| Nevada                                                         | 20-0443575                           |
|----------------------------------------------------------------|--------------------------------------|
| (State of other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |

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| Table of Contents                                                                                                    |   |
|----------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                 | Page   |
|                                                                                                                 |   |
| PART I. FINANCIAL INFORMATION                                                                                        |   |
|                                                                                                                 |   |
| Item 1. Condensed Financial Statements                                                                               | 1      |
|                                                                                                                 |   |
| Balance Sheet as of June 30, 2010 (Unaudited) and December 31, 2009 (Audited)                                        | 1      |
|                                                                                                                 |   |
| Statements of Operations for the Three and Six Months Ended June 30, 2010 (Unaudited) and March 31, 2010 (Unaudited) | 3      |
|                                                                                                                 |   |
| Statements of Cash Flows for the Six Months Ended June 30, 2010 (Unaudited) and June 30, 2009 (Unaudited)            | 4      |
|                                                                                                                 |   |
| Notes to Condensed Financial Statements (Unaudited)                                                                  | 5      |
|                                                                                                                 |   |
| Item 2. Management’s Discussion and Analysis or Plan of Operation                                              | 9      |
|                                                                                                                 |   |
| Item 3. Quantitative and Qualitative Disclosures About Market Risk                                                   | 14     |
|                                                                                                                 |   |
| Item 4T. Controls and Procedures                                                                                     | 14     |
|                                                                                                                 |   |
|                                                                                                                 |   |
| PART II. OTHER INFORMATION                                                                                           |   |
|                                                                                                                 |   |
| Item 1. Legal Proceedings                                                                                            | 15     |
|                                                                                                                 |   |
| Item 2. Unregistered Sales of Equity Securities and Use of Proceeds                                                  | 15     |
|                                                                                                                 |   |
| Item 3. Defaults Upon Senior Securities                                                                              | 15     |
|                                                                                                                 |   |
| Item 4. Other Information                                                                                            | 15     |
|                                                                                                                 |   |
| Item 5. Exhibits                                                                                                     | 16     |
|                                                                                                                 |   |
| Signatures                                                                                                           | 17     |
|                                                                                                                 |   |
| Certifications                                                                                                       |   |
| Exhibit 31                                                                                                           |   |
| Exhibit 32                                                                                                           |   |

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table of contents

PART I

Item 1. Condensed Financial Statements

PREMIER ALLIANCE GROUP, INC.

|                                                                    |   | (Unaudited) |      |
|-------------------------------------------------------------------------|--------|-------------|-----------|
|                                                                    |   | June 30,    |      |   | December 31, |   |
|                                                                    |   | 2010        |      |   | 2009 |   |
| ASSETS                                                                  |   |        |      |   |   |   |
|                                                                    |   |        |      |   |   |   |
| CURRENT ASSETS:                                                         |   |        |      |   |   |   |
|   Cash                                                        |   | $           | 607,801   |   |   | $ | - |   |
|   Accounts receivable                                         |   |        | 1,908,247 |   |   |   | 1,121,186 |   |
|   Marketable securities                                       |   |        | 29,511    |   |   |   | 30,918 |   |
|   Deferred income taxes                                       |   |        | 28,000    |   |   |   | 15,000 |   |
|   Prepaid expenses                                            |   |        | 71,377    |   |   |   | 37,216 |   |
|                                                                    |   |        |      |   |   |   |   |   |
|                                                                    |   |        |      |   |   |   |   |   |
|     Total current assets                            |   |        | 2,644,936 |   |   |   | 1,204,320 |   |
|                                                                    |   |        |      |   |   |   |   |   |
|                                                                    |   |        |      |   |   |   |   |   |
|                                                                    |   |        |      |   |   |   |   |   |
| PROPERTY AND EQUIPMENT - at cost less                                   |   |        |      |   |   |   |   |   |
|   accumulated depreciation                                    |   |        | 28,718    |   |   |   | 11,728 |   |
|                                                                    |   |        |      |   |   |   |   |   |
|                                                                    |   |        |      |   |   |   |   |   |
| OTHER ASSETS:                                                           |   |        |      |   |   |   |   |   |
|   Goodwill                                                    |   |        | 2,363,578 |   |   |   | 1,450,578 |   |
|   Intangible assets - net                                     |   |        | 138,400   |   |   |   | 79,800 |   |
|   Investment in equity-method investee                        |   |        | 182,265   |   |   |   | 190,432 |   |
|   Investment in cost-method investee                          |   |        | 100,000   |   |   |   | 100,000 |   |
|   Cash surrender value of officers’ life insurance |   |        | 334,930   |   |   |   | 370,032 |   |
|   Deferred income taxes                                       |   |        | 52,000    |   |   |   | 46,000 |   |
|   Loan Fees - net                                             |   |        | 35,185    |   |   |   | 0 |   |
|   Deposits and other assets                                   |   |        | 6,100     |   |   |   | 6,100 |   |
|                                                                    |   |        |      |   |   |   |   |   |
|                                                                    |   |        | 3,212,458 |   |   |   | 2,242,942 |   |
|                                                                    |   |        |      |   |   |   |   |   |
|                                                                    |   |        |      |   |   |   |   |   |
|                                                                    |   |        |      |   |   |   |   |   |
|                                                                    |   |        |      |   |   |   |   |   |
|                                                                    |   |        |      |   |   |   |   |   |
|                                                                    |   |        |      |   |   |   |   |   |
|                                                                    |   | $           | 5,886,112 |   |   | $ | 3,458,990 |   |

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|                                                                      |   | (Unaudited) |       |
|---------------------------------------------------------------------------|--------|-------------|------------|
|                                                                      |   | June 30,    |       |   | December 31, |   |
|                                                                      |   | 2010        |       |   | 2009 |   |
|                                                                      |   |        |       |   |   |   |
|    LIABILITIES AND STOCKHOLDERS' EQUITY                    |   |        |       |   |   |   |
|                                                                      |   |        |       |   |   |   |
| CURRENT LIABILITIES:                                                      |   |        |       |   |   |   |
|   Note payable                                                  |   | $           | 626,000    |   |   | $ | 211,000 |   |
|   Current portion of long-term debt                             |   |        | 122,611    |   |   |   | 133,152 |   |
|   Accounts payable                                              |   |        | 417,143    |   |   |   | 320,152 |   |
|   Accrued expenses                                              |   |        | 657,494    |   |   |   | 384,990 |   |
|   Income taxes payable                                          |   |        | 22,827     |   |   |   | 33,086 |   |
|                                                                      |   |        |       |   |   |   |   |   |
|                                                                      |   |        |       |   |   |   |   |   |
|     Total current liabilities                         |   |        | 1,846,075  |   |   |   | 1,082,255 |   |
|                                                                      |   |        |       |   |   |   |   |   |
| LONG-TERM DEBT                                                            |   |        | 152,998    |   |   |   | 114,606 |   |
|                                                                      |   |        |       |   |   |   |   |   |
| COMMITMENTS AND CONTINGENCIES                                             |   |        | -          |   |   |   | - |   |
|                                                                      |   |        |       |   |   |   |   |   |
|                                                                      |   |        |       |   |   |   |   |   |
| STOCKHOLDERS' EQUITY:                                                     |   |        |       |   |   |   |   |   |
|   Class A convertible preferred stock, $.001                    |   |        |       |   |   |   |   |   |
|     par value, 5,000,000 shares authorized,           |   |        |       |   |   |   |   |   |
|     69,772 Pref A shares issued and Outstanding, |   |        | 69         |   |   |   | 561 |   |
|   Class B convertible preferred stock, $.001                    |   |        |       |   |   |   |   |   |
|     par value, 2,000,000 shares authorized,           |   |        |       |   |   |   |   |   |
|     960,000 Pref B shares issued and Outstanding |   |        | 960        |   |   |   |   |   |
|   Common stock, $.001 par value, 45,000,000                     |   |        |       |   |   |   |   |   |
|     shares authorized, 7,398,220 shares               |   |        |       |   |   |   |   |   |
|     issued and outstanding                            |   |        | 7,398      |   |   |   | 6,072 |   |
|   Additional paid-in capital                                    |   |        | 5,090,235  |   |   |   | 3,414,635 |   |
|   Accumulated deficit                                           |   |        | (1,211,623 | ) |   |   | (1,159,139 | ) |
|                                                                      |   |        |       |   |   |   |   |   |
|                                                                      |   |        |       |   |   |   |   |   |
|                                                                      |   |        | 3,887,039  |   |   |   | 2,262,129 |   |
|                                                                      |   |        |       |   |   |   |   |   |
|                                                                      |   |        |       |   |   |   |   |   |
|                                                                      |   |        |       |   |   |   |   |   |
|                                                                      |   |        |       |   |   |   |   |   |
|                                                                      |   |        |       |   |   |   |   |   |
|                                                                      |   |        |       |   |   |   |   |   |
|                                                                      |   |        |       |   |   |   |   |   |
|                                                                      |   | $           | 5,886,112  |   |   | $ | 3,458,990 |   |

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PREMIER ALLIANCE GROUP, INC

|                                             |   | Three months  |      |   | Three months  |   |      | Six months    |   |   | Six months    |   |
|--------------------------------------------------|--------|---------------|-----------|--------|---------------|--------|-----------|---------------|--------|--------|---------------|--------|
|                                             |   | Ended         |      |   | Ended         |   |      | Ended         |   |   | Ended         |   |
|                                             |   | June 30, 2010 |      |   | June 30, 2009 |   |      | June 30, 2010 |   |   | June 30, 2009 |   |
|                                             |   |          |      |   |          |   |      |          |   |   |          |   |
| NET REVENUE                                      |   | $             | 3,971,927 |   |          | $      | 2,045,699 |          |   | $      | 6,847,286     |   |   | $ | 4,486,019 |   |
| OPERATING EXPENSES:                              |   |          |      |   |          |   |      |          |   |   |          |   |   |   |   |   |
|   Cost of revenues                     |   |          | 3,082,290 |   |          |   | 1,523,668 |          |   |   | 5,359,023     |   |   |   | 3,311,378 |   |
|   Selling, general and administrative  |   |          | 843,312   |   |          |   | 498,289   |          |   |   | 1,454,704     |   |   |   | 1,040,081 |   |
|   Depreciation                         |   |          | 1,818     |   |          |   | 1,448     |          |   |   | 3,010         |   |   |   | 3,128 |   |
|    Total operating expenses       |   |          | 3,927,420 |   |          |   | 2,023,405 |          |   |   | 6,816,737     |   |   |   | 4,354,587 |   |
| INCOME (LOSS) FROM OPERATIONS                    |   |          | 44,507    |   |          |   | 22,294    |          |   |   | 30,549        |   |   |   | 131,432 |   |
|                                             |   |          |      |   |          |   |      |          |   |   |          |   |   |   |   |   |
| OTHER (EXPENSE) INCOME:                          |   |          |      |   |          |   |      |          |   |   |          |   |   |   |   |   |
|   Interest expense, net                |   |          | (35,085   | )      |          |   | (2,759    | )             |   |   | (37,913       | )      |   |   | (6,236 | ) |
|   Gain (loss) on marketable securities |   |          | (1,763    | )      |          |   | 7,947     |          |   |   | (1,408        | )      |   |   | 11,892 |   |
|   Officers’ life insurance       |   |          | (52,182   | )      |          |   | 50,696    |          |   |   | (35,101       | )      |   |   | 8,344 |   |
|   Equity in net (loss) of              |   |          |      |   |          |   |      |          |   |   |          |   |   |   |   |   |
|    equity-method investee         |   |          | (94       | )      |          |   | 2,120     |          |   |   | (8,167        | )      |   |   | 2,120 |   |
|   Other income                         |   |          | 0         |   |          |   | 2,400     |          |   |   | 2,474         |   |   |   | 2,400 |   |
|    Total other (expense) income   |   |          | (89,124   | )      |          |   | 60,404    |          |   |   | (80,115       | )      |   |   | 18,520 |   |
|                                             |   |          |      |   |          |   |      |          |   |   |          |   |   |   |   |   |
| NET INCOME (LOSS) BEFORE INCOME TAXES            |   |          | (44,617   | )      |          |   | 82,698    |          |   |   | (49,566       | )      |   |   | 149,952 |   |
| INCOME TAX (EXPENSE) BENEFIT                     |   |          | (13,916   | )      |          |   | (12,814   | )             |   |   | (2,918        | )      |   |   | (55,895 | ) |
|                                             |   |          |      |   |          |   |      |          |   |   |          |   |   |   |   |   |
| NET (LOSS) INCOME                                |   |          | (58,533   | )      |          |   | 69,884    |          |   |   | (52,484       | )      |   |   | 94,057 |   |
| PREFERRED STOCK DIVIDENDS EARNED                 |   |          | -         |   |          |   | -         |          |   |   | -             |   |   |   | - |   |
| NET (LOSS) INCOME AVAILABLE TO COMMON            |   |          |      |   |          |   |      |          |   |   |          |   |   |   |   |   |
|   STOCKHOLDERS                         |   | $             | (58,533   | )      |          | $      | 69,884    |          |   | $      | (52,484       | )      |   | $ | 94,057 |   |
| Net income (loss) per share                      |   |          |      |   |          |   |      |          |   |   |          |   |   |   |   |   |
|   Basic                                |   | $             | (0.01     | )      |          | $      | 0.01      |          |   | $      | (0.01         | )      |   | $ | 0.02 |   |
|   Diluted                              |   | $             | (0.01     | )      |          | $      | 0.01      |          |   | $      | (0.01         | )      |   | $ | 0.01 |   |
| Weighted average number of shares                |   |          |      |   |          |   |      |          |   |   |          |   |   |   |   |   |
|   Basic                                |   |          | 6,628,820 |   |          |   | 5,867,945 |          |   |   | 7,111,009     |   |   |   | 5,867,945 |   |
|   Diluted                              |   |          | 6,628,820 |   |          |   | 6,428,691 |          |   |   | 7,111,009     |   |   |   | 6,428,691 |   |

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PREMIER ALLIANCE GROUP, INC.

|                                                                                                                   |   | 2010   |       |   | 2009   |   |
|------------------------------------------------------------------------------------------------------------------------|--------|--------|------------|--------|--------|--------|
| Cash flows from operating activities:                                                                                  |   |   |       |   |   |   |
|   Net income (loss)                                                                                          |   | $      | (52,484    | )      |   | $      | 94,057 |   |
|   Adjustments to reconcile net income (loss)                                                                 |   |   |       |   |   |   |   |   |
|     to net cash provided by operating activities:                                                  |   |   |       |   |   |   |   |   |
|       Depreciation                                                                       |   |   | 14,225     |   |   |   | 3,128 |   |
|       Amortization of debt discount                                                      |   |   | 25,771     |   |   |   |   |   |
|       Decrease (increase) of cash surrender value                                        |   |   |       |   |   |   |   |   |
|         of officers’ life insurance                                      |   |   | 35,101     |   |   |   | (8,343 | ) |
|       (Increase) in Deferred income taxes                                                |   |   | (19,000    | )      |   |   | (6,000 | ) |
|       Consulting expense paid with warrants                                              |   |   | 47,805     |   |   |   | - |   |
|       Equity in (gain) loss of equity-method      investee |   |   | 8,167      |   |   |   | (2,120 | ) |
|     Changes in operating assets and liabilities:                                                   |   |   |       |   |   |   |   |   |
|       (Increase) Decrease in accounts receivable                                         |   |   | (787,061   | )      |   |   | 264,703 |   |
|       Decrease (Increase) in marketable securities                                       |   |   | 1,408      |   |   |   | (11,892 | ) |
|       (Increase) Decrease in prepaid expenses                                            |   |   | (34,161    | )      |   |   | (34,221 | ) |
|       Decrease in deposits and other assets                                              |   |   | -          |   |   |   | 2,318 |   |
|       Increase (Decrease)in accounts payable                                             |   |   | 97,116     |   |   |   | 12,285 |   |
|       Increase (Decrease) in accrued expenses                                            |   |   | 272,503    |   |   |   | (47,517 | ) |
|       (Decrease) Increase in income taxes payable                                        |   |   | (10,259    | )      |   |   | (65,398 | ) |
|     Net cash (used in) provided by                                                       |   |   |       |   |   |   |   |   |
|       operating activities                                                               |   |   | (400,869   | )      |   |   | 201,000 |   |
|                                                                                                                   |   |   |       |   |   |   |   |   |
| Cash flows from investing activities:                                                                                  |   |   |       |   |   |   |   |   |
|   Acquisitions                                                                                               |   |   | (1,000,000 | )      |   |   |   |   |
|   Purchases of property and equipment                                                                        |   |   | -          |   |   |   | - |   |
|     Net cash used in investing activities                                                          |   |   | (1,000,000 | )      |   |   | - |   |
|                                                                                                                   |   |   |       |   |   |   |   |   |
| Cash flows from financing activities:                                                                                  |   |   |       |   |   |   |   |   |
|   Issuance of Common Stock                                                                                   |   |   | 40         |   |   |   |   |   |
|   Issuance of Preferred Stock                                                                                |   |   | 672,000    |   |   |   |   |   |
|   Issue costs and commissions – preferred stock                                                        |   |   | (62,370    | )      |   |   |   |   |
|   Issuance of convertible debentures                                                                         |   |   | 350,000    |   |   |   |   |   |
|   Original issue discount - convertible debentures                                                           |   |   | (28,000    | )      |   |   |   |   |
|   Loan Fees – convertible debentures                                                                   |   |   | (38,000    | )      |   |   | - |   |
|   (Net payments)/Proceeds from line of credit                                                                |   |   | 415,000    |   |   |   | (201,000 | ) |
|     Net cash (used in) provided by                                                                 |   |   |       |   |   |   |   |   |
|       financing activities                                                               |   |   | 2,008,670  |   |   |   | (201,000 | ) |
|                                                                                                                   |   |   |       |   |   |   |   |   |
|                                                                                                                   |   |   |       |   |   |   |   |   |
| Net increase in cash                                                                                                   |   |   | 607,801    |   |   |   | - |   |
|                                                                                                                   |   |   |       |   |   |   |   |   |
|                                                                                                                   |   |   |       |   |   |   |   |   |
| Cash - beginning of period                                                                                             |   |   | -          |   |   |   | - |   |
|                                                                                                                   |   |   |       |   |   |   |   |   |
| Cash - end of period                                                                                                   |   | $      | 607,801    |   |   | $      | - |   |

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PREMIER ALLIANCE GROUP, INC.

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| Current assets                           |  $               - |   |
|------------------------------------------|-----------------------------------------------------------------------------------------------|--------|
| Property and equipment                   | 20,000                                                                                        |   |
| Intangible assets-customer relationships | 67,000                                                                                        |   |
| Goodwill                                 | 913,000                                                                                       |   |
| Total assets acquired                    | 1,000,000                                                                                     |   |
| Liabilities assumed                      | -                                                                                             |   |
| Net assets acquired                      | $1,000,000                                                                                    |   |

|                                      |   | Three months ended June 30, 2009 |      |                | Six months ended June 30, 2009 |   |
|-------------------------------------------|--------|----------------------------------|-----------|---------------------|--------------------------------|--------|
| Net revenues                              |   | $                                | 3,372,385 |                |                           | $      | 7,688,649 |   |
| Operating income (loss)                   |   |                             | (73,998   | )                   |                           |   | 130,629 |   |
| Net income (loss) per share – basic |   |                             | (0.01     | )    |                           |   | 0.02 |   |
| Net income (loss) per share- diluted      |   |                             | (0.01     | )    |                           |   | 0.02 |   |

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| Options                        | Shares  | Weighted Average Exercise Price |
|--------------------------------|---------|--------------------------------------|
| Outstanding at January 1, 2010 | 600,000 | $0.75                                |
| Issued                         | 325,000 | $1.00                                |
| Outstanding at June 30, 2010   | 925,000 | $0.84                                |

| Options                        | Shares    | Weighted Average Exercise Price |
|--------------------------------|-----------|--------------------------------------|
| Outstanding at January 1, 2010 | -         | -                                    |
| Issued                         | 1,509,740 | $0.77                                |
| Outstanding at June 30, 2010   | 1,509,740 | $0.77                                |

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Item 2. Management’s 

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Item 3. 

Item 4T

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PART II

Item 1.

Item 2. 

Item 3. 

Item 4. 

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Item 5.

| 31.1 | Certification of Principal Executive and Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Sec. 1350). |
|------|-------------------------------------------------------------------------------------------------------------------------------------------------------|

| 32.1 | Written Statement of Chief Executive and Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350). |
|------|------------------------------------------------------------------------------------------------------------------------------------------------|

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SIGNATURES

|                  |   | PREMIER ALLIANCE GROUP, INC.        |   |
|-----------------------|--------|-------------------------------------|--------|
|                  |   | (Registrant)                        |   |
| DATE: August 13, 2010 | By:    | /s/ Mark S. Elliott                 |   |
|                  |   | Mark S. Elliott                     |   |
|                  |   | President (Chief Executive Officer  |   |
|                  |   | and Acting Chief Financial Officer) |   |

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