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UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C.
20549

FORM 10-QSB

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended April 30, 2008

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
EXCHANGE ACT

For the transition period from _________to ________

Commission File No. 000-52452

DUSSAULT APPAREL
INC.(Exact name of small business issuer as specified in its
charter)

|Nevada                                                               | 98-0513727                          
|-------------------------------------------------------------------- | ------------------------------------
|(State or other jurisdiction of incorporation or
      organization) | (I.R.S. Employer Identification No.)

8010 Melrose Avenue, Los Angeles California,
90046-7010(Address of principal executive offices)

(866) 841 - 2010(Issuers telephone
number)

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

Check whether the issuer (1) filed all reports 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. Yes [ ] No
[X]

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

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

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

APPLICABLE ONLY TO CORPORATE ISSUERS

State the number of shares outstanding of each of the issuers
classes of common equity as of the latest practicable date:

As of June 20, 2008, there were 44,762,000 shares of common
stock, par value $0.001, outstanding.

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

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- 2 -

PART I - FINANCIAL INFORMATION

Our financial statements are stated in United States Dollars
(US$) and are prepared in accordance with United States Generally Accepted
Accounting Principles.

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|- 3 -                        
|-----------------------------
|                             
|                             
|DUSSAULT APPAREL INC.        
|(A Development Stage Company)
|Balance Sheet                

|                                                       |   | April 30    |   |   | October 31, |  
|------------------------------------------------------ | - | ----------- | - | - | ----------- | -
|                                                       |   | 2008        |   |   | 2007        |  
|                                                       |   | (Unaudited) |   |   |             |  
|ASSETS                                                 |   |             |   |   |             |  
|Current
      Assets                                   |   |             |   |   |             |  
|Cash                                                   | $ | 503,062     |   | $ | 227,256     |  
|Accounts Receivable                                    |   | 83,275      |   |   | 102,944     |  
|Inventory                                              |   | 2,089,885   |   |   | 2,144,817   |  
|                                                       |   |             |   |   |             |  
|Total Current
      Assets                             |   | 2,676,222   |   |   | 2,475,017   |  
|                                                       |   |             |   |   |             |  
|FIXED ASSETS                                           |   |             |   |   |             |  
|Property
      and Equipment, net                      |   | 64,218      |   |   | 68,641      |  
|                                                       |   |             |   |   |             |  
|                                                       |   | 64,218      |   |   | 68,641      |  
|                                                       |   |             |   |   |             |  
|Total Assets                                           | $ | 2,740,440   |   | $ | 2,543,658   |  
|                                                       |   |             |   |   |             |  
|LIABILITIES AND SHAREHOLDERS' EQUITY                   |   |             |   |   |             |  
|Current Liabilities                                    |   |             |   |   |             |  
|Accounts Payable                                       | $ | 4,423       |   | $ | 889         |  
|Subscriptions
      Received                           |   | 1,288,000   |   |   | 924,573     |  
|                                                       |   |             |   |   |             |  
|Total Current
      Liabilities                        |   | 1,292,423   |   |   | 925,462     |  
|                                                       |   |             |   |   |             |  
|Total Liabilities                                      | $ | 1,292,423   |   | $ | 925,462     |  
|                                                       |   |             |   |   |             |  
|Shareholders' Equity                                   |   |             |   |   |             |  
|Common Stock, $0.001 par value;
      authorized       |   |             |   |   |             |  
|75,000,000 shares; issued
      and outstanding        |   |             |   |   |             |  
|56,487,000 shares                                      |   | 56,487      |   |   | 56,487      |  
|Additional Paid-In
      Capital                       |   | 8,152,755   |   |   | 7,485,513   |  
|Deficit accumulated during the
      development stage |   | ($6,761,225 | ) |   | (5,923,804  | )
|                                                       |   |             |   |   |             |  
|Total Shareholders' Equity                             |   | 1,448,017   |   |   | 1,618,196   |  
|                                                       |   |             |   |   |             |  
|Total Liabilities and Shareholders'
      Equity       | $ | 2,740,440   |   | $ | 2,543,658   |  

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

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|- 4 -                        
|-----------------------------
|                             
|                             
|DUSSAULT APPAREL INC.        
|(A Development Stage Company)
|Statement of Operations      
|(Unaudited)                  

|                                     |   | For the    |   |   | For the    |   |   |             |   |   |             |   |   | For the        |  
|------------------------------------ | - | ---------- | - | - | ---------- | - | - | ----------- | - | - | ----------- | - | - | -------------- | -
|                                     |   | three      |   |   | three      |   |   | For the six |   |   | For the six |   |   | period         |  
|                                     |   | months     |   |   | months     |   |   | months      |   |   | months      |   |   | Aug. 1 2006    |  
|                                     |   | ended      |   |   | ended      |   |   | ended       |   |   | ended       |   |   | (inception) to |  
|                                     |   | April 30,  |   |   | April 30,  |   |   | April 30,   |   |   | April 30,   |   |   | April 30,      |  
|                                     |   | 2008       |   |   | 2007       |   |   | 2008        |   |   | 2007        |   |   | 2008           |  
|                                     |   |            |   |   |            |   |   |             |   |   |             |   |   |                |  
|                                     |   |            |   |   |            |   |   |             |   |   |             |   |   |                |  
|Revenue                              | $ | 129,430    |   | $ | -          |   | $ | 280,248     |   | $ | -           |   | $ | 383,193        |  
|                                     |   |            |   |   |            |   |   |             |   |   |             |   |   |                |  
|Cost of Sales                        |   | 41,418     |   |   | -          |   |   | 145,724     |   |   | -           |   |   | 179,159        |  
|                                     |   |            |   |   |            |   |   |             |   |   |             |   |   |                |  
|Operating Income                     |   | 88,012     |   |   | -          |   |   | 134,524     |   |   | -           |   |   | 204,034        |  
|                                     |   |            |   |   |            |   |   |             |   |   |             |   |   |                |  
|General and Administrative Expenses: |   |            |   |   |            |   |   |             |   |   |             |   |  
|Salaries & Wages                     |   | 43,843     |   |   | -          |   |   | 143,876     |   |   | -           |   |   | 265,558        |  
|Professional Fees                    |   | 18,012     |   |   | 16,401     |   |   | 44,697      |   |   | 25,401      |   |   | 73,771         |  
|Start-Up Costs                       |   | -          |   |   | -          |   |   | -           |   |   | -           |   |   | 5,777,175      |  
|Development-                         |   |            |   |   |            |   |   |             |   |   |             |   |   |                |  
|Vancouver                            |   | 96,297     |   |   | -          |   |   | 221,199     |   |   | -           |   |   | 221,199        |  
|Depreciation                         |   | 1,500      |   |   | -          |   |   | 1,500       |   |   | -           |   |   | 1,500          |  
|Other Admin. Expenses                |   | 65,041     |   |   | 181        |   |   | 560,673     |   |   | 181         |   |   | 626,056        |  
|Total General and                    |   |            |   |   |            |   |   |             |   |   |             |   |   |                |  
|Administrative                       |   |            |   |   |            |   |   |             |   |   |             |   |   |                |  
|Expenses                             |   | 224,693    |   |   | 16,582     |   |   | 971,945     |   |   | 25,582      |   |   | 6,965,259      |  
|                                     |   |            |   |   |            |   |   |             |   |   |             |   |   |                |  
|Net Loss                             | $ | (136,681   | ) | $ | (16,582    | ) | $ | (837,421    | ) | $ | (25,582     | ) | $ | (6,761,225     | )
|                                     |   |            |   |   |            |   |   |             |   |   |             |   |   |                |  
|Loss Per Common Share:               |   |            |   |   |            |   |   |             |   |   |             |   |   |                |  
|Basic and diluted                    | $ | (0.002     | ) | $ | (0.000     | ) | $ | (0.015      | ) | $ | (0.001      | ) |   |                |  
|                                     |   |            |   |   |            |   |   |             |   |   |             |   |   |                |  
|                                     |   |            |   |   |            |   |   |             |   |   |             |   |   |                |  
|Weighted Average Shares              |   |            |   |   |            |   |   |             |   |   |             |   |   |                |  
|Outstanding basic and                |   |            |   |   |            |   |   |             |   |   |             |   |   |                |  
|diluted                              |   | 56,487,000 |   |   | 49,000,000 |   |   | 56,487,000  |   |   | 48,750,002  |   |   |                |  

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

---

|- 5 -                        
|-----------------------------
|                             
|                             
|DUSSAULT APPAREL INC.        
|(A Development Stage Company)
|Statement of Cash Flows      
|(Unaudited)                  

|                                                    |   |               |   |   | For
      the |   |   |             |   |   |             |   |   | For the        |  
|--------------------------------------------------- | - | ------------- | - | - | ------------- | - | - | ----------- | - | - | ----------- | - | - | -------------- | -
|                                                    |   | For the three |   |   | three         |   |   | For the six |   |   | For the six |   |   | period         |  
|                                                    |   | months        |   |   | months        |   |   | months      |   |   | months      |   |   | Aug. 1 2006    |  
|                                                    |   | ended         |   |   | ended         |   |   | ended       |   |   | ended       |   |   | (inception) to |  
|                                                    |   | April 30,     |   |   | April 30,     |   |   | April 30,   |   |   | April 30,   |   |   | April 30,      |  
|                                                    |   | 2008          |   |   | 2007          |   |   | 2008        |   |   | 2007        |   |   | 2008           |  
|Cash flows from operating activities:               |   |               |   |   |               |   |   |             |   |   |             |   |   |                |  
|Net loss                                            | $ | (136,681      | ) | $ | (16,582       | ) | $ | (837,421    | ) | $ | (25,582     | ) | $ | (6,761,225     | )
|Adjustments to reconcile net
      loss to net cash |   |               |   |   |               |   |   |             |   |   |             |   |  
|used by operating activities:                       |   |               |   |   |               |   |   |             |   |   |             |   |   |                |  
|Depreciation                                        |   | 1,500         |   |   | -             |   |   | 1,500       |   |   | -           |   |   | 1,500          |  
|Change in
      operating assets and liabilities:   |   |               |   |   |               |   |   |             |   |   |             |   |  
|Decrease in
      Accounts Receivable               |   |               |   |   | -             |   |   | 19,670      |   |   | -           |   |   | (83,275        | )
|Decrease in Inventory                               |   | (36,468       | ) |   | -             |   |   | 54,932      |   |   | -           |   |   | (2,089,885     | )
|Increase in
      accounts payable                  |   |               |   |   |               |   |   |             |   |   |             |   |   |                |  
|and accrued liabilities                             |   | (5,494        | ) |   | -             |   |   | 3,534       |   |   | -           |   |   | 4,423          |  
|Non cash issue of stock for services                |   |               |   |   |               |   |   |             |   |   |             |   |   | 5,272,000      |  
|Net cash (used by) operating                        |   |               |   |   |               |   |   |             |   |   |             |   |   |                |  
|activities                                          |   | (177,143      | ) |   | (16,582       | ) |   | (757,785    | ) |   | (25,582     | ) |   | (3,656,462     | )
|Cash flows from investing activities                |   |               |   |   |               |   |   |             |   |   |             |   |   |                |  
|Purchase of property, equipment                     |   | (77,145       | ) |   | -             |   |   | (55,577     | ) |   | -           |   |   | (124,218       | )
|Net cash (used by) investing                        |   |               |   |   |               |   |   |             |   |   |             |   |   |                |  
|activities                                          |   | (77,145       | ) |   | -             |   |   | (55,577     | ) |   | -           |   |   | (124,218       | )
|Cash flows from financing
      activities:         |   |               |   |   |               |   |   |             |   |   |             |   |   |                |  
|Subscriptions received                              |   | 678,423       |   |   | -             |   |   | 1,089,168   |   |   |             |   |   | 2,013,742      |  
|Common stock issued for
      cash                  |   | -             |   |   | -             |   |   | -           |   |   | 9,000       |   |   | 2,270,000      |  
|Net cash (used by)
      provided                   |   |               |   |   |               |   |   |             |   |   |             |   |   |                |  
|by financing activities                             |   | 678,423       |   |   | -             |   |   | 1,089,168   |   |   | 9,000       |   |   | 4,283,742      |  
|                                                    |   |               |   |   |               |   |   |             |   |   |             |   |   |                |  
|Net increase (decrease) in cash                     |   | 424,135       |   |   | (16,582       | ) |   | 275,806     |   |   | (16,582     | ) |   | 503,062        |  
|Cash, beginning of the period                       |   | 78,927        |   |   | 43,846        |   |   | 227,256     |   |   | 43,846      |   |   | -              |  
|                                                    |   |               |   |   |               |   |   |             |   |   |             |   |   |                |  
|Cash, end of the period                             | $ | 503,062       |   | $ | 27,264        |   | $ | 503,062     |   | $ | 27,264      |   | $ | 503,062        |  
|                                                    |   |               |   |   |               |   |   |             |   |   |             |   |   |                |  
|Supplemental cash flow disclosure:                  |   |               |   |   |               |   |   |             |   |   |             |   |   |                |  
|Interest paid                                       | $ | -             |   | $ | -             |   | $ | -           |   | $ | -           |   | $ | -              |  
|Taxes paid                                          | $ | -             |   | $ | -             |   | $ | -           |   | $ | -           |   | $ | -              |  

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

---

|- 6 -                            
|---------------------------------
|                                 
|                                 
|DUSSAULT APPAREL INC.            
|(A Development Stage Company)    
|Statement of Shareholders' Equity
|(Unaudited)                      

|                                                              |  |              |  |   |            |  |   |            |   |   | Deficit       |   |   |            |  
|------------------------------------------------------------- |  | ------------ |  | - | ---------- |  | - | ---------- | - | - | ------------- | - | - | ---------- | -
|                                                              |  |              |  |   |            |  |   |            |   |   | Accumulated   |   |   | Total      |  
|                                                              |  | Common Stock |  |   | Additional |  |   | during the |   |   | Shareholders' |  
|                                                              |  | Number of    |  |   |            |  |   | Paid-In    |   |   | Development   |   |   | Equity     |  
|                                                              |  | Shares       |  |   | Amount     |  |   | Capital    |   |   | Stage         |   |   | (Deficit)  |  
|                                                              |  |              |  |   |            |  |   |            |   |   |               |   |   |            |  
|Inception: August 1, 2006                                     |  | -            |  | $ | -          |  | $ | -          |   | $ | -             |   | $ | -          |  
|                                                              |  |              |  |   |            |  |   |            |   |   |               |   |   |            |  
|Aug. 31, 2006: issued stock for cash at
      $0.02 per share |  | 1,500,000    |  |   | 1,500      |  |   | 13,500     |   |   |               |   |   | 15,000     |  
|Oct 31, 2006: issued stock for cash at $0.02 per share        |  | 1,550,000    |  |   | 1,550      |  |   | 29,450     |   |   |               |   |   | 31,000     |  
|Net loss for period January 12 - October
      31, 2006       |  |              |  |   |            |  |   |            |   |   | (2,154        | ) |   | (2,154     | )
|Balance, October 31, 2006                                     |  | 3,050,000    |  | $ | 3,050      |  | $ | 42,950     |   | $ | (2,154        | ) | $ | 43,846     |  
|                                                              |  |              |  |   |            |  |   |            |   |   |               |   |   |            |  
|Nov. 8, 2006: issued stock for cash at $0.02 per share        |  | 450,000      |  |   | 450        |  |   | 8,550      |   |   |               |   |   | 9,000      |  
|                                                              |  |              |  |   |            |  |   |            |   |   |               |   |   |            |  
|Balances before 14 for 1 forward common stock split           |  | 3,500,000    |  |   | 3,500      |  |   | 51,500     |   |   | (2,154        | ) |   | 52,846     |  
|Jun 11, 2007: 14 for 1 forward common stock
      split       |  | 45,500,000   |  |   | 45,500     |  |   | (45,500    | ) |   |               |   |   | -          |  
|Balances after 14 for 1 forward common stock split            |  | 49,000,000   |  |   | 49,000     |  |   | 6,000      |   |   | (2,154        | ) |   | 52,846     |  
|                                                              |  |              |  |   |            |  |   |            |   |   |               |   |   |            |  
|Aug 31, 2007 issued stock for services at $1.00 per           |  |              |  |   |            |  |   |            |   |   |               |   |   |            |  
|share                                                         |  | 5,272,000    |  |   | 5,272      |  |   | 5,266,728  |   |   |               |   |   | 5,272,000  |  
|Aug. 31, 2007 issued stock for cash at $1.00 per share        |  | 2,215,000    |  |   | 2,215      |  |   | 2,212,785  |   |   |               |   |   | 2,215,000  |  
|Net loss for year ended October 31, 2007                      |  |              |  |   |            |  |   |            |   |   | (5,921,650    | ) |   | (5,921,650 | )
|                                                              |  |              |  |   |            |  |   |            |   |   |               |   |   |            |  
|Balances at October 31, 2007                                  |  | 56,487,000   |  | $ | 56,487     |  | $ | 7,485,513  |   |   | ($5,923,804   | ) | $ | 1,618,196  |  
|                                                              |  |              |  |   |            |  |   |            |   |   |               |   |   |            |  
|April 30, 2008 contribution of Vancouver
      office assets  |  |              |  |   |            |  |   | 667,242    |   |   |               |   |   | 667,241    |  
|Net loss for the six months ended April 30, 2008              |  |              |  |   |            |  |   |            |   |   | (837,421      | ) |   | (837,421   | )
|Balances at April 30, 2008                                    |  | 56,487,000   |  | $ | 56,487     |  | $ | 8,152,755  |   |   | ($6,761,225   | ) | $ | 1,448,016  |  

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

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- 7 -

DUSSAULT APPAREL INC. (A Development Stage
Company)NOTES TO THE FINANCIAL STATEMENTS April 30, 2008

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. In-house designs are
manufactured in China and warehoused in Los Angeles. The Company also wholesales
to similar outlets 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 six months ended April 30, 2008.
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.

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

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- 8 -

value. The carrying amounts of the Companys financial
instruments as of March 31, 2008 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
April 30, 2008 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 $837,421 in the six months ended April 30, 2008. The
Corporation had a positive cash flow however, of $275,806 in the same period,
generated by subscriptions received for stock. The Company opened its planned
retail outlet in November 2007, however the ability of the Company to continue
as a going concern is dependent on the successful stimulation of sales 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
  $6,761,225. 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.

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- 9 -

Accounts Receivable

The company shipped inventory at wholesale prices to ten retail
outlets in October of 2007 totaling $102,944. Payment terms varied. As at April
30, 2008 $83,275 remained outstanding, and none of the terms have been defaulted
upon. An accounting policy for allowance for doubtful accounts has not been
established because of insufficient experience. Customers were qualified by
management from prior business arrangements, and management expects the
remaining amount of $83,275 will be collected in the balance of the fiscal
year.

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. A perpetual inventory system is
maintained.

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. Major
additions, betterment and rental improvements during the construction phase of
the retail store April through October 2007 are capitalized. Maintenance and
repairs are expensed currently. Fixtures and equipment including leasehold
improvements total $64,218 net of accumulated depreciation as at April 30,
2008.

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.

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 April 30, 2008.

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
six months ended April 30, 2008 and 2007:

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- 10 -

|                                      |   | 2008       |   |   | 2007       |  
|------------------------------------- | - | ---------- | - | - | ---------- | -
|Basic and diluted net loss per share: |   |            |   |   |            |  
|Numerator                             |   |            |   |   |            |  
|Net (Loss)                            | $ | (837,421   | ) | $ | (25,582    | )
|                                      |   |            |   |   |            |  
|Denominator                           |   |            |   |   |            |  
|Basic and diluted weighted average    |   |            |   |   |            |  
|number of shares outstanding          |   | 56,487,000 |   |   | 48,750,002 |  
|                                      |   |            |   |   |            |  
|Basic and Diluted Net Loss Per Share  | $ | (0.015     | ) | $ | (0.001     | )

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 April 30, 2008.

A property lease was entered into March 7, 2007 by the
principals of the Company on behalf of the Company for a retail store at 8010
Melrose Avenue, Los Angeles, California: The terms of the lease call for a five
year lease beginning March 15, 2007 at a flat rate of $7,900 per month, and
ending July 15, 2012. Rent for April, May, June, and July 2007 was abated. This
was during the construction period of improvements to a retail store. The lease
provides for an option to renew for five years at a re-negotiated rent.

Future minimum lease payments required under the lease are as
follows, for fiscal years ending October 31:

|2008                         | $ 47,400 | Balance of fiscal year
|---------------------------- | -------- | ----------------------
|2009                         | 94,800   |                       
|2010                         | 94,800   |                       
|2011                         | 94,800   |                       
|2012                         | 71,100   |                       
|Total minimum lease payments | $402,900 |                       

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- 11 -

NOTE 4  CAPITAL STRUCTURE

Common Stock Transactions during the period from inception
August 1, 2006 through April 30, 2008

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.

As of April 30, 2008 the Company had authorized 75,000,000
shares of $0.001 par value common stock, of which 56,487,000 shares were issued
and outstanding.

NOTE 5  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.

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- 12 -

Item 2. Managements Discussion and Analysis or Plan of
Operation.

Corporate History

Our company was incorporated in the State of Nevada on August
1, 2006. 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 we effected a fourteen (14) for one (1)
forward stock split of our authorized, issued and outstanding shares. As a
result, our authorized capital increased from 75,000,000 shares of common stock
with a par value of $0.001 to 1,050,000,000 shares of common stock with a par
value of $0.001. Our issued and outstanding share capital increased from
3,500,000 shares of common stock to 49,000,000 shares of common stock.

Our common shares are quoted for trading on the OTCBB under the
symbol DUSS.

The address of our principal executive office is 8010 Melrose
Avenue, Los Angeles California, 90046-7010. Our telephone number is (866)
841-2010.

Since inception our business 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 to pursue
opportunities in the retail fashion industry.

Plan of Operations

General Overview

We remain an early stage company that has only recently
commenced active operations. As noted below we have only recently been
generating revenue from our retail sales. Our primary concerns in regards to our
efforts to maintain and expand our business and increase our revenues are:

- market acceptance of our products;
- our ability to successfully compete with other more established companies
  who provide similar products; and
- our short term funding requirements until we achieve a break-even level of
  operations.

While we are encouraged by the recent increase in sales and
revenues ($129,430 for the quarter ended April 30, 2008 compared to $0.00 for
the quarter ended April 30, 2007), we realize that in order for this trend to
continue we must establish and maintain a significant share of our target market
for the sales of our products. The only measurement that we have for
ascertaining whether or not the market is accepting our products, and whether or
not we are successfully competing in such market, is whether our revenues are
increasing on a month to month basis. As we are an early stage company, and
until we achieve a more substantial level of operations and have greater
resources available to us, it will be difficult to analyze how we are doing in
terms of our efforts to obtain additional market share and successfully compete
in the retail market, other than by looking to our revenues as a benchmark.

Until we are able to generate material revenues from operations
we must limit our expenses as much as possible. To date the majority of our
expenses have been as a result of the acquisition of inventory, start up costs
in regards to our retail operations, and stock compensation expenses due to
share issuances to certain directors, officers and employees. Once we are no
longer faced with such expenses, we anticipate that our ongoing operating
expenses will be at a manageable level, provided that we at least maintain our
current level of revenues and locate some additional financing.

Results of Operations  Quarter ended April 30, 2008
compared to quarter ended April 30, 2007

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- 13 -

The following summary of our results of operations should be
read in conjunction with our consolidated financial statements for the quarter
ended April 30, 2008 which are included herein.

Our operating results for the quarter ended April 30, 2008 and
for the quarter ended April 30, 2007 are summarized as follows:

Quarter Ended April 30, 2008
    
    Quarter Ended April 30, 2007Revenue
    $
    129,430
    $
    0.00Expenses
    $
    224,693
    $
    16,582Salaries & Wages
    $
    43,843
    $
    0.00Start-Up Costs
    $
    0.00
    $
    0.00Other administrative Expenses
    $
    65,041
    $
    0.00Professional fees
    $
    18,012
    $
    16,401


We incurred a net loss of $136,681 for the quarter ended April
30, 2008 compared to a net loss of $16,582 for the quarter ended April 30, 2007.
The increase was primarily as a result of an increase in salaries and wages, the
development in Vancouver and other administrative expenses.

We recognized an increase in revenues to $129,430 for the
quarter ended April 30, 2008. During the quarter ended April 30, 2007, we did
not recognize any revenues. The increase in revenue was primarily due to our
store opening in Los Angeles. Our operating loss during the quarter ended April
30, 2008 was $136,681.

We experienced an increase in general and administration
expenses during the quarter ended April 30, 2008 of $224,693, as compared to
general and administration expenses for the quarter ended April 30, 2007 of
$16,582. This increase was primarily due to an increase in salaries and wages,
the development in Vancouver and other administrative expenses.

As of April 30, 2008 our current assets were $2,676,222,
compared to current assets of $2,475,017 as at October 31, 2007.

As of April 30, 2008, we had a working capital of $1,383,799,
compared to working capital of $1,549,555 as at October 31, 2007.

Liquidity and Capital Resources

Our principal capital resources have been through the issuance
of common stock, although we may use shareholder loans, advances from related
parties, or borrowing in the future.

As at April 30, 2008 we had $503,062 of cash on hand. As at
April 30, 2008, our total current assets were $2,676,222, which consisted
primarily of inventory of $2,089,885, cash on hand as noted above and accounts
receivable of $83,275.

While our revenue from sales has been increasing from period to
period, there is no guarantee that this will continue, or will increase to a
sufficient level to fund our operations. However, as our revenues and cash flow
from operations increase, we look forward to relying less on the sale of stock
and advances from related parties in order to finance our operations.

As at April 30, 2008, our total current liabilities increased
to $1,292,423 from $925,462 at October 31, 2007, primarily reflecting an
increase in subscription receivable of $1,288,000.

We do not anticipate any material changes in the cost or
requirements relating to the capital resources required to conduct our
operations. We do not have any obligations regarding, and do not intend on
making, any material capital expenditures.

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- 14 -

Historically, we have financed our cash flow and operations
from the sale of stock and advances from shareholders. During the quarter ended
April 30, 2008, did not receive funds from the sale of our stock or from
advances from shareholders. At April 30, 2008 we had cash on hand of $503,062.
These funds will not be sufficient for us to address our minimum current and
ongoing expenses, and as a result we may have to restrict or eliminate expenses
associated with the marketing and promotion activity connected with the
development and marketing of our products and expansion of our retail
operations. However, we cannot satisfy our minimum cash requirements for the
year ending October 31, 2008 without further funding. As we will require
additional monies during 2008, we hope to raise any such additional capital
primarily through the private placement of our securities or advances from
related parties.

For the quarter ended April 30, 2008, we incurred operating
expenses of $224,693.

We have no external sources of liquidity in the form of credit
lines from banks. Based on our future operations described below, management
believes that our available cash will not be sufficient to fund our working
capital requirements in the near future and therefore, we will have to raise
financing through the sale of our equity securities or arrange an advance from
shareholders of our company.

Future Operations

Presently, our revenues are not sufficient to meet our
operating and capital expenses. Management projects that we will require
additional funding to maintain and expand our current operations.

Our capital requirements are difficult to plan in light of our
current strategy to expand our customer base and retail operations for 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. It is our
intention to raise sufficient funds necessary to carry our company through to
positive cash flow and profitability. We have incurred operating losses since
inception, and this is likely to continue into the year ended October 31, 2008.

Management believes that our products will become increasingly
popular in our targeted market segment and that if we are successful at building
our brand and showing consistent sales growth that we may be successful at
completing future equity or debt financings.

We are pursuing various financing alternatives to meet our
immediate and long-term financial requirements, which we anticipate will consist
of further private placements of equity securities, advances from related
parties or shareholder loans. We plan to rely on loans from management to meet
our short term cash requirements. We have not entered into any definitive
agreements with any shareholders or related parties for the provision of loans
or advances. 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, 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.

Immediate Objectives

Our primary objective in the next twelve months will be to
further develop and expand our retail store locations and increase sales in such
locations as they open.

Cash Requirements

We anticipate that we will require up to $920,000 for the 12
months to implement our expansion plans. Specifically, we estimate our operating
expenses and working capital requirements for the next 12 months to be as
follows:

Estimated Funding Required During the Next
      Twelve MonthsDesign and Development Activities
    $
    100,000Officer and Employee Compensation
    
    500,000Sales and Marketing
    
    140,000Legal, Accounting and Professional Fees
      
      80,000General and Administrative
      
      100,000Total
      $
      920,000


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- 15 -

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, if and when it is needed, we will be forced to
scale down or perhaps even cease the operation of our business.

Retail Locations

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.

Purchase of Significant Equipment

We do not intend to purchase any significant equipment over the
twelve months ending April 30, 2009 other than the completion of our first
retail location and the purchase of equipment associated with that.

Employees

As at April 30, 2008 we have no employees other than our
directors and officers. We do not expect to hire new employees over the next 12
month period as we expand into the retail fashion industry. We do and will
continue to outsource contract employment as needed.

Off-Balance Sheet Arrangements

Our company has no outstanding derivative financial
instruments, off-balance sheet guarantees, interest rate swap transactions or
foreign currency contracts. Neither our company nor our operating subsidiaries
engage in trading activities involving non-exchange traded contracts.

Going Concern

We have suffered recurring losses from operations. The
continuation of our company as a going concern is dependent upon our company
attaining and maintaining profitable operations and raising additional capital.
The financial statements do not include any adjustment relating to the recovery
and classification of recorded asset amounts or the amount and classification of
liabilities that might be necessary should our company discontinue
operations.

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.

Income Taxes

We utilize 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 our 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. We generated deferred tax credits through net operating loss
carryforwards. However, a valuation allowance of 100% has been

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- 16 -

established, as the realization of the deferred tax credits is
not reasonably certain, based on going concern considerations outlined
below.

Going Concern

Our 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 April 30, 2008
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 $837,421 in the six months ended April 30, 2008. The
Corporation had a positive cash flow however, of $275,806 in the same period,
generated by subscriptions received for stock. The Company opened its planned
retail outlet in November 2007, however the ability of the Company to continue
as a going concern is dependent on the successful stimulation of sales 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

We are 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, we have incurred operating losses totaling $6,761,225.
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 financial information
to make informed investment decisions.

Accounts Receivable

We shipped inventory at wholesale prices to ten retail outlets
in October of 2007 totaling $102,944. Payment terms varied. As at April 30, 2008
$83,275 remained outstanding, and none of the terms have been defaulted upon. An
accounting policy for allowance for doubtful accounts has not been established
because of insufficient experience. Customers were qualified by management from
prior business arrangements, and management expects the remaining amount of
$83,275 will be collected in the balance of the fiscal year.

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. A perpetual inventory system is
maintained.

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. Major
additions, betterment and rental improvements during the construction phase of
the retail store April through October 2007 are capitalized. Maintenance and
repairs are expensed currently. Fixtures and equipment including leasehold
improvements total $64,218 net of accumulated depreciation as at April 30,
2008.

We review 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.

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- 17 -

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. We have no potentially dilutive
securities as of April 30, 2008.

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 April 30, 2008 and 2007:

|                                      |   | 2008       |   |   | 2007       |  
|------------------------------------- | - | ---------- | - | - | ---------- | -
|Basic and diluted net loss per share: |   |            |   |   |            |  
|Numerator                             |   |            |   |   |            |  
|Net (Loss)                            | $ | (837,421   | ) | $ | (25,582    | )
|                                      |   |            |   |   |            |  
|Denominator                           |   |            |   |   |            |  
|Basic and diluted weighted average    |   |            |   |   |            |  
|number of
      shares outstanding    |   | 56,487,000 |   |   | 48,750,002 |  
|                                      |   |            |   |   |            |  
|Basic and Diluted Net Loss Per Share  | $ | (0.015     | ) | $ | (0.001     | )

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

RISK FACTORS

Much of the information included in this quarterly report
includes or is based upon estimates, projections or other forward-looking
statements. Such forward-looking statements include any projections or
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.

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- 18 -

Our common shares are considered speculative during the
development of our new business operations. Prospective investors should
consider carefully the risk factors set out below.

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 April 30, 2008, we had working capital of $1,383,799. We do
not expect positive material cash flow from operations in the near term. We have
estimated that we may require up to $$920,000 to carry out our plan in regards
to retail fashion during the twelve month period ended April 30, 2009. However,
there is no assurance that actual cash requirements will not exceed our
estimates.

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.

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.

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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, 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, FINRA believes that
there is a high probability that speculative low priced securities will not be
suitable for at least some customers. FINRA requirements make it more difficult
for 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 3. Controls and Procedures.

As required by Rule 13a-15 under the Exchange Act, we have
evaluated the effectiveness of the design and operation of our disclosure
controls and procedures at April 30, 2008, which is the end of the period
covered by this report. This evaluation was carried out by our principal
executive officer and our principal financial officer. Based on this evaluation,
our principal executive officer and our principal financial officer have
concluded that the design and operation of our disclosure controls and
procedures are effective as at the end of the period covered by this report.
There were no changes in our internal control over financial reporting or in
other factors that have materially affected, or are reasonably likely to
materially affect, our internal control over financial reporting in our most
recent fiscal quarter.

Disclosure controls and procedures are controls and other
procedures that are designed to ensure that information required to be disclosed
by our company in the reports that we file or submit under the Exchange Act is
recorded, processed, summarized and reported, within the time periods specified
in the SEC's rules and forms. Disclosure controls and procedures include,
without limitation, controls and procedures designed to ensure that information

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- 20 -

required to be disclosed by our company in the reports that we
file or submit under the Exchange Act is accumulated and communicated to our
management, including our principal executive officer and our principal
financial officer, as appropriate, to allow timely decisions regarding required
disclosure.

Item 3A(T). 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 principal
executive officer (our chief executive officer) and principal accounting and
financial officer (our Chief Financial Officer) to allow for timely decisions
regarding required disclosure. In designing and evaluating our disclosure
controls and procedures, our management recognizes that any controls and
procedures, no matter how well designed and operated, can provide only
reasonable assurance of achieving the desired control objectives, and our
management is required to apply its judgment in evaluating the cost-benefit
relationship of possible controls and procedures.

As of April 30, 2008, the end of the three month period year
covered by this report, we carried out an evaluation, under the supervision and
with the participation of our management, including our chief executive officer
and our chief financial officer, of the effectiveness of the design and
operation of our disclosure controls and procedures. Based on the foregoing, our
chief executive officer and our chief financial officer concluded that our
disclosure controls and procedures were effective as of the end of the period
covered by this quarterly report.

There have been no significant changes in our internal controls
over financial reporting that occurred during the quarter ended April 30, 2008
that have materially affected, or are reasonably likely to materially affect,
our internal controls over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

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

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

On April 16, 2008, we entered into a bridge loan agreement with
Dayton Boot Co. Ent. Ltd., whereby we agreed to lend them $300,000. This loan is
evidenced by a promissory note pursuant to which the principal amount, plus
simple interest calculated at a rate of 6% per annum, will be due and payable on
the earlier of the date a transaction is concluded between the parties or
December 31, 2008.

On April 28, 2008, we closed a private placement consisting of
1,275,000 units of our securities (the Units) at a price of US$1.00 per Unit
for aggregate proceeds of $1,275,000. Each Unit consists of one common share of
the Company (the Share) and one common share purchase warrant (the Warrant),
with each Warrant entitling the holder, on exercise thereof, to purchase one
additional common share of the Company at a price of US$1.25 at any time until
the close of business on the day which is 24 months from the date of closing of
the Offering, on which the Units are issued. We issued the Units to one investor
in reliance upon the exemption from registration provided under Regulation S of
the Securities Act of 1933, as amended.

Item 3. Defaults Upon Senior Securities

None.

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

None.

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- 21 -

Item 5. Other Information

Effective April 1, 2008, Jamie Arthur Lewin resigned as our
chief financial officer and Robert Mintak was appointed our interim chief
financial officer.

Effective June 3, 2008, Munir Ali resigned as a member of our
Advisory Board and William L. Macdonald was appointed as a member of our
Advisory Board.

Item 6. Exhibits

Exhibits required by Item 601 of Regulation S-B

|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).                
|        |                                                                                                                                                                                                   
|(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.

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- 22 -

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.

DUSSAULT APPAREL INC.

By: /s/ Terry Fitzgerald Terry Fitzgerald
President, Chief Executive Officer & Director (Principal Executive
Officer) Dated: June 20, 2008

By: /s/ Robert Mintak Robert Mintak Chief
Financial Officer (Principal Financial Officer and Principal Accounting
Officer) Dated: June 20, 2008

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