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


**Washington,
      D.C. 20549**







**FORM
      10-Q**







**(Mark
      One)**


**x**
            **QUARTERLY
                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
                ACT OF
                1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30,
                2008**




**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)**




Indicate
      by check mark whether the Registrant (1) has filed all reports required by
      Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
      preceding 12 months (or for such shorter period that the Registrant was required
      to file such reports) and (2) has been subject to such filing requirements
      for the past 90 days:  Yes x No  ̈





Indicate
      by check mark whether the Registrant is a large accelerated filer, an
      accelerated filer, or a non–accelerated filer. See definition of “accelerated
      filer and large accelerated filer” in Rule 12b–2 of the Exchange Act. (Check
      one):





Large
      accelerated filer  ̈ Accelerated
      filer  ̈ Non–Accelerated
      filer  ̈   Small
      Business Issuer 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





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





Indicate
      the number of shares outstanding of each of the issuer’s classes of common
      stock, as of the latest practicable date.





**Class**
            
            **Outstanding
                at August 19, 2008**Common
                stock, $0.001 par value
            
            56,883,478










**Part
      I. Financial Information**


**Page****PART
                    I - FINANCIAL INFORMATION**Item 1.
                
                Condensed
                    Consolidated Financial Statements (unaudited)Condensed
                    Consolidated Balance Sheets
                
                4Condensed
                    Consolidated Statements of Income
                
                5Condensed
                    Consolidated Statement of Cash Flows
                
                6Notes
                    to Condensed Consolidated Financial Statements
                
                7Item 2.
                
                Management
                    Discussion & Analysis of Financial Condition and Results of
                    Operations
                
                15Item 3
                
                Quantitative
                    and Qualitative Disclosures About Market Risk
                
                19Item 4.
                
                Controls
                    and Procedures
                
                20**PART
                    II – OTHER INFORMATION**Item 1.
                
                Legal
                    Proceedings
                
                21Item 1A
                
                Risk
                    Factors
                
                21Item 2.
                
                Unregistered
                    Sales of Equity Securities and Use of Proceeds
                
                22Item 3.
                
                Defaults
                    Upon Senior Securities
                
                22Item 4.
                
                Submission
                    of Matters to a Vote of Security Holders
                
                22Item 5
                
                Other
                    information
                
                22Item 6.
                
                Exhibits
                
                23




*CERTIFICATIONS*


Exhibit
                  31 – Management certificationExhibit
                  32 – Sarbanes-Oxley Act









PART
      I
      FINANCIAL INFORMATION





General





The
      accompanying condensed consolidated financial statements have been prepared
      in
      accordance with the instructions to Form 10-Q. 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, 2007. 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 June 30, 2008 are not
      necessarily indicative of the results that can be expected for the year ended
      December 31, 2008.





3




**Dairy
        Fresh Farms Inc.**
 **Condensed
        Consolidated Balance Sheets**
 Expressed
        in U.S. Dollars
 
 June 30,
              
              December 31,2008
              
              2007(Unaudited)
              
              (Audited)AssetsCurrent
                  AssetsCash
              
              $
              3,883
              
              $
              299,665Accounts
                  Receivable
              
              
              -
              
              
              -Prepaid
                  expenses
              
              
              -
              
              
              458Loan
                  Receivable – Others
              
              
              196,078
              
              
              -199,961
              
              
              300,123Property
                  and equipment
              
              
              5,987
              
              
              7,325$
              205,948
              
              $
              307,448LIABILITIESCurrent
                  liabilitiesAccounts
                  payable and accrued liabilities
              
              $
              453,243
              
              $
              243,636Management
                  contracts payable (Note 6)
              
              
              344,097
              
              
              357,788Notes
                  payable
              
              
              80,465
              
              
              41,030Loan
                  payable from affiliates
              
              
              1,235,362
              
              
              1,284,8572,113,167
              
              
              1,927,311SHAREHOLDERS’
                  DEFICIENCYCommon
                  shares, $0.001 par value, voting, 150,000,000 authorized shares,
                  56,883,478 shares issued and outstanding as of June 30, 2008 and
                  56,633,478 shares as of December 31, 2007
              
              
              43,593
              
              
              43,593Contributed
                  surplus
              
              
              4,686,501
              
              
              4,686,501Accumulated
                  comprehensive loss
              
              
              (242,662
              )
              
              (312,402
              )Deficit
              
              
              (6,394,651
              )
              
              (6,037,555
              )(1,907,219
              )
              
              (1,619,863
              )$
              205,948
              
              $
              307,448
  The
        accompanying notes are an integral part of the condensed consolidated financial
        statements.




4




**Dairy
      Fresh Farms Inc.**


**Condensed
      Consolidated Statements of Operations**


Expressed
      in U.S. Dollars







UnauditedThree Months Ended
              June 30
            
            Six Months Ended
              June 30**2008**
            
            **2007**
            
            **2008**
            
            **2007**$
            
            $
            
            $
            
            $Operating
                ExpensesFreight
                and Product costs
            
            
            -
            
            
            1,288
            
            
            -
            
            
            13,361Advertising
            
            
            -
            
            
            3,779
            
            
            -
            
            
            7,122Depreciation
                of property andEquipment
            
            
            540
            
            
            912
            
            
            1,079
            
            
            1,767Interest
                and Bank Charges, Net
            
            
            2,622
            
            
            10,691
            
            
            2,939
            
            
            10,634Management
                Fees
            
            
            214,060
            
            
            82,192
            
            
            214,060
            
            
            159,306Office
            
            
            11,421
            
            
            2,481
            
            
            13,364
            
            
            5,528Investor
                Relations
            
            
            -
            
            
            243,727
            
            
            -
            
            
            481,761Professional
                Fees
            
            
            35,107
            
            
            4,864
            
            
            78,287
            
            
            51,639Rent
            
            
            847
            
            
            4,358
            
            
            2,793
            
            
            8,446Telecommunications
            
            
            4,315
            
            
            2,810
            
            
            7,937
            
            
            7,505Travel
            
            
            5,690
            
            
            14,720
            
            
            36,636
            
            
            24,620274,602
            
            
            371,822
            
            
            357,095
            
            
            771,689Net
                Loss
            
            
            (274,602
            )
            
            (371,822
            )
            
            (357,095
            )
            
            (771,689
            )Other
                comprehensive lossForeign
                  currency translationAdjustment
            
            
            (302
            )
            
            23,455
            
            
            (72
            )
            
            (58,747
            )Comprehensive
                Loss
            
            
            (274,904
            )
            
            (348,367
            )
            
            (357,167
            )
            
            (830,436
            )Net
                loss per share, basic and diluted
            
            $
            (0.01
            )
            
            (0.02
            )
            
            (0.01
            )
            
            (0.03
            )Weighted
                average common sharesOutstanding
            
            
            56,883,478
            
            
            23,003,549
            
            
            56,883,478
            
            
            22,225,273





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




5




**Dairy
      Fresh Farms Inc.**


**Condensed
      Consolidated Statements of Cash Flows**


Expressed
      in U.S. Dollars







Six Months Ended
                June 302008
              
              2007OPERATING
                  ACTVITIESNet
                  loss
              
              
              (357,095
              )
              
              (771,689
              )Adjustments
                  to reconcile net loss to net cash provided by (used in) operating
                  activitiesDepreciation
                  and amortization
              
              
              1,079
              
              
              969Issuance
                  of common stocks in exchange for services
              
              
              -
              
              
              1,020,600Changes
                  in working capital itemsAccounts
                  Receivable
              
              
              -
              
              
              49,056Prepaid
                  Expenses
              
              
              458
              
              
              (425,457
              )Accounts
                  payable and accrued liabilities
              
              
              209,607
              
              
              (111,152
              )Management
                  contracts payable
              
              
              (13,691
              )
              
              (25,161
              )(159,642
              )
              
              (262,834
              )INVESTING
                  ACTIVITIESPurchase
                  of property and equipment
              
              
              -
              
              
              -Cash
                  Flows used in investing activities
              
              
              -
              
              
              -FINANCING
                  ACTIVITIESLoan
                  Receivable – Others
              
              
              (196,078
              )
              
              -Loan
                  Payable from Affiliates
              
              
              (49,495
              )
              
              -Issuance
                  of convertible debtProceeds
                  from notes payable
              
              
              39,435
              
              
              -Repayment
                  of notes payable
              
              
              -
              
              
              (57,641
              )Cash
                  flows provided by financing activities
              
              
              (206,138
              )
              
              (57,641
              )Effect
                  of changes in exchange rates on cash
              
              
              69,998
              
              
              16,602Net
                  increase in cash
              
              
              (295,782
              )
              
              (303,873
              )Cash,
                  beginning of period
              
              
              299,665
              
              
              375,858Cash,
                  end of period
              
              
              3,883
              
              
              71,985





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




6




**Dairy
      Fresh Farms Inc.**


**Notes
      to Condensed Consolidated Financial Statements**


**June
      30, 2008**


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, 2007 and,
      in
      the opinion of management, include all adjustments considered necessary for
      a
      fair presentation of financial position, results of June 30, 2008 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 Farms TM" 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**


**June
      30, 2008**


Expressed
      in U.S. Dollars


(Unaudited)







***LIQUIDITY***





The
      Company has incurred a net loss of $274,602 and $357,095 during the three and
      six months ended June 30, 2008. In addition, the Company generated negative
      cash
      flows from operations of $159,642 for the six months ended June 30, 2008 and
      has
      generated negative cash flows from operations since inception.


The
      audit
      states that the net loss incurred during the year ended December 31, 2007,
      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, 2007 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, 2006
      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 sufficiency 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**


**June
      30, 2008**


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.




**Threemonthsended**
              **June 30,2008**
              **(Unaudited)**
            
            **Threemonthsended**
              **June 30.2007**
              **(Unaudited)**
            
            **Six monthsended**
              **June 30,2008**
              **(Unaudited)**
            
            **Six monthsended**
              **June 30. 2007**
              **(Unaudited)**ExpensesManagement
                fees (a)
            
            
            
            
            
            **82,192**
            
            
            **214,060**
            
            
            **159,306**Amounts
                due to and due from related partiesAmount
                due from companies under common control (b)
            
            
            
            
            
            
            
            
            **-**Notes
                payable to related parties (c)
            
            
            
            
            
            
            
            
            **80,465**
            
            
            **25,983**Amount
                due to a company under common control (d)
            
            
            
            
            
            
            
            
            **-**
            
            
            **6,754**




(a)
      During the six month periods ended June 30, 2008 and June 30, 2007, the Company
      incurred management services to four companies controlled by officers of the
      Company. The management fees payable are $344,097 as at June 30, 2008 and
      $188,749 as at June 30, 2007




(b)
      The
      Company issued $41,030 of 5% promissory notes to an officer of the Company
      during the year ended December 31, 2007. The notes are repayable when a major
      financing is completed.




9




**Dairy
      Fresh Farms Inc.**


**Notes
      to Condensed Consolidated Financial Statements**


**June
      30, 2008**


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 June 30, 2008 is $NIL (June
      30,
      2007 - $6,754). The Company expensed $nil in the three and six months ended
      June
      30, 2008 and $nil in the three and six months ended June 30, 2007,
      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.




***6*** **–
      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:





**Three months ended**
              **June 30, 2008**
              **(Unaudited)**
            
            **Three months ended**
              **June 30, 2007(Unaudited)**
            
            **Six months ended**
              June 30, 2008
              (Unaudited
            
            **Six months ended**
              June 30, 2007
              (Unaudited$
            
            
            $
            
            
            $
            
            
            $Net
                loss as reported
            
            
            
            
            
            (371,822
            )
            
            (357,095
            )
            
            (771,689
            )Foreign
                currency translation adjustment
            
            
            
            
            
            23,455
            
            
            (72
            )
            
            (58,747
            )Comprehensive
                loss
            
            
            -
            
            
            (348,367
            )
            
            (357,167
            )
            
            (830,436
            )




10




**Dairy
      Fresh Farms Inc.**


**Notes
      to Condensed Consolidated Financial Statements**


**June
      30, 2008**


Expressed
      in U.S. Dollars


(Unaudited)







**7
      - NEW ACCOUNTING PRONOUNCEMENTS**




*Determining
      Whether Instruments Granted in Share-Based Payment Transactions Are
      Participating Securities*





In
      June 2008, the FASB issued FSP Emerging Issues Task Force (“EITF”) Issue
      No. 03-6-1, “Determining Whether Instruments Granted in Share-Based Payment
      Transactions Are Participating Securities.” The FSP addresses whether
      instruments granted in share-based payment transactions are participating
      securities prior to vesting and, therefore, need to be included in the earnings
      allocation in computing earnings per share under the two-class method. The
      FSP
      affects entities that accrue dividends on share-based payment awards during
      the
      awards’ service period when the dividends do not need to be returned if the
      employees forfeit the award. This FSP is effective for fiscal years beginning
      after December 15, 2008. The Company is currently assessing the impact of
      FSP EITF 03-6-1 on its consolidated financial position and results of
      operations.





*Determining
      Whether an Instrument (or an Embedded Feature) Is Indexed to an entity's Own
      Stock*





In
      June
      2008, the FASB ratified EITF Issue No. 07-5, "Determining Whether an Instrument
      (or an Embedded Feature) Is Indexed to an Entity's Own Stock" (EITF 07-5).
      EITF
      07-5 provides that an entity should use a two step approach to evaluate whether
      an equity-linked financial instrument (or embedded feature) is indexed to its
      own stock, including evaluating the instrument's contingent exercise and
      settlement provisions. It also clarifies on the impact of foreign currency
      denominated strike prices and market-based employee stock option valuation
      instruments on the evaluation. EITF 07-5 is effective for fiscal years beginning
      after December 15, 2008. The Company is currently assessing the impact of EITF
      07-5 on its consolidated financial position and results of
      operations.





*Accounting
      for Convertible Debt Instruments That May Be Settled in Cash upon Conversion
      (
      Including Partial Cash Settlement)*





In
      May 2008, the FASB issued FSP Accounting Principles Board (“APB”) Opinion
      No. 14-1, “Accounting for Convertible Debt Instruments That May Be
      Settled in Cash upon Conversion (Including Partial Cash Settlement).” The FSP
      clarifies the accounting for convertible debt instruments that may be settled
      in
      cash (including partial cash settlement) upon conversion. The FSP requires
      issuers to account separately for the liability and equity components of certain
      convertible debt instruments in a manner that reflects the issuer's
      nonconvertible debt (unsecured debt) borrowing rate when interest cost is
      recognized. The FSP requires bifurcation of a component of the debt,
      classification of that component in equity and the accretion of the resulting
      discount on the debt to be recognized as part of interest expense in our
      consolidated statement of operations. The FSP requires retrospective application
      to the terms of instruments as they existed for all periods presented. The
      FSP
      is effective for us as of January 1, 2009 and early adoption is not permitted.
      The Company is currently evaluating the potential impact of FSP APB 14-1 upon
      its consolidated financial statements.




11




**Dairy
      Fresh Farms Inc.**


**Notes
      to Condensed Consolidated Financial Statements**


**June
      30, 2008**


Expressed
      in U.S. Dollars


(Unaudited)







*The
      Hierarchy of Generally Accepted Accounting Principles*




In
      May
      2008, the FASB issued SFAS No. 162, "The Hierarchy of Generally Accepted
      Accounting Principles" (FAS No.162). SFAS No. 162 identifies the sources of
      accounting principles and the framework for selecting the principles used in
      the
      preparation of financial statements. SFAS No. 162 is effective 60 days following
      the SEC's approval of the Public Company Accounting Oversight Board amendments
      to AU Section 411, "The Meaning of Present Fairly in Conformity with Generally
      Accepted Accounting Principles". The implementation of this standard will not
      have a material impact on the Company's consolidated financial position and
      results of operations.




*Determination
      of the Useful Life of Intangible Assets*




In
      April
      2008, the Financial Accounting Standards Board (“FASB”) issued FASB Staff
      Position on Financial Accounting Standard (“FSP FAS”) No. 142-3, “Determination
      of the Useful Life of Intangible Assets”, which amends the factors that should
      be considered in developing renewal or extension assumptions used to determine
      the useful life of intangible assets under SFAS No. 142 “Goodwill and Other
      Intangible Assets”.  The intent of this FSP is to improve the consistency
      between the useful life of a recognized intangible asset under SFAS No. 142
      and
      the period of the expected cash flows used to measure the fair value of the
      asset under SFAS No. 141 (revised 2007) “Business Combinations” and other U.S.
      generally accepted accounting principles.    The Company is
      currently evaluating the potential impact of FSP FAS No. 142-3 on its
      consolidated financial statements.




*Disclosure
      about Derivative Instruments and Hedging Activities*




In
      March
      2008, the FASB issued SFAS No. 161, *“* Disclosure
      about Derivative Instruments and Hedging Activities *,* an
      amendment of SFAS No. 133”, (SFAS 161). This statement requires that objectives
      for using derivative instruments be disclosed in terms of underlying risk and
      accounting designation. The Company is required to adopt SFAS No. 161 on January
      1, 2009. The Company is currently evaluating the potential impact of SFAS No.
      161 on the Company’s consolidated financial statements.




12




**Dairy
      Fresh Farms Inc.**


**Notes
      to Condensed Consolidated Financial Statements**


**June
      30, 2008**


Expressed
      in U.S. Dollars


(Unaudited)







*Delay
      in Effective Date*




In
      February 2008, the FASB issued FSP FAS No. 157-2, “Effective Date of FASB
      Statement No. 157”. This FSP delays the effective date of SFAS No. 157 for
      all nonfinancial assets and nonfinancial liabilities, except those that are
      recognized or disclosed at fair value on a recurring basis (at least annually)
      to fiscal years beginning after November 15, 2008, and interim periods
      within those fiscal years. The impact of adoption was not material to the
      Company’s consolidated financial condition or results of
      operations.




*Business
      Combinations*




In
      December 2007, the FASB issued SFAS No. 141(R) “Business Combinations” (SFAS
      141(R)). This Statement replaces the original SFAS No. 141. This Statement
      retains the fundamental requirements in SFAS No. 141 that the acquisition
      method of accounting (which SFAS No. 141 called the *purchase
      method* )
      be used
      for all business combinations and for an acquirer to be identified for each
      business combination. The objective of SFAS No. 141(R) is to improve the
      relevance, and comparability of the information that a reporting entity provides
      in its financial reports about a business combination and its effects. To
      accomplish that, SFAS No. 141(R) establishes principles and requirements for
      how
      the acquirer:




a.
            Recognizes
                and measures in its financial statements the identifiable assets
                acquired,
                the liabilities assumed, and any noncontrolling interest in the
                acquiree.


b.
            Recognizes
                and measures the goodwill acquired in the business combination or
                a gain
                from a bargain purchase.


c.
            Determines
                what information to disclose to enable users of the financial statements
                to evaluate the nature and financial effects of the business
                combination.




This
      Statement applies prospectively to business combinations for which the
      acquisition date is on or after the beginning of the first annual reporting
      period beginning on or after December 15, 2008 and may not be applied before
      that date. The Company is unable at this time to determine the effect that
      its
      adoption of SFAS No. 141(R) will have on its consolidated results of operations
      and financial condition.




13




**Dairy
      Fresh Farms Inc.**


**Notes
      to Condensed Consolidated Financial Statements**


**June
      30, 2008**


Expressed
      in U.S. Dollars


(Unaudited)







*Noncontrolling
      Interests in Consolidated Financial Statements—an amendment of ARB No.
      51*




In
      December 2007, the FASB issued SFAS No. 160 “Noncontrolling Interests in
      Consolidated Financial Statements – an amendment of ARB No. 51” (SFAS No. 160).
      This Statement amends the original Accounting Review Board (ARB) No. 51
“Consolidated Financial Statements” to establish accounting and reporting
      standards for the noncontrolling interest in a subsidiary and for the
      deconsolidation of a subsidiary. It clarifies that a noncontrolling interest
      in
      a subsidiary is an ownership interest in the consolidated entity that should
      be
      reported as equity in the consolidated financial statements. This Statement
      is
      effective for fiscal years and interim periods within those fiscal years,
      beginning on or after December 15, 2008 and may not be applied before that
      date.
      The Company is unable at this time to determine the effect that its adoption
      of
      SFAS No. 160 will have on its consolidated results of operations and financial
      condition.




*Fair
      Value Option for Financial Assets and Financial Liabilities*




In
      February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for
      Financial Assets and Financial Liabilities – Including an amendment of SFAS No. 115” (SFAS No. 159), which becomes effective
      for the Company on February 1, 2008, permits companies to choose to measure
      many
      financial instruments and certain other items at fair value and report
      unrealized gains and losses in earnings. Such accounting is optional and is
      generally to be applied instrument by instrument. The Company does not
      anticipate its election of this fair-value option will have a material effect
      on
      its consolidated financial condition, results of operations, cash flows or
      disclosures.




*Fair
      Value Measurements*




In
      September 2006, the FASB issued SFAS No. 157, "Fair Value Measurements" (SFAS
      No. 157). SFAS No. 157 provides guidance for using fair value to measure assets
      and liabilities. SFAS No. 157 addresses the requests from investors for expanded
      disclosure about the extent to which companies’ measure assets and liabilities
      at fair value, the information used to measure fair value and the effect of
      fair
      value measurements on earnings. SFAS No. 157 applies whenever other standards
      require (or permit) assets or liabilities to be measured at fair value, and
      does
      not expand the use of fair value in any new circumstances. SFAS No. 157 is
      effective for financial statements issued for fiscal years beginning after
      November 15, 2007 and has been adopted by the Company in the first quarter
      of
      fiscal year 2008. The Company is unable at this time to determine the effect
      that its adoption of SFAS No. 157 will have on its consolidated results of
      operations and financial condition.




14






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





This
      Management's Discussion and Analysis of Financial Condition and Results of
      Operation contains various "forward looking statements" within the meaning
      of
      Section 21E of the Securities Exchange Act of 1934 and Section 27A of the
      Securities Act of 1933, regarding future events or the future financial
      performance of the Company that involve risks and uncertainties. Certain
      statements included in this Form 10−Q, 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'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.





Management’s
      Discussion and Analysis of Financial Condition and Results of Operations
      ("MD&A") should be read in conjunction with the consolidated condensed
      financial statements included herein. Further, this quarterly report on Form
      10−Q should be read in conjunction with the Company’s consolidated financial
      statements and notes to consolidated financial statements included in its 2007
      Annual Report on Form 10−KSB. In addition, you are urged to read this report in
      conjunction with the risk factors described herein.




**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 realizes that it has to look at different opportunities in order to
      expand on it’s current business plan and to provide for the long term success of
      the Company. After a considerable and lengthy overview of opportunities,
      management determined that it would be in the best interests of the Company
      and
      its shareholders to enter into an agreement to merge an operating entity into
      the Company.





**Great
      Bear Explorations Inc.**





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”). Pursuant to the terms and conditions of the Merger
      Agreement, GBE merged with and into our company (the “Merger”).




15


Also
      as a
      result of the Merger all of the outstanding shares of GBE common stock were
      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.





The
      original business model surrounding the Dairy Fresh Farms Intellectual Property
      has evolved with the merger with Great Bear Exploration. At the present time
      we
      have two distinct business groups within the company. As we move forward, we
      intend to see the role of the Dairy Business reduced in our overall plans with
      the option of selling off this section of the business using a third party
      arms
      length value assessor for the eventual sale. This will leave us with a business
      plan focused on the Oil and Gas business. For instance, we anticipate that
      on a
      moving forward basis our first plan of action within the old Dairy Fresh
      Business is to keep the value of the past work at its highest possible value,
      this would include all of the licensing agreements, trademarks, research and
      manufacturing contacts as well as suppliers of ingredients. On a moving forward
      basis we would look at several options. The first would be to sell off what
      we
      have achieved to date as a turn key opportunity. The second would be to just
      sell off the licensing to a manufacturer who wanted to expand their product
      line
      into the health food category. The number of employees in this area is one.
      The
      mandate that management has been working under is to keep the optimum value
      of
      the Dairy Fresh business intact while looking or accepting offers. To date
      we
      have not received any offers but have several interested parties doing due
      diligence.





On
      October 23, 2007, Dairy Fresh Farms, Inc., an Nevada company (the “Company”),
      entered into a definitive Agreement and Plan of Merger (the “Merger Agreement”)
      with Great Bear Explorations Inc., an Alberta, Canada corporation (“GBE”). Dairy
      Fresh Farms Inc. is the surviving entity. The Board of Directors has voted
      to
      change the operating name from Dairy Fresh Farms Inc. to Great Bear Oil and
      Gas,
      Inc. Management is proceeding with corporate and regulatory requirements to
      finalize this name change. For the remainder of this document we will refer
      to
      the new entity as Dairy Fresh/Great Bear)





Dairy
      Fresh/Great Bear is a Nevada Corporation with 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 Energy Corp to participate
      in oil and gas activities on the Tall Cree Reserve lands (approximately 8,200
      ha.) and to post and bid on other lands that have been extensively analyzed
      by
      the Peace East Energy Corp over the last 18 months. The “Peace East” area is
      located in North Central Alberta.


An
      extensive Business Plan is being developed for the Dairy Fresh/Great Bear side
      of the business.





The
      principals of Dairy Fresh/Great Bear have a historical relationship with several
      of the First Nations in British Columbia and Alberta based on past business
      activities in the forestry, mining and energy sectors during the past twenty
      years.





We
      share
      a key objective to create a sustainable economy for all concerned.




16


Opening
      these oil and gas properties to the world markets ensures that new funds will
      flow through to each individual band member ensuring long-term economic
      benefits.





Included
      in this plan is the task of providing comprehensive training for the individual
      Band Members in a wide range of career fields including but not limited to:
      construction estimating, pipeline construction, well site maintenance,
      environmental assessment and environmental reclamation as well as archeological
      site impact assessment.





Together
      we will add value to Albert’s skilled labor pool and enhance Northern Alberta’s
      regional economy.





**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.





**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 financing related to the ongoing
      development of our oil and gas properties.





Dairy
      Fresh/Great Bear is a development stage Nevada Company with Canadian interests.
      The Company has acquired a 35% interest in Peace East Energy Corp, whose assets
      consists of joint venture and farm out agreements with the Tall Cree First
      Nation in North Central Alberta, Canada. These agreements provide for Peace
      East
      Energy Corp., to participate in oil and gas activities on certain property
      (approximately 8,200 ha.) and to post and bid on other properties that have
      been
      extensively analyzed by Peace East Energy Corp over the past 18 months. In
      addition, the owners of Peace East Energy Corp. have given Dairy Fresh/Great
      Bear first right of refusal to acquire the remaining 65% of the Peace East
      Energy Corp.





Our
      partners the Tall Cree First nations are based and live on 5 widely spaced
      reserves which are like islands within a larger Tall Cree First Nations
      Traditional Land-use Area of approximately 6,000,000 acres. Our mandate at
      Dairy
      Fresh/Great Bear is to expand our land lease base to acquire up to 531 sections
      (339,840 acres or 531 square miles), of both on and off reserve property.




17


Management
      is looking to self fund the project in the short term with the eventual goal
      of
      utilizing a convertible debenture loan vehicle to raise additional capital
      for
      the Company. This will be specifically targeted on the four key areas of the
      Oil
      and Gas Business:


(i.)
      The
      first area is the acquisition of the remaining 65% of the Peace East Energy
      Corp., to ensure 100% ownership of the project moving forward, although not
      a
      critical need management believes it is desirable. If we cannot close the
      remaining 65% management would move to have a value associated with the
      remaining 65% so that this ownership issue does not come back once we go into
      full production with a huge cost overhang;


(ii.)
      The
      second funding requirement is to Post and pay for land acquisition. Our current
      Joint Venture agreements allow us to acquire up to 531 square miles (sections)
      of territory in our mandate. Without this property we would have no land to
      explore and drill on. In our agreements with the Tall Cree First Nation partners
      of North Central Alberta the ability to acquire up to 5% of the territory of
      Peace East lands which are the traditional hunting and gathering lands of the
      Tall Cree. The Company has a time limit of 3 years to acquire all of the
      property; however, management may if the price is advantageous move to purchase
      the entire package in years one and two. Geological promising locations have
      been identified by the Company to acquire over the past 18 months of analysis;


(iii.)
      The third area is again part of our mandate with the Tall Cree and that is
      to
      ensure we comply with and do preliminary environmental assessment work on
      potential seismic testing routes and shoot the first 15km of seismic in year
      one. It is important to understand that this is just the preliminary work and
      failure to meet these minimum targets will mean the loss of the agreement with
      the Tall Cree energy companies. Once through the first year we have additional
      requirements to purchase additional leases (200 square miles) and do more
      seismic (100km) and to start to drill wells at a pace of 21 per year;


(iv.)
      Over the next twelve months the operations budget, (office lease, travel,
      employees, telephone, insurance, audit/legal, compliance work etc.), is
      estimated at $950,000 USD. This does not include the costs associated with
      land
      acquisition, environmental work, seismic or test drilling.





In
      summary, we believe that Dairy Fresh/Great Bear represents a significant
      opportunity for our shareholders. The Peace East property is located in close
      proximity at its southern end to major pipelines and infrastructure including
      paved road, air fields and supplies.




**Off-Balance
      Sheet Arrangements**




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




**Liquidity
      and Capital Resources**




At
      June
      30, 2008, we have an accumulated deficit of $6,394,651 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
      June
      30, 2008, we have $3,883 in cash.




18


Assuming
      our funding is raised, we intend to focus our efforts over the next twelve
      months on creating and entering into marketing and sales agreements in 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, 2007 states that the net loss incurred during the year ended
      December 31, 2007, 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, 2007,
      as well as the accumulated deficit as of June 30, 2008, and the other factors
      described in Note 2 to the consolidated financial statements included in the
      Company’s Quarterly Report on Form 10-Q raise substantial doubt about the
      Company’s ability to continue as a going concern. 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”). Pursuant to the terms and conditions of the Merger
      Agreement, GBE merged with and into our company (the “Merger”).




Also
      as a
      result of the Merger all of the outstanding shares of GBE common stock were
      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.




Additional
      Information




We
      file
      reports and other materials with the Securities and Exchange Commission. These
      documents may be inspected and copied the Commission’s Public Reference Room at
      100 F Street, N.E., Washington, D.C. 20549. The public may obtain information
      on
      the operation of the Public Reference Room by calling the Commission at
      1-800-SEC-0330. The Commission maintains a web site at http://www.sec.gov that
      contains reports, proxy and information statements, and other information
      regarding issuers that file electronically with the Commission.


**ITEM
        3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
        RISK**
  We
        do not
        hold any derivative instruments and do not engage in any hedging activities.




19


**ITEM
      4. CONTROLS AND PROCEDURES**




*(a)
      Evaluation of Disclosure Controls and Procedures.* Our
      Chief Executive Officer and Chief Financial Officer evaluated the effectiveness
      of our disclosure controls and procedures as of the end of the period covered
      by
      this report. Based on that evaluation, our Chief Executive Officer and Chief
      Financial Officer concluded that our disclosure controls and procedures as
      of
      the end of the period covered by this report were effective such that the
      information required to be disclosed by us in reports filed under the Securities
      Exchange Act of 1934 is (i) recorded, processed, summarized and reported
      within the time periods specified in the SEC’s rules and forms and
      (ii) accumulated and communicated to our management, including our Chief
      Executive Officer and Chief Financial Officer, as appropriate to allow timely
      decisions regarding disclosure. A controls system cannot provide absolute
      assurance, however, that the objectives of the controls system are met, and
      no
      evaluation of controls can provide absolute assurance that all control issues
      and instances of fraud, if any, within a company have been
      detected.




*Management’s
      Report on Internal Control over Financial Reporting.* Our
      management is responsible for establishing and maintaining adequate internal
      control over financial reporting (as defined in Rule 13a-15(f) under the
      Exchange Act). Our internal control over financial reporting is a process
      designed to provide reasonable assurance regarding the reliability of financial
      reporting and the preparation of financial statements for external purposes
      in
      accordance with accounting principles generally accepted in the United States.




Because
      of its inherent limitations, internal control over financial reporting may
      not
      prevent or detect misstatements. Therefore, even those systems determined to
      be
      effective can provide only reasonable assurance of achieving their control
      objectives. Furthermore, smaller reporting companies face additional
      limitations.  Smaller reporting companies employ fewer individuals and find
      it difficult to properly segregate duties.  Often, one or two individuals
      control every aspect of the Company’s operation and are in a position to
      override any system of internal control.  Additionally, smaller reporting
      companies tend to utilize general accounting software packages that lack a
      rigorous set of software controls.





Our Chief Executive Officer and Chief Financial Officer ,
      evaluated the effectiveness of the Company’s internal control over financial
      reporting as of June 30, 2008.  In making this assessment, our management
      used the criteria set forth by the Committee of Sponsoring Organizations of
      the
      Treadway Commission (COSO) in Internal Control — Integrated Framework.
 Based on this evaluation, our management, with the participation of the
      President, concluded that, as of June 30, 2008, our internal control over
      financial reporting was effective.





(b) *Changes
      in Internal Control over Financial Reporting.* There
      were no changes in our internal control over financial reporting, as defined
      in
      Rules 13a-15(f) and 15d-15(f) under the Exchange Act, during our most recently
      completed fiscal quarter that have materially affected, or are reasonably likely
      to materially affect, our internal control over financial
      reporting.


20




**PART
      II** **–
      OTHER INFORMATION**




**ITEM
      1.**  **Legal
      Proceedings**




We
      are
      currently not involved in any litigation that we believe could have a material
      adverse effect on our financial condition or results of operations. There is
      no
      action, suit, proceeding, inquiry or investigation before or by any court,
      public board, government agency, self-regulatory organization or body pending
      or, to the knowledge of the executive officers of our company or any of our
      subsidiaries, threatened against or affecting our company, our common stock,
      any
      of our subsidiaries or of our companies or our subsidiaries' officers or
      directors in their capacities as such, in which an adverse decision could have
      a
      material adverse effect.





**ITEM 1A
      -** **Risk Factors**





We
      have
      updated the risk factors previously disclosed in Annual Report on Form 10–KSB
      for the year ended December 31, 2007, which was filed with the Securities
      and Exchange Commission on April 15, 2008 (the “Fiscal 2007 10–KSB”). We believe
      there are no changes that constitute material changes from the risk factors
      previously disclosed in the Fiscal 2007 10–KSB except as disclosed
      below.





*Our
      Common Stock Is Subject To Penny Stock Regulation*





Our
      shares are subject to the provisions of Section 15(g) and Rule 15g-9 of the
      Securities Exchange Act of 1934, as amended (the "Exchange Act"), commonly
      referred to as the "penny stock" rule. Section 15(g) sets forth certain
      requirements for transactions in penny stocks and Rule 15g-9(d)(1) incorporates
      the definition of penny stock as that used in Rule 3a51-1 of the Exchange Act.
      The Commission generally defines penny stock to be any equity security that
      has
      a market price less than $5.00 per share, subject to certain exceptions. Rule
      3a51-1 provides that any equity security is considered to be penny stock unless
      that security is: registered and traded on a national securities exchange
      meeting specified criteria set by the Commission; authorized for quotation
      on
      the NASDAQ Stock Market; issued by a registered investment company; excluded
      from the definition on the basis of price (at least $5.00 per share) or the
      registrant's net tangible assets; or exempted from the definition by the
      Commission. Since our shares are deemed to be "penny stock", trading in the
      shares will be subject to additional sales practice requirements on
      broker/dealers who sell penny stock to persons other than established customers
      and accredited investors.





*The
      Liquidity Of Our Common Stock Is Seriously Limited And There Is A Limited Market
      For Our Common Stock*





Our
      stock
      is currently being traded on the NASDAQ Over-The-Counter Bulletin Board, and
      the
      liquidity of our common stock is limited. The Bulletin Board is a limited market
      and subject to substantial restrictions and limitations in comparison to the
      NASDAQ system. Any broker/dealer that makes a market in our stock or other
      person that buys or sells our stock could have a significant influence over
      its
      price at any given time.


21


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





There
      were no changes in securities and small business issuer purchase of equity
      securities during the period ended June 30, 2008.





**ITEM
      3.  DEFAULTS UPON SENIOR SECURITIES**




There
      were no defaults upon senior securities during the period ended June 30,
      2008.




**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 June 30, 2008.




**ITEM
      5.  OTHER INFORMATION**





There
      is
      no information with respect to which information is not otherwise called for
      by
      this form, except that on August 18, 2008, the Board of Directors of Dairy
      Fresh
      Farms, Inc. appointed Ian Morrice, our Chief Executive Officer as interim Chief
      Financial Office of Dairy Fresh Farms, Inc.




**ITEM
      6. EXHIBITS**




**31.1**
            Certification
                of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley
                Act**31.2**
            Certification
                of Chief Financial Officer and Principal 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 Chief Financial Officer and Principal Accounting Officer Pursuant
                to
                Section 906 of the Sarbanes-Oxley
                Act.




22


**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.By
            /s/Ian
                MorriceIan
                MorriceChief
                Executive OfficerDate:
                August 19, 2008By
            /s/
                Ian MorriceIan MorricePrincipal
                Accounting OfficerDate:
                August 19, 2008




23