**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


WASHINGTON,
      D.C.  20549







FORM
      10-QSB





x
      QUARTERLY REPORT UNDER
      SECTION 13 OR 15(d) OF


THE
      SECURITIES EXCHANGE ACT OF 1934





**For
      the quarterly period ended June 30, 2007**





o
      TRANSITION REPORT UNDER
      SECTION 13 OR 15(d) OF


THE
      SECURITIES EXCHANGE ACT OF 1934





For
      the
      transition period from _________ to _________





**Commission
      File Number :  0-7475**





**NATURE
      VISION, INC.**


(Exact
      name of small business issuer as specified in its charter)




**Minnesota**
            **41-0831186**(State
                or other jurisdiction ofincorporation
                or organization)
            (I.R.S.
                EmployerIdentification
                No.)







1480
      Northern Pacific Road




**Brainerd,
      MN  56401**


(Address
      of principal executive offices)




**(218)
      825-0733**


(Issuer’s
      telephone number)





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


Yes  x                      No  o




Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2 of the Exchange Act)


Yes  o                      No  x




The
      number of shares of issuer’s common stock, par value $0.16 per share,
      outstanding as of June 30 2007, was 2,312,583.  The registrant
      has no other classes of securities outstanding.





Transitional
      Small Business Disclosure Format (Check one):  Yes  oNo  x













**NATURE
      VISION, INC.**


**INDEX**








**PART
                I**
            
            
            Page
              Number**Item
                1**:
            Financial
                InformationConsolidated
                Balance Sheet – June 30, 2007 and December 31,
                2006
            2Consolidated
                Statements of Operations - Three Months and Six
                Months Ended June 30, 2007 and 2006
            3Consolidated
                Statements of Cash Flows - Six Months Ended
                June 30, 2007 and 2006
            4Notes
                to Consolidated Financial
                Statements
            5**Item
                2:**
            Management's
                Discussion and Analysis of Financial Condition
                and Results of Operations
            14**Item
                3:**
            Controls
                and Procedures
            18**PART
                II****Item
                4:**
            Submission
                of Matters to a Vote of Security
                Holders
            19**Item
                6**:
            Exhibits
            19Signatures
            20




1
 ***Index***





**Part
      I**


**Item
      1: Financial Information**


**Nature
      Vision, Inc. and Subsidiaries**


**Consolidated
      Balance Sheets**


**June
      30, 2007 and December 31, 2006**





**Unaudited****June 30, 2007**
            
            
            **December 31, 2006**ASSETSCURRENT
                ASSETSCash
                and cash equivalents
            
            $
            32,597
            
            
            $
            2,344Accounts
                receivable, net
            
            
            303,631
            
            
            
            2,664,246Current
                portion of note receivable
            
            
            -
            
            
            
            100,000Inventories,
                net
            
            
            3,980,524
            
            
            
            4,466,189Prepaid
                expenses
            
            
            317,498
            
            
            
            390,608Current
                assets sold relating to discontinued operations
            
            
            -
            
            
            
            84,855Current
                assets retained relating to discontinued operations
            
            
            1,143,810
            
            
            
            4,066,480Total
                Current Assets
            
            
            5,778,060
            
            
            
            11,774,722PROPERTY
                AND EQUIPMENT, NET
            
            
            1,620,161
            
            
            
            1,695,958NON-CURRENT
                ASSETSBuilding
                and land held for sale, net
            
            
            565,449
            
            
            
            565,449Other
                assets sold relating to discontinued operations
            
            
            -
            
            
            
            186,701Cash
                surrender value of life insurance
            
            
            -
            
            
            
            148,310Note
                receivable, net of current portion
            
            
            -
            
            
            
            200,000Prepaid
                expenses, net of current portion
            
            
            62,260
            
            
            
            61,040Deferred
                income taxes
            
            
            1,022,546
            
            
            
            1,022,546Intangibles
                – net
            
            
            76,481
            
            
            
            91,498Total
                Non-Current Assets
            
            
            1,726,736
            
            
            
            2,275,544TOTAL
                ASSETS
            
            $
            9,124,957
            
            
            $
            15,746,224LIABILITIES
                AND STOCKHOLDERS’ EQUITYCURRENT
                LIABILITIESChecks
                issued in excess of cash in bank
            
            $
            -
            
            
            $
            71,394Current
                portion of deferred retirement benefits
            
            
            72,795
            
            
            
            72,795Line
                of credit, bank
            
            
            1,535,000
            
            
            
            3,900,000Accounts
                payable
            
            
            340,787
            
            
            
            632,398Accrued
                payroll and payroll taxes
            
            
            216,587
            
            
            
            175,582Accrued
                expenses
            
            
            348,488
            
            
            
            840,005Income
                taxes payable
            
            
            -
            
            
            
            5,000Current
                liabilities sold relating to discontinued operations
            
            
            -
            
            
            
            46,678Current
                liabilities retained relating to discontinued operations
            
            
            43,000
            
            
            
            1,872,901Total
                Current Liabilities
            
            
            2,556,657
            
            
            
            7,616,753LONG-TERM
                LIABILITIESDeferred
                retirement benefits, net of current portion
            
            
            519,968
            
            
            
            557,871Total
                Non-Current Liabilities
            
            
            519,968
            
            
            
            557,871Total
                Liabilities
            
            
            3,076,625
            
            
            
            8,174,624COMMITMENTS
                AND CONTINGENCIESSTOCKHOLDERS’
                EQUITYCommon
                stock, $.16 par value per share 25,000,000 shares authorized common
                shares
                issued and outstanding at June 30, 2007 were 2,312,583 and December
                31,
                2006 were 2,225,377
            
            
            370,015
            
            
            
            356,062Additional
                paid-in capital
            
            
            6,852,947
            
            
            
            6,789,287Retained
                earnings (deficit)
            
            
            (1,174,630
            )
            
            
            426,251Total
                Stockholders’ Equity
            
            
            6,048,332
            
            
            
            7,571,600TOTAL
                LIABILITIES AND STOCKHOLDERS’ EQUITY
            
            $
            9,124,957
            
            
            $
            15,746,224




*See
      accompanying notes to consolidated financial statements.*





2
 ***Index***




**Nature
      Vision, Inc. and Subsidiaries**


**Consolidated
      Statements of Operations (Unaudited)**




**Three months ended June 30,**
            
            
            **Six months ended June 30,****2007**
            
            
            **2006**
            
            
            **2007**
            
            
            **2006**SALES,
                NET
            
            $
            767,852
            
            
            $
            680,729
            
            
            $
            2,523,931
            
            
            $
            2,351,683COST
                OF GOOD SOLD
            
            
            876,726
            
            
            
            636,428
            
            
            
            2,323,840
            
            
            
            1,843,275GROSS
                PROFIT (LOSS)
            
            
            (108,874
            )
            
            
            44,301
            
            
            
            200,091
            
            
            
            508,408SELLING,
                GENERAL AND ADMINISTRATIVE EXPENSES
            
            
            860,987
            
            
            
            721,609
            
            
            
            1,826,704
            
            
            
            1,906,663LOSS
                FROM OPERATIONS
            
            
            (969,861
            )
            
            
            (677,308
            )
            
            
            (1,626,613
            )
            
            
            (1,398,255
            )OTHER
                INCOME (EXPENSE)Interest
                expense
            
            
            (65,223
            )
            
            
            (124,056
            )
            
            
            (126,114
            )
            
            
            (174,932
            )Interest
                income
            
            
            11,176
            
            
            
            -
            
            
            
            16,649
            
            
            
            -Other
                income
            
            
            -
            
            
            
            18,464
            
            
            
            -
            
            
            
            21,278Net
                Other Expenses
            
            
            (54,047
            )
            
            
            (105,592
            )
            
            
            (109,465
            )
            
            
            (153,654
            )LOSS
                FROM CONTINUING OPERATIONS BEFORE TAXES
            
            
            (1,023,908
            )
            
            
            (782,900
            )
            
            
            (1,736,078
            )
            
            
            (1,551,909
            )PROVISION
                FOR INCOME TAX EXPENSE (BENEFIT)
            
            
            284,000
            
            
            
            (313,000
            )
            
            
            -
            
            
            
            (620,000
            )LOSS
                FROM CONTINUING OPERATIONS
            
            
            (1,307,908
            )
            
            
            (469,900
            )
            
            
            (1,736,078
            )
            
            
            (931,909
            )GAIN  FROM
                DISCONTINUED OPERATIONS, NET OF TAX
            
            
            155,673
            
            
            
            163,676
            
            
            
            135,197
            
            
            
            183,993NET
                LOSS
            
            $
            (1,152,235
            )
            
            $
            (306,224
            )
            
            $
            (1,600,881
            )
            
            $
            (747,916
            )Loss
                from continuing operations per common shareBasic
            
            $
            (0.57
            )
            
            $
            (0.21
            )
            
            $
            (0.77
            )
            
            $
            (0.42
            )Diluted
            
            $
            (0.57
            )
            
            $
            (0.21
            )
            
            $
            (0.77
            )
            
            $
            (0.42
            )Gain
                from discontinued operations per common shareBasic
            
            $
            0.07
            
            
            $
            0.07
            
            
            $
            0.06
            
            
            $
            0.08Diluted
            
            $
            0.07
            
            
            $
            0.07
            
            
            $
            0.06
            
            
            $
            0.08Net
                loss per common shareBasic
            
            $
            (0.50
            )
            
            $
            (0.14
            )
            
            $
            (0.71
            )
            
            $
            (0.34
            )Diluted
            
            $
            (0.50
            )
            
            $
            (0.14
            )
            
            $
            (0.71
            )
            
            $
            (0.34
            )Weighted
                average common sharesBasic
            
            
            2,297,260
            
            
            
            2,217,887
            
            
            
            2,261,522
            
            
            
            2,194,395Diluted
            
            
            2,297,260
            
            
            
            2,217,887
            
            
            
            2,261,522
            
            
            
            2,194,395




*See
      accompanying notes to consolidated financial statements.*





3
 ***Index***




**Nature
      Vision, Inc. and Subsidiaries**


**Consolidated
      Statements of Cash Flows (Unaudited)**


**Six
      Months Ended June 30, 2007 and 2006**




**2007**
            
            
            **2006**CASH
                FLOWS FROM OPERATING ACTIVITIESNet
                loss
            
            $
            (1,600,881
            )
            
            $
            (747,916
            )Adjustments
                to reconcile net loss to net cash flows from operating
                activitiesDepreciation
                and amortization
            
            
            220,488
            
            
            
            239,731Gain
                on disposal of property and equipment
            
            
            (163,000
            )
            
            
            (13,883
            )Gain
                on sale of discontinued operations
            
            
            (152,612
            )
            
            
            -Benefit
                from deferred income taxes
            
            
            -
            
            
            
            (498,000
            )Change
                in deferred retirement benefits
            
            
            -
            
            
            
            (29,875
            )Change
                in bad debt reserve
            
            
            -
            
            
            
            6,654Changes
                in operating assets and liabilitiesAccounts
                receivable
            
            
            4,044,929
            
            
            
            1,766,233Inventories,
                net
            
            
            1,887,021
            
            
            
            (1,174,334
            )Prepaid
                expenses
            
            
            84,579
            
            
            
            65,455Other
                non-current assets
            
            
            -
            
            
            
            (11,448
            )Accounts
                payable
            
            
            (1,284,296
            )
            
            
            (366,862
            )Income
                taxes payable
            
            
            (5,000
            )
            
            
            (2,000
            )Accrued
                payroll and payroll taxes
            
            
            (36,655
            )
            
            
            (128,283
            )Accrued
                expenses
            
            
            (531,842
            )
            
            
            (130,784
            )Payments
                on deferred retirement benefits
            
            
            (37,903
            )
            
            
            (30,459
            )Net
                Cash Flows from Operating Activities
            
            
            2,424,828
            
            
            
            (1,055,771
            )CASH
                FLOWS FROM INVESTING ACTIVITIESPurchases
                of property and equipment
            
            
            (129,674
            )
            
            
            (645,238
            )Proceeds
                from sale of property and equipment
            
            
            -
            
            
            
            53,924Proceeds
                from sale of life insurance policies
            
            
            148,310
            
            
            
            -Proceeds
                from sale of discontinued operations
            
            
            407,801
            
            
            
            -Payments
                received on note receivable
            
            
            300,000
            
            
            
            -Purchases
                of intangibles
            
            
            -
            
            
            
            (56,420
            )Net
                Cash Flows from Investing Activities
            
            
            726,437
            
            
            
            (647,734
            )CASH
                FLOWS FROM FINANCING ACTIVITIESDecrease
                in checks issued in excess of cash in bank
            
            
            (71,394
            )
            
            
            (240,911
            )Net
                advances from (payments on) line of credit, bank
            
            
            (2,365,000
            )
            
            
            2,185,000Principal
                payments on long-term debt
            
            
            -
            
            
            
            (46,485
            )Payments
                on contract payable
            
            
            (762,231
            )
            
            
            (462,419
            )Cash
                received on exercise of options
            
            
            77,613
            
            
            
            268,320Net
                Cash Flows from Financing Activities
            
            
            (3,121,012
            )
            
            
            1,703,505Net
                Change in Cash and Cash Equivalents
            
            
            30,253
            
            
            
            -CASH
                AND CASH EQUIVALENTS - January 1, 2007 and 2006
            
            
            2,344
            
            
            
            -CASH
                AND CASH EQUIVALENTS – June 30, 2007 and 2006
            
            $
            32,597
            
            
            $
            -Supplemental
                Cash Flow Disclosures:Cash
                paid for interest
            
            $
            148,438
            
            
            $
            166,767Cash
                paid for income taxes
            
            $
            5,000
            
            
            $
            2,000Noncash
                Investing and Financing Activities:Proceeds
                from sale of Vaddio fixed assets included in current assets retained
                related to discontinued operations
            
            $
            163,000
            
            
            
            -Transaction
                costs related to sale of segment included in current liabilities
                retained
                related to discontinued operations
            
            $
            43,000
            
            
            
            -




*See
      accompanying notes to consolidated financial statements.*





4
 ***Index***




NATURE
      VISION, INC. AND SUBSIDIARIES


NOTES
      TO
      CONSOLIDATED FINANCIAL STATEMENTS


June
      30,
      2007 and 2006 (Unaudited)




NOTE
      1 -
      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES




NATURE
      OF
      OPERATIONS




On
      August
      31, 2004, the Company changed its name from Photo Control Corporation to Nature
      Vision, Inc. in connection with a reverse merger transaction with Nature Vision
      Operating, Inc. (f/k/a, Nature Vision, Inc.), a Minnesota corporation that
      was
      incorporated in 1998. As part of the merger transaction, Nature Vision
      Operating, Inc. became a wholly owned subsidiary of the Company. The merger
      transaction has been accounted for as a reverse merger.




Nature
      Vision, Inc. (the Company) is an outdoor recreation products
      Company.  On October 20, 2006, Nature Vision, Inc. sold the Norman
      product line (Norman) of its Photo Control division and renamed the division
      the
      Vaddio Division.  On February 5, 2007, the Company sold certain assets
      and transferred certain liabilities related to its Vaddio division
      (Vaddio).  The Norman and Vaddio divisions designed, manufactured and
      marketed professional cameras, electronic flash equipment, lens shades and
      related photographic accessories and sold products used in the video
      conferencing and presentation industry. The Company began discussions and
      efforts to sell Norman and Vaddio in the third and fourth quarter of 2006,
      respectively. See Note 8 for additional information related to the sale of
      the
      Norman and Vaddio operations, respectively.  The assets and
      liabilities of Vaddio at December 31, 2006 met the requirements of Statement
      of
      Financial Accounting Standards (SFAS) No. 144, "Accounting for Impairment or
      Disposal of Long-Lived Assets" as being held for sale. Operations and cash
      flows
      will be eliminated as a result of the sale and the Company will not have any
      significant involvement in the operations after the sale. In accordance with
      appropriate accounting rules, the Company has reclassified the previously
      reported financial results to exclude the results of the Norman and Vaddio
      operations and have presented on a historical basis these operations as a
      separate line in the consolidated statements of operations and the consolidated
      balance sheets under discontinued operations.  All of the financial
      information in the consolidated financial statements and notes to the
      consolidated financial statements has been revised to reflect only the results
      of continuing operations of the Company’s outdoor recreation
      products.  As a result of the sale of the Vaddio and Norman divisions,
      the Company has only one segment.




Nature
      Vision, Inc. (Nature Vision) designs and markets primarily outdoor recreation
      products for the sport fishing and sport hunting markets.  The Company
      grants unsecured credit to its customers which are primarily dealers and
      consumers located throughout the United States and Canada.  The
      Company contracts with outside organizations for the manufacture and sale of
      its
      products.  The geographic market in which the Company competes
      consists of the entire United States and, to a lesser extent some foreign
      countries.




INTERIM
      FINANCIAL INFORMATION




The
      accompanying consolidated balance sheet at June 30, 2007 and the consolidated
      statements of operations and cash flows for the six months and three months
      ended June 30, 2007 and 2006 are unaudited. The unaudited interim consolidated
      balance sheet and consolidated statements of operations, and cash flows have
      been prepared in accordance with accounting principles generally accepted in
      the
      United States of America and, in the opinion of management, reflect all
      adjustments, which include only normal recurring adjustments, necessary to
      present fairly the Company's financial position, results of operations and
      its
      cash flows for the six months and three months ended June 30, 2007 and 2006.
      The
      financial data and other information disclosed in these notes to the
      consolidated financial statements related to these periods are
      unaudited.  Operating results for the six months and three months
      ended June 30, 2007 are not necessarily indicative of the results that may
      be
      expected for the year ending December 31, 2007. The consolidated financial
      statements should be read in conjunction with the audited financial statements
      for the year ended December 31, 2006 included in the Annual Report on Form
      10-KSB of the Company filed with the Securities and Exchange
      Commission.




PRINCIPLES
      OF CONSOLIDATION




The
      consolidated financial statements include the accounts of the Company and its
      wholly-owned subsidiary. All significant inter-company transactions and balances
      have been eliminated in consolidation.




5
 ***Index***




INVENTORIES




Inventories
      consist of raw materials, work in process and finished goods and are valued
      at
      lower of cost using the first-in, first-out (FIFO) method or
      market.  Market represents estimated realizable value in the case of
      finished goods and replacement or reproduction cost in the case of other
      inventories.  Because of changing technology and market demand,
      inventory is subject to obsolescence.  An annual review is made of all
      inventories to determine if any obsolete, discontinued or slow moving items
      are
      in inventory.  Based on this review, inventory is disposed of or an
      allowance for obsolescence established to cover any future
      disposals.  Such estimates are difficult to make under current
      volatile economic conditions and it is possible significant changes in required
      inventory reserves may occur in the future.





DISCONTINUED
      OPERATIONS





The
      sale
      of the Company’s Norman photography product line to Promark International, Inc.
      was completed on October 20, 2006 pursuant to the terms of an Asset Purchase
      Agreement. The transaction involved the sale of inventory, equipment and certain
      other assets relating to the Norman photography product line. The Company
      negotiated the sale of these assets during the quarter ended September 30,
      2006.





On
      February 5, 2007, the Company sold certain assets and transferred certain
      liabilities related to its Vaddio division. The Company negotiated the sale
      of
      these assets and assumption of certain liabilities during the quarter ended
      December 31, 2006.





These
      assets met the requirements of SFAS No. 144, "Accounting for Impairment or
      Disposal of Long-Lived Assets" as being held for sale.  Operations and
      cash flows will be eliminated as a result of the sales and the Company will
      not
      have any significant involvement in the operations after the sales. In
      accordance with  appropriate accounting rules, the Company has
      reclassified the previously reported financial results to exclude  the
      results of the Norman and Vaddio product lines and these  results
      are  presented  on a historical  basis as a
      separate line in the
      consolidated  statements  of  operations  and
      the  consolidated  balance  sheets
      entitled  "Assets/Liabilities sold relating to discontinued
      operations" and “Assets/Liabilities retained relating to discontinued
      operations”. In accordance with EITF 87-24, “Allocation of Interest to
      Discontinued Operations”, the Company elected to not allocate consolidated
      interest expense to the discontinued operations where the debt is not directly
      attributed to or related to the discontinued operations.  All of the
      financial information in the consolidated financial statements and notes to
      the
      consolidated financial statements has been revised to reflect only the results
      of continuing operations (see Note 8).




BUILDING
      AND LAND HELD FOR SALE




In
      November 2006, management signed an agreement and began marketing for sale
      the
      building and land located in Minneapolis, Minnesota.  Accordingly, the
      Company has reflected the carrying value of the building as held for sale as
      June 30, 2007 and December 31, 2006.  As a result, the Company
      discontinued recording depreciation on the building in the fourth quarter of
      the
      year ended December 31, 2006 and management believes that the current market
      value of the building and land is in excess of its carrying value.




REVENUE
      RECOGNITION




The
      Company recognizes revenue on the date products are shipped to the customer
      and
      returns are permitted for defective equipment. The Company does not sell
      products with the guaranteed right of return. Estimated reserves for returns
      are
      established by management based on historical experience and are subject to
      ongoing review and adjustment by the Company. Revenues are reported net of
      the
      provision for actual and estimated future returns, discounts and allowances
      in
      the accompanying consolidated statements of operations. The Company’s revenue is
      recognized in accordance with generally accepted accounting principles as
      outlined in the SEC’s Staff Accounting Bulletin No. 104 “Revenue Recognition,”
which requires that four basic criteria be met before revenue can be recognized:
      (i) persuasive evidence of an arrangement exists; (ii) the price is fixed or
      determinable; (iii) reasonably assured it is collectible; and (iv) product
      delivery has occurred. The Company recognizes revenue as products are shipped
      based on FOB shipping point terms when title passes to customers.




6
 ***Index***




ALLOWANCE
      ACCOUNTS




The
      Company has established allowance reserves for warranty cost. Reserves are
      estimated based on historical experience, current product lines being sold,
      and
      management's estimates. The Company provides a standard one-year warranty
      program for the majority of its products.  The allowance reserve for
      warranty cost relating to continuing operations was $85,000 at June 30, 2007
      and
      $175,000 at December 31, 2006.  The following table provides the
      expense recorded and charges against the reserve relating to continuing
      operations for the six months ended June 30, 2007 and 2006.




**2007**
            
            
            **2006**Accrued
                balance – beginning
            
            $
            175,000
            
            
            $
            175,000Provision
            
            
            42,759
            
            
            
            31,837Claims
                incurred
            
            
            (132,759
            )
            
            
            (121,837
            )Accrued
                balance – ending
            
            $
            85,000
            
            
            $
            85,000






RESEARCH
      AND DEVELOPMENT




The
      Company expenses all costs related to product research and development as
      incurred.




STOCK-BASED
      COMPENSATION




Prior
      to
      January 1, 2006, the Company accounted for its employee stock awards under
      the
      recognition and measurement provisions of APB Opinion No. 25, Accounting for
      Stock Issued to Employees, and related Interpretations, as permitted by SFAS
      No.
      123, Accounting for Stock-Based Compensation.  Generally, no stock
      option-based employee compensation cost was recognized in the Company’s
      Consolidated Statements of Operations prior to January 1, 2006, as stock options
      granted under those plans had an exercise price equal to the market value of
      the
      underlying common stock on the date of grant.




Effective
      January 1, 2006, the Company adopted the fair value recognition and measurements
      provisions of SFAS No. 123(R), using the modified-prospective-transition method.
      Under that transition method, compensation cost for stock options recognized
      during the six months ended June 30, 2007 and 2006 includes compensation cost
      for all options granted prior to, but not vested as of January 1, 2006, based
      on
      the grant date fair value estimated in accordance with the provisions of SFAS
      No. 123. Compensation cost will be recorded for all options granted, if any,
      subsequent to January 1, 2006, based on the grant-date fair value estimated
      in
      accordance with the provisions of SFAS No. 123(R).




In
      accordance with SFAS No. 123(R), cash flows from income tax benefits resulting
      from tax deductions in excess of the compensation cost recognized for
      stock-based awards have been classified as financing cash flows prospectively
      from January 1, 2006. Prior to adoption of SFAS No. 123(R), such excess income
      tax benefits were presented as operating cash flows.  There were no
      cash flows from income tax benefits for the three months and six months ended
      June 30, 2007 and 2006.





As
      a
      result of adopting SFAS 123(R) on January 1, 2006, the Company’s net loss for
      the three months and six months ended June 30, 2007 and 2006 was not impacted
      since there were no options that were granted and / or vested during the
      respective periods.  Basic and diluted loss per common share would not
      have changed for the three months and six months ended June 30, 2007 and 2006
      if
      the Company had not adopted SFAS No. 123(R).





There
      were no stock options granted during the three months and six months ended
      June
      30, 2007 and 2006.





Stock
      options issued to non-employees (which no options were issued to non-employees),
      are accounted for in accordance with Emerging Issues Task Force (EITF) 96-18,
      Accounting for Equity Instruments That Are Issued to Other Than Employees for
      Acquiring, or in Conjunction with Selling, Goods or Services.





7
 ***Index***




NET
      INCOME (LOSS) PER COMMON SHARE




Net
      loss
      per common share was based on the weighted average number of common shares
      outstanding during the periods when computing the basic net loss per share.
      When
      dilutive, stock options and warrants are included as equivalents using the
      treasury stock market method when computing the diluted net loss per
      share.  There were no dilutive common stock equivalents, options and
      warrants, for the six months and three months ended June 30, 2007 and 2006,
      respectively.  Anti-dilutive options were 66,450 and 197,958 at June
      30, 2007 and June 30, 2006, respectively.




INCOME
      TAXES




The
      Company accounts for income taxes using the asset and liability approach, which
      requires the recognition of deferred tax assets and liabilities for tax
      consequences of temporary differences between the financial statement and income
      tax reporting bases of assets and liabilities based on currently enacted rates
      and laws. These temporary differences principally include depreciation,
      amortization, net operating losses, deferred retirement benefits, paid time
      off
      and performance benefits, contract payable, allowance for doubtful accounts,
      inventory obsolescence allowance, and warranty reserves. Deferred taxes are
      reduced by a valuation allowance to the extent that realization of the related
      deferred tax assets is not assured.




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.  For the Company, significant estimates include the
      allowance for doubtful accounts receivable, reserves for inventory valuation,
      reserves for sales returns, reserves for warranty services, and the valuation
      allowance for deferred tax assets.  Returns increased 75.5% and 76.8% for
      the three and six months ended June 30, 2007 over the same periods for the
      prior
      year, respectively.  Returns were higher than our previous estimate and
      experience and, as such, reduced our gross profit for the three and six months
      ended June 30, 2007.




RECENT
      ACCOUNTING PRONOUNCEMENTS




In
      July
      2006, the FASB issued FASB Interpretation No. 48, Accounting for Uncertainty
      in
      Income Taxes – an Interpretation of FASB Statement 109 (FIN 48), which clarifies
      the accounting for uncertainty in tax positions. FIN 48 provides that the tax
      effects from an uncertain tax position can be recognized in the Company’s
      financial statements only if the position is more likely than not of being
      sustained on audit, based on the technical merits of the position. To the extent
      interest and penalties would be assessed by taxing authorities on any
      underpayment of income taxes, such amounts would be accrued and classified
      as a
      component of income tax expenses on the consolidated statement of
      operations.  The Company has no accrued liabilities for interest or
      penalties recorded related to unrecognized tax benefits.  The
      provisions of FIN 48 are effective as of January 1, 2007, with the cumulative
      effect of the change in accounting principle recorded as an adjustment to
      retained earnings. The adoption of FIN 48 was not material to the financial
      statements.





In
      February 2007, FASB issued Statement 159, The Fair Value Option for
      Financial Assets and Financial Liabilities. This statement allows all entities
      to choose, at specified election dates, to measure eligible items at fair value.
      Under this option, an entity will report unrealized gains and losses on items
      for which the fair value option has been elected in earnings. This statement
      is
      effective as of the beginning of the first fiscal year which begins after
      November 15, 2007. Early adoption is permitted as of the beginning of the
      fiscal year that begins on or before November 15, 2007 provided the company
      has also elected to apply the provisions of FASB Statement No. 157, Fair
      Value Measurements. We are currently evaluating the impact of adopting FASB
      Statement 159 on our financial statements.





RECLASSIFICATIONS





Certain
      accounts in the prior periods' consolidated financial statements have been
      reclassified for comparative purposes to conform with the presentation in the
      current period consolidated financial statements. These reclassifications had
      no
      effect on net income or stockholders' equity.





8
 ***Index***




NOTE
      2 -
      INVENTORIES




Inventories
      consisted of the following at:




**June
                30,**
              **2007**
            
            
            **December 31,**
                **2006**Raw
                Materials
            
            $
            2,342,638
            
            
            $
            2,611,257Finished
                Goods
            
            
            1,712,886
            
            
            
            2,009,932Total
            
            
            4,055,524
            
            
            
            4,621,189Less:
                Valuation Allowance
            
            
            (75,000
            )
            
            
            (155,000
            )Inventories,
                net
            
            $
            3,980,524
            
            
            $
            4,466,189




NOTE
      3 -
      PROPERTY AND EQUIPMENT




Property
      and equipment consisted of the following at:




**June
                30,**
              **2007**
            
            
            **December 31,**
                **2006**Tooling
            
            
            1,679,752
            
            
            
            1,669,071Office
                furniture and equipment
            
            
            599,037
            
            
            
            592,784Warehouse
                equipment
            
            
            293,834
            
            
            
            293,834Vehicles
            
            
            20,279
            
            
            
            20,279Leasehold
                improvements
            
            
            205,827
            
            
            
            199,257Construction
                in progress
            
            
            150,790
            
            
            
            44,620Total
            
            
            2,949,519
            
            
            
            2,819,845Less:
                Accumulated depreciation and amortization
            
            
            (1,329,358
            )
            
            
            (1,123,887
            )Net
            
            $
            1,620,161
            
            
            $
            1,695,958




NOTE
      4 -
      LINE OF CREDIT, BANK




The
      Company has a line of credit financing agreement with First National Bank of
      Deerwood up to a maximum amount of $3,000,000 which expires April 1, 2008.
      Interest is payable monthly at prime plus 1.00% (9.25% at June 30, 2007) with
      a
      minimum interest rate of 5%.  The line of credit is collateralized by
      accounts receivable, inventories, property and equipment.  The
      agreement requires the following affirmative covenants measured based upon
      December 31 financial results, minimum net worth of $7,000,000, debt to equity
      ratio of less than 1.0 to 1.0 and debt service ratio not to exceed 1.2 to
      1.0.  The Company was out of compliance with debt to equity ratio
      being 1.11 to 1.0 and a negative debt service ratio at December 31,
      2006.  The Company received a waiver letter from its credit provider.
      The weighted average interest rate on the line of credit for the six months
      ended June 30, 2007 and 2006 was 9.13% and 8.46%, respectively. The weighted
      average interest rate on the line of credit for the three months ended June
      30,
      2007 and 2006 was 9.25% and 8.75%, respectively.  The balance
      outstanding on the line of credit was $1,535,000 and $3,900,000 at June 30,
      2007
      and December 31, 2006, respectively.




9
 ***Index***




NOTE
      5 -
      INCOME TAXES




The
      provision for income taxes for continuing operations consists of the following
      components for the six months ended June 30:




**2007**
            
            
            **2006**Current
            
            $
            -
            
            
            $
            -Deferred
            
            
            -
            
            
            
            (620,000
            )Total
                Benefit from Income Taxes
            
            $
            -
            
            
            $
            (620,000
            )




The
      provision for taxes differs from the expected provision that would result from
      the application of federal tax rates to pre-tax income. A comparison of the
      provision for income tax expense at the federal statutory rate of 34% for the
      six months ended June 30 to the Company’s effective rate is as
      follows:




**2007**
            
            
            **2006**Federal
                statutory rate
            
            
            (34.0
            )%
            
            
            (34.0
            )%State
                tax, net of federal benefit
            
            
            (2.8
            )
            
            
            (2.8
            )Permanent
                differences and other including surtax exemption
            
            
            (0.9
            )
            
            
            (2.3
            )Research
                and development credit
            
            
            (0.0
            )
            
            
            (0.5
            )Valuation
                allowance for deferred tax assets
            
            
            37.7
            
            
            
            0.0Effective
                Tax Rate
            
            
            0.0
            %
            
            
            (39.6
            )%




A
      comparison of the provision for income tax expense at the federal statutory
      rate
      of 34% for the three months ended June 30 to the Company’s effective rate is as
      follows:




**2007**
                  
                  
                  **2006**Federal
                      statutory rate
                  
                  
                  (34.0
                  )%
                  
                  
                  (34.0
                  )%State
                      tax, net of federal benefit
                  
                  
                  (2.8
                  )
                  
                  
                  (2.8
                  )Permanent
                      differences and other including surtax exemption
                  
                  
                  0.5
                  
                  
                  
                  (2.7
                  )Research
                      and development credit
                  
                  
                  (0.0
                  )
                  
                  
                  (0.5
                  )Valuation
                      allowance for deferred tax assets
                  
                  
                  64.0
                  
                  
                  
                  0.0Effective
                      Tax Rate
                  
                  
                  27.7
                  %
                  
                  
                  (40.0
                  )%




Based
      on
      certain triggering events that occurred during the three months ended June
      30,
      2007, including significantly higher than estimated sales returns and other
      events, the Company determined the deferred tax asset for the loss before income
      taxes for the three and six months ended June 30, 2007 should have a 100%
      valuation allowance recorded.





The
      Company adopted FIN 48 effective January 1, 2007.  Upon adoption,
      there was approximately $400,000 of unrecognized income tax
      benefits.  The adoption of FIN 48 had no effect on stockholders’
equity.  As of June 30, 2007 and December 31, 2006, there was
      approximately $400,000 of unrecognized income tax benefits related to temporary
      differences included as a deferred tax liability.  The Company’s
      federal and state tax returns are potentially open to examinations for fiscal
      years 2003-2006.




NOTE
      6 –
CONTRACT PAYABLE – VADDIO




The
      Company had employment agreements with 3 employees.  The agreements,
      which expired on December 31, 2006, provided for an annual base salary and
      bonus
      payments under each employment agreement, equal to 3.4% to each employee of
      annual sales of Vaddio products (net of allowances for returns and billing
      errors) in excess of $1,600,000 and $2,000,000 in 2005 and 2006,
      respectively.  The employee has agreed, during his employment and for
      a period of three years thereafter, not to compete with the Company in any
      business that the Company is conducting on the date of termination, nor will
      he
      solicit employees, customers and suppliers of the Company or accept employment
      or provide services to the Company’s customers during this three-year time
      period.  Contract payments of $762,231 and $462,420 were paid during
      the six months ended June 30, 2007 and 2006, respectively.  The amount
      owed related to the contract payable was $0 and $762,231 at June 30, 2007 and
      December 31, 2006, respectively, and is included in current liabilities retained
      relating to discontinued operations.




10
 ***Index***




NOTE
      7 –
CONCENTRATIONS




Major
      Customers




The
      Company derived more than 10% of its revenues from the following unaffiliated
      customers in the following amounts for the three months ended June
      30:





**2007**
            
            
            **2006**Customer
                A
            
            $
            184,480
            
            
            $
            295,865Customer
                B
            
            
            230,468
            
            
            
            199,875








The
      Company derived more than 10% of its revenues from the following unaffiliated
      customers in the following amounts for the six months ended June
      30:





**2007**
            
            
            **2006**Customer
                A
            
            $
            324,028
            
            
            $
            637,021Customer
                B
            
            
            400,477
            
            
            
            549,564





The
      Company had receivable balances greater than 10% of its accounts receivable
      from
      the following unaffiliated customers:





**June
                30, 2007**
            
            
            **December
                31, 2006**Customer
                A
            
            $
            *
            
            
            $
            445,923Customer
                B
            
            
            98,810
            
            
            
            429,095Customer
                C
            
            
            *
            
            
            
            461,742Customer
                D
            
            
            82,043
            
            
            
            *Customer
                E
            
            
            45,307
            
            
            
            *




*Did
      not
      represent more than 10% of the Company’s revenues or accounts receivable for the
      period indicated.




Foreign
      Sales





Included
      in the consolidated statements of operations are foreign sales related to
      continuing operations of $595,232 and $354,386 for the six months ended June
      30,
      2007 and 2006, respectively, and $452,202 and $183,059 for the three months
      ended June 30, 2007 and 2006, respectively.





Foreign
      Inventory





Included
      in the consolidated balance sheets are international inventories related to
      continuing operations of $259,926 and $204,098 at June 30, 2007 and December
      31,
      2006, respectively.   Foreign inventories consist of raw material
      goods held in Asia and used in the production of Nature Vision
      products.





NOTE
      8 –
DISCONTINUED OPERATIONS





**Norman
      photography product line sale**





The
      sale
      of Nature Vision’s Norman photography product line to Promark International,
      Inc. was completed on October 20, 2006 pursuant to the terms of an Asset
      Purchase Agreement. The transaction involved the sale of inventory, equipment
      and certain other assets relating to Nature Vision’s Norman photography product
      line for a total purchase price of approximately $2,400,000, of which $300,000
      was payable pursuant to the terms of a three-year note.  The note
      carried interest at prime plus 1% and was unsecured.  The note
      required quarterly principal payments of $25,000 plus interest.  The
      remaining balance of the note was paid off during the three months ended June
      30, 2007.  This product line has been classified as discontinued
      operations.





11
 ***Index***





**Vaddio
      product line sale**




The
      sale
      of Nature Vision’s Vaddio product line to New Vad, LLC (New Vad) closed on
      February 5, 2007 pursuant to the terms of the Asset Purchase
      Agreement.  The transaction involved the sale of fixed assets,
      equipment, licenses, intellectual property and certain other assets relating
      to
      Nature Vision’s Vaddio product line.  The original purchase price paid
      by the Buyer was $757,372 which consisted of $710,694 in cash at closing and
      $46,678 in assumed paid time off.  In addition, Nature Vision will
      receive 2% of receipts from the gross sales of all Vaddio products sold by
      New
      Vad after March 1, 2007, paid on a monthly basis with a six-month deferral,
      until a total payment of $750,000 is received.




As
      part
      of the transaction, the parties also entered into a Consignment Sale Agreement,
      providing for the sale of Nature Vision’s inventory to New Vad over the next 12
      months at a book value estimated to be $2,031,359.  Under the terms of
      the Consignment Sale Agreement, New Vad will purchase, at the Company’s cost,
      the consigned inventory from Nature Vision as needed before purchasing a similar
      type of item from a third party until the inventory is sold in its entirety,
      or
      January 31, 2008, at which time the remaining inventory will be
      purchased.  The Company has sold $1,171,475 of inventory to New Vad
      through June 30, 2007.  There is $120,926 included in accounts
      receivable relating to discontinued operations that is due from New Vad as
      part
      of inventory sold during the three months ended June 30, 2007.  The
      remaining inventory to be purchased by New Vad was $859,884 at June 30,
      2007.




In
      addition, the parties entered into a Collection Agreement, under which New
      Vad
      will collect and transmit to Nature Vision payments made by customers on Nature
      Vision’s accounts receivable for products or services sold or provided before
      the closing date.




The
      gain
      on the sale was calculated as follows:




Cash
                received
            
            $
            710,694Assumption
                of accrued paid time off
            
            
            46,678Subtotal
            
            
            757,372Less:
                Estimated transaction costs
            
            
            (345,893
            )Net
                consideration on sale
            
            
            411,479Less:  Prepaid
                expenses
            
            
            (72,166
            )Less:  Property
                and equipment carrying amount
            
            
            (186,701
            )Gain on disposition of assets
            
            $
            152,612




The
      potential deferral proceeds of up to $750,000 will be recorded when earned
      and
      collection is deemed probable.  No deferred sale proceeds were
      recorded during the six months ending June 30, 2007.




This
      product line has been classified as discontinued operations.





The
      following are condensed statements of the discontinued operations (Vaddio and
      Norman) for the three and six months ended June 30:





Three months ended June 30
            
            
            Six
                months ended June 302007
            
            
            2006
            
            
            2007
            
            
            2006Sales,
                Net
            
            $
            -
            
            
            $
            3,963,773
            
            
            $
            736,802
            
            
            $
            6,959,410Cost
                of good sold
            
            
            123,017
            
            
            
            2,683,633
            
            
            
            697,780
            
            
            
            4,584,489Gross
                profit
            
            
            (123,017
            )
            
            
            1,280,140
            
            
            
            39,022
            
            
            
            2,374,921Selling,
                general, and administrative
            
            
            (4,567
            )
            
            
            1,006,871
            
            
            
            269,437
            
            
            
            2,072,808Income
                (loss) from operations
            
            
            (118,450
            )
            
            
            273,269
            
            
            
            (230,415
            )
            
            
            302,113Other
                income (expense)
            
            
            50,000
            
            
            
            (593
            )
            
            
            50,000
            
            
            
            3,880Gain
                on sale of equipment
            
            
            163,000
            
            
            
            -
            
            
            
            163,000
            
            
            
            -Gain
                on sale of Vaddio product line
            
            
            75,123
            
            
            
            -
            
            
            
            152,612
            
            
            
            -Income
                and gain from discontinued operations
            
            
            169,673
            
            
            
            272,676
            
            
            
            135,197
            
            
            
            305,993Provision
                for income taxes
            
            
            (14,000
            )
            
            
            (109,000
            )
            
            
            -
            
            
            
            (122,000
            )Gain
                from discontinued operations
            
            $
            155,673
            
            
            $
            163,676
            
            
            $
            135,197
            
            
            $
            183,993





12
 ***Index***





Assets
      and liabilities as a result of discontinued operations consisted of the
      following at June 30, 2007 and December 31, 2006:





2007
            
            
            2006Current
                assets sold relating to discontinued operations:Prepaid
                expenses
            
            $
            -
            
            
            $
            84,855Other
                assets sold relating to discontinued operations:Fixed
                assets, net
            
            
            -
            
            
            
            156,199Intangibles,
                net
            
            
            -
            
            
            
            30,502Total
            
            $
            -
            
            
            $
            186,701Current
                liabilities assumed relating to discontinued operations:Accrued
                vacation
            
            $
            -
            
            
            $
            46,678




Assets
      and liabilities retained relating to the discontinued operations consisted
      of
      the following at June 30, 2007 and December 31, 2006:




2007
            
            
            2006Current
                assets retained relating to discontinued operations:Accounts
                receivable
            
            $
            120,926
            
            
            $
            1,805,240Other
                receivable
            
            
            163,000
            
            
            
            -Inventory
            
            
            859,884
            
            
            
            2,261,240Total
            
            $
            1,143,810
            
            
            $
            4,066,480Current
                liabilities retained relating to discontinued operations:Accounts
                payable
            
            $
            -
            
            
            $
            992,685Accrued
                payroll and related expenses
            
            
            -
            
            
            
            80,012Contract
                payable
            
            
            -
            
            
            
            762,231Accrued
                transaction costs
            
            
            43,000
            
            
            
            -Other
                current liabilities
            
            
            -
            
            
            
            37,973Total
            
            $
            43,000
            
            
            $
            1,872,901





13
 ***Index***





NOTE
      9 –
SUBSEQUENT EVENT





On
      July
      3, 2007, the Company purchased substantially all the assets of Fish Hawk
      Electronics Corporation for $268,979.  $100,000 was paid at closing,
      $68,979 is due in October 2007, and $100,000 is payable pursuant to a three
      year
      promissory note.  The note bears interest at 8% and requires annual
      principal payments of $33,333 plus interest at 8% through July
      2010.   The purchase provides the Company with downrigger display
      technology that compliments its Vector line of downrigger trolling
      products.  The pro forma results of operations as if the Fish
      Hawk Electronic Corporation purchase occurred on January 1, 2006 are not
      material.







**Item
      2: Management’s Discussion and Analysis of Financial Condition
      and Results of Operations**




The
      following discussion and analysis of financial condition, results of operations,
      liquidity and capital resources should be read in conjunction with our audited
      consolidated financial statements and notes thereto appearing elsewhere in
      this
      report. This discussion contains forward-looking statements that involve risks
      and uncertainties, including information with respect to our plans, intentions
      and strategies for our businesses. Our actual results may differ materially
      from
      those estimated or projected in any of these forward-looking
      statements.




**Company
      History and Overview**




Nature
      Vision, Inc., (f/k/a Photo Control Corporation) (the “Company” or “we”) was
      incorporated as a Minnesota corporation in 1959. On August 31, 2004, the Company
      changed its name to Nature Vision, Inc. in connection with a merger transaction
      with Nature Vision Operating Inc. (f/k/a Nature Vision, Inc.) a Minnesota
      corporation that was incorporated in 1998. As a part of the merger, Nature
      Vision Operating Inc. became a wholly-owned subsidiary of the Company. The
      shares of the combined company trade on the Nasdaq Capital Market under the
      symbol, “NRVN.”




The
      Company’s continuing operations are composed of one operating division, the
      Nature Vision division for outdoor recreation products, located in Brainerd,
      Minnesota. On October 20, 2006, Nature Vision, Inc. sold the Norman product
      line
      of its Photo Control division (Norman) and renamed the division the Vaddio
      division. On February 5, 2007, the Company sold certain assets and transferred
      certain liabilities related to its Vaddio division (Vaddio). The Norman and
      Vaddio divisions designed, manufactured and marketed professional cameras,
      electronic flash equipment, lens shades and related photographic accessories
      and
      sold audio visual peripheral products used in the video conferencing and
      presentation industry. The Company began discussions and efforts to sell Norman
      and Vaddio in the third and fourth quarter of 2006, respectively. The assets
      and
      liabilities of Vaddio at December 31, 2006 met the requirements of Statement
      of
      Financial Accounting Standards (SFAS) No. 144, "Accounting for Impairment or
      Disposal of Long-Lived Assets" as being held for sale. Operations and cash
      flows
      were eliminated as a result of the sale and the Company will not have any
      significant involvement in the operations after the sale. In accordance with
      appropriate accounting rules, the Company has reclassified the previously
      reported financial results to exclude the results of the Norman and Vaddio
      operations and have presented on a historical basis these operations as a
      separate line in the consolidated statements of operations and the consolidated
      balance sheets under discontinued operations. All of the financial information
      in the consolidated financial statements and notes to the consolidated financial
      statements has been revised to reflect only the results of continuing operations
      of the Company’s outdoor recreation products.




The
      long-term growth plans for the Company will be in the outdoor recreation
      markets. This growth will be generated organically and through strategic
      acquisitions.




**Revenue**




Revenue
      consists of sales of our products net of returns and allowances. Direct revenue
      includes sales from orders to distributors, dealers and direct consumers and
      includes customer service and shipping charges. New product innovation through
      the use of technology will continue to be the basis of our organic growth.
      We
      will look to strategic acquisitions to provide penetration into new product
      categories and channels.




**Cost
      of Goods Sold**




Cost
      of
      goods sold for our products consists of the cost of direct materials, labor
      to
      produce the products, freight in, depreciation, amortization, warehousing,
      associated management, occupancy costs, customer service and warranty, shipping
      and receiving costs, quality assurance and other indirect miscellaneous
      manufacturing costs. Cost of goods sold can fluctuate based on the product
      mix
      sold for a given period. The increased cost of oil continues to drive up the
      cost of components and the freight to receive and ship products. We continue
      to
      evaluate make versus outsource opportunities to reduce these costs. We look
      to
      increase our distribution abilities and capacities.


**Gross
        Profit**
  We
        define
        gross profit as the difference between revenue and cost of goods sold. We
        believe our gross profit is our best metric to manage the business on a
        divisional and product line basis.


14
 ***Index***




**Selling,
      General and Administrative Expenses**




Selling,
      general and administrative expenses include directly identifiable operating
      costs and other expenses. The majority of these costs are fairly consistent
      from
      month to month. Selling costs consist of payroll, commissions, product
      management, marketing, advertising and servicing accounts costs. General and
      administrative costs include payroll, product design, product development,
      engineering, order processing costs, management information systems, accounting
      and administrative. General and administrative expenses include costs associated
      with general corporate management and shared departmental services such as
      legal, external accounting, management information systems, finance, insurance
      and human resources. Other costs consist primarily of interest on the existing
      line of credit. The interest rate on the credit facility floats with prime,
      at
      prime plus 1.00%. As rates have increased over the prior year, these costs
      have
      continued to rise.




**Income
      from Operations**




Income
      from Operations is defined as revenue less cost of goods sold and selling,
      general and administrative expenses.




**Gain
      (Loss) from Discontinued Operations**




On
      October 20, 2006, Nature Vision, Inc. sold the Norman product line of its Photo
      Control division (Norman) and renamed the division the Vaddio Division. On
      February 5, 2007, the Company sold certain assets and transferred certain
      liabilities related to its Vaddio division (Vaddio). In accordance with
      Statement of Financial Accounting Standards No. 144 , “Accounting for the
      Impairment or Disposal of Long-Lived Assets,” this operating segment was
      classified as discontinued operations and the financial results are reported
      separately as discontinued operations for all periods presented.




**Trends
      and Opportunities**




*Retail
      Expansion by Larger Customers.*Our large customers, such as Cabela’s, Bass
      Pro Shops and Gander Mountain continue to represent a large concentration
      of our revenue. Our smaller customers continue to reduce in quantity and
      quality. These new large retail store expansion plans will provide significant
      opportunities for growth at the expense of the smaller owner operator
      establishments. We anticipate the number of customers within the Outdoor
      recreation products market to continue to reduce as the average size of our
      customer continues to increase. This consolidation puts significant pressure
      on
      the business with its increased reliance on fewer customers. Failure to continue
      business with an existing customer or even maintain an existing sales level
      with
      a customer could have a significant impact on earnings.




*Inventories*.
      At the end of 2006, we increased our
      required levels to insure a high rate of order fulfillment. Lower than
      anticipated sales in 2006 were a cause for the increase ininventories.
      We currently have stock in
      place to fulfill orders and management feels that the inventory is saleable.
      We
      anticipate the ability to reduce the required levels in future quarters. Should
      sales of existing products not achieve forecasted levels, a change in product
      components or customer requirements occur, such reductions may not be
      obtainable.




*Increased
      oil prices.*Increased oil prices may affect us more negatively than our
      competition. If gasoline prices should continue to increase, consumers may
      opt
      to reduce the amount of discretionary spending on entertainment items and take
      fewer vacations. Increased oil prices continue to impact the costs of material
      components. We rely on outsourced production and the costs for the associated
      shipping could materially impact the cost of product and gross profit
      margins.




*Increased
      interest costs.*Given the cyclical nature of our business we are reliant on
      a credit facility. As growth rates dictate additional borrowing, interest rates
      have consistently increased impacting the costs of financing. If we are unable
      to maintain favorable financing arrangements it will impact the overall
      profitability of the Company.




*Acquisition
      opportunities*. We continue to evaluate opportunities for strategic
      acquisitions. These acquisitions are expected to be accretive to earnings.
      These
      potential acquisitions will require financing which we anticipate we will be
      able to obtain.




*Investment
      in infrastructure.*We anticipate that we will continue investing in our
      infrastructure to support our new distribution facility. We will also continue
      to invest in qualified employees to support our organic growth with new product
      innovation.





15
 ***Index***





**Results
      of
      Operations**




The
      following table provides the
      percentage change in our net sales, gross profit, loss from operations, and
      net
      loss for the three months and six months ended June 30:


**(in
                  thousands)**
            
            Three
                  months ended
              June
                  30
            
            
            Increase
              (Decrease)
            
            
            Six
                  months ended
              June
                  30
            
            
            Increase
              (Decrease)**2007**
            
            
            **2006**
            
            
            
            
            
            **2007**
            
            
            **2006**NET
                  SALES
            
            $
            768
            
            
            $
            681
            
            
            
            12.8
            %
            
            $
            2,524
            
            
            $
            2,352
            
            
            
            7.3
            %GROSS
                  PROFIT
            
            
            (109
            )
            
            
            44
            
            
            
            (347.7
            %)
            
            
            200
            
            
            
            508
            
            
            
            (60.6
            %)LOSS
                  FROM OPERATIONS
            
            
            (970
            )
            
            
            (677
            )
            
            
            (43.3
            %)
            
            
            (1,627
            )
            
            
            (1,398
            )
            
            
            (16.4
            %)NET
                  LOSS
            
            $
            (1,152
            )
            
            $
            (306
            )
            
            
            (276.5
            %)
            
            $
            (1,601
            )
            
            $
            (748
            )
            
            
            (114.0
            %)








The
      following table presents our gross
      profit, loss from operations and net loss as a percentage of net sales for
      the
      three months and six months ended June 30:


Three months ended June 30
            
            
            Six months ended June 30**2007**
            
            
            **2006**
            
            
            **2007**
            
            
            **2006**GROSS
                  PROFIT
            
            
            (14.2
            %)
            
            
            6.5
            %
            
            
            7.9
            %
            
            
            21.6
            %LOSS
                  FROM OPERATIONS
            
            
            (126.3
            %)
            
            
            (99.4
            %)
            
            
            (64.5
            %)
            
            
            (59.4
            %)NET
                  LOSS
            
            
            (150.0
            %)
            
            
            (44.9
            %)
            
            
            (63.4
            %)
            
            
            (31.8
            %)





Net
      sales
      have remained flat for both the three and six months ending June 30,
      2007.  Net sales are a function of gross sales less returns, discounts
      and allowances.  Gross sales have increased 24.5% and 20.1% for the
      three and six months ending June 30, 2007 over the same periods for the prior
      year respectively.  Increased gross sales were due to an increase in
      hunting product sales as a result of new hunting blinds.  In addition,
      there was an increase in sales in the Vector product as a result of this product
      line being introduced by the Company towards the end of March,
      2006.  The Company has implemented a price increase effective August
      1, 2007.  The increases in gross sales were more than offset by higher
      than expected returns during the three and six months ended June 30,
      2007.  Returns have increased 75.5% and 76.8% for the three and six
      months ending June 30, 2007 over the same periods for the prior year
      respectively.  In June 2007, the Company has contracted with an
      independent off-shore quality consultant to inspect and qualify all goods prior
      to shipment.  The Company feels that the impact of this action will
      not be realized until some time in 2008.  Gross material margins have
      remained relatively constant in year over year comparisons.  Gross
      profits were also impacted by rising fuel costs passed along through increased
      freight costs, both incoming and outgoing and the cost to warrant defect
      product. Outgoing freight was additionally impacted by the sale of lower cost
      items in similar or larger configurations and quantities, thereby increasing
      the
      cost per unit shipped. The final major impact on gross profit was the move
      to
      our new leased facility from our previously owned facility. This change results
      in a lease expense in 2007 that reduces gross profit while the owned facility
      in
      2006 generated interest expense, which did not reduce gross
      profit.  Management believes that the Company’s gross profits will
      return to historical levels in future quarters.  Based on certain
      triggering events that occurred in the quarter ended June 30, 2007, management
      elected to change its estimate on the future realization of tax benefits derived
      from the current year losses.  Therefore management created a
      valuation allowance of 100% against the deferred tax assets related to current
      year losses.





**Selling,
      General and Administrative Expenses**





Selling,
      general and administrative costs have decreased for the six months ended June
      30, 2007 due to the Company reducing its engineering costs as a result of lower
      headcount.   Research and development expenses increased from
      $44,668 for the six months ended June 30, 2006 to $50,546 for the six months
      ended June 30, 2007.




**Liquidity
      and Capital Resources**




The
      Company had a cash balance of $32,597 at June 30, 2007 compared to $2,344 at
      December 31, 2006. The change is a combination of many factors. Cash provided
      from operations was $2,424,828 for the six months ended June 30, 2007. The
      components of cash provided from operations are the following: (i) depreciation
      and amortization of $220,488 and (ii) changes in various operating assets and
      liabilities of $4,120,833.  These amounts were offset by a net loss of
      $1,600,881, gain on sale of discontinued operations related to Vaddio of
      $152,612, and gain on sale of fixed assets of $163,000. The most significant
      components relating to the change in various operating assets and liabilities
      relate to the change in accounts receivable of $4,044,929 and inventory of
      $1,887,021, offset by a change in accounts payable of $1,284,296. The majority
      of the change in the accounts receivable, inventory, and accounts payable is
      related to the discontinued operations and the seasonality of the continuing
      operations.





16
 ***Index***





Cash
      provided from investing activities was $726,437 for the six months ended June
      30, 2007 primarily provided by the sale of discontinued operations.




The
      Company sold its Vaddio product line to New Vad, LLC on February 5, 2007
      pursuant to the terms of the Asset Purchase Agreement. The transaction involved
      the sale of fixed assets, equipment, licenses, intellectual property and certain
      other assets relating to Nature Vision’s Vaddio product line. The original
      purchase price paid by the Buyer was $757,372 which consisted of $710,694 in
      cash at closing and $46,678 in assumed vacation pay. The gain on the sale of
      the
      product line is based on prepaid expenses of $72,166 and equipment and
      intangibles of $186,701. Estimated transaction costs of (legal and broker fee)
      are projected to be $345,893, of which $43,000 are accrued for at June 30,
      2007.
      The estimated pretax gain on the sale of the business unit is calculated at
      $152,612. The Company utilized the net proceeds to pay down the contract payable
      liability that was retained by the Company in the sale and to reduce the line
      of
      credit. In connection with the asset purchase agreement, Nature Vision will
      receive 2% of receipts from the gross sales of all Vaddio products sold by
      New
      Vad after March 1, 2007, paid on a monthly basis with a six-month deferral,
      until a total payment of $750,000 is received. The proceeds from these deferred
      payments are not included in the above mentioned pretax gain. As part of the
      transaction, the parties also entered into a Consignment Sale Agreement,
      providing for the sale of Nature Vision’s inventory to New Vad LLC over the next
      12 months.  Under the terms of the Consignment Sale Agreement, New Vad
      LLC will purchase the consigned inventory from Nature Vision, Inc. as needed
      before purchasing a similar type of item from a third party until the inventory
      is sold in its entirety, or January 31, 2008, at which time the remaining
      inventory will be purchased. The Company has sold $1,171,475 of inventory
      to New Vad through June 30, 2007.  The remaining inventory to be
      purchased by New Vad was $859,884 at June 30, 2007.    In
      addition, the parties entered into a Collection Agreement, under which New
      Vad
      LLC will collect and transmit to Nature Vision, Inc. payments made by customers
      on Nature Vision’s accounts receivable for products or services sold or provided
      before the closing date. Any remaining balances due on June 5, 2007 were
      remitted by New Vad LLC to Nature Vision, Inc.





The
      Company purchased $129,674 of property and equipment during the six months
      ended
      June 30, 2007. In addition, the Company received $300,000 of principal payments
      on the $300,000 note receivable that was part of the Norman photography product
      line sale that was completed on October 20, 2006.





Cash
      used
      in financing activities was $3,121,012 for the six months ended June 30, 2007.
      This is made up of payments on the Company’s line of credit of $2,365,000,
      $762,231 of payments on the contract payable, and a decrease in checks issued
      in
      excess of cash in bank of $71,394; offset by cash received on exercise of
      options of $77,613.




As
      of
      June 30, 2007 working capital decreased to $3,221,403 from $4,157,969 at
      December 31, 2006.




The
        Company is currently very seasonal with greater than 50% of annual sales
        occurring in the last four months of the year historically. Losses have
        historically been produced in the 2nd and 3rd quarters. The Company has a
        current backlog of sales orders totaling approximately $5,802,000 compared
        to
        $927,000 at the same time the prior year.  The current backlog is
        expected to be filled within the next 7 months.  Due to the backlog
        period involved, however, it is possible that there could be cancellations
        of a
        portion of the currently backlogged orders.  The Company expects to
        fund the purchase of product and sale of the backlogged orders through cash
        flow
        provided by the sale of those orders and existing financing.  The
        Company cautions investors who may utilize published bookings and backlog
        information as tools to forecast the Company’s revenue during the given
        timeframe since certain purchase orders may be subject to cancellation and/or
        delivery schedule revision.




Nature
      Vision Inc. has a secured line of credit for $3,000,000 at prime plus 1.00%.
      The
      prime rate at June 30, 2007 was 8.25%. As of June 30, 2007, the Company had
      the
      ability to borrow against the entire line of credit. Management anticipates
      continued advances against the line of credit to fund anticipated sales growth
      in future quarters. The agreement requires the following affirmative covenants
      measured based on December 31 audited results, minimum net worth of $7,000,000,
      debt to equity ratio of less than 1.0 to 1.0 and debt service ratio of not
      to
      exceed 1.2 to 1.0. ****** Management believes
      short-term liquidity needs of the Company will be provided through working
      capital and the line of credit, and will be sufficient to finance operations
      for
      a period of at least the next 12
      months.******





The
      Company signed an agreement in November 2006 to market and sell its Minneapolis,
      MN facility and land. This property relates to the discontinued operations
      of
      the Company. Management anticipates the sale of the property to exceed the
      carrying value as presented on the balance sheet. The Company anticipates
      utilizing the proceeds to reduce any existing debt or assist in funding a future
      acquisition. There is no assurance the Company will be able to sell the
      building.





On
      July
      3, 2007, the Company purchased substantially all the assets of Fish Hawk
      Electronics Corporation for $268,979.  $100,000 was paid at closing,
      $68,979 is due in October 2007, and $100,000 is payable pursuant to a three
      year
      promissory note.  The note bears interest at 8% and requires annual
      principal payments of $33,333 plus interest at 8% through July
      2010.





17
 ***Index***





It
      is
      management’s belief that it will fund any potential acquisitions through
      additional financing and the potential issuance of common stock. Management
      believes that any additional long-term debt requirements and additional lines
      of
      credit will be available. There is no assurance the Company will be able to
      obtain the necessary financing if needed.




It
      is
      management’s belief that long-term liquidity needs for the foreseeable future
      will be provided by working capital, and the expectation that the current line
      of credit will be renewed and any additional long-term debt requirements will
      be
      available.




The
      Company believes that the effect of inflation has not been material during
      the
      six months ended June 30, 2007.




**Off-Balance
      Sheet Financing Arrangements**




As
      of
      June 30, 2007, there were no off-balance sheet arrangements, unconsolidated
      subsidiaries and commitments or guaranties of other parties.




**Critical
      Accounting Policies**




Management’s
      estimate of the warranty reserve is based on historical company data and
      management’s best estimate. We evaluated the key factors and assumptions used to
      develop the warranty reserve in determining that it is reasonable in relation
      to
      the consolidated financial statements taken as a whole.




The
      Company recognizes revenue when products are shipped and the customer takes
      ownership and assumes risk of loss, collection of the relevant receivable is
      probable, persuasive evidence of an arrangement exists and the sales price
      is
      fixed or determinable.  The Company’s revenue recognition policy is in
      accordance with SEC Staff Accounting Bulletin, No. 104.




Management
      records a reserve on accounts receivable which is an estimate of the amount
      of
      accounts receivable that are uncollectible. The reserve is based on a
      combination of specific customer knowledge, general economic conditions and
      historical trends. Management believes the results could be materially different
      if economic conditions change for our customers.




The
      carrying value of long-lived assets is periodically assessed to insure their
      carrying value does not exceed their estimated net realizable future value.
      This
      assessment includes certain assumptions related to future needs for the asset
      to
      help generate future cash flow. Changes in those assessments, future economic
      conditions or technological changes could have a material adverse impact of
      the
      carrying value of these assets.




The
      inventory reserve is an estimate of the future net realizable value of our
      inventory. It is based on historical trends, product life cycles, forecast
      of
      future inventory needs and on-hand inventory levels. Management believes reserve
      levels could be materially affected by changes in technology, our customer
      base,
      customer needs, general economic conditions and the success of certain Company
      sales programs.




Realization
      of deferred tax assets is dependent upon the generation of future taxable income
      during the periods in which those temporary differences become deductible.
      Management considers the scheduled reversal of deferred tax liabilities and
      projected future taxable income in making this assessment. Actual future
      operating results, as well as changes in future performance, could have a
      material adverse impact on the valuation reserves.




**Item
      3: Controls and Procedures**




(a)           As
      of June 30, 2007 an evaluation was performed by the registrant’s President and
      Chief Financial Officer of the effectiveness of the design and operation of
      the
      registrant’s disclosure controls and procedures (as defined in Rules 13a-15(e)
      and 15d-15(e) under the Securities Exchange Act of 1934).  Based upon,
      and as of the date of that evaluation, the President and Chief Financial Officer
      concluded that the registrant’s disclosure controls and procedures were
      effective.




18
 ***Index***





(b)           There
      were no changes in the registrant’s internal controls over financial reporting
      identified in connection with the evaluation required by paragraphs (d) of
      Rules
      13a-15(d) or 15d-15 under the Securities Exchange Act of 1934 that could
      materially, or is reasonably likely to materially affect these controls
      subsequent to the date of their evaluation.






**Part
      II**




**Item
                1.**
            **Legal
                Proceedings.**  Not
                applicable.




**Item
                2.**
            **Unregistered
                Sales of Equity Securities and Use of Proceeds.**  Not
                applicable.




**Item
                3.**
            **Defaults
                Upon Senior Securities.**  Not
                applicable.




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




(a)  The
      registrant held its annual meeting of shareholders on May 18, 2007.




(b)  Not
      applicable.




(c)  The
      following matter was
      voted upon and approved by the registrant’s shareholders at the registrant’s
      annual meeting:  Election of two Class I directors to hold office for
      three-year terms or until their successors are elected or
      appointed:




Common
      shares voting in favor of
      Jeffrey P. Zernov:  1,422,096.


Common
      shares voting against or
      withheld:  33,004.








Common
      shares voting in favor of
      Richard P. Kiphart:  1,450,286.


Common
      shares voting against or
      withheld:  4,814.




**Item
                5.**
            **Other
                Information.**  Not
                applicable.




**Item
                6.**
            **Exhibits.**




(a)
      Listing of Exhibits:




31.1
            Certification
                of Chief Executive Officer.





31.2
            Certification
                of Chief Financial Officer.





32.1
            Certification
                pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
                906 of
                the Sarbanes-Oxley Act of 2002.





19
 ***Index***




**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.





NATURE
                VISION, INC.Date:  August
                14, 2007
            By:
            /s/
              Jeffrey P. ZernovIts:  Chief
                Executive Officer and PresidentDate:  August
                14, 2007
            By:
            /s/
              Michael R. DayIts:  Chief
                Financial Officer






20