| x | report                under Section 13 or 15(d) of the Securities Exchange Act of                1934 |
|---|-------------------------------------------------------------------------------------------------------|

| o | Transition                report under Section 13 or 15(d) of the Exchange                Act |
|---|-----------------------------------------------------------------------------------------------|

----

| Minnesota                                      | 41-1716250                         |
|------------------------------------------------|------------------------------------|
| (State                or Other Jurisdiction of | (I.R.S.                Employer    |
| Incorporation                or Organization)  | Identification                No.) |

----

----

----

----

|                  | **MakeMusic,                Inc.**                                             |                        |
|-----------------------|--------------------------------------------------------------------------------|-----------------------------|
|                  |                                                                           |                        |
|                  | **INDEX**                                                                      |                        |
|                  |                                                                           |                        |
|                  | **PART                I. FINANCIAL INFORMATION**                               | **Page                No.** |
|                  |                                                                           |                        |
| Item                1 | Condensed                Consolidated Financial Statements                     | 3                           |
|                  |                                                                           |                        |
|                  | Condensed                Consolidated Balance Sheets                           |                        |
|                  | June                30, 2006 and December 31, 2005                             | 3                           |
|                  |                                                                           |                        |
|                  | Condensed                Consolidated Statement of Operations                  |                        |
|                  | Three-                and six-month periods ended June 30, 2006 and 2005       | 4                           |
|                  |                                                                           |                        |
|                  | Condensed                Consolidated Statements of Cash Flows                 |                        |
|                  | Three-                and six-month periods ended June 30, 2006 and 2005       | 5                           |
|                  |                                                                           |                        |
|                  | Notes                to Condensed Consolidated Financial Statements            | 6                           |
|                  |                                                                           |                        |
| Item                2 | Management’s                Discussion and Analysis or Plan of Operation | 10                          |
|                  |                                                                           |                        |
| Item                3 | Controls                and Procedures                                         | 14                          |
|                  |                                                                           |                        |
|                  | **PART                II. OTHER INFORMATION**                                  |                        |
|                  |                                                                           |                        |
| Item                1 | Legal                Proceedings                                               | 16                          |
|                       |                                                                                |
|                  |                                                                           |                        |
| Item                2 | Unregistered                Sales of Equity Securities and Use of Proceeds     | 16                          |
|                  |                                                                           |                        |
| Item                3 | Defaults                Upon Senior Securities                                 | 16                          |
|                  |                                                                           |                        |
| Item                4 | Submission                of Matters to a Vote of Security Holders             | 16                          |
|                  |                                                                           |                        |
| Item                5 | Other                Information                                               | 17                          |
|                  |                                                                           |                        |
| Item                6 | Exhibits                                                                       | 17                          |
|                  | Signatures                                                                     | 17                          |
|                  | Exhibit                Index                                                   | 18                          |

----

**PART      I. FINANCIAL INFORMATION**

**Item      1. Condensed Consolidated Financial Statements.**

**MakeMusic,      Inc.**

**Condensed      Consolidated Balance Sheets**

*(In      thousands of U.S. dollars)*

|                                                                                                                                                             |   | **June                30,** |        | **Dec.                31,** |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------|-------------|-----------------------------|--------|
|                                                                                                                                                             |   | **2006**                    |        | **2005**                    |   |
|                                                                                                                                                             |   | (unaudited)                 |        |                        |   |
| **Assets**                                                                                                                                                       |   |                        |        |                        |   |
| Cash                                                                                                                                                             |   | **$**                       | **2,014**   |                        | $      | 2,952 |   |
| Accounts                receivable, net of allowances                                                                                                            |   |                        | **829**     |                        |   | 1,004 |   |
| Inventories,                net of reserves                                                                                                                      |   |                        | **309**     |                        |   | 435 |   |
| Prepaid                expenses and other current assets                                                                                                         |   |                        | **107**     |                        |   | 161 |   |
| Total                current assets                                                                                                                              |   |                        | **3,259**   |                        |   | 4,552 |   |
|                                                                                                                                                             |   |                        |        |                        |   |   |   |
| Property                and equipment, net                                                                                                                       |   |                        | **622**     |                        |   | 323 |   |
| Goodwill,                net                                                                                                                                     |   |                        | **3,630**   |                        |   | 3,630 |   |
| Capitalized                software                                                                                                                              |   |                        | **617**     |                        |   | 471 |   |
| Other                non-current assets                                                                                                                          |   |                        | **72**      |                        |   | 66 |   |
| **Total                assets**                                                                                                                                  |   | **$**                       | **8,200**   |                        | $      | 9,042 |   |
|                                                                                                                                                             |   |                        |        |                        |   |   |   |
| **Liabilities                and Shareholders’ Equity**                                                                                                    |   |                        |        |                        |   |   |   |
| Current                portion of capital lease obligations                                                                                                      |   | **$**                       | **6**       |                        | $      | 6 |   |
| Accounts                payable                                                                                                                                  |   |                        | **215**     |                        |   | 441 |   |
| Accrued                compensation                                                                                                                              |   |                        | **782**     |                        |   | 681 |   |
| Other                accrued liabilities                                                                                                                         |   |                        | **202**     |                        |   | 238 |   |
| Post-contract                support                                                                                                                             |   |                        | **181**     |                        |   | 181 |   |
| Reserve                for product returns                                                                                                                       |   |                        | **391**     |                        |   | 339 |   |
| Current                portion of deferred rent                                                                                                                  |   |                        | **20**      |                        |   | 20 |   |
| Deferred                revenue                                                                                                                                  |   |                        | **867**     |                        |   | 842 |   |
| Total                current liabilities                                                                                                                         |   |                        | **2,664**   |                        |   | 2,748 |   |
|                                                                                                                                                             |   |                        |        |                        |   |   |   |
| Capital                lease obligations, net of current portion                                                                                                 |   |                        | **6**       |                        |   | 9 |   |
| Deferred                rent, net of current portion                                                                                                             |   |                        | **110**     |                        |   | 120 |   |
|                                                                                                                                                             |   |                        | **116**     |                        |   | 129 |   |
|                                                                                                                                                             |   |                        |        |                        |   |   |   |
| Shareholders’                Equity:                                                                                                                       |   |                        |        |                        |   |   |   |
| Common                stock, $0.01 par value:                                                                                                                    |   |                        |        |                        |   |   |   |
| Authorized                shares - 10,000,000Issued                and outstanding shares - 3,911,555 and 3,856,654in                2006 and 2005, respectively |   |                        | **39**      |                        |   | 39 |   |
| Additional                paid-in capital                                                                                                                        |   |                        | **62,751**  |                        |   | 62,459 |   |
| Accumulated                deficit                                                                                                                               |   |                        | **(57,370** | **)**                       |   | (56,347 | ) |
| Other                comprehensive income                                                                                                                        |   |                        | **0**       |                        |   | 14 |   |
| Total                shareholders’ equity                                                                                                                  |   |                        | **5,420**   |                        |   | 6,165 |   |
| Total                liabilities and shareholders’ equity                                                                                                  |   | **$**                       | **8,200**   |                        | $      | 9,042 |   |

----

**MakeMusic,      Inc.**

**Condensed      Consolidated Statements of Operations**

*(In      thousands of U.S. dollars, except share and per share data)*

|                                                       | **Three                Months**   |   | **Six                Months**     |
|------------------------------------------------------------|-----------------------------------|--------|-----------------------------------|
|                                                       | **Ended                June 30,** |   | **Ended                June 30,** |
|                                                       | **2006**                          |   | 2005                              |   | **2006** |   | 2005 |
| Notation                Revenue                            | **1,598**                         |   | 1,627                             |   | **4,104** |   | 3,692 |
| SmartMusic                Revenue                          | **472**                           |   | 316                               |   | **938** |   | 661 |
| Other                Revenue                               | **77**                            |   | 80                                |   | **193** |   | 194 |
| NET                REVENUE                                 | **2,147**                         |   | 2,023                             |   | **5,235** |   | 4,547 |
|                                                       |                              |   |                              |   |   |   |   |
| COST                OF REVENUES                            | **349**                           |   | 376                               |   | **767** |   | 845 |
|                                                       |                              |   |                              |   |   |   |   |
| GROSS                PROFIT                                | **1,798**                         |   | 1,647                             |   | **4,468** |   | 3,702 |
|                                                       |                              |   |                              |   |   |   |   |
| OPERATING                EXPENSES:                         |                              |   |                              |   |   |   |   |
| Development                expenses                        | **834**                           |   | 914                               |   | **1,722** |   | 1,726 |
| Selling                and marketing expenses              | **857**                           |   | 787                               |   | **2,037** |   | 1,811 |
| General                and administrative expenses         | **853**                           |   | 837                               |   | **1,778** |   | 1,687 |
|                                                       |                              |   |                              |   |   |   |   |
| Total                operating expenses                    | **2,544**                         |   | 2,538                             |   | **5,537** |   | 5,224 |
|                                                       |                              |   |                              |   |   |   |   |
| LOSS                FROM OPERATIONS                        | **(746)**                         |   | (891)                             |   | **(1,069)** |   | (1522) |
|                                                       |                              |   |                              |   |   |   |   |
| Interest                income                             | **32**                            |   | 8                                 |   | **51** |   | 31 |
| Other                income (expense)                      | **0**                             |   | (8)                               |   | **1** |   | (8) |
| Net                loss before income tax                  | **(714)**                         |   | (891)                             |   | **(1,017)** |   | (1,499) |
|                                                       |                              |   |                              |   |   |   |   |
| Income                tax                                  | **0**                             |   | 0                                 |   | **7** |   | 1 |
| Net                loss                                    | **(714)**                         |   | (891)                             |   | **(1,024)** |   | (1,500) |
|                                                       |                              |   |                              |   |   |   |   |
| Loss                per common share:                      |                              |   |                              |   |   |   |   |
| Basic                                                      | **(0.18)**                        |   | (0.26)                            |   | **(0.26)** |   | (0.44) |
| Diluted                                                    | **(0.18)**                        |   | (0.26)                            |   | **(0.26)** |   | (0.44) |
|                                                       |                              |   |                              |   |   |   |   |
| Weighted                average common shares outstanding: |                              |   |                              |   |   |   |
| Basic                                                      | **3,910,490**                     |   | 3,448,132                         |   | **3,899,360** |   | 3,436,695 |
| Diluted                                                    | **3,910,490**                     |   | 3,448,132                         |   | **3,899,360** |   | 3,436,695 |

----

**MakeMusic,      Inc.**

**Condensed      Consolidated Statements of Cash Flows**

*(In      thousands of U.S. dollars)*

|                                                                                                      | **Three****Months** | ThreeMonths | **Six****Months** | SixMonths |
|-----------------------------------------------------------------------------------------------------------|---------------------|-------------|-------------------|-----------|
|                                                                                                      | **Ended**           | Ended       | **Ended**         | Ended     |
|                                                                                                      | **2006**            | 2005        | **2006**          | 2005      |
| **Operating                activities**                                                                   |                |        |              |      |
| Net                loss                                                                                   | **(714)**           | (891)       | **(1,024)**       | (1,500)   |
| Adjustments                to reconcile net loss to net cash used in operating                activities: |                |        |              |      |
| Amortization                of intangible assets                                                          | **0**               | 226         | **0**             | 453       |
| Depreciation                and amortization of property                                                  |                |        |              |      |
| and                equipment                                                                              | **57**              | 40          | **98**            | 78        |
| Other                amortization                                                                         | **38**              | 46          | **75**            | 89        |
| Stock                based compensation expense                                                           | **78**              | 3           | **171**           | 6         |
| Increase                (decrease) in cash from:                                                          |                |        |              |      |
| Accounts                receivable                                                                        | **323**             | 196         | **176**           | 247       |
| Inventories                                                                                               | **79**              | (136)       | **126**           | (266)     |
| Prepaid                expenses and other current assets                                                  | **52**              | 60          | **43**            | 63        |
| Accounts                payable                                                                           | **25**              | (65)        | **(226)**         | 10        |
| Accrued                liabilities and product returns                                                    | **8**               | 264         | **89**            | (125)     |
| Deferred                revenue                                                                           | **(36)**            | (35)        | **29**            | 53        |
| Net                cash used in operating activities                                                      | **(110)**           | (292)       | **(443)**         | (892)     |
|                                                                                                      |                |        |              |      |
| **Investing                activities**                                                                   |                |        |              |      |
| Purchases                of property and equipment                                                        | **(105)**           | (91)        | **(396)**         | (141)     |
| Capitalized                software development and other intangibles                                     | **(158)**           | (72)        | **(217)**         | (124)     |
| Net                cash used by investing activities                                                      | **(263)**           | (163)       | **(613)**         | (265)     |
|                                                                                                      |                |        |              |      |
| **Financing                activities**                                                                   |                |        |              |      |
| Proceeds                from stock options and warrants exercised                                         | **2**               | 94          | **121**           | 160       |
| Payments                on capital leases                                                                 | **(2)**             | (1)         | **(3)**           | (3)       |
| Net                cash provided by financing activities                                                  | **0**               | 93          | **118**           | 157       |
|                                                                                                      |                |        |              |      |
| Net                decrease in cash                                                                       | **(373)**           | (362)       | **(938)**         | (1,000)   |
| Cash,                beginning of period                                                                  | **2,386**           | 1,577       | **2,952**         | 2,215     |
| Cash,                end of period                                                                        | **2,014**           | 1,215       | **2,014**         | 1,215     |
|                                                                                                      |                |        |              |      |
| **Supplemental                disclosure of cash flow information**                                       |                |        |              |      |
| Interest                paid                                                                              | **0**               | 2           | **0**             | 4         |
| Income                taxes paid                                                                          | 1                   | 0           | 7                 | 1         |

----

**MakeMusic,      Inc.**

**Notes      to Condensed Consolidated Financial Statements**

| Note              1 | **Accounting                Policies.** ** **The                information furnished in this report is unaudited but reflects all                adjustments that are necessary, in the opinion of management, for                a fair                statement of the results for the interim period. The operating results                for                three and six months ended June 30, 2006 are not necessarily indicative                of                the operating results to be expected for the full fiscal year. These                statements should be read in conjunction with the Company's most                recent                Annual Report on Form 10-KSB. |
|---------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Note              2 | **Net** **Loss                Per Share.**                Net loss per share was calculated by dividing the net loss by the                weighted                average number of shares outstanding during the period. The following                table summarizes the shares of stock included in calculating earnings                per                share for the three and six months ended June 30, 2006 and 2005 in                accordance with FASB Statement 128 (“FAS 128”), *Earnings                per Share*: |
|---------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                                  |   | **Three                Months****Ended                June 30,** |          | **Six                Months****Ended                June 30,** |   |
|-----------------------------------------------------------------------|--------|------------------------------------------------------------------|---------------|----------------------------------------------------------------|--------|
|                                                                  |   | **2006**                                                         |          | 2005                                                           |   | **2006** |   | 2005 |   |
|                                                                  |   |                                                             |          |                                                           |   |
| Weighted-average                common shares outstanding             |   |                                                             | **3,910,490** |                                                           |   | 3,448,132 |   |   | **3,899,360** |   |   | 3,436,695 |   |
| Dilutive                effect of stock options and warrants          |   |                                                             | **-**         |                                                           |   | - |   |   | **-** |   |   | - |   |
| Equivalent                average common shares outstanding - diluted |   |                                                             | **3,910,490** |                                                           |   | 3,448,132 |   |   | **3,899,360** |   |   | 3,436,695 |   |

| Note              3 | **Income                Tax Expense.**The                Company did not record a provision for income tax in the three and                six                months ended June 30, 2006 and 2005 due to the fact the Company recorded                a                net loss for the periods respectively. The only income tax expense                recorded in the three and six months ended June 30, 2006 and 2005                was for                minimum state income tax payments. Due to the uncertainty regarding                the                realization of our Federal deferred income tax assets and specifically                the                net operating loss carry-forwards, we have recorded a valuation allowance                against our income tax benefit for 2006 and 2005. |
|---------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| Note                4 | **Stock-Based                Compensation.**The                company currently offers a stock based compensation plan to its employees,                directors and consultants. These plans are administered by the                compensation committee of the Board of Directors, which recommends                to the                Board persons eligible to receive awards and the number of shares                and/or                options subject to each award, the terms, conditions, performance                measures, and other provisions of the award. Readers should refer                to Note                6 of our consolidated financial statements in our Annual Report on                Form                10-KSB for the fiscal year ended December 31, 2005 for additional                information related to the Company’s stock based compensation                plans. |
|-----------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                                   | Three                Months |   |   | Six                Months |   |
|--------------------------------------------------------|-----------------------------|--------|--------|---------------------------|--------|
|                                                   | 2005                        |   |   | 2005                      |   |
|                                                   |
| Net                loss:                               |                        |   |   |                      |   |
| Net                loss as reported                    | ($891)                      |   |   | ($1,500)                  |   |
| Stock                compensation credit under FAS 123 | 89                          |   |   | 3                         |   |
| Pro                forma net loss                      | ($802)                      |   |   | ($1,497)                  |   |
| Loss                per share:                         |                        |   |   |                      |   |
| Basic                and Diluted                       |                        |   |   |                      |   |
| As                reported                             | ($0.26)                     |   |   | ($0.44)                   |   |
| Pro                forma                               | ($0.23)                     |   |   | ($0.44)                   |   |

*Stock      Options*

|                                   |   | June                30, |   | June                30, |
|----------------------------------------|--------|-------------------------|--------|-------------------------|
|                                   |   | 2006                    |   | 2005                    |
| Black-Scholes                Model:    |   |                    |   |                    |
| Risk-free                interest rate |   | 3.2%                    |   | 4.0%                    |
| Expected                life, in years |   | 3.8                     |   | 4.0                     |
| Expected                volatility     |   | 87.7%                   |   | 94.4%                   |
| Dividend                yield          |   | 0.0%                    |   | 0.0%                    |
|                                   |   |                    |   |                    |
| Binomial                Model:         |   |                    |   |                    |
| Risk-free                interest rate |   | 3.6%                    |   | na                      |
| Expected                life, in years |   | 6.0                     |   | na                      |
| Expected                volatility     |   | 136.3%                  |   | na                      |
| Dividend                yield          |   | 0.0%                    |   | na                      |

----

|                                                                  |   | Shares Reserved for                Grant |    | Plan                Options |   |  WeightedAverage                Exercise Price |   | Weighted                Average Remaining Contract Life |   |
|-----------------------------------------------------------------------|--------|----------------------------------------------------|---------|-----------------------------|--------|-----------------------------------------------------|--------|---------------------------------------------------------|--------|
|                                                                  |   |                                               |    |                        |   |                                           |   |                                                    |   |
| Outstanding                at Dec. 31, 2005                           |   |                                               | 16,675  |                        |   | 712,473                                             |   | $                                                       | 3.96   |   |   |  |   |
|                                                                  |   |                                               |    |                        |   |                                                |   |                                                    |   |   |   |   |   |
| Granted                                                               |   |                                               | (12,000 | )                           |   | 12,000                                              |   | $                                                       | 10.32  |   |   |   |   |
| Expired                                                               |   |                                               |    |                        |   | (15,900                                             | )      | $                                                       | 20.11  |   |   |   |   |
| Forfeited                                                             |   |                                               |    |                        |   |                                                |   |                                                    |   |   |   |   |   |
| Cancelled                                                             |   |                                               | 1,000   |                        |   | (1,000                                              | )      | $                                                       | 2.35   |   |   |   |   |
| Exercised                                                             |   |                                               |         |                        |   | (2,080                                              | )      | $                                                       | 5.00   |   |   |  |   |
| Authorized                May 18, 2006                                |   |                                               | 200,000 |                        |   | 0                                                   |   |                                                    | na     |   |   |   |   |
| Outstanding                at June 30, 2006                           |   |                                               | 205,675 |                        |   | 705,493                                             |   | $                                                       | 3.71   |   |   | 4.4                Years |   |
| Outstanding                exercisable atJune                30, 2006 |   |                                               | na      |                        |   | 291,745                                             |   | $                                                       | 4.26   |   |   | 3.9                Years |   |

----

**Item      2.**
**      Management’s Discussion And Analysis Or Plan Of Operation.**

----

**Results      of Operations**

|                                              | Three                Months Ended June 30, |   | Six                Months Ended June 30, |
|---------------------------------------------------|--------------------------------------------|--------|------------------------------------------|
|                                              | 2006                                       |   | 2005                                     |   | Incr.                (Decr.) | % |   | 2006 |   | 2005 |   | Incr.                (Decr.) | % |
| Notation                revenue                   | $1,598                                     |   | $1,627                                   |   | ($29) | (2) |   | $4,104 |   | $3,692 |   | $412 | 11 |
| SmartMusic                revenue                 | 472                                        |   | 316                                      |   | 156 | 49 |   | 938 |   | 661 |   | 277 | 42 |
| Other                revenue                      | 77                                         |   | 80                                       |   | (3) | (4) |   | 193 |   | 194 |   | (1) | (1) |
| Net                revenue                        | 2,147                                      |   | 2,023                                    |   | 124 | 6 |   | 5,235 |   | 4,547 |   | 688 | 15 |
| Cost                of revenues                   | 349                                        |   | 376                                      |   | (27) | (7) |   | 767 |   | 845 |   | (78) | (9) |
| Gross                profit                       | 1,798                                      |   | 1,647                                    |   | 151 | 9 |   | 4,468 |   | 3,702 |   | 766 | 21 |
| Percentage                of net sales            | 84%                                        |   | 81%                                      |   | 3% |   |   | 85% |   | 81% |   | 4% |   |
| Development                expenses               | 834                                        |   | 914                                      |   | (80) | (9) |   | 1,722 |   | 1,725 |   | (3) | 0 |
| Selling                and marketing expense      | 857                                        |   | 787                                      |   | 70 | 9 |   | 2,037 |   | 1,812 |   | 225 | 12 |
| General                and administrative expense | 853                                        |   | 837                                      |   | 16 | 2 |   | 1,778 |   | 1,687 |   | 91 | 5 |
| Total                operating expense            | 2,544                                      |   | 2,538                                    |   | 6 | 0 |   | 5,537 |   | 5,224 |   | 313 | 6 |
| Operating                loss                     | (746)                                      |   | (891)                                    |   | 145 | 16 |   | (1,069) |   | (1,522) |   | 453 | 30 |
| Other                income                       | 32                                         |   | 0                                        |   | 32 | 100 |   | 52 |   | 23 |   | 29 | 126 |
| Net                loss before taxes              | (714)                                      |   | (891)                                    |   | 177 | 20 |   | (1,017) |   | (1,499) |   | 482 | 32 |
| Income                tax provision               | 0                                          |   | 0                                        |   | 0 | na |   | (7) |   | (1) |   | (6) | na |
| Net                Loss                           | ($714)                                     |   | ($891)                                   |   | $177 | 20% |   | ($1,024) |   | ($1,500) |   | $476 | 32% |

----

***For      the three-month and six-month periods ended June 30, 2006 compared to the      three-month and six-month periods ended June 30,      2005.***

***Net      Revenues.***

***Gross      Profit.***

----

***Development      Expenses.***

***Sales      and Marketing Expenses.***

***General      and Administrative Expenses.***

***Net      Loss from Operations***

***Net      Loss***

----

***Liquidity      and Capital Resources***
**.**

**Item      3. Controls And Procedures.**

*      Evaluation of disclosure controls and procedures*

*      Changes in internal controls*

----

***Cautionary      Statements***

*This      report may contain forward-looking statements within the meaning of the Private      Securities Litigation Reform Act of 1995. Forward-looking statements provide      current expectations or forecasts of future events and can be identified by      the      use of terminology such as “believe,” “estimate,” “expect,” “intend,” “may,”“could,” “will,” and similar words or expressions. Our forward-looking      statements in this report generally relate to the anticipated effect of Impact      on our SmartMusic subscriptions, the timing of Impact’s introduction, our      product development, market introduction and sales efforts, the continuing      effect of stock option expensing, and our expectations as to the sufficiency      of      capital. Forward-looking statements cannot be guaranteed and actual results      may      vary materially due to the uncertainties and risks, known and unknown,      associated with such statements. We caution investors that many important      factors have affected, and in the future could affect, our actual results of      operations and cause such results to differ materially from those anticipated      in      forward-looking statements made in this release and elsewhere by us or on our      behalf. These factors include, but are not limited to, our possible need for      and      ability to obtain additional capital; the market acceptance of Impact and other      of our products; our dependence upon new product development effort; our      dependence on releasing annual Finale upgrades; the maintenance of strategic      relationships; the success of our SmartMusic subscription business; maintaining      license agreements with a limited number of publishers; the limited and      fluctuating sales of certain of our products; the intense competition we face;      the rapid technological changes and obsolescence in our industry; our dependence      on key personnel and the proprietary nature of our technology; other general      business and economic conditions; and those risks described from time to time      in      our reports to the Securities and Exchange Commission (including our Annual      Report on Form 10-KSB). It is not possible to foresee or identify all factors      that could cause actual results to differ from expected or historic results.      As      such, investors should not consider any list of such factors to be an exhaustive      statement of all of the risks, uncertainties or potentially inaccurate      assumptions that investors should take into account when making investment      decisions. Shareholders and other readers are cautioned not to place undue      reliance on forward-looking statements, which speak only as of the date on      which      they are made. We undertake no obligation to update publicly or revise any      forward-looking statements.*

----

**PART      II. OTHER INFORMATION**

| **Item              1.** | **Legal                Proceedings.** |
|--------------------------|---------------------------------------|

| **Item              2.** | **Unregistered                Sales of Equity Securities and Use of Proceeds**  |
|--------------------------|--------------------------------------------------------------------------------------|

| **Item              3.** | **Defaults                Upon Senior Securities** |
|--------------------------|----------------------------------------------------|

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

----

| **Item              5.** | **Other                Information** |
|--------------------------|--------------------------------------|

| **Item              6.** | **Exhibits.** |
|--------------------------|---------------|

**SIGNATURES**

| Date:                July 27, 2006  | MAKEMUSIC, INC.                                           |
|------------------------------------------|-----------------------------------------------------------|
|                                     |                                                      |
|                                     |                                                      |
|                                     | By: /s/              William R. Wolff                |
|                                     | William R. Wolff, Chief Executive              Officer    |
|                                     | (Principal Executive Officer)                             |
|                                     |                                                      |
|                                     |                                                      |
|                                     | And: /s/              Alan G. Shuler                      |
|                                     | Alan G. Shuler, Chief Financial              Officer      |
|                                     | (Principal Financial and Accounting              Officer) |

----

**EXHIBIT      INDEX**

**Form      10-QSB**

**Three      and six months ended June 30, 2006**

| **Exhibit              No. ** | **Description**                                                                                                                   |
|------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------|
|                               |                                                                                                                              |
| **3.1**                            | Restated                Articles of Incorporation, as amended                                                                     |
| **3.2**                            | Bylaws,                as amended                                                                                                 |
| **32.1**                           | Certification                of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley                Act of 2002. |
| **32.2**                           | Certification                of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley                Act of 2002. |
|                               |                                                                                                                              |
|                               |                                                                                                                              |

----