhibit 32 - Certifications of Chief Executive Officer and Chief Financial
                   Officer pursuant to 18 U.S.C. Section 1350.

(b)  Reports on Form 8-K - No reports on Form 8-K were filed  during the quarter
     ended September 30, 2003.




                                       18
<PAGE>



                             DeKalb Bankshares, Inc.

                                    SIGNATURE

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



                                        s/William C. Bochette, III
                                    By:-----------------------------------------
                                       William C. Bochette, III
                                       Chief Executive Officer, President, and
                                       Chief Financial Officer
Date:  November 13, 2003



                                       19
<PAGE>



                             DeKalb Bankshares, Inc.

                                 Exhibit Index

     31             Certification of Principal  Executive  Officer and Principal
                    Financial Officer required by Rule 13a-14(a).

     32             Certification of Chief Executive Officer and Chief Financial
                    Officer pursuant to 18 U.S.C.  Section 1350. 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.