SEE NOTES TO FINANCIAL STATEMENTS


                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                   FORM 10-QSB
(Mark one)

 |X|   Quarterly report under Section 13 or 15(d) of the Securities
       Exchange Act of 1934

                  For the quarterly period ended September 30, 2005

 | |   Transition report under Section 13 or 15(D) of the Exchange Act


                        Commission file number 000-50502

                          PREMIER ALLIANCE GROUP, INC.
                          ----------------------------
        (Exact Name of Small Business Issuer as Specified in Its Charter)

         Nevada                                        20-0443575
         ------                                        -----------
    (State or Other                        (I.R.S. Employer Identification No.)
    Jurisdiction of
    Incorporation or
     Organization)

                                4521 Sharon Road
                                    Suite 300
                         Charlotte, North Carolina 28211
                     ---------------------------------------
                    (Address of Principal Executive Offices)

                                 (704) 521-8077
                                 --------------
                (Issuer's Telephone Number, Including Area Code)


Check whether the issuer (1) filed all reports required to be filed by Section
     13 or 15(d) of the Exchange Act 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 | |  No |X|

Indicate by check mark whether the registrant is a shell company (as defined in
     Rule 12b-2 of the Exchange Act). Yes | |  No |X|

   As of November 8, 2005, 5,811,093 shares of common stock were outstanding.

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

<PAGE>

<TABLE>
<CAPTION>

                                Table of Contents

                                                                                               Page
                                                                                               ----
PART I. FINANCIAL INFORMATION

<S>                                                                                           <C>
Item 1. Condensed Financial Statements

     Balance Sheet as of September 30, 2005 (Unaudited)                                         3

     Statements of Operations for the Three and  Nine Months Ended September 30, 2005
     (Unaudited)
     and September 30, 2004 (Unaudited)                                                         5

     Statements of Cash Flows for Nine Months Ended September 30, 2005 (Unaudited)
     and September 30, 2004 (Unaudited)                                                         6

     Notes to Condensed Financial Statements (Unaudited)                                        7

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

Item 3. Controls and Procedures                                                                12

PART I. OTHER INFORMATION

Item 1. Legal Proceedings                                                                      13

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds                            13

Item 3. Defaults Upon Senior Securities                                                        13

Item 4. Submission of Matters to a Vote of Security Holders                                    13

Item 5. Other Information                                                                      13

Item 6. Exhibits                                                                               13

Signatures                                                                                     14

Certifications
</TABLE>

                       See Notes to Financial Statements

<PAGE>


                          PREMIER ALLIANCE GROUP, INC.
                                  BALANCE SHEET
                               SEPTEMBER 30, 2005
                                   (UNAUDITED)


                ASSETS

CURRENT ASSETS:
  Cash                                             $    24,437
  Accounts receivable                                1,436,905
  Marketable securities                                 17,935
  Prepaid expenses                                      51,950
                                                    ----------


    Total current assets                                            1,531,227




PROPERTY AND EQUIPMENT - at cost less
  accumulated depreciation                                             25,812


OTHER ASSETS:
  Goodwill                                           2,231,284
  Investment in equity-method investee                 236,151
  Investment in cost-method investee                   100,000
  Cash surrender value of officers' life insurance     387,106
  Deferred income taxes                                 10,000
  Deposits and other assets                              5,375
                                                    ----------



    Total other assets                                              2,969,916
                                                                   ----------






                                                                  $ 4,526,955
                                                                  ===========

                       See Notes to Financial Statements

                                       3
<PAGE>











   LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
  Note payable                                    $   520,078
  Accounts payable                                    330,821
  Accrued expenses                                    415,098
  Income taxes payable                                142,966
  Deferred income taxes                                57,000
                                                   ----------

    Total current liabilities                                      1,465,963


COMMITMENTS AND CONTINGENCIES                                            -


STOCKHOLDERS' EQUITY:
  Class A convertible preferred stock, $.001
    par value, 5,000,000 shares authorized,
    617,591 shares issued and outstanding                 618
  Common stock, $.001 par value, 45,000,000
    shares authorized, 5,811,065 shares
    issued and outstanding                              5,811
  Additional paid-in capital                        3,238,639
  Accumulated deficit                                (184,076)
                                                   ----------


    Total stockholders' equity                                     3,060,992
                                                                  ----------






                                                                 $ 4,526,955
                                                                 ===========

                       See Notes to Financial Statements

                                       4
<PAGE>

<TABLE>
<CAPTION>


                          PREMIER ALLIANCE GROUP, INC.
                            STATEMENTS OF OPERATIONS
             THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2005 AND 2004
                                   (UNAUDITED)

                                 Three months         Three months         Nine months         Nine months
                                    ended                ended                ended                ended
                              September 30, 2005   September 30, 2004   September 30, 2005   September 30, 2004
                              ------------------   ------------------   ------------------   ------------------

<S>                         <C>                  <C>                  <C>                  <C>
NET REVENUE                  $         2,643,160  $         2,966,562  $         8,071,897  $         8,543,075
                              ------------------   ------------------   ------------------   ------------------
OPERATING EXPENSES:
  Cost of revenues                     1,954,435            2,217,686            6,013,043            6,381,413
  Selling, general and
   administrative                        574,135              686,021            1,857,609            1,968,487
  Depreciation                             4,425                4,860               12,219               12,670
                              ------------------   ------------------   ------------------   ------------------
   Total operating expenses            2,532,995            2,908,567            7,882,871            8,362,570
                              ------------------   ------------------   ------------------   ------------------
INCOME FROM OPERATIONS                   110,165               57,995              189,026              180,505
                              ------------------   ------------------   ------------------   ------------------

OTHER (EXPENSE) INCOME:
  Interest (expense) income, net          (7,247)                (796)             (23,630)              (3,506)
  (Loss) gain on marketable
    securities                            (7,673)               3,661              (17,092)              11,191
  Officers' life insurance                22,453                1,160                 (822)              (1,425)
  Equity in net income (loss) of
   equity-method investee                  2,096                  -                 (4,152)                 -
  Other income                             2,320                  100                3,930                  100
                              ------------------   ------------------   ------------------   ------------------
   Total other income
    (expense)                             11,949                4,125              (41,766)               6,360
                              ------------------   ------------------   ------------------   ------------------

NET INCOME BEFORE INCOME TAXES           122,114               62,120              147,260              186,865
INCOME TAX EXPENSE                       (44,008)             (15,699)             (56,284)            (310,368)
                              ------------------   ------------------   ------------------   ------------------

NET INCOME (LOSS)                         78,106               46,421               90,976             (123,503)
PREFERRED STOCK DIVIDENDS                    -                    -                (47,800)                 -
                              ------------------   ------------------   ------------------   -------------------

NET INCOME (LOSS) AVAILABLE
  TO COMMON STOCKHOLDERS     $            78,106  $            46,421  $            43,176  $          (123,503)
                              ==================   ==================   ==================   ==================
Net income (loss) per share,
  basic and diluted          $              0.01  $              0.01                 0.01                (0.02)
                              ==================   ==================   ------------------   ------------------
Weighted average number of
  shares, basic and diluted            5,811,065            5,168,126            5,811,065            5,168,126
                              ==================   ==================   ==================   ==================

</TABLE>

                       See Notes to Financial Statements

                                       5
<PAGE>


                          PREMIER ALLIANCE GROUP, INC.
                            STATEMENTS OF CASH FLOWS
                  NINE MONTHS ENDED SEPTEMBER 30, 2005 AND 2004
                                   (UNAUDITED)

                                                      2005           2004
                                                   ----------     ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income (loss)                               $    90,976    $  (123,503)
  Adjustments to reconcile net income (loss)
    to net cash provided by operating activities:
      Depreciation                                     12,219         12,670
      Increase of cash surrender value of
        officers' life insurance                      (74,838)      (138,706)
      Deferred income taxes                          (125,000)       171,000
      Equity in loss of equity-method investee          4,152            -
    Changes in operating assets and liabilities:
      Increase in accounts receivable                (324,416)       (39,899)
      Decrease (increase) in marketable securities    136,695        (21,075)
      (Increase) decrease in prepaid expenses         (26,609)       389,328
      Decrease (increase) in deposits and
        other assets                                      641           (686)
      Increase in accounts payable                     74,758        235,541
      Decrease in excess of outstanding
        checks over bank balances                         -         (797,632)
      Increase in accrued expenses                     51,996        103,995
      Increase in income taxes payable                120,548        139,368
                                                   ----------     ----------
    Net cash (used in) provided by operating
      activities                                      (58,878)       (69,599)
                                                   ----------     ----------


CASH FLOWS FROM INVESTING ACTIVITIES:
  Investment in equity - method investee                  -         (250,000)
  Purchases of property and equipment                  (1,904)       (14,735)
                                                   ----------     ----------
    Net cash used in investing activities              (1,904)      (264,735)
                                                   ----------     ----------


CASH FLOWS FROM FINANCING ACTIVITIES:
  S Corporation distributions                         (62,000)      (245,063)
  Preferred stock dividends                           (47,800)           -
  Proceeds from (payments on) line of credit          (42,000)       239,078
  Proceeds from preferred stock issuance                  -          597,500
  Issue cost of preferred stock                           -          (21,292)
                                                   ----------     ----------
    Net cash (used in) provided by financing
      activities                                     (151,800)       570,223
                                                   ----------     ----------


NET (DECREASE) INCREASE IN CASH                      (212,582)       235,889


CASH - beginning of period                            237,019         10,146
                                                   ----------     ----------


CASH - end of period                              $    24,437    $   246,035
                                                   ==========     ==========

                       See Notes to Financial Statements

                                       6
<PAGE>



                          PREMIER ALLIANCE GROUP, INC.
                          NOTES TO FINANCIAL STATEMENTS
             THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2005 AND 2004
                                   (UNAUDITED)



NOTE 1 - BASIS OF PRESENTATION:

     The accompanying unaudited interim financial statements of Premier Alliance
Group, Inc. (the "Company") have been prepared in accordance with accounting
principles generally accepted in the United States of America and the rules of
the Securities and Exchange Commission ("SEC") and should be read in conjunction
with the audited financial statements and notes thereto contained in the
Company's Annual Report filed with the SEC on Form 10-KSB. In the opinion of
management, all adjustments, consisting of normal recurring adjustments,
necessary for a fair presentation of financial position and the results of
operations for the interim periods presented have been reflected herein. The
results of operations for interim periods are not necessarily indicative of the
results expected for the full year. Notes to the financial statements which
would substantially duplicate the disclosure contained in the audited financial
statements for fiscal year 2004 as reported in the 10-KSB have been omitted.



NOTE 2 - ORGANIZATION AND BUSINESS:

     Premier Alliance Group, Inc. ("Old Premier") was organized under the laws
of North Carolina in June, 1995. Old Premier provided information technology
solutions and consulting services to customers operating in a variety of
industries throughout the United States.

     On November 5, 2004, Old Premier and its shareholders consummated a share
exchange agreement with the Company. The Company was an inactive public company
that was organized in Nevada in January, 2000. Pursuant to the exchange
agreement, shareholders of Old Premier were issued 36,176,863 shares of common
stock and 4,323,157 shares of Class A convertible preferred stock in exchange
for all of their outstanding common stock and preferred stock in Old Premier. As
a result of the share exchange agreement, the shareholders of Old Premier
acquired a majority of the issued and outstanding common and preferred stock of
the merged company. For accounting purposes, the transaction was accounted for
as a reverse merger. Old Premier was merged into the Company and immediately
after the merger the Company was renamed Premier Alliance Group, Inc. The
historical financial statements prior to November 5, 2004 are those of Old
Premier.



                                       7

<PAGE>

NOTE 3 - INCOME TAXES:

     On June 6, 2004, effective with the issuance of preferred stock, the
Company was required by income tax regulations to change from an S Corporation
to a C Corporation. Prior to June 6, 2004, as an S Corporation, the Company had
no liability or expense for income taxes and none were reflected in the
financial statements for 2004 prior to June 6th. Effective with the conversion
to a C Corporation, the Company accounts for income taxes under Financial
Accounting Standards Board's Statements on Financial Accounting Standards
("SFAS") No. 109 "Accounting for Income Taxes". Under SFAS No. 109, deferred tax
assets and liabilities are recognized for the future tax consequences
attributable to differences between the financial statement carrying amounts of
existing assets and liabilities and their respective tax basis. Deferred tax
assets and liabilities are measured using enacted tax rates expected to apply to
taxable income in the years in which those temporary differences are expected to
be removed or settled.

NOTE 4 - ADDITIONAL PAID-IN CAPITAL:

     The Company had $1,057,673 of undistributed earnings (retained earnings) at
the date of its conversion (June 6, 2004) from an S Corporation to a C
Corporation. In accordance with SEC Staff Accounting Bulletin Topic 4B, the
Company treated this amount as a constructive distribution to the owners
followed by a contribution to the capital of the corporation by the owners.
During the nine months ended September 30, 2005, the Company made S Corporation
distributions of $62,000, which was recorded as a reduction of the additional
paid-in capital contributed by the owners.

NOTE 5 - PREFERRED STOCK DIVIDEND:

     In June 2005, the Company paid $47,800 in dividends on its 617,591
outstanding shares of Class A preferred stock.


                                       8


<PAGE>


ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

This quarterly report on Form 10-QSB may include "forward-looking statements"
within the meaning of section 27(a) of the Securities Act of 1933 and section
21(e) of the Securities Exchange Act of 1934. We intend all forward-looking
statements to be covered by the safe-harbor provisions for forward-looking
statements. All statements regarding our expected financial position and
operating results, our business strategy, our financing plans, and the outcome
of any contingencies constitute forward-looking statements. All forward-looking
statements are subject to risks and uncertainties, including without limitation
those described in "Risk Factors" in our annual report on Form 10-KSB, that
could cause actual results to differ materially from described in or implied by
any forward-looking statements.

The following discussion should be read in conjunction with our financial
statements and the related notes included in this Form 10-QSB.

OPERATIONS

We operate in one industry segment, providing information technology (IT)
services to our clients. The services we provide typically encompass the IT
business-solution life cycle, including phases for planning, developing,
implementing, managing, and ultimately maintaining the IT solution. Our typical
customer is an organization with large, complex information and data-processing
requirements. We promote our services through our IT Services and IT Solutions
divisions:

o        IT Services Division--This division provides staffing and consulting
         services across a broad range of skills and expertise. It assists our
         customers by providing skilled business and technical expertise to help
         lead and train our customers, and it can provide the manpower necessary
         to supplement project efforts. In most cases our work is on a
         time-and-materials basis. Because of the type of expertise and the
         complexity of technology, customers typically commit to long-term
         contracts with these types of engagements.

o        IT Solutions Division--This division handles advanced technology and
         solutions. It provides expertise in project management, architecture,
         and methodology, with the focus being on serving customers on a project
         or deliverable basis. The work is performed on site and off site. With
         this type of work there is a contractual obligation and terms for a
         defined delivery or product.

RESULTS OF OPERATIONS

Net revenue for the three months ended September 30, 2005, was $2,643,000, a
decrease of 10.9%, compared to $2,966,000 for the same period in 2004. For the
2005 year-to-date period, revenue was $8,072,000 compared to $8,543,000 for the
2004 year-to-date period, a slight decrease of 5.5%.

Cost of revenues, defined as all costs for billable staff, were 73.9% of revenue
for the three months ended September 30, 2005, as compared to 74.8% of revenue
for the same period in 2004. For the 2005 year-to-date period and the 2004
year-to-date period, costs were 74% of revenue.

                                       9
<PAGE>

General and administrative (G&A) expenses represented 21.9% of revenue for the
three months ended in September 30, 2005, as compared to 23.4% for the same
period in 2004. For the 2005 year-to-date period and the 2004 year-to-date
period, it was 23.2% of revenue. The slight increase in G&A expense for the year
is mostly attributed to professional fees and expenses (legal and accounting)
associated with public company filings. We have been able to balance offsetting
changes in many of the other key G&A expense items, such as overhead wages,
travel, client entertainment, staff development, and rent.

Operating income for the three months ended in September 30, 2005, was a gain of
$110,000 as compared to a gain of $58,000 for the same period in 2004. For the
2005 year-to-date period, operating income was $189,000 compared to $181,000 for
the 2004 year-to-date period.

Other income and expense, net, consisted of a gain of $12,000 for the three
months ended in September 30, 2005, compared to a gain of $4,000 for the same
period in 2004. For the 2005 year-to-date period, the loss was $42,000 compared
to a gain of $6,000 for the 2004 year-to-date period. The loss in 2005 is mostly
attributable to an increase of the net cost of executive life insurance policies
(due to market fluctuation), an increase in interest expense and a small loss on
marketable securities.

In June 2004 our company changed from being an S corporation to a C corporation
for federal and state tax-reporting purposes. This change shifts the burden of
income tax liability from the shareholders to the corporation. The effective
rate for the first nine months of 2005 is 38% compared to 166% for the same
period in 2004. The change in rate is a direct result of the immediate
recognition in 2004 of deferred income taxes accumulated while taxed as an S
Corporation. In 2005, the income tax accrual is a result of the current year
earnings.

Net income for the three months ended in September 30, 2005, was $78,000 or $.01
per diluted share, compared with net income of $46,000 for the same period in
2004, or $.01 per diluted share. For the 2005 year-to-date period, net income
was $91,000 compared to a net loss of $123,000 for the 2004 year-to-date period.

DIVIDEND

On June 7, 2004, North Carolina Premier issued 597,500 shares of Class A
preferred stock in a private placement. The holders of shares of preferred stock
were entitled to receive an 8% annual dividend until the earlier of (1) the
third anniversary of the date of issuance or (2) automatic conversion of shares
of Class A preferred stock into shares of common stock. A dividend was declared
and distributed in June 2005 in the amount of $47,800.

Attached with each preferred share was a warrant entitling the holder to
purchase one share of common stock at an exercise price of $2.00. The warrants
were immediately exercisable and had a term of three years.

On consummation of the share exchange, holders of these shares of preferred
stock were issued in exchange shares of our Class A preferred stock having
substantially identical terms, as well as warrants with substantially identical
terms, except that the exercise price of the warrants was adjusted to $1.96.

                                       10
<PAGE>

CRITICAL ACCOUNTING POLICIES

We make certain estimates and judgments in determining income tax expense for
financial statement purposes. These estimates and judgments occur in calculating
tax credits, tax benefits, and deductions that arise from differences in the
timing of recognition of revenue and expense for tax and financial-statement
purposes.

We assess the likelihood that we will be able to recover deferred tax assets. If
recovery is unlikely, we must increase the provision for taxes by recording a
valuation allowance against the estimated deferred tax assets that will not
ultimately be recoverable. As of September 30, 2005, we believed that all of the
deferred tax assets recorded on our balance sheet would ultimately be recovered.
However, should there be a change in our ability to recover our deferred tax
assets, our tax provision would increase in the period in which we determine
that the recovery is unlikely.

FINANCIAL CONDITION AND LIQUIDITY

As of September 30, 2005, we had cash and cash equivalents of $24,000. Net
working capital at September 30, 2005, was $65,000, as compared to $242,000 on
September 30, 2004. Current assets at September 30, 2005, were $1,531,000. The
decrease in working capital was primarily due to accrual of current income tax
expense and current deferred income tax expense resulting from transfer of
income-tax burden from the shareholders to our company. We had no long term
debt. Shareholders' equity as of September 30, 2005, was $3,061,000, which
represented 68% of total assets.

During the nine months ended September 30, 2005, the net cash used by operating
activities was $59,000 and was primarily attributable to an increase in accounts
receivable of $324,000, a decrease in deferred income taxes of $125,000 offset
by a reduction of $137,000 from the sale of marketable securities, and increases
in taxes payable of $121,000, and accounts payable of $75,000.

Cash flows from investing activities decreased $2,000, due to property and
equipment purchases.

Financing activities used $152,000 of cash for the nine months ended September
30, 2005. $42,000 was due to borrowings on our revolving line of credit. We
borrow or repay this revolving debt as needed based upon our working capital
obligations. We distributed a dividend of $47,800 to preferred shareholders of
North Carolina Premier. We distributed $62,000 to certain shareholders of North
Carolina Premier to permit them to pay income taxes on their portion of North
Carolina Premier's S corporation taxable income reported on their respective
personal income tax returns. We believe that internally generated funds, current
cash on hand, and available borrowings under our revolving credit line will be
adequate to meet foreseeable liquidity needs.

                                       11
<PAGE>

OUTLOOK

Our priority is to broaden the range of services we offer and build a more
geographically diverse client base. We believe that achieving this goal will
require a combination of merger activity and organic growth. This will in part
depend on continued improvement in the U.S. jobs market.

OFF-BALANCE-SHEET ARRANGEMENTS

As of September 30, 2005, and during the prior three months then ended, there
were no transactions, agreements or other contractual arrangements to which an
unconsolidated entity was a party under which we (1) had any direct or
contingent obligation under a guarantee contract, derivative instrument, or
variable interest in the unconsolidated entity, or (2) had a retained or
contingent interest in assets transferred to the unconsolidated entity.

ITEM 3. CONTROLS AND PROCEDURES

Based on his evaluation of the effectiveness of our disclosure controls and
procedures as of September 30, 2005, our chief executive officer has concluded
that our disclosure controls and procedures are effective and sufficient to
ensure that we record, process, summarize, and report information required to be
disclosed by us in our periodic reports.

Subsequent to the date of his evaluation, there have not been any significant
changes in our internal controls or in other factors that could significantly
affect these controls, including any corrective action with regard to
significant deficiencies and material weaknesses.


                                       12
<PAGE>


                                     PART II
                                OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

None.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS

None.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

31.1    Certification of acting chief executive officer and acting chief
        financial officer under 18 U.S.C. section 1350, as adopted in
        accordance with section 302 of the Sarbanes-Oxley act of 2002

32.1    Certification of acting chief executive officer and acting chief
        financial officer under 18 U.S.C. section 1350, as adopted in
        accordance with section 906 of the Sarbanes-Oxley act of 2002


                                       13

<PAGE>


                                   SIGNATURES


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.


                          PREMIER ALLIANCE GROUP, INC.
                                                     (Registrant)


DATE: November 15, 2005               By: /s/ Mark S. Elliott
                                          -------------------
                                          Mark S. Elliott
                                          President (Chief Executive Officer
                                          and Acting Chief Financial Officer)


                                       14