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                                                                    EXHIBIT 10.1


July 29, 2005

Mr. James Dorst
2097 Caminito Capa
La Jolla, CA 92037

Dear Jim:

         Aethlon Medical ("Aethlon") is pleased to offer you the position of
Chief Financial Officer. We would like your start date to be August 1, 2005.

         You will be expected to perform various duties consistent with your
position, as provided to you by the Chairman and CEO. Aethlon may change your
position, duties and work location from time to time, as it deems necessary.

         If you accept this offer, your compensation will be $6,250.00, semi
monthly, less standard payroll deductions and all required withholdings.

         This offer also includes options to purchase 500,000 shares of common
stock at a price equal to market close on August 1, 2005. These options will
vest on the anniversary start date over three years, as follows:

             165,000 vest at August 1, 2006
             165,000 vest at August 1, 2007
             170,000 vest at August 1, 2008

         Aethlon Medical will reimburse your costs associated with continuing
benefits under your previous employer's group benefit plan(s) for you and your
qualified dependents. Upon implementation, you and any qualified dependents will
be eligible to participate in Aethlon's employee group benefit plan(s). At such
time group benefits become available, Aethlon will then cease payments of
premiums to plans outside of the company.

         As an Aethlon employee, you will be expected to abide by Aethlon
corporate policies. As a condition of employment, you will be required to sign
and comply with our Employee Nondisclosure and Invention Assignment Agreement,
which among other things, prohibits unauthorized use or disclosure of
proprietary technology, information, and trade secrets of Aethlon.

         Please understand that all employees at Aethlon are considered to be
"at will employees," which means that no guarantee of employment is made or
implied. You may terminate your employment with Aethlon at any time and for any
reason whatsoever simply by notifying Aethlon. Likewise, Aethlon may terminate
your employment at any time and for any reason whatsoever, with or without cause
or advance notice. This at-will employment relationship cannot be changed except
in writing signed by an authorized Aethlon officer.

         This letter provides a complete and exclusive statement of the terms of
your employment with Aethlon. The employment terms in this letter supersede any
other agreements or promises made to you by anyone, whether oral or written.
This offer is subject to satisfactory proof of your right to work in the United
States as well as your fulfillment of all other necessary conditions required by
state or federal law.

         Please sign and date one copy of this letter, and return it to me at
Aethlon Medical, Inc., 3030 Bunker Hill, Suite 4000, San Diego, CA 92109 to
indicate your acceptance of this offer. Retain the second copy for your records.

         When reporting to your first day of employment, please be prepared to
provide satisfactory evidence for eligibility of employment as required by
federal law. Failure to provide satisfactory evidence for eligibility of
employment may delay your employment status with Aethlon.

         We are looking forward to a mutually rewarding relationship and believe
in your ability to contribute to the future success of Aethlon. If you have any
questions about this offer, please do not hesitate to call me.

    Sincerely,



By: /s/ James A. Joyce
    --------------------
    Chairman and CEO


    Agreed and Accepted:

By: /s/ James Dorst
    --------------------

    July 29, 2005
    Date