# UNITED STATES
SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549

# FORM 10-QSB

# QUARTERLY REPORT UNDER
SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

# FOR THE QUARTERLY
PERIOD ENDED MARCH 31, 2006

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# Commission file number:
333-125542

Eliason Funding
Corporation (Exact Name of Small Business Issuer as Specified in its Charter)

|WISCONSIN                                | 20-1150223                             
|---------------------------------------- | ---------------------------------------
|(State of incorporation)                 | (I.R.S. employer identification number)
|548 Highway 155                         
|ST. GERMAIN, WISCONSIN                   | 54558                                  
|(Address of principal executive offices) | (Zip code)                             
|                                         |                                        

Issuers telephone
number, including area code: (715) 479-5535

Check 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 past 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing requirements for
the past 90 days. |X| Yes [_] No

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

State the number of shares
outstanding of each of the issuers classes of Common equity, as of the latest
practicable date: As of April 30, 2006, the issuer had 100 shares of common stock issued
and outstanding

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# ELIASON FUNDING
CORPORATIONFORM 10-QSB FOR THE QUARTER ENDED MARCH 31, 2006

|                                                                        | Page
|----------------------------------------------------------------------- | ----
|PART I. FINANCIAL INFORMATION                                           |     
|ITEM 1. Financial Statements                                           
|Statements of Financial Condition                                       | 1   
|March 31, 2006 (Unaudited) and December 31, 2005                       
|Statements of Operations (Unaudited)                                    | 2   
|Three Months ended March 31, 2006 and March 31, 2005                   
|Statements of Changes in Stockholder's (Deficit) Equity (Unaudited)     | 3   
|Statements of Cash Flows (Unaudited)                                    | 4   
|Three Months ended March 31, 2006 and March 31, 2005                   
|Notes to Financial Statements                                           | 5   
|ITEM 2. Management's Discussion and Analysis of Financial Condition and | 9   
|Results of Operations                                                  
|ITEM 3. Controls and Procedures                                         | 11  
|PART II. OTHER INFORMATION                                             
|ITEM 6. Exhibits                                                        | 12  
|Signature                                                               | 13  
|302 Certification of Chief Executive Officer                           
|302 Certification of Principal Financial Officer                       
|906 Certification of Reporting Officers                                

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# PART I. FINANCIAL INFORMATION

# ITEM 1. FINANCIAL
STATEMENTS

# ELIASON FUNDING
CORPORATION STATEMENTS OF FINANCIAL CONDITION

|                                                             | March 31, 2006
Unaudited | December 31,
2005
Audited
|------------------------------------------------------------ | ------------------------ | -------------------------
|ASSETS                                                       |                          |                          
|Cash and cash equivalents                                    |                          |                          
|Prepaid expenses and other assets                            |                          |                          
|Notes receivable - related party                             |                          |                          
|                                                             |                          |                          
|Total assets                                                 |                          |                          
|                                                             |                          |                          
|LIABILITIES AND STOCKHOLDER'S (DEFICIT) EQUITY               |                          |                          
|Current Liabilities:   Accounts payable and accrued expenses |                          |                          
|                                                             |                          |                          
|Total current liabilities                                    |                          |                          
|Notes payable - long-term                                    |                          |                          
|Stockholder's (deficit) equity:                              |                          |                          
|Common stock                                                 |                          |                          
|Additional paid in capital                                   |                          |                          
|Accumulated deficit                                          |                          |                          
|                                                             |                          |                          
|Total stockholder's (deficit) equity                         |                          |                          
|                                                             |                          |                          
|Total liabilities and stockholder's (deficit)                |                          |                          
|equity                                                       |                          |                          
|                                                             |                          |                          

See accompanying notes.

1

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# ELIASON FUNDING
CORPORATION STATEMENTS OF OPERATIONS (Unaudited)

|                     | Three
Months Ended
March 31, 2006
|-------------------- | ---------------------------------
|Revenues:            |                                  
|Interest income      |                                  
|                     |                                  
|Total revenues       |                                  
|Expenses:            |                                  
|Legal and accounting |                                  
|Advertising          |                                  
|Administrative       |                                  
|Interest             |                                  
|                     |                                  
|Total expenses       |                                  
|                     |                                  
|NET LOSS             |                                  
|                     |                                  

See accompanying notes.

2

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# ELIASON FUNDING
CORPORATION STATEMENTS OF CHANGES IN STOCKHOLDER'S (DEFICIT) EQUITY (Unaudited)

# For the Three Months
Ended March 31, 2006

|                          
|--------------------------
|Balance December 31, 2005 
|Additional paid in capital
|Net loss                  
|                          
|Balance March 31, 2006    
|                          

# For the Three Months Ended
March 31, 2005

|                            
|----------------------------
|Balance at December 31, 2004
|Additional paid in capital  
|Net loss                    
|                            
|Balance March 31, 2005      
|                            

See accompanying notes.

3

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# ELIASON FUNDING
CORPORATION STATEMENTS OF CASH FLOWS (Unaudited)

|                                                                            | Three
Months Ended
March 31, 2006
|--------------------------------------------------------------------------- | ---------------------------------
|Cash flows from operating activities:                                       |                                  
|Net loss                                                                    |                                  
|Adjustments to reconcile net loss to net cash used in operating activities: |                                  
|Changes in:                                                                 |                                  
|Prepaid expenses and other assets                                           |                                  
|Notes receivable - related party                                            |                                  
|Accounts payable and accrued liabilities                                    |                                  
|                                                                            |                                  
|Net cash used in operating activities                                       |                                  
|Cash flows from financing activities:                                       |                                  
|Proceeds from issuance of notes payable                                     |                                  
|Contribution of capital                                                     |                                  
|                                                                            |                                  
|Net cash provided by financing activities                                   |                                  
|                                                                            |                                  
|                                                                            |                                  
|NET DECREASE IN CASH AND CASH EQUIVALENTS                                   |                                  
|Cash and cash equivalents at beginning of period                            |                                  
|                                                                            |                                  
|Cash and cash equivalents at end of period                                  |                                  
|                                                                            |                                  
|Supplemental disclosures of cash flow information:                          |                                  
|Cash paid during the three months for:                                      |                                  
|Interest                                                                    |                                  

See accompanying notes.

4

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# ELIASON FUNDING
CORPORATION NOTES TO FINANCIAL STATEMENTS March 31, 2006(Unaudited)

NOTE A 
ORGANIZATION AND PRESENTATION

Eliason Funding Corporation is a
State of Wisconsin Corporation that is headquartered in St. Germain, Wisconsin. The
Company provides financing to affiliated entities through the issuance of public debt.

The financial statements presented
herein are based on interim amounts. In the opinion of management, all adjustments
(consisting only of normal recurring accruals) necessary to present fairly the financial
position, results of operations and cash flows at March 31, 2006 and for all periods
presented have been made. The loss from operations for the period ended March 31, 2006 is
not necessarily indicative of the operating results for the full year.

NOTE B  SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES

| | 1. | Use
of Estimates
| | -- | ----------------

| | The
preparation of financial statements in conformity with accounting principles generally
accepted in the United States of America requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and disclosures of
contingent assets and liabilities at the date of the financial statements and
accompanying notes. Management believes that the estimates utilized in preparing its
financial statements are reasonable and prudent. Actual results could differ from those
estimates.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 2. | Cash
and Cash Equivalents
| | -- | -------------------------

| | The
Company considers cash and cash equivalents to include those investments with maturities
of 90 days or less.
| | ----------------------------------------------------------------------------------------------------------------

| | 3. | Income
Taxes
| | -- | ------------

| | The
Company has elected, for Federal and state income tax purposes, to be treated as
Qualified S-Corporation subsidiary under the provisions of the Internal Revenue Code.
Accordingly, the Companys taxable income is included in the tax return of its
parent company, Eliason, Inc.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 4. | Revenue
Recognition
| | -- | -------------------

| | The
Company recognizes interest income on notes receivable as it is earned.
| | ---------------------------------------------------------------------------

| | 5. | Notes
Receivable
| | -- | ----------------

| | The
Company records notes receivable at their stated value as disclosed on the face of the
note.
| | ------------------------------------------------------------------------------------------------

5

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NOTE B - SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

| | 6. | Notes
Payable
| | -- | -------------

| | The
Company records notes payable at their stated value as disclosed on the face of the note.
| | ---------------------------------------------------------------------------------------------

| | 7. | Advertising
| | -- | -----------

| | The
Company expenses advertising as incurred.
| | ---------------------------------------------

| | 8. | Fair
Value
| | -- | ----------

| | All
cash and cash equivalents and notes receivable  related party are financial assets
with a carrying value that approximates fair market value. All accounts payable and
accrued expenses and notes payable are financial assets with a carrying value that
approximates fair market value.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

NOTE C  NOTES
RECEIVABLE  RELATED PARTY

As of March 31, 2006, the Company had
$1,644,867 in outstanding notes receivable from a related party.

$1,249,867 was loaned in several
notes to Eliason 1031 Properties Corporation (related party through common ownership) for
the purchase of an apartment complex in Metropolitan Atlanta, Georgia. The notes bear
interest at 12% per annum with interest payments due quarterly. The notes have a stated
due date of September 21, 2006, but are callable at anytime by the Company. The notes are
guaranteed by the stockholders of the related party.

$395,000 was loaned in several notes
to Eliason 1031 Properties Corporation for the purchase of an apartment complex in Mebane,
North Carolina. The notes bear interest at 12.5% per annum with interest payments due
quarterly. The notes have a stated due date of December 31, 2006, but are callable at
anytime by the Company. The notes are guaranteed by the stockholders of the related party.

NOTE D  RELATED
PARTY TRANSACTIONS

The Company has a Management Services
agreement with Eliason, Inc. (a related party through common ownership) as described
below. The agreement calls for payments of $5,000 per month for management and accounting
services. The agreement is automatically renewed on an annual basis unless notification is
provided thirty days prior to the end of the year. Through March 31, 2006 a total of
$15,000 has been expensed under this agreement.

Notes receivable  related party
consists of the following at March 31, 2006:

| | Eliason
1031 Properties Corporation                   $ 1,644,867
| | -----------------------------------------------------------------

6

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NOTE D  RELATED
PARTY TRANSACTIONS (CONTINUED)

Eliason, Inc. through subsidiaries
is the parent Company of both Eliason 1031 Properties Corporation and Eliason Funding
Corporation.

The notes receivable from Eliason
1031 Properties Corporation (see Note C) bear interest at varying amounts between 12% and
12.5% per annum with interest payments due quarterly. The notes mature in varying amounts
between September and December 2006, but the notes are callable at any time by the
Company. The notes are guaranteed by the stockholders of the related party.

On January 13, 2005, the Company
entered into a Contribution Agreement with Eliason, Inc., Eliason Capital Group, Inc. and
Brian Eliason and David Eliason (related parties through common ownership). Under the
agreement, the related parties have agreed to fund the obligations of the Company as
necessary.

The Company leases office space from
Eliason Financial Group, LLC (related party through common ownership). The lease is on a
month-to-month basis at $200 per month beginning in August 2005. Rent expense was $600
under the terms of the lease for the three months ended March 31, 2006.

NOTE E  NOTES
PAYABLE

As of March 31, 2006, the Company had
outstanding notes payable of $1,812,500. These notes were issued under a public debt
offering beginning August 19, 2005. The debt offering remains open at managements
discretion. There are four classes of notes based upon their maturity from issuance. The
classes are Two-Year, Five-Year, Seven-Year and Ten-Year notes with terms as follows:

|Class   | Maximum
Principal | Maturity | Rate | Notes
Issued
|------- | ----------------- | -------- | ---- | ------------
|2-Year  |                   |          | $    | 4,000,000   
|5-Year  |                   |          | $    | 5,000,000   
|7-Year  |                   |          | $    | 6,000,000   
|10-Year |                   |          | $    | 6,000,000   
|        |                   |          |      |             
|        |                   |          | $    | 1,812,500   
|        |                   |          |      |             

Future maturities consist of the
following at March 31, 2006:

|March 31, 2007 |  |  | $ | --        | 
|-------------- |  |  | - | --------- | 
|March 31, 2008 |  |  |   | 125,000   | 
|March 31, 2009 |  |  |   | --        | 
|March 31, 2010 |  |  |   | --        | 
|March 31, 2011 |  |  |   | 105,000   | 
|Thereafter     |  |  |   | 1,582,500 | 
|               |  | 
|               |  |  | $ | 1,812,500 | 
|               |  | 

7

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NOTE F  SUBSEQUENT
EVENTS

From March 31, 2006 through April 25,
2006 the Company sold $115,000 in additional notes to the public. These notes consist of
$65,000 in Five-Year Notes and $50,000 in Ten-Year Notes.

8

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

# CAUTIONARY STATEMENT
REGARDING FORWARD-LOOKING STATEMENTS

This
Form 10-QSB contains forward-looking statements within the meaning of that term in the
Private Securities Litigation Reform Act of 1995 (the Act) (Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934). Additional
written or oral forward-looking statements may be made by the Company from time to time in
filings with the Securities Exchange Commission, press releases, or otherwise. Statements
contained in this Form 10-QSB that are not historical facts are forward-looking statements
made pursuant to the safe harbor provisions of the Act. Forward-looking statements may
include, but are not limited to, projections of revenue, income or loss and capital
expenditures, statements regarding future operations, anticipated financing needs,
compliance with financial covenants in loan agreements, plans for acquisitions or sales of
assets or businesses, plans relating to products or services of the Company, assessments
of materiality, predictions of future events, the effects of pending and possible
litigation, and assumptions relating to the foregoing. In addition, when used in this Form
10-KSB, the words anticipates, believes, estimates,
expects, intends, plans and variations thereof and
similar expressions are intended to identify forward-looking statements.

Forward-looking
statements are inherently subject to risks and uncertainties, some of which cannot be
predicted or quantified based on current expectations. Consequently, future events and
actual results could differ materially from those set forth in, contemplated by, or
underlying the forward-looking statements contained in this Form 10-QSB, or in other
Company filings, press releases, or otherwise. In addition to the factors discussed in
this Form 10-QSB, other factors that could contribute to or cause such differences
include, but are not limited to, developments in any one or more of the following areas:
our borrowers ability to make payments to us, economic slowdowns in our market
areas, deterioration in the value of collateral used to secure loans made by us and other
risk factors which may be detailed from time to time in the Companys Securities and
Exchange Commission filings.

Readers
are cautioned not to place undue reliance on any forward-looking statements contained
herein, which speak only as of the date hereof. The Company undertakes no obligation to
publicly release the result of any revisions to these forward-looking statements that may
be made to reflect events or circumstances after the date hereof or to reflect the
occurrence of unexpected events.

General:
On August 19, 2005, we received approval to offer up to $21,000,000 in Notes. As of March
31, 2006, Notes totaling $1,812,500 had been sold and issued to the public. Of this
amount, $1,577,500 were Ten Year notes, $5,000 were Seven Year notes, $105,000 were Five
Year notes, and $125,000 were Two Year notes.

Results
of operations: As of March 31, 2006, we reported a quarterly loss of
$65,061. These losses were primarily the result of compliance costs, marketing efforts
directed at selling the notes and administrative expenses related to the Management
Services Agreement with Eliason, Inc. Additional expenditures related to compliance,
marketing and administration are anticipated.

9

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# Quarter Ended March
31, 2006 compared to the Quarter Ended March 31, 2005

Revenues:
For the quarter ended March 31, 2006 revenues were $46,641. With the exception of minor
amounts derived from interest earned on bank deposits, these were earned as the result of
lending to related parties the proceeds of our Note offering. For the quarter ended March
31, 2005 revenues were $63 and were derived from interest earned on bank deposits. For the
quarter ended March 31, 2006, the revenue earned was primarily the result of receiving
approval to issue public notes on August 19, 2005, with the corresponding ability to lend
those funds out. The total amount lent at March 31, 2006 was $1,664,867.

Legal
and accounting: Legal and accounting fees totaled $35,116 for the quarter
ended March 31, 2006 and $35,813 for the quarter ended March 31, 2005. Legal and
accounting fees for the quarter ended March 31, 2006 related to on going regulatory
compliance requirements. Legal and accounting fees for the quarter ended March 31, 2005
related to the regulatory requirements of issuing the Notes.

Advertising:
Advertising expenses totaled $19,832 for the quarter ended March 31, 2006 and $3,043 for
the quarter ended March 31, 2005. Advertising expenses for the quarter ended March 31,
2006 were related to the marketing campaign. Advertising expenses for the quarter ended
March 31, 2005 were related to the initial costs of starting the advertising campaign.

Administrative:
Administrative expenses were $21,290 for the quarter ended March 31, 2006 and $15,015 for
the quarter ended March 31, 2005. For the quarter ended March 31, 2006, $15,000 was
related to the Management Services Agreement we have with Eliason, Inc. and $3,600 was
related to directors and officers liability insurance. The remaining amounts were related
to general administrative items such as postage and office supplies. For the quarter
ending March 31, 2005, $15,000 was related to the Management Services Agreement with
Eliason, Inc. The remaining amounts were related to general and administrative items such
as postage and office supplies.

Interest
expense: For the quarter ended March 31, 2006, interest expense was
$35,464. There was no interest expense for the quarter ended March 31, 2005. Interest
expense was related to the issuance of Notes beginning August 19, 2005. The total amount
of Notes issued at March 31, 2006 totaled $1,812,500. The interest rates on the Notes sold
to the public are all fixed rates and range from 5.5% to 9.0%.

# LIQUIDITY AND CAPITAL
RESOURCES

For
the quarter ended March 31, 2006 cash and cash equivalents decreased by $192,569. This
was the result of $20,000 in capital contributions made by our parent company Eliason
Capital Group, Inc. to cover operating activities and $254,500 in Notes issued. These
sources of cash were offset by $467,069 in cash used in operating activities.

10

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Of
the $467,069 of cash used in operating activities through March 31, 2006, $395,000 was lent to a related entity
as part of normal business operations. The remaining cash used in operations of
$72,069 was a loss for the quarter ended March 31, 2006 of $65,061 plus the increase in
prepaid expenses and other assets of $20,800, offset by an increase in accounts payable
and accrued liabilities of $13,792.

Cash
provided from financing activities consisted of $254,500 of Notes issued for the quarter ended
March 31, 2006 and $20,000 of capital contributions from our parent Eliason
Capital Group, Inc.

On
January 13, 2005, we entered into a Contribution Agreement with Eliason, Inc, Eliason
Capital Group, Inc, and Brian and David Eliason (related parties). Under the Contribution
Agreement, the related parties have agreed to fund our obligations as necessary. During the quarter ended
March 31, 2006, the Company received $20,000 as an additional contribution of capital under the Contribution
Agreement.

At
March 31, 2006, we were still reliant upon our parent corporation for capital
contributions to meet our operating cash flow needs, without depleting the principal
received from the issuance of the Notes. Pursuant to the Contribution Agreement cited
above, we feel we may rely upon this agreement until we have sold sufficient Notes and
made loans to related entities to generate operating cash flow sufficient to meet our
normal cash needs.

# THE POTENTIAL IMPACT OF
KNOWN FACTS, COMMITMENTS, EVENTS AD UNCERTAINTIES

# Off-balance sheet
arrangements

As
of March 31, 2006, there were no off-balance sheet arrangements.

# Contractual Obligations

There
were no material changes outside the ordinary course of our business to contractual
obligations during the quarter ended March 31, 2006

# Critical Accounting
Policies

There
were no changes in our critical accounting policies during the quarter ended
March 31, 2006.

# ITEM 3. CONTROLS AND
PROCEDURES

Under
the supervision and with the participation of our management, including our principal
executive officer and principal financial officer, we conducted an evaluation of the
effectiveness of the design and operation of our disclosure controls and procedures, as
defined in Rules 13a-14(c) and 15d-14(c) under the Securities Exchange Act of 1934, as of
March 31, 2006 (the Evaluation Date). Based upon this evaluation, our
principal executive officer and principal financial officer concluded as of the Evaluation
Date that our disclosure controls and procedures were effective such that the material
information required to the included in our Securities and Exchange Commission
(SEC) reports is recorded, processed, summarized, and reported within the time
periods specified in SEC rules and forms relating to the Company, including, our
consolidated subsidiaries, and was made known to them by others within those entities,
particularly during the period when this report was being prepared.

11

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In
addition, there were no significant changes in our internal controls or in other factors
that could significantly affect these controls subsequent to the Evaluation Date. We have
not identified any significant deficiencies or material weaknesses in our internal
controls, and therefore, there were no corrective actions taken.

# PART II. OTHER
INFORMATION

# ITEM 6: EXHIBITS

# INDEX TO EXHIBITS

|EXHIBIT
NUMBER | DESCRIPTION                                                                                   
|-------------- | ----------------------------------------------------------------------------------------------
|3.1            | Articles of Incorporation (1)                                                                 
|3.2            | Bylaws (1)                                                                                    
|4.1            | Form of Indenture between Eliason Funding Corporation and US Bank, national Association, as   
|               | Trustee (2)                                                                                   
|10.1           | Form of Management Services Agreement between Eliason Funding Corporation and Eliason, Inc.,  
|               | dated October 31, 2004 (1)                                                                    
|10.2           | Form of Contribution Agreement between Eliason Funding Corporation, Brian Eliason, David      
|               | Eliason, Eliason, Inc. and Eliason Capital Group, Inc., dated January 13, 2005 (2)            
|31.1           | Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 
|               | 2002                                                                                          
|31.2           | Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act
|               | of 2002                                                                                       
|32             | Certification of Reporting Officers pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 

|(1) | Incorporated by reference from Registration Statement on Form SB-2 of Eliason
          Funding Corporation Registration No. 333-125542, filed June 6, 2005.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Incorporated by reference from Amendment No. 1 to Registration Statement on Form
          SB-2 of Eliason Funding Corporation Registration No. 333-125542, filed July 27,
          2005.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

12

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# SIGNATURE

In
accordance with the requirements of the Exchange Act, the registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly authorized.

# ELIASON FUNDING
CORPORATION

(Registrant)

|Date: May 15, 2006 | /s/ David J. Eliason       
|------------------ | ---------------------------
|                   |                            
|                   | David J. Eliason, President

13