**SECURITIES
      AND EXCHANGE COMMISSION**


**WASHINGTON,
      D.C. 20549**


____________________________________________________





**FORM
      10-KSB**





[X]
      ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES
      EXCHANGE


ACT
      OF
      1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2007.





[_]
      TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES


EXCHANGE
      ACT OF 1934 FOR THE TRANSITION PERIOD FROM





**COMMISSION
      FILE NO. 000-49672**





**THE
      BLACKHAWK FUND**


(Exact
      name of issuer as specified in its charter)





**NEVADA                                                                                           
      88-0408213**


(State
      or
      other jurisdiction of incorporation or
      organization)        
                 
(I.R.S. Employer  Identification Number)







**1802
      N. CARSON STREET, SUITE 212**


**CARSON
      CITY, NEVADA           
  89701**


(Address
      of principal executive offices) (Zip Code)





Registrant's
      telephone number, including area code: (775) 887-0670




Securities
      registered under Section 12(b)  of the Exchange Act:  
NONE





Securities
      registered under Section 12(g) of the Exchange Act:  Common
      Stock, Par Value $0.001 per share




Indicate
      by check mark whether the registrant (1) has filed all reports required to
      be
      filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
      the
      preceding twelve months (or 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 if disclosure of delinquent filers pursuant to Item 405 of
      Regulation S-K is not contained herein, and will not be contained, to the best
      of registrant's knowledge, in definitive proxy or information statements
      incorporated by reference in Part III of this Form 10-KSB or any amendment
      to
      this Form 10-KSB. [  ]




Indicate
      by check mark whether the registrant is a large accelerated filer, an
      accelerated filer or a non-accelerated filer, as defined in Rule 12b-2 of the
      Exchange Act.




Large
      accelerated filer [   ]   Accelerated filer [  ]
     Non-accelerated filer [ X]




Indicate
      by check mark whether the registrant is a shell company (as defined By rule
      12b-2 of the Securities Exchange Act) Yes [  ] No [ X ]




State
      issuer's revenues for its most recent fiscal year: $305,908





State
      the
      aggregate market value of the voting and non-voting common equity held by
      non-affiliates computed by reference to the price at which the common equity
      was
      last sold, or the average bid and asked price of such common equity, as of
      January 23, 2008:  $169,225.





As
      of
      January 15, 2008, Issuer had a total of 341,193,791 shares of common stock
      issued and outstanding.





Documents
      incorporated by reference: None.





Transitional
      Small Business Disclosure Format (Check one): Yes [  ] No
      [X]


1



















**TABLE
      OF CONTENTS**








Item
      1.
      Business............................................................................................
      1


Item
      2.
      Description of
      Property................................................................
      10


Item
      3.
      Legal Proceedings
      ........................................................................
      10


Item
      4.
      Submission of Matters to a Vote of Security Holders..............11


Item
      5.
      Market for Common Equity and Related Stockholder


Matters..........................................................................................................11


Item
      6.
      Management's Discussion and Analysis or Plan
      of


Operation......................................................................................................12


Item
      7.
      Financial
      Statements......................................................................18


Item
      8.
      Changes in and Disagreements With Accountants
      on


Accounting
      and Financial Disclosure.....................................................
      18


Item
      8A.
      Controls and Procedures
      ...........................................................19


Item
      8B
      Other
      information.........................................................................
      19


Item
      9.
      Directors, Executive Officers, Promoters
      and


Control
      Persons; Compliance With Section 16(a)
      of


the
      Exchange
      Act.......................................................................................
      19


Item
      10.
      Executive
      Compensation.............................................................21


Item
      11.
      Security Ownership of Certain Beneficial Owners
      and


Management
      and Related Stockholder Matters
      ...................................22


Item
      12.
      Certain Relationships and Related
      Transactions....................23


Item
      13.
      Exhibits...........................................................................................23


Item
      14.
      Principal Accountant Fees and
      Services..................................24


















































2







**PART
      I**


**ITEM
      1. BUSINESS.**





**COMPANY
      OVERVIEW**





We
      were
      formed on or about November of 1998. USA Telcom, as we were previously called,
      acted as an agent in commercial transactions between Vietnamese purchasers
      and
      U.S. manufacturers.





**CHANGE
      OF CONTROL**




On
      November 29, 2004, a change in control occurred as the result of the acquisition
      of our series A, series B and series C preferred stock by Palomar Enterprises,
      Inc., a Nevada corporation ("Palomar").





Pursuant
      to that certain capital Stock Purchase Agreement dated November 9, 2004, between
      Robert C. Simpson, our then-sole director and officer and Palomar, on November
      29, 2004, Palomar acquired from Dr. Simpson 19,000,000 shares of our series
      A
      preferred stock, 10,000,000 shares of our series B preferred stock and
      10,000,000 shares of our Series C preferred stock. Each share of the series
      A
      preferred stock is convertible into ten shares of our common stock. The shares
      of the series A preferred stock do not have voting rights. Each share of the
      series B preferred stock is convertible into two hundred shares of our common
      stock. On all matters submitted to a vote of the holders of the Common Stock,
      a
      holder of the Series B Preferred Stock is entitled to one vote per share of
      the
      Series B Preferred Stock held by such holder. The series C preferred stock
      is
      not convertible into our common shares. Each share of the series C preferred
      stock entitles the holder to 100 votes of our common stock on all matters
      brought before our stockholders.





All
      of
      the preferred shares acquired by Palomar carried a legend restricting the
      transfer thereof under the Securities Act of 1933, as amended. Palomar used
      $380,000 of its working capital as consideration for the preferred shares
      purchased by it pursuant to the Capital Stock Purchase Agreement.





Concurrently
      with the stock purchase transaction, Robert C. Simpson, our then-sole director
      and officer, nominated Steve Bonenberger and Brent Fouch as directors. Steve
      Bonenberger was also elected president and chief executive officer and Brent
      Fouch was elected Secretary and chief financial officer. Following the election
      of Messrs. Bonenberger and Fouch as our officers and directors, Robert C.
      Simpson resigned his positions as our director and officer.





**CURRENT
      BUSINESS PLAN**




The
      BlackHawk Fund is a principally owned company that is operated by its 
managing partner, Palomar Enterprises, Inc. (PLMA.OB).  The BlackHawk Fund
      operates as a business development company with the specific interest in Media
      and Television Production, as well as real estate (both residential and
      commercial) development projects.




We
      have
      the following business model in place and operating: The Company takes a lead
      role in managing and implementing proprietary media properties that are 100%
      owned, operated and managed by The Blackhawk Fund. These Media Properties are
      network quality cable television shows that air nationwide. This media content
      is converted into Online Video magazines and DVDs, which provide advertising
      opportunities to selected sponsors. We also re-develop residential and
      commercial properties to be sold at higher prices. Our purpose is to gain a
      higher valuation for the equity positions that are held by The BlackHawk Fund
      in
      both our redeveloped real properties and also in our media properties that
      are
      expanding their advertiser and viewer bases.




During
      the past twelve months, the company has accomplished the following:




a.   
      Real property redevelopment:  the company successfully purchased a property
      in the St. Louis, MO region out of foreclosure, completed the renovation and
      refurbishments and re-sold the property for a profit




b.   
      Real property redevelopment:  the company successfully purchased a property
      in Carlsbad, CA and completely renovated this existing structure. The company
      currently has this property in its held for sale portfolio. The company has
      this
      property leased on a month-to-month basis.  The property is currently on
      the market to be sold and the company expects this to occur sometime in the
      first or second quarter of 2008




c.   
      Real property redevelopment:  the company engaged SAN DIEGO REAL ESTATE
      EXPERTS in a joint-venture development in Oceanside, CA.  This property has
      undergone a complete and exhaustive renovation.  The property located
      within yards of the beach is placed for re-sale.   The company expects to
      recognize the revenue and profit from this joint-venture in the first or second
      quarter of 2008


3




d.   
      Entered the media properties business producing infomercials. In January 2008
      the Company expanded this to include radio components that are aired throughout
      the nation.  The company signed a business development agreement in 2006
      with Maximum Impact Television Group, which BHWF cancelled due to a breach
      in
      performance on MITG’s duties.




The
      company has identified the following benchmarks for the next 12-24
      months:




a.   
      Raise enough capital to expand our core real property redevelopment
      projects




b.   
      Raise additional capital to strengthen and expand our media properties, with
      a
      look to bring our advertiser partners a substantial return on their media
      investments




c.   
      Maintain good corporate relationships with all of our advertising partners
      and
      the vendors that assist us in the redevelopment projects.




In
      2007,
      The BlackHawk Fund was able to establish firm footings in its two core business
      sectors.  The company looks for 2008 to be the largest year in its
      existence in terms of revenue produced, potential profits retained and
      shareholder equity increased.





**KEY
      PERSONNEL**





Our
      future financial success depends to a large degree upon the efforts of Messrs.
      Bonenberger and Fouch, our officers and directors. Messrs. Bonenberger and
      Fouch
      have played major roles in developing and executing our business strategy.
      The
      loss of Messrs. Bonenberger and Fouch could have an adverse effect on our
      business and our chances for profitable operations. While we intend to employ
      additional management and marketing personnel in order to minimize the critical
      dependency upon any one person, there can be no assurance that we will be
      successful in attracting and retaining the persons needed. If we do not succeed
      in retaining and motivating our current employees and attracting new high
      quality employees, our business could be adversely affected. We do not maintain
      key man life insurance on the lives of Messrs. Bonenberger and
      Fouch.





**OUR
      FINANCIAL RESULTS MAY BE AFFECTED BY FACTORS OUTSIDE OF OUR
      CONTROL**





Our
      future operating results may vary significantly from quarter to quarter due
      to a
      variety of factors, many of which are outside our control. Our anticipated
      expense levels are based, in part, on our estimates of future revenues and
      may
      vary from our projections. We may be unable to adjust spending rapidly enough
      to
      compensate for any unexpected revenues  shortfall. Accordingly, any
      significant shortfall in revenues in relation to our planned expenditures would
      materially adversely affect our business, operating results and financial
      condition.





We
      cannot
      predict with certainty our revenues and operating results. Further, we believe
      that period-to-period comparisons of our operating results are not necessarily
      a
      meaningful indication of future performance.





**CORPORATE
      OFFICES**





Our
      executive office is located at 1802 N. Carson Street, Suite 212, Carson City,
      Nevada, 89701, telephone number (775) 887-0670.





**RECENT
      EVENTS**





In
      July
      2007, weestablished a new series of common stock labeled B which has 30,000,000
      outstanding shares.





**EMPLOYEES**





We
      have
      two full-time employees and two part-time employees as of January 15, 2008.
      As
      we grow, we will need to attract an unknown number of additional qualified
      employees. Although we have experienced no work stoppages and believe our
      relationships with our employees are good, we could be unsuccessful in
      attracting and retaining the persons needed. None of our employees are currently
      represented by a labor union.






4


**RISK
      FACTORS**





***NEED
      FOR ONGOING FINANCING.***





We
      will
      need additional capital to continue our operations and will endeavor to raise
      funds through the sale of equity shares and revenues from
      operations.


There
      can
      be no assurance that we will generate sufficient revenues from operations or
      obtain sufficient capital on acceptable terms, if at all. Failure to obtain
      such
      capital or generate such operating revenues would have an adverse impact on
      our
      financial position and results of operations and ability to continue as a going
      concern. Our operating and capital requirements during the next fiscal year
      and
      thereafter will vary based on a number of factors, including the level of sales
      and marketing activities for our services and products. There can be no
      assurance that additional private or public financing, including debt or equity
      financing, will be available as needed, or, if available, on terms favorable
      to
      us. Any additional equity financing may be dilutive to stockholders and such
      additional equity securities may have rights, preferences or privileges that
      are
      senior to those of our existing common stock.





Furthermore,
      debt financing, if available, will require payment of interest and may involve
      restrictive covenants that could impose limitations on our operating
      flexibility. Our failure to successfully obtain additional future funding may
      jeopardize our ability to continue our business and operations.





If
      we
      raise additional funds by issuing equity securities, existing stockholders
      may
      experience a dilution in their ownership. In addition, as a condition to giving
      additional funds to us, future investors may demand, and may be granted, rights
      superior to those of existing stockholders.





***BUSINESS
      CONCENTRATION.***





While
      we
      consider our relationships with our customers to be satisfactory, given the
      concentration of our sales to a few key customers, our continued relationships
      may be subject to the policies and practices of the customers. We continue
      to
      concentrate our efforts on expanding our customer base in order to reduce our
      reliance on our current customers.





***INFLATION.***





In
      our
      opinion, inflation has not had a material effect on our financial condition
      or
      results of our operations.





***TRENDS,
      RISKS AND UNCERTAINTIES.***





We
      have
      sought to identify what we believe to be the most significant risks to our
      business, but we cannot predict whether, or to what extent, any of such risks
      may be realized nor can we guarantee that we have identified all possible risks
      that might arise. Investors should carefully consider all of such risk factors
      before making an investment decision with respect to our common
      stock.





***CAUTIONARY
      FACTORS THAT MAY AFFECT FUTURE RESULTS.***





We
      provide the following cautionary discussion of risks, uncertainties and possible
      inaccurate assumptions relevant to our business and our products. These are
      factors that we think could cause our actual results to differ materially from
      expected results. Other factors besides those listed here could adversely affect
      us.





***POTENTIAL
      FLUCTUATIONS IN QUARTERLY OPERATING RESULTS.***





Our
      quarterly operating results may fluctuate significantly in the future as a
      result of a variety of factors, most of which are outside our control, including
      the demand for our services, seasonal trends in purchasing, the amount and
      timing of capital expenditures; price competition or pricing changes in the
      industry; technical difficulties or system downtime; general economic
      conditions, and economic conditions specific to our industry. Our quarterly
      results may also be significantly impacted by the impact of the accounting
      treatment of acquisitions, financing transactions or other matters. Particularly
      at our early stage of development, occurrences such as accounting treatment
      can
      have a material impact on the results for any quarter. Due to the foregoing
      factors, among others, it is likely that our operating results will fall below
      our expectations or those of investors in some future quarter.





***LACK
      OF INDEPENDENT DIRECTORS.***





We
      cannot
      guarantee that our board of directors will have a majority of independent
      directors in the future. In the absence of a majority of independent directors,
      our executive officers, could establish policies and enter into transactions
      without independent review and approval thereof. This could present the
      potential for a conflict of interest between us and our stockholders
      generally and the controlling officers, stockholders or directors.





5


***LIMITATION
        OF LIABILITY AND INDEMNIFICATION OF OFFICERS AND
        DIRECTORS.***
 
 Our
        officers and directors are required to exercise good faith and high integrity
        in
        our management affairs. Our articles of incorporation provide, however, that
        our
        officers and directors shall have no liability to our stockholders for losses
        sustained or liabilities incurred which arise from any transaction in their
        respective managerial capacities unless they violated their





***MANAGEMENT
      OF POTENTIAL GROWTH.***





We
      may
      experience rapid growth which will place a significant strain on our managerial,
      operational, and financial systems resources. To accommodate our current size
      and manage growth, we must continue to implement and improve our financial
      strength and our operational systems, and expand, train and manage our sales
      and
      distribution base. There is no guarantee that we will be able to effectively
      manage the expansion of our operations, or that our facilities, systems,
      procedures or controls will be adequate to support our expanded operations.
      Our inability to effectively manage our future growth would have a material
      adverse effect on us.





***WE
      PAY NO DIVIDENDS.(IS THIS CORRECT)NOTE***





We
      have
      never declared nor paid cash dividends on our capital stock. We currently intend
      to retain any earnings for funding growth however these plans may change
      depending upon capital raising requirements.




***QUANTITATIVE
      AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK.***





We
      believe that we do not have any material exposure to interest or commodity
      risks. Our financial results are quantified in U.S. dollars and a majority
      of
      our obligations and  expenditures with respect to our operations are
      incurred in U.S. dollars. Although we do not believe we currently have any
      materially significant market risks relating to our operations resulting from
      foreign exchange rates, if we enter into financing or other business
      arrangements denominated in currency other than the U.S. dollars, variations
      in
      the exchange rate may give rise to foreign exchange gains or losses that may
      be
      significant.





We
      do not
      use financial instruments for trading purposes and we are not a party to any
      leverage derivatives.





**RISKS
      RELATING TO OUR BUSINESS**





***WE
      ARE NOT LIKELY TO SUCCEED UNLESS WE CAN OVERCOME THE MANY OBSTACLES WE
      FACE.***





As
      an
      investor, you should be aware of the difficulties, delays and expenses we
      encounter, many of which are beyond our control, including unanticipated market
      trends, employment costs, and administrative expenses. We cannot assure our
      investors that our proposed business plans as described in this report will
      materialize or prove successful, or that we will ever be able to finalize
      development of our products or services or operate profitably. If we cannot
      operate profitably, you could lose your entire investment. As a result of the
      nature of our business, initially we expect to sustain substantial operating
      expenses without generating significant revenues.





***OUR
      AUDITORS HAVE STATED WE MAY NOT BE ABLE TO STAY IN
      BUSINESS.***





Our
      auditors have issued a going concern opinion, which means that there is
      substantial doubt that we can continue as an ongoing business for the  next
      12 months. Unless we can raise additional capital, we may not be able to achieve
      Our objectives and may have to suspend or cease operations. See 
"Management's Discussion and Analysis of Financial Condition and Results of
      Operations."




***OUR
      NEW BUSINESS STRATEGY INVOLVES A NUMBER OF RISKS.***





We
      intend
      to pursue growth through the expanding of the media business. This strategy
      involves certain risks, including difficulties in the integration of operations
      and systems, the diversion of our management's attention from other business
      concerns, and the potential loss of key employees. We may not be able to
      successfully integrate this businesses into our operations.




6






**RISKS
        RELATING TO OUR STOCK**
 
 ***WE
        MAY NEED TO RAISE ADDITIONAL CAPITAL. IF WE ARE UNABLE TO RAISE
        NECESSARY***
 ***ADDITIONAL
        CAPITAL, OUR BUSINESS MAY FAIL OR OUR OPERATING RESULTS AND OUR
        STOCK***
 ***PRICE
        MAY BE MATERIALLY ADVERSELY AFFECTED.***
  Due
      to
      the lack of profitability, we need to secure adequate funding. If we are unable
      to obtain adequate funding, we may not be able to successfully develop and
      market our products and services and our business will most likely fail. We
      do
      not have commitments for additional financing. To secure additional financing,
      we may need to borrow money or sell more securities,
      which may reduce the value of our outstanding securities. Under these
      circumstances, we may be unable to secure additional financing on favorable
      terms or at all.





Selling
      additional stock, either privately or publicly, would dilute the equity
      interests of our stockholders. If we borrow more money, we will have to pay
      interest and may also have to agree to restrictions that limit our operating
      flexibility. If we are unable to obtain adequate financing, we may have to
      curtail business operations which would have a material negative effect on
      operating results and most likely result in a lower stock price.





***OUR
      COMMON STOCK HAS EXPERIENCED IN THE PAST, AND IS EXPECTED TO EXPERIENCE
      IN***


***THE
      FUTURE, SIGNIFICANT PRICE AND VOLUME VOLATILITY, WHICH
      SUBSTANTIALLY***


***INCREASES
      THE RISK THAT YOU MAY NOT BE ABLE TO SELL YOUR SHARES AT OR ABOVE
      THE***


***PRICE
      THAT YOU PAY FOR THE SHARES.***





Because
      of the limited trading market for our common stock, and because of the possible
      price volatility, you may not be able to sell your shares of common stock when
      you desire to do so. During 2006 and 2007, our common stock was sold and
      purchased at prices that ranged from a high of $0.08 to a low of $0.0005 per
      share. The inability to sell your shares in a rapidly declining market may
      substantially increase your risk of loss because of such illiquidity because
      the
      price for our common stock may suffer greater declines due to its price volatility.





The
      price
      of our common stock that will prevail in the market after this filing may be
      higher or lower than the price you pay. Certain factors, some of which are
      beyond our control, that may cause our share price to fluctuate significantly
      include, but are not limited to, the following:





-
      Variations in our quarterly operating results;





-
      The
      development of a market in general for our products and services;





-
      Changes
      in market valuations of similar companies;





-
      Announcement by us or our competitors of significant contracts, acquisitions,
      strategic partnerships, joint ventures or capital commitments;





-
      Loss of
      a major customer or failure to complete significant transactions;





-
      Additions or departures of key personnel; and





-
      Fluctuations in stock market price and volume.





Additionally,
      in recent years the stock market in general, and the OTC Bulletin Board and
      technology stocks in particular, have experienced extreme price and volume
      fluctuations. In some cases, these fluctuations are unrelated or
      disproportionate to the operating performance of the underlying company. These
      market and industry factors may materially and adversely affect our stock price,
      regardless of our operating performance.





Over
      the
      past few months, there have been periods of significant increases in trading
      volume of our common stock during which the price of our stock has both
      increased and decreased. The historical trading of our common stock is not
      necessarily an indicator of how it will trade in the future and our trading
      price as of the date of this report does not necessarily portend what the
      trading price of our common stock might be in the future.





In
      the
      past, class action litigation has often been brought against companies following
      periods of volatility in the market price of the common stock of those
      companies. If we become involved in this type of litigation in the future,
      it
      could result in substantial costs and diversion of management attention and
      resources, which could have a further negative effect on your investment in
      our
      stock.





7


***OUR
        DIRECTORS HAVE THE RIGHT TO AUTHORIZE THE ISSUANCE OF PREFERRED STOCK
        AND***
 ***ADDITIONAL
        SHARES OF OUR COMMON STOCK.***
 
 Our
        directors, within the limitations and restrictions contained in our articles
        of
        incorporation and without further action by our stockholders, have the authority
        to issue shares of preferred stock from time to time in one or more series
        and
        to fix the number of shares and the relative rights, conversion  rights,
        voting rights, and terms of redemption, liquidation preferences and any other
        preferences, special rights and qualifications of any such series. We have
        no
        intention of issuing preferred stock at the present time. Any issuance of
        preferred stock could adversely affect the rights of holders of our common
        stock. Should
        we
        issue additional shares of our common stock at a later time, each investor's
        ownership interest in The Blackhawk Fund would be proportionally reduced.
        No
        investor will have any preemptive right to acquire additional shares of our
        common stock, or any of our other securities.





***THE
      ISSUANCE OF SHARES UPON THE EXERCISE OF OUTSTANDING WARRANTS MAY
      CAUSE***


***IMMEDIATE
      AND SUBSTANTIAL DILUTION TO OUR EXISTING
      STOCKHOLDERS.***





The
      issuance of shares upon the exercise of warrants may result in substantial
      dilution to the interests of other stockholders since the selling stockholders
      may ultimately convert and sell the full amount issuable on conversion. There
      is
      no upper limit on the number of shares that may be issued which will have the
      effect of further diluting the proportionate equity interest and voting power
      of
      holders of our common stock, including investors in this offering.





***IF
      WE FAIL TO REMAIN CURRENT ON OUR REPORTING REQUIREMENTS, WE COULD BE
      REMOVED***


***FROM
      THE OTC BULLETIN BOARD WHICH WOULD LIMIT THE ABILITY OF BROKER-DEALERS
      TO***


***SELL
      OUR SECURITIES AND THE ABILITY OF STOCKHOLDERS TO SELL THEIR SECURITIES
      IN***


***THE
      SECONDARY MARKET.***





Companies
      trading on the OTC Bulletin Board, such as The Blackhawk Fund, must be reporting
      issuers under Section 12 of the Securities Exchange Act of 1934, as amended
      (the
      "Exchange Act"), and must be current in their reports under Section 13, in
      order
      to maintain price quotation privileges on the OTC Bulletin Board. If we fail
      to
      remain current on our reporting requirements, we could be removed from the
      OTC
      Bulletin Board. As a result, the market liquidity for our securities could
      be
      severely adversely affected by limiting the ability of
      broker-dealers to sell our securities and the ability of stockholders to sell
      their securities in the secondary market.





***OUR
      COMMON STOCK IS SUBJECT TO THE "PENNY STOCK" RULES OF THE SEC AND
      THE***


***TRADING
      MARKET IN OUR SECURITIES IS LIMITED, WHICH MAKES TRANSACTIONS IN
      OUR***


***STOCK
      CUMBERSOME AND MAY REDUCE THE VALUE OF AN INVESTMENT IN OUR
      STOCK.***





The
      Securities and Exchange Commission has adopted Rule 15g-9 which establishes
      the
      definition of a "penny stock," for the purposes relevant to us, as any equity
      security that has a market price of less than $5.00 per share or with an
      exercise price of less than $5.00 per share, subject to certain exceptions.
      Inasmuch as that the current bid and ask price of common stock is less than
      $5.00 per share, our shares are classified as "penny stock" under the rules
      of
      the SEC. For any transaction involving a penny stock, unless exempt, the rules
      require:





-
      That a
      broker or dealer approve a person's account for transactions in penny stocks;
      and





-
      The
      broker or dealer receives from the investor a written agreement to the
      transaction, setting forth the identity and quantity of the penny stock to
      be
      purchased.





In
      order
      to approve a person's account for transactions in penny stocks, the broker
      or
      dealer must:





-
      Obtain
      financial information and investment experience objectives of the person;
      and





-
      Make a
      reasonable determination that the transactions in penny stocks are suitable
      for
      that person and the person has sufficient knowledge and experience in financial
      matters to be capable of evaluating the risks of transactions in penny
      stocks.




The
      broker or dealer must also deliver, prior to any transaction in a penny stock,
      a
      disclosure schedule prescribed by the Commission relating to the penny stock
      market, which, in highlight form:





-
      Sets
      forth the basis on which the broker or dealer made the suitability
      determination; and





-
      That
      the broker or dealer received a signed, written agreement from the investor
      prior to the transaction.





Generally,
      brokers may be less willing to execute transactions in securities subject to
      the
      "penny stock" rules. This may make it more difficult for investors to dispose
      of
      our common stock and cause a decline in the market value of our
      stock.





Disclosure
      also has to be made about the risks of investing in penny stocks in both public
      offerings and in secondary trading and about the commissions payable to both
      the
      broker-dealer and the registered representative, current quotations for the
      securities and the rights and remedies available to an investor in cases of
      fraud in penny stock transactions. Finally, monthly statements have to be sent
      disclosing recent price information for the penny stock held in the account
      and
      information on the limited market in penny stocks.


8


**ITEM
      2. DESCRIPTION OF PROPERTY.**





We
      lease
      office space at 1802 N. Carson Street, Suite 212, Carson City, Nevada, 89701.
      Our Carson Street lease costs $100 per month and is scheduled to expire on
      December 31, 2008.




**ITEM
      3. LEGAL PROCEEDINGS.**





None





**ITEM
      4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.**





None







**PART
      II**


**ITEM
      5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER
      MATTERS.**





Our
      common stock was quoted on the OTC Board under the symbol "BHWK.OB." These
      quotations reflect inter-dealer prices, without mark-up, mark-down or
      commission, and may not represent actual transactions.






**CALENDAR
      YEAR 2006       HIGH     
 LOW**


First
      Quarter             
   
            
..08           
..04


Second
      Quarter                        
..04            
..02


Third
      Quarter                            
..02           
..014


Fourth
      Quarter 
                       
..014          
..008





**CALENDAR
      YEAR 2007       HIGH     
 LOW**


First
      Quarter             
              
 .048         
..015


Second
      Quarter                       
..015          .009


Third
      Quarter                          
 .015         
..008


Fourth
      Quarter                        
 .015        
..0005





As
      of
      January 15, 2008 we had 341,193,791 shares of our common stock outstanding.
      Our
      shares of common stock are held by approximately 35 stockholders of record.
      The
      number of record holders was determined from the  records of our transfer
      agent and does not include beneficial owners of common stock whose shares are
      held in the names of various security brokers, dealers, and registered clearing
      agencies.





**SECTION
      15(G) OF THE EXCHANGE ACT**





The
      shares of our common stock are covered by Section 15(g) of the Exchange Act,
      and
      Rules 15g-1 through 15g-6 promulgated thereunder, which impose additional sales
      practice requirements on broker-dealers who sell our securities to persons
      other
      than established customers and accredited investors.





Rule
      15g-2 declares unlawful any broker-dealer transactions in "penny stocks" unless
      the broker-dealer has first provided to the customer a standardized disclosure
      document.





Rule
      15g-3 provides that it is unlawful for a broker-dealer to engage in a "penny
      stock" transaction unless the broker-dealer first discloses and subsequently
      confirms to the customer the current quotation prices or similar market
      information concerning the penny stock in question.





Rule
      15g-4 prohibits broker-dealers from completing "penny stock" transactions for
      a
      customer unless the broker-dealer first discloses to the customer the amount
      of
      compensation or other remuneration received as a result of the penny stock
      transaction.





Rule
      15g-5 requires that a broker-dealer executing a "penny stock" transaction,
      other
      than one exempt under Rule 15g-1, disclose to its customer, at the time of
      or
      prior to the transaction, information about the sales person's
      compensation.





Our
      common stock may be subject to the foregoing rules. The application of the
      "penny stock" rules may affect our stockholders' ability to sell their shares
      because some broker-dealers may not be willing to make a market in our common
      stock because of the burdens imposed upon them by the "penny stock"
      rules.


9





The
      following table provides information about purchases by us and our affiliated
      purchasers during the quarter ended December 31, 2007 of equity securities
      that
      are registered by us pursuant to Section 12 of the Securities Exchange Act
      of
      1934:


**SMALL
      BUSINESS ISSUER PURCHASES OF EQUITY SECURITIES**




**Maximum**


**Total
      number                     
number (or**


**of
      shares  (or                  
 approximate**


**units)                         
dollar value)of**


**purchased
      as                     
shares (or**


**part
      of                         
 units) that may**


**Total
      number                                                                          
 publicly                                
yet be**


**of shares
      (or                     
Average
      price                          
announced                        
purchased**


**units)                                
 paid
      per                                   
plans
      or                        under
      the plans**


**Period                                                          
purchased                       
share (or
      unit)                            
 programs                         
or programs**




October
      2007                                                              
 -0-                                       
 -0-                                            
 -0-                                      
-0-


November
      2007                                                           
 -0-                                       
 -0-                                             
-0-                                       -0-


December
      2007 -0-                                       
       
-0-                                              -0-                                     
 -0-




Total                                                                             
      -0-                                        
 -0-                                            
 -0-                                       -0-





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





**FORWARD-LOOKING
      INFORMATION**





Much
      of
      the discussion in this Item is "forward looking" as that term is used in Section
      27A of the Securities Act and Section 21E of the Exchange Act. Actual operations
      and results may materially differ from present plans and projections due to
      changes in economic conditions, new business opportunities, changed business
      conditions, and other developments. Other factors that could cause results
      to
      differ materially are described in our filings with the Securities and Exchange
      Commission.





There
      are
      several factors that could cause actual results or events to differ materially
      from those anticipated, and include, but are not limited to general economic,
      financial and business conditions, changes in and compliance with governmental
      laws and regulations, including various state and federal environmental
      regulations, our ability to obtain additional financing from outside investors
      and/or bank and mezzanine lenders and our ability to generate sufficient
      revenues to cover operating losses and position us to achieve positive cash
      flow.





Readers
      are cautioned not to place undue reliance on the forward-looking Statements
      contained herein, which speak only as of the date hereof. We believe the
      information contained in this Form 10-KSB to be accurate as of the date hereof.
      Changes may occur after that date. We will not update that information except
      as
      required by law in the normal course of its public disclosure
      practices.





10







**MANAGEMENT'S
      PLAN OF OPERATIONS**





The
      Management of The Blackhawk Fund plans to aggressively market the real estate
      properties held, that have been renovated and ready for sale. The Company plans
      to generate the highest return on their investment, by selling these properties
      at substantial profits. The Management believes we will sell all three
      properties held between the first and second quarter of 2008.





The
      Management plans to expand the Media Division significantly, by developing
      and
      airing the cable television productions, and radio spots. . The Media Division
      will generate additional revenue by converting the content from the cable
      television shows to Online Video Magazines and DVDs, which provide additional
      advertising vehicles for our sponsors to reach their target
      audience.





The
      company has identified the following benchmarks for the next 12-24
      months:




a.   
      Raise enough capital to expand our core real property redevelopment
      projects


b.   
      Raise additional capital to strengthen and expand our media properties, with
      a
      look to bring our advertiser partners a substantial return on their media
      investments


c.   
      Maintain good corporate relationships with all of our advertising partners
      and
      the vendors that assist us in the redevelopment projects.




In
      2007,
      The BlackHawk Fund was able to establish firm footings in its two core business
      sectors.  The company looks for 2008 to be the largest year in its
      existence in terms of revenue produced, potential profits retained and
      shareholder equity increased.





**RESULTS
      OF OPERATIONS**





**TWELVE
      MONTHS ENDED DECEMBER 31, 2007 COMPARED TO THE TWELVE MONTHS
      ENDED**  **DECEMBER
      31, 2006.**





**REVENUE**





Revenue
      for the 12 months ended December 31, 2007 was $309,908 compared to 
$149,451 for the 12 months ended December 31, 2006. The increase in revenue
      is
      due to the launching of our media business. Cost of Sales was 234,231 in 2007
      compared to 140,000 in 2006.




**GENERAL
      AND ADMINISTRATIVE EXPENSES**





General
      and administrative expenses ("G&A") were $2,208,360 for the 12 months ended
      December 31, 2007, compared to $472,780 for the 12 months  ended December
      31, 2006,. The increase was due mainly to higher stock for services of
      $1,322,885 and $267,605 of Media expenses. There was also an increase in
      payments made to companies controlled by our officers of $135,000.





We
      expect
      G&A expenses to decrease substantially in the coming 12 months due to an
      anticipated decrease in stock for services. We intend to focus on operating
      efficiencies, increasing revenues, and ensuring profitability in our core
      business units during this period.




**LIQUIDITY
      AND CAPITAL RESOURCES**





During
      the twelve-month period ended December 31, 2006, cash used in operating
      activities was 969,640. We intend to continue to find ways to expand our 
business through new product development . We believe that revenues and 
earnings will increase as we grow. We anticipate that we will incur
      smaller  losses in the near future if we are able to expand our business
      and the marketing of our products and services now under development.
      .





During
      the 12 months ended December 31, 2007, we generated a net loss of $2,318,651.
      Cash provided by financing activities was $1,048 638.





In
      order
      to execute our business plan, we will need to acquire additional capital from
      debt or equity financing. In the absence of significant  revenue and
      profits, we will be completely dependent on additional debt and  equity
      financing arrangements. There is no assurance that any financing will  be
      sufficient to fund our capital expenditures, working capital and other
      cash  requirements for the fiscal year ending December 31, 2008. No
      assurance can  be given that any such additional funding will be available
      or that, if available,  can be obtained on terms favorable to us. If we are
      unable to raise needed  funds on acceptable terms, we will not be able to
      execute our business plan,  develop or enhance existing services, take
      advantage of future opportunities or respond to competitive pressures or
      unanticipated requirements. A material  shortage of capital will require us
      to take drastic steps such as further reducing our level of operations,
      disposing of selected assets or seeking an acquisition 
partner.






11




**CRITICAL
      ACCOUNTING POLICIES**





The
      preparation of our financial statements in conformity with accounting principles
      generally accepted in the United States requires us to make estimates and
      judgments that affect our reported assets, liabilities, revenues, and expenses,
      and the disclosure of contingent assets and liabilities. We base our estimates
      and judgments on historical experience and on various other
      assumptions we believe to be reasonable under the circumstances. Future events,
      however, may differ markedly from our current expectations and assumptions.
      While there are a number of significant accounting policies affecting our
      consolidated financial statements, we believe the following critical accounting
      policy involve the most complex, difficult and subjective estimates and
      judgments.





**STOCK-BASED
      COMPENSATION**





In
      December 2002, the FASB issued SFAS No. 148 - Accounting for Stock-Based
      Compensation - Transition and Disclosure. This statement amends SFAS No. 123
      -
      Accounting for Stock-Based Compensation, providing alternative methods of
      voluntarily transitioning to the fair market value based method of accounting
      for stock based employee compensation. SFAS 148 also requires disclosure of
      the
      method used to account for stock-based employee compensation and the effect
      of
      the method in both the annual and interim financial statements. The provisions
      of this statement related to transition methods are effective for fiscal years
      ending after December 15, 2002, while provisions related to disclosure requirements
      are effective in financial reports for interim periods beginning after December
      31, 2002.





We
      adopted SFAS No. 123 effective January 1, 2006.




**RECENT
      ACCOUNTING PRONOUNCEMENTS**





We
      adopted SFAS No. 142. Under the new rules, we will no longer amortize goodwill
      and other intangible assets with indefinite lives, but such assets will be
      subject to periodic testing for impairment. On an annual basis, and when there
      is reason to suspect that their values have been diminished or impaired, these
      assets must be tested for impairment, and write-downs to be included in results
      from operations may be necessary. SFAS No. 142 also requires us to complete
      a
      transitional goodwill impairment test six months from the date of adoption.





Any
      goodwill impairment loss recognized as a result of the transitional goodwill
      impairment test will be recorded as a cumulative effect of a change in
      accounting principle no later than the end of fiscal year 2002. The adoption
      of
      SFAS No. 142 had no material impact on our consolidated financial
      statements





**OFF-BALANCE
      SHEET ARRANGEMENTS**





We
      do not
      have any off-balance sheet arrangements.




**ITEM
      7. FINANCIAL STATEMENTS.**





Please
      see the audited financial statements and notes thereto included as a part of
      this report.




**ITEM
      8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND** **FINANCIAL
      DISCLOSURE.**





On
      June
      22, 2004 we engaged Malone & Bailey, PC as our independent accountants. On
      January 24, 2007 we dismissed Malone & Bailey, PC.





The
      reports of Malone & Bailey, PC on our financial statements for the fiscal
      years ended December 31, 2004 and 2005 did not contain an adverse opinion or
      a
      disclaimer of opinion, nor were such reports qualified or modified as to
      uncertainty, audit scope or accounting principles.





The
      decision to dismiss Malone & Bailey, PC was approved by our board of
      directors.





During
      that time, there were no "reportable events" as set forth in Item 304(a)(1)(i-v)
      of Regulation S-B adopted by the Securities and Exchange
      Commission.





We
      engaged Gruber & Company, LLC as our independent accountants in January
      2007. The decision to engage this firm was recommended by our board of
      directors.





12




During
      our two most recent fiscal years and any subsequent interim period prior to
      the
      engagement of Gruber & Company, LLC, neither we nor anyone on our behalf
      consulted with Gruber & Company, LLC regarding either (i) the application of
      accounting principles to a specified transaction, either contemplated or
      proposed, or the type of audit opinion that might be rendered on our financial
      statements or (ii) any matter that was either the subject of a "disagreement"
      or
      a "reportable event."





We
      have
      provided Malone & Bailey, PC with a copy of our current report on
      Form 8-K prior to its filing with the Commission, and we have requested that
      they furnish a letter addressed to the Commission stating whether it agreed
      with
      the statements made by us in that report and if not, stating the reasons it
      did
      not.





**ITEM
      8A. CONTROLS AND PROCEDURES.**





Disclosure
      controls and procedures are controls and other procedures that are designed
      to
      ensure that information required to be disclosed by us in the reports that
      we
      file or submit under the Exchange Act is recorded, processed, summarized and
      reported, within the time periods specified in the Securities and Exchange
      Commission's rules and forms. Disclosure controls and procedures include,
      without limitation, controls and procedures designed to ensure that information
      required to be disclosed by us in the reports that we file under the Exchange
      Act is accumulated and communicated to our management, including our principal
      executive and financial officers, as appropriate to allow timely decisions
      regarding required disclosure.





Evaluation
      of disclosure and controls and procedures. As of the end of the period covered
      by this Annual report, we conducted an evaluation, under the supervision and
      with the participation of our chief executive officer and chief financial
      officer, of our disclosure controls and procedures (as defined in Rules
      13a-15(e) of the Exchange Act). Based on this evaluation, our chief executive
      officer and chief financial officer concluded that our disclosure controls
      and
      procedures are effective to ensure that information required to be disclosed
      by us in reports that we file or submit under the Exchange Act is recorded,
      processed, summarized and reported within the time periods specified in
      Securities and Exchange Commission rules and forms.





Changes
      in internal controls over financial reporting. There was no change in our
      internal controls, which are included within disclosure controls and procedures,
      during our most recently completed fiscal quarter that has materially affected,
      or is reasonably likely to materially affect, our internal
      controls.


**ITEM
      8B. OTHER INFORMATION.**





None.





**PART
      III**




**ITEM
      9.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
      PERSONS;**  **COMPLIANCE
      WITH SECTION 16(A) OF THE EXCHANGE ACT.**





Our
      directors and executive officers are:




**NAME                                                   
      AGE                       POSITION(S)                                                                          
POSITION HELD SINCE**





Steve
      Bonenberger                              
51                          President,
      director and chief executive
      officer                                          
2004





Brent
      Fouch                                       
 
38                         
Secretary, director and chief financial
      officer                                            
2004




Our
      executive officers are elected annually by our board of directors.





Steve
      Bonenberger: During the past five years, Mr. Bonenberger was the owner,operator
      of a corporate consulting firm. Going forward, he intends to devote a
      significant portion of his time to the furtherance of our
      operations.





Brent
      Fouch: Over the past four years, Mr. Fouch has been a corporate con sultant.
      Mr.
      Fouch intends to serve as our chief financial officer, director and secretary.
      In the period encompassing from 2003 to present, Mr. Fouch has served as chief
      operating officer of Palomar Enterprises, Inc., prior to that he owned and
      operated a corporate consulting firm, where he performed business consulting
      services.





13


**SECTION
        16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE**
  Under
      Section 16(a) of the Exchange Act, our directors and certain of our officers,
      and persons holding more than 10 percent of our common stock are required to
      file forms reporting their beneficial ownership of our common stock and
      subsequent changes in that ownership with the Securities and Exchange
      Commission. Such persons are also required to furnish us with copies of all
      forms so filed.





**CODE
      OF ETHICS**





We
      have
      adopted a code of ethics that applies to our principal executive officer,
      principal financial officer, principal accounting officer or controller, or
      persons performing similar functions. The code of ethics is designed to deter
      wrongdoing and to promote:





-
      Honest
      and ethical conduct, including the ethical handling of actual or apparent
      conflicts of interest between personal and professional
      relationships;





-
      Full,
      fair, accurate, timely, and understandable disclosure in reports and documents
      that we file with, or submits to, the SEC and in other public communications
      made by us;





-
      Compliance with applicable governmental laws, rules and
      regulations;





-
      The
      prompt internal reporting of violations of the code to an appropriate person
      or
      persons identified in the code; and





-
      Accountability for adherence to the code.





A
      copy of
      our code of ethics that applies to our principal executive officer, principal
      financial officer, principal accounting officer or controller, or persons
      performing similar functions is filed as an exhibit to this Annual report.
      We
      have posted a copy of the code of ethics on our website.





We
      will
      provide to any person without charge, upon request, a copy of our code of
      ethics. Any such request should be directed to our corporate secretary at 1802
      N. Carson Street, Suite 212, Carson City, Nevada, 89701.




**ITEM
      10. EXECUTIVE COMPENSATION.**


**SUMMARY
      OF CASH AND CERTAIN OTHER COMPENSATION(NEED TO FILL IN 2006 ANDSTOCK YOU
      RECEIVED IF ANY )**





The
      following table provides certain summary information concerning the compensation
      earned by the named executive officers (determined as of the end of the last
      fiscal year) for services rendered in all capacities to The Blackhawk Fund
      and
      our subsidiaries:




**SUMMARY
                COMPENSATION TABLE****FISCAL
                YEAR COMPENSATION**
            
            **LONG
                TERM COMPENSATION****-**
            
            
            **Awards**
            
            **Payouts****Name
                and Principal Position(s)**
            
            **Year**
            
            **Salary**
              **($)**
            
            **Bonus**
              **($)**
            
            **Other**
              **Annual**
              **Compensation****(4)**
            
            **Securities**
              **Underlying**
              **Option/SARs**
              **Granted**
            
            **Restricted
                Shares**
              **or
                Restricted Share**
              **Units**
            
            **LTIP
                Payouts**
              **($)**
            
            **All
                other**
              **Compensation**
              **($)**Steve
                Bonenberger, President, Chief Executive Officer and
                Director
            
            
            2007
              2006
            
            
            165,000
              90,000
            
            
            0
              0
            -
              -
            
            0
              0
            
            
            0
              0
            
            
            0
              0
            
            
            0
              0
            
            
            0
              0Brent
                Fouch, Secretary, Treasurer, Principal Accounting Officer and
              Director
            
            
            2007
              2006
            
            
            150,000
              90,000
            
            
            0
              0
            -
              -
            
            0
              0
            
            
            0
              0
            
            
            0
              0
            
            
            0
              0
            
            
            0
              0





14


**EMPLOYMENT
      AGREEMENTS**





We
      do not
      have employment agreements with either of our officers or directors at this
      time. However, we do intend to enter into employment agreements with each of
      Mr.
      Steve Bonenberger and Mr. Brent Fouch in the near future. We will promptly
      report our entry into such employment agreements with Messrs. Bonenberger and
      Fouch by making appropriate filing(s) with the Commission. We also plan to
      enter
      into consulting agreements with various consulting entities owned by our
      officers and directors. We will promptly report our entry into such consulting
      agreements by making appropriate filing(s) with the Commission.





**CONFIDENTIALITY
      AGREEMENTS**





None.





**ITEM
      11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
      AND**


**RELATED
      STOCKHOLDER MATTERS.**





**EQUITY
      COMPENSATION PLAN INFORMATION -**  **SECURITIES
      AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS**





The
      following table provides information as of the end of the most recently
      completed fiscal year with respect to compensation plans (including individual
      compensation arrangements) under which equity securities of the registrant
      are
      authorized for issuance, aggregated as follows:





-
      All
      compensation plans previously approved by security holders; and





-
      All
      compensation plans not previously approved by security holders.








**NUMBER OF SECURITIES REMAINING**


**NUMBER OF SECURITIES TO
      BE                                                                                               AVAILABLE
      FOR FUTURE ISSUANCE**


**ISSUED UPON EXERCISE
      OF               
WEIGHTED-AVERAGE
      EXERCISE                     
UNDER EQUITY COMPENSATION**


**OUTSTANDING OPTIONS,
      WARRANTS           OF
      OUTSTANDING
      OPTIONS,                       
PLANS (EXCLUDING SECURITIES**


**AND
      RIGHTS                                         
WARRANTS AND
      RIGHTS                                 
REFLECTED IN COLUMN (A))**


****  **PLAN
      CATEGORY                                                           
(A)                                                                       
(B)                                                                                   
(C)**





Equity
      compensation
      plans                                                                    -0-                                                                      
 N/A                                                                                 
N/A


approved
      by security holders




Equity
      compensation plans
      not 207,500,000                                                                    0.001                                                                               
       N/A


approved
      by security holders





Total                                                                                             
      207,500,000                                                                  
$0.001                                                                                
 -0-








15







**SECURITY
      OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT**





The
      following table sets forth, as of December 31, 2007, information concerning
      ownership of our securities by:





-
      Each
      person who owns beneficially more than five percent of the outstanding shares
      of
      our common stock;





-
      Each
      person who owns beneficially outstanding shares of our preferred
      stock;





-
      Each
      director;





-
      Each
      named executive officer; and





- All
      directors and officers as a group.


**COMMON STOCK
      BENEFICIALLY                                         
PREFERRED STOCK BENEFICIALLY**


**** **OWNED
      (2)** **** **OWNED
      (2)**


**NAME
      AND ADDRESS OF BENEFICIAL OWNER (1)** **** **NUMBER                       
PERCENT** **** **NUMBER                         
      PERCENT**




Steve
      Bonenberger                                                                                                    
 15,000,000                               4                                                           
-0-                                      
 -0-


Brent
      Fouch 15,000,000                               4  -0-                                       
-0-




All
      directors and officers as a group (two
      persons)                                             
30,000,000                               8                                                             -0-                                      
 -0-





Palomar
      Enterprises
      (6)                                                                                              
69,989,054                              20


10,000,000
      (4)                   
100 (4)


10,000,000
      (5)                   
100 (4)






(1)
      Unless otherwise indicated, the address for each of these stockholders is c/o
      The Blackhawk Fund, 1802 N. Carson Street, Suite 212, Carson City, Nevada,
      89701, telephone number (775) 887-0670. Also, unless otherwise indicated, each
      person named in the table above has the sole voting and investment power with
      respect to the shares of our common and preferred stock which he beneficially
      owns.





(2)
      Beneficial ownership is determined in accordance with the rules of the SEC.
      As
      of December 31, 2007 the total number of outstanding shares of the common stock
      is 341,193,791, the total number of outstanding shares of the Series A preferred
      stock is 0, the total number of outstanding shares of the Series B preferred
      stock is 10,000,000 and the total number of outstanding shares of the Series
      C
      preferred stock is 10,00,000.





(3)
      Series A preferred stock.




(4)
      Series B preferred stock.





(5)
      Series C preferred stock.





(6)
      Palomar Enterprises, Inc., a Nevada publicly-traded corporation, is controlled
      by Messrs. Steve Bonenberger and Brent Fouch, our officers and directors.
      Palomar Enterprises holds 10,000,000 shares of our Series B preferred stock,
      10,000,000 shares of our series C preferred stock and 69,989,054 shares of
      common stock, equivalent to the voting  power
      of
      3,069,989,054 shares of our common stock as of December 31, 2007.





There
      are
      no arrangements, known to us, including any pledge by any person of our
      securities, the operation of which may at a subsequent date result in a change
      in control of The Blackhawk Fund.


16


There
      are
      no arrangements or understandings among members of both the former and the
      new
      control groups and their associates with respect to election of directors or
      other matters.




**ITEM
      12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.**





During
      the year ended December 31, 2007, we paid $ 165,000 in consulting fees to BMM,
      LLC, a Limited liability company owned and controlled by Steve Bonenberger,
      our
      officer and director. We also paid $ 150,000 in consulting fees to Prize
      Entertainment, Inc., a corporation owned and controlled by Brent Fouch, our
      officer and director.





**ITEM
      13. EXHIBITS.**





**EXHIBIT
      NO.**   **IDENTIFICATION
      OF EXHIBIT**




3.1**    Articles
      of Incorporation.


3.2**    Certificate
      of Amendment to Articles of Incorporation, filed on June 30, 2004.


3.3**    Certificate
      of Designation establishing our Series A, B and C Preferred Stock, filed
      effective July 21, 2004.


3.4**  Certificate
      of Correction to the Certificate of Designation for our Series B Preferred
      Stock, filed effective on November 29, 2004.


3.5**    Certificate
      of Amendment to Articles of Incorporation, filed effective January 3,
      2005.


3.6**    Certificate
      of Amendment to Articles of Incorporation, filed effective January 4,
      2005


3.7**    Amended
      Bylaws of Zannwell, Inc.


10.1** Zannwell
      Inc. Capital Stock Purchase Agreement, dated November 29,2004.


14**    Code
      of
      Ethics


21**    Subsidiaries


23.1 Consent
      of Gruber & Company, LLC


23 .2 Consent
      of Malone & Bailey, PC


31.1 Certification
      of Steve Bonenberger, President and Chief Executive Officer of The 
Blackhawk Fund, pursuant to 18 U.S.C. Sec.1350, as adopted pursuant
      to  Sec.302 of    the Sarbanes-Oxley Act of 2002


31.2 Certification
      of Brent Fouch, Secretary and Chief Financial Officer of The  Blackhawk
      Fund, pursuant to 18 U.S.C. Sec.1350, as adopted pursuant to Sec.302 of the
      Sarbanes-Oxley Act of 2002


32.1 Certification
      of Steve Bonenberger, President and Chief Executive Officer of The 
Blackhawk Fund, pursuant to 18 U.S.C. Sec.1350, as adopted pursuant to Sec.
      906
      of the Sarbanes-Oxley Act of 2002.


32.2 Certification
      of Brent Fouch, Secretary and Chief Financial Officer of The  Blackhawk
      Fund, pursuant to 18 U.S.C. Sec.1350, as adopted pursuant to Sec.906 of the
      Sarbanes-Oxley Act of 2002.


_________


**
      Previously Filed




**AUDIT-RELATED
      FEES**




The
      aggregate fees billed by Gruber & Company for professional services rendered
      for the audit of our annual financial statements for 2006 were approximately
      $15,000.





The
      aggregate fees billed by Gruber & Company LLC for assurance and related
      services that are reasonably related to the performance of the audit or review
      of our financial statements for fiscal year 2007 were $24,000





**ALL
      OTHER FEES**





There
      were no other fees billed by Gruber & Company LLC for professional
      services rendered, other than as stated under the captions Audit Fees,
      Audit-Related Fees, and Tax Fees.




17















**SIGNATURES**





In
      accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934,
      as
      amended, the Registrant has duly caused this Annual report to be signed on
      its
      behalf by the undersigned, thereunto duly authorized.





**The
      Blackhawk Fund**





Date:
      March 26, 2008    /s/
      Steve
      Bonenberger


By: Steve Bonenberger, President and Chief Executive 
Officer





Pursuant
      to the requirements of the Securities Exchange Act of 1934, as amended, this
      Annual report has been signed by the following persons on behalf of the
      registrant and in the capacities and on the dates indicated.





Signature(s)      Title(s)  Date(s)




/s/ Steve Bonenberger           
             President, Chief
      Executive Officer and
      Director                      
March 26, 2008


By: 
      Steve Bonenberger





/s/ Brent Fouch             
               
       Secretary, Chief Financial Officer and
 Director                        March
      26, 2008


By: 
      Brent Fouch


















































18




**GRUBER
        & COMPANY, LLC**
 **400
        Lake Saint**  **Louis
        Blvd.**
 **Lake
        Saint Louis, MO, United States**
 **Phone:
        (636) 561-5639**
      **REPORT
        OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**
 
 
 To
        the
        Board of Directors
 The
        Blackhawk Fund
 Cardiff,
        California
 
 We
        have
        audited the accompanying balance sheet of The Blackhawk Fund ("Blackhawk")
        as of
        December 31, 2007 and the related statements of  operations, stockholders'
        deficit, and cash flows for the years then  ended. These financial
        statements are the responsibility of Blackhawk's  management. Our
        responsibility is to express an opinion on these financial statements based
        on
        our audits.
 
 
 
 
 **NEW
        OPINION**
 
 /s/
        Gruber & Company, LLC
 Lake
        St.
        Louis, MO.
 February
        1, 2007
 
  19
  **BALANCE
                    SHEET****DECEMBER
                    31,****ASSETS**
                **2,007**
                **2,006**Cash
                $                            2,381
                $                           11,748Prepaid
                    Financing Costs
                829
                -Total
                    Current Assets
                3,210
                11,748Fixed
                    Assets-Net
                5,055
                -Property
                    Held For Sale
                1,774,900
                1,692,600Prepaid
                    Financing Costs
                23,704
                -Total
                    Assets
                1,806,869
                1,704,348**LIABILITIES
                    AND STOCKHOLDERS' DEFICIT**Current
                    LiabilitiesAccounts
                    Payable
                4,240
                1,219Note
                    Payable- related party
                827,828
                590,700Note
                    Payable
                22,000
                -Total
                    Current Liabilities
                854,068
                591,919Long-
                    Term LiabilitiesNote
                    Payable
                1,936,000
                1,496,000Commitments
                    and Contingencies
                -
                -Stockholders'
                    DeficitPreferred
                    Stock, $.001 par value:Series
                    A: Authorized 20,000,000, 0, and 9,000,000 issued
                -
                9,000Series
                    B: Authorized 10,000,000,10,000,000 issued
                10,000
                10,000Series
                    C: Authorized 20,000,000,10,000,000 issued
                10,000
                10,000Common
                    Stock, $.001 par value:4,000,000,000
                    shares authorized,341,193,791 and24,664,792
                    issued and outstanding
                341,194
                24,665Common
                    Stock B, .001 par 150,000,000 authorized issued and outstanding
                    30,000,000
                    and 0
                30,000
                -Additional
                    Paid in Capital
                36,252,318
                34,646,962Common
                    Stock Subscribed
                (223,862)
                -Retained
                    Deficit
                (37,402,849)
                (35,084,198)Total
                    Stockholders' Deficit
                (983,199)
                (383,571)Total
                    Liabilities and Stockholders' Deficit
                1,806,869
                1,704,348**See
                    accompanying summary of significant accounting policies and notes
                    to
                    financial statements.**
  
 20
   **THE
          BLACKHAWK FUND**
 **STATEMENTS
          OF OPERATIONS**
 **Years
          Ended December 31, 2007 and 2006**
 
 
 **December
                    31**
                **December
                    31****2007**
                **2006**Revenues
                $305,908
                $
                    149,451Cost
                    of Sales
                234,231
                140,000Gross
                    Profit
                71,677
                9,451**OPERATING
                    EXPENSES**General
                    & Administrative
                2,208,360
                472,780Interest
                    Expense
                181,968
                100,736**NET
                    LOSS**
                **$(2,318,651)**
                **$(564,065)**Basic
                    and Diluted Net Income (Loss) Per Common Share
                **$(0.01)**
                **$(0.03)**Weighted
                    Average Number of Shares Outstanding
                **246,948,708**
                **18,424,741**
 
 
 
 21
   **THE
          BLACKHAWK FUND**
 **Statement
          of Stockholders' Equity**
 **Years
          Ended December 31, 2007 and 2006**
  **Preferred
                    Stock**
                
                **Preferred
                    Stock**
                
                **Common
                    Stock**
                
                
                
                **Additional**
                **Stock**
                **Retained**
                **Total****Series
                    A**
                
                **Series
                    B&C**
                
                **Series
                    B**
                
                **Common
                    Stock**
                
                **Paid-In**
                **Subscriptions**
                **Earnings**
                **Stockholders'****Shares**
                **Amount**
                **Shares**
                **Amount**
                **Shares**
                **Amount**
                **Shares**
                **Amount**
                **Capital**
                **Receivable**
                **(Deficit)**
                **(Deficit)****$**
                
                **$**
                
                **$**
                
                **$**
                **$**
                **$**
                **$**
                **$**Balances
                    December 31, 2005
                9,000,000
                9,000
                20,000,000
                20,000
                -
                -
                3,209,2007
                3,209
                34,457,058
                (40,000)
                (
                    34,520,133)
                (70,866)-Proceeds
                
                
                
                
                
                
                14,000,000
                14,000
                
                40,000
                
                54,000Proceeds
                -
                
                
                
                
                
                10,000,000
                10,000
                135,168
                
                
                145,168Stock
                    for Services
                
                
                
                
                
                
                1,000,000
                1,000
                12,000
                
                
                13,000Subscription
                    Agreement
                -
                
                
                
                
                
                2,000,000
                2,000
                28,001
                
                
                30,001Stock
                    Cancelled
                
                
                
                
                
                
                (5,544,215)
                ( 5,544)
                5,544
                
                
                -Proceeds
                    on Agreement
                
                
                
                
                
                
                
                
                9,191
                
                
                9,191Net
                    Loss
                
                
                
                
                
                
                
                
                
                
                ( 564,065)
                (564,065)**_____________**
                _________
                ___________
                _______
                ___________
                _______
                ______________
                __________
                ___________
                ______________
                _____________
                ______________-Balance
                    December 31, 2006
                9,000,000
                9,000
                20,000,000
                20,000
                -
                -
                24,664,792
                24,665
                34,646,962
                -
                (35,084,198)
                (383,571)Proceeds
                
                
                
                
                
                
                9,915,333
                9,915
                67,085
                
                
                77,000Stock
                    for Services
                
                
                
                
                
                
                67,300,000
                67,300
                1,046,300
                
                
                1,113,600Exchange
                    of Shares
                (9,000,000)
                (9,000)
                
                
                
                
                90,000,000
                90,000
                (81,000)
                
                
                -Stock
                    for Services
                
                
                
                
                
                
                24,767,000
                24,767
                155,569
                
                
                180,336Proceeds
                
                
                
                
                
                
                213,333
                213
                2,787
                
                
                3,000Proceeds
                
                
                
                
                
                
                14,000,000
                14,000
                (4,000)
                
                
                10,000Services
                
                
                
                
                
                
                7,000,000
                7,000
                21,900
                -
                -
                28,900Proceeds
                
                
                
                
                10,000,000
                10,000
                
                
                240,000
                
                
                250,000Proceeds
                
                
                
                
                20,000,000
                20,000
                
                
                180,000
                (143,862)
                
                56,138Proceeds
                -
                
                
                
                
                
                40,000,000
                40,000
                (40,000)
                
                
                -Stock
                    for Services
                
                
                
                
                
                
                97,107
                97
                (49)
                
                
                48Proceeds
                
                
                
                
                
                
                63,236,226
                63,237
                16,764
                (80,000)
                
                1Net
                    Loss
                -
                -
                -
                -
                -
                -
                -
                -
                -
                -
                (2,318,651)
                (2,318,651)**Balances,
                    December 31, 2007**
                **-**
                **-**
                **20,000,000**
                **20,000**
                **30,000,000**
                **30,000**
                **341,193,791**
                **341,194**
                **36,252,318**
                **(223,862)**
                **(37,402,849)**
                **(983,199)**
  **See
          accompanying summary of significant accounting policies and notes to financial
          statements.**
   22
  
  
 **THE
        BLACKHAWK FUND**
 **STATEMENTS
        OF CASH FLOWS**
 **Years
        Ended December 31, 2007 and 2006**
 
 **2007**
              **2006****Cash
                  Flows From Operating Activities**Net
                  Income (Loss)
              $(2,318,651)
              $(564,065)Adjustments
                  to reconcile net income (loss) to net cash
                provided
                  by (used in) operating activities:Depreciation
              1,010-Stock
                  Issued for Services
              1,322,885
              51,000Imputed
                  Interest
              46,628
              18,204Changes
                  in Operating Assets and Liabilities:(Increase)
                  in Prepaid Financing costs
              (24,533)
              -Increase
                  (Decrease) in Accounts Payable
              3,021
              (4,861)Net
                  cash used in operating activities
              (969,640)
              (499,722)Cash
                  Flows From Investing Activities:Purchase
                  of Assets
              (88,365)
              (196,600)Net
                  cash provided by (used in) investing activities
              (88,365)
              (196,600)Cash
                  Flows from Financing Activities:Increase
                  in Notes Payable
              462,000Proceeds
                  from the sale of common stock
              396,138
              200,360Proceeds
                  from related party loan
              190,500
              518,001Payments
                  on loan payable-Shareholder
              
              (23,000)Net
                  cash provided by financing activities
              1,048,638
              695,361Net
                  Change in Cash
              (9,367)
              (961)Cash
                  Beginning of Period
              11,748
              12,709Cash
                  End of Period
              2,381
              11,748Supplemental
                  information:Interest
                  Paid
              $135,340
              $82,532Income
                  Taxes Paid
              -
              -
   **See
        accompanying summary of significant accounting policies and notes to financial
        statements.**
 
  23
   
 **THE
        BLACKHAWK FUND**
 
 **NOTES
        TO FINANCIAL STATEMENTS**
 
 **NOTE
        1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**
 
 Nature
        of
        business. The Blackhawk Fund ("Blackhawk") was organized November 5, 1998
        in
        Nevada as USA Telecom. In 1998, the entity amended its articles of incorporation
        to change its name to USA Telcom, in 2000 it amended its articles of
        incorporation to change its name to USA Telcom Internationale, in 2004 it
        amended its articles of incorporation to change its name to ZannWell Inc.,
        and
        in January 2005, it amended its articles of incorporation to change its name
        to
        Blackhawk Fund. For the year ended December 31, 2007 the Company was in
        the  business of residential development and sales and the media business.
        ( See Note 3)
 Use
        of
        Estimates. In preparing financial statements, management makes estimates
        and
        assumptions that affect the reported amounts of assets and liabilities in
        the
        balance sheet and revenue and expenses in the statement of expenses. Actual
        results could differ from those estimates.
 
 Cash
        and
        Cash Equivalents. For purposes of the statement of cash flows, Blackhawk
        considers all highly liquid investments purchased with an original maturity
        of
        three months or less to be cash equivalents.
 
 Revenue
        Recognition. Blackhawk recognizes revenue when it sells property and a "closing"
        takes place.
 
 Property
        held for sale is valued at lower of faire value or cost. Additions are
        capitalized Gains and losses on dispositions of property are reflected in 
operations. As property is held for resale, no depreciation is
        taken.
 
 Impairment
        of Long-Lived Assets. Blackhawk reviews the carrying value of its long-lived
        assets annually or whenever events or changes in circumstances indicate that
        the
        historical cost-carrying value of an asset may no longer be appropriate.
        Blackhawk assesses recoverability of the carrying value of the asset by
        estimating the future net cash flows expected to result from the asset,
        including eventual disposition. If the future net cash flows are less than
        the
        carrying value of the asset, an impairment loss is recorded equal to the
        difference between the asset's carrying value and fair value.
 
 Income
        taxes. Blackhawk recognizes deferred tax assets and liabilities based on
        differences between the financial reporting and tax bases of assets and
        liabilities using the enacted tax rates and laws that are expected to be
        in
        effect when the differences are expected to be recovered. Blackhawk provides
        a
        valuation allowance for deferred tax assets for which it does not consider
        realization of such assets to be more likely than not.
 
 Basic
        and
        diluted net income (loss) per share. The basic net loss per common share
        is
        computed by dividing the net income (loss) by the weighted average number
        of
        common shares outstanding. Diluted net income (loss) per common share is
        computed by dividing the net income (loss) adjusted on an "as if converted"
        basis, by the weighted average number of common shares outstanding plus
        potential dilutive securities. For the year ended December 31, 2006,there
        were  no potential dilutitive securities.
  **NOTE
        2 - STOCK BASED COMPENSATION**
 
 Prior
        to
        January 1, 2006 we accounted for stock based compensation under Statement
        of
        Financial Accounting Standards No. 123 Accounting for Stock-Based Compensation
        (FAS 123). As permitted under this standard, compensation cost was recognized
        using the intrinsic value method described in Accounting Principles Board
        Opinion No. 25, Accounting for Stock Issued to Employees (APB 25). Effective
        January 1, 2006, the Company has adopted Statement of Financial Accounting
        Standards No. 123 (Revised 2004), Share-Based Payment (FAS 123R) and applied
        the
        provisions of the Securities and Exchange Commission Staff Accounting Bulletin
        No. 107 using the modified-prospective transition method. Prior periods were
        not
        restated to reflect the impact of adopting the new standard. As a result
        of the
        adoption of FAS 123R, stock-based compensation expense recognized during
        the six
        months ended June 30, 2007 includes compensation expense for all share-based
        payments granted on or prior to, but not yet vested as of December 31, 2006,
        based on the grant date fair value estimated in accordance with the original
        provisions of FAS 123, and compensation cost for all share-based payments
        granted on or subsequent to January 1, 2006, based on the grant date fair
        value
        estimated in accordance with the provisions of FAS 123R.
 
 Beginning
        on January 1, 2006, any future excess tax benefits derived from the exercise
        of
        stock options will be recorded prospectively and reported as cash flows from
        financing activities in accordance with FAS 123R.
 
 During
        the year the Company did not make any stock option grants and therefore did
        not
        recognize any stock-based option expense. For the year ended December 31,
        2007
        the Company recorded stock based consulting expense of $1,322,885, as determined
        under FASB 123R..
 
 **NOTE
        3 - PROPERTY - HELD FOR SALE/FIXED ASSETS**
 
 In
        late
        March 2006, the Company purchased a condominium located in Carlsbad, California
        for $625,083. The Company intends to renovate and sell the condo. Since the
        Company intends to sell the condominium upon completion of the planned
        renovations, it has been designated as "held-for-sale". Therefore it will
        be
        carried at the lower cost or fair value (net of expected sales costs) during
        the
        renovation period and will not be depreciated. Major improvements and
        renovations are capitalized.
  
    24
   
 **THE
        BLACKHAWK FUND**
 **NOTES
        TO FINANCIAL STATEMENTS**
 
 
 
 In
        June
        of 2006, the Company entered into a joint venture agreement to renovate and
        then
        sell a residential home located in Oceanside, California. The Company is
        a 50%
        joint venture partner, but has the right to exercise control. The Company
        is
        100% responsible for improvement costs, with these costs to be reimbursed
        upon
        sale and any remaining profits split 50/50. the Company has valued the house
        at
        the original value of the liability assumed of $1,000,000. As the intention
        on
        this property is identical described above the description related to "held
        for
        sale" and depreciation apply. The Company has capitalized improvements on
        this
        property of $149,817.
 
 The
        Company has capitalized and depreciated computer equipment with a cost of
        $6,065. The asset is being depreciated over 3 years under the straight line
        method . During the year $1,010 was depreciated.
 
 **NOTE
        4 - COMMON STOCK**
 
 During
        the year ended December 31, 2007, the company issued 316,528,999 shares of
        common stock. Of this amount 90,000,000 was converted from preferred stock,
        99,164,107 shares for services valued at $1,322,885 and 127,364,892 for cash
        of
        $90,000.
 In
        April
        2007, the Company created a new class of common stock pursuant to a subscription
        agreement. That agreement, indicates 30,000,000 shares issued with a par
        value
        of .001. The Company has issued the shares and has recorded a subscription
        receivable. For the year ended December 31, 2007 $306,138 has been
        realized.
 
 **NOTE
        5 - NOTES PAYABLE/MORTGAGES PAYABLE**
 
 In
        conjunction with the purchase of the condominium described in Note 3 above,
        the
        Company executed a 30-year adjustable rate promissory note for $496,000.
        The
        initial interest rate on the note is 7.875% and may change on April 1, 2008
        and
        on that date every sixth month thereafter. Pursuant to the terms of the note,
        the Company is required to make interest only payments for the first 10 years
        (first 120 payments). The initial monthly payments will be $3,225 and may
        change
        beginning on April 1, 2008. The note payable is personally guaranteed by
        the
        Company’s president.
 
 In
        conjunction with the joint venture property described in note 3 above, the
        Company refinanced this note in July 2007 and assumed a 50% interest and
        corresponding promissory note debt of $1,440,000. Terms indicate that the
        first
        note is for $1,120,000 over 30 years interest only for the first 10 years.
        The
        second note is carried for $320,000 with interest at 9.875 over 30 years
        interest only for the first 10 years. Monthly amounts are presently $9,983.
        Both
        of the above notes are classified as long term notes payable.
 
 Included
        in short terms note payable is a note to a vendor for $22,000 payable in
        monthly
        installments of $3,000 as settlement for a media invoice.
 
 **NOTE
        6-RELATED PARTY TRANSACTIONS**
 
 At
        December 31, 2007, and included as a short term note payable, the Company
        is
        indebted to a related party for $827,828. . Interest has been imputed at
        6% per
        year.
 
 During
        the year ended December 31, 2007, the Company made payments totaling $315,000
        to
        entities controlled by the CEO and CFO for consulting services.
 During
        the first quarter 2007 30,000,000 shares were issued to its CFO and CEO for
        services. Those shares have been valued at market and included in stock for
        services.
 During
        the first quarter 2007, 9,000,000 shares of preferred A stock, held by a
        related
        entity, was converted to 90,000,000 shares of common stock.
 
 **NOTE
        7-GOING CONCERN**
 
 The
        Company has incurred significant losses, has a negative capital, and negative
        current ratio. These factors, among others indicate that the Company may
        not be
        able to continue as a going concern. No adjustments have been made to the
        carrying value of assets and liabilities should the company not continue
        as a
        going concern.
 
    25
   **THE
        BLACKHAWK FUND**
 **NOTES
        TO FINANCIAL STATEMENTS**
 
 
 **NOTE
        8-SEGMENT INFORMATION**
 
 The
        Company adopted SFAS No. 131, "Disclosures About Segments of an Enterprise
        and
        Related Information", in respect of its operating segments. The Company's
        reportable segment is Blackhawk Media a media and production
        enterprise.
 
 The
        segment is managed separately because each business requires different
        technology and marketing strategies. The Company evaluates performance based
        upon operating earnings of the unit. The accounting policy of the segment
        are
        the same as those described in the summary of significant accounting policies.
        The corporate assets include cash. There were no significant intercompany
        transactions. In determining operating income (loss) by segment, general
        corporate expenses and other income ad expense items of a non operating nature
        are not considered, as such items are not allocated to the Company's segments.
        Segment information for the year ended December 31, 2007 is as
        follows.
 
 Sales
        from
        Media                        
$283,323
 
 Cost
        of
        Sales                                  234,231
 
 Gross
        Profit                                   
 48,992
 
 Media
        Expenses                           267,605
 
 Loss
        from
        Media
        Segment        (218,613)
   **NOTE
        9 - INCOME TAXES**
 
 Blackhawk
        uses the liability method, where deferred tax assets and liabilities are
        determined based on the expected future tax consequences of temporary
        differences between the carrying amounts of assets and liabilities for financial
        and income tax reporting purposes.
 
 Internal
        Revenue Section 382 restricts the ability to use these carry-forwards whenever
        an ownership change as defined occurs. Blackhawk incurred such an ownership
        change on March 19, 2004 and again on November 29, 2004.
  **NOTE
        10 - PREFERRED STOCK**
 
 There
        are
        three classes of preferred stock, A, B & C.
 
 Each
        Series A holder is entitled to receive cash, stock, or other property, as
        dividends, and at any time, may redeem the whole or any part of the outstanding
        Series A Preferred Stock. Each share of Series A is convertible at the option
        of
        the holder into 10 shares of common stock. The Series A Preferred Stock will
        have no voting rights, prior to conversion into shares of common
        stock.
 
 Each
        Series B holder is entitled to receive cash, stock or other property, as
        dividends, and at any time may redeem the whole or any part of the outstanding
        Series B Preferred Stock. Each share of Series B is convertible at the option
        of
        the holder into 200 shares of common stock. Series B holders are entitled
        to one
        vote per share.
 
 Each
        Series C holder is entitled to receive cash, stock or other property, as
        dividends, and at any time may redeem the whole or any part of the outstanding
        Series C Preferred Stock. Series C is not convertible, but each share has
        100
        votes per share.
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