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UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

Form 10-Q

(Mark One)

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended January 31, 2009

or

[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 
For the transition period from _________________ to
_________________

Commission File Number 000-52452

DUSSAULT APPAREL
INC.(Exact name of registrant as specified in its
charter)

|Nevada                                                               | 98-0513727                       
|-------------------------------------------------------------------- | ---------------------------------
|(State or other jurisdiction of incorporation or
      organization) | (IRS Employer Identification No.)
|                                                                     |                                  
|2250 East Hastings Street, Vancouver BC                              | V5L 1V4                          
|(Address of principal executive offices)                             | (Zip Code)                       

604.569.2619(Registrants telephone number,
including area code)

N/A(Former name, former address and former
fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
[ X ] YES [ ] NO

Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated filer, or a small
reporting company. See the definitions of large accelerated filer,
accelerated filer and smaller reporting company in Rule 12b-2 of the
Exchange Act

|Large
      accelerated filer                       | [ ] | Accelerated filer         | [ ]  
|--------------------------------------------------- | --- | ------------------------- | -----
|Non-accelerated
      filer                         | [ ] | Smaller reporting company | [ X ]
|(Do
      not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company
(as defined in Rule 12b-2 of the Exchange Act
[ ] YES [ X ] NO

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PRECEDING FIVE YEARS

Check whether the registrant has filed all documents and reports
required to be filed by Sections 12, 13 or 15(d) of the Exchange Act after the
distribution of securities under a plan confirmed by a court.
[ ] YES [ ] NO

APPLICABLE ONLY TO CORPORATE ISSUERS

Indicate the number of shares outstanding of each of the
issuers classes of common stock, as of the latest practicable date.
60,287,000 common shares issued and outstanding as of March 13, 2009

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PART 1  FINANCIAL INFORMATION

Item 1. Financial Statements.

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|DUSSAULT APPAREL INC.        
|-----------------------------
|(A Development Stage Company)
|Balance Sheet                
|as at January
      31,      

|                                                       |   | January 31, |   |   | December 31, |  
|------------------------------------------------------ | - | ----------- | - | - | ------------ | -
|                                                       |   | 2009        |   |   | 2008         |  
|                                                       |   | (Unaudited) |   |   |              |  
|ASSETS                                                 |   |             |   |   |              |  
|Current
      Assets                                   |   |             |   |   |              |  
|Cash                                                   | $ | 198,151     |   | $ | 163,214      |  
|Accounts Receivable                                    |   |             |   |   | 59,186       |  
|Inventory                                              |   | 54,348      |   |   | 181,847      |  
|                                                       |   |             |   |   |              |  
|Total Current Assets                                   | $ | 252,499     |   | $ | 404,247      |  
|                                                       |   |             |   |   |              |  
|Notes Receivable                                       |   | 293,000     |   |   | 293,000      |  
|                                                       |   |             |   |   |              |  
|Property and Equipment, net                            |   | 8,953       |   |   | 51,515       |  
|                                                       |   |             |   |   |              |  
|Other Assets                                           |   |             |   |   |              |  
|Deposits                                               |   | 23,851      |   |   | 23,851       |  
|                                                       |   |             |   |   |              |  
|Total Assets                                           | $ | 578,303     |   | $ | 772,613      |  
|                                                       |   |             |   |   |              |  
|LIABILITIES AND STOCKHOLDERS' EQUITY                   |   |             |   |   |              |  
|Current Liabilities                                    |   |             |   |   |              |  
|Accounts Payable and accrued liabilities               | $ | 28,179      |   | $ | 6,437        |  
|                                                       |   |             |   |   |              |  
|Total Current Liabilities                              |   |             |   |   | 6,437        |  
|                                                       |   |             |   |   |              |  
|Stockholders'
      Equity                             |   |             |   |   |              |  
|Common Stock, $0.001 par value; authorized             |   |             |   |   |              |  
|75,000,000 shares;
      issued and outstanding        |   |             |   |   |              |  
|51,687,000 shares as at October 31, 2008               |   |             |   |   |              |  
|56,487,000 shares
      as at October 31, 2007         |   | 51,687      |   |   | 51,687       |  
|Additional Paid-In Capital                             |   | 10,817,555  |   |   | 10,817,555   |  
|Accumulated other comprehensive loss                   |   | (216,050    | ) |   | (21,194      | )
|Accumulated deficit during the development
      stage |   | (10,103,066 | ) |   | (10,081,872  | )
|                                                       |   |             |   |   |              |  
|Total
      Stockholders' Equity                       |   | 550,125     |   |   | 766,176      |  
|                                                       |   |             |   |   |              |  
|Total
      Liabilities and Stockholders' Equity       | $ | 578,303     |   | $ | 772,613      |  

The accompanying notes are an integral part of these financial
statements

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|DUSSAULT APPAREL INC.        
|-----------------------------
|(A Development Stage Company)
|Statement of Operations      
|(Unaudited)                  

|                                     |   |                            |   |   |                |   |   | For the period |  
|------------------------------------ | - | -------------------------- | - | - | -------------- | - | - | -------------- | -
|                                     |   |                            |   |   |                |   |   | Aug. 1 2006    |  
|                                     |   | For the three months ended |   |   | (inception) to |  
|                                     |   | January 31,                |   |   | January 31,    |  
|                                     |   | 2009                       |   |   | 2008           |   |   | 2009           |  
|Revenue                              | $ | 257,391                    |   | $ | 145,976        |   | $ | 905,119        |  
|                                     |   |                            |   |   |                |   |   |                |  
|Cost of Sales                        |   | 207,601                    |   |   | 154,683        |   |   | 469,729        |  
|Operating Income                     |   | 49,790                     |   |   | (8,707         | ) |   | 435,390        |  
|                                     |   |                            |   |   |                |   |   |                |  
|Selling Costs                        |   |                            |   |   |                |   |   |                |  
|Marketing                            |   |                            |   |   |                |   |   | 20,000         |  
|Advertising                          |   | 19,468                     |   |   |                |   |   | 73,885         |  
|Samples                              |   | 82,554                     |   |   |                |   |   | 143,123        |  
|Development -
      Vancouver        |   | 33,287                     |   |   |                |   |   | 762,370        |  
|                                     |   | 135,309                    |   |   | -              |   |   | 999,378        |  
|General and Administrative Expenses: |   |                            |   |   |                |   |   |                |  
|Salaries & Wages                     |   | 18,750                     |   |   | 100,033        |   |   | 349,292        |  
|Professional Fees                    |   | 36,503                     |   |   | 26,685         |   |   | 347,379        |  
|Occupancy Costs                      |   | 7,500                      |   |   |                |   |   | 35,466         |  
|Warehousing                          |   | 3,824                      |   |   |                |   |   | 85,374         |  
|Design                               |   | 3,541                      |   |   |                |   |   | 17,891         |  
|Depreciation                         |   |                            |   |   | 565,315        |   |   | 35,413         |  
|Retail Launch                        |   |                            |   |   |                |   |   | 5,777,175      |  
|Other
      Administrative Exp.      |   | 74,594                     |   |   |                |   |   | 1,234,005      |  
|                                     |   | 144,712                    |   |   | 692,033        |   |   | 7,881,995      |  
|Non-Recurring Items                  |   |                            |   |   |                |   |   |                |  
|Inventory markdown                   |   |                            |   |   | -              |   |   | 1,791,526      |  
|Total Expenses                       |   | 280,021                    |   |   | 692,033        |   |   | 10,672,899     |  
|Net Loss                             |   | (230,231                   | ) |   | (700,740       | ) |   | (10,237,509    | )
|Currency translation                 |   |                            |   |   |                |   |   |                |  
|adjustment                           |   | 14,181                     |   |   | -              |   |   | (35,375        | )
|                                     |   |                            |   |   |                |   |   |                |  
|Comprehensive income (loss)          | $ | (216,050                   | ) | $ | (700,740       | ) | $ | (10,272,884    | )
|                                     |   |                            |   |   |                |   |   |                |  
|Loss Per Common Share:               |   |                            |   |   |                |   |   |                |  
|Basic and diluted                    | $ | (0.004                     | ) | $ | (0.012         | ) |   |                |  
|                                     |   |                            |   |   |                |   |   |                |  
|Weighted average shares outstanding, |   |                            |   |   |                |   |   |                |  
|basic and diluted                    |   | 51,687,000                 |   |   | 56,487,000     |   |   |                |  

The accompanying notes are an integral part of these financial
statements

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|DUSSAULT APPAREL INC.        
|-----------------------------
|(A Development Stage Company)
|Statement of Cash Flows      
|(Unaudited)                  

|                                            |   |                            |   |   |                |   |   | For the period |  
|------------------------------------------- | - | -------------------------- | - | - | -------------- | - | - | -------------- | -
|                                            |   |                            |   |   |                |   |   | Aug. 1 2006    |  
|                                            |   | For the three months ended |   |   | (inception) to |  
|                                            |   | January 31,                |   |   | January 31,    |  
|                                            |   | 2009                       |   |   | 2008           |   |   | 2008           |  
|Cash flows from operating activities:       |   |                            |   |   |                |   |   |                |  
|Net loss                                    | $ | (216,051                   | ) | $ | (700,740       | ) | $ | (916,791       | )
|Adjustments to
      reconcile net loss to  |   |                            |   |   |                |   |   |                |  
|net cash used by operating activities:      |   |                            |   |   |                |   |   |                |  
|Depreciation                                |   | (28,026                    | ) |   |                |   |   |                |  
|Stock issued for
      services             |   |                            |   |   |                |   |   |                |  
|Contribution of capital assets              |   |                            |   |   |                |   |   |                |  
|Change in operating assets and liabilities: |   |                            |   |   |                |   |   |                |  
|Accounts receivable                         |   | 59,186                     |   |   | 19,669         |   |   |                |  
|Accounts payable                            |   | 21,741                     |   |   | 13,870         |   |   |                |  
|Inventory                                   |   | 127,500                    |   |   | 88,855         |   |   |                |  
|Deposits                                    |   |                            |   |   |                |   |   | (23,851        | )
|Net cash (used by)                          |   |                            |   |   |                |   |   |                |  
|operating
      activities                  |   | (35,650                    | ) |   | (578,346       | ) |   | (940,642       | )
|Cash flows from investing activities:       |   |                            |   |   |                |   |   |                |  
|Purchase of equipment                       |   |                            |   |   | (37,444        | ) |   | (88,428        | )
|Writedown/Abandonment of fixed assets       |   | 70,587                     |   |   | 56,716         |   |   |                |  
|Net cash (used by) investing                |   |                            |   |   |                |   |   |                |  
|activities                                  |   | 70,587                     |   |   | 19,272         |   |   | (88,428        | )
|Cash flows from financing
      activities: |   |                            |   |   |                |   |   |                |  
|Loan to Dayton
      Boots                  |   |                            |   |   |                |   |   | (293,000       | )
|Subscription received                       |   |                            |   |   | 410,745        |   |   |                |  
|Common stock
      issued for cash          |   |                            |   |   |                |   |   | 4,930,000      |  
|Net cash (used by)
      provided           |   |                            |   |   |                |   |   |                |  
|by financing activities                     |   | -                          |   |   | 410,745        |   |   | 4,637,000      |  
|Effect of exchange rates                    |   |                            |   |   |                |   |   | `              |  
|on cash                                     |   |                            |   |   |                |   |   | (21,194        | )
|Net increase (decrease) in cash             |   | 34,937                     |   |   | (148,329       | ) |   | 3,586,736      |  
|Cash, beginning of the period               |   |                            |   |   | 227,256        |   |   | -              |  
|Cash, end of the period                     | $ | 34,937                     |   | $ | 78,927         |   | $ | 3,586,736      |  
|                                            |   |                            |   |   |                |   |   |                |  
|Supplemental cash flow disclosure:          |   |                            |   |   |                |   |   |                |  
|Interest paid                               |   | -                          |   |   | -              |   |   | -              |  
|Taxes paid                                  |   | -                          |   |   | -              |   |   | -              |  

The accompanying notes are an integral part of these financial
statements

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DUSSAULT APPAREL INC.
(A Development Stage Company)NOTES TO THE FINANCIAL STATEMENTS
January 31, 2009

NOTE 1  ORGANIZATION

The financial statements presented are those of Dussault Apparel
  Inc. (the Company). The Company was incorporated under the laws of the State
  of Nevada on August 1, 2006 as Release Your Lease Inc. Business operations had
  not commenced when in May, 2007, control of the company changed hands. Jason
  Dussault bought 1,500,000 common shares of the majority shareholder and assumed
  the offices of President , CEO, CFO, Secretary and Treasurer, and a Director.

On June 11, 2007 Release Your Lease Inc. effected a reverse
  forward merger with Dussault Apparel Inc, a Nevada shell company. The name was
  changed to Dussault Apparel, Inc. The Company changed its orientation toward
  the retail fashion clothing business.

Current Business of the Company

The Company opened a retail clothing and accessory store on
  Melrose Avenue in Los Angeles in November, 2007. Designs were produced in the
  Vancouver, Canada office, manufactured in China and warehoused in Los Angeles.
  The Company closed this store in November, 2008 in the wake of declining sales
  and current economic conditions. The Company continues to wholesale its products
  to retail outlets as well as sports organizations throughout the U.S. and Canada.

NOTE 2  SUMMARY OF SIGNIFICANT ACCOUNTING P0LICIES

Basis of Preparation

These financial statements have been prepared in accordance
  with generally accepted accounting principles in the United States of America
  and with the instructions to Form 10-QSB as promulgated by the Securities and
  Exchange Commission (SEC).

These financial statements include all adjustments that in
  the opinion of management are necessary to present fairly the financial position,
  results of operations and cash flows for the year months ended January 31, 2009.
  All adjustments are of a normal recurring nature.

Use of Estimates

The preparation of financial statements in accordance with
  generally accepted accounting principles in the United States of America requires
  the use of estimates and assumptions that affect the reported amounts of assets
  and liabilities, disclosure of contingent assets and liabilities known to exist
  as of the date the financial statements are published, and the reported amounts
  of revenues and expenses during the reporting period. Uncertainties with respect
  to such estimates and assumptions are inherent in the preparation of the Companys
  financial statements; accordingly, it is possible that the actual results could
  differ from these estimates and assumptions and could have a material effect
  on the reported amounts of the Companys financial position and results
  of operations.

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Fair Value of Financial Instruments

The Financial Accounting Standards Board issued Statement
  of Financial Accounting Standards (SFAS) No. 107, Disclosures
  About Fair Value of Financial Instruments. SFAS No. 107 requires disclosure
  of fair value information about financial instruments when it is practicable
  to estimate that value. The carrying amounts of the Companys financial
  instruments as of January 31, 2009 approximate their respective fair values
  because of the short-term nature of these instruments. Such instruments consist
  of cash, accounts payable and accrued expenses. The fair value of related party
  payables is not determinable.

Financial instruments

The Companys financial instruments consist of cash and
  cash equivalents, accounts payable and accrued liabilities, amounts due to officers
  and directors. The fair value of these financial instruments approximate their
  carrying value due to the short maturities of these instruments, unless otherwise
  noted.

Income Taxes

The Company utilizes SFAS No. 109, Accounting for Income
  Taxes, which requires the recognition of deferred tax assets and liabilities
  for the expected future tax consequences of events that have been included in
  the financial statements or tax returns. Under this method, deferred tax assets
  and liabilities are determined based on the difference between the tax basis
  of assets and liabilities and their financial reporting amounts based on enacted
  tax laws and statutory tax rates applicable to the periods in which the differences
  are expected to affect taxable income. Valuation allowances are established,
  when necessary, to reduce deferred tax assets to the amount expected to be realized.
  The Company generated deferred tax credits through net operating loss carryforwards.
  However, a valuation allowance of 100% has been established, as the realization
  of the deferred tax credits is not reasonably certain, based on going concern
  considerations outlined below.

Going Concern

The Companys financial statements are prepared using
  accounting principles generally accepted in the United States of America applicable
  to a going concern, which contemplates the realization of assets and liquidation
  of liabilities in the normal course of business. The Company as at January 31,
  2009 had not established an ongoing source of revenues sufficient to cover its
  operating costs and to allow it to continue as a going concern.

As shown in the accompanying financial statements, the Company
  incurred a net loss of $216,050 in the three months ended January 31, 2009.
  The Corporation had an increase cash flow of $34,937in the same period due
  to bulk sales. The Company closed its retail outlet in November 2008 and its
  ability to continue as a going concern is dependent on the successful stimulation
  of wholesale sales or in other areas in order to fund operating losses and become
  profitable. If the Company is unable to make it profitable, the Company could
  be forced to cease development of operations. Management cannot provide any
  assurances that the Company will be successful in its retail operation. The
  accompanying financial statements do not include any adjustments that might
  be necessary if the Company is unable to continue as a going concern.

---

Development-Stage Company

The Company is considered a development-stage company, with
  limited operating revenues during the periods presented, as defined by Statement
  of Financial Accounting Standards (SFAS) No. 7. SFAS. No. 7 requires
  companies to report their operations, shareholders deficit and cash flows since
  inception through the date that revenues are generated from managements
  intended operations, among other things. Management has defined inception as
  August 1, 2006. Since inception, the Company has incurred operating losses totaling
  $10,272,884. The Companys working capital has been generated through
  the sales of common stock. Management has provided financial data since August
  1, 2006 Inception in the financial statements, as a means to provide
  readers of the Companys financial information to make informed investment
  decisions.

Accounts Receivable

An accounting policy for allowance for doubtful accounts has
  not been established because of insufficient experience.

Inventory

Inventories are stated at the lower of cost or market value.
  Market value represents net realizable value. Inventories are priced by the
  Retail Inventory (average cost) method in a perpetual inventory system. On October
  1, 2008 inventory was marked down by $1,791,526 to net realizable value
  of $181,847.50. Sales since the beginning of the year have reduced inventory
  to $54,348.

Property and Equipment

Fixtures and equipment are stated at cost less accumulated
  depreciation at cost and depreciated using straight line methods over the estimated
  useful lives of the related assets ranging from 7 to 10 years. Maintenance and
  repairs are expensed currently. Leasehold improvements at the Los Angeles store
  were written off at the closure of the store in November, 2008. Fixtures and
  equipment itotal $70,587 net of accumulated depreciation of $28,026
  as at January 31, 2009.

The Company reviews the carrying value of long-term assets
  to be held and used when events and circumstances warrant such a review. If
  the carrying value of a long-lived asset is considered impaired, a loss is recognized
  based on the amount by which the carrying value exceeds the fair market value.
  Fair market value is determined primarily using the anticipated cash flows discounted
  at a rate commensurate with the risk involved. The cost of normal maintenance
  and repairs is charged to operations as incurred. Major overhaul that extends
  the useful life of existing assets is capitalized. When equipment is retired
  or disposed, the costs and related accumulated depreciation are eliminated and
  the resulting profit or loss is recognized in income.

Note Receivable

On April 16, 2008 the Company entered into a bridge loan agreement
  under a promissory note from Dayton Boot Co. Enterprises Ltd. of Vancouver,
  Canada for $300,000. The terms are that the principal amount, plus 6% simple
  interest, will be due and payable when a transaction is concluded between the
  two parties, or December 31, 2008, the earlier. The sum was advanced in Canadian
  funds, equating to USD 293,000. The note is accompanied by restrictions on Dayton
  Boot regarding the acquisition of stock or votes or control of the Company or
  selling its stock to the Company. The note was extended for an additional 12
  months

---

Loss Per Share

Net loss per share is calculated in accordance with SFAS 128,
  Earnings Per Share, for the periods presented. Basic net loss per share is based
  upon the weighted average number of common shares outstanding. Diluted net loss
  per share is based on the assumption that all dilutive convertible shares and
  stock options were converted or exercised. The Company has no potentially dilutive
  securities as of January 31, 2009.

On June 11, 2007 a forward stock split of Common Stock occurred
  on a 14 for 1 basis.

The loss per share for the periods presented has been calculated
  accordingly, giving retroactive effect to the forward stock split.

The following is a reconciliation of the numerators and denominators
  of the basic and diluted earnings per share computations for the three months
  ended January 31, 2009 and 2008:

|                                           | 2009       |   | 2008       |  
|------------------------------------------ | ---------- | - | ---------- | -
|Basic and diluted net loss per share:      |            |   |            |  
|Numerator                                  |            |   |            |  
|Comprehensive Net (Loss)                   | $ (216,050 | ) | $ (700,740 | )
|                                           |            |   |            |  
|Denominator                                |            |   |            |  
|Basic and diluted weighted average         |            |   |            |  
|number of shares outstanding               | 56,487,000 |   | 56,487,000 |  
|                                           |            |   |            |  
|Basic and
      Diluted Net Loss Per Share | $ (0.004   | ) | $ (0.012   | )

Recent Accounting Pronouncements

In February 2007, the Financial Accounting Standards Board
  (FASB) issued SFAS Statement No. 159, The Fair Value Option for Financial
  Assets and Financial Liabilities - Including an amendment of FASB Statement
  No. 115 (SFAS 159). SFAS 159, which becomes effective for the Company
  on January 1, 2008, permits companies to choose to measure many financial instruments
  and certain other items at fair value and report unrealized gains and losses
  in earnings. Such accounting is optional and is generally to be applied instrument
  by instrument.

FASB Statement of Financial Accounting Standards (SFAS) No.
  157 Fair Value Measurements establishes a formal framework for measuring
  fair value under GAAP. It defines and codifies the many definitions of fair
  value included among various other authoritative literature, clarifies and,
  in some instances, expands on the guidance for implementing fair value measurements,
  and increases the level of disclosure required for fair value measurements.
  Although SFAS No. 157 applies to and amends the provisions of existing FASB
  and AICPA pronouncements, it does not, of itself, require any new fair value
  measurements, nor does it establish valuation standards. SFAS No. 157 applies
  to all other accounting pronouncements requiring or permitting fair value measurements,
  except for SFAS 123(r) Share-Based Payment, and related pronouncements, the
  practicability exceptions to fair value determination allowed by various other
  authoritative pronouncements, and AICPA Statements of Position 97-2 and 98.9
  that deal with software revenue recognition. This statement is effective for
  financial statements issued for fiscal years beginning after November 15, 2007,
  and interim periods within those fiscal years.

---

NOTE 3 - COMMITMENTS AND CONTINGENCIES

There were no contingent liabilities as at January 31, 2009.

NOTE 4  CAPITAL STRUCTURE

Common Stock Transactions during the period from inception
  August 1, 2006 through January 31, 2009:

On August 31, 2006, the company issued 1,500,000 shares of
  its common stock to a single investor at a price of $0.01 per share for
  a total of $15,000.

On October 31, 2006 the Company issued a total of 1,550,000
  shares of its common stock to 27 investors. The shares were sold at $0.02
  for a total of $31,000.

As of October 31, 2005, the Company had authorized 75,000,000
  of $0.001 par common stock, of which 3,050,000 shares were issued and outstanding.

On November 8, 2006, the Company issued a total of 450,000
  shares of its common stock to 5 investors. The shares were sold at $0.02
  realizing $9,000.

On June 11, 2007 a fourteen (14) for one (1) forward stock
  split was effected of authorized, issued and outstanding common stock. Authorized
  capital was increased from 75,000,000 shares to 1,050,000,000 shares. Issued
  and outstanding capital was increased from 3,060,000 to 42,840,000 shares. Par
  value of $0.001 per common share remained the same.

On August 31, 2007, the Company issued a total of 5,272,000
  shares of common stock at a price of $1.00 per share for consultants
  fees valued at $5,272,000.

On August 31, 2007, the Company issued 2,215,000 shares of
  common stock for cash at a price of $1.00 per share, realizing $2,215,000
  before fees.

On November 23, 2007 13,000,000 shares of common stock were
  returned to Treasury.

On April 28,2008 the Company issued 1,275,000 units of its
  securities, each unit consisting of one share of common stock and one common
  share purchase warrant, for cash at a price of $1.00 per unit, realizing
  $1,275,000. Each warrant entitles the holder to purchase one additional
  common share of the Company at a price of US $1.25 until 24 months from
  the closing of the transaction.

On October 7, 2008 the Company issued 6,925,000 units of its
  securities, each unit consisting of one share of common stock and a one half
  Series A and a one half series B common share purchase warrant, for cash at
  a price of $1.20 per unit, realizing $1,385,000. Each Series A warrant
  entitles the holder to purchase one additional common share of the Company at
  a price of US $0.30 until 24 months from the closing of the transaction.
  Each Series B warrant entitles the holder to purchase one additional common
  share of the Company at a price of US $0.60 until 24 months from the closing
  of the transaction. The Series B warrants are only exercisable following the
  exercise of all the Series A warrants held by such holder.

As of January 31, 2009 the Company had authorized 75,000,000
  shares of $0.001 par value common stock, of which 51,687,000 shares were
  issued and outstanding.

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NOTE 6  LEGAL PROCEEDINGS

There were no legal proceedings against the Company with respect
  to matters arising in the ordinary course of business. Neither the Company nor
  any of its officers or directors is involved in any other litigation either
  as plaintiffs or defendants, and have no knowledge of any threatened or pending
  litigation against them or any of the officers or directors.

NOTE 7  SUBSEQUENT EVENTS

Nil

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Item 2. Managements Discussion and Analysis of Financial
Condition and Results of Operations

Forward-Looking Statements

This quarterly report contains forward-looking statements.
These statements relate to future events or our future financial performance. In
some cases, you can identify forward-looking statements by terminology such as
"may", "should", "expects", "plans", "anticipates", "believes", "estimates",
"predicts", "potential" or "continue" or the negative of these terms or other
comparable terminology. These statements are only predictions and involve known
and unknown risks, uncertainties and other factors, including the risks in the
section entitled "Risk Factors", that may cause our or our industry's actual
results, levels of activity, performance or achievements to be materially
different from any future results, levels of activity, performance or
achievements expressed or implied by these forward-looking statements. Although
we believe that the expectations reflected in the forward-looking statements are
reasonable, we cannot guarantee future results, levels of activity, performance
or achievements. Except as required by applicable law, including the securities
laws of the United States, we do not intend to update any of the forward-looking
statements to conform these statements to actual results.

Our unaudited financial statements are stated in United States
Dollars (US$) and are prepared in accordance with United States Generally
Accepted Accounting Principles. The following discussion should be read in
conjunction with our financial statements and the related notes that appear
elsewhere in this quarterly report. The following discussion contains
forward-looking statements that reflect our plans, estimates and beliefs. Our
actual results could differ materially from those discussed in the forward
looking statements. Factors that could cause or contribute to such differences
include, but are not limited to, those discussed below and elsewhere in this
quarterly report, particularly in the section entitled "Risk Factors".

In this quarterly report, unless otherwise specified, all
dollar amounts are expressed in United States dollars. All references to "CDN$"
refer to Canadian dollars and all references to "common stock" refer to the
common shares in our capital stock.

As used in this quarterly report, the terms we, us and
our refer to Dussault Apparel Inc. and our wholly-owned subsidiaries, unless
the context clearly requires or states otherwise.

Corporate Overview

The address of our principal executive office is 2250 East
Hastings Street, Vancouver, BC V5L 1V4. Our telephone number is (604) 569 -
2619.

Our common stock is quoted on the OTC Bulletin Board under the
symbol DUSS.

Corporate History

We were incorporated on August 1, 2006 in the State Nevada
under the name Release Your Lease Inc. Our initial business plan was to create a
web-based service for buyers and sellers of leased automobiles. A decision was
made by new management, to change the corporate direction of our company and to
pursue opportunities in the retail fashion industry.

Effective June 11, 2007, we completed a merger with our
subsidiary Dussault Apparel Inc. As a result, we changed our name from Release
Your Lease Inc. to Dussault Apparel Inc. We changed the name of our company
to better reflect the anticipated direction and business of our company. On June
11, 2007, our symbol changed to DUSS.

Effective July 11, 2007 we effected a fourteen (14) for one (1)
forward stock split of our authorized, issued and outstanding shares. As a
result, our authorized capital has increased from 75,000,000 shares of common
stock with a par value of $0.001 to 10,050,000,000 shares of common stock with a
par value of $0.001. Our issued and outstanding share capital increased from
3,060,000 shares of common stock to 49,000,000 shares of common stock.

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On June 25, 2007, we entered in a non-binding letter of intent
with Dussault Jeans Inc., pursuant to the letter of intent we agreed to
negotiate the terms of a formal agreement for a business combination between the
two companies. On November 5, 2007, we entered into a revised non-binding letter
of intent with Dussault Jeans Inc. The revised letter of intent replaced and
superseded our previous letter of intent with Dussault Jeans Inc. dated June 25,
2007.

Under the letter of intent, both companies had the right to
conduct due diligence on each other while we negotiated the terms of the formal
agreement. We have not entered into a formal agreement with Dussault Jeans Inc.
and the letter of intent terminated without prejudice to either party on
November 30, 2007.

On November 8, 2007, we opened our first retail location on
Melrose Avenue, California. Our Melrose location features womens and mens
Ready-To-Wear collections as well as jewelry, luggage and headwear.

On October 31, 2008, we elected to close our store located on
Melrose Avenue in Los Angeles, California and ceased all operations relating to
this location. Given the losses associated with our Melrose location, and the
current market circumstances for retailers, management was of the view such
closure was necessary to prevent further losses and conserve working capital. We
will continue to focus on our remaining operations and distribution arrangements
and will seek additional opportunities in the apparel retail sector.

Our Current Business

Our principal products are limited edition high fashion
streetwear, specifically hoodies. We design, market, distribute and sell our
products under the Dussault Custom Ink trademark. Our products are sold in
Canada and abroad to upscale retailers and boutiques and we also produce private
collections for custom orders. Samples of our products can be viewed on our
website located at www.Dussaultapparel.com.

We currently sell men's styles and women's styles. Our products
are made with high quality materials that are effected with a variety of
processes including bleaching, washing, painting and hand finishing. Although we
operate in a highly competitive market, what distinguishes our brand is the
attention to detail and the exclusivity of our products.

Our hoodies are inspired hand finished pieces of art, these
hoodies for men and women are lined with silk and accented with tattoo inspired
artwork on the back. Skulls, lions, flames or a bloody cleaver toting panda give
these hoodies an edge.

Our products can be found in major Canadian cities. Our
products are sold to fashion conscious, affluent customers who shop in high-end
boutiques and stores to customers who want to wear and be seen in the latest,
trendiest streetwear.

Competition

The apparel industry is intensely competitive and fragmented.
We compete against other small apparel companies, as well as large companies
that have a similar business and large marketing companies, importers and
distributors that sell products similar to or competitive with ours.

Government Regulation and Supervision

Our operations are subject to the effects of international
treaties and regulations such as the North American Free Trade Agreement
(NAFTA). We are also subject to the effects of international trade agreements
and embargoes by entities such as the World Trade Organization. Generally, these
international trade agreements benefit our business rather than burden it
because they tend to reduce trade quotas, duties, taxes and similar impositions.
However, these trade agreements may also impose restrictions that could have an
adverse impact on our business, by limiting the countries from whom we can
purchase our fabric or other component materials, or limiting the countries
where we might market and sell our products.

5

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Labeling and advertising of our products is subject to
regulation by the Federal Trade Commission. We believe that we are in
substantial compliance with these regulations.

Research and Development

We do not currently have a formal research and development
effort but we plan to continue to develop new products.

Purchase of Significant Equipment

We do not intend to purchase any significant equipment over the
twelve months ending January 31, 2010.

Corporate Offices

Our principal office is located at 2250 East Hastings Street,
Vancouver, BC V5L 1V4. We sublease space at this location from Dayton Boot Co.
Ltd. for $2,500 per month, on a month to month basis. We believe that this space
is sufficient to meet our present needs and do not anticipate any difficulty in
securing alternative or additional space, as needed, on terms acceptable to
us.

Employees

Currently, our only employees are our directors and officers,
who include Terry Fitzgerald, our President and Chief Executive Officer, Jason
Dussault, our Secretary and Treasurer, Robert Mintak, our Chief Operating
Officer and Chief Financial Officer and Jason Sundar, our VP Corporate
Finance.

We expect to hire no new employees over the next 12 month
period.

Critical Accounting Policies

Our financial statements and accompanying notes are prepared in
accordance with generally accepted accounting principles used in the United
States. Preparing financial statements requires management to make estimates and
assumptions that affect the reported amounts of assets, liabilities, revenue,
and expenses. These estimates and assumptions are affected by management's
application of accounting policies. We believe that understanding the basis and
nature of the estimates and assumptions involved with the following aspects of
our consolidated financial statements is critical to an understanding of our
financials.

Use of Estimates

The preparation of financial statements in accordance with
generally accepted accounting principles in the United States of America
requires the use of estimates and assumptions that affect the reported amounts
of assets and liabilities, disclosure of contingent assets and liabilities known
to exist as of the date the financial statements are published, and the reported
amounts of revenues and expenses during the reporting period. Uncertainties with
respect to such estimates and assumptions are inherent in the preparation of our
companys financial statements; accordingly, it is possible that the actual
results could differ from these estimates and assumptions and could have a
material effect on the reported amounts of our companys financial position and
results of operations.

Fair Value of Financial Instruments

The Financial Accounting Standards Board issued Statement of
Financial Accounting Standards (SFAS) No. 107, Disclosures About Fair Value
of Financial Instruments. SFAS No. 107 requires disclosure of fair value
information about financial instruments when it is practicable to estimate that
value. The carrying amounts of our companys financial instruments as of January
31, 2009 approximate their respective fair values because of the short-term
nature of these instruments. Such instruments consist of cash, accounts payable
and accrued expenses. The fair value of related party payables is not
determinable.

6

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Financial instruments

Our financial instruments consist of cash and cash equivalents,
accounts payable and accrued liabilities, amounts due to officers and directors.
The fair value of these financial instruments approximate their carrying value
due to the short maturities of these instruments, unless otherwise noted.

Income Taxes

Our company utilizes SFAS No. 109, Accounting for Income
Taxes, which requires the recognition of deferred tax assets and liabilities
for the expected future tax consequences of events that have been included in
the financial statements or tax returns. Under this method, deferred tax assets
and liabilities are determined based on the difference between the tax basis of
assets and liabilities and their financial reporting amounts based on enacted
tax laws and statutory tax rates applicable to the periods in which the
differences are expected to affect taxable income. Valuation allowances are
established, when necessary, to reduce deferred tax assets to the amount
expected to be realized. The Company generated deferred tax credits through net
operating loss carryforwards. However, a valuation allowance of 100% has been
established, as the realization of the deferred tax credits is not reasonably
certain, based on going concern considerations outlined below.

Development-Stage Company

Our company is considered a development-stage company, with
limited operating revenues during the periods presented, as defined by Statement
of Financial Accounting Standards (SFAS) No. 7. SFAS. No. 7 requires companies
to report their operations, shareholders deficit and cash flows since inception
through the date that revenues are generated from managements intended
operations, among other things. Management has defined inception as August 1,
2006. Since inception, our company has incurred operating losses totaling
$10,272,884. Our working capital has been generated through the sales of common
stock. Management has provided financial data since August 1, 2006 Inception
in the financial statements, as a means to provide readers of our companys
financial information to make informed investment decisions.

Accounts Receivable

An accounting policy for allowance for doubtful accounts has
not been established because of insufficient experience.

Property and Equipment

Fixtures and equipment are stated at cost less accumulated
depreciation at cost and depreciated using straight line methods over the
estimated useful lives of the related assets ranging from 7 to 10 years.
Maintenance and repairs are expensed currently. Leasehold improvements at the
Los Angeles store were written off at the closure of the store in November,
2008. Fixtures and equipment total $70,587 net of accumulated depreciation of
$28,026 as at January 31, 2009.

Our company reviews the carrying value of long-term assets to
be held and used when events and circumstances warrant such a review. If the
carrying value of a long-lived asset is considered impaired, a loss is
recognized based on the amount by which the carrying value exceeds the fair
market value. Fair market value is determined primarily using the anticipated
cash flows discounted at a rate commensurate with the risk involved. The cost of
normal maintenance and repairs is charged to operations as incurred. Major
overhaul that extends the useful life of existing assets is capitalized. When
equipment is retired or disposed, the costs and related accumulated depreciation
are eliminated and the resulting profit or loss is recognized in income.

Loss Per Share

Net loss per share is calculated in accordance with SFAS 128,
Earnings Per Share, for the periods presented. Basic net loss per share is based
upon the weighted average number of common shares outstanding. Diluted net loss
per

7

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share is based on the assumption that all dilutive convertible
shares and stock options were converted or exercised. Our company has no
potentially dilutive securities as of January 31, 2009.

On June 11, 2007 a forward stock split of Common Stock occurred
on a 14 for 1 basis.

The loss per share for the periods presented has been
calculated accordingly, giving retroactive effect to the forward stock
split.

The following is a reconciliation of the numerators and
denominators of the basic and diluted earnings per share computations for the
three months ended January 31, 2009 and 2008:

|                                           | 2009       |   | 2008       |  
|------------------------------------------ | ---------- | - | ---------- | -
|Basic and diluted net loss per share:      |            |   |            |  
|Numerator                                  |            |   |            |  
|Comprehensive Net (Loss)                   | $ (216,050 | ) | $ (700,740 | )
|                                           |            |   |            |  
|Denominator                                |            |   |            |  
|Basic and diluted weighted average         |            |   |            |  
|number of shares outstanding               | 56,487,000 |   | 56,487,000 |  
|                                           |            |   |            |  
|Basic and
      Diluted Net Loss Per Share | $ (0.004   | ) | $ (0.012   | )

Going Concern

We have suffered recurring losses from operations and are
dependent on our ability to raise capital from stockholders or other sources to
meet our obligations and repay our liabilities arising from normal business
operations when they become due. In their report on our audited financial
statements for the year ended October 31, 2008, our independent auditors
included an explanatory paragraph regarding concerns about our ability to
continue as a going concern. Our financial statements contain additional note
disclosure describing the circumstances that lead to this disclosure by our
independent auditors.

Results of Operations

The following summary of our results of operations should be
read in conjunction with our financial statements for the quarter ended January
31, 2009 which are included herein.

Three month Summary ended January 31, 2009 and 2008

|                   |   | Three Months Ended |  
|------------------ | - | ------------------ | -
|                   |   |                    |  
|                   |   | 2009               |  
|Sales              | $ | 257,391            |  
|Cost of Sales      | $ | 207,601            |  
|Operating Expenses | $ | 280,021            |  
|Net Loss           | $ | (216,050           | )

Sales

Our sales for the three months ended January 31, 2009 were $257,391, compared to our sales for the three months ended January 31, 2008, which were $145,976, representing approximately a 76% increase. The increase in sales is due to release of 2009 collection and bulk sale to Major League Sports Players Union.

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Cost of Sales

Our cost of sales for the three months ended January 31, 2009 was $207,604 (80% of product sales), compared to our cost of sales for the three months ended January 31, 2008, which was $154,683 (106% of product sales). The increase in our cost of sales is mainly due to production of samples and marketing material. Cost of sales includes silk screening, embroidery, production., raw materials , printing, freight. We expect that our cost of sales will decrease over the next twelve months, mainly due to sampling and literature support in place related to these sales.

Future cost of sales may be impacted by, the effects of
inflation and changing prices from our suppliers and fluctuations in foreign
currency rates as certain costs are incurred in foreign currencies.

Total Operating Costs

Our total operating expenses consist of salaries and wages,
professional fees and general and administrative costs. For the three months
ended January 31, 2009, our total operating expenses were $144,712 while they
were $692,033 for the three months ended January 31, 2008. The decrease in our
total operating costs in mainly due to a reduction in salaries and wages and
depreciation. We expect to continue to increase our business activities, but we
expect our total operating expenses to continue to decrease over the coming
twelve months.

Liquidity and Financial Condition

Working Capital

|                    |   | At          |  |   | At          | 
|------------------- | - | ----------- |  | - | ----------- | 
|                    |   | January 31, |  |   | October 31, | 
|                    |   | 2009        |  |   | 2008        | 
|Current assets      | $ | 252,499     |  | $ | 404,247     | 
|Current liabilities | $ | 28,179      |  | $ | 6,437       | 
|Working capital     | $ | 224,320     |  | $ | 397,810     | 

Cash Flows

|                                              |   | Three Months Ended |  
|--------------------------------------------- | - | ------------------ | -
|                                              |   | January 31,        |  
|                                              |   | 2009               |  
|Net Cash Used in Operating Activities         | $ | (35,650            | )
|Net Cash Used in Investing Activities         | $ | 70,587             |  
|Net Cash Proved by Financing Activities       | $ | Nil                |  
|Net increase (decrease) in cash during period | $ | 34,937             |  

We had cash in the amount of $198,151 as of January 31, 2009 as
compared to $163,214 as of October 31, 2008. We had a working capital surplus of
$224,320 as of January 31, 2009 compared to a working capital surplus of
$397,810 as of October 31, 2008.

Our principal source of funds has been cash flows from private
placement financings.

Future Financings

Presently, our revenues may not be sufficient to meet our
operating and capital expenses.

Our capital requirements are difficult to plan in light of our
current strategy to limit our operations and our products. Since our inception,
we have been dependent on investment capital as an important source of
liquidity. Our operations presently are generating negative cash flow, and we do
not expect positive cash flow from operations in the near term. We need to
secure additional working capital in the short-term in order to sustain our
operations and execute our business plan. We have incurred operating losses
since inception, and this is likely to continue into the year ended October 31,
2009.

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There can be no assurance that additional financing will be
available to us when needed or, if available, that it can be obtained on
commercially reasonable terms. If we are not able to obtain the additional
financing on a timely basis should it be required, or generate significant
material revenues from operations, we will not be able to meet our other
obligations as they become due and we will be forced to scale down or perhaps
even cease our operations.

Contractual Obligations

As a smaller reporting company, we are not required to
provide tabular disclosure obligations.

Off-Balance Sheet Arrangements

We have no significant off-balance sheet arrangements that have
or are reasonably likely to have a current or future effect on our financial
condition, changes in financial condition, revenues or expenses, results of
operations, liquidity, capital expenditures or capital resources that are
material to stockholders.

Recently Issued Accounting Standards

In February 2007, the Financial Accounting Standards Board
(FASB) issued SFAS Statement No. 159, The Fair Value Option for Financial
Assets and Financial Liabilities - Including an amendment of FASB Statement No.
115 (SFAS 159). SFAS 159, which becomes effective for the Company on January 1,
2008, permits companies to choose to measure many financial instruments and
certain other items at fair value and report unrealized gains and losses in
earnings. Such accounting is optional and is generally to be applied instrument
by instrument.

FASB Statement of Financial Accounting Standards (SFAS) No. 157
Fair Value Measurements establishes a formal framework for measuring fair
value under GAAP. It defines and codifies the many definitions of fair value
included among various other authoritative literature, clarifies and, in some
instances, expands on the guidance for implementing fair value measurements, and
increases the level of disclosure required for fair value measurements. Although
SFAS No. 157 applies to and amends the provisions of existing FASB and AICPA
pronouncements, it does not, of itself, require any new fair value measurements,
nor does it establish valuation standards. SFAS No. 157 applies to all other
accounting pronouncements requiring or permitting fair value measurements,
except for SFAS 123(r) Share-Based Payment, and related pronouncements, the
practicability exceptions to fair value determination allowed by various other
authoritative pronouncements, and AICPA Statements of Position 97-2 and 98.9
that deal with software revenue recognition. This statement is effective for
financial statements issued for fiscal years beginning after November 15, 2007,
and interim periods within those fiscal years.

Our company does not believe that the adoption of the above
recent pronouncements will have a material effect on our consolidated financial
position, results of operations, or cash flows.

Item 4. Controls and Procedures

Managements Report on Disclosure Controls and
Procedures

We maintain disclosure controls and procedures that are
designed to ensure that information required to be disclosed in our reports
filed under the Securities Exchange Act of 1934, as amended, is recorded,
processed, summarized and reported within the time periods specified in the
Securities and Exchange Commission's rules and forms, and that such information
is accumulated and communicated to our management, including our president (also
our principal executive officer) and our chief financial officer (also our
principal financial officer and principal accounting officer) to allow for
timely decisions regarding required disclosure.

As of January 31, 2009, the end of our first quarter covered by
this report, we carried out an evaluation, under the supervision and with the
participation of our president (also our principal executive officer) and our
chief financial officer (also our principal financial officer and principal
accounting officer), of the effectiveness of the design and operation of our
disclosure controls and procedures. Based on the foregoing, our president (also
our principal executive officer) and our chief financial officer (also our
principal financial officer and principal accounting

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officer) concluded that our disclosure controls and procedures
were effective in providing reasonable assurance in the reliability of our
financial reports as of the end of the period covered by this quarterly
report.

Inherent limitations on effectiveness of
controls

Internal control over financial reporting has inherent
limitations which include but is not limited to the use of independent
professionals for advice and guidance, interpretation of existing and/or
changing rules and principles, segregation of management duties, scale of
organization, and personnel factors. Internal control over financial reporting
is a process which involves human diligence and compliance and is subject to
lapses in judgment and breakdowns resulting from human failures. Internal
control over financial reporting also can be circumvented by collusion or
improper management override. Because of its inherent limitations, internal
control over financial reporting may not prevent or detect misstatements on a
timely basis, however these inherent limitations are known features of the
financial reporting process and it is possible to design into the process
safeguards to reduce, though not eliminate, this risk. Therefore, even those
systems determined to be effective can provide only reasonable assurance with
respect to financial statement preparation and presentation. Projections of any
evaluation of effectiveness to future periods are subject to the risk that
controls may become inadequate because of changes in conditions, or that the
degree of compliance with the policies or procedures may deteriorate.

Changes in Internal Control over Financial
Reporting

There have been no changes in our internal controls over
financial reporting that occurred during the quarter ended January 31, 2009 that
have materially or are reasonably likely to materially affect, our internal
controls over financial reporting.

OTHER INFORMATION

Item 1. Legal Proceedings

We know of no material, active or pending legal proceedings
against us, nor are we involved as a plaintiff in any material proceedings or
pending litigation. There are no proceedings in which any of our directors,
officers or affiliates, or any registered or beneficial shareholder are an
adverse party or has a material interest adverse to us.

Item 1A. Risk Factors

Much of the information included in this annual report includes
or is based upon estimates, projections or other forward looking statements.
Such forward looking statements include any projections and estimates made by us
and our management in connection with our business operations. While these
forward-looking statements, and any assumptions upon which they are based, are
made in good faith and reflect our current judgment regarding the direction of
our business, actual results will almost always vary, sometimes materially, from
any estimates, predictions, projections, assumptions or other future performance
suggested herein.

Such estimates, projections or other forward looking
statements involve various risks and uncertainties as outlined below. We
caution the reader that important factors in some cases have affected and, in
the future, could materially affect actual results and cause actual results to
differ materially from the results expressed in any such estimates, projections
or other forward looking statements.

RISKS RELATED TO OUR BUSINESS

We have had minimal cash flows from operations and if we are
not able to obtain further financing we may be forced to scale back or cease
operations or our business operations may fail.

To date we have had minimal cash flows from operations and we have been dependent on sales of our equity securities to meet our cash requirements.  As of January 31, 2009, we had working capital surplus of $224,320. We do not expect positive material cash flow from operations in the near term.  We have estimated that we may require up to $250,000 to carry out our plan in regards to retail fashion during the twelve month period ended January 31, 2010.  However, there is no assurance that actual cash requirements will not exceed our estimates.

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We depend on third parties for significant elements of our
sales and distribution efforts. If these third parties do not continue to assist
us in our sales and distribution, our revenue could decrease, which would have
an adverse impact on our business.

We have limited marketing efforts. We depend substantially upon
third parties for several critical elements of our business including, among
other things, sales and distribution activities. There can be no assurance that
we or these third parties will be able to establish or maintain adequate sales
and distribution capabilities, that we will be able to enter into agreements or
relationships with third parties in additional territories on financially
acceptable terms or that any third parties with whom we enter into such
arrangements will be successful in selling or distributing our products. If they
are not, our business could be negatively impacted. Also, if we are unable to
maintain our relationships with these sales agents and distributors or if these
sales agents and distributors begin selling our competitors products, then our
ability to generate revenues through the sale of our products could be
negatively impacted.

Changes to government regulation and supervision could have
an adverse effect on our business.

Any negative changes to international trade agreements and
regulations such as NAFTA or any agreements affecting international trade such
as those made by the World Trade Organization which result in a rise in trade
quotas, duties, taxes and similar impositions or which has the result of
limiting the countries from whom we can purchase our fabric or other component
materials, or limiting the countries where we might market and sell our
products, could have an adverse effect on our business.

Changes in trends may cause uncertainties with respect to
the growth of our company and can effect our ability to generate
revenues.

Our ability to generate revenues in the future is dependent on
whether we successfully develop our products and create a marketable product and
license or otherwise commercialize our products. We cannot predict whether or
when this may happen and this causes uncertainty with respect to the growth of
our company and our ability to generate revenues.

Our revenues are influenced by general economic cycles, a
continued or sustained rise in oil prices could adversely affect consumer
spending and demand for our products and also increase our operating costs, both
of which could adversely affect our business and financial condition.

Apparel is a cyclical industry that is dependent upon the
overall level of consumer spending. Our wholesale customers anticipate and
respond to adverse changes in economic conditions and uncertainty by reducing
inventories and canceling orders. As a result, factors that diminish consumer
spending and confidence in any of the regions in which we compete, particularly
deterioration in general economic conditions, increases in energy costs or
interest rates, housing market downturns, and other factors such as acts of war,
acts of nature or terrorist or political events that impact consumer confidence,
could reduce our sales and adversely affect our business and financial
condition. For example, the price of oil has risen in the recent past. A
continued or sustained rise in oil prices could adversely affect consumer
spending and demand for our products and also increase our operating costs, both
of which could adversely affect our business and financial condition.

Intense competition in the worldwide apparel industry could
reduce our sales and prices.

We face a variety of competitive challenges from jeanswear and
casual apparel marketers, fashion-oriented apparel marketers, vertically
integrated specialty stores and retailers of private-label products. Some of
these competitors have greater financial and marketing resources than we do and
may be able to adapt to changes in consumer preferences or retail requirements
more quickly, devote greater resources to the building and sustaining of their
brand equity and the marketing and sale of their products or adopt more
aggressive pricing policies than we can. As a result, we may not be able to
compete as effectively with them and may not be able to maintain or grow the
equity of and demand for our brand. Increased competition in the worldwide
apparel industry  including from international expansion of vertically
integrated specialty stores, from department stores, chain stores and mass

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channel retailers developing exclusive labels, and from
well-known and successful non-apparel brands expanding into jeans and casual
apparel  could reduce our sales and adversely affect our business and financial
condition.

RISKS RELATED TO OUR COMMON STOCK

Trading in our common shares on the OTC Bulletin Board is
limited and sporadic making it difficult for our shareholders to sell their
shares or liquidate their investments.

Our common shares are currently listed for public trading on
the OTC Bulletin Board. The trading price of our common shares has been subject
to wide fluctuations. Trading prices of our common shares may fluctuate in
response to a number of factors, many of which will be beyond our control. The
stock market has generally experienced extreme price and volume fluctuations
that have often been unrelated or disproportionate to the operating performance
of companies with no current business operation. There can be no assurance that
trading prices and price earnings ratios previously experienced by our common
shares will be matched or maintained. These broad market and industry factors
may adversely affect the market price of our common shares, regardless of our
operating performance.

In the past, following periods of volatility in the market
price of a companys securities, securities class-action litigation has often
been instituted. Such litigation, if instituted, could result in substantial
costs for us and a diversion of managements attention and resources.

Our stock is a penny stock. Trading of our stock may be
restricted by the SECs penny stock regulations which may limit a stockholders
ability to buy and sell our stock.

Our stock is a penny stock. The Securities and Exchange
Commission has adopted Rule 15g-9 which generally defines penny stock to be
any equity security that has a market price (as defined) less than $5.00 per
share or an exercise price of less than $5.00 per share, subject to certain
exceptions. Our securities are covered by the penny stock rules, which impose
additional sales practice requirements on broker-dealers who sell to persons
other than established customers and accredited investors. The term
accredited investor refers generally to institutions with assets in excess of
$5,000,000 or individuals with a net worth in excess of $1,000,000 or annual
income exceeding $200,000 or $300,000 jointly with their spouse. The penny stock
rules require a broker-dealer, prior to a transaction in a penny stock not
otherwise exempt from the rules, to deliver a standardized risk disclosure
document in a form prepared by the SEC which provides information about penny
stocks and the nature and level of risks in the penny stock market. The
broker-dealer also must provide the customer with current bid and offer
quotations for the penny stock, the compensation of the broker-dealer and its
salesperson in the transaction and monthly account statements showing the market
value of each penny stock held in the customers account. The bid and offer
quotations, and the broker-dealer and salesperson compensation information, must
be given to the customer orally or in writing prior to effecting the transaction
and must be given to the customer in writing before or with the customers
confirmation. In addition, the penny stock rules require that prior to a
transaction in a penny stock not otherwise exempt from these rules, the
broker-dealer must make a special written determination that the penny stock is
a suitable investment for the purchaser and receive the purchasers written
agreement to the transaction. These disclosure requirements may have the effect
of reducing the level of trading activity in the secondary market for the stock
that is subject to these penny stock rules. Consequently, these penny stock
rules may affect the ability of broker-dealers to trade our securities. We
believe that the penny stock rules discourage investor interest in and limit the
marketability of our common stock.

FINRA sales practice requirements may also limit a
stockholders ability to buy and sell our stock and may have an adverse effect
on the market for our shares.

In addition to the penny stock rules promulgated by the
Securities and Exchange Commission, the FINRA has adopted rules that require
that in recommending an investment to a customer, a broker-dealer must have
reasonable grounds for believing that the investment is suitable for that
customer. Prior to recommending speculative low priced securities to their
non-institutional customers, broker-dealers must make reasonable efforts to
obtain information about the customers financial status, tax status, investment
objectives and other information. Under interpretations of these rules, the
FINRA believes that there is a high probability that speculative low priced
securities will not be suitable for at least some customers. The FINRA
requirements make it more difficult for

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broker-dealers to recommend that their customers buy our common
stock, which may limit your ability to buy and sell our stock and have an
adverse effect on the market for our shares.

Item 2. Unregistered Sales of Equity Securities and Use of
Proceeds

On October 7, 2008, we closed a private placement consisting of 6,925,000 units of our securities (the “Units”) at a price of US $0.20 per Unit for aggregate proceeds of $1,385,000. Each Unit consists of one common share of the company (the “Share”), one-half of one non-transferable common share purchase warrant (each whole share purchase warrant, a “Series A Warrant”) and one-half of one non-transferable common share purchase warrant (each whole share purchase warrant, a “Series B Warrant”).  We paid a finder’s fee of $100,000 to Jason Sundar, an officer of our company, in relation to this private placement.

Each whole Series A Warrant entitles the holder, on exercise
thereof, to purchase one common share of the company (each, a Series A Warrant
Share) at a price of US$0.30 at any time until the close of business on the day
which is 24 months from the date on which the Units are issued.

Each whole Series B Warrant entitles the holder, on exercise
thereof, to purchase one common share of the company (each, a Series B Warrant
Share) at a price of US$0.60 at any time until the close of business on the day
which is 24 months from the date on which the Units are issued. The Series B
Warrants are only exercisable following the exercise of all the Series A
Warrants held by such holder.

We issued 5,225,000 Units to 22 non-US persons pursuant to an
offshore transaction relying on Regulation S and/or Section 4(2) of the
Securities Act of 1933, as amended.

We issued 1,700,000 Units to 4 US persons pursuant to the
exemption from registration provided for under Rule 506 of Regulation D,
promulgated under the United States Securities Act of 1933, as amended.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Submission of Matters to a Vote of Securities
Holders

None.

Item 5. Other Information

None.

Item 6. Exhibits

|Exhibit |                                                                                                                                                                                   
|------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Number  | Description                                                                                                                                                                       
|        |                                                                                                                                                                                   
|(3)     | Articles of Incorporation and By-laws                                                                                                                                             
|        |                                                                                                                                                                                   
|3.1     | Articles of Incorporation (incorporated by
      reference from our Registration Statement on Form SB-2 filed on January
      11, 2007).                                         
|        |                                                                                                                                                                                   
|3.2     | Bylaws (incorporated by reference from our
      Registration Statement on Form SB-2 Filed on January 11, 2007).                                                                  
|        |                                                                                                                                                                                   
|3.3     | Articles of Merger filed with the Nevada Secretary
      of State on May 29, 2007 (incorporated by reference from our Current Report
      on Form 8-K filed on June 16, 2007).   
|        |                                                                                                                                                                                   
|3.4     | Certificate of Change filed with the Nevada
      Secretary of State on May 29, 2007 (incorporated by reference from our Current
      Report on Form 8-K filed on June 16, 2007).

14

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|Exhibit |                                                                                                                                                                                                               
|------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Number  | Description                                                                                                                                                                                                   
|        |                                                                                                                                                                                                               
|(10)    | Material Contracts                                                                                                                                                                                            
|        |                                                                                                                                                                                                               
|10.1    | Employment Agreement
        dated June 22, 2007, between our company and Terry Fitzgerald incorporated
        by reference from our Current Report on Form 8-K filed on June 25, 2007).                     
|        |                                                                                                                                                                                                               
|10.2    | Letter of Intent
        dated June 25, 2007, between our company and Dussault Jeans Inc. (incorporated
        by reference from our Current Report on Form 8-K filed on July 2, 2007).                      
|        |                                                                                                                                                                                                               
|10.3    | Letter of
        Intent dated November 5, 2007 between our company and Dussault Jeans Inc.
        (incorporated by reference from our Current Report on Form 8-K filed on
        November 5, 2007).        
|        |                                                                                                                                                                                                               
|10.4    | Consulting Agreement
        dated July 19, 2007, between our company and Jason Sundar (incorporated
        by reference from our Annual Report on Form 10-KSB filed on February 13,
        2008).          
|        |                                                                                                                                                                                                               
|10.5    | Consulting Agreement
        dated July 19, 2007, between our company and Robert Mintak (incorporated
        by reference from our Annual Report on Form 10-KSB filed on February 13,
        2008).         
|        |                                                                                                                                                                                                               
|10.6    | Bridge Loan Agreement
        dated July 19, 2007, between our company and Dussault Jeans Inc. (incorporated
        by reference from our Current Report on Form 8-K filed on August 1, 2007).               
|        |                                                                                                                                                                                                               
|10.7    | Bridge Loan Agreement
        dated April 16, 2008, between our company and Dayton Boot Co. Ent. Ltd.
        (incorporated by reference from our Current Report on Form 8-K filed on
        April 23, 2008).
|        |                                                                                                                                                                                                               
|(31)    | Section 302
        Certification                                                                                                                                                                             
|        |                                                                                                                                                                                                               
|31.1*   | Section
        302 Certification of Chief Executive Officer.                                                                                                                                                 
|        |                                                                                                                                                                                                               
|31.2*   | Section
        302 Certification of Chief Financial Officer.                                                                                                                                                 
|        |                                                                                                                                                                                                               
|(32)    | Section 906
        Certification                                                                                                                                                                             
|        |                                                                                                                                                                                                               
|32.1*   | Section
        906 Certification of Chief Executive Officer.                                                                                                                                                 
|        |                                                                                                                                                                                                               
|32.2*   | Section
        906 Certification of Chief Financial Officer.                                                                                                                                                 

* Filed herewith.

15

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.

|                      | DUSSAULT APPAREL INC.                     
|--------------------- | ------------------------------------------
|                      | (Registrant)                              
|                      |                                           
|                      |                                           
|Dated: March 23, 2009 | */s/ Terry Fitzgerald*                    
|                      | Terry Fitzgerald                          
|                      | Chief Executive Officer and President     
|                      | (Principal Executive Officer)             
|                      |                                           
|                      |                                           
|Dated: March 23, 2009 | */s/ Robert Mintak*                       
|                      | Robert Mintak                             
|                      | Chief Financial Officer                   
|                      | (Principal Financial Officer and Principal
|                      | Accounting Officer)                       

16

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