UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                           WASHINGTON, D.C.  20549

                                 Form 10-QSB


        [X]   Quarterly report pursuant to Section 13 or 15(d) of the
                        Securities Exchange Act of 1934

               for the quarterly period ended January 31, 2005.

        [ ]   Transition report pursuant to Section 13 or 15(d) of the
                       Securities Exchange Act of 1934.

                       Commission File Number: 0-16787


                         YOCREAM INTERNATIONAL, INC.
                     (Exact name of small business issuer
                         as specified in its charter)

           Oregon                                          91-0989395
(State or other jurisdiction of                         (I.R.S. Employer
incorporation or organization)                        Identification Number)

                            5858 N.E. 87th Avenue
                           Portland, Oregon  97220
                   (Address of principal executive office)

                                (503)256-3754
               (Issuers telephone number, including area code)

Indicate by check mark whether the issuer (1) has filed all reports required to
be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

                            YES  X        NO ___


The number of shares outstanding of the issuer's common stock, as of the latest
practicable date is:

                     Class:  Common stock outstanding at
                      March 11, 2005:  2,142,400 shares

Transitional Small Business Disclosure Format:  YES __  NO  X













                         YOCREAM INTERNATIONAL, INC.

                                   CONTENTS
<table>
<caption>
                                                                   Page

PART I   FINANCIAL INFORMATION:

                                                                 <c>
Item 1.  Financial Statements                                       3-7

            Balance Sheets as of January 31, 2005,                  3
            (unaudited) and October 31, 2004

            Statements of Income for the                            4
            Three Months ended January 31, 2005
            and 2004 (all unaudited)

            Statements of Cash Flows for the                        5
            Three Months ended January 31, 2005
            and 2004 (all unaudited)

            Notes to Financial Statements                           6-10

Item 2.  Management's Discussion and Analysis of                    10-15
         Financial Condition and Results of
         Operations

Item 3.  Controls and Procedures                                    15

<caption>
PART II  OTHER INFORMATION

                                                                 <c>
Item 1.  Legal Proceedings                                          15

Item 2.  Changes in Securities and Small Business Issuer
         Purchases of Equity Securities                             16

Item 3.  Defaults upon Senior Securities                            16

Item 4.  Submission of Matters to a Vote of                         16
          Security Holders

Item 5.  Other Information                                          16

Item 6.  Exhibits                                                   16-17

SIGNATURES                                                          17
</table>











PART I.   FINANCIAL INFORMATION
Item 1.   Financial Statements

                         YOCREAM INTERNATIONAL, INC.
                                BALANCE SHEETS
<table>
<caption>
                                                January 31,       October 31,
                                                   2005              2004
                                                (Unaudited)
                          ASSETS                -----------       -----------

                                             <c>               <c>
Current assets
   Cash and cash equivalents                    $ 2,201,409       $ 3,806,993
   Accounts receivable, net                         767,275           910,010
   Inventories                                    2,214,516         1,866,051
   Other current assets                             410,100           198,622
   Income tax receivable                             85,354            51,154
   Deferred tax asset                               194,519           194,519
                                                -----------       -----------
         Total current assets                     5,873,173         7,027,349

Fixed assets, net                                 6,260,311         6,328,875
Intangible and other long-term assets, net          406,408           399,672
                                                -----------       -----------
                                                $12,539,892       $13,755,896
                                                ===========       ===========
<caption>
               LIABILITIES AND SHAREHOLDERS EQUITY

                                             <c>               <c>
Current liabilities
   Current portion of long-term debt            $   403,319       $   403,319
   Accounts payable                                 810,787         1,208,074
   Accrued liabilities                               78,219           149,206
                                                -----------       -----------
         Total current liabilities                1,292,325         1,760,599

Long-term debt, less current portion              2,206,250         2,305,939
Interest rate swap, at fair value                    25,700                 -
Deferred tax liability                            1,053,520         1,070,720
Other liabilities                                    50,008            46,060
                                                -----------       -----------
         Total liabilities                        4,627,803         5,183,318
                                                -----------       -----------
Shareholders equity
   Preferred stock, no par value,
      5,000,000 shares authorized
      none issued or outstanding                          -                 -
   Common stock, no par value,
      30,000,000 shares authorized;
      2,148,800 shares outstanding at
      January 2005, and 2,282,500
      outstanding at October 2004                 4,164,026         4,739,581
   Retained earnings                              3,764,263         3,832,997
   Accumulated other comprehensive loss             (16,200)                -
                                                -----------       -----------
         Total shareholders equity                7,912,089         8,572,578
                                                -----------       -----------
                                                $12,539,892       $13,755,896
                                                ===========       ===========
</table>
The accompanying notes are an integral part of the financial statements.


                         YOCREAM INTERNATIONAL, INC.
                             STATEMENTS OF INCOME

             For the three months ended January 31, 2005 and 2004
                                 (Unaudited)
<table>
<caption>
                                                       2005           2004
                                                    -----------    -----------

                                                 <c>            <c>
Sales                                               $3,506,160     $3,449,984

Cost of sales                                        2,534,270      2,490,812
                                                    -----------    -----------
         Gross profit                                  971,890        959,172

Selling and marketing expenses                         514,415        433,489

General and administrative expenses                    539,685        517,432
                                                    -----------    -----------
         Income (loss) from operations                 (82,210)         8,251

Other income (expenses)
     Interest income                                     4,728          1,755
     Interest expense                                  (31,652)       (23,573)
                                                     ----------    -----------
         Loss before income taxes                     (109,134)       (13,567)

Income tax benefit                                      40,400          5,100
                                                    -----------    -----------
         Net loss                                   $  (68,734)    $   (8,467)
                                                    ===========    ===========


Loss per common share - basic                       $    (0.03)    $      .00
                                                    ===========    ===========
Loss per common share - diluted                     $    (0.03)    $      .00
                                                    ===========    ===========
Shares used in basic loss per share                  2,183,726      2,277,956
                                                    ===========    ===========
Shares used in diluted loss per share                2,183,726      2,277,956
</table>                                            ===========    ===========












The accompanying notes are an integral part of the financial statements.



                         YOCREAM INTERNATIONAL, INC.
                           STATEMENTS OF CASH FLOWS

             For the three months ended January 31, 2005 and 2004
                                 (Unaudited)
<table>
<caption>
                                                         2005          2004
                                                     ------------   -----------

                                                 <c>            <c>
Cash flows from operating activities:
   Net loss                                          $   (68,734)   $   (8,467)
   Adjustments to reconcile net
   loss to net cash used in
   operating activities:
      Depreciation and amortization                      159,105       143,916
      Deferred income taxes                               (7,700)       (2,200)
      Change in assets and liabilities
         Accounts receivable                             142,735       112,471
         Inventories                                    (348,465)     (160,172)
         Other assets                                   (218,214)     (137,840)
         Accounts payable                               (397,287)     (260,120)
         Income taxes receivable                         (34,200)       (3,115)
         Other accrued liabilities                       (67,039)      (73,037)
                                                      -----------   -----------
            Net cash used in
              operating activities                      (839,799)     (388,564)
                                                      -----------   -----------
Cash flows from investing activities:
   Expenditures for plant and equipment                  (90,541)     (224,359)
                                                      -----------   -----------
            Net cash used in investing
              activities                                 (90,541)     (224,359)
                                                      -----------   -----------
Cash flows from financing activities:
   Proceeds from issuance of long-term debt                    -       394,886
   Principal payments on long-term debt                  (99,689)      (90,077)
   Repurchase of common stock                           (575,555)            -
                                                      -----------   -----------
            Net cash provided by (used in)
              financing activities                      (675,244)      304,809
                                                      -----------   -----------
            Net decrease in cash and
              equivalents                             (1,605,584)     (308,114)

Cash and equivalents, beginning of period              3,806,993     2,644,436
                                                      -----------   -----------
Cash and equivalents, end of period                   $2,201,409    $2,336,322
                                                      ===========   ===========
</table>





The accompanying notes are an integral part of the financial statements.





                         YOCREAM INTERNATIONAL, INC.
                        NOTES TO FINANCIAL STATEMENTS



Note A - Basis of Presentation

The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information and with the instructions to Form 10-QSB.  Accordingly, they do not
include all of the information and footnotes required by generally accepted
accounting principles for complete financial statements. In the opinion of
management, all adjustments, which consist of normal recurring accruals,
considered necessary for a fair presentation have been included. Operating
results for the quarter ended January 31, 2005 are not necessarily indicative
of the results that may be expected for the year ending October 31, 2005.  For
further information, refer to the financial statements and related footnotes
included in the Companys annual report on Form 10-KSB for the year ended
October 31, 2004.

Note B - Reclassifications

Certain expenses have been reclassified to conform to the current years
presentation.

Note C - New Accounting Pronouncements

In December 2004, the FASB issued SFAS No. 153, Exchanges of Nonmonetary
Assets. This standard amended APB Opinion No. 29, Accounting for Nonmonetary
Transactions, to eliminate the exception from fair value measurement for
nonmonetary exchanges of similar productive assets. This standard replaces this
exception with a general exception from fair value measurement for exchanges of
nonmonetary assets that do not have commercial substance. A nonmonetary
exchange has no commercial substance if the future cash flows of the entity are
expected to change significantly as a result of the exchange. This statement is
effective for all nonmonetary asset exchanges completed by the Company starting
November 1, 2005. The Company does not believe the adoption of this standard
will have a material impact on its financial position, results of operations or
cash flows.

Note D - Inventories

Inventories consist of the following:
<table>
<caption>
                                        January 31,        October 31,
                                            2005               2004
                                        ----------         ----------
     
                                <c>                <c>
     Finished goods                     $1,652,889         $1,467,790
     Raw materials                         373,594            249,068
     Packaging materials and supplies      188,033            149,193
                                        ----------         ----------
                                        $2,214,516         $1,866,051
                                        ==========         ==========
</table>

Note E - Current and Long-Term Debt

The Company has an uncollateralized bank line of credit, which permits
borrowings of up to $2,000,000.  The line, which bears interest at the banks
commercial lending rate of 5.25% at January 31, 2005 is subject to renewal by
July 2007.  There were no amounts drawn on this line at January 31, 2005.

In December 2003, the Company finalized the terms of a master lease facility in
the amount of $2,552,553.  The facility refinanced the existing bank term loans
of $991,667 and provided additional monies to fund food manufacturing equipment
expenditures, including $1,566,000 borrowed in October 2003 and $394,886
borrowed in December 2003.  The facility provides for payments over seven years
with interest at 30-day LIBOR plus 175 basis points (4.34% at January 31,
2005), with the option to convert to a fixed rate by using an interest rate
swap at the Companys discretion (see Note F). The facility is subject to the
same financial covenants as the revolving line of credit, and is collateralized
by the aseptic system project assets, and by the other equipment and fixtures
related to the refinanced term loans.

The master finance lease facility contains certain financial covenants
including the ratio of senior liabilities (as defined) to adjusted tangible
capital, current ratio and operating cash flow to fixed charge as well as
limits on the amount of common stock which can be repurchased by the Company.
At January 31, 2005, the Company believes that it was in compliance with all of
these ratios and covenants.

Note F - Fair Value of Derivative Financial Instruments

In November 2004, the Company entered into an interest rate swap agreement,
which converted the variable interest rate paid on its debt to a fixed rate of
5.88%.  This agreement will terminate on January 1, 2011.  It is the Companys
policy to enter into agreements when management deems them useful in reducing
risks to the Company.  To the extent that the fixed rate is higher than the
Libor rate as defined in the Master Lease Agreement, payment is due from the
Company for the difference.  To the extent that the fixed rate is below the
Libor rate, the Company is entitled to receive the difference.  In accordance
with SFAS No. 133, Accounting for Derivative Instruments and Hedging
Activities, as amended, the Company has reviewed and designated its interest
rate swap agreement as a cash flow hedge and recognizes the fair value of its
interest rate swap agreement on the balance sheet.  Changes in the fair value
of this agreement are recorded in other comprehensive income (loss).  The hedge
ineffectiveness, if any, is recorded in earnings. There was no hedge
ineffectiveness for the three months ended January 31, 2005.

Note G - Comprehensive Loss

Comprehensive loss for the three-month periods ended January 31, are as
follows:
<table>
<caption>
                                                    2005        2004
                                                 ---------   ---------
   
                                           <c>         <c>
   Net loss                                      $(68,734)   $ (8,467)
   Change in fair value of derivative
      financial instruments, net of
      deferred income taxes of $9,500             (16,200)          -
                                                 ---------   ---------
   Comprehensive loss                            $(84,934)   $ (8,467)
                                                 =========   =========
</table>

Note H - Common Stock Repurchase Plan

On November 8, 2004, the Companys Board of Directors authorized the repurchase
of up to $1,250,000 of the Companys common stock.  Under the terms of Plan,
the Company may make purchases over time through open market transactions,
block purchases, or through privately negotiated transactions.  Based on the
recent market price, the Company could acquire in excess of 10% of the
outstanding common stock of the Company.  To assist the Company in executing
the stock repurchases, the Company has entered into a 10b5-1 trading plan that
will be administered and executed by a designated broker that may purchase
shares on behalf of the Company beginning November 8, 2004 and ending on April
30, 2005, unless terminated earlier by the Company.  As of January 31, 2005,
the Company has repurchased 133,700 shares at an average price of $4.305 per
share for a total cost of $575,555.  This leaves a remaining authorization of
$674,445.

Note I - Loss per share

Loss per share are calculated as follows for the three months ended January 31,
2005 and 2004:
<table>
<caption>
                                   Three Months Ended January 31, 2005
                                   -----------------------------------
                                 Net Earnings      Shares       Per-Share
                                 (Numerator)    (Denominator)     Amount
                                 ------------   -------------   ----------
   
                             <c>             <c>            <c>
   Basic loss per share:

   Net loss                        $(68,734)       2,183,726      $(0.03)

   Effect of dilutive securities (1)                       -           -
                                   ---------       ---------      -------
   Diluted loss per share          $(68,734)       2,183,726      $(0.03)
                                   =========       =========      =======
<fn>
<f1>
 (1)  Common stock equivalents totaling 3,550 shares have not been included for
the three months ended January 31, 2005 because the effect would be anti-
dilutive.
</fn>

<caption>
                                   Three Months Ended January 31, 2004
                                   -----------------------------------
                                 Net Earnings      Shares       Per-Share
                                 (Numerator)    (Denominator)     Amount
                                 ------------   -------------   ----------
   
                             <c>            <c>              <c>
   Basic loss per share:

   Net loss                        $ (8,467)      2,277,956        $  .00

   Effect of dilutive securities (1)                      -             -
                                   ---------      ---------        ------
   Diluted loss per share          $ (8,467)      2,277,956        $  .00
                                   =========      =========        ======
<fn>
<f1>
 (1)  Common stock equivalents totaling 28,584 shares have not been included
for the three months ended January 31, 2004 because the effect would be anti-
dilutive.
</fn>
</table>

Note J - Stock Based Compensation Plans

The Company has stock-based employee compensation plans for which it has
adopted the disclosure only provisions of Financial Accounting Standard No.
123, Accounting for Stock-Based Compensation (SFAS 123).  It applies APB
Opinion No. 25, Accounting for Stock Issued to Employees, in accounting for its
Plans.

Had the Company used the fair value methodology of SFAS 123 for determining
compensation expense, the Companys net income and net income per share for the
three months ended January 31, would approximate the pro forma amounts below:

<table>
<caption>
                                                   2005         2004
                                                ---------     --------
   
                                          <c>          <c>
   Net loss, as reported                        $(68,700)    $ (8,500)
   Deduct:  stock based compensation expense
    determined under the fair value method,
    net of tax                                   (21,000)     (15,000)
                                                ---------    ---------
   Net loss, pro forma                          $(89,700)    $(23,500)
                                                =========    =========
   Net loss per share,
   as reported
      Basic                                     $  (0.03)     $   .00
      Diluted                                   $  (0.03)     $   .00

   Net loss per share,
   proforma
      Basic                                     $  (0.04)     $ (0.01)
      Diluted                                   $  (0.04)     $ (0.01)
                                                =========     ========

   Number of options which became exercisable     16,668       11,666

   Weighted average assumptions:
      Risk-free interest rate                       3.07%        2.95%
      Expected dividend yield                          -            -
      Expected lives (years)                           5            5
      Expected volatility                           40.2%        42.7%
</table>

Note K - Supplemental Cash Flow Information

Supplemental cash flow information for the three-month periods ended January
31, are as follows:

<table>
<caption>
                                                    2005        2004
                                                  --------    --------
   
                                            <c>         <c>
   Cash paid during the period for income taxes   $  1,500    $    216
   Cash paid during the period for interest       $ 31,015    $ 25,215
   Increase in deferred taxes related to
     interest rate swap                           $  9,500           -
   Liability for interest rate swap, net of tax   $ 16,200           -
                                                  ========    ========
</table>

Item 2. Managements Discussion and Analysis of Financial Condition and
Results of Operations.

The following discussion includes forward-looking statements within the meaning
of the safe-harbor provisions of the Private Securities Litigation Reform Act
of 1995.  Such forward-looking statements are based on the beliefs of the
Companys management and on assumptions made by and information currently
available to management.  All statements other than statements of historical
fact, regarding the Companys financial position, business strategy and plans
and objectives of management for future operations of the Company are forward-
looking statements.  When used herein, the words anticipate, believe, estimate,
expect, and intend and words or phrases of similar meaning, as they relate to
the Company or management, are intended to identify forward-looking statements.
Although the Company believes that the expectations reflected in such forward-
looking statements are reasonable, it can give no assurance that such
expectations will prove to have been correct. Forward-looking statements are
subject to certain risks and uncertainties, which could cause actual results to
differ materially from those, indicated by the forward-looking statements.
These risks and uncertainties include the Companys ability to maintain or
expand its distribution abilities, including the risk of disruptions in the
transportation system and relationships with brokers and distributors. Further,
actual results may be affected by the Companys ability to compete on price and
other factors with other manufacturers and distributors of frozen dessert
products; customer acceptance of new products; general trends in the food
business as they relate to customer preferences for the Companys products; and
the Companys ability to obtain raw materials and produce finished products in
a timely manner, as well as its ability to develop and maintain its co-packing
relationships and strategic alliances. In addition, there are risks inherent in
dependence on key customers, the loss of which could materially adversely
affect the Companys operations. The reader is advised that this list of risks
is not exhaustive and should not be construed as any prediction by the Company
as to which risks would cause actual results to differ materially from those
indicated by the forward-looking statements.

Results of Operations

The primary business of the Company is the manufacture, marketing and sales of
superior quality frozen yogurt, smoothies, frozen custard, sorbet, cultured
soy, and ice cream products in a variety of premium, low-fat, and nonfat
flavors.  The Company also copacks similar products for other companies.
Because of the nature of these products, sales are subject to seasonal
fluctuations, with the summer months normally being the busiest season.  The
introduction and roll out of new products has tended to level the seasonal
fluctuations.

Sales

For the three months ended January 31, 2005, sales increased 1.6% over the same
period in 2004.  The increase is primarily due to higher sales of nonfat frozen
yogurt, offset by decreases in other categories.  The breakdown of sales by
category for both periods is as follows:

<table>
<caption>
                                                            Dollar        %
Category         2005     % Total      2004     % Total    Increase     Change
--------      ----------  -------   ----------  -------  -----------  --------

           <c>          <c>      <c>         <c>      <c>          <c>
Yogurt        $2,187,000    62.4%   $1,862,000   54.0%   $  325,000      17.5%

Smoothies      1,275,000    36.4%    1,295,000   37.5%      (20,000)    (1.5)%

Coffee Latte
Freeze                -        -       158,000    4.6%     (158,000)  (100.0)%

Custard,
Ice Cream
and Soy           44,000     1.2%      116,000    3.4%      (72,000)   (62.1)%

Copacking             -        -%       19,000    0.5%      (19,000)  (100.0)%
              ----------  -------   ----------  -------  -----------  --------

Total         $3,506,000   100.0%   $3,450,000  100.0%   $   56,000       1.6%
              ==========  =======   ==========  =======  ===========  ========
</table>

Frozen Yogurt:	The increase in frozen yogurt sales of 17.5% was primarily
due to continued growth in three sectors:  wholesale club, healthcare / insti-
tutions and other foodservice.

The Company continues to develop and experience success in its core business of
frozen yogurt.  In 2005 concentrated sales activities continue to focus on the
healthcare and military/government segments as well as national broadline
distribution of the Companys core products.  The Company has seen successive
growth in its military/government business since 2001. Subsequent to previously
engaged contracts, the Company has expanded is sales efforts in the healthcare
and institution segment. This activity has resulted in successful sales
conversions of competitors products to the Companys products. This business
also facilitated expanded distribution of the Companys products with broadline
foodservice distributors.  Sales focus on distribution has allowed the Company
to secure 25 new national points of distribution in the last two years and six
new points of distribution in the first quarter of 2005. The Company continues
to service wholesale club sales by maintaining a high level of customer
support.

In March 2005, the Company became a sponsor for the Major League Baseball
Arizona Diamondbacks.  This sponsorship allows for the Company to sell its soft
serve frozen yogurt in Bank One Ballpark, for the next two years with an option
for a third year.

The newest addition to the Companys line of better-for-you desserts is
Dannon(registered trademark) YoCream(registered trademark) Frozen Yogurt pints.
This product has been developed as a creamy indulgent frozen yogurt, which
compares to high-fat ice cream, yet only contains 5% butterfat.  With high
counts of live active cultures, this product provides the benefits of
probiotics along with outstanding flavors and inclusions that management
believes will create the taste experience that discriminating customers expect.
Six flavors of this product are being offered through the Fred Meyer retail
grocery chain in the Northwest this spring.  Management considers this as an
excellent opportunity to reenter the retail marketplace because of Fred Meyers
significant retail presence in the Northwest.  Fred Meyer is part of the Kroger
family of stores.

Smoothies:  There was a slight decrease in sales of smoothies in the first
quarter when compared to the same period last year.  The growth in sales from
new business has been offset by the effect of the Companys lead customer
recently electing to use a competitors smoothie product for one of its nine
distribution centers.  The Coffee latte freeze category was discontinued in
2004.

In addition to the normal growth in business for this category, the Company
expects smoothie sales to increase as a result of the introduction of the
following new products:

  Dannon Frozen Frusion by YoCream(registered trademark) is a unique frozen
  drink of yogurt and fruit.  This beverage is an example of a probiotic
  product designed to contain live micro organisms that improve health by
  modifying intestinal microflora.  This product will be presented to the
  foodservice marketplace in the second quarter of 2005.

  Fruitquake(registered trademark) dispenser smoothies are a line of bold and
  intense fruit beverages with high concentrations of real fruit.  This new
  ready-to-use line designed for frozen beverage and granite machines has been
  selectively introduced in the first quarter of 2005 and is expected to be
  offered nationwide this spring.  This product is packaged on the Companys
  aseptic packing line for a shelf stable product.

  YoCaffe Latte(registered trademark) is an aseptically packaged coffee
  concentrate product, which is designed to be mixed with milk and served
  through a frozen beverage machine.  This product has been developed in
  response to foodservice operators demand for convenient coffee beverages.
  This product is currently being tested in a club store chain in Canada.
  In the second quarter of 2005, the Company also expects to introduce a new
  ready-to-use version of YoCaffe Latte(registered trademark) that is pre-mixed
  with milk. This is also an aseptically packaged product designed to be stored
  at room temperature.

Custard, Ice Cream and Soy:  Sales in this category decreased when compared to
the same period in the prior year primarily due to a restaurant chain that had
been purchasing the Companys soft serve frozen custard changing to the
Companys reduced fat ice cream product in the second quarter of 2004, and then
subsequently electing not to renew the contract in favor of a local supply
effective in December 2004.

Copacking:  The Company promotes its copacking capabilities, and the
flexibility of its manufacturing facility through industry affiliations such as
Northwest Food Processors Association and the All Star Dairy Buying Group, as
well as through the direct sales activities of business development managers
and senior sales staff.

The decrease in copacking revenue occurred as a result of a large copacking
customer acquiring its own production facility in the second quarter of 2004.
The Company is in the process of developing new proprietary products at the
request of significant potential customers that could result in new, high
volume accounts in the near future.

Gross Profit

The gross profit margin, as a percentage of sales, were 27.7% and 27.8% for the
first quarter of 2005 and 2004, respectively.

Selling and Marketing Expenses

Selling and marketing expenses, as a percentage of sales, were 14.7% and 12.6%
for the first quarter of 2005 and 2004, respectively.  The sales department was
reorganized late in 2004, which resulted in the addition of senior level sales
and marketing personnel to support projected growth.  This reorganization has
resulted in increased personnel and travel related expenses.  Management
believes that the opportunities merit the expected increase in expenses related
to the intensified sales and marketing activities.

General and Administrative Expenses

General and administrative expenses, as a percentage of sales, were 15.4% and
15.0%, for the first quarter of 2005 and 2004, respectively.  The slight
increase relates to personnel related costs and depreciation.

Income (Loss) from Operations

As a percentage of sales, the loss from operations was 2.3% for the first
quarter of 2005 compared to an income of 0.2% for the same period in 2004.
This is primarily due to the reasons explained above.

Provision for Income Taxes

The effective tax rate was 37.0% and 37.6% for the first quarter of 2005 and
2004, respectively.

Net Loss

The net loss in the first quarter of 2005 was more than in the prior year for
the reasons described above.  Management expects increased earnings over the
prior year as sales volumes increase with warmer weather, and as the benefits
are realized from the growth in both the new business and the products
described above.

Liquidity and Capital Resources

In recent years, the Company has financed its operations and expansion from
bank loans, operating leases, capital leases, stock sales, and internally
generated funds.

During fiscal 2003 the Company arranged a master finance lease facility to fund
the new aseptic processing system.  The project was funded by this facility in
December 2003.  At that time the amounts previously drawn on the line of credit
and the existing term loans were refinanced under the master lease facility.
The Company also received approximately $395,000, resulting in a long-term
obligation totaling approximately $2,953,000.  This financing arrangement
provides for payments over seven years with interest at 30-day LIBOR plus 175
basis points (4.34% at January 31, 2005), with the option to convert to a fixed
rate by using an interest rate swap at the Companys discretion.

In November 2004, the Company entered into an interest rate swap agreement with
the objective to take advantage of the current low interest rate environment.
This swap agreement is designated as a fair-value hedge of the Companys
floating rate debt, effectively converting this debt to a fixed rate of 5.88%.
It is the Companys policy to enter in to interest rate swap agreements when
management deems them useful in reducing risks to the Company.  The Company is
accounting for this interest rate swap as a cash flow hedge, which it has
determined to be highly effective.  The fair value of the interest rate swap is
recorded on the balance sheet and changes in fair value of this instrument are
shown, net of tax, in accumulated other comprehensive income.

The Company has an unutilized bank line of credit of $2 million, which matures
in July 2007, and provides for an interest rate at prime, with the option to
lock in sub-prime rates on blocks of funds up to 90 days.  The bank has also
offered an additional $500,000 term loan line for equipment purchases, which
has not been utilized.

The Company has not historically used its line of credit to finance operations,
even during the slower season of the year, because of the significant level of
cash flow on an annual basis, and the level of available cash funds.  This
continued to be the situation during the first quarter of fiscal 2005 and 2004.
Cash used in operations was approximately $840,000 in the first quarter of 2005
compared with $389,000 in the first quarter of 2004.  Increases in inventory in
anticipation of sales growth from the opportunities mentioned in the sales
section, and an increase in prepaid insurance and property tax payments were
factors accounting for the higher level of cash used in operations in 2005.
Furthermore, the Company chose to significantly reduce its accounts payables at
the end of the first quarter in 2005.

Expenditures for plant and equipment of approximately $91,000 in the first
quarter of 2005 were less than the $224,000 spent in the same period last year.
The higher level of expenditures in the 2004 period mainly related to the
aseptic packaging system, which was placed in service in October 2003.  The
Company is in the process of evaluating its capital expenditure plans for the
balance of fiscal 2005.

The Company follows the practice of repurchasing its common stock from time to
time, pursuant to board-approved plans.  The Company also purchases stock for
its required contributions to the Companys 401(k) Employee Savings Plan and
Trust.

On November 8, 2004, the Companys Board of Directors authorized the repurchase
of up to $1,250,000 of the Companys common stock.  Under the terms of Plan,
the Company may make purchases over time through open market transactions,
block purchases, or through privately negotiated transactions.  As of January
31, 2005, the Company has repurchased 133,700 shares at an average price of
$4.305 per share for a total cost of $575,555.  This leaves a remaining
authorization of $674,445.  See Note H in the notes to financial statements for
further details.

In March 2005, the Company renegotiated the terms of the lease on the adjoining
warehouse property rented in October 2003 from a related party.  This resulted
in retroactively changing the rent schedule to amounts based on the change in
the consumer price index.  Originally the rent schedule was based on fixed
amounts, which changed every three years over the 15-year term of the lease.
This may result in a lesser increase in rent expense in the future than under
the original lease.

The Company believes its existing assets, bank lines, and revenues from
operations will be sufficient to fund the Companys operations for at least the
next twelve months.

New Accounting Pronouncements

See Note C in the notes to financial statements for the new accounting
pronouncements applicable to the Company during the first quarter of 2005.

Critical Accounting Policies and Estimates

The critical accounting policies and the use of estimates as reported in the
Companys Form 10-KSB for the year ended October 31, 2004 are reaffirmed.

Item 3. Controls and Procedures

     (a)  Disclosure Controls and Procedures

Under the supervision and with the participation of its Chief Executive Officer
and Chief Financial Officer, management has evaluated the effectiveness of the
Companys disclosure controls and procedures as of the end of the period
covered by this report pursuant to Rule 13a-15(b) under the Securities Exchange
Act of 1934 (the Exchange Act). Based on that evaluation, the Chief Executive
Officer and Chief Financial Officer have concluded that, as of the end of the
period covered by this report, the Companys disclosure controls and procedures
are effective in ensuring that information required to be disclosed in the
Companys Exchange Act reports is (1) recorded, processed, summarized and
reported in a timely manner, and (2) accumulated and communicated to the
Companys management, including its Chief Executive Officer and Chief Financial
Officer, as appropriate to allow timely decisions regarding required
disclosure.

     (b)  Internal Control Over Financial Reporting

There has been no change in the Companys internal control over financial
reporting that occurred during the last fiscal quarter that has materially
affected, or is reasonably likely to materially affect, the Companys internal
control over financial reporting.


                         PART II.  OTHER INFORMATION


Item 1.   Legal Proceedings

      The Company is not involved in any material pending legal proceedings.

Item 2.   Changes in Securities and Small Business Issuer
          Purchases of Equity Securities
<table>
<caption>
                                           (c) Total
                                            Number of      (d) Dollar
                                             Shares          Value of
                                           Purchased as     Shares that
                                             Part of           May be
              (a) Total                      Publicly        Purchased
              Number of        (b)           Announced       Under the
               Shares      Average Price     Plans or        Plans or
Period        Purchased    Paid Per Share    Programs        Programs
-----------   ----------   --------------  --------------  --------------

             <c>           <c>             <c>            <c>
11/8/04 -
  11/30/04       78,200       $4.302           78,200        $913,576

12/1/04 -
  12/31/04       50,000       $4.293           50,000        $698,926

1/1/05 -
  1/31/05         5,500       $4.451            5,500        $674,445
                -------       ------          -------        --------
Total           133,700       $4.305          133,700        $674,445
                =======       ======          =======        ========
</table>

On November 8, 2004, the Companys Board of Directors authorized the
repurchase of up to $1,250,000 of the Companys common stock.  Under the
terms of Plan, the Company may make purchases over time through open
market transactions, block purchases, or through privately negotiated
transactions.

Item 3.   Defaults Upon Senior Securities

      None.

Item 4.   Submission of Matters to Vote of Security Holders

      None.

Item 5.   Other Information

      All items required to be reported on Form 8-K were timely filed.

Item 6.  Exhibits

      10.8  Letter agreement regarding amendment of rent schedule to
            commercial lease between Pente Investments, LLC and YoCream
            International, Inc., dated March 15, 2005

      31.1  Certification of John N. Hanna pursuant to Section 302 of the
            Sarbanes-Oxley Act of 2002

      31.2  Certification of W. Douglas Caudell pursuant to Section 302
            of the Sarbanes-Oxley Act of 2002

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

      32.2  Certification of W. Douglas Caudell pursuant to 18 U.S.C.
            Section 1350 as adopted pursuant to Section 906 of the
            Sarbanes-Oxley Act of 2002


                                  SIGNATURES

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

  Registrant:

                                            YOCREAM INTERNATIONAL, INC.

Date:    March 17, 2005                     By:    /s/  John N. Hanna
                                            -------------------------
                                            John N. Hanna, Chairman of the
                                            Board, and Chief Executive
                                            Officer

Date:    March 17, 2005                     By:   /s/ W. Douglas Caudell
                                            ----------------------------
                                            W. Douglas Caudell
                                            Chief Financial Officer