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

                                   FORM 10-QSB

(MARK ONE)
[X]      QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES
                              EXCHANGE ACT OF 1934

                  FOR THE QUARTERLY PERIOD ENDED: JUNE 30, 2006

[ ]      TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES
                              EXCHANGE ACT OF 1934

                        For the transition period from to

                        Commission file number 000-51206

                            Diamond Ranch Foods, Ltd.
        (Exact name of small business issuer as specified in its charter)

                   NEVADA                             20-1389815
        (State or other jurisdiction of (I.R.S. Employer Identification No.)
         Incorporation or organization)

                                555 West Street
                               New York, NY 10014
                    (Address of principal executive offices)

                                 (212) 807-7600
                           (Issuer's telephone number)

[X]      Check whether the issuer (1) filed all reports  required to be filed by
         Section 13 or 15(d) of the  Exchange  Act during the past 12 months (or
         for such shorter  period that the  registrant was required to file such
         reports),  and (2) has been subject to such filing requirements for the
         past 90 days.

                      APPLICABLE ONLY TO CORPORATE ISSUERS

         As of June 30,  2006,  there  were  58,846,150  shares of the  Issuer's
common stock, par value $0.0001, issued.

         Transitional  Small Business  Disclosure Format (check one). Yes ; No X



<PAGE>


                            DIAMOND RANCH FOODS, LTD
                                 BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                                   (Unaudited)
                                                                                      June 30,           March 31,
ASSETS:                                                                                 2006               2006
                                                                                   ---------------    ---------------
Current Assets:
<S>                                                                                     <C>                <C>
     Inventory                                                                          $ 223,350          $ 169,827
     Prepaid Expenses                                                                     125,000            140,000
     Accounts Receivable - Net                                                          1,492,123          1,654,394
                                                                                   ---------------    ---------------

          Total Current Assets                                                          1,840,474          1,964,221
                                                                                   ---------------    ---------------

Fixed Assets - Net                                                                        288,669            308,669
                                                                                   ---------------    ---------------
Other Assets:
     Cash Exchange                                                                              -              6,500
     Deposits                                                                              11,800             11,800
                                                                                   ---------------    ---------------

          Total Other Assets                                                               11,800             18,300
                                                                                   ---------------    ---------------

     Total Assets                                                                     $ 2,140,943        $ 2,291,190
                                                                                   ===============    ===============

LIABILITIES & STOCKHOLDERS' EQUITY
Current Liabilities:
     Bank Overdraft                                                                     $ 178,283          $ 211,915
     Accounts Payable and Accrued Expenses                                              1,177,586          1,518,979
     Factoring Line of Credit                                                           1,278,400          1,406,645
     Exchange Note                                                                        169,500            240,000
     Notes Payable Brooks Provisions                                                       88,120            107,303
     Capital Lease Obligation                                                              10,182              9,958
                                                                                   ---------------    ---------------

          Total Current Liabilities                                                     2,902,071          3,494,800
                                                                                   ---------------    ---------------

Non-current Liabilities:
     Capital Lease Obligation                                                              15,597             18,228
     Shareholder Loans                                                                    971,000            971,000
     Interest Payable                                                                      71,853             58,925
                                                                                   ---------------    ---------------
          Total Long Term Liabilities                                                   1,058,449          1,048,153
                                                                                   ---------------    ---------------

TOTAL LIABILITIES                                                                       3,960,520          4,542,953
                                                                                   ---------------    ---------------

STOCKHOLDERS' EQUITY (DEFICIT)
     Preferred Stock, par value $.0001, 20,000,000 shares
          Authorized, 0 shares issued at June 30 and March 31, 2006                             -                  -
     Common Stock, par value $.0001, 500,000,000 shares
          Authorized, 58,846,150 and 57,696,150 shares issued at
          June 30 and March 31, 2006                                                        5,884              5,769
     Additional Paid-In Capital                                                         1,301,519          1,116,634
     Related Party Loans                                                                  630,590            492,100
     Retained Earnings (Deficit)                                                      (3,757,571)        (3,866,266)
                                                                                   ---------------    ---------------

          Total Stockholders' Equity                                                  (1,819,577)        (2,251,763)
                                                                                   ---------------    ---------------

          Total Liabilities and Stockholders' Equity                                  $ 2,140,943        $ 2,291,190
                                                                                   ===============    ===============
</TABLE>

   The accompanying notes are an integral part of these financial statements.


<PAGE>

                            DIAMOND RANCH FOODS, LTD
                            STATEMENTS OF OPERATIONS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                         For the Three Months Ended
                                                                                  June 30,
                                                                         2006                 2005
                                                                   -----------------    ------------------
<S>                                                                     <C>                   <C>
        Revenues                                                        $ 2,747,447           $ 3,558,356
        Cost of Goods Sold                                                2,139,182             3,061,232
                                                                   -----------------    ------------------
        Gross Profit                                                        608,265               497,124

        Expenses:
             Payroll                                                        157,820               284,425
             Factoring Fee                                                   78,504                75,348
             Rent Expense                                                    57,314                51,443
             Depreciation and Amortization                                   20,000                21,901
             General and Administrative                                      94,876               151,855
             Sales Commission                                                72,551                75,258
                                                                   -----------------    ------------------

              Total Expenses                                                481,064               660,230
                                                                   -----------------    ------------------

        Operating Income (Loss)                                             127,201             (163,106)

           Interest Expense                                                (18,501)              (15,014)

             Net Profit (Loss)                                            $ 108,701           $ (178,120)
                                                                   =================    ==================

        Basic & Diluted Income (Loss) Per Share                     $          0.00      $         (0.00)
                                                                   =================    ==================

        Weighted Average Shares Outstanding                            58,672,261           56,686,983
                                                                   =================    ==================
</TABLE>










   The accompanying notes are an integral part of these financial statements.


<PAGE>



                            DIAMOND RANCH FOODS, LTD
                            STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                        For the three months ended
                                                                                                 June 30,
                                                                                         2006                2005
                                                                                    ----------------    ----------------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                                                  <C>                 <C>
Net Profit (Loss)                                                                    $     108,701       $    (178,120)
Adjustments to reconcile net loss to net cash
Provided by operating activities
Depreciation and Amortization                                                               20,000              21,901
(Increase) Decrease in Inventory                                                           (53,523)            (50,147)
(Increase) Decrease in Accounts Receivable                                                 162,381            (300,191)
(Increase) Decrease in Deposits and Prepaids                                                21,500                  -
Stock Issued in Exchange for Services                                                            -             12,750
(Decrease) Increase in Accounts Payable and Accrued Expenses                              (341,509)            60,393
(Decrease) Increase in Interest Payable                                                     12,928             10,386
                                                                                    ----------------    ----------------
      Net Cash Used in Operating Activities                                                (69,522)           (423,028)
                                                                                    ----------------    ----------------

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchase of Equipment                                                                            -              (5,568)
                                                                                    ----------------    ----------------
      Net Cash Used in Investing Activities                                                      -              (5,568)
                                                                                    ----------------    ----------------

CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on Capital Lease Obligation                                                         (2,408)            (2,204)
Factoring Payable                                                                          (128,245)           171,566
Shareholder and Related Party Loans                                                         138,490            274,000
Payments on Notes Payable                                                                   (89,683)                 -
Stock Issued in Exchange for Cash                                                           185,000                  -
Bank Overdraft                                                                              (33,632)           (14,766)
                                                                                    ----------------    ----------------
      Net Cash Provided by Financing Activities                                              69,522            428,596
                                                                                    ----------------    ----------------

Net (Decrease) Increase in Cash and Cash Equivalents                                              -                  -
Cash and Cash Equivalents at Beginning of Period                                                  -                  -
                                                                                    ----------------    ----------------
Cash and Cash Equivalents at End of Period                                          $             -     $            -
                                                                                    ================    ================

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the year for:
  Interest                                                                          $         5,573     $            -

SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
Stock issued in asset acquisition agreement                                         $             -     $        25,950
Stock issued for services                                                           $             -     $           600
</TABLE>

   The accompanying notes are an integral part of these financial statements.


<PAGE>


                            DIAMOND RANCH FOODS, LTD
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                FOR THE THREE MONTHS ENDED JUNE 30, 2006 AND 2005
                                   (Unaudited)


NOTE 1 - NATURE OF OPERATIONS AND GOING CONCERN

         The Company's consolidated financial statements have been prepared on a
going  concern  basis,   which   contemplates  the  realization  of  assets  and
satisfaction of liabilities in the normal course of business.  The  consolidated
financial  statements do not include any adjustment  relating to  recoverability
and  classification  of recorded amounts of assets and liabilities that might be
necessary should the Company be unable to continue as a going concern.

         The Company has incurred a net profit of $108,701 for the quarter ended
June 30, 2006 and a net loss of $178,120  for the quarter  ended June 30,  2005.
The Company used cash of $69,522 and $423,028 in  operating  activities  for the
quarters  ended June 30,  2006 and 2005,  respectively.  As of June 30, 2006 and
2005, the Company had a working  capital  deficit of $1,692,187 and  $2,022,679,
respectively.  These results show  substantial  improvement  as to the Company's
ability to continue as a going concern.

         The  Company's  continued  existence is  dependent  upon its ability to
continue to execute its operating plan and to obtain  additional  debt or equity
financing. There can be no assurance the necessary debt or equity financing will
be available, or will be available on terms acceptable to the Company.

         Management  plans include  acquiring  additional  meat  processing  and
distribution  operations and obtaining  additional  financing to fund payment of
obligations  and to provide working capital for operations and to finance future
growth.  The  Company is actively  pursuing  alternative  financing  and has had
discussions  with various third parties,  although no firm commitments have been
obtained. In the interim,  shareholders of the Company have committed to meeting
its  operating  expenses.   Management  believes  these  efforts  will  generate
sufficient  cash flows from future  operations to pay the Company's  obligations
and realize other assets.  There is no assurance any of these  transactions will
occur.

Organization and Basis of Presentation

         The Company was incorporated  under the laws of the State of Florida on
November 30, 1942 under the name Jerry's Inc. The Company  ceased all  operating
activities  during  the  period  from  January  1, 1998 to March 8, 2004 and was
considered  dormant.  On March 8, 2004 the Company  changes its  domicile to the
State of Nevada.  On March 30,  2004,  the  company  changed its name to Diamond
Ranch Foods, Ltd.

         On May 1, 2004,  the  shareholders  of the Diamond  Ranch  Foods,  Ltd.
(formerly  Jerry's Inc.)  completed a stock  purchase  agreement with MBC Foods,
Inc., a Nevada  corporation.  The merger was accounted for as a reverse  merger,
with MBC Foods,  Inc.  being  treated  as the  acquiring  entity  for  financial
reporting  purposes.  In  connection  with this  merger,  Diamond  Ranch  Foods,
Ltd.(formerly  Jerry's  Inc.) issued  31,607,650  shares of common stock for the
acquisition of MBC Foods,  Inc. which was recorded as a reverse merger and shown
on the Statement of Stockholders Equity as a net issuance of 25,692,501 shares.

         For financial  reporting  purposes,  MBC Foods, Inc. was considered the
new reporting entity.

Nature of Business

         The Company is a meat  processing and  distribution  company located in
the  historic  Gansevoort  "meatpacking  district" in lower  Manhattan,  NY. The
Companies operations consist of packing, processing,  labeling, and distributing
products to a customer base, including, but not limited to; in-home food service
businesses,  retailers, hotels, restaurants, and institutions, deli and catering
operators, and industry suppliers.


<PAGE>

                            DIAMOND RANCH FOODS, LTD
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                FOR THE THREE MONTHS ENDED JUNE 30, 2006 AND 2005
                                   (UNAUDITED)
                                   (Continued)

NOTE 2 - SUMMARY OF ACCOUNTING POLICIES

         This summary of accounting  policies for Diamond  Ranch Foods,  Ltd. is
presented to assist in understanding  the Company's  financial  statements.  The
accounting policies conform to generally accepted accounting principles and have
been consistently applied in the preparation of the financial statements.

Use of Estimates

         The financial  statements  are prepared in conformity  with  accounting
principles  generally accepted in the United States of America. In preparing the
financial  statements,  management is required to make estimates and assumptions
that effect the reported  amounts of assets and  liabilities  and  disclosure of
contingent  assets  and  liabilities  as of the date of the  balance  sheet  and
statement of operations for the year then ended.  Actual results may differ from
these estimates. Estimates are used when accounting for allowance for bad debts,
collect  ability of  accounts  receivable,  amounts  due to  service  providers,
depreciation and litigation contingencies, among others.

Cash and Cash Equivalents

         For purposes of the statement of cash flows, the Company  considers all
highly liquid debt instruments purchased with a maturity of three months or less
to be cash equivalents to the extent the funds are not being held for investment
purposes.

Revenue recognition

         The Company derives its revenue from the sale of meat products, and the
revenue is recognized when the product is delivered to the customer.

Concentration of Credit Risk

         The Company has no  significant  off-balance  sheet  concentrations  of
credit  risk such as foreign  exchange  contracts,  options  contracts  or other
foreign hedging arrangements.

Fixed Assets

         Fixed assets are recorded at cost.  Major renewals and improvements are
capitalized,  while  maintenance  and repairs are expensed when incurred.  As of
June 30, 2006, depreciation is computed as follows:

<TABLE>
<CAPTION>
                                                                                Accumulated
                               Cost              Method           Life         Depreciation             Net
                         ------------------ ----------------- ------------- -------------------- -------------------
<S>                      <C>                <C>               <C>           <C>                  <C>
Leasehold Improvements            $269,906    Strait Line       10 Years               $104,018            $165,888
Equipment                          329,311    Strait Line      3-5 Years                206,530             122,781
                         ------------------                                 -------------------- -------------------
                                  $599,217                                             $310,548            $288,669
                         ==================                                 ==================== ===================

         As of March 31, 2006, depreciation is computed as follows:
                                                                                Accumulated
                               Cost              Method           Life         Depreciation             Net
                         ------------------ ----------------- ------------- -------------------- -------------------
Leasehold Improvements            $269,906    Strait Line       10 Years                $97,271            $172,635
Office Equipment                   329,311    Strait Line      3-5 Years                193,277             136,034
                         ------------------                                 -------------------- -------------------
                                  $599,217                                             $290,548            $308,669
                         ==================                                 ==================== ===================
</TABLE>

Total  depreciation  expense for the  quarters  ended June 31, 2006 and 2005 was
$20,000 and $21,901.



<PAGE>


                            DIAMOND RANCH FOODS, LTD
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                FOR THE THREE MONTHS ENDED JUNE 30, 2006 AND 2005
                                   (UNAUDITED)
                                   (Continued)
Earnings per Share

         Basic gain or loss per share has been computed by dividing the loss for
the period applicable to the common  stockholders by the weighted average number
of common shares outstanding during the years. There are no dilutive outstanding
common stock equivalents as of June 30, 2006 and 2005.

Income Taxes

         The Company  accounts  for income  taxes under the  provisions  of SFAS
No.109,  "Accounting  for Income  Taxes." SFAS No.109  requires  recognition  of
deferred  income tax assets and  liabilities  for the expected future income tax
consequences,  based on enacted tax laws, of temporary  differences  between the
financial reporting and tax bases of assets and liabilities.

Comprehensive Income

         The Company does not have any accumulated  comprehensive  income items,
and therefore, is not required to report comprehensive income.

Inventory

         Inventory  consists of  finished  meat  products,  and is valued at the
lower of cost,  determined on the first-in,  first-out  basis (FIFO),  or market
value.

Advertising

         Advertising costs are expensed as incurred.

Recent Accounting Pronouncements

         In June 2001, the Financial  Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") 141, BUSINESS COMBINATIONS,
and SFAS 142,  GOODWILL AND  INTANGIBLE  ASSETS.  SFAS 141 is effective  for all
business  combinations  completed after June 30, 2001. SFAS 142 is effective for
fiscal years beginning after December 15, 2001;  however,  certain provisions of
this Statement apply to goodwill and other  intangible  assets acquired  between
July 1, 2001 and the  effective  date of SFAS  142.  Major  provisions  of these
Statements and their effective dates for the Company are as follows:

(a)               All business  combinations  initiated after June 30, 2001 must
                  use  the  purchase  method  of  accounting.   The  pooling  of
                  interests  method  of  accounting  is  prohibited  except  for
                  transactions initiated before July 1, 2001.
(b)               Intangible  assets acquired in a business  combination must be
                  recorded   separately   from   goodwill  if  they  arise  from
                  contractual  or other legal rights or are  separable  from the
                  acquired entity and can be sold, transferred, licensed, rented
                  or  exchanged,  either  individually  or as part of a  related
                  contract, asset or liability.
(c)               Goodwill,  as well as intangible assets with indefinite lives,
                  acquired after June 30, 2001, will not be amortized.
(d)               Effective January 1, 2002, all previously  recognized goodwill
                  and intangible  assets with indefinite lives will no longer be
                  subject to amortization.
(e)               Effective January 1, 2002, goodwill and intangible assets with
                  indefinite  lives will be tested for  impairment  annually and
                  whenever there is an impairment indicator.
(f)               Effective  January 1,  2002,  the  useful  life of  intangible
                  assets  with finite  lives will be  evaluated  each  reporting
                  period to determine whether events and circumstances warrant a
                  revision to the remaining period of amortization.
(g)               All acquired  goodwill must be assigned to reporting units for
                  purposes of impairment testing and segment reporting.


<PAGE>


                            DIAMOND RANCH FOODS, LTD
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                FOR THE THREE MONTHS ENDED JUNE 30, 2006 AND 2005
                                   (UNAUDITED)
                                   (Continued)

         On April 1, 2003,  the Company  adopted SFAS 142 and as  required,  the
useful lives of the customer lists were evaluated and the remaining amortization
periods  adjusted  accordingly.  Prior to the  adoption of SFAS 142, the Company
amortized  the customer  lists over an estimated  useful life of fifteen  years.
Since the adoption of SFAS 142, the Company amortizes the customer lists over an
estimated useful life of five years.

NOTE 3 - INCOME TAXES

         As of June 30, 2006, the Company had a net operating loss carry-forward
for income tax  reporting  purposes  of  approximately  $3,719,336  to be offset
against future taxable income through 2025. Current tax laws limit the amount of
loss  available to be offset  against  future  taxable income when a substantial
change in ownership  occurs.  Therefore,  the amount  available to offset future
taxable income may be limited. No tax benefit has been reported in the financial
statements,  because the Company  believes  there is a 50% or greater chance the
carry-forwards  will expire unused.  Accordingly,  the potential tax benefits of
the loss carry-forwards are offset by a valuation allowance of the same amount.

                                               2006                2005
                                         ------------------  ------------------
      Net Operating Losses                         118,644           (178,120)
      Depreciation                                  20,000            (21,901)
      Valuation Allowance                         138,644            (200,021)
                                         ------------------  ------------------
                                                         -                   -
                                         ==================  ==================

         The provision for income taxes differs from the amount  computed  using
the federal US statutory income tax rate as follows:

<TABLE>
<CAPTION>
                                                        2006                2005
                                                  ------------------  ------------------
<S>                                                       <C>                 <C>
      Provision (Benefit) at US Statutory Rate            (256,221)           (516,840)
      Depreciation                                         (24,435)             (5,017)
      Increase (Decrease) in Valuation Allowance            280,656             521,857
                                                  ------------------  ------------------
                                                                  -                   -
                                                  ==================  ==================
</TABLE>

The Company evaluates its valuation  allowance  requirements  based on projected
future operations.  When circumstances change and cause a change in management's
judgment  about the  recoverability  of deferred  tax assets,  the impact of the
change on the valuation is reflected in current income.

NOTE 4 - OPERATING LEASE COMMITMENTS

         The  Companies  operating  facility  is a New York City owned  property
consisting  of 7,000 sq. ft. The  Company  leases the space on a  month-to-month
basis.


1
1
Total lease  expense for the  quarters  ended June 30, 2006 and 2005 was $20,576
and $20,466.

NOTE 5 - CAPITAL LEASE COMMITMENTS

         The  Company  has  entered  into  capital  leases for the  purchase  of
equipment. The future minimum lease payments are as follows:
                                      Year               Lease Payment
                               -------------------    --------------------
                               2006                                $9,959
                               2007                                10,881
                               2008                                 7,346
                               2009                                     -
                               2010                                     -
                                                      --------------------
                               Total                              $28,186
                                                      ====================


<PAGE>


                            DIAMOND RANCH FOODS, LTD
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                FOR THE THREE MONTHS ENDED JUNE 30, 2006 AND 2005
                                   (UNAUDITED)
                                   (Continued)
NOTE 6 - NOTES PAYABLE

Exchange Note

         As of June 30, 2006 the Company had an outstanding short-term loan with
American  Crest  Capital  in  the  amount  of  $169,500  and  is  shown  on  the
accompanying balance sheet under Exchange Note in the current liability section.
This note is due on demand and carries a 0% interest rate.

         As of August 26, 2005 the  Company  agreed to convert  indebtedness  of
$155,303.07 to Brooks Provisions Inc. into a Note Payable. The Company agreed to
pay the principal  indebtedness,  together with interest accruing at the rate of
10% per annum,  in equal  payments of $2,146.04  commencing on September 8, 2005
and continuing weekly for an additional seventy-seven weeks. The Company has the
right to  prepay  the note at any  time.  As of June  30,  2006 the  outstanding
balance of the note is $88,120.

Factoring Line of Credit

         On November  25,  2002,  the Company  entered  into an  agreement  with
Platinum  Funding Corp.  where in Platinum Funding will purchase the majority of
the Company's account receivable.  Under the terms of the agreement, the Company
would receive 75 percent of the purchase  price up front and 25 percent would be
held in reserves until the receivables are collected.  Platinum funding extended
up to $ 750,000 of credit.

         On November  17,  2003,  the Company  entered  into an  agreement  with
American Crest  Capital,  Inc. where in American Crest Capital will purchase the
majority of the Company's account receivable.  Under the terms of the agreement,
the  Company  would  receive 90 percent  of the  purchase  price up front and 10
percent would be held in reserves  until the  receivables  are  collected.  This
agreement  shall last until November 30, 2004. The agreement  shall continue for
successive terms unless written notice of cancellation is received 60 days prior
to completion of the term.  American Crest Capital has extended up to $1,665,000
of credit.

         As of January 12, 2005, the Company receives 94 percent of the purchase
price up front and 6  percent  is held in  reserve  until  the  receivables  are
collected.

         Under the terms of the agreement American Crest Capital shall receive a
discount for purchasing the accounts receivable.  The discount for the first ten
million dollars in annual volume is as follows
         1.5% if payment of an Accounts  Receivable  is  collected up to 30 days
         3.0% if payment of an Accounts  Receivable is collected  between 31 and
         60 days 4.5% if payment of an Accounts  Receivable is collected between
         61 and 90 days

The      discount  for annual  volume  between  ten  million  dollars to fifteen
         million is as follows:  1.25% if payment of an Accounts  Receivable  is
         collected up to 30 days 2.50% if payment of an Accounts  Receivable  is
         collected  between  31 and 60 days  3.75%  if  payment  of an  Accounts
         Receivable is collected between 61 and 90 days

 The     discount for annual volume in excess of fifteen  million is as follows:
         1.00% if payment of an Accounts  Receivable  is collected up to 30 days
         2.00% if payment of an Accounts  Receivable is collected between 31 and
         60 days 3.00% if payment of an Accounts Receivable is collected between
         61 and 90 days

Full recourse at 5% implemented if an accounts receivable is not collected in 90
days.

         These  factoring  lines  of  credit  have  been  treated  as a  secured
financing  arrangement.  As of June 30, 2006 and 2005 the  company had  factored
receivables in the amount of $1,278,400 and  $1,392,659  respectively.  Discount
provided during  factoring of the accounts  receivable have been expensed on the
accompanying Statements of Operations as Factoring Fees.


<PAGE>


                            DIAMOND RANCH FOODS, LTD
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                FOR THE THREE MONTHS ENDED JUNE 30, 2006 AND 2005
                                   (UNAUDITED)
                                   (Continued)

Convertible Debenture

         On March 19,  2002,  the  Company  issued a  convertible  debenture  in
exchange for value received.  The $150,000 is due and payable, with 6% interest,
on April 1, 2004,  unless  sooner  converted  into shares of common  stock.  The
debenture is convertible into 400,000 shares of common stock of the Company.  As
of March 31, 2005 there was no balance owed on the convertible debenture.

NOTE 7 - RELATED PARTY TRANSACTIONS

         As of June 30, 2006,  shareholders  have advanced the Company $630,590,
payable on demand and not carrying an interest rate.  This  transaction has been
recorded in the accompanying financial statements as Related Party Loans.

         As of June 30, 2006 the Company has an  outstanding  note  payable to a
shareholder  in the amount of  $971,000.  This loan  carries with it an interest
rate of 5% and no payments of interest or  principal  are due until the due date
of  September  30, 2009.  As of June 30, 2006  interest on this loan is $71,853.
This transaction has been recorded in the accompanying  financial  statements as
Long Term Shareholder Loans.

NOTE 8 - MERGER

         On May 1, 2004,  the  shareholders  of the Diamond  Ranch  Foods,  Ltd.
(formerly  Jerry's Inc.)  completed a stock  purchase  agreement with MBC Foods,
Inc., a Nevada corporation. The merger was accounted for as a reverse -- merger,
with MBC Foods,  Inc.  being  treated  as the  acquiring  entity  for  financial
reporting purposes.  In connection with this merger,  Diamond Ranch Foods, Ltd.,
(formerly  Jerry's  Inc.)  issued  31,607,650  shares  of  common  stock for the
acquisition  of MBC Foods,  Inc. This was recorded as a reverse merger and shown
on the Statement of Stockholders Equity as a net issuance of 25,692,501 shares.

         For financial  reporting  purposes,  MBC Foods, Inc. was considered the
new reporting entity.


         The following table  summarizes the estimated fair values of the assets
acquired and liabilities assumed at the date of acquisition.

                                                   May 1, 2004
                                              ----------------------
Assets:                                                   $       -
                                              ======================

Liabilities:                                              $       -

Equity:
     Common Stock                                             2,569
     Paid-In Capital                                          5,333
     Retained Deficit                                             -
                                              ----------------------
          Total Stockholders Equity                               -
                                              ----------------------

          Total Liabilities and Equity                    $       -
                                              ======================

         The aggregate purchase price was 25,692,501 common shares.



<PAGE>


                            DIAMOND RANCH FOODS, LTD
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                FOR THE THREE MONTHS ENDED JUNE 30, 2006 AND 2005
                                   (UNAUDITED)
                                   (Continued)

NOTE 9 - STOCK TRANSACTIONS

         On June 3, 2004, the Company issued  24,000,000  shares of common stock
from a  private  sale of  securities  under the  provisions  of  Section  504 of
Regulation  D for  cash at  $0.00025  per  share.  The sale was made to ten (10)
individuals  who  were  Accredited  Investors  pursuant  to Rule  501(a)  of the
Regulation

         On June 24, 2004 The Company  issued 600,000 shares of common stock for
$0.00025 per share in return for investor relation services, valued at the price
of services rendered.

         On July 8, 2004 the Company  issued  200,000 shares of common stock for
$0.00025 per share in return for an independent  research report,  valued at the
price of services rendered.

         On September 30, 2004 the Company issued 200,000 shares of common stock
in exchange for the  customer  lists from Jack  Steiger  Sales.  These shares of
stock were valued at $0.39 per share.

         On April 14, 2005 the Company issued 75,000 shares of restricted common
stock in exchange  for the  settlement  of an account  payable.  These shares of
stock were valued at $0.17 per share.

         On April 17, 2006 the Company  issued  1,000,000  shares of  restricted
common  stock in  exchange  of  $165,000.  These  shares of stock were valued at
$0.165 per share.

         On April 17,  2006 the  Company  issued  150,000  shares of  restricted
common stock in exchange of $20,000. These shares of stock were valued at $0.133
per share.


NOTE 10 - GRANT INCOME

                  During 2003 the Company received revenue from the WTC Business
Recovery Grant Program,  which provided  grants of between 3 and 25 days in lost
revenue to  businesses  with fewer than 500  employees  located on or below 14th
Street on September 11, 2001. As this grant was for lost revenues experienced as
a result of the September 11, 2001 tragedy,  the grant revenue was recognized in
the accompanying statement of operations in the period that it was received.


NOTE 11 - SALE OF SUBSIDIARY

         On May 24, 2004 the Company disposed of its subsidiary, MBC Foods, Inc.
in exchange for  retirement  of  convertable  debt in the amount of $150,000 and
Interest of $19,407.  On the date of the disposal the  subsidiary had no assets,
liabilities  or  operations.  The  Companies  carrying  value of the  subsidiary
corporation was $7,902. This sale of MBC Foods resulted in a gain on sale in the
amount of $161,505 that has been accounted for in the accompanying  Statement of
Operations.








<PAGE>


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

This  statement  includes  projections  of future  results and "forward  looking
statements" as that term is defined in Section 27A of the Securities Act of 1933
as amended (the "Securities  Act"),  and Section 21E of the Securities  Exchange
Act of 1934 as amended (the "Exchange Act"). All statements that are included in
this Quarterly  Report,  other than  statements of historical  fact, are forward
looking statements. Although management believes that the expectations reflected
in these forward  looking  statements are  reasonable,  it can give no assurance
that such expectations will prove to have been correct.

SALES

Our  revenues  from  operations  for the three  months  ended June 30, 2006 were
$2,747,447, and were generated from the sale of our meat products and services.

The company  continues to work on a daily basis to bring in new product,  either
by the request of the customer, or by management's  initiative,  to capture more
of our existing customers'  business.  Using a personal approach with customers,
our  salesmen  work to satisfy  their  specific  needs as well as their  general
product requirements.  We intend to grow at a steady and proportionate rate, and
therefore,  would project that the coming quarter's growth increase would be the
same ratio of 80% existing customer vs. 20% new customer. To continue operations
in a controlled  and  manageable  fashion,  we seek to add  approximately  5 new
customers per week, or approximately 20 customers per month.

COST OF SALES AND GROSS PROFIT

Our cost of sales for the  three  months  ended  June 30,  2006 was  $2,139,182,
generating a gross profit of $608,265, or 22.14%.

Although  revenues  decreased by 22.8% in  comparison  to the three months ended
June 2005,  this  decrease  is a direct  result of the  company's  April 1, 2006
decision to eliminate the low profit jobber trade.

As a result our gross  profit has  increased  from 13.97% to 22.14%  between the
three months ended June 30, 2006 and 2005.  Management  expects gross profits to
increase  as revenues  increase  and the cost of sales  decrease.  A decrease in
sales costs could be attributed to many factors,  including,  but not limited to
decrease  in  food  costs  and  decreased   product  costs  due  to  outsourcing
manufactured products and various conditions outside the control of the Company.

For  the  quarter  ended  June  30,  2006,  we have  increased  our  margins  by
outsourcing  manufactured  products and  eliminating  low margin sales to jobber
trade as compared to those in fiscal year ended March 31, 2006. We will continue
to grow  through  increased  sales  efforts  made by our  management  team using
standard marketing procedures, such as in-person sales visits and demonstrations
and "warm" referrals through existing clientele.  We acquired the client list of
Steiger  Meats in September  2004 in exchange for 200,000  shares of  restricted
common  stock,  recorded  at $0.39 per  share,  adding  approximately  40-50 new
customers to our  existing  roster and  representing  less than 10% of our gross

<PAGE>

annual sales.  The intangible asset created by this acquisition had been written
off in the  third  quarter  ended  December  31,  2004  as is  reflected  in our
Statement  of  Operations  for the  fiscal  year  ended  March 31,  2005.  These
customers have continued  their  patronage with our company  through the quarter
ended June 30, 2006 and have increased  their order sizes to include  additional
items we offer. Increases in revenue can also be attributed to existing clients,
who  are  responsible  for  managing  multiple  hotel  and  restaurant   chains,
introducing our products to additional locations. Our second largest client, who
is  responsible  for  approximately  3.1% of our gross sales,  manages almost 20
separate  accounts that are current  users of our  products.  A portion of these
locations  became new customers in the second quarter ended  September 30, 2004,
allowing for growth in our revenues of approximately  34%, compared to the prior
year's second quarter  revenue.  As locations are added, and products ordered by
existing clients increase, our revenues increase, with no additional operational
expense because additional  business is conducted within the same facilities and
larger deliveries are being made to existing stops.

Expanding  the  business  will not  impact the  benefit of being a smaller  meat
processor and distributor.  Increasing our customer base will not categorize our
operation as a larger meat  processor and  distributor.  We will be able to give
the same advantages and price  competitiveness to our clients with the influx of
new  customers.  We intend to  control  and  manage  growth as it occurs  and to
maintain  operations  as  they  currently  exist.  Should  growth  exponentially
increase,  we will hire more personnel,  or seek a larger facility.  The revenue
increase from new customers would allow for us to pay for this expansion.

EXPENSES

Our Payroll  expenses  for the three  months  ended June 30, 2006 was  $157,820,
which was a  decrease  of  $126,605  over the amount of  $284,425  for the three
months  ended  June 30,  2005.  This  decrease  was mostly  attributable  to the
decrease in size of our workforce due to the outsourcing of our manufacturing.

Our Rent  expenses for the three  months ended June 30, 2006 was $57,314,  which
was an increase of $5,871 over the amount of $51,443 for the three  months ended
June 30, 2005.  This  increase was mostly  attributable  to the increase in rent
amount in connection with the rental of equipment and trucks.

Our Sales Commission for the three months ended June 30, 2006 was $72,551, which
was a decrease  of $2,707  over the amount for the three  months  ended June 30,
2005.  This decrease is  attributable to the lower revenues for the three months
ended June 30, 2006.

LIQUIDITY AND CAPITAL RESOURCES

For the Three-Months  ended March 31, 2006; the Company's cash used in operating
activities  totaled  $69,522,  and cash  provided by  financing  activities  was
$69,522.

For the Three-Months  ended March 31, 2005; the Company's cash used in operating
activities totaled $423,900,  the cash used in investing activity was $5,568 and
cash provided by financing activities was $428,596.

PLAN OF OPERATION

For the next  twelve  months  we plan to  operate  the  business  using  our new
methods. We will continue to outsource  manufactured  products. We will continue

<PAGE>

to increase sales using  commission-based  salesmen.  We are able to satisfy our
cash requirements,  material commitments, and applicable filing fees anticipated
under our  obligations  of the  Exchange  Act.  For our company to continue as a
fully-reporting  entity, we estimate our annual accounting and filing fees to be
$35,000,  and our legal  fees to be  $15,000,  which will also be  satisfied  by
existing  operations.  Management is committed to supplement any cash shortfall,
or relinquish their salaries, or a portion thereof, if cash flow from operations
does not cover our cash requirements.  Certain  shareholders of the Company have
also committed to meet our operating expenses if needed.

We anticipate  incurring material research and development costs during the next
12 months,  which we will pay for by selling  our common  stock.  We  anticipate
spending funds on research and  development to further develop the Diamond Ranch
Foods brand name, to include new packaging and marketing materials. We also plan
to establish a new product line for distribution of pre-cooked  poultry and meat
items.  Such a product  line would give  current and new  customers  access to a
fully-cooked  product for those  businesses  that do not have the  facilities to
prepare  raw,  uncooked  materials.  Additionally,  we  do  not  anticipate  the
acquisition or sale of material property,  plant or equipment during the next 12
months.

Management  continuously  evaluates  operating  practices  and is  ready to make
modifications to our present-day operations when necessary. We feel our attempts
to be more efficient have proven viable since our profits have increased for the
three  months  ended June 30, 2006 as  compared  to losses for the three  months
ended June 30, 2005.  With a continuous  increase in revenues and the  continued
implementation of stringent purchasing controls, we believe an increase in gross
profit will occur,  leading to increased net profits.  The  Company's  long-term
existence is  dependent  upon our ability to execute our  operating  plan and to
obtain  additional  debt or equity  financing  to fund  payment of  obligations,
provide working capital for operations.  There can be no assurance the necessary
debt or  equity  financing  will be  available,  or will be  available  on terms
acceptable to the Company.

We intend  to expand  our  business  through  acquisitions  of  additional  meat
distribution operations, but would require obtaining debt or equity financing to
finance  this future  growth as is  indicated  in our  auditor's  going  concern
opinion.  In  preparation  for  such  expansion,  we  have  engaged  in  several
substantive  discussions with prospective  equity  investors.  To date, no terms
have been finalized or contracts signed, and although there is no guarantee,  we
anticipate  finalizing favorable financing terms for our business to continue as
a going concern.

SALES AND COLLECTION PROCEDURES

We retained the services of American  Crest  Capital (ACC) to act as our invoice
factoring company. They fully manage our sales ledger and provide us with credit
control and collection services of all our outstanding debts. We send ACC all of
our sales  invoices  and receive a 94% cash advance of the invoice  amount.  The
balance,  less  ACC's  service  fee,  is paid when the  customer  makes  payment
directly to them.

We elect to  factor  our  receivables  to  immediately  access  cash owed to our
company so it may be used to purchase the raw materials  for our products  whose
vendors require payment on receipt.  By having our cash unlocked from the unpaid
invoices, we are afforded a smoother,  more consistent cash flow, which enhances
purchasing power and provides for the accurate prediction of payment.


<PAGE>

Typically,  we'd have to wait  30-45 days to receive  payment  on  invoices  for
products  that have already been  delivered,  not  accounting  for  late-payers.
Because we offer our  customers  payment  terms,  there is a minimal time period
that must elapse prior to our reimbursement by the factoring company.  We have a
sizeable  customer  base,  we  don't  rely  on  any  few  customers  to  sustain
operations,  and our clientele does have favorable  reputations in the industry,
but we still elect not to be  dependent on timely  payments for our  receivables
since these funds need to be recycled for our next-day fresh product  purchases.
Working with an invoice factoring company  eliminates the threat of non-payment,
cash shortfalls,  and enables an increased focus on revenue generation than bill
collection.

ACQUISITIONS

We will need to raise  additional  funds  should  management  decide to  acquire
existing like-minded businesses. Certain candidates have been identified however
no  definitive  agreements  exist.  We  have  targeted  several  businesses  for
acquisition  in New York City. We would acquire 100% of the stock and operations
of these entities,  including,  without limitation,  all rights, title know-how,
assignment of property leases, equipment, furnishings,  inventories,  processes,
trade names, trademarks,  goodwill, and other assets of every nature used in the
entities' operations.

All of the  facilities  that may be acquired are  centrally  located  within the
historic  Gansevoort  market in lower Manhattan,  thus affording the company the
ability to take  advantage of the economies of scale for  delivery,  purchasing,
and other daily operating responsibilities.

If we were successful in raising funds through the sale of our common stock, and
will be able to enter into  negotiations  for the  purchase of any and/or all of
the selected  businesses,  initially no changes in day-to-day  operations in any
acquired facilities would be necessary.

No  negotiations  have taken place,  and no contracts have been entered into, to
purchase  any  such  businesses   described  herein.  We  assume  that  if  such
purchase(s) were to be completed, additional funds would be required to renovate
the existing  facilities,  as well as improve or replace machinery as prescribed
by the existing landlord or pursuant to USDA regulation.

We anticipate no significant  changes in the number of employees within the next
twelve months.

TRENDS

Management  has  perceived  a variety of recent  trends that have had a material
impact  on our  current  revenues  and our  projected  revenues  for the  coming
quarters.  Meat  consumption has dramatically  increased  overall due to dieting
habits;  most famously  known is The Atkins Diet,  as well as other diets,  that
emphasize  high-protein,  low-carbohydrate  intake.  These diets suggest  eating
meats,  including red,  instead of high  carbohydrate  foods,  and  specifically
recommend avoiding refined carbohydrates.  High protein consumption has become a
part of American  culture,  more than a societal  tendency,  in that in order to
meet increasing customer requests for low-carb type items, one of our customers,
TGI Friday's,  has become an Atkins Nutritional  Approach partner by featuring a
selection of  Atkins-approved  menu items.  We consider that the market research
conducted  by this  customer  was ample to  effectuate  such a menu  change  and
concurs with our perception that the demand for beef,  poultry,  and other meats

<PAGE>

is a continuing and upwards trend. We  substantiate  the same claims through our
own customers'  purchasing trends which are evidenced by our increased revenues.
The marketplace also indicates that poultry  consumption is rising steadily.  In
order to maximize this trend, we are expanding our pre-cooked  poultry offerings
to  all  food  providers,   as  well  as  those  without   full-service  cooking
establishments.  Aside from the lack of a cooking facility,  many purveyors seek
pre-cooked poultry for safety reasons since these products offer a significantly
low safety risk at causing  bacterial  cross-contamination.  We offer pre-cooked
items  currently,  and feel that making the  investment to market these products
under own branded  name will  increase  our revenue  due to  heightened  product
awareness and our reputation for quality-conscious production methods.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements.

ITEM 3.  CONTROLS AND PROCEDURES

Diamond Ranch Foods, Ltd. management,  including the Principal Executive Officer
and  Principal   Financial   Officer,   have  conducted  an  evaluation  of  the
effectiveness  of disclosure  controls and  procedures  pursuant to Exchange Act
Rule 13a-14(c) and 15d-14(c).  Based on that evaluation, the Principal Executive
Officer and Principal  Financial Officer concluded that the disclosure  controls
and procedures are effective in ensuring that all material  information required
to be filed in this  quarterly  report  has been made  known to them in a timely
fashion. There have been no significant changes in internal controls or in other
factors that could significantly affect internal controls subsequent to the date
the Principal  Executive Officer and Principal Financial Officer completed their
evaluation.

                           PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

None.

ITEM 2.  CHANGE IN SECURITIES AND USE OF PROCEEDS

         On April 14, 2005 the Company issued 75,000 shares of restricted common
stock in exchange for the  settlement  of an accounts  payable.  These shares of
stock were valued at $0.17 per share.

         On April 17, 2006 the Company  issued  1,000,000  shares of  restricted
common  stock in  exchange  of  $165,000.  These  shares of stock were valued at
$0.165 per share.

         On April 17,  2006 the  Company  issued  150,000  shares of  restricted
common stock in exchange of $20,000. These shares of stock were valued at $0.133
per share.


ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

None.


<PAGE>

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

None for the quarterly reporting period ended June 30, 2006.

ITEM 5.  OTHER INFORMATION

None.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 10QSB

Exhibits

Diamond Ranch Foods, Ltd. includes herewith the following exhibits:

Number   Description

31       Certification  Pursuant  to Section  302 of the  Sarbanes-Oxley  Act of
         2002.

32       Certification  Pursuant  to Section  906 of the  Sarbanes-Oxley  Act of
         2002.

Reports on Form 8-K

No filings were made during the period covered by this report.



<PAGE>



                                   SIGNATURES

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


                            Diamond Ranch Foods, Ltd.
                                  (Registrant)





DATE:     August 21, 2006             By:    /s/ Joseph Maggio
       -----------------------            --------------------------------------
Joseph Maggio, Chairman, CEO, and Director


DATE:     August 21, 2006             By:    /s/ Louis Vucci, Jr.
       -----------------------            --------------------------------------
Louis Vucci, Jr., President and Director


DATE:     August 21, 2006             By:    /s/ Philip Serlin
       -----------------------            --------------------------------------
Philip Serlin, COO and Director


DATE:     August 21, 2006             By:    /s/ William DeMarzo
       -----------------------            --------------------------------------
William DeMarzo, Chief Financial Officer