**U.S.
      SECURITIES AND EXCHANGE COMMISSION**


**Washington,
      D.C. 20549**







**FORM
      10-QSB**







**(Mark
      One)**


**x**
            **QUARTERLY
                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
                ACT OF
                1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30,
                2007**






**OR**




** ̈**
            **TRANSITION
                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
                ACT OF
                1934**




**Commission
      file number: 333-111486**








**DAIRY
      FRESH FARMS INC.**




**(Name
      of small business issuer in its charter)**





**Nevada**
            98-0407549**(State
                or other jurisdiction of incorporation )**
            **(I.R.S.Employer
                identification No.)**






**413
      Churchill Avenue N. Ottawa, Ontario, Canada K1Z 5C7**





**(Address
      of principal executive offices)**





**Tel:
      613-724-2484**


**(Issuer's
      telephone number)**





**Securities
      registered under Section 12(b) of the Exchange Act:**


**None**




**Securities
      registered under Section 12(g) of the Exchange Act:**


**Common
      Stock, $0.001 par value per share**


**(Title
      of Class)**






Check
      whether the issuer: (i) 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 (ii) has been
      subject to such filing requirements for the past 90
      days.    Yes x No  ̈




As
      of
      October 31, 2007, there were 23,003,549  shares
      of
      the registrant's common stock outstanding.





Transitional
      Small Business Disclosure Format (check one) Yes o No x





Indicate
      by check mark whether the registrant is a shell company (as defined in rule
      12b-2 of the Exchange Act).   Yes o ; No x









**Part
                  I. Financial Information**
              **Page**Item
                  1.
              
              Condensed
                  Consolidated Financial Statements and Notes to Condensed Consolidated
                  Financial Statements(a)
              
              Unaudited
                  Condensed Consolidated Statements of Operations for the Three and
                  Nine
                  Months Ended September 30, 2007 and 2006(b)
              
              Unaudited
                Condensed Consolidated Statements of Cash Flows for the Three and
                Nine
                Months Ended September 30, 2007 and 2006.(c)
              
              Unaudited
                  Condensed Consolidated Balance Sheets as at September 30, 2007
                  and
                  December 31, 2006.
              5(d)
              
              Unaudited
                  Notes to Condensed Consolidated Financial Statements.
              6Item
                2.
              
              Management's
                  Discussion and Analysis or Plan of Operations
              11Item
                  3.
              
              Controls
                  and Procedures
              15**Part
                  II. Other Information**Item
                  1.
              
              Legal
                  ProceedingsItem
                  2.
              
              Unregistered
                  Sales of Equity Securities and Use of ProceedsItem
                  3.
              
              Defaults
                  upon Senior SecuritiesItem
                  4.
              
              Submission
                  of Matters to a Vote of Security HoldersItem
                  5.
              
              Other
                  InformationItem
                  6.
              
              ExhibitsSignatures


2


PART
      I
      FINANCIAL INFORMATION





General





The
      accompanying condensed consolidated financial statements have been prepared
      in
      accordance with the instructions to Form 10-QSB. Therefore, they do not include
      all information and footnotes necessary for a complete presentation of financial
      position, results of operations, cash flow, and stockholders’ deficit in
      conformity with generally accepted accounting principles in the United States
      of
      America. Except as disclosed herein, there has been no material change in the
      information disclosed in the notes to the consolidated financial statements
      included in the Company’s annual report on Form 10-KSB for the year ended
      December 31, 2006. In the opinion of management, all adjustments considered
      necessary for a fair presentation of the results of operations and financial
      position have been included and all such adjustments are of a normal recurring
      nature. Operating results for the quarter ended September 30, 2007
      are not necessarily indicative of the results that can be expected for the
      year
      ended December 31, 2007.








3





**Dairy
      Fresh Farms Inc.**


**Condensed
      Consolidated Statements of Operations**


Expressed
      in U.S. Dollars (Unaudited)







Three
                Months Ended
            
            Nine
                Months EndedSeptember
                30
            
            September
                302007
            
            2006
            
            2007
            
            2006$
            
            $
            
            $
            
            $Operating
                expensesFreight
                and product costs
            
            
            331
            
            
            -
            
            
            13,692
            
            
            1,234Advertising
            
            
            (494
            )
            
            834
            
            
            6,628
            
            
            17,617Depreciation
                of property and equipment
            
            
            948
            
            
            1,029
            
            
            2,715
            
            
            3,058Interest
                and bank charges, net
            
            
            2,400
            
            
            1,845
            
            
            13,034
            
            
            7,850Management
                fees
            
            
            85,569
            
            
            87,302
            
            
            244,875
            
            
            272,602Office
            
            
            737
            
            
            3,882
            
            
            6,265
            
            
            8,076Investor
                relations
            
            
            250,721
            
            
            -
            
            
            732,482
            
            
            -Professional
                fees
            
            
            16,538
            
            
            63,159
            
            
            68,177
            
            
            148,744Rent
            
            
            4,536
            
            
            4,267
            
            
            12,982
            
            
            12,584Telecommunications
            
            
            3,219
            
            
            3,044
            
            
            10,724
            
            
            11,213Travel
            
            
            6,351
            
            
            38,462
            
            
            30,971
            
            
            84,965370,856
            
            
            203,824
            
            
            1,142,545
            
            
            567,943Net
                loss
            
            
            (370,856
            )
            
            (203,824
            )
            
            (1,142,545
            )
            
            (567,943
            )Other
                comprehensive lossForeign
                currency translation adjustment
            
            
            (22,504
            )
            
            (3,208
            )
            
            (81,251
            )
            
            (35,955
            )Comprehensive
                loss
            
            
            (393,360
            )
            
            (207,032
            )
            
            (1,223,796
            )
            
            (603,898
            )Net
                loss per share, basic and diluted
            
            $
            (0.02
            )
            $
            (0.01
            )
            $
            (0.05
            )
            $
            (0.04
            )Weighted
                average common shares outstanding
            
            
            23,003,549
            
            
            15,681,782
            
            
            22,487,549
            
            
            15,674,195







The
      accompanying notes are an integral part of the condensed consolidated financial
      statements **.**
















4











**Dairy
        Fresh Farms Inc.**
 **Condensed
        Consolidated Statements of Cash Flows**
 Expressed
        in U.S. Dollars (Unaudited)









Nine
                months ended September 302007
            
            2006$
            
            $OPERATING
                ACTIVITIESNet
                income (loss)
            
            
            
            
            
            (1,142,545
            )
            
            (567,943
            )Adjustments
                to reconcile net income (loss) to net cash provide by (used in) operating
                activitiesDepreciation
                and amortization
            
            
            
            
            
            2,715
            
            
            3,058Issuance
                of common stocks in exchange for services
            
            
            
            
            
            1,020,600
            
            
            26,250Changes
                in working capital itemsAccounts
                receivable
            
            
            
            
            
            24,923
            
            
            (17,955
            )Prepaid
                expenses
            
            
            
            
            
            (261,348
            )
            
            (58,616
            )Accounts
                payable and accrued liabilities
            
            
            
            
            
            (70,620
            )
            
            (48,399
            )Management
                contracts payable
            
            
            
            
            
            78,590
            
            
            226,484Cash
                flows used in operating activities
            
            
            
            
            
            (347,685
            )
            
            (437,121
            )*INVESTING
                ACTIVITIES*Purchase
                of property and equipment
            
            
            
            
            
            -
            
            
            -Cash
                flows used in investing activities
            
            
            
            
            
            -
            
            
            -*FINANCING
                ACTIVITIES*Issuance
                of convertible debt
            
            
            
            
            
            -
            
            
            923,356Proceeds
                from notes payable
            
            
            
            
            
            -
            
            
            88,637Cash
                flows provided by financing activities
            
            
            
            
            
            -
            
            
            1,011,993Effect
                of changes in exchange rates on cash
            
            
            
            
            
            5,741
            
            
            5,866Net
                increase (decrease) in cash
            
            
            
            
            
            (341,944
            )
            
            580,738Cash,
                beginning of period
            
            
            
            
            
            375,858
            
            
            12,976Cash,
                end of period
            
            
            
            
            
            33,914
            
            
            593,714*NON-CASH
                FINANCING ACTIVITIES:*Issuance
                of common stocks in repayment of note payable
            
            
            
            
            $
            59,832
            
            $
            -






The
      accompanying notes are an integral part of the condensed consolidated financial
      statements **.**







5





**Dairy
      Fresh Farms Inc.**


**Condensed
      Consolidated Balance Sheets**


Expressed
      in U.S. Dollars







(Unaudited)
            
            (Audited)September
                30
            
            December
                312007
            
            2006$
            
            $AssetsCurrent
                assetsCash
            
            
            33,914
            
            
            375,858Accounts
                receivable
            
            
            52,790
            
            
            77,713Prepaid
                expenses
            
            
            261,735
            
            
            387348,439
            
            
            453,958Property
                and equipment
            
            
            8,228
            
            
            9,593356,667
            
            
            463,551*LIABILITIES*Current
                liabilitiesAccounts
                payable and accrued liabilities
            
            
            387,873
            
            
            458,493Management
                contracts payable (Notes 6)
            
            
            292,500
            
            
            213,910Notes
                payable
            
            
            30,157
            
            
            85,815710,530
            
            
            758,218*SHAREHOLDERS'
                DEFICIENCY*Common
                shares, $0.001 par value, voting, 75,000,000 authorized shares, 23,003,549
                shares issued and outstanding as of September 30, 2007 and 19,391,549
                shares as of December 31, 2006
            
            
            9699
            
            
            6087Contributed
                surplus
            
            
            4,233,707
            
            
            3,153,719Accumulated
                comprehensive loss
            
            
            (183,013
            )
            
            (101,762
            )Deficit
            
            
            (4,414,256
            )
            
            (3,352,711
            )(353,863
            )
            
            (294,667
            )356,667
            
            
            463,551




The
      accompanying notes are an integral part of the condensed consolidated financial
      statements **.**











6





---

**Dairy
      Fresh Farms Inc.**


**Notes
      to Condensed Consolidated Financial Statements**


**September
      30, 2007**


Expressed
      in U.S. Dollars


(Unaudited)





***1
      - BASIS OF PRESENTATION***




The
      accompanying unaudited condensed consolidated financial statements of Dairy
      Fresh Farms Inc. (“Dairy Fresh” or the “Company”) and its subsidiaries have been
      prepared pursuant to the rules and regulations of the United States Securities
      and Exchange Commission (“SEC”). Certain information and footnote disclosures
      normally included in financial statements prepared in accordance with generally
      accepted accounting principles in the United States of America (“US GAAP”) have
      been condensed or omitted pursuant to such rules and regulations. These
      condensed consolidated financial statements should be read in conjunction with
      the financial statements and notes included in the latest annual report on
      Form
      10-KSB. These statements have been prepared on the same basis as the audited
      consolidated financial statements for the year ended December 31, 2006 and,
      in
      the opinion of management, include all adjustments considered necessary for
      a
      fair presentation of financial position, results of September 30, 2007 are
      not
      necessarily indicative of the results to be expected for the full
      year.




**2 - COMPANY
      BACKGROUND AND LIQUIDITY**




***COMPANY
      BACKGROUND***





The
      Company was incorporated under the name of Northwest Horizon Corporation in
      the
      State of Nevada, United States of America on February 5, 2003. The name was
      changed to Dairy Fresh Farms Inc. on August 11, 2005.





The
      Company was in the development stage until January 1, 2005. The Company
      originally intended to establish itself as a transportation broker specializing
      in trucking as the efficient mode of transporting both raw materials and
      finished products to their destination. On December 17, 2004 the Board of
      Directors passed a resolution indicating that the Company would be unable to
      raise the necessary funds to proceed with this original plan.




On
      March
      3, 2005, the company merged via a reverse takeover with Dairy Fresh Technologies
      Ltd. Dairy Fresh Technologies Ltd. was incorporated under the Canada Business
      Corporations Act on May 14, 2002 to develop and exploit a unique patented dairy
      process in Canada. This patent, "Dairy Fresh Farm sTM"
      produces monounsaturated-enhanced dairy products. Dairy Fresh Technologies
      Ltd.
      was also in the development stage until January 1, 2005.





7




**Dairy
        Fresh Farms Inc.**
 **Notes
        to Condensed Consolidated Financial Statements**
 **September
        30, 2007**
 Expressed
        in U.S. Dollars
 (Unaudited)






***LIQUIDITY***





The
      Company has incurred a net loss of $370,856 and $1,142,545 during the three
      and
      nine months ended September 30, 2007. In addition, the Company generated
      negative cash flows from operations of $347,685 for the nine months ended
      September 30, 2007 and has generated negative cash flows from operations since
      inception.









The
      audit
      states that the net loss incurred during the year ended December 31, 2006,
      the
      accumulated deficit as of that date and the other factors described in Note
      2 to
      the Consolidated Financial Statements included in the Company’s Annual Report on
      Form 10-KSB for the year ended December 31, 2006 raise substantial doubt about
      the Company’s ability to continue as a going concern. The auditors’ report on
      the Company’s financial statements for the year ended December 31, 2005
      contained a similar statement. The consolidated financial statements have been
      prepared assuming the Company will continue as a going concern and do not
      include any adjustments that might result from the outcome of this
      uncertainty.





Management
      plans to address these issues by continuing to seek new financing and continuing
      to control expenses. The Company’s ability to continue as a going concern is
      subject to management’s ability to successfully implement the above plans.
      Failure to implement these plans could have a material adverse effect on the
      Company’s position and/or results of operation and may necessitate a reduction
      in operating activities. These condensed consolidated financial statements
      do
      not include adjustments that may be required if the assets are not realized
      and
      the liabilities settled in the normal course of operations.





In
      the
      longer term, the Company has to generate the levels of revenue which would
      result in cash surpluses,
      and it may need to continue to raise capital by selling additional equity or
      by
      obtaining credit facilities. No assurance can be given that any such financing
      will be available or that, if available, it can be obtained on terms favourable
      to the company.








8




**Dairy
        Fresh Farms Inc.**
 **Notes
        to Condensed Consolidated Financial Statements**
 **September
        30, 2007**
 **Expressed
        in U.S. Dollars**
 **(Unaudited)**






***3 - RELATED
      PARTY TRANSACTIONS***


The
      Company entered into the following related party transactions. These
      transactions were concluded in the normal course of operations at the exchange
      amount, which is the amount established and accepted by the parties.




**Three
                months ended**
              **September
                30, 2007**
              **(Unaudited)**
            
            **Three
                months ended**
              **September
                30. 2006**
              **(Unaudited)**
            
            **Nine
                months ended**
              **September
                30, 2007**
              **(Unaudited)**
            
            **Nine
                months ended**
              **September
                30. 2006**
              **(Unaudited)****$**ExpensesManagement
                fees (a)
            
            
            **85,569**
            
            
            **87,302**
            
            
            **244,875**
            
            
            **272,602**Amounts
                due to and due from related parties
            
            
            
            
            
            
            
            
            **September
                30, 2007**
            
            
            **September
                30, 2006**Amount
                due from companies under common control (b)
            
            
            
            
            
            
            
            
            **15,413**
            
            
            **11,186**Notes
                payable to related parties (c)
            
            
            
            
            
            
            
            
            **30,157**
            
            
            **26,862**Amount
                due to a company under common control (d)
            
            
            
            
            
            
            
            
            **7,840**
            
            
            **6,982**




(a)
      During the nine month periods ended September 30, 2007 and September 30, 2006,
      the Company incurred management services to four companies controlled by
      officers of the Company. The management fees payable are $292,500 as at
      September 30, 2007 and $700,966 as at September 30, 2006




(b)
      The
      Company paid legal expenses for Dairy One Technologies Limited and Purple Cow
      Investments Inc., companies under common control, during the year ended December
      31, 2006 resulting in the above amount receivable from companies under common
      control. The legal fees paid during the three and nine months ended September
      30, 2007 were $557.




(c )
      The
      Company issued $28,174 of 5% promissory notes to an officer of the Company
      during the year ended December 31, 2006. The notes are repayable when a major
      financing is completed.







9




**Dairy
        Fresh Farms Inc.**
 **Notes
        to Condensed Consolidated Financial Statements**
 **September
        30, 2007**
 Expressed
        in U.S. Dollars
 (Unaudited)


(d)
      The
      Company incurred royalty expense to Dairy One Technologies Limited, a company
      under common control. The amount payable as at September 30, 2007 is $7,840
      (September 30, 2006 - $6,705). The Company expensed $nil in the three and nine
      months ended September 30, 2007 and $nil in the three and nine months ended
      September 30, 2006, respectively.




***4
      - NOTES PAYABLE***




Notes
      payable bear interest at 5%, unsecured and repayable when a major financing
      is
      completed.




***5
      - LOSS PER SHARE***




For
      the
      purpose of the loss per share computation, the weighted average number of common
      shares outstanding has been used. Had the treasury stock method been applied
      to
      the unexercised share warrants, the effect on the loss per share would be
      anti-dilutive.




The
      total
      warrants outstanding at September 30, 2007 and September 30, 2006 were 2,935,078
      and 2,220,792 respectively.




***6
      - SHAREHOLDERS’ EQUITY***




In
      February 2007, the Company issued 3,402,000 common shares as payment for
      professional fees incurred for the period from October 1, 2006 to December
      31,
      2007, valued at $0.30 per share which represents the fair value of the Company’s
      share when the services were completed. The excess in the par value is recorded
      in contributed surplus.




10





**Dairy
        Fresh Farms Inc.**
 **Notes
        to Condensed Consolidated Financial Statements**
 **September
        30, 2007**
 Expressed
        in U.S. Dollars
 (Unaudited)





In
      February 2007, the Company issued 210,000 common shares to repay a Note Payable
      to an Officer of the Company. The shares were valued at $0.30 per share which
      represents the fair value of the Company’s share when the Note Payable was
      repaid. The excess in the par value is recorded in contributed
      surplus.




***8
      -COMPREHENSIVE LOSS***




Comprehensive
      loss includes changes in the balances of items that are reported directly in
      a
      separate component of shareholders’ equity in the Company’s unaudited condensed
      consolidated balance sheets. The components of comprehensive loss are as
      follows:







**Nine
                months ended**
              **September
                30, 2007 (Unaudited)**
            
            **Nine
                months ended**
              **September
                30, 2006 (Unaudited)**$
            
            $Net
                loss as reported
            
            
            (1,142,545
            )
            
            (567,943
            )Foreign
                currency translation adjustment
            
            
            (81,251
            )
            
            (35,955
            )Comprehensive
                loss
            
            
            (1,223,796
            )
            
            (603,898
            )







**9
      - NEW ACCOUNTING PRONOUNCEMENTS**






**FASB
      Interpretation 48**







In
      July
      2006, the FASB issued FASB Interpretation No. 48, “Accounting for
      Uncertainty in Income Taxes-an interpretation of FASB Statement No. 109”,
      (“FIN No. 48”), which clarifies the accounting for uncertainty in tax
      positions. FIN No. 48 requires that the Company recognize the impact of a
      tax position, if that position is more likely than not of not being sustained
      on
      audit, based on the technical merits of the position. FIN No. 48 seeks to
      reduce the diversity in practice associated with certain aspects of the
      recognition and measurement related to accounting for income taxes. The
      provisions of FIN No. 48 will be effective for fiscal year ends beginning
      after December 15, 2006, with the cumulative effect of the change in accounting
      principle recorded as an adjustment to opening retained earnings. The Company
      expects that the adoption of FIN No. 48 will not have a material impact on
      the consolidated financial position and results of operations or cash flows.







11




**Dairy
        Fresh Farms Inc.**
 **Notes
        to Condensed Consolidated Financial Statements**
 **September
        30, 2007**
 Expressed
        in U.S. Dollars
 (Unaudited)






**SFAS
      No. 157**




In
      September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements”,
      which establishes a framework for measuring fair value under other accounting
      pronouncements that require fair value measurements and expands disclosures
      about such measurements. SFAS No. 157 does not require any new fair value
      measurements, but rather it creates a consistent method for calculating fair
      value measurements to address non-comparability of financial statements
      containing fair value measurements utilizing different definitions of fair
      value. SFAS No. 157 is effective for financial statements issued for fiscal
      years beginning after November 15, 2007. The Company does not anticipate
      that the adoption of SFAS No. 157 will have a significant impact on the
      consolidated financial position, results of operations or cash
      flows.




**SFAS
      No. 159**






On
      February 15, 2007, the FASB issued SFAS No. 159, “The Fair Value
      Option for Financial Assets and Financial Liabilities: Including an amendment
      of
      FASB Statement No. 115”, to reduce earnings volatility caused by related
      assets and liabilities measured differently under GAAP. SFAS No. 159 allows
      all entities to make an irrevocable instrument-by-instrument election to measure
      eligible items at fair value in their entirety. In addition, unrealized gains
      and losses will be reported in earnings at each reporting date. SFAS
      No. 159 also establishes presentation and disclosure requirements that
      focus on providing information about the impact of electing the fair value
      option. SFAS No. 159 is effective as of the beginning of the first fiscal
      year that begins after November 15, 2007, concurrent with the adoption of
      SFAS No. 157. The Company does not anticipate that the adoption of SFAS
      No. 159 will have a significant impact on the consolidated financial
      position, results of operations or cash flows.






**SAB
      108**




In
      September 2006, the Securities and Exchange Commission issued Staff Accounting
      Bulletin No. 108, Considering the Effects of Prior Year Misstatements when
      Quantifying Misstatements in Current Year Financial Statements (‘SAB 108’). SAB
      108 provides interpretative guidance on how the effects of prior year
      uncorrected misstatements should be considered when quantifying misstatements
      in
      the current year financial statements. SAB 108 requires registrants to quantify
      misstatements using both an income statement (‘rollover’) and balance sheet
      (‘iron curtain’) approach and evaluate whether either approach results in a
      misstatement that, when all relevant quantitative and qualitative factors are
      considered, are material. If prior years errors that had been previously
      considered immaterial now are considered material based on either approach,
      no
      restatement is required so long as management properly applied its previous
      approach and all relevant facts and circumstances were considered. If prior
      years are not restated, the cumulative effect adjustment is recorded in opening
      accumulated earnings of the beginning of the fiscal year of adoption. SAB 108
      is
      effective for fiscal years ending after November 15, 2006. The company has
      determined that there will be no material impact to the financial statements
      upon the adoption of thsi bulletin.







12




ITEM
      2.
      MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
      OPERATIONS





Management’s
      Discussion and Analysis contains various “forward looking statements” within the
      meaning of Section 21E of the Securities Exchange Act of 1934, as amended,
      regarding future events or the future financial performance of the Company
      that
      involve risks and uncertainties. Certain statements included in this Form
      10-QSB, including, without limitation, statements related to anticipated cash
      flow sources and uses, and words including but not limited to “anticipates”,
“believes”, “plans”, “expects”, “future” and similar statements or expressions,
      identify forward looking statements. Any forward-looking statements herein
      are
      subject to certain risks and uncertainties in the Company’s business, including
      but not limited to, reliance on key customers and competition in its markets,
      market demand, product performance, technological developments, maintenance
      of
      relationships with key suppliers, difficulties of hiring or retaining key
      personnel and any changes in current accounting rules, all of which may be
      beyond the control of the Company. The Company adopted at management’s
      discretion, the most conservative recognition of revenue based on the most
      astringent guidelines of the SEC in terms of recognition of software licenses
      and recurring revenue. Management will elect additional changes to revenue
      recognition to comply with the most conservative SEC recognition on a forward
      going accrual basis as the model is replicated with other similar markets (i.e.
      SBDC). The Company’s actual results could differ materially from those
      anticipated in these forward-looking statements as a result of certain factors,
      including those set forth therein.




Forward-looking
      statements involve risks, uncertainties and other factors, which may cause
      our
      actual results, performance or achievements to be materially different from
      those expressed or implied by such forward-looking statements. Factors and
      risks
      that could affect our results and achievements and cause them to materially
      differ from those contained in the forward-looking statements include those
      identified in the section titled “Risk Factors” in the Company’s Annual Report
      on Form 10-KSB for the year ended December 31, 2007, as well as other factors
      that we are currently unable to identify or quantify, but that may exist in
      the
      future.




In
      addition, the foregoing factors may affect generally our business, results
      of
      operations and financial position. Forward-looking statements speak only as
      of
      the date the statement was made. We do not undertake and specifically decline
      any obligation to update any forward-looking statements.







**BACKGROUND**





The
      September 30, 2007 financials should be read in conjunction with September
      30,
      2006 financials. These condensed consolidated financial statements have been
      prepared using the generally accepted accounting principles in the United States
      of America on the same basis as the audited consolidated financial statements
      for the year ended December 31, 2006 and, in the opinion of management, include
      all adjustments considered necessary for a fair presentation of financial
      position, results of operations and cash flows of the Company.







13


**Company’s
      overview**







Dairy
      Fresh Farms Inc. (“Dairy Fresh” or the “Company”) and its wholly owned
      subsidiary, Dairy Fresh Technologies Ltd., have the exclusive license in Canada
      to develop and exploit the patented formula for a healthy milk based product
      ”Dairy Fresh Farms”. The Company launched a test trial of 2-litre regular milk
      and a 1-litre lactose free product with Canada Safeway stores in Western Canada
      during the period of January 2005 to December 2005.





The
      Company will launch an expanded product line and in Ultra High Temperature
      (UHT)
      form when planned financing as discussed under “Liquidity and Capital Resources”
is completed. Consequently, there are no revenues in the three and nine months
      ended September30, 2007.





Dairy
      Fresh Farms is an all natural process resulting in a healthier milk based
      product which is low in cholesterol, trans fat free, lactose free, low in
      saturated fat, 99% fat free and has high levels of omega 6 and 3 and
      monounsaturated fat enhanced without compromising great taste.




**Critical
      accounting policies and estimates**




Our
      discussion and analysis of our financial condition and results of operations
      are
      based on our condensed consolidated financial statements, which have been
      prepared in accordance with accounting principles generally accepted in the
      United States of America. The preparation of financial statements requires
      application of management’s subjective judgments, often requiring the need to
      make estimates about the effect of matters that are inherently uncertain and
      may
      change in the subsequent periods. Our actual results may differ substantially
      from these estimates under different assumptions or conditions. While our
      significant accounting policies are described in more detail in the notes to
      the
      condensed consolidated financial statements included in the Form 10-KSB for
      the
      year ended December 31, 2006, we believe that the following accounting policies
      require the application of significant judgments and estimates.





**Plan
      of operation**





The
      plan
      of operation for the Company was developed over a three-year period. Management
      started by studying the Australian experience as it related to the Canadian
      market place. Significant sales numbers had been delivered out of
      Sydney,


Australia
      but with both market changes and potential differing Canadian tastes management
      decided to take another approach to tackling the Canadian market. Camelford
      Graham Research Group undertook an independent market research study. This
      study
      was conducted in Vancouver, British Columbia and Montreal, Quebec. The results
      from the study were published in December 2003 with resulting findings focusing
      our operations on several very important areas.





First,
      the size of the opportunity was much larger than originally anticipated due
      to
      the intent to purchase numbers that resulted from this study. This meant that
      management had to revise the packing sizes for the Dairy Fresh Farms upwards
      to
      accommodate the anticipated demand.





Second,
      the study directed management to launch in Western Canada as a first step into
      the rest of the country. It was perceived that the logistics and more
      importantly the market reception would be very favorable with a product launch
      in the West. This decision was also reinforced with the effort and support
      that
      Canada Safeway stores and their manufacturing division Lucerne Foods gave our
      group with initial manufacturing test runs and distribution
      expertise.





14


Finally,
      it was felt that perfecting the launch strategy in Western Canada would give
      Dairy Fresh Farms a strong base of operations prior to moving into the much
      larger and diverse markets of both Ontario and Quebec.





The
      most
      significant conclusion from our test launch with Canada Safeway/Lucerne was
      the
      need to produce the product in Ultra High Temperature (UHT) format, which will
      provide extended shelf life to approximately 45 days. This is necessary to
      build
      brand awareness with the customers during the early stages of growth and allow
      sufficient distribution time, as the product is rolled out to other retailers.
      Otherwise the company would need to spend excessive amounts on marketing and
      in
      store demos in order to move the product on a timely basis.





We
      finished our test launch in December 2005. We are currently actively seeking
      new
      financing. When the financing is completed, we will resume our production and
      distribution plan for Western Canada and the rest of Canada.





Assuming
      our funding is raised, we intend to focus our sales and marketing efforts over
      the next 12 months primarily on expanding our distribution in Canada. If we
      are
      not able to raise additional funds on a timely basis, any progress with respect
      to our products and our potential revenues will be adversely
      affected.







**RESULTS
      OF OPERATIONS**





**Fluctuations
      in operating results**





Our
      results of operations have fluctuated significantly from period to period and
      are likely to continue to do so in the future. We anticipate that our annual
      results of operations will be impacted for the foreseeable future by several
      factors including the progress and timing of expenditures related to product
      launches. Due to these fluctuations, we believe that the period-to-period
      comparisons of our operating results are not a good indication of our future
      performance.







**OPERATING
      EXPENSES**




**Advertising
      and product support**





With
      the
      launch of the Company’s initial two products there was a marketing program
      established to support sales in the year ended December 31, 2005. The majority
      of the focus was on in-store demos. With the products off the shelves, there
      was
      little in the way of initiatives in the three and nine months ended September
      30, 2007.







**Management
      fees**




Management
      fees for the nine months ended September 30, 2007 were approximately 11% lower
      than for the nine months ended September 30, 2006 with no changes to the
      management structure. Certain of the senior management team have reduced their
      compensation to preserve cash. Cash payment of management fees were suspended
      in


the
      last
      quarter.




15


**Investor
      Relations**




Investor
      Relations in the three and nine month period ended September 30, 2007 include
      a
      significant investment for advisory services regarding a proposed financing
      transaction as well as preparation of corporate materials such as business
      plans
      and corporate presentations.




**Travel**




Travel
      costs for the nine months ended September 30, 2007 decreased 64% from the nine
      months ended September 30, 2007 due to the lack of product support requirements.
      Travel costs reflect senior management maintaining a presence for financing
      and
      business activity in Western Canada.







**Off-Balance
      Sheet Arrangements**




The
      Company did not engage in any off-balance sheet arrangements during the
      quarter.











16




**Liquidity
      and Capital Resources**




At
      September 30, 2007, we have an accumulated deficit of $4,414,256 and we expect
      to incur additional losses in the short term at least until such time, if ever,
      that our products are manufactured and marketed profitably. We have financed
      our
      operations since inception primarily through the private placements of equity
      and debt securities.





At
      September 30, 2007 we have $33,914 in cash. Net cash used in operating
      activities was $347,685 for the nine months ended September 30, 2007
      compared to $437,121 for the nine months ended September 30, 2006.




Assuming
      our funding is raised, we intend to focus our sales and marketing efforts over
      the next twelve months on expanding our distribution and retail share in the
      rest of the Canadian marketplace. In such event, if we are unable to raise
      additional funds on a timely basis or at all, any progress with respect to
      our
      products and, therefore, our potential revenues, would be adversely
      affected.





In
      the
      event that our plans change, our assumptions change or prove inaccurate, or
      if
      our existing cash resources, together with other funding resources including
      anticipated sales of our products, otherwise prove to be insufficient to fund
      our operations, we could be required to seek additional financing. We have
      no
      current arrangements with respect to sources of additional
      financing.





The
      auditors’ report on the Company’s consolidated financial statements as of
      December 31, 2006 states that the net loss incurred during the year ended
      December 31, 2006, the accumulated deficit as of that date, and the other
      factors described in Note 2 to the consolidated financial statements included
      in
      the Company’s Annual Report on Form 10-KSB for the year ended December 31, 2006,
      raise substantial doubt about the Company’s ability to continue as a going
      concern. The auditors’ report on the Company’s financial statements for the year
      ended December 31, 2005 contained a similar statement. The consolidated
      financial statements have been prepared assuming the Company will continue
      as a
      going concern and do not include any adjustments that might result from the
      outcome of this uncertainty.





On
      October 23, 2007, we entered into a definitive Agreement and Plan of Merger
      (the
“Merger Agreement”) with Great Bear Explorations Inc., an Alberta, Canada
      corporation (“GBE”). The Merger Agreement provides that, upon the terms and
      subject to the conditions set forth in the Merger Agreement filed on Form 8-K,
      on October 24, 2007, will merge with and into our company (the “Merger”). The
      closing is anticipated to on or about November 15, 2007.




Also
      as a
      result of the Merger all of the outstanding shares of GBE common stock will
      be
      converted into the right to receive, on a pro rata basis, thirty million
      (30,000,000) shares of our common stock as set forth in the Merger Agreement.
      Consummation of the Merger is subject to customary closing conditions, including
      state regulatory filings and issuance of our common stock.








17








Great
      Bear Explorations Inc.





Great
      Bear Explorations Inc. is a Canadian oil and gas exploration business. This
      corporation has recently acquired a 35% interest in Peace East Energy Corp,
      which has joint venture and farm out agreements with the Tall Cree First Nation.
      The agreements provide for Peace East to participate in oil and gas activities
      on the First Nation Reserve lands (approximately 8,200 ha.) and to post and
      bid
      on other lands that have been extensively analyzed by the Peace East over the
      last 18 months. The “Peace East” area is located in Northern Western Alberta
      .




**Risks
      Related to Our Company**




We
      have
      not been profitable since our inception in 2003. As of September 30, 2007,
      we
      have an accumulated deficit of $4,414,256 primarily as a result of our start
      up
      expenses. We may never realize sufficient revenues from the sale of our products
      or be profitable. Each of the following factors, among others, may influence
      the
      timing and extent of our profitability, if any:





-
            the
                completion and success of financing to provide marketing and
                administration


support
      for the launch of our product;


-
            the
                market acceptance of Dairy Fresh Farms with the Canadian
                Consumer;


-
            our
                ability to effectively and efficiently manufacture, market and distribute
                our products; and


-
            our
                ability to sell our products at competitive prices which exceed our
                per
                unit costs.





We
      anticipate that, if cash generated from operations is insufficient to satisfy
      our requirements, we will require additional funding to continue to market
      our
      products. We will continue to rely on private funding. However, our projections
      of future cash needs and cash flows may differ from actual results.





Our
      plan
      to sell additional equity securities or convertible debt could result in
      dilution to our stockholders. We can give no assurance that we will be able
      to
      generate adequate funds from operations, that funds will be available to us
      from
      debt or equity financing or that, if available, we will be able to obtain such
      funds on favorable terms and conditions. If we cannot obtain such funds if
      needed, we would need to curtail or cease some or all of our
      operations.




**ITEM
      3. CONTROLS AND PROCEDURES**




**Evaluation
      of Disclosure Controls and Procedures**





We
      carried out an evaluation, under the supervision and with the participation
      of
      our management, including our Chief Executive Officer and Principal Financial
      and Accounting Officer, of the effectiveness of our disclosure controls and
      procedures, as defined in Rules 13a-15(e) and 15d-15(e) of the Securities
      Exchange Act of 1934 as of the end of the period covered by this report. Based
      on that evaluation, our Chief Executive Officer and Principal Financial and
      Accounting Officer have concluded that our disclosure controls and procedures
      as
      of September 30, 2007 were not effective due to material weakness in our
      internal controls over financial reporting described below, and other factors
      related to the Company’s financial reporting processes and information
      technology security protocols.





18


As
      disclosed in the Company’s Form 10-KSB for the year ended December 31, 2006,
      both the Company and its independent registered public accounting firm
      identified certain significant internal control deficiencies that we considered
      to be, in the aggregate, a material weakness. The primary concern was the
      adequacy of review of supporting schedules that result in adjusting journal
      entries being entered into the accounting systems that were inaccurate or
      disclosures in the notes to the financial statements that were incorrect or
      inadequate. These inaccuracies were not detected by the control procedures
      of
      management reviewing the schedules and supporting documentation, resulting
      in
      errors appearing on the financial statements and subsequent detection in the
      audit. The other area of concern was the inadequate segregation of duties among
      the administrative staff. Due to the size of our Company and the costs
      associated to remediate these issues, we still consider these concerns to be
      relevant.





**Changes
      in Internal Controls**





During
      the Quarter ended September 30, 2007, there was no change in our internal
      control over financial reporting (as such term is defined in Rule 13a-15(f)
      under the Exchange Act) that has materially affected, or is reasonably likely
      to
      materially affect, our internal control over financial reporting.







PART
      II OTHER INFORMATION








Item
      1.
      Legal Proceedings






There
      are
      no material currently pending legal proceedings to which the Company is a party
      and, to the Company's knowledge, no proceedings are contemplated against the
      Company.







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







In
      February 2007, the Company issued 3,402,000 common shares as payment for
      professional fees incurred for the period from October 1, 2006 to December
      31,
      2007, valued at $0.30 per share which represents the fair value of the Company’s
      share when the services were completed. The excess in the par value is recorded
      in contributed surplus. In
      February 2006, the Company issued 35,000 common shares in exchange for
      professional fees incurred. The shares were valued at $0.75 per share which
      represents the fair value of the Company’s share when the services were
      completed. The excess in the par value is recorded in contributed
      surplus.




In
      February 2007, the Company issued 210,000 common shares to repay a Note Payable
      to an Officer of the Company. The shares were valued at $0.30 per share which
      represents the fair value of the Company’s share when the Note Payable was
      repaid. The excess in the par value is recorded in contributed
      surplus.







**Item
      3.**  **Defaults
      upon Senior Securities**





There
      were no defaults upon senior securities during the period ended September 30,
      2007.





19





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




There
      were no matters submitted to the vote of securities holders during the period
      ended September 30, 2007.





**Item
      5.**  **Other
      Information:**







There
      is
      no information with respect to which information is not otherwise called for
      by
      this form.







Item
      6.
      Exhibits




A.
      Exhibits:




31.1
            Certification
                of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley
                Act.





31.2
            Certification
                of Principal Financial and Accounting Officer Pursuant to
                Section 302 of the Sarbanes-Oxley Act.





32.1
              Certification
                  of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley
                  Act.
 32.2
                Certification
                      of Principal Financial and Accounting Officer Pursuant to
                      Section 906 of the Sarbanes-Oxley Act.


20











**SIGNATURES**





Pursuant
      to the requirements of Section 13 or 15(b) of the Securities Exchange Act of
      1934, the registrant caused this report to be signed on its behalf by the
      undersigned, thereunto duly authorized, in the city of Ottawa,
      Canada.


DAIRY
                FRESH FARMS INC.Date: November
              14, 2007
            By:
            /s/ Robert
              HarrisonRobert
                Harrison
              Chief
                  Executive Officer





Date: November
              14, 2007
            By:
            /s/ Don
              PatersonDon
                Paterson
              Principal
                  Accounting Officer







21