##### Table of Contents



UNITED STATES SECURITIES AND
    EXCHANGE COMMISSION
 Washington, D.C.
    20549
      Form 10-K
  (Mark One)þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended
    December 31, 2006oro

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the transition period
    from          to   Commission file number:
    000-30241
      DDi CORP.
 (Exact name of registrant as
    specified in its charter)
  Delaware

06-1576013(State or other jurisdiction
    of
    incorporation or organization)

(I.R.S. Employer
    Identification No.)1220 Simon Circle,
    Anaheim, California(Address of principal
    executive offices)

92806(Zip
    Code)   (714) 688-7200
 (Registrants telephone number, including area code)
      Securities registered pursuant to Section 12(b) of the
    Act:
   Title of each class

Name of each exchange on which registeredCommon Stock, $0.001 par value

The NASDAQ Stock Market LLC   Securities registered pursuant to Section 12(g) of the
    Act:
 None
  o þ
  o þ
  þ o
  Regulation S-K Form 10-K Form 10-K. þ
  Rule 12b-2
  o þ o
  Rule 12b-2 o þ
    þ o
    DOCUMENTS
    INCORPORATED BY REFERENCE
  Form 10-K.




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##### 



DDi
    CORP.FORM 10-K
  
  Index
  PagePART IItem 1.


Business


1Item 1A.


Risk Factors


9Item 1B.


Unresolved Staff
    Comments


15Item 2.


Properties


15Item 3.


Legal Proceedings


16Item 4.


Submission of Matters to a Vote of
    Security Holders


16PART IIItem 5.


Market for Registrants
    Common Equity, Related Stockholder Matters and Issuer Purchases
    of Equity Securities


17Item 6.


Selected Financial Data


19Item 7.


Managements Discussion and
    Analysis of Financial Condition and Results of
    Operations


20Item 7A.


Quantitative and Qualitative
    Disclosures About Market Risk


35Item 8.


Financial Statements and
    Supplementary Data


36Item 9.


Changes in and Disagreements With
    Accountants on Accounting and Financial Disclosure


71Item 9A.


Controls and Procedures


71Item 9B.


Other Information


72PART IIIItem 10.


Directors, Executive Officers and
    Corporate Governance


72Item 11.


Executive Compensation


72Item 12.


Security Ownership of Certain
    Beneficial Owners and Management and Related Stockholder
    Matters


72Item 13.


Certain Relationships and Related
    Transactions, and Director Independence


72Item 14.


Principal Accounting Fees and
    Services


72PART IVItem 15.


Exhibits and Financial Statement
    Schedules


72Signatures


78EXHIBIT 10.2EXHIBIT 10.3EXHIBIT 10.10EXHIBIT 10.12Exhibit 10.43EXHIBIT 21.1EXHIBIT 23.1EXHIBIT 31.1EXHIBIT 31.2EXHIBIT 32.1EXHIBIT 32.2




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Form 10-K
  SPECIAL
    NOTE REGARDING FORWARD-LOOKING STATEMENTS
  On one or more occasions, we may make statements regarding
    our assumptions, projections, expectations, targets, intentions
    or beliefs about future events. All statements other than
    statements of historical facts included in this Annual Report on
    Form 10-K
    relating to expectation of future financial performance,
    continued growth, changes in economic conditions or capital
    markets and changes in customer usage patterns and preferences
    are forward-looking statements.
  Words or phrases such as anticipates,
    believes, estimates,
    expects, intends, plans,
    predicts, projects, targets,
    will likely result, will continue,
    may, could or similar expressions
    identify forward-looking statements. Forward-looking statements
    involve risks and uncertainties which could cause actual results
    or outcomes to differ materially from those expressed. We
    caution that while we make such statements in good faith and we
    believe such statements are based on reasonable assumptions,
    including without limitation, managements examination of
    historical operating trends, data contained in records and other
    data available from third parties, we cannot assure you that our
    expectations will be realized.
  In addition to the factors and other matters discussed in
    Item 1A. Risk Factors in this Annual Report on
    Form 10-K,
    some important factors that could cause actual results or
    outcomes for DDi or our subsidiaries to differ materially from
    those discussed in forward-looking statements include:
  
    changes in general economic conditions in the markets in
    which we may compete and fluctuations in demand in the
    electronics industry;
    increased competition;
    increased costs;
    our ability to retain key members of management;
    our ability to address changes to environmental laws and
    regulations;
    adverse state, federal or foreign legislation or regulation
    or adverse determinations by regulators; and
    other factors identified from time to time in our filings
    with the Securities and Exchange Commission.  Any forward-looking statement speaks only as of the date on
    which such statement is made, and, except as required by law, we
    undertake no obligation to update any forward-looking statement
    to reflect events or circumstances after the date on which such
    statement is made or to reflect the occurrence of unanticipated
    events. New factors emerge from time to time, and it is not
    possible for management to predict all such factors.




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PART I Item 1.Business.  Overview
          Industry
    Overview
      
    Increasing customer demand for quick-turn
    production.Rapid advances in technology are
    significantly shortening product life-cycles and placing
    increased pressure on original equipment manufacturers
    (OEMs) to develop new products in shorter periods of
    time. In response to these pressures, OEMs look to printed
    circuit board manufacturers that can offer design and
    engineering support and quick-turn manufacturing services to
    reduce time to market. Many OEMs, in an effort to increase
    electronic supply chain efficiency, work with a small number of
    technically qualified suppliers that have sophisticated
    manufacturing expertise and are able to offer a broad range of
    printed circuit board products.
    Increasing complexity of electronic
    equipment.OEMs are continually designing more
    complex and higher performance electronic equipment, which
    requires sophisticated printed circuit boards that accommodate
    higher speeds and frequencies and increased component densities
    and operating temperatures. In turn, 1




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##### Table of Contents



OEMs rely on printed circuit board manufacturers that can
    provide advanced engineering and manufacturing services early in
    the new product development cycle.  
    Shifting of high volume production to
    Asia.Asian-based printed circuit board
    manufacturers have been able to capitalize on lower labor costs
    and to increase their market share on production of printed
    circuit boards used in high-volume consumer electronics
    applications, such as personal computers and cell phones.
    Asian-based manufacturers have generally been unable to meet the
    lead time requirements for the production of complex printed
    circuit boards on a quick-turn basis.    Our
    Customer Solution
      
    Customized Engineering Solutions.We are
    actively involved in the early stages of our customers
    product development cycles. This positions us at the leading
    edge of technical innovation in the engineering of complex
    printed circuit boards. Our engineering and sales teams
    collaborate to identify the specific needs of our customers and
    work with them to develop innovative, high performance
    solutions. This method of product development provides us with
    an in-depth understanding of our customers businesses and
    enables us to better anticipate and serve their needs.
    Advanced Manufacturing Technologies.We are
    committed to manufacturing process improvements and focus on
    enhancing existing capabilities as well as developing new
    technologies. We are consistently among the first to adopt
    advances in printed circuit board manufacturing technology. For
    example, we believe that we were the first printed circuit board
    manufacturer in North America to manufacture printed circuit
    boards utilizing stacked microvia, or
    SMVTM
    Technology. We believe we continue to lead the domestic industry
    in advancing this technology.
    Time-Critical Services.In addition to
    customized engineering solutions and advanced manufacturing
    technologies, we specialize in providing time-critical, or
    quick-turn, printed circuit board engineering and manufacturing
    services. Our engineering, fabrication and customer service
    systems enable us to respond to customers needs with
    quick-turn services. Our personnel are trained and experienced
    in providing our services with speed and precision. For example,
    we are able to issue price quotes to our customers in hours,
    rather than days. Nearly half of our net printed circuit board
    sales in 2006 were generated from orders with manufacturing
    delivery of 10 days or less, and we fill some of our
    customers orders in as little as 24 hours.  Our
    Strategy
    Focus on engineering services and support for high technology
    and complex printed circuit boards.
  Maintain our technology leadership.
 2




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Focus on time-critical services.
  Continue to serve our large and diverse customer
    base.
  Pursue new customers and markets with high growth
    potential.
  Our
    Services
  PCB Prototype Engineering and
    Manufacturing.
  Pre-Production and Production Fabrication
    Services.
    Manufacturing
    Technologies and Processes
       3




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
    Laser Direct Imaging (LDI).LDI is
    a process that allows us to process high-density products by
    direct writing onto photoresist with a high-precision laser
    technology. LDI is a high-resolution tool that is capable of
    imaging sub 0.002 inches/0.002 inches line/space and also gives
    us the ability to image solder mask especially where tolerances
    are tightly defined.
    Blind or Buried Vias.Vias are drilled holes
    which provide electrical connectivity between layers of
    circuitry in a printed circuit board. Blind vias connect the
    surface layer of the printed circuit board to the nearest inner
    layer. Buried vias are holes that do not reach either surface of
    the printed circuit board but allow inner layers to be
    interconnected. Products with blind and buried vias can be made
    thinner, smaller, lighter and with higher component density and
    more functionality than products with traditional vias, and may
    require fewer layers.
    Laser Drilling Microvias.We have a variety of
    laser technologies capable of laser drilling any customer driven
    application including UV, UV/CO2 and CO2. Microvias are small
    vias with diameters generally between 0.003 and 0.008 inches
    after laser drilling. The fabrication of printed circuit boards
    with microvias requires specialized equipment and highly skilled
    process knowledge. These tools are also capable of solder mask
    ablation and precision milling. Applications such as handheld
    wireless devices employ microvias to obtain a higher degree of
    functionality from a smaller given surface area. These products
    can be delivered in as little as 3 days.
    Stacked Microvias (SMV).Stacked microvias are
    microvias plated with solid copper that can be stacked,
    connecting as many as six layers sequentially on each side of a
    center buried via core. This technology provides improved
    current carrying capability and thermal characteristics, planar
    surface for ball-grid array assembly and increased routing
    density for fine pitch ball-grid arrays and flipchip devices.
    SMV technology provides solutions for next generation
    technologies that include high Input/Output count, 0.65mm,
    0.50mm, 0.40mm and 0.25mm ball-grid array and flipchip devices.
    This is done by allowing extra routing channels directly under
    the bonding pads, as compared to a conventional microvia that is
    limited to 1 or 2 layer deep routing. We believe that we remain
    one of the few printed circuit board manufacturers in North
    America that currently offers fabrication of printed circuit
    boards utilizing SMV Technology.
    Buried passives.Buried passive technology
    involves embedding the capacitor and resistor elements inside
    the printed circuit board, which allows for removal of passive
    components from the surface of the printed circuit board,
    leaving more surface area for active components. We have offered
    buried resistor products since the early 1990s. This technology
    is used in the high speed interconnect space as well as single
    chip or multichip modules, memory and high speed switches. This
    process is used to eliminate surface mount resistors and allows
    for termination to occur directly under other surface mounted
    components such as ball-grid arrays and quad-flat packs. We have
    offered embedded capacitance layers since the mid 1990s.
    The buried capacitance layers are currently used mostly as a
    noise reduction method.
    Fine line traces and spaces.Traces are the
    connecting copper lines between the different components of the
    printed circuit board and spaces are the distances between
    traces. The smaller the traces and tighter the spaces, the
    higher the density on the printed circuit board and the greater
    the expertise required to achieve a desired final yield on a
    customer required order. We are able to provide 0.002 inch
    traces and spaces.
    High aspect ratios.The aspect ratio is the
    ratio between the thickness of the printed circuit board and the
    diameter of a drilled hole. The higher the ratio, the greater
    the difficulty to reliably form, electroplate and finish all the
    holes on a printed circuit board. We are able to provide aspect
    ratios of up to 15:1. We are currently developing a solution to
    provide a 20:1 and greater aspect ratio technology.
    Thin core processing.A core is the basic
    inner-layer building block material from which printed circuit
    boards are constructed. A core consists of a flat sheet of
    material comprised of glass-reinforced resin with copper foil on
    either side. The thickness of inner-layer cores is determined by
    the overall thickness of the printed circuit board and the
    number of layers required. The demand for thinner cores derives
    from 4




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requirements of thinner printed circuit boards, higher layer
    counts and various electrical parameters. Core thickness in our
    printed circuit boards ranges from as little as 0.001 inches up
    to 0.062 inches.  
    Flexible and Rigid-Flex PCBs.The use of
    flexible and rigid-flex printed circuit board technology offers
    certain advantages over traditional rigid printed circuit
    boards. Flexible printed circuits consist of copper conductive
    patterns that have been etched or printed while affixed to
    flexible substrate materials such as polyimide or polyester. The
    circuits are manufactured by subjecting the base materials to
    multiple processes, such as drilling, screening, photo imaging,
    etching, plating and finishing. We manufacture flexible PCBs
    using a Static or
    Flex-to-install
    application which enables interconnection to be made
    between two or more mechanical units in areas that have
    mechanical constraints or non-standard packaging that cannot
    accommodate conventional interconnects. This application is
    useful in both the military and aerospace markets.    
    Materials.We offer a full range of materials
    for microwave, radio frequency and high speed applications.
    These materials can be used in hybrid
    stack-ups to
    allow for maximum performance in a cost reduced package. We
    currently use approximately 50 different materials and have
    added Green or Halogen-free materials and materials
    suitable for lead free assembly. The use of these
    materials requires advanced capabilities in the areas of
    drilling, hole cleaning, plating and registration.    Our
    Customers and Markets
  6-month
 5




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Year EndedDecember 31,End Markets(1)(2)

2006


2005


2004Communications/Networking


41
%


43
%


41
%Medical/Test/Industrial


20



21



21High-end Computing


25



22



22Military/Aerospace


6



6



6Other


8



8



10Total


100
%


100
%


100
%     (1)
    
    Sales to electronic manufacturing services providers are
    classified by the end markets of their customers.(2)
    
    Statistical information for 2005 and 2004 have been reclassified
    to exclude results of the Companys European operations,
    which were discontinued in February 2005 and have been reported
    as a discontinued operation.    Sales and
    Marketing
      Research
    and Development
    Proprietary
    Processes
   6




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Our
    Suppliers
  just-in-time
    Competition
      
    ability to offer
    time-to-market
    capabilities;
    capability and flexibility to produce technologically complex
    products;
    engineering and design services to compliment the manufacturing
    process;
    additional available manufacturing capacity without significant
    additional capital expenditures;
    consistent high-quality products; and
    outstanding customer service.  Backlog
    Environmental
    Matters
    
    the Occupational Safety and Health Administration
    (OSHA) pertaining to health and safety in the
    workplace; 7




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
    the Environmental Protection Agency (EPA) pertaining
    to the use, storage, discharge and disposal of hazardous
    chemicals used in the manufacturing processes; and
    corresponding country, state and local agencies.      Employees
    Executive
    Officers of the Registrant
    Name

Age


OfficeMikel H. Williams


50



President, Chief Executive Officer and DirectorMichael R. Mathews


46



Senior Vice President  Manufacturing OperationsGerald P. Barnes


48



Senior Vice President  SalesSally L. Goff


40



Vice President and Chief Financial Officer     Mikel H. Williams
  Michael R. Mathews
 8




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Gerald P. Barnes
  Sally L. Goff
  Available
    Information
  Form 10-K, Form 10-Q, Form 8-K,
  Item 1A.
    Risk
    Factors.  The
    trading price of our common stock may continue to be
    volatile.
   9




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We may
    need additional capital in the future and it may not be
    available on acceptable terms, or not at all.
    
    to fund our operations beyond 2007;
    to fund working capital requirements for future growth that we
    may experience;
    to enhance or expand the range of services we offer;
    to increase our sales and marketing activities; or
    to respond to competitive pressures or perceived opportunities,
    such as investment, acquisition and international expansion
    activities.    We may
    issue additional shares of common stock that may dilute the
    value of our common stock and adversely affect the market price
    of our common stock.
    
    approximately 2.4 million shares of our common stock may be
    required to be issued pursuant to outstanding stock options or
    stock options issuable under our 2005 Stock Incentive Plan;
    a significant number of additional shares of our common stock
    may be issued if we seek to raise capital through offerings of
    our common stock, securities convertible into our common stock,
    or rights to acquire such securities or our common stock.    The
    terms of our senior credit facility may restrict our financial
    and operational flexibility.
    Our
    customers are subject to economic cycles and fluctuations in
    product demand. A significant downturn in demand for our
    customers products would similarly affect demand for our
    products and as such our sales, gross margin and operating
    performance would be adversely affected.
     10




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Unless
    we are able to respond to technological change at least as
    quickly as our competitors, our services could be rendered
    obsolete, which would reduce our sales and operating
    margins.
      We may
    experience significant fluctuation in our revenue because we
    sell primarily on a purchase order basis, rather than pursuant
    to long-term contracts.
    We
    rely on a core group of significant customers for a substantial
    portion of our revenue, and a reduction in demand from, or an
    inability to pay by, this core group could adversely affect our
    revenue.
    If we
    experience excess capacity due to variability in customer
    demand, our gross margins may decline.
    We are
    subject to intense competition, and our business may be
    adversely affected by these competitive pressures.
   11




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If
    Asian-based production capabilities increase in sophistication,
    we may lose market share, and our gross margins may be adversely
    affected by increased pricing pressure.
    Defects
    in our products could result in financial or other damages to
    our customers, which could result in reduced demand for our
    services and liability claims against us.
    If we
    are unable to protect our intellectual property or infringe or
    are alleged to infringe others intellectual property, our
    operating results may be adversely affected.
      
    stop producing products that use the intellectual property in
    question;
    obtain an intellectual property license to sell the relevant
    technology at an additional cost, which license may not be
    available on reasonable terms, or at all; and
    redesign those products or services that use the technology in
    question.   12




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Complying
    with applicable environmental laws requires significant
    resources and, if we fail to comply, we could be subject to
    substantial liability.
  on-site
    and/or
  We
    depend on our key personnel and may have difficulty attracting
    and retaining skilled employees.
   13




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Our
    manufacturing processes depend on the collective industry
    experience of our employees. If these employees were to leave
    and take this knowledge with them, our manufacturing processes
    may suffer, and we may not be able to compete
    effectively.
    We
    rely on suppliers for the timely delivery of materials used in
    manufacturing our printed circuit boards, and an increase in
    industry demand or a shortage of raw materials may increase the
    price of the raw materials we use and may limit our ability to
    manufacture certain products and adversely impact our gross
    margins.
    Our
    recent acquisition of Sovereign Circuits or future acquisitions
    may be costly and difficult to integrate, may divert management
    resources and may dilute shareholder value.
    
    problems integrating the purchased operations, technologies or
    products;
    failure to achieve potential sales, materials costs and other
    synergies;
    unanticipated expenses and working capital requirements;
    difficulty achieving sufficient sales to offset increased
    expenses associated with acquisitions;
    diversion of managements attention;
    adverse effects on business relationships with our or the
    acquired companys suppliers and customers;
    difficulty in entering markets in which we have limited or no
    prior experience;
    losses of key employees, particularly those of the acquired
    organization; and
    problems implementing adequate internal controls and procedures.    
    issue stock that would dilute our current stockholders
    percentage ownership;
    incur debt and assume liabilities that could impair our
    liquidity; 14




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
    incur amortization expenses related to intangible assets; or
    incur large and immediate write-offs that would negatively
    impact our results of operations.    We are
    subject to risks associated with currency fluctuations, which
    could have a material adverse effect on our results of
    operations and financial condition.
    Significant
    decreases in our stock price could result in our having to
    record an impairment charge related to our
    goodwill.
    Item 1B.
    Unresolved
    Staff Comments.    Item 2.
    Properties.        Square FeetLocation

Primary Function


(Approx.)Sterling, Virginia


Manufacturing



100,000Anaheim, California


Corporate headquarters



27,000Anaheim, California


Manufacturing



70,000Milpitas, California


Manufacturing



72,000Toronto, Canada


Manufacturing



45,000North Jackson, Ohio


Manufacturing



75,000Total






389,000    15




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Item 3.
    Legal
    Proceedings.  03-7063 MMM
  No. CV2006-006541). No. CV06-1661-PHX-FJM)
  No. CV06-1661-PHX-FJM).
    Item 4.
    Submission
    of Matters to a Vote of Security Holders.   16




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PART II
  Item 5.
    Market
    for the Registrants Common Equity and Related Stockholder
    Matters and Issuer Purchases of Equity Securities.  Market
    for Common Stock
      DDi Corp.Common StockHigh


LowFiscal Year Ended
    December 31, 2006:Fourth Quarter

$
8.22


$
7.18Third Quarter

$
8.60


$
6.59Second Quarter

$
8.94


$
6.69First Quarter

$
8.10


$
5.32Fiscal Year Ended
    December 31, 2005:Fourth Quarter

$
6.65


$
4.62Third Quarter

$
13.93


$
5.04Second Quarter

$
24.50


$
12.11First Quarter

$
22.89


$
15.75     Dividend
    Policy
    Performance
    Graph
    one-for-seven
 17




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18




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Item 6.
    Selected
    Financial Data.  one-for-seven Managements Discussion and Analysis of Financial
    Condition and Results of Operations Form 10-K Form 10-K.
  Reorganized DDi Corp.



Predecessor DDi Corp.One Month



Eleven Months


YearYears Ended December 31,


Ended



Ended


Ended2006


2005


2004


Dec. 31, 2003



Nov. 30, 2003


Dec. 31, 2002(In millions, except per share data)Consolidated Statement of
    Operations Data:Net sales

$
198.1


$
184.6


$
189.0


$
14.6



$
145.0


$
185.6Cost of goods sold


160.2



157.9



164.1



18.2




130.0



174.4Gross profit (loss)


37.9



26.7



24.9



(3.6
)



15.0



11.2Operating expenses:Sales and marketing


15.2



15.0



17.0



2.1




13.5



19.7General and administrative


14.6



15.7



17.2



2.1




8.5



10.5Amortization of intangible assets


4.7



4.6



4.6



0.4








Loss on sale of assembly business


4.6




















Litigation reserve


1.7




















Restructuring and other related
    charges


1.1



4.7



0.9



0.4




3.9



25.3Goodwill impairment






54.7












2.0



128.7Reorganization expenses










0.8



0.5




7.4



2.1Operating loss


(4.0
)


(68.0
)


(15.6
)


(9.1
)



(20.3
)


(175.1
)Loss on interest rate swap
    termination



















5.6



Interest and other expense, net


1.4



4.8



7.6



0.8




16.3



19.9Reorganization items:Gain on extinguishment of debt



















(120.4
)


Fresh start accounting adjustments



















(115.2
)


Reorganization proceeding expenses














1.1




14.0



Income (loss) from continuing
    operations before income taxes


(5.4
)


(72.8
)


(23.2
)


(11.0
)



179.4



(195.0
)Income tax expense


(1.8
)


(1.4
)


(2.0
)







(0.1
)


(17.0
)Income (loss) from continuing
    operations


(7.2
)


(74.2
)


(25.2
)


(11.0
)



179.3



(212.0
)Net income (loss) from discontinued
    operations, net of tax






10.2



(20.7
)


(3.0
)



(14.9
)


(76.1
)Net income (loss)


(7.2
)


(64.0
)


(45.9
)


(14.0
)



164.4



(288.1
)Series B Preferred Stock
    dividends, accretion and repurchase charge


(16.4
)


(6.4
)


(4.0
)











Net income (loss) applicable to
    common stockholders

$
(23.6
)

$
(70.4
)

$
(49.9
)

$
(14.0
)


$
164.4


$
(288.1
)Other Financial Data:Depreciation

$
9.8


$
9.9


$
9.9


$
0.9



$
12.4


$
16.1Capital expenditures


6.3



6.7



4.4



0.1




3.9



8.0Net cash provided by (used in)
    operating activities from continuing operations


9.3



(1.6
)


3.6



5.6




(12.2
)


(7.6
)Net cash provided by (used in)
    investing activities from continuing operations


3.6



(9.9
)


4.2



0.7




(2.6
)


1.0Net cash provided by (used in)
    financing activities from continuing operations


(22.8
)


(14.9
)


12.7



(0.1
)



(6.2
)


22.0  19




---



##### Table of Contents



Predecessor DDiReorganized DDi Corp.



Corp.December 31,



December 31,2006


2005


2004


2003



2002(In millions)Consolidated Balance Sheet
    Data:Cash, cash equivalents and
    marketable securities (excluding restricted)

$
15.9


$
26.0


$
23.5


$
11.2



$
29.0Working capital (deficit)


31.2



26.2



20.9



25.6




(220.2
)Total assets


139.6



164.3



226.7



228.8




151.8Total debt, including current
    maturities


2.0



19.9



35.1



90.5




288.9Stockholders equity (deficit)

$
109.6


$
108.0


$
77.1


$
91.4




(163.9
)   Item 7.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations.  Overview
  ,
  03-13,
    one-for-seven
   20




---



##### Table of Contents



Critical
    Accounting Policies and Estimates
      Revenue recognition
  Receivables and Allowance for Doubtful
    Accounts
  Valuation of long-lived assets
  Goodwill impairment
 21




---



##### Table of Contents



Inventory obsolescence
  Income taxes
  Purchase accounting
  Litigation and other contingencies
  Stock-Based Compensation SFAS 123-R,
 22




---



##### Table of Contents



Results
    of Operations and Other Financial Data
    Year Ended


Year Ended


Year EndedDecember 31,


December 31,


December 31,2006


2005


2004Net sales

$
198,115


$
184,625


$
189,007Cost of goods sold


160,188



157,959



164,076Gross profit


37,927



26,666



24,931Operating expenses:Sales and marketing


15,228



14,993



16,933General and administrative


14,543



15,728



17,199Amortization of intangible assets


4,744



4,598



4,598Loss on sale of assembly business


4,544







Litigation reserve


1,727







Restructuring and other related
    charges


1,140



4,703



903Goodwill impairment






54,669



Reorganization expenses










829Operating loss


(3,999
)


(68,025
)


(15,531
)Interest expense, net


1,362



4,443



5,144Other expense, net


44



313



2,493Loss from continuing operations
    before income taxes


(5,405
)


(72,781
)


(23,168
)Income tax expense


1,828



1,429



1,984Loss from continuing operations


(7,233
)


(74,210
)


(25,152
)Income (loss) from discontinued
    operations, net of tax






10,236



(20,713
)Net loss


(7,233
)


(63,974
)


(45,865
)Less: Series B Preferred
    Stock dividends, accretion and repurchase charge


(16,419
)


(6,473
)


(4,044
)Net loss applicable to common
    stockholders

$
(23,652
)

$
(70,447
)

$
(49,909
)   Year
    Ended December 31, 2006 Compared to the Year Ended
    December 31, 2005
  Net
    Sales
     23




---



##### Table of Contents



Gross
    Profit
    Non-Cash
    Compensation
    Year Ended


Year EndedDecember 31,


December 31,2006


2005Non-cash compensation:Cost of good sold

$
428


$
3,428Sales and marketing expenses


58



116General and administrative expenses


1,061



1,058Total non-cash compensation

$
1,547


$
4,602   SFAS 123-R SFAS 123-R,
  Sales
    and Marketing Expenses
    General
    and Administrative Expenses
   24




---



##### Table of Contents



Loss
    on Sale of Assembly Business
  03-13 03-13).
  03-13, 12-month 90-days 03-13,
    Litigation
    Reserve
    Amortization
    of Intangibles
    Restructuring
   25




---



##### Table of Contents



EmployeeTermination


Contract


Facility


Other ExitBenefits


Terminations


Closure


Costs


TotalAccrued restructuring costs at
    December 31, 2005

$



$
16


$
999


$
67


$
1,082Additional accruals:Arizona closure


43



347



433



300



1,123Colorado closure


6



15







4



25Other














(8
)


(8
)Payments


(49
)


(378
)


(1,432
)


(363
)


(2,222
)Accrued restructuring costs at
    December 31, 2006

$



$



$



$



$
     Goodwill
    Impairment
      Interest
    expense, net
    Other
    (Income) Expense, Net
   26




---



##### Table of Contents



Income
    Tax Expense
    Series B
    Preferred Stock Dividends and Accretion
      Net
    Income From Discontinued Operations
    Year
    Ended December 31, 2005 Compared to the Year Ended
    December 31, 2004
  Net
    Sales
    Gross
    Profit
   27




---



##### Table of Contents



Non-Cash
    Compensation
    Year Ended


Year EndedDecember 31,


December 31,2005


2004Non-cash compensation:Cost of good sold

$
3,428


$
11,787Sales and marketing expenses


116



2,402General and administrative expenses


1,058



4,155Total non-cash compensation

$
4,602


$
18,344     Sales
    and Marketing Expenses
    General
    and Administrative Expenses
    Amortization
    of Intangibles
    Restructuring
   28




---



##### Table of Contents



Goodwill
    Impairment
    Interest
    Expense and Other (Income)/Expense, Net
    Income
    Tax Expense
    Series B
    Preferred Stock Dividends and Accretion
    Net
    Income From Discontinued Operations
   29




---



##### Table of Contents



Quarterly
    Financial Information
    Three Months EndedMar. 31,


June 30,


Sept. 30,


Dec. 31,


Mar. 31,


June 30,


Sept. 30,


Dec. 31,2006


2006


2006


2006


2005


2005


2005


2005(In millions)Net sales

$
51.0


$
52.5


$
51.4


$
43.2


$
44.9


$
45.5


$
46.0


$
48.2Gross profit(a)


10.3



10.1



9.1



8.4



8.0



5.5



6.5



6.6Loss from continuing
    operations(b) (c) (d)


(0.5
)


(2.1
)


(4.5
)


(0.1
)


(2.6
)


(38.7
)


(27.3
)


(5.6
)Net income from discontinued
    operations


















9.7







0.5



Net income (loss)


(0.5
)


(2.2
)


(4.5
)


(0.1
)


7.1



(38.7
)


(26.8
)


(5.6
)Net income (loss) applicable to
    common stockholders


(2.3
)


(4.0
)


(6.3
)


(11.0
)


5.8



(40.0
)


(28.8
)


(7.4
)Loss per share from continuing
    operations:Basic and Diluted

$
(0.13
)

$
(0.22
)

$
(0.32
)

$
(0.50
)

$
(1.00
)

$
(9.63
)

$
(5.15
)

$
(0.41
)Net income per share from
    discontinued operations:Basic and Diluted

$



$



$



$



$
2.47


$



$
0.09


$
Net income (loss) per share
    applicable to common stockholders:Basic and Diluted

$
(0.13
)

$
(0.22
)

$
(0.32
)

$
(0.50
)

$
1.47


$
(9.63
)

$
(5.06
)

$
(0.41
)     (a)
    Gross profit for the three months ended March 31, 2005
    included a $1.3 million restructuring related inventory
    impairment.  (b)
    Loss from continuing operations for the three months ended
    June 30, 2005 and September 30, 2005 included goodwill
    impairment charges of $31.1 million and $23.6 million,
    respectively.  (c)
    Loss from continuing operations for the three months ended
    June 30, 2006 included a $1.7 million legal reserve.  (d)
    Loss from continuing operations for the three months ended
    September 30, 2006 included a $4.5 million loss on the
    sale of our assembly business.  Liquidity
    and Capital Resources
  December 31,


December 31,2006


2005(Dollars in thousands)Working capital

$
31,230


$
26,209Current ratio (current assets to
    current liabilities)


2.25 : 1.0



1.52 : 1.0Cash and cash equivalents
    (excluding restricted cash)

$
15,920


$
25,985Short term borrowings

$



$
19,929      30




---



##### Table of Contents



Consolidated
    Cash Flows
    December 31,


December 31,


December 31,2006


2005


2004Net cash provided by (used
    in):Operating activities from
    continuing operations

$
9,274


$
(1,556
)

$
3,636Investing activities from
    continuing operations


3,559



(9,855
)


4,157Financing activities from
    continuing operations


(22,768
)


14,911



12,735Effect of discontinued operations
    on cash






(1,099
)


(7,746
)Effect of exchange rates on cash


(130
)


58



(458
)Net change in cash and cash
    equivalents

$
(10,065
)

$
2,459


$
12,324   Year
    Ended December 31, 2006 Compared to the Year Ended
    December 31, 2005
       31




---



##### Table of Contents



Year
    Ended December 31, 2005 Compared to the Year Ended
    December 31, 2004
        Contractual
    Obligations
    Payments Due by PeriodLess Than


One to


Three to


More ThanCommitments

Total


One Year


Three Years


Five Years


Five YearsLong-term debt(a)


2,547



443



783



697



624Operating Leases


13,998



4,298



6,446



3,254



Total Commitments

$
16,545


$
4,741


$
7,229


$
3,951


$
624     (a)
    Long-term debt consisted of mortgage obligations and term notes
    acquired in connection with the purchase of Sovereign Circuits
    in 2006. In calculating future payments due by period, we used
    the interest rates in effect for the mortgage and term notes at
    December 31, 2006.  Revolving
    Credit Facility
   32




---



##### Table of Contents



Sovereign
    Circuits Revolving Credit Facility
    Sovereign
    Circuits Capital Expenditures Credit Facility
    Series B
    Preferred Stock
  Series B-1 Series B-2
   33




---



##### Table of Contents



Dividends
    Year Ended


Year Ended


Year EndedDecember 31,


December 31,


December 31,2006


2005


2004Dividends paid in cash

$
918


$
2,280



Dividends paid in DDi common
    stock(a)





$
915


$
2,744
(b)Total dividends

$
918


$
3,195


$
2,744     (a)
    On May 26, 2004, our stockholders approved a proposal to
    allow us to make dividend and redemption payments using our
    common stock provided that no more than 1,428,571 shares of
    common stock in the aggregate were used for redemption payments.
    Shares of our common stock issued as dividends or redemption
    payments are issued at a 5% discount to the volume
    weighted-average market price over the 20 trading days prior to
    the dividend payment date.  (b)
    Dividends were accrued in 2004 and paid in March 2005.  Recent
    Accounting Pronouncements
    No. 06-3,
 34




---



##### Table of Contents



Item 7A.
    Quantitative and Qualitative Disclosures About Market
    Risk.  Interest
    Rate Risk
    Foreign
    Currency Exchange Risk
   35




---



##### Table of Contents



Item 8.
    Financial
    Statements and Supplementary Data.  Index to
    Financial Statements
  PageReport of Independent Registered
    Public Accounting Firm


37Consolidated Balance Sheets as of
    December 31, 2006 and 2005


39Consolidated Statements of
    Operations for the Years Ended December 31, 2006, 2005 and
    2004


40Consolidated Statements of
    Comprehensive Loss for the Years Ended December 31, 2006,
    2005 and 2004


41Consolidated Statements of
    Stockholders Equity for the Years Ended December 31,
    2006, 2005 and 2004


42Consolidated Statements of Cash
    Flows for the Years Ended December 31, 2006, 2005 and 2004


43Notes to Consolidated Financial
    Statements


44Financial Statement ScheduleSchedule II 
    Valuation and Qualifying Accounts


70  36




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
  To the Board
    of Directors and
     Consolidated
    Financial Statements and Financial Statement
    Schedule
      Internal
    Control Over Financial Reporting
  Report of Management on Internal Control Over Financial
    Reporting Internal Control  Integrated Framework Internal Control 
    Integrated Framework
   37




---



##### Table of Contents



/s/  PricewaterhouseCoopers
    LLP
  Orange
    County, California
  38




---



##### Table of Contents



DDi
    CORP.
  CONSOLIDATED
    BALANCE SHEETS
 (In
    thousands, except share and per share amounts)
  December 31,2006


2005ASSETSCurrent assets:Cash and cash equivalents

$
15,920


$
25,985Cash and cash
    equivalents  restricted (see Note 2)






2,972Accounts receivable, net


24,593



29,710Inventories


14,559



16,117Prepaid expenses and other


1,146



1,506Total current assets


56,218



76,290Property, plant and equipment, net


31,162



31,063Goodwill


39,229



41,845Intangible assets, net


12,467



13,411Other assets


535



1,719Total assets

$
139,611


$
164,328LIABILITIES, MANDATORILY
    REDEEMABLE PREFERREDSTOCK AND STOCKHOLDERS
    EQUITYCurrent liabilities:Current maturities of long-term
    debt

$
312


$
Revolving credit facility






19,929Accounts payable


12,884



15,443Accrued expenses and other current
    liabilities


9,820



12,639Income tax payable


1,972



2,070Total current liabilities


24,988



50,081Long-term debt


1,732



Other long-term liabilities


3,324



4,745Series A Preferred Stock






Total liabilities


30,044



54,826Commitments and contingencies
    (Note 12)Series B mandatorily
    redeemable preferred stock






1,513Stockholders equity:Common stock 
    $0.001 par value, 190,000,000 shares authorized,
    22,568,989 and 18,259,356 shares issued and outstanding at
    December 31, 2006 and 2005, respectively


23



18Additional
    paid-in-capital


240,356



231,821Deferred compensation






(349
)Accumulated other comprehensive
    income


268



346Accumulated deficit


(131,080
)


(123,847
)Total stockholders equity


109,567



107,989Total liabilities, mandatorily
    redeemable preferred stock and stockholders equity

$
139,611


$
164,328    39




---



##### Table of Contents



DDi
    CORP.
  CONSOLIDATED
    STATEMENTS OF OPERATIONS
 (In
    thousands, except per share amounts)
  Year Ended


Year Ended


Year EndedDecember 31,


December 31,


December 31,2006


2005


2004Net sales

$
198,115


$
184,625


$
189,007Cost of goods sold


160,188



157,959



164,076Gross profit


37,927



26,666



24,931Operating expenses:Sales and marketing


15,228



14,993



16,933General and administrative


14,543



15,728



17,199Amortization of intangible assets


4,744



4,598



4,598Loss on sale of assembly business


4,544







Litigation reserve


1,727







Restructuring and other related
    charges


1,140



4,703



903Goodwill impairment






54,669



Reorganization expenses










829Operating loss


(3,999
)


(68,025
)


(15,531
)Interest expense, net


1,362



4,443



5,144Other (income) expense, net


44



313



2,493Loss from continuing operations
    before income taxes


(5,405
)


(72,781
)


(23,168
)Income tax expense


(1,828
)


(1,429
)


(1,984
)Loss from continuing operations


(7,233
)


(74,210
)


(25,152
)Income (loss) from discontinued
    operations, net of tax






10,236



(20,713
)Net loss


(7,233
)


(63,974
)


(45,865
)Less: Series B Preferred
    Stock dividends, accretion and redemption charge


(16,419
)


(6,473
)


(4,044
)Net loss applicable to common
    stockholders

$
(23,652
)

$
(70,447
)

$
(49,909
)Loss per share from continuing
    operations applicable to common stockholders  basic
    and diluted

$
(1.21
)

$
(10.04
)

$
(7.51
)Net loss per share applicable to
    common stockholders  basic and diluted

$
(1.21
)

$
(8.76
)

$
(12.85
)Weighted-average shares used in
    per share computations  basic and diluted


19,623,415



8,039,094



3,885,092    40




---



##### Table of Contents



DDi
    CORP.
  CONSOLIDATED
    STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
 (In
    thousands)
  DDi Corp.Year Ended


Year Ended


Year EndedDecember 31,


December 31,


December 31,2006


2005


2004Net loss

$
(7,233
)

$
(63,974
)

$
(45,865
)Other comprehensive income (loss):Foreign currency translation
    adjustments


(78
)


1,058



(560
)Comprehensive loss

$
(7,311
)

$
(62,916
)

$
(46,425
)    41




---



##### Table of Contents



DDi
    CORP.
    CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY
    (In thousands, except share and per share amounts)
  Additional











OtherCommon Stock


Paid-In


Deferred


Stockholder


Accumulated


ComprehensiveShares


Amount


Capital


Compensation


Receivables


Deficit


Loss


Total(In thousands, except share amounts)Balance, December 31, 2003


3,665,399


$
3


$
138,682


$
(32,454
)

$
(635
)

$
(14,008
)

$
(152
)

$
91,436Deferred compensation adjustments










(2,027
)


2,027















Amortization of deferred
    compensation














20,982















20,982Issuance of new common stock in
    private placement, net of offering costs


142,857



1



14,766



















14,767Issuance of common stock upon
    exercise of stock options


13,549







383



















383Vesting of restricted common stock


95,535







1



















1Foreign currency translation
    adjustment


























(560
)


(560
)Accrued interest on stockholder
    receivables


















(17
)










(17
)Accrual of dividends payable on
    Series B Preferred Stock










(2,765
)


















(2,765
)Accretion on Series B
    Preferred Stock










(1,279
)


















(1,279
)Net loss






















(45,865
)






(45,865
)Balance, December 31, 2004


3,917,340


$
4


$
147,761


$
(9,445
)

$
(652
)

$
(59,873
)

$
(712
)

$
77,083Deferred compensation










(5,095
)


5,095















Amortization of deferred
    compensation














4,001















4,001Issuance of new common stock in
    rights offering and in standby purchase agreement


14,013,159



14



74,986



















75,000Costs incurred in connection with
    the issuance of common stock










(2,954
)


















(2,954
)Series B Preferred Stock
    beneficial conversion feature, net of accretion of $1,509 (and
    debt issuance costs of $414)










17,410



















17,410Conversion of Series B
    Preferred Stock to common stock


49,603







1,000



















1,000Issuance of new common stock upon
    exercise of stock options


7,603







26



















26Issuance of restricted common stock


59,821



























Foreign currency translation
    adjustment


























512



512Foreign currency translation
    recognized on disposal of DDi Europe


























546



546Accrued interest on stockholder
    receivables


















(18
)










(18
)Repayment of stockholder
    receivables (including interest of $70)


















670











670Dividends paid in common stock on
    Series B Preferred Stock


211,830







3,660



















3,660Accrual of dividends payable on
    Series B Preferred Stock, including 1% redemption fee of
    $203










(3,179
)


















(3,179
)Accretion on Series B
    Preferred Stock










(1,794
)


















(1,794
)Net loss






















(63,974
)






(63,974
)Balance, December 31, 2005


18,259,356


$
18


$
231,821


$
(349
)

$



$
(123,847
)

$
346


$
107,989Stock-based compensation expense
    under
    SFAS 123-R










1,547



















1,547Deferred compensation










(349
)


349















Accretion on Series B
    Preferred Stock










(4,340
)


















(4,340
)Dividends paid in cash on
    Series B Preferred Stock










(919
)


















(919
)Common stock issued to repurchase
    Series B Preferred Stock


731,736



1



5,465



















5,466Redemption of Series B
    Preferred Stock










(13,480
)


















(13,480
)Issuance of common stock upon
    exercise of stock options


62,375



1



115



















116Issuance of common stock upon
    exercise of warrants


2,302,001



2



12,083



















12,085Vesting of restricted common stock


11,557



























Foreign currency translation
    adjustment


























(78
)


(78
)Issuance of common stock in
    acquisition of Sovereign Circuits


1,201,964



1



8,413



















8,414Net loss






















(7,233
)






(7,233
)Balance, December 31, 2006


22,568,989


$
23


$
240,356


$



$



$
(131,080
)

$
268


$
109,567   42




---



##### Table of Contents



DDi
    CORP.
  CONSOLIDATED
    STATEMENTS OF CASH FLOWS
 (In
    thousands)
  Year Ended


Year Ended


Year EndedDecember 31,


December 31,


December 31,2006


2005


2004CASH FLOWS FROM OPERATING
    ACTIVITIES:Net Loss

$
(7,233
)

$
(63,974
)

$
(45,865
)(Income) loss from discontinued
    operations, net of tax






(10,236
)


20,713Adjustments to reconcile net loss
    to cash provided by (used in) operating activities:Depreciation


9,848



9,918



9,856Amortization of intangible assets


4,744



4,598



5,367Amortization of debt issuance costs
    and discount


716



702



1,496Goodwill impairment






54,669



Non-cash compensation


1,547



4,602



18,345Non-cash and accrued restructuring
    and other related charges


60



2,478



757Loss on sale of assembly business


4,544







Restructuring related inventory
    impairment






1,253



Capital senior note accretion






200



581Other


206



238



123Change in operating assets and
    liabilities, (net of acquisitions and disposals):Accounts receivable


1,832



(2,966
)


(2,406
)Inventories


(3,717
)


698



(1,195
)Prepaid expenses and other assets


696



215



(427
)Accounts payable


(782
)


(1,313
)


2,337Accrued expenses and other
    liabilities


(4,177
)


(4,735
)


(6,327
)Income tax payable


990



2,097



281Net cash provided by (used in)
    operating activities from continuing operations


9,274



(1,556
)


3,636Net cash used in operating
    activities from discontinued operations






(1,975
)


(4,700
)Net cash provided by (used in)
    operating activities


9,274



(3,531
)


(1,064
)CASH FLOWS FROM INVESTING
    ACTIVITIES:Purchases of property and equipment


(6,262
)


(6,699
)


(4,378
)Proceeds from sale of assembly
    business


12,000







Payment of costs incurred in
    connection with sale of assembly business


(195
)






Proceeds from sale of fixed assets


7



116



1,510Acquisition of Sovereign, net of
    cash acquired of $607


(4,546
)






Payment of costs incurred in
    connection with acquisition of Sovereign


(417
)






Changes in restricted cash


2,972



(2,972
)


7,500Cash outflows related to
    acquisition earn out






(300
)


(475
)Net cash used in investing
    activities from discontinued operations






(9
)


(3,354
)Net cash provided by (used in)
    investing activities


3,559



(9,864
)


803CASH FLOWS FROM FINANCING
    ACTIVITIES:Net (repayments to) borrowings on
    revolving credit facility


(19,929
)


3,981



15,948Issuance proceeds (redemption
    payments) of Series B Preferred Stock


(13,867
)


(40,667
)


61,000Payment of Series B Preferred
    Stock dividends


(919
)


(2,280
)


Payments on long-term debt


(254
)


(19,357
)


(73,525
)Refunds (payments) of debt issuance
    costs






183



(2,350
)Costs incurred in connection with
    the issuance of Series B Preferred Stock










(3,488
)Proceeds from exercise of standby
    warrants






75,000



Proceeds from issuance of common
    stock










15,980Payment of costs incurred with
    issuance of common stock






(2,645
)


(1,213
)Repayment of shareholder
    receivable, including interest






670



Proceeds from exercise of warrants


12,085







Proceeds from exercise of stock
    options


116



26



383Net cash provided by financing
    activities from discontinued operations






885



308Net cash (used in) provided by
    financing activities


(22,768
)


15,796



13,043Effect of exchange rate changes on
    cash and cash equivalents


(130
)


58



(458
)Net (decrease) increase in cash and
    cash equivalents


(10,065
)


2,459



12,324Cash and cash equivalents,
    beginning of period


25,985



23,526



11,202Cash and cash equivalents, end of
    period

$
15,920


$
25,985


$
23,526   43




---



##### Table of Contents



DDi
    CORP.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  1.
    BASIS OF
    PRESENTATION AND DESCRIPTION OF BUSINESS  Basis
    of Presentation
          Common
    Stock Reverse Split
  one-for-seven
  Description
    of Business
    2.
    SIGNIFICANT
    ACCOUNTING POLICIES  Principles of Consolidation
  Business combinations
  Management Estimates
 44




---



##### Table of Contents



DDi CORP.
 NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Fair value of financial instruments
  Cash and cash equivalents
  Cash and cash equivalents  restricted
  Revenue recognition
        Year Ended


Year Ended


Year EndedDecember 31, 2006


December 31, 2005


December 31, 2004Beginning balance

$
527


$
656


$
522Current year warranty charges


3,215



2,556



2,762Net utilization


(3,150
)


(2,685
)


(2,628
)Ending Balance

$
592


$
527


$
656  45




---



##### Table of Contents



DDi CORP.
 NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Concentration of credit risk
  Receivables and Allowance for Doubtful
    Accounts
  Inventories
  Property, plant and equipment
  Debt issuance costs and debt discounts
  Long-lived assets
  Goodwill and identifiable intangibles
 46




---



##### Table of Contents



DDi CORP.
 NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Income taxes
  Deferred lease liability
  Comprehensive loss
  Foreign currency translation
    Stock-Based Compensation  SFAS 123-R SFAS 123-R.
  SFAS 123-R,
 47




---



##### Table of Contents



DDi CORP.
 NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Basic and diluted earnings per share Earnings
    Per Share
    Segment reporting
      Year Ended


Year Ended


Year EndedDecember 31,


December 31,


December 31,2006


2005


2004Net sales:North America(1)

$
183,444


$
176,441


$
180,817Asia


12,415



5,369



5,826Other


2,256



2,815



2,364Total

$
198,115


$
184,625


$
189,007     (1)
    Sales to the United States represent the majority of sales to
    North America.  Reclassifications
    Recent
    accounting pronouncements
   48




---



##### Table of Contents



DDi CORP.
 NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    No. 06-3,
      3.
    DISCONTINUED
    OPERATIONS    No. 03-13,
   49




---



##### Table of Contents



DDi CORP.
 NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    DDi
    Europe Statements of Operations
  Year Ended


Year EndedDecember 31,


December 31,2005


2004(In thousands)Net sales

$
7,873


$
99,775Cost of goods sold


6,843



90,927Gross profit


1,030



8,848Operating expenses:Sales and marketing


126



4,957General and administrative


1,618



10,513Goodwill impairment






7,252Restructuring and other related
    charges


219



7,044Reorganization expenses






329Operating loss


(933
)


(21,247
)Gain on disposal of DDi Europe


11,549



Interest and other expense, net


380



750Income (loss) from discontinued
    operations before income taxes


10,236



(21,997
)Income tax benefit






(1,284
)Net income (loss) from
    discontinued operations

$
10,236


$
(20,713
)   4.
    DETAIL OF
    CERTAIN ACCOUNTS    December 31,2006


2005Accounts receivable

$
26,526


$
31,591Less: Allowance for doubtful
    accounts


(1,933
)


(1,881
)$
24,593


$
29,710     December 31,2006


2005Raw materials

$
7,719


$
8,630Work-in-process


3,265



5,059Finished goods


3,575



2,428$
14,559


$
16,117  50




---



##### Table of Contents



DDi CORP.
 NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    December 31,2006


2005Accrued salaries and related
    benefits

$
6,202


$
5,924Accrued restructuring charges






1,082Deferred lease liability


714



1,358Other accrued expenses


2,904



4,275$
9,820


$
12,639     December 31,2006


2005Long term deferred lease liability

$
1,771


$
2,485Income Tax Payable and other
    long-term liabilities


1,553



2,260$
3,324


$
4,745   5.
    PROPERTY,
    PLANT AND EQUIPMENT    December 31,2006


2005Land, buildings and leasehold
    improvements

$
13,091


$
10,595Machinery and equipment


36,510



34,053Office furniture and equipment


5,328



4,503Vehicles


72



62Deposits on equipment


1,350



91256,351



50,125Less: Accumulated depreciation


(25,189
)


(19,062
)$
31,162


$
31,063   6.
    REVOLVING
    CREDIT FACILITY AND LONG-TERM DEBT    December 31,2006


2005Revolving credit facilities

$



$
19,929Long-term debt


2,044



Sub-total


2,044



19,929Less: current maturities


312



Less: Dynamic Details Revolving
    Credit Facility






(19,929
)Total

$
1,732


$
  51




---



##### Table of Contents



DDi CORP.
 NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Revolving
    Credit Facility
        Sovereign
    Circuits Credit Facility and Line of Credit
     52




---



##### Table of Contents



DDi CORP.
 NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Sovereign
    Circuits Long-Term Debt
        Year Ending December 312007


2008


2009


2010


2011


Thereafter


Total(In thousands)Long-term debt


312



291



291



291



286



573



2,044   Capital
    Senior Accreting Notes
    7.
    SERIES A
    MANDATORILY REDEEMABLE PREFERRED STOCK    8.
    SERIES B
    MANDATORILY REDEEMABLE PREFERRED STOCK  Series B-1 Series B-2
 53




---



##### Table of Contents



DDi CORP.
 NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Beneficial
    Conversion Feature
  paid-in-capital
  Redemption
    and Conversion
         54




---



##### Table of Contents



DDi CORP.
 NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Dividends
    Year Ended


Year Ended


Year EndedDecember 31,


December 31,


December 31,2006


2005


2004Dividends paid in cash

$
918


$
2,280



Dividends paid in DDi common
    stock(a)





$
915


$
2,744
(b)Total dividends

$
918


$
3,195


$
2,744     (a)
    On May 26, 2004, the Companys stockholders approved a
    proposal to allow the Company to make dividend and redemption
    payments using its common stock provided that no more than
    1,428,571 shares of common stock in the aggregate were used
    for redemption payments. Shares of the Companys common
    stock issued as dividends or redemption payments are issued at a
    5% discount to the volume weighted-average market price over the
    20 trading days prior to the dividend payment date.  (b)
    Dividends were accrued in 2004 and paid in March, 2005.  9.
    STOCKHOLDERS
    EQUITY  Common
    Stock
        Stockholder
    Receivable
   55




---



##### Table of Contents



DDi CORP.
 NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Stock
    Options
        SFAS 123-R
    WeightedWeighted


AverageAverage Exercise


Remaining


AggregateOptions


Price


Contractual Life


Intrinsic ValueOutstanding


per Option


in Years


(in thousands)Balance as of December 31,
    2005


1,164,836


$
12.43Granted


1,014,095


$
7.79Exercised


(62,375
)

$
1.85Forfeited


(254,850
)

$
15.97Balance as of December 31,
    2006


1,861,706


$
8.42



8.7


$
1,040Options exercisable as of
    December 31, 2006


446,181


$
18.03



7.2


$
426  56




---



##### Table of Contents



DDi CORP.
 NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Contingent
    Options
    Restricted
    Stock
    Adoption
    of
    SFAS 123-R
  SFAS 123-R, SFAS 123-R.
  Determining
    Fair Value
  Valuation and amortization method 
  Expected Term 
  Expected Stock Price Volatility 
 57




---



##### Table of Contents



DDi CORP.
 NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Expected Dividend Yield 
  Risk-Free Interest Rate 
  Expected Forfeiture Rate 
  Fair Value 
  December 31,


December 31,


December 31,2006


2005


2004Expected term (years)


4



4



4Expected stock price volatility


71.0
%


60.0
%


61.0
%Expected dividend yield


0
%


0
%


0
%Risk-free interest rate


5.0
%


4.4
%


3.1
%Weighted-average fair value per
    share

$
4.43


$
21.18


$
23.10   Stock
    Compensation Expense
    Year Ended


Year EndedDecember 31,


December 31,2005


2004(In thousands)Net loss applicable to common
    stockholders:As reported basic and diluted

$
(70,447
)

$
(49,909
)Less: non-cash compensation
    expenses underFAS 123, net of tax


(9,642
)


(23,812
)Add: non-cash compensation
    expenses under APB 25, net of tax


4,001



20,982Pro forma basic and diluted

$
(76,088
)

$
(52,739
)Net loss per share applicable to
    common stockholders  basic and diluted:As reported

$
(8.76
)

$
(12.85
)Pro forma

$
(9.46
)

$
(13.56
)  58




---



##### Table of Contents



DDi CORP.
 NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  SFAS 123-R SFAS 123-R,
      Year Ended


Year Ended


Year EndedDecember 31,


December 31,


December 31,2006


2005


2004(In thousands)Non-cash compensation expense:Cost of goods sold

$
428


$
3,428


$
11,787Sales and marketing expenses


58



116



2,402General and administrative expenses


1,061



1,058



4,155Non-cash compensation expense from
    continuing operations


1,547



4,602



18,344Discontinued operations






(601
)


2,638Total non-cash compensation expense

$
1,547


$
4,001


$
20,982Deferred compensation:Grants of stock options,
    contingent options and restricted stock

$



$



$
1,328Cancellation of stock options and
    restricted stock






(3,459
)


(208
)Adjustment for contingent options










(1,087
)Elimination of deferred
    compensation under
    SFAS 123-R


(349
)






Deferred compensation from
    continuing operations


(349
)


(3,459
)


33Cancellation of stock options and
    restricted stock for discontinued operations






(1,636
)


(1,825
)Adjustment for contingent options
    for discontinued operations










(235
)Total

$
(349
)

$
(5,095
)

$
(2,027
)   SFAS 123-R,
   59




---



##### Table of Contents



DDi CORP.
 NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    10.
    NET LOSS
    PER SHARE    Year Ended


Year Ended


Year EndedDecember 31,


December 31,


December 31,2006


2005


2004Loss from continuing operations

$
(7,233
)

$
(74,210
)

$
(25,152
)Less: Series B Preferred
    Stock dividends, accretion and repurchase charge


(16,419
)


(6,473
)


(4,044
)Loss from continuing operations
    applicable to common stockholders

$
(23,652
)

$
(80,683
)

$
(29,196
)Weighted-average shares of common
    stock outstanding (basic and diluted)


19,623,415



8,039,094



3,885,092Loss per share from continuing
    operations applicable to common stockholders

$
(1.21
)

$
(10.04
)

$
(7.51
)Net income (loss) from
    discontinued operations, net of tax

$



$
10,236


$
(20,713
)Weighted-average shares of common
    stock outstanding (basic and diluted)


19,623,415



8,039,094



3,885,092Net income (loss) per share of
    common stock from discontinued operations

$



$
1.26


$
(5.33
)Net loss

$
(7,233
)

$
(63,974
)

$
(45,865
)Less: Series B Preferred
    Stock dividends, accretion and repurchase charge


(16,419
)


(6,473
)


(4,044
)Net loss applicable to common
    stockholders

$
(23,652
)

$
(70,447
)

$
(49,909
)Weighted average shares of common
    stock outstanding (basic and diluted)


19,623,415



8,039,094



3,885,092Net loss per share applicable to
    common stockholders

$
(1.21
)

$
(8.76
)

$
(12.85
)      60




---



##### Table of Contents



DDi CORP.
 NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   11.
    INCOME
    TAX MATTERS    Year Ended


Year Ended


Year EndedDecember 31,


December 31,


December 31,2006


2005


2004Current:Federal

$



$
312


$
96State


380



131



244Foreign


1,402



915



1,6441,782



1,358



1,984Deferred:Foreign


46



71



46



71



Provision for income taxes from
    continuing operations

$
1,828


$
1,429


$
1,984     December 31,2006


2005Deferred tax assets:Net operating loss carryforwards

$
55,669


$
53,149Tax credits


3,785



3,286Accrued liabilities


1,115



1,811Capitalized research and
    development costs


5,717



4,842Other


1,278



1,69167,564



64,779Deferred tax liabilities:Property, plant and equipment


(1,745
)


228Intangible assets


(3,843
)


(3,492
)(5,588
)


(3,264
)Valuation allowance


(61,771
)


(61,264
)Net deferred tax assets from
    continuing operations

$
205


$
251    61




---



##### Table of Contents



DDi CORP.
 NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     Year Ended


Year Ended


Year EndedDecember 31,


December 31,


December 31,2006


2005


2004Computed expected tax
    benefit from continuing operations

$
(1,892
)

$
(25,473
)

$
(8,109
)Increase (decrease) in income
    taxes resulting from:State tax


380



131



244Goodwill adjustments and impairment


1,083



19,134



Dividend income






2,243



Foreign tax differential


641



570



136Non-cash compensation


476



1,417



700Research and development credits


(1,119
)


(843
)


(325
)Increase in valuation allowance


2,311



3,998



9,108Other


(52
)


252



230Provision for income taxes for
    continuing operations

$
1,828


$
1,429


$
1,984            62




---



##### Table of Contents



DDi CORP.
 NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      and/or and/or
  12.
    COMMITMENTS,
    CONTINGENCIES AND GUARANTEES  Environmental
    matters
    Operating
    leases
    Year Ending December 31,2007

$
4,2982008


3,6002009


2,8462010


1,8942011


1,360Thereafter


Future minimum lease payments

$
13,998    63




---



##### Table of Contents



DDi CORP.
 NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Litigation
  No. CV 03-7063 MMM
      Indemnification of Directors and Officers
  13.
    RESTRUCTURING
    AND OTHER RELATED CHARGES     64




---



##### Table of Contents



DDi CORP.
 NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
          EmployeeTermination


Contract


Facility


Other ExitBenefits


Terminations


Closure


Costs


TotalAccrued restructuring costs at
    December 31, 2003

$
1,440


$
1,652


$



$
2,209


$
5,3012004 reduction in force


1,112



17







287



1,416Other






(370
)










(370
)Payments


(2,537
)


(1,051
)






(2,341
)


(5,929
)Accrued restructuring costs at
    December 31, 2004


15



248







155



418Arizona shutdown


654



334



1,100



233



2,321Colorado closure


94



6







12



112Other














432



432Payments


(763
)


(572
)


(101
)


(765
)


(2,201
)Accrued restructuring costs at
    December 31, 2005






16



999



67



1,082Arizona shutdown


43



347



433



300



1,123Colorado closure


6



15







4



25Other














(8
)


(8
)Payments


(49
)


(378
)


(1,432
)


(363
)


(2,222
)Accrued restructuring costs at
    December 31, 2006

$



$



$



$



$
    65




---



##### Table of Contents



DDi CORP.
 NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  14.
    SUPPLEMENTAL
    DISCLOSURE OF CASH FLOW INFORMATION (in thousands)  Year Ended


Year Ended


Year EndedDecember 31,


December 31,


December 31,2006


2005


2004Cash Payments For:Income taxes

$
786


$
314


$
906Interest

$
232


$
3,042


$
4,061Reorganization proceeding expenses

$



$



$
1,543Non-cash investing and financing
    activities:Conversion of Series B
    Preferred Stock to common stock

$



$
1,000


$
Repurchase of Series B
    Preferred Stock with common stock

$
5,466


$



$
Acquisition of Sovereign Circuits:Cash consideration including
    acquisition costs

$
5,570Fair value of stock consideration


8,414Fair value of non-cash tangible
    assets acquired


(12,029
)Goodwill


(2,286
)Intangible assets


(3,800
)Liabilities assumed and incurred


4,739Cash acquired

$
608   15.
    SALE OF
    ASSEMBLY BUSINESS    12-month 90-days
   66




---



##### Table of Contents



DDi CORP.
 NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  16.
    ACQUISITION
    OF SOVEREIGN CIRCUITS      No. 99-12,
    Purchase price:Stock consideration
    (1,201,964 shares at $7.00 per share)

$
8,414Cash


5,153Assumption of debt


2,288Acquisition costs


417Total

$
16,272Allocation of purchase price:Current assets

$
5,129Property, plant and equipment, net


7,508Current liabilities


(2,451
)Intangible assets


3,800Goodwill


2,286Total

$
16,272     2006


2005


2004Net sales

$
213,365


$
199,231


$
202,765Net loss


(23,345
)


(70,806
)


(50,089
)Pro forma net loss per share
    (basic and diluted)

$
(1.13
)

$
(7.66
)

$
(9.85
)Pro forma weighted-averaged shares


20,598,159



9,241,058



5,087,056  67




---



##### Table of Contents



DDi CORP.
 NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  17.
    GOODWILL
    AND INTANGIBLES  Goodwill
    2005
    Goodwill Activity
      2006
    Goodwill Activity
        Annual
    Goodwill Impairment Test
   68




---



##### Table of Contents



DDi CORP.
 NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Year Ended


Year EndedDecember 31,


December 31,2006


2005Beginning balance

$
41,845


$
99,375Adjustments related to pre-fresh
    start accounting tax items


(1,808
)


(2,861
)Allocation to assembly business
    included in loss on disposal


(3,094
)


Goodwill resulting from Sovereign
    acquisition


2,286



Impairment charges






(54,669
)Ending balance

$
39,229


$
41,845   Intangible
    Assets
        As of December 31, 2006


As of December 31, 2005Gross


Accumulated


Net


Gross


Accumulated


NetAmount


Amortization


Amount


Amount


Amortization


AmountIdentifiable intangible assets:Customer relationships

$
26,790


$
(14,323
)

$
12,467


$
22,990


$
(9,579
)

$
13,411Backlog


1,923



(1,923
)






1,923



(1,923
)


$
28,713


$
(16,246
)

$
12,467


$
24,913


$
(11,502
)

$
13,411     Year Ending December 31,

DDi Corp.2007

$
5,3582008


4,9752009


7602010


7602011


614Total

$
12,467  69




---



##### Table of Contents



FINANCIAL
    STATEMENT SCHEDULE
  Form 10-K.
  SCHEDULE
    II  VALUATION AND QUALIFYING ACCOUNTS
  Column A

Column B


Column C


Column D


Column EAdditions


AdditionsBalance at


Charged to


Charged to





Balance atBeginning of


Costs and


other





End ofDescription

Period


Expenses(1)


accounts


Deductions


Period(in thousands)Allowance for Doubtful Accounts:Year ended December 31, 2006

$
1,881


$
1,199


$



$
(1,147
)

$
1,933Year ended December 31, 2005

$
1,579


$
1,394


$



$
(1,092
)

$
1,881Year ended December 31, 2004

$
1,076


$
1,382


$



$
(879
)

$
1,579Deferred Tax Valuation Allowance:Year ended December 31, 2006

$
61,264


$



$
507


$



$
61,771Year ended December 31, 2005

$
89,037


$



$



$
(27,773
)

$
61,264Year ended December 31, 2004

$
77,985


$



$
11,052


$



$
89,037     (1)
    
    Includes both amounts charged to general and administrative
    expense (for bad debts) and as a reduction to revenue (for sales
    returns and discounts). 70




---



##### Table of Contents



Item 9.
    Changes
    in and Disagreements With Accountants on Accounting and
    Financial Disclosure.   Item 9A.  Controls
    and Procedures.  Disclosure
    Controls and Procedures
  Rules 13a-15(e) Form 10-K
  Report of
    Management on Internal Control Over Financial
    Reporting
  Rules 13a-15(f)
  Internal Control  Integrated
    Framework. Form 10-K. Form 10-K,
  Inherent
    Limitations of Effectiveness of Controls
   71




---



##### Table of Contents



Changes
    in Internal Control Over Financial Reporting
    Item 9B.  Other
    Information.
    PART III
 Item 10.  Directors,
    Executive Officers and Corporate Governance.   Item 11.  Executive
    Compensation.   Item 12.  Security
    Ownership of Certain Beneficial Owners and Management and
    Related Stockholder Matters.   Item 13.  Certain
    Relationships and Related Transactions, and Director
    Independence.   Item 14.  Principal
    Accounting Fees and Services.    PART IV
  Item 15.
    Exhibits
    and Financial Statement Schedules.  Exhibits.
 72




---



##### Table of Contents



Form 10-K.
  Incorporated by ReferenceFiled





Period





FilingExhibit


Description


Herewith


Form


Ending


Exhibit


Date3
.1


Amended and Restated Certificate of
    Incorporation of DDi Corp.





8-K






3
.1


12/13/20033
.2


Certificate of Designation of DDi
    Corp.





8-K






3
.2


12/13/20033
.3


Certificate of Designation of
    Series B Preferred Stock of DDi Corp.





8-K






10
.2


4/7/20043
.4


Certificate of Amendment to the
    Amended and Restated Certificate of Incorporation of DDi Corp.





8-K






3
.1


8/10/20053
.5


Amended and Restated Bylaws of DDi
    Corp.





10-Q


6/30/2005



3
.4


8/9/200510
.1*


Dynamic Details Incorporated 2006
    Senior Management Bonus Program





10-K


12/31/2005



10
.1


3/16/200610
.2*


Dynamic Details Incorporated 2007
    Senior Management Bonus Program


X10
.3*


Independent Director Compensation
    Policy


X10
.4*


2003 Directors Equity
    Incentive Plan





S-8






4
.3


6/14/200410
.5*


Form of Stock Option Agreement
    (2003 Directors Equity Incentive Plan)





S-8






4
.4


6/14/200410
.6*


DDi Corp. 2003 Management Incentive
    Plan





S-1






10
.41


2/12/200410
.7*


DDi Corp. 2005 Stock Incentive Plan





8-K






10
.1


8/10/200510
.8*


Form of Stock Option Agreement
    under the DDi Corp 2005 Stock Incentive Plan





8-K






10



12/27/200510
.9*


Employment Agreement dated
    March 16, 2006 between DDi Corp. and Mikel Williams





10-K


12/31/2005



10
.1


3/16/200610
.10*


Employment Agreement dated
    December 7, 2006 between DDi Corp. and Michael R. Mathews


X10
.11*


Employment Letter dated
    March 9, 2006 between DDi Corp. and Sally Goff





8-K






99
.1


3/31/200610
.12*


Employment Letter dated
    December 13, 2006 between DDi Corp. and Gerald Barnes


X10
.13*


Severance Agreement and General
    Release dated February 9, 2006 between DDi Corp. and Bruce
    McMaster





8-K






10
.1


2/15/200610
.14*


Separation Agreement and General
    Release dated March 31, 2006 between DDi Corp. and Diane
    Brundage





10-Q


3/31/2006



10
.5


5/9/200610
.15*


Separation Agreement and Release
    dated October 2, 2006 between DDi Corp. and Brad Tesch





8-K






10
.2


10/5/200610
.16


Real Property Master Lease
    Agreement dated January 1, 1996 between James I. Swenson
    and Susan G. Swenson, as Trustees of the Swenson Family Trust,
    and Details, Inc.





S-4






10
.4


11/26/1997 73




---



##### Table of Contents



Incorporated by ReferenceFiled





Period





FilingExhibit


Description


Herewith


Form


Ending


Exhibit


Date10
.17


Amendment Number One to Real
    Property Master Lease Agreement dated January 1, 1997
    between James I. Swenson and Susan G. Swenson, as trustees of
    the Swenson Family Trust and Details, Inc.





10-K


12/31/2000



10
.38


3/31/200110
.18


Amendment No. 3 to Real
    Property Master Lease Agreement





8-K






10
.3


11/29/200510
.19


Lease Agreement dated July 22,
    1991 between Geomax and Dynamic Circuits, Inc.





10-K


12/31/1998



10
.30


3/31/199910
.20


Lease dated March 20, 1997 by
    and between Mercury Partners 30, Inc. and Dynamic Circuits,
    Inc.





10-K


12/31/1998



10
.31


3/31/199910
.21


Amendment to Lease Agreement, dated
    as of November 9, 2001 by and between D & D Tarob
    Properties, LLC and Dynamic Details Incorporated Silicon Valley





10-K


12/31/2001



10
.30


3/28/200210
.22


Credit Agreement dated as of
    March 30, 2004, among Dynamic Details, Incorporated,
    Dynamic Details, Incorporated, Virginia, Dynamic Details
    Incorporated, Silicon Valley, and Laminate Technology Corp.; the
    other Credit Parties signatory thereto; General Electric Capital
    Corporation, for itself, as Lender, and as Agent for Lenders,
    and the other Lenders signatory thereto from time to time





8-K






10
.3


4/7/200410
.23


Amendment No. 1 to Credit
    Agreement dated as of June 30, 2004, by and among Dynamic
    Details, Incorporated, Dynamic Details, Incorporated, Virginia,
    Dynamic Details Incorporated, Silicon Valley and Laminate
    Technology Corp., the other Credit Parties signatory thereto;
    and General Electric Capital Corporation





10-Q


6/30/2004



10
.8


8/16/200410
.24


Amendment No. 2 to Credit
    Agreement, by and among Dynamic Details, Incorporated, Dynamic
    Details Canada, Corp., DDi Canada Acquisition Corp., the other
    Credit Parties signatory thereto and GE Canada Finance Holding
    Company





8-K






10
.2


11/29/200510
.25


Amendment No. 3 to Credit
    Agreement, by and among Dynamic Details, Incorporated, Dynamic
    Details, Incorporated, Virginia, Dynamic Details Incorporated,
    Silicon Valley, Laminate Technology Corp., the other Credit
    Parties signatory thereto and General Electric Capital
    Corporation





8-K






10
.1


11/29/200510
.26


Security Agreement, dated as of
    March 30, 2004, made by Dynamic Details, Incorporated,
    Dynamic Details Incorporated, Virginia, Dynamic Details
    Incorporated, Silicon Valley, Laminate Technology Corp., Dynamic
    Details Incorporated, Colorado Springs, DDi Sales Corp., Dynamic
    Details Texas, LLC, DDi-Texas Intermediate Partners II, L.L.C.,
    DDi-Texas Intermediate Holdings II, L.L.C., and Dynamic
    Details, L.P., in favor of General Electric Capital Corporation,
    as agent for the lenders from time to time party to the Credit
    Agreement





8-K






10
.4


4/7/200410
.27


Guaranty dated as of March 30,
    2004, made by DDi Corp., DDi Intermediate Holdings Corp., DDi
    Capital Corp., Dynamic Details Incorporated, Colorado Springs,
    DDi Sales Corp., Dynamic Details Texas, LLC, DDi-Texas
    Intermediate Partners II, L.L.C., DDi-Texas Intermediate
    Holdings II, L.L.C., Dynamic Details, L.P., in favor of
    General Electric Capital Corporation, as agent for the lenders
    from time to time party to the Credit Agreement





8-K






10
.5


4/7/2004 74




---



##### Table of Contents



Incorporated by ReferenceFiled





Period





FilingExhibit


Description


Herewith


Form


Ending


Exhibit


Date10
.28


Pledge Agreement dated as of
    March 30, 2004, made by Dynamic Details, Incorporated,
    Dynamic Details, Incorporated, Virginia, Dynamic Details
    Incorporated, Silicon Valley, Laminate Technology Corp., DDi
    Corp., DDi Intermediate Holdings Corp., DDi Capital Corp.,
    Dynamic Details Incorporated, Colorado Springs, DDi Sales Corp.,
    Dynamic Details Texas, LLC, DDi-Texas Intermediate Partners II,
    L.L.C., DDi-Texas Intermediate Holdings II, L.L.C., Dynamic
    Details, L.P., in favor of General Electric Capital Corporation,
    as agent for the lenders from time to time party to the Credit
    Agreement





8-K






10
.6


4/7/200410
.29


Patent, Trademark and Copyright
    Security Agreement dated as of March 30, 2004, made by
    Dynamic Details, Incorporated, Dynamic Details Incorporated,
    Virginia, Dynamic Details Incorporated, Silicon Valley, Laminate
    Technology Corp., Dynamic Details Incorporated, Colorado
    Springs, DDi Sales Corp., Dynamic Details Texas, LLC, DDi-Texas
    Intermediate Partners II, L.L.C., DDi-Texas Intermediate
    Holdings II, L.L.C., and Dynamic Details, L.P., in favor of
    General Electric Capital Corporation, as agent for the lenders
    from time to time party to the Credit Agreement.





8-K






10
.7


4/7/200410
.30


Master Agreement for Documentary
    Letters of Credit, dated as of March 30, 2004





8-K






10
.8


4/7/200410
.31


Master Agreement for Standby
    Letters of Credit, dated as of March 30, 2004





8-K






10
.9


4/7/200410
.32


Credit Agreement dated as of
    June 30, 2004 among Dynamic Details Canada, Corp., and DDi
    Canada Acquisition Corp., as Borrowers, the Other Credit Parties
    Signatory Thereto, as Credit Parties, the Lenders Signatory
    Thereto from Time to Time, as Lenders, and GE Canada Finance
    Holding Company, as Agent and Lender





10-Q


6/30/2004



10
.1


8/16/200410
.33


Guaranty, dated as of June 30,
    2004, made by DDi Corp., a Delaware corporation, DDi
    Intermediate Holdings Corp., a California corporation, DDi
    Capital Corp., a California corporation, Dynamic Details,
    Incorporated, a California corporation, Dynamic Details
    Incorporated, Virginia, a Delaware corporation, Dynamic Details
    Incorporated, Silicon Valley, a Delaware corporation, Laminate
    Technology Corp., a Delaware corporation, Dynamic Details
    Incorporated, Colorado Springs, a Colorado corporation, DDi
    Sales Corp., a Delaware corporation, Dynamic Details Texas, LLC,
    a Delaware limited liability company, DDi-Texas Intermediate
    Partners II, L.L.C., a Delaware limited liability company,
    DDi-Texas Intermediate Holdings II, L.L.C., a Delaware
    limited liability company, and Dynamic Details, L.P., a Delaware
    limited partnership, in favor of GE Canada Finance Holding
    Company, a Nova Scotia unlimited liability company





10-Q


6/30/2004



10
.2


8/16/200410
.34


Intercreditor Agreement dated as of
    June 30, 2004, between GE Capital Finance Holding Company,
    a Nova Scotia unlimited liability company, and General Electric
    Capital Corporation, a New York corporation





10-Q


6/30/2004



10
.3


8/16/200410
.35


Master Agreement for Documentary
    Letters of Credit, dated as of June 30, 2004





10-Q


6/30/2004



10
.4


8/16/200410
.36


Master Agreement for Standby
    Letters of Credit, dated as of June 30, 2004





10-Q


6/30/2004



10
.5


8/16/2004 75




---



##### Table of Contents



Incorporated by ReferenceFiled





Period





FilingExhibit


Description


Herewith


Form


Ending


Exhibit


Date10
.37


Security Agreement dated as of
    June 30, 2004, made by Dynamic Details Canada, Corp., and
    DDi Canada Acquisition Corp. in favor of GE Canada Finance
    Holding Company





10-Q


6/30/2004



10
.6


8/16/200410
.38


Pledge Agreement dated as of
    June 30, 2004, made by Dynamic Details, Incorporated, DDi
    Canada Acquisition Corp. in favor of GE Canada Finance Holding
    Company





10-Q


6/30/2004



10
.7


8/16/200410
.39


Registration Rights Agreement dated
    September 21, 2005





8-K/A






10
.2


9/23/200510
.40


Agreement and Plan of Merger dated
    August 8, 2006, by and among DDi Corp., DDi Acquisition
    Corp., Sovereign Circuits, Inc., Beverly John Berryman, Hugh
    David Turner and Carole Fahy, as trustees of a settlement dated
    December 21, 1965 and made between Herbert Anthony Cann,
    Kenneth Robert Woodford and John Michael Geoffrey Andrews and a
    Deed of Appointment dated October 6, 1976 by Kenneth Robert
    Woodford and Michael Geoffrey Andrews, together a trust formed
    under English law, Beverly John Berryman, Hugh David Turner and
    Carole Fahy, as trustees of a settlement dated
    September 10, 1985 and made between Tonio Christian Hoch as
    settlor and Bermuda Trust Company Limited as original trustee,
    which is a trust established under Bermuda law and known as the
    Hoch Settlement, and Robert Q. Buss, an individual





8-K






2
.1


8/30/200610
.41


Asset Purchase Agreement dated
    August 8, 2006, by and among Dynamic Details Incorporated,
    Silicon Valley, solely for the purpose of guaranteeing the
    performance of all obligations of Dynamic Details Incorporated,
    Silicon Valley under Section 8.2 of the Asset Purchase
    Agreement, Dynamic Details, Incorporated, VMS, LLC and, solely
    for the purpose of guaranteeing the performance of all
    obligations of VMS, LLC under Section 8.3 of the Asset
    Purchase Agreement, VERITEK Manufacturing Services, LLC





8-K






2
.2


8/30/200610
.42


Letter Agreement dated
    September 29, 2006 by and among Dynamic Details
    Incorporated, Silicon Valley, Dynamic Details, Incorporated,
    VMS, LLC and VERITEK Manufacturing Services, LLC





8-K






10
.1


10/5/200610
.43


Open End Mortgage dated May 10,
    2006 between Sovereign Circuits, Inc. and Key Bank National
    Association


X14
.1


Code of Business Conduct and Ethics





8-K






14
.1


3/6/200621
.1


Subsidiaries of DDi Corp.


X23
.1


Consent of PricewaterhouseCoopers
    LLP


X31
.1


Certification of Chief Executive
    Officer of DDi Corp., Pursuant to Rule 13a-14 of the
    Securities Exchange Act


X31
.2


Certification of Chief Financial
    Officer of DDi Corp., Pursuant to Rule 13a-14 of the
    Securities Exchange Act


X32
.1


Certification of Chief Executive
    Officer of DDi Corp., Pursuant to Section 906 of the
    Sarbanes-Oxley Act of 2002


X32
.2


Certification of Chief Financial
    Officer of DDi Corp., Pursuant to Section 906 of the
    Sarbanes-Oxley Act of 2002


X  76




---



##### Table of Contents



*
    
    Indicates a management contract or compensatory plan or
    arrangement  Financial Statement Schedules.
   77




---



##### Table of Contents



SIGNATURES       By:
    /s/  Mikel
    H. Williams   President and Chief Executive Officer
  Sally
    L. Goff
   Chief Financial Officer
    Signature

Title

Date/s/  Mikel
    H. WilliamsMikel
    H. Williams

President, Chief Executive
    Officer
    and Director
    (Principal Executive Officer)

March 9, 2007/s/  Sally
    L. GoffSally
    L. Goff

Chief Financial Officer
    (Principal Financial and Accounting Officer)

March 9, 2007/s/  Robert
    J. AmmanRobert
    J. Amman

Director

March 9, 2007/s/  Robert
    GuezuragaRobert
    Guezuraga

Director

March 9, 2007/s/  Jay
    B. HuntJay
    B. Hunt

Director

March 9, 2007/s/  Andrew
    E. LietzAndrew
    E. Lietz

Director

March 9, 2007/s/  Steven
    C. SchleppSteven
    C. Schlepp

Director

March 9, 2007/s/  Carl
    R. Vertuca,
    Jr.Carl
    R. Vertuca, Jr.

Director

March 9, 2007  78




---



##### Table of Contents



Exhibit Index
  Incorporated by ReferenceFiled





Period





FilingExhibit


Description


Herewith


Form


Ending


Exhibit


Date3
.1


Amended and Restated Certificate of
    Incorporation of DDi Corp.





8-K






3
.1


12/13/20033
.2


Certificate of Designation of DDi
    Corp.





8-K






3
.2


12/13/20033
.3


Certificate of Designation of
    Series B Preferred Stock of DDi Corp.





8-K






10
.2


4/7/20043
.4


Certificate of Amendment to the
    Amended and Restated Certificate of Incorporation of DDi
    Corp.





8-K






3
.1


8/10/20053
.5


Amended and Restated Bylaws of DDi
    Corp.





10-Q


6/30/2005



3
.4


8/9/200510
.1*


Dynamic Details Incorporated 2006
    Senior Management Bonus Program





10-K


12/31/2005



10
.1


3/16/200610
.2*


Dynamic Details Incorporated 2007
    Senior Management Bonus Program


X10
.3*


Independent Director Compensation
    Policy


X10
.4*


2003 Directors Equity Incentive Plan





S-8






4
.3


6/14/200410
.5*


Form of Stock Option Agreement
    (2003 Directors Equity Incentive Plan)





S-8






4
.4


6/14/200410
.6*


DDi Corp. 2003 Management Incentive
    Plan





S-1






10
.41


2/12/200410
.7*


DDi Corp. 2005 Stock Incentive Plan





8-K






10
.1


8/10/200510
.8*


Form of Stock Option Agreement
    under the DDi Corp 2005 Stock Incentive Plan





8-K






10



12/27/200510
.9*


Employment Agreement dated
    March 16, 2006 between DDi Corp. and Mikel Williams





10-K


12/31/2005



10
.1


3/16/200610
.10*


Employment Agreement dated
    December 7, 2006 between DDi Corp. and Michael R. Mathews


X10
.11*


Employment Letter dated
    March 9, 2006 between DDi Corp. and Sally Goff





8-K






99
.1


3/31/200610
.12*


Employment Letter dated
    December 13, 2006 between DDi Corp. and Gerald Barnes


X10
.13*


Severance Agreement and General
    Release dated February 9, 2006 between DDi Corp. and Bruce
    McMaster





8-K






10
.1


2/15/200610
.14*


Separation Agreement and General
    Release dated March 31, 2006 between DDi Corp. and Diane
    Brundage





10-Q


3/31/2006



10
.5


5/9/200610
.15*


Separation Agreement and Release
    dated October 2, 2006 between DDi Corp. and Brad Tesch





8-K






10
.2


10/5/200610
.16


Real Property Master Lease
    Agreement dated January 1, 1996 between James I. Swenson
    and Susan G. Swenson, as Trustees of the Swenson Family Trust,
    and Details, Inc.





S-4






10
.4


11/26/199710
.17


Amendment Number One to Real
    Property Master Lease Agreement dated January 1, 1997
    between James I. Swenson and Susan G. Swenson, as trustees of
    the Swenson Family Trust and Details, Inc.





10-K


12/31/2000



10
.38


3/31/200110
.18


Amendment No. 3 to Real
    Property Master Lease Agreement





8-K






10
.3


11/29/200510
.19


Lease Agreement dated July 22,
    1991 between Geomax and Dynamic Circuits, Inc.





10-K


12/31/1998



10
.30


3/31/1999 79




---



##### Table of Contents



Incorporated by ReferenceFiled





Period





FilingExhibit


Description


Herewith


Form


Ending


Exhibit


Date10
.20


Lease dated March 20, 1997 by
    and between Mercury Partners 30, Inc. and Dynamic Circuits,
    Inc.





10-K


12/31/1998



10
.31


3/31/199910
.21


Amendment to Lease Agreement, dated
    as of November 9, 2001 by and between D & D Tarob
    Properties, LLC and Dynamic Details Incorporated Silicon Valley





10-K


12/31/2001



10
.30


3/28/200210
.22


Credit Agreement dated as of
    March 30, 2004, among Dynamic Details, Incorporated,
    Dynamic Details, Incorporated, Virginia, Dynamic Details
    Incorporated, Silicon Valley, and Laminate Technology Corp.; the
    other Credit Parties signatory thereto; General Electric Capital
    Corporation, for itself, as Lender, and as Agent for Lenders,
    and the other Lenders signatory thereto from time to time





8-K






10
.3


4/7/200410
.23


Amendment No. 1 to Credit
    Agreement dated as of June 30, 2004, by and among Dynamic
    Details, Incorporated, Dynamic Details, Incorporated, Virginia,
    Dynamic Details Incorporated, Silicon Valley and Laminate
    Technology Corp., the other Credit Parties signatory thereto;
    and General Electric Capital Corporation





10-Q


6/30/2004



10
.8


8/16/200410
.24


Amendment No. 2 to Credit
    Agreement, by and among Dynamic Details, Incorporated, Dynamic
    Details Canada, Corp., DDi Canada Acquisition Corp., the other
    Credit Parties signatory thereto and GE Canada Finance Holding
    Company





8-K






10
.2


11/29/200510
.25


Amendment No. 3 to Credit
    Agreement, by and among Dynamic Details, Incorporated, Dynamic
    Details, Incorporated, Virginia, Dynamic Details Incorporated,
    Silicon Valley, Laminate Technology Corp., the other Credit
    Parties signatory thereto and General Electric Capital
    Corporation





8-K






10
.1


11/29/200510
.26


Security Agreement, dated as of
    March  30, 2004, made by Dynamic Details,
    Incorporated, Dynamic Details Incorporated, Virginia, Dynamic
    Details Incorporated, Silicon Valley, Laminate Technology Corp.,
    Dynamic Details Incorporated, Colorado Springs, DDi Sales Corp.,
    Dynamic Details Texas, LLC, DDi-Texas Intermediate Partners II,
    L.L.C., DDi-Texas Intermediate Holdings II, L.L.C., and Dynamic
    Details, L.P., in favor of General Electric Capital Corporation,
    as agent for the lenders from time to time party to the Credit
    Agreement





8-K






10
.4


4/7/200410
.27


Guaranty dated as of March 30,
    2004, made by DDi Corp., DDi Intermediate Holdings Corp., DDi
    Capital Corp., Dynamic Details Incorporated, Colorado Springs,
    DDi Sales Corp., Dynamic Details Texas, LLC, DDi-Texas
    Intermediate Partners II, L.L.C., DDi-Texas Intermediate
    Holdings II, L.L.C., Dynamic Details, L.P., in favor of General
    Electric Capital Corporation, as agent for the lenders from time
    to time party to the Credit Agreement





8-K






10
.5


4/7/200410
.28


Pledge Agreement dated as of
    March 30, 2004, made by Dynamic Details, Incorporated,
    Dynamic Details, Incorporated, Virginia, Dynamic Details
    Incorporated, Silicon Valley, Laminate Technology Corp., DDi
    Corp., DDi Intermediate Holdings Corp., DDi Capital Corp.,
    Dynamic Details Incorporated, Colorado Springs, DDi Sales Corp.,
    Dynamic Details Texas, LLC, DDi-Texas Intermediate Partners II,
    L.L.C., DDi-Texas Intermediate Holdings II, L.L.C., Dynamic
    Details, L.P., in favor of General Electric Capital Corporation,
    as agent for the lenders from time to time party to the Credit
    Agreement





8-K






10
.6


4/7/2004 80




---



##### Table of Contents



Incorporated by ReferenceFiled





Period





FilingExhibit


Description


Herewith


Form


Ending


Exhibit


Date10
.29


Patent, Trademark and Copyright
    Security Agreement dated as of March  30, 2004, made
    by Dynamic Details, Incorporated, Dynamic Details Incorporated,
    Virginia, Dynamic Details Incorporated, Silicon Valley, Laminate
    Technology Corp., Dynamic Details Incorporated, Colorado
    Springs, DDi Sales Corp., Dynamic Details Texas, LLC, DDi-Texas
    Intermediate Partners II, L.L.C., DDi-Texas Intermediate
    Holdings II, L.L.C., and Dynamic Details, L.P., in favor of
    General Electric Capital Corporation, as agent for the lenders
    from time to time party to the Credit Agreement





8-K






10
.7


4/7/200410
.30


Master Agreement for Documentary
    Letters of Credit, dated as of March  30, 2004





8-K






10
.8


4/7/200410
.31


Master Agreement for Standby
    Letters of Credit, dated as of March 30, 2004





8-K






10
.9


4/7/200410
.32


Credit Agreement dated as of
    June 30, 2004 among Dynamic Details Canada, Corp., and DDi
    Canada Acquisition Corp., as Borrowers, the Other Credit Parties
    Signatory Thereto, as Credit Parties, the Lenders Signatory
    Thereto from Time to Time, as Lenders, and GE Canada Finance
    Holding Company, as Agent and Lender





10-Q


6/30/2004



10
.1


8/16/200410
.33


Guaranty, dated as of June 30,
    2004, made by DDi Corp., a Delaware corporation, DDi
    Intermediate Holdings Corp., a California corporation, DDi
    Capital Corp., a California corporation, Dynamic Details,
    Incorporated, a California corporation, Dynamic Details
    Incorporated, Virginia, a Delaware corporation, Dynamic Details
    Incorporated, Silicon Valley, a Delaware corporation, Laminate
    Technology Corp., a Delaware corporation, Dynamic Details
    Incorporated, Colorado Springs, a Colorado corporation, DDi
    Sales Corp., a Delaware corporation, Dynamic Details Texas, LLC,
    a Delaware limited liability company, DDi-Texas Intermediate
    Partners II, L.L.C., a Delaware limited liability company,
    DDi-Texas Intermediate Holdings II, L.L.C., a Delaware limited
    liability company, and Dynamic Details, L.P., a Delaware limited
    partnership, in favor of GE Canada Finance Holding Company, a
    Nova Scotia unlimited liability company





10-Q


6/30/2004



10
.2


8/16/200410
.34


Intercreditor Agreement dated as of
    June 30, 2004, between GE Capital Finance Holding Company,
    a Nova Scotia unlimited liability company, and General Electric
    Capital Corporation, a New York corporation





10-Q


6/30/2004



10
.3


8/16/200410
.35


Master Agreement for Documentary
    Letters of Credit, dated as of June 30, 2004





10-Q


6/30/2004



10
.4


8/16/200410
.36


Master Agreement for Standby
    Letters of Credit, dated as of June 30, 2004





10-Q


6/30/2004



10
.5


8/16/200410
.37


Security Agreement dated as of
    June 30, 2004, made by Dynamic Details Canada, Corp., and
    DDi Canada Acquisition Corp. in favor of GE Canada Finance
    Holding Company





10-Q


6/30/2004



10
.6


8/16/200410
.38


Pledge Agreement dated as of
    June 30, 2004, made by Dynamic Details, Incorporated, DDi
    Canada Acquisition Corp. in favor of GE Canada Finance Holding
    Company





10-Q


6/30/2004



10
.7


8/16/200410
.39


Registration Rights Agreement dated
    September 21, 2005





8-K/A






10
.2


9/23/2005 81




---



##### Table of Contents



Incorporated by ReferenceFiled





Period





FilingExhibit


Description


Herewith


Form


Ending


Exhibit


Date10
.40


Agreement and Plan of Merger dated
    August 8, 2006, by and among DDi Corp., DDi Acquisition
    Corp., Sovereign Circuits, Inc., Beverly John Berryman, Hugh
    David Turner and Carole Fahy, as trustees of a settlement dated
    December  21, 1965 and made between Herbert Anthony
    Cann, Kenneth Robert Woodford and John Michael Geoffrey Andrews
    and a Deed of Appointment dated October 6, 1976 by Kenneth
    Robert Woodford and Michael Geoffrey Andrews, together a trust
    formed under English law, Beverly John Berryman, Hugh David
    Turner and Carole Fahy, as trustees of a settlement dated
    September 10, 1985 and made between Tonio Christian Hoch as
    settlor and Bermuda Trust Company Limited as original
    trustee, which is a trust established under Bermuda law and
    known as the Hoch Settlement, and Robert Q. Buss, an
    individual





8-K






2
.1


8/30/200610
.41


Asset Purchase Agreement dated
    August  8, 2006, by and among Dynamic Details
    Incorporated, Silicon Valley, solely for the purpose of
    guaranteeing the performance of all obligations of Dynamic
    Details Incorporated, Silicon Valley under Section 8.2 of
    the Asset Purchase Agreement, Dynamic Details, Incorporated,
    VMS, LLC and, solely for the purpose of guaranteeing the
    performance of all obligations of VMS, LLC under
    Section 8.3 of the Asset Purchase Agreement, VERITEK
    Manufacturing Services, LLC





8-K






2
.2


8/30/200610
.42


Letter Agreement dated
    September 29, 2006 by and among Dynamic Details
    Incorporated, Silicon Valley, Dynamic Details, Incorporated,
    VMS, LLC and VERITEK Manufacturing Services, LLC





8-K






10
.1


10/5/200610
.43


Open End Mortgage dated May 10,
    2006 between Sovereign Circuits, Inc. and Key Bank National
    Association


X14
.1


Code of Business Conduct and Ethics





8-K






14
.1


3/6/200621
.1


Subsidiaries of DDi Corp.


X23
.1


Consent of PricewaterhouseCoopers
    LLP


X31
.1


Certification of Chief Executive
    Officer of DDi Corp., Pursuant to
    Rule 13a-14
    of the Securities Exchange Act


X31
.2


Certification of Chief Financial
    Officer of DDi Corp., Pursuant to
    Rule 13a-14
    of the Securities Exchange Act


X32
.1


Certification of Chief Executive
    Officer of DDi Corp., Pursuant to Section 906 of the
    Sarbanes-Oxley Act of 2002


X32
.2


Certification of Chief Financial
    Officer of DDi Corp., Pursuant to Section 906 of the
    Sarbanes-Oxley Act of 2002


X     *
    
    Indicates a management contract or compensatory plan or
    arrangement 82