SECURITIES
AND EXCHANGE COMMISSION


WASHINGTON,
D.C. 20549





FORM
10-Q




x
            QUARTERLY REPORT
      PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934For the quarterly
      period ended September 30, 2008o
            TRANSITION REPORT
      PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934




Commission
File Number: 000-52692





DON
MARCOS TRADING CO.


(Exact
name of registrant as specified in its charter)






Florida
            65-0921319(State or other
      jurisdiction of incorporation
      or organization)
            (IRS Employer
      Identification No.)




1850 Southeast
17thStreet, Suite 300, Ft.
Lauderdale, FL  33316


(Address
of principal executive offices)




(954)
356-8111


(Issuer's
telephone number)




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. Yes þ No  ̈




Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller 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  ̈
              (Do not check if a smaller reporting
      company)
            Smaller reporting
      company þ




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


As of
October 31, 2008, the number of shares of common stock outstanding was
44,300,000.










INDEX






Page
      NumberPART I - FINANCIAL
      INFORMATIONItem 1.
            Financial Statements
      (Unaudited)
            1Condensed Balance
      Sheet – September 30, 2008 and 2007
            2Condensed
      Statement of Operations –
              For
      the three and nine months ended September 30, 2008 and
2007
            3Condensed
      Statements of Cash Flows –
              For
      the nine months ended September 30, 2008 and 2007
            4Condensed Notes to
      Financial Statements
            6Item 2.
            Management’s
      Discussion and Analysis of Financial Condition and Results of
      Operations
            9Item
      3.
            Quantitative
      and Qualitative Disclosures About Market Risk
            13Item 4.
            Controls and
      Procedures
            13Item 4T.
            Controls and
      Procedures
            13PART II - OTHER
      INFORMATIONItem 1.
            Legal
      Proceedings
            14Item 1A.
            Risk
    Factors
            14Item 2.
            Unregistered Sales
      of Equity Securities and Use of Proceeds
            14Item 3.
            Defaults Upon Senior
      Securities
            14Item 4.
            Submission of
      Matters to a Vote of Security Holders
            14Item 5.
            Other
      Information
            14Item 6.
            Exhibits
            14SIGNATURES
            15









PART
I - FINANCIAL INFORMATION





ITEM
1.FINANCIAL
STATEMENTS




1


DON
MARCOS TRADING CO.
 (A
DEVELOPMENT STAGE COMPANY)
 CONDENSED
BALANCE SHEET
 SEPTEMBER
30, 2008 AND DECEMBER 31, 2007
   Unaudited
                
                
                AuditedSeptember
      30, 2008
                
                
                December 31,
      2007ASSETSCURRENT ASSETSCash
                
                $
                7,642
                
                
                $
                11,166Accounts
      receivable
                
                
                96
                
                
                
                0Inventory
                
                
                8,900
                
                
                
                4,255TOTAL CURRENT
      ASSETS
                
                $
                16,638
                
                
                $
                15,421LIABILITIES AND STOCKHOLDERS’
      EQUITYCURRENT
      LIABILITIESAccounts payable and
      accrued expenses
                
                $
                10,824
                
                
                $
                9,466STOCKHOLDERS’
      EQUITYPreferred stock, no
      stated valueAuthorized
      10,000,000 sharesIssued and
      outstanding -0- shares
                
                
                -
                
                
                
                -Common stock, no par
      valueAuthorized
      100,000,000 sharesIssued and
      outstanding - 44,300,000 shares atSeptember 30, 2008
      and 37,100,000 sharesat December 31,
      2007
                
                
                223,454
                
                
                
                187,454Deficit accumulated
      during the development stage
                
                
                (217,640
                )
                
                
                (181,499
                )TOTAL STOCKHOLDERS’
      EQUITY
                
                
                5,814
                
                
                
                5,955TOTAL LIABILITIES AND STOCKHOLDERS’
      EQUITY
                
                $
                16,638
                
                
                $
                15,421
  
 The
accompanying notes are an integral part of these unaudited financial
statements.
 2
  DON
MARCOS TRADING CO.
 (A
DEVELOPMENT STAGE COMPANY)
 CONDENSED
STATEMENTS OF OPERATIONS
 FOR
THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2008 AND 2007
 AND
FOR THE PERIOD FROM MAY 11, 1999 TO SEPTEMBER 30, 2008
 (UNAUDITED)
 Three Month Periods
      EndedSeptember
      30,
                                                                                      
                                                                                      
                                                                                      Nine Month Periods
      EndedSeptember
      30,
                                                                                      
                                                                                      
                                                                                      May 11,
1999
                                                                                        (Inception)
                                                                                        To
                                                                                        September
      30,2008
                                                                                      
                                                                                      
                                                                                      2007
                                                                                      
                                                                                      
                                                                                      2008
                                                                                      
                                                                                      
                                                                                      2007
                                                                                      
                                                                                      
                                                                                      2008REVENUES
                                                                                      
                                                                                      $
                                                                                      288
                                                                                      
                                                                                      
                                                                                      
                                                                                      -
                                                                                      
                                                                                      
                                                                                      $
                                                                                      288
                                                                                      
                                                                                      
                                                                                      $
                                                                                      -
                                                                                      
                                                                                      
                                                                                      $
                                                                                      288COSTS OF GOODS
      SOLD
                                                                                      
                                                                                      
                                                                                      14
                                                                                      
                                                                                      
                                                                                      
                                                                                      -
                                                                                      
                                                                                      
                                                                                      
                                                                                      14
                                                                                      
                                                                                      
                                                                                      
                                                                                      -
                                                                                      
                                                                                      
                                                                                      
                                                                                      14GROSS
    PROFIT
                                                                                      
                                                                                      
                                                                                      274
                                                                                      
                                                                                      
                                                                                      
                                                                                      -
                                                                                      
                                                                                      
                                                                                      
                                                                                      274
                                                                                      
                                                                                      
                                                                                      
                                                                                      -
                                                                                      
                                                                                      
                                                                                      
                                                                                      274OPERATING
      EXPENSES
                                                                                      
                                                                                      
                                                                                      11,969
                                                                                      
                                                                                      
                                                                                      
                                                                                      25,218
                                                                                      
                                                                                      
                                                                                      
                                                                                      36,429
                                                                                      
                                                                                      
                                                                                      
                                                                                      118,733
                                                                                      
                                                                                      
                                                                                      
                                                                                      217,928NET LOSS
                                                                                      
                                                                                      
                                                                                      (11,695
                                                                                      )
                                                                                      
                                                                                      
                                                                                      (25,218
                                                                                      )
                                                                                      
                                                                                      $
                                                                                      (36,141
                                                                                      )
                                                                                      
                                                                                      $
                                                                                      (118,733
                                                                                      )
                                                                                      
                                                                                      $
                                                                                      (217,640
                                                                                      )NET LOSS PER
      SHAREBasic
      and diluted
                                                                                      
                                                                                      
                                                                                      (.00
                                                                                      )
                                                                                      
                                                                                      
                                                                                      (.00
                                                                                      )
                                                                                      
                                                                                      $
                                                                                      (.00
                                                                                      )
                                                                                      
                                                                                      $
                                                                                      (.00
                                                                                      )
                                                                                      
                                                                                      $
                                                                                      (.01
                                                                                      )WEIGHTED AVERAGE
      NUMBEROF SHARES
      OUTSTANDINGBasic
      and diluted
                                                                                      
                                                                                      
                                                                                      42,526,087
                                                                                      
                                                                                      
                                                                                      
                                                                                      36,900,000
                                                                                      
                                                                                      
                                                                                      
                                                                                      39,718,978
                                                                                      
                                                                                      
                                                                                      
                                                                                      26,285,635
                                                                                      
                                                                                      
                                                                                      
                                                                                      39,718,978
  The
accompanying notes are an integral part of these unaudited financial
statements
 3
  DON
MARCOS TRADING CO.
 (A
DEVELOPMENT STAGE COMPANY)
 CONDENSED
STATEMENTS OF CASH FLOWS
 FOR
THE NINE MONTHS ENDED SEPTEMBER 30, 2008 AND 2007
 AND
FOR THE PERIOD FROM MAY 11, 1999 (INCEPTION) TO SEPTEMBER 30, 2008
 UNAUDITED
   May 11,
    1999(Inception)To2008
                                        
                                        
                                        2007
                                        
                                        
                                        September 30,
      2008CASH FLOWS FROMOPERATING
      ACTIVITIES:Net
      loss
                                        
                                        $
                                        (36,141
                                        )
                                        
                                        $
                                        (118,733
                                        )
                                        
                                        $
                                        (217,640
                                        )Adjustments
      to reconcile netloss
      to net cash usedby
      operating activities :Common
      stock issuedfor
      services
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        3,635Stock
      based compensation
                                        
                                        
                                        -
                                        
                                        
                                        
                                        45,474
                                        
                                        
                                        
                                        45,474Changes
      in operating assets and liabilities:Accounts
      receivable
                                        
                                        
                                        (96
                                        )
                                        
                                        
                                        -
                                        
                                        
                                        
                                        (96
                                        )Inventory
                                        
                                        
                                        (4,645
                                        )
                                        
                                        
                                        -
                                        
                                        
                                        
                                        (8,900
                                        )Accounts
      payable and accrued expenses
                                        
                                        
                                        1,358
                                        
                                        
                                        
                                        6,533
                                        
                                        
                                        
                                        10,824NET CASH USED INOPERATING
      ACTIVITIES
                                        
                                        
                                        (39,524
                                        )
                                        
                                        
                                        (66,726
                                        )
                                        
                                        
                                        (
      166,703
                                        )CASH FLOWS FROMINVESTING
      ACTIVITIES
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -CASH FLOWS FROMFINANCING
      ACTIVIITESIssuance
      of common stock for cash
                                        
                                        
                                        36,000
                                        
                                        
                                        
                                        82,000
                                        
                                        
                                        
                                        172,000Cash
      contributed by stockholder
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -
                                        
                                        
                                        
                                        2,345NET CASH PROVIDED BYFINANCING
      ACTIVITIES
                                        
                                        
                                        36,000
                                        
                                        
                                        
                                        82,000
                                        
                                        
                                        
                                        174,345NET
      INCREASE (DECREASE) IN CASHAND
      CASHEQUIVALENTS
                                        
                                        
                                        (3,524
                                        )
                                        
                                        
                                        15,274
                                        
                                        
                                        
                                        7,642CASH AND CASH
      EQUIVALENTS,BEGINNING OF
      PERIOD
                                        
                                        
                                        11,166
                                        
                                        
                                        
                                        131
                                        
                                        
                                        
                                        -CASH AND CASH
      EQUIVALENTS,END OF
      PERIOD
                                        
                                        $
                                        7,642
                                        
                                        
                                        $
                                        15,405
                                        
                                        
                                        $
                                        7,642
  
 The
accompanying notes are an integral part of these unaudited financial
statements
 4




DON
MARCOS TRADING CO.


(A
DEVELOPMENT STAGE COMPANY)


CONDENSED
STATEMENTS OF CASH FLOWS (CONTINUED)


FOR
THE NINE MONTHS ENDED SEPTEMBER 30, 2008 AND 2007


AND
FOR THE PERIOD FROM MAY 11, 1999 (INCEPTION) TO SEPTEMBER 30, 2008


(UNAUDITED)






2008
            
            
            2007
            
            
            May 11,
1999
              (Inception)
              To
              September 30,
      2008SUPPLEMENTAL DISCLOSURE OF
      CASH FLOW INFORMATIONCASH PAID DURING THE YEAR
      FOR:Interest
            
            $
            -
            
            
            $
            -
            
            
            $
            -Taxes
            
            $
            -
            
            
            $
            -
            
            
            $
            -






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


5
  DON
MARCOS TRADING CO.
 (A
DEVELOPMENT STAGE COMPANY)
 CONDENSED
NOTES TO FINANCIAL STATEMENTS
 SEPTEMBER
30, 2008 AND 2007
 (UNAUDITED)
 
  NOTE 1
              SUMMARY OF SIGNIFICANT
      ACCOUNTING POLICIES
                
                Nature of Business and
      History of Company
                
                Don
      Marcos Trading Co. (“the Company”) is a development stage enterprise
      incorporated on May 11, 1999 in the state of Florida. The Company has had
      no significant operations since its inception. The Company’s activities
      have been mainly organizational, with only $288 of sales.
                
                The
      Company is the sole importer and distributor of Don Marcos
      coffee.
                
                Basis of
      Presentation
                
                The
      interim financial statements of Don Marcos Trading Co. are condensed and
      do not include some of the information necessary to obtain a complete
      understanding of the financial data.  Management believes that
      all adjustments necessary for a fair presentation of results have been
      included in the unaudited financial statements for the interim period
      presented.  Operating results for the nine months ended
      September 30, 2008 are not necessarily indicative of the results that may
      be expected for the year ended December 31, 2008.  Accordingly,
      your attention is directed to footnote disclosures found in the December
      31, 2007 Annual Report and particularly to Note 1, which includes a
      summary of significant accounting policies.
                
                Use of
      Estimates
                
                The
      preparation of financial statements in conformity with generally accepted
      accounting principles requires management to make estimates and
      assumptions that affect the reported amounts of assets and liabilities and
      disclosure of contingent assets and liabilities at the date of the
      financial statements and the reported amounts of revenues and expenses
      during the reporting period. Actual results could differ from those
      estimates.
                
                Cash and Cash
      Equivalents
                
                The
      Company considers all highly liquid debt instruments purchased with an
      original maturity of three months or less to be cash
      equivalents.
                
                Fair value of
      financial instruments
                
                For
      certain of the Company’s instruments, including cash and accounts payable
      and accrued expenses, the carrying amounts approximate fair value due to
      their short maturities.
 6
  DON
MARCOS TRADING CO.
 (A
DEVELOPMENT STAGE COMPANY)
 CONDENSED
NOTES TO FINANCIAL STATEMENTS
 SEPTEMBER
30, 2008 AND 2007
 (UNAUDITED)
 
 NOTE 1
                SUMMARY OF SIGNIFICANT
      ACCOUNTING POLICIES (CONTINUED)
                  
                  Net Loss Per
      Share
                  
                  The
      Company adopted Statement of Financial Accounting Standards No. 128 that
      requires the reporting of both basic and diluted earnings (loss) per
      share. Basic earnings (loss) per share is computed by dividing net income
      (loss) available to common stockholders by the weighted average number of
      common shares outstanding for the period. Diluted earnings (loss) per
      share reflects the potential dilution that could occur if securities or
      other contracts to issue common stock were exercised or converted into
      common stock. In accordance with FASB 128, any anti-dilutive effects on
      net income (loss) per share are excluded.
                  
                  Revenue
      Recognition
                  
                  The
      Company recognizes revenue from product sales when shipment of product to
      the customer has been made, which is when title passes. The Company
      estimates and records provisions for rebates, sales returns and allowances
      in the period the sale is recorded. Shipping and handling charges are
      included in gross sales, with the related costs included in selling,
      general and administrative expenses.
                  
                  Inventory
                  
                  Inventory
      is stated at the lower of cost (determined by the first-in, first-out
      method) or market.  Inventories are adjusted for estimated
      obsolescence and written down to net realizable value based upon estimates
      of future demand, technology developments, and market
      conditions.
                  
                  Stock Based
      Compensation
                  
                  Effective
      November 1, 2005, the Company adopted Statement of Financial Accounting
      Standards (“SFAS”) No. 123(R), “Share-Based Payment: An Amendment of FASB
      Statements No. 123 and 95” using the modified prospective method. Under
      this method, compensation cost is recognized on or after the effective
      date for the portion of outstanding awards, for which the requisite
      service has not yet been rendered, based on the grant date fair value of
      those awards. For stock-based awards issued on or after November 1, 2005,
      the Company recognizes the compensation cost on a straight-line basis over
      the requisite service period for the entire award. Measurement and
      attribution of compensation cost for awards that are unvested as of the
      effective date of SFAS No. 123(R) are based on the same estimate of the
      grant-date or modification-date fair value and the same attribution method
      used previously under SFAS No.
12.
  7
  DON
MARCOS TRADING CO.
 (A
DEVELOPMENT STAGE COMPANY)
 CONDENSED
NOTES TO FINANCIAL STATEMENTS
 SEPTEMBER
30, 2008 AND 2007
 (UNAUDITED)
 
 NOTE 1
                SUMMARY OF SIGNIFICANT
      ACCOUNTING POLICIES (CONTINUED)
                  
                  Development Stage
      Enterprise
                  
                  The
      Company is a development stage enterprise, as defined in Financial
      Accounting Standards Board No. 7. The Company’s planned principal
      operations have not commenced, and accordingly, only nominal revenue has
      been derived during this period.NOTE
      2
                GOING
      CONCERN
                  
                  The
      accompanying financial statements have been prepared assuming that the
      Company will continue as a going concern, which contemplates the
      recoverability of assets and the satisfaction of liabilities in the normal
      course of business.
                    
                    The
      Company’s development activities since inception have been financially
      sustained through stockholder contribution to the Company and issuance of
      common stock. The Company may raise additional funding to continue its
      operations through contributions from the current shareholders and stock
      issuance to other investors.
                      
                      The
      ability of the Company to continue as a going concern is dependent upon
      its ability to raise additional capital from the sale of common stock and,
      ultimately, the achievement of significant operating revenues. The
      accompanying financial statements do not include any adjustments that
      might be required should the Company be unable to recover the value of its
      assets or satisfy its liabilities.NOTE
      3
                COMMON
      STOCK
                  
                  The
      Company effected a 1:5 forward split of the stock in February 2007. All
      per share amounts and number of shares outstanding have been retroactively
      restated for this adjustment.
                    
                    On
      March 14, 2007, the Company offered a private placement of 16,400,000
      shares of common stock, no par value, with an aggregate value of
      $82,000.
                      
                      The
      Company effected a 1:10 forward split of the stock on March 30, 2007. All
      per share amounts and number of shares outstanding have been retroactively
      restated for this adjustment.
                        
                        On
      April 1, 2008, the Company sold 2,400,000 shares of its common stock, no
      par value, with an aggregate value of $12,000, to three officers of the
      company.
                          
                          On
      August 4, 2008, the Company sold 4,800,000 shares of its common stock, no
      par value, with an aggregate value of $24,000 to three officers of the
      company.


8




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





The
following discussion and analysis should be read in conjunction with our
financial statements, including the notes thereto, appearing elsewhere in this
Report.




Overview




We were
incorporated on May 11, 1999 in the state of Florida to be the sole importer and
distributor of Don Marcos® Coffee.




Critical
Accounting Policies




Our
discussion and analysis of our financial condition and results of operations are
based upon our financial statements, which have been prepared in accordance with
accounting principles generally accepted in the United States of America. The
preparation of these financial statements requires us to make estimates and
judgments that affect the reported amounts of assets, liabilities, revenues and
expenses.  In consultation with our Board of Directors, we have
identified several accounting principles that we believe are key to
understanding of our financial statements.  These important accounting
policies require management's most difficult, subjective judgments.




Development
Stage Enterprise




We are a
development stage enterprise, as defined in Financial Accounting Standards Board
No. 7. Our planned principal operations have not commenced, and, accordingly,
only nominal revenue has been derived during the period.




Use
of Estimates




The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period.  Actual results could differ from those
estimates.




Net
Loss Per Share




We
adopted Statement of Financial Accounting Standards No. 128 that requires the
reporting of both basic and diluted earnings (loss) per share. Basic earnings
(loss) per share is computed by dividing net income (loss) available to common
stockholders by the weighted average number of common shares outstanding for the
period.  Diluted earnings (loss) per share reflects the potential
dilution that could occur if securities or other contracts to issue common stock
were exercised or converted into common stock. In accordance with FASB 128, any
anti-dilutive effects on net income (loss) per share are excluded.




9




Inventory




Inventory
is stated at the lower of cost (determined by the first-in, first-out method),
or market.  Inventories are adjusted for estimated obsolescence and
written down to net realizable value based upon estimates of future demand,
technology developments, and market conditions.




Stock
Issued for Non-Cash Transactions




It is our
policy to value stock issued for non-cash transactions, such as services, at the
fair market value of the goods or services received or the consideration
granted, whichever is more readily determinable, at the date the transaction is
negotiated.




There
were no shares of common stock issued for services during the nine months ended
September 30, 2008 and 2007.




Going
Concern




Our
financial statements are prepared using generally accepted accounting principles
applicable to a going concern, which contemplates the realization of assets and
liquidation of liabilities in the normal course of business. Our ability to
continue as a going concern is dependent upon our ability to locate sources of
capital, and attain future profitable operations. Our management is currently
initiating their business plan. The accompanying financial statements do not
include any adjustments that might be necessary should we be unable to continue
as a going concern.




Stock
Based Compensation




We
adopted SFAS No. 123 (Revised 2004), Share Based Payment (“SFAS
No. 123R”), under the modified-prospective transition method on
January 1, 2006. SFAS No. 123R requires companies to measure and
recognize the cost of employee services received in exchange for an award of
equity instruments based on the grant-date fair-value. Share-based compensation
recognized under the modified-prospective transition method of SFAS
No. 123R includes share-based compensation based on the grant-date
fair-value determined in accordance with the original provisions of SFAS
No. 123, Accounting for Stock-Based Compensation, for all share-based
payments granted prior to and not yet vested as of January 1, 2006 and
share-based compensation based on the grant-date fair-value determined in
accordance with SFAS No. 123R for all share-based payments granted after
January 1, 2006. SFAS No. 123R eliminates the ability to account for
the award of these instruments under the intrinsic value method prescribed by
Accounting Principles Board (“APB”) Opinion No. 25, Accounting for Stock
Issued to Employees, and allowed under the original provisions of SFAS
No. 123. Prior to the adoption of SFAS No. 123R, we accounted for our
stock option plans using the intrinsic value method in accordance with the
provisions of APB Opinion No. 25 and related interpretations.




Stock-based
compensation represents the cost related to stock-based awards granted to
employees.  We measure stock-based compensation cost at grant date,
based on the estimated fair value of the award, and recognizes the cost as
expense on a straight-line basis (net of estimated forfeitures) over the
employee requisite service period.  We estimate the fair value of
stock options using a Black-Scholes valuation model.  The expense is
recorded in operating expenses in the condensed statements of
operations.




10




Results
of Operations





You
should read the selected financial data set forth below along with our
discussion and our financial statements and the related notes.  We
have derived the financial data from our unaudited financial
statements.  We believe the financial data shown in the table below
include all adjustments consisting only of normal recurring adjustments, that we
consider necessary for a fair presentation of such
information.  Operating results for the period are not necessarily
indicative of the results that may be expected in the future.





Nine
      Months Ended
              September
      30, 2008
              (unaudited)
            
            
            Nine
      Months Ended
              September
      30, 2007
              (unaudited)
            
            
            Three
      Months Ended
              September
      30, 2008
              (unaudited)
            
            
            Nine
      Months Ended
              September
      30, 2007
              (unaudited)Revenue
            
            $
            288
            
            
            
            ---
            
            
            $
            288
            
            
            
            ---Operating
      expenses
            
            $
            36,429
            
            
            $
            118,733
            
            
            $
            11,983
            
            
            $
            25,218Net
      (loss)
            
            $
            (36,141
            )
            
            $
            (118,733
            )
            
            $
            (11,695
            )
            
            $
            (25,218
            )Net
      (loss) per share
            
            $
            (.00
            )
            
            $
            (.00
            )
            
            $
            (.00
            )
            
            $
            (.00
            )





Results for the Nine Months
Ended September 30, 2008 Compared to the Nine Months Ended September 30, 2007
(unaudited)




Revenues




There
were revenues from operations in the amount of $288 for the nine months ended
September 30, 2008.  The Company’s first sale took place during this
period.  There were no revenues from operations for the nine months
ended September 30, 2007.




Operating
Expenses




Operating
expenses decreased by $82,304 to $36,429for the nine months
ended September 30, 2008 as compared to $118,733 for the nine months ended
September 30, 2007.




During
the nine months ended September 30, 2008, we incurred accounting, legal and
professional services expenses of $35,626 associated with our public company
reporting requirements and other expenses of $803.  During the nine
months ended September 30, 2007, we incurred accounting, legal and professional
services expenses of $72,614 associated with our public company reporting
requirements, salaries expense of $45,474 associated with the issuance of stock
options to employees, and other expenses of $645.




11




Net
Loss





Primarily
as a result of our operating expenses, we had a net loss of $36,141 for the nine
months ended September 30, 2008 compared to a net loss of $118,733 for the same
period in the prior year.





Results for the Three Months
Ended September 30, 2008 Compared to the Three Months ended September 30, 2007
(unaudited)





Revenues




There was
revenue from operations in the amount of $288 for the three months ended
September 30, 2008.  There were no revenues from operations for the
three months ended September 30, 2007.




Operating
Expenses




Our total
operating expenses for the three months ended September 30, 2008 were $11,983
compared to $25,218 for the three months ended September 30,
2007.  Our expenses for the three months ended September 30, 2008 and
2007 were primarily for legal and accounting fees associated with our public
company reporting requirements.




Impact
of Inflation




We
believe that inflation has had a negligible effect on our operations over the
past three years.




Liquidity
and Capital Resources




We
currently have no material commitments for capital expenditures and have no
fixed expenses.




Working
capital is summarized and compared as follows:





September
      30, 2008
            
            
            September
      30, 2008Current
      assets
            
            $
            16,638
            
            
            $
            34,351Current
      liabilities
            
            $
            10,824
            
            
            $
            10,261Working
      capital (deficit)
            
            $
            5,814
            
            
            $
            24,090





The
changes in our working capital are primarily due to the issuance of common stock
for cash less payments of legal and accounting fees.




Changes
in cash flows are summarized as follows:




Our net
cash used by operations was $39,524 for the nine months ended September 30, 2008
as compared to net cash used of $66,726 for the nine months ended September 30,
2007.  During the nine months ended September 30, 2008, we experienced
a net loss of $36,141.  We had an increase in accounts receivable of
$96 and inventory of $4,645.  These amounts were offset by an increase
in accounts payable and accrued expenses of $1,358. During the nine months ended
September 30, 2007, we experienced a net loss of $118,733.  This was
offset by non-cash stock options issued to employees in the amount of $45,474
and an increase in accounts payable and accrued expenses of $6,533.




12




There was
no net cash used or provided from investing activities for the nine months ended
September 30, 2008 and 2007.




Our net
cash provided from financing activities was $36,000 during the nine months ended
September 30, 2008, due to the issuance of a private placement of common
stock.  For the nine months ended September 30, 2007, cash was
provided from financing activities of $82,000, due to the issuance of a private
placement of common stock.




Off-Balance
Sheet Arrangements




None.





ITEM
3. QUANTITATIVE
AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK





We are a
smaller reporting company as defined by Rule 12b-2 of the Securities Exchange
Act of 1934 and are not required to provide information under this
item.





ITEM
4.CONTROLS AND
PROCEDURES





Evaluation
of Disclosure Controls and Procedures





Our
President and Chief Financial Officer have evaluated the effectiveness of our
disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e)
of the Securities Exchange Act of 1934) as of the end of period covered by this
report.  Based upon such evaluation,  the President and
Chief Financial Officer concluded that our disclosure controls and procedures
were effective to ensure that the information required to be disclosed by us in
the reports that we file or submit under the Securities Exchange Act of 1934 is
recorded, processed, summarized and reported within the time periods specified
in the SEC’s rules and forms, and is accumulated and communicated to our
management, including our President and Chief Financial Officer, as appropriate
to allow timely decisions regarding required disclosure.




Changes
in Internal Control Over Financial Reporting




There
were no changes in our internal control over financial reporting during the
period covered by this report that have materially affected, or are reasonably
likely to materially affect, our internal control over financial
reporting.




ITEM
4T. CONTROLS
AND PROCEDURES





We are a
smaller reporting company as defined by Rule 12b-2 of the Securities Exchange
Act of 1934 and are not required to provide information under this
item.




13




PART
II - OTHER INFORMATION





ITEM
1.LEGAL
PROCEEDINGS





To the
best knowledge of our management, there are no legal proceedings pending or
threatened against us.





ITEM
1A. RISK
FACTORS.





We are a
smaller reporting company as defined by Rule 12b-2 of the Securities Exchange
Act of 1934 and are not required to provide information under this
item.





ITEM
2. UNREGISTERED
SALES OF EQUITY SECURITIES AND USE OF PROCEEDS





None.





ITEM
3.DEFAULTS UPON
SENIOR SECURITIES





None.





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





None.





ITEM
5.OTHER
INFORMATION





None.





ITEM
6.EXHIBITS





The
following Exhibits are filed herein:




No.
            Title31.1
            Certification
      of President Pursuant to the Securities Exchange Act of 1934, Rules
      13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the
      Sarbanes-Oxley Act of 200231.2
            Certification
      of Chief Financial Officer Pursuant to the Securities Exchange Act of
      1934, Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of
      the Sarbanes-Oxley Act of 200232
            Certifications
      Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of
      the Sarbanes-Oxley Act of 2002




14


SIGNATURES





In
accordance with the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, duly authorized.




DATED:
      November 7, 2008
              DON
      MARCOS TRADING CO./s/ Earl T.
      ShannonBY:
      Earl T. ShannonITS:
      President(Principal
      Executive Officer)/s/ Scott W.
      BodenweberBY:
      Scott W. BodenweberITS:
      Chief Financial Officer(Principal
      Financial Officer and Principal Accounting Officer)










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