**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**WASHINGTON
      D.C. 20549**





**FORM
      10-Q**





QUARTERLY
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE


SECURITIES
      EXCHANGE ACT OF 1934, AS AMENDED:





**For
      the Quarterly Period Ended March 31, 2008**









**Commission
      File No. 33-49797**









**ETOTALSOURCE,
      INC.**


(Name
      of
      Small Business Issuer in Its Charter)




**Colorado**
            **84-1066959**(State
                or Other Jurisdiction of Incorporation
              or
                Organization)
            (I.R.S.
                Employer Identification No.)**1818
                North Farwell Avenue, Milwaukee, WI**
            **53202**(Address
                of Principal Executive Offices)
            (Zip
                Code)**(****414)
                727-2695**(Issuer’s
                Telephone Number, Including Area
                Code)




Indicate
      by a check mark whether the issuer (1) filed all reports required to be filed
      by
      Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
      shorter period that the registrant was required to file such reports), and
      (2)
      has been subject to such filing requirements for the past 90 days. Yes x No o




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


Yes
x
      No o




State
      the
      number of shares outstanding of each of the issuer's classes of common equity,
      as of the latest practicable date: As of March 31, 2008 –299,998,972  shares
      of common stock





Indicate
      by a check mark whether the registrant is (check one):


an
      accelerated filer o a non
      accelerated filer o or a smaller
      reporting company x







**ETOTALSOURCE,
      INC.**





**FORM
      10-Q**





**TABLE
      OF CONTENTS**





PART
                1
            FINANCIAL
                STATEMENTS
            
            3Item
                1.
            Financial
                Statements
            
            3Balance
                Sheet as of March 31, 2008 (Unaudited) and December 31, 2007
                (Audited)
            
            3Statements
                of Operations for the Three Months EndedMarch
                31, 2008 and 2007 (Unaudited)
            
            4Consolidated
                Statements of Cash Flows for the Three Months EndedMarch
                31, 2008 and 2007 (Unaudited)
            
            5Notes
                to Condensed Consolidated Financial Statements as of March 31, 2008(Unaudited)
            
            6Item
                2.
            Management’s
                Discussion and Analysis of Financial Conditionand
                Results of Operations
            
            8Item
                3.
            Quantitative
                and Qualitative Disclosures About Market Risk
            
            11Item
                4.
            Controls
                and Procedures
            
            11PART
                II
            OTHER
                INFORMATION
            
            12Item
                1.
            Legal
                Proceedings
            
            12Item
                2.
            Unregistered
                Sales of Equity Securities and Use of Proceeds
            
            12Item
                3.
            Defaults
                Upon Senior Securities
            
            12Item
                4.
            Submission
                of Matters to a Vote of Security Holders
            
            13Item
                5.
            Other
                Information
            
            13Item
                6.
            Exhibits
            
            13SIGNATURES
            
            
            14CERTIFICATIONS
            
            
            15Certification
                of CEO & CFO Pursuant to 13a-14(a) under the Exchange
                ActCertification
                of the CEO & CFO Pursuant to 18 U.S.C. Section 1350




2




**PART
      I**




**FINANCIAL
      INFORMATION**




**Item
      1.**  **Financial
      Statements.**





**eTotalSource,
      Inc**


**Balance
      Sheet**





March 31, 2008
              (Unaudited)
            
            December 31,
              2007 (Audited)***Current
                Assets***Cash
            
            $
            969
            
            $
            969Prepaid
                Expense
            
            
            2,950
            
            
            2,950*Total
                Current Assets*
            
            
            3,919
            
            
            3,919***Other
                Assets***Prepaid
                finance cost
            
            
            2,289
            
            
            3,223***Total
                Assets***
            
            $
            6,208
            
            $
            7,142**LIABILITIES
                AND STOCKHOLDERS' EQUITY (DEFICIT)*****Current
                Liabilities***Convertible
                notes payable
            
            $
            225,000
            
            $
            225,000Notes
                payable
            
            
            839,754
            
            
            839,754Judgments
                payable
            
            
            204,788
            
            
            204,788Accounts
                payable and other accrued liabilities
            
            
            290,884
            
            
            283,234Accrued
                compensation payable
            
            
            1,092,203
            
            
            1,092,203Accrued
                interest payable
            
            
            865,987
            
            
            770,204Convertible
                Debentures, less current maturities and net of amortized discount
                of
                $79,315
            
            
            867,197
            
            
            848,071**Total
                Current Liabilities**
            
            
            4,385,813
            
            
            4,263,254**Commitments
                and Contingencies*****Stockholders'
                Equity (Deficit)***Common
                stock; no par value; 300 million shares authorized,299,998,972
                shares issued and outstanding, respectively
            
            
            6,731,159
            
            
            6,731,159Accumulated
                (deficit)
            
            
            (11,110,764
            )
            
            (10,987,271
            )*Total
                Stockh4olders' Equity (Deficit)*
            
            
            (4,379,605
            )
            
            (4,256,112
            )***Total
                Liabilities and Stockholders' Equity
                (Deficit)***
            
            $
            6,208
            
            $
            7,142




See
      accompanying notes.




3




**eTotalSource,
      Inc**


**Statement
      of Operations**


**(Unaudited)**





**March
                31,****2008**
            
            **2007****Revenues**
            
            $
            -
            
            $
            -**General
                and Administrative Expenses**
            
            
            7,650
            
            
            16,222**Operating
                Income (Loss)**
            
            
            (7,650
            )
            
            (16,222
            )**Other
                Income (Expense)**Interest
                expense
            
            
            (114,908
            )
            
            (76,394
            )Other
                income (expense), net
            
            
            (935
            )
            
            -**Total
                Other Income (Expense)**
            
            
            (115,843
            )
            
            (76,394
            )**Net
                (Loss)**
            
            $
            (123,493
            )
            $
            (92,616
            )**Basic
                and Diluted (Loss) per Share**
            
            $
            (0.000
            )
            $
            (0.011
            )**Weighted
                Average Common Shares Outstanding**
            
            
            299,998,972
            
            
            83,670,270




See
      accompanying notes.




4




**eTotalSource,
      Inc.**


**Statements
      of Cash Flows**


**(Unaudited)**





**March
                31,****2008**
            
            **2007****Cash
                Flows From (Used in) Operating Activities:**Net
                (loss)
            
            $
            (123,493
            )
            $
            (92,616
            )Depreciation
                and amortization
            
            
            934
            
            
            -Amortization
                of discounted convertible debentures
            
            
            19,126
            
            
            17,894Changes
                in assets and liabilities:Increase
                (decrease) in payables, and accrued liabilities
            
            
            7,650
            
            
            39,610Increase
                (decrease) in accrued interest payable
            
            
            95,783
            
            
            34,675Net
                Cash (Used in) Operating Activities
            
            
            0
            
            
            (437
            )Increase
                (Decrease) in Cash
            
            
            0
            
            
            (437
            )Cash
                - Beginning of Period
            
            
            969
            
            
            563Cash
                - End of Period
            
            $
            969
            
            $
            126**Supplemental
                Disclosures of Cash flow Information:**Interest
                paid
            
            $
            -
            
            $
            -Income
                taxes paid
            
            
            -
            
            
            -Non-cash
                investing and financing transactions:Accounts
                Payable
            
            
            5,000
            
            
            -Conversion
                of convertible debenture
            
            
            -
            
            
            6,000




See
      accompanying notes .




5




**eTotalSource,
      Inc.**




**Notes
      to Condensed Financial Statements as of March 31, 2008**


**NOTE
        1. BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**
  The
        financial statements have been prepared in accordance with Securities Exchange
        Commission requirements for interim financial statements. Therefore, they
        do not
        include all information and footnotes required by accounting principles
        generally accepted in the United states for complete financial statements.
        These
        financial statements should be read in conjunction with the financial statements
        and notes there to contained in the Company’s Annual Report on Form 10-KSB for
        the year ended December 31, 2007 as filed with the Securities Exchange
        Commission.
 
 The
        results of operations for the interim period shown in this report are not
        necessarily indicative of results to be expected for the full year. In the
        opinion of management, the information contained herein reflects all adjustments
        necessary to make the results of operations for the interim period a fair
        statement of such operations. All such adjustments are of a normal recurring
        nature.
 
 *Going
        Concern Uncertainty*
 
 The
        Company’s financial statements are prepared based on the going concern
        principle. That principal anticipates the realization of assets and payments
        of
        liabilities through the ordinary course of business. No adjustments have
        been
        made to reduce the value of any assets or record additional liabilities,
        if any,
        if the Company were to cease to exist. The Company has incurred significant
        operating losses since inception. These operating losses have been funded
        by the
        issuance of capital, loans and advances. There are not guarantees that the
        Company will continue to be able to raise the funds necessary. Additionally,
        the
        lack of capital may limit the Company’s ability to establish a viable
        business.
 
 **NOTE
        2. CONVERTIBLE NOTES PAYABLE AT MARCH 31, 2008**
 
 The
        Company has a Convertible
        notes payable with interest at 6% payable monthly, due in 2001, unsecured.
        Principal ($50,000 at March 31, 2008) and accrued interest ($19,248 at March
        31,
        2008) are convertible to common stock at $.50 per share. The note and interest
        are in default.
 
 The
        Company has Convertible
        notes payables with interest ranging from 6% - 8% payable monthly, due in
        between the years of 2001 and 2003, unsecured. Principal ($175,000 at March
        31,
        2008) and accrued interest ($91,941 at March 31, 2008) are convertible to
        common
        stock at $.50 per share. Warrants also issued to note holders to purchase
        73,748
        shares of common stock for five years at $.50 per share. The notes and interest
        are in default. The note holder received a judgment against the Company on
        March
        27, 2008 in the amount of $266,940 for the principal and interest outstanding.
 
 **NOTE
        3.**  **NOTES
        PAYABLE AT MARCH 31, 2008**
 
 The
        Company has a Note
        payable with interest at 6% payable monthly, due in 2001, unsecured. Principal
        ($25,000 at March 31, 2008) and accrued interest ($9,624 at March 31, 2008)
        are
        due. Warrants also issued to note holder to purchase 18,750 shares of common
        stock for five years at $.50 per share. The note and interest are in default.
 
 The
        Company has a Note payable to an unrelated individual; principal and interest
        at
        12%, due October 15, 2006. Principal ($25,000 at March 31, 2008) and unpaid
        interest ($4,998 at March 31, 2008) are due. The note and interest are
        default.
 
 The
        Company has a Note payable; interest at 15% payable monthly through December
        18,
        2003. Principal ($172,000 at March 31, 2008) and unpaid interest ($61,257
        at
        March 31, 2008) are due. The note and interest are in default.
 
 The
        Company has a note payable; interest at 10% and principal due January 17,
        2003,
        extended to December 17, 2003. Principal ($110,000 at March 31, 2008) and
        unpaid
        interest ($41,129 at March 31, 2008) (with interest increased to 18% and
        due
        monthly beginning February 17, 2003) are due. The note and interest are in
        default.
 
 The
        Company has a note payable; interest at 15% payable monthly through December
        18,
        2003. Principal ($40,000 at March 31, 2008) and unpaid interest ($14,246
        at
        March 31, 2008) are due. The note and interest are in default.
 
 The
        Company has a note payable ;
        stated
        interest rate of 10% due June 2003, extended to June 2004. As consideration
        for
        forbearance, the note holder received 50,000 shares of common stock in 2004,
        valued at $.525 per share ($26,250). In October 2004, the note was extended
        to
        April 2005. In December 2005, the note was extended to June 2006. Principal
        ($52,483 at March 31, 2008) and unpaid interest ($10,511 at March 31, 2008)
        are
        due. This note and interest are in default.
  6
 The
        Company has a note payable; principal and interest at 10% due monthly. This
        note
        is a revolving credit obligation and the Company can repay and borrow up
        to the
        amount of the note. In October 2004, the note was extended to April 2005.
        In
        December 2005, the note was extended to June 2006. Principal ($262,631 at
        March
        31, 2008) and unpaid interest ($52,598 at March 31, 2008) are due. This note
        and
        interest are in default.
 
 The
        Company has a note payable;
        principal and interest at 9.2%, due December 4, 2002, extended to May 1,
        2003.
        Principal ($20,000 at March 31, 2008) and unpaid interest ($11,677 at March
        31,
        2008) are due, unsecured. The note and interest are in default .
 
 The
        Company has a note payable
        to YA Global; principal and interest at 10%, due August 1, 2005. Principal
        ($25,000 at March 31, 2008) and unpaid interest ($6,904 at March 31, 2008)
        are
        due. The note and interest are in default.
 
 The
        Company has a note payable to YA Global Investors; principal and interest
        at
        14%, due October 1, 2007. Principal ($7,640 at March 31, 2008) and unpaid
        interest ($787 at March 31, 2008) are due.
 
 The
        Company has a note payable to YA Global; principal and interest at 12%, due
        August 1, 2005. Principal ( $100,000 at March 31, 2008) and unpaid interest
        ($35,375) at March 31, 2008) are due. The note and interest are in
        default.
 
 **NOTE
        4. CONVERTIBLE DEBENTURES AT MARCH 31, 2008**
 
 The
        Company has a Convertible debentures payable to a YA Global, principal and
        interest at 12%, payable November 1, 2008, secured by 225,000,000 shares
        of
        common stock and 7 million warrants. Principal and accrued interest convertible
        to common stock at a
        conversion price equal to the lower of (i) $.024 price per share of common
        stock
        or (ii) 80% of the lowest closing bid price of our common stock, as quoted
        by
        Bloomberg, L.P., for the five trading days immediately preceding the conversion
        date. At the due date the Company has the option to repay the debt or issue
        common stock. The principal balance as of March 31, 2008 was
        $849,250.
 
 The
        Company has a Convertible
        debentures payable to a YA Global,, principal and interest at 12%, payable
        December 21, 2008. Principal and accrued interest convertible to common stock
        at
        a conversion price equal to the lower of (i) $.0018 price per share of common
        stock or (ii) 80% of the lowest closing bid price of our common stock, as
        quoted
        by Bloomberg, L.P., for the five trading days immediately preceding the
        conversion date. At the due date the Company has the option to repay the
        debt or
        issue common stock. The principal balance as of March 31, 2008 was
        $7,642.
 
 On
        April
        13, 2007, the Company issued a convertible debenture to YA Global, in the
        principal amount of $72,000(principal and interest at 12% payable April 13,
        2009). Principal and accrued interest convertible to common stock at a
        conversion price equal to the lower of (i) $.0018 price per share of common
        stock or (ii) 80% of the lowest closing bid price of our common stock, as
        quoted
        by Bloomberg, L.P., for the five trading days immediately preceding the
        conversion date. The principal balance as of March 31, 2008 was
        $72,000.
 
 On
        December 4, 2007, the Company issued a convertible debenture to YA Global,
        in
        the principal amount of $17,620(principal and interest at 15% payable November
        9, 2008). Principal and accrued interest convertible to common stock at a
        conversion price equal to the lower of (i) $.002 price per share of common
        stock
        or (ii) 95% of the lowest volume weighted average price of our common stock,
        as
        quoted by Bloomberg, L.P., for the thirty trading days immediately preceding
        the
        conversion date. The principal balance as of March 31, 2008 was
        $17,620.
 
 7
 
 **Item
        2. Management's Discussion And Analysis Or Plan Of
        Operations.**
  ***Forward-Looking
        Statements and Associated Risks.***  *This
        Report contains forward-looking statements. Such forward-looking statements
        include statements regarding, among other things, (a) our projected sales
        and
        profitability, (b) our growth strategies, (c) anticipated trends in our
        industry, (d) our future financing plans, (e) our anticipated needs for working
        capital, (f) our lack of operational experience, and (g) the benefits related
        to
        ownership of our common stock. Forward-looking statements, which involve
        assumptions and describe our future plans, strategies, and expectations,
        are
        generally identifiable by use of the words “may,” “will,” “should,” “expect,”
“anticipate,” “estimate,” “believe,” “intend,” or “project” or the negative of
        these words or other variations on these words or comparable terminology.
        This
        information may involve known and unknown risks, uncertainties, and other
        factors that may cause our actual results, performance, or achievements to
        be
        materially different from the future results, performance, or achievements
        expressed or implied by any forward-looking statements. These statements
        may be
        found under “Management’s Discussion and Analysis of Financial Condition and
        Results of Operations” and “Business,” as well as in this Report generally.
        Actual events or results may differ materially from those discussed in
        forward-looking statements as a result of various factors, including, without
        limitation, the risks outlined under “Risk Factors” and matters described in
        this Report generally. In light of these risks and uncertainties, there can
        be
        no assurance that the forward-looking statements contained in this report
        will
        in fact occur as projected.*
  **Description
        of Our Business**
 
 The
        Company was incorporated in Colorado on September 16, 1987 as Premium
        Enterprises, Inc. (“Premium”) On December 20, 2002, Premium entered into a Plan
        and Agreement of Reorganization with eTotalSource, Inc., a California
        corporation (the “Company” or “eTotalSource”) and its shareholders whereby
        Premium acquired 91% of the issued and outstanding common stock of eTotalSource
        in exchange for 15,540,001 shares of common stock of Premium. The contract
        was
        completed December 31, 2002. On June 17, 2003, shareholders voted to amend
        the
        Articles to change the name of Premium Enterprises, Inc. to eTotalSource,
        Inc.
  ***History.***
  For
        a
        period of time in 1988-1994, Premium operated three fast lube locations,
        at
        various times in Arizona and Colorado as “Grease Monkey” franchises. The
        locations were unprofitable, two were sold, and the last franchise closed in
        1994.
  Premium
        then attempted to enter the automobile and truck tire recycling business
        in
        1994. It formed a limited partnership, of which it owned 62.5%, and commenced
        limited tire recycling operations. The equipment proved to be inadequate
        and
        Premium ran out of capital and ceased all operations in 1996. Premium wrote-off
        all of its investment in equipment and licenses for tire recycling in 1996
        and
        became dormant.
  ***Business.***
  The
        sole
        business of the Company is that of eTotalSource. The Company ceased the majority
        of operations in the fourth quarter of 2006 due to lack of
        capital.
 
 ***Recent
        Developments***
 
 ****   **Management
        Transition** .
        On
        March 27, 2007, the Company’s Board of Directors accepted the resignations of
        Terry Eilers and A. Richard Barber as members of the Board. The Company did
        not
        have a disagreement with any of the resigning directors. Neither Mr. Eilers
        nor
        Mr. Barber served on any committees of the Board. On March 27, 2007, the
        Company’s Board of Directors also accepted the resignations of the following
        officers: Terry Eilers, President and Chief Executive Officer, and Michael
        Sullinger, Chief Operating Officer and Secretary. The Company did not have
        a
        disagreement with any of the resigning officers.
  In
        addition, on March 27, 2007, the Board of Directors of the Company appointed
        David Marks as a member of the Board and appointed Frank Orlando as Chief
        Restructuring Officer, Chief Financial Officer and Secretary of the Company.
        Mr.
        Orlando and Mr. Marks are not our employees, and as of the date of this report
        we do not have employment contracts with either of them nor agreements regarding
        compensation and related matters. Mr. Orlando and Mr. Marks are each an officer
        of Crivello Group, LLC and other entities. We expect that Crivello Group,
        LLC
        will enter into a management services agreement with us.
  8
  The
        Company currently has no active operations, but, is actively pursuing operating
        business acquisition opportunities. The Company expects to incur additional
        losses until it acquires an operating business.   There can be no
        assurance that Company will ever achieve any revenues or profitable
        operations.  The new management team will be undertaking an analysis and
        evaluation of the Company’s assets and liabilities, our financial condition, and
        overall prospects in order to determine whether to continue the Company’s
        current operations or to develop and implement a new business strategy that
        could result in a substantial change in the Company’s business model, a
        liquidation of the Company’s existing assets, and other changes. During this
        evaluation phase, we have operations and reduced our personnel to no full-time
        employees and no part-time employees in order to minimize operating costs
        pending the outcome of the analysis noted above. In addition, during this
        evaluation phase, we anticipate that our operating revenues will be negligible,
        that the Company will generate a significant loss from operations, and that
        the
        Company will need to obtain debt and/or equity financing for working capital
        purposes. No assurance can be given that such financing will be available
        on
        terms acceptable to the Company.
  **Debenture
        Financings** .
        We have
        entered into a series of debenture financings with YA Global Investments,
        L.P,
        f/k/a Cornell Capital Partners, L.P. (“YA Global”) as described in greater
        detail below in this report. Most recently, we issued and sold a $7,642
        debenture to Cornell in December 2006, a $72,000 debenture to YA Global in
        April
        2007 and a $17,620 debenture to YA Global in December 2007. The proceeds
        from
        these three debt financings were used to pay professional fees associated
        with
        securities law compliance, audit fees, transaction costs, and related
        fees.
  **Financial
        Condition**
  There
        is
        substantial doubt about the ability of ETLS to continue as a going concern
        as
        disclosed in the Note 1 to the three months ended March 31, 2008 financial
        statements filed by ETLS in this Report. Those conditions continued through
        the
        end of thee months ended March 31, 2008 resulting in operating losses and
        liquidity shortages, including default conditions on all notes payable and
        judgments payable to creditors. The Company had a net loss of $123,493 for
        the
        three months ended March 31, 2008. Additionally, as of March 31, 2008, current
        liabilities exceed current assets by approximately $4,381,894.
  Management
        continued to meet operating deficits primarily through short-term borrowings
        and
        may attempt to utilize debt and equity financing alternatives to sustain
        operations. Whether such financing will be available as needed and the ultimate
        form of such financing is uncertain and the effects of this uncertainty could
        ultimately lead to bankruptcy.
  **Going
        Concern Uncertainty**
  The
        Company has incurred losses from operations for the three months ended March
        31,
        2008, and such losses are expected to continue. In addition, the Company
        has no
        working capital. The foregoing raises substantial doubt about the Company's
        ability to continue as a going concern. Management's plans include seeking
        additional capital and/or debt financing, and re-evaluation of the Company’s
        business strategy as discussed above in this report. There is no guarantee
        that
        additional capital and/or debt financing will be available when and to the
        extent required, or that if available, it will be on terms acceptable to
        the
        Company. The financial statements do not include any adjustments that might
        result from the outcome of this uncertainty.
  The
        Company currently has no active operations, but, is actively pursuing operating
        business acquisition opportunities, and the organic development of opportunities
        in real estate, investment, and financing.  The Company expects to incur
        additional losses until it acquires an operating business, or until its organic
        business opportunities reach a critical mass.   There can be no
        assurance that Company will ever achieve any revenues or profitable
        operations.
  Set
        forth
        below is a discussion of the financial condition and results of operations
        of
        etotalSource, Inc. (the "Company," "we," "us," or "our") for the three months
        ended March 31, 2008 and 2007. The following discussion should be read in
        conjunction with the information set forth in the consolidated financial
        statements and the related notes thereto appearing elsewhere in this quarterly
        report.
 
 **Results
        Of Operations For The Three Months Ended March 31, 2008, Compared To Three
        Months Ended** **March
        31, 2007.**
  ***Revenues.***
 Revenues
        for the three ended March 31, 2008 and 2007 were $0.
 
 ***General
        & Administrative Expenses.***
 Operating
        expenses for the three months ended March 31, 2008 were $7,650 as compared
        to
        $16,222 for the comparable 2007 period, or a decrease of $8,572. This decrease
        was primarily due to the cease in operations of eTotalSource.
  9
 ***(Loss)
        From Operations.***
 eTotalSource
        recognized a loss for the three months ended March 31, 2008 in the amount
        of
        ($7,650), as compared with a loss of ($16,222) for the corresponding period
        ended March 31, 2007. The decrease of $8,572 was attributable to the cease
        in
        operations of eTotalSource.
 
 ***Interest
        Expense***
 Interest
        expense for the three months ended March 31, 2008 was $114,908 as compared
        to
        $76,394 for the comparable 2007 period, an increase of $38,514. This increase
        was attributed to the additional debentures accruing interest.
 
 ***Net
        Income/(Loss)***
 Net
        loss
        for the three months ended March 31, 2008 was ($123,493) as compared to a
        net
        loss of ($92,616) for the comparable 2007 period, an increase of $30,877.
        This
        increase was attributed to the additional debentures accruing
        interest.
 
 **Liquidity
        & Capital Resources** ***.***
  At
        March
        31, 2008, eTotalSource had $969 in cash with which to conduct operations,
        and no
        other capital resources. The company needs equity or debt financing for working
        capital but has no commitments for new capital availability. **** There
        can
        be no assurance that ETLS will be able to pursue its business plan or fully
        exploit business opportunities that management may identify. Accordingly,
        ETLS
        will need to seek additional financing through loans, the sale and issuance
        of
        additional debt and/or equity securities, or other financing arrangements,
        including loans from our shareholders to cover expenses. ETLS presently has
        no
        sources of capital. ETLS is unable to carry out any plan of business without
        funding. Because of the re-evaluation of our business model currently in
        process, we are unable to quality and estimate our working capital requirements
        for the 12 months ending December 31, 2008. We cannot predict to what extent
        our
        current lack of liquidity and capital resources will impair the continuation
        of
        business or whether it will incur further operating losses. There is no
        assurance that we can continue as a going concern without substantial funding,
        for which there is no source.
  ***Contractual
        Obligations and Commercial Commitments.***
  As
        of
        March 31, 2008, the following obligations were outstanding:
 
 **Contractual Obligations**
              
              **Less than 1 year**Judgments
                  payable
              
              $
              204,788Short
                  Term note payables
              
              
              1,064,754Convertible
                  debentures
              
              
              867,197Other
                  current liabilities
              
              
              2,249,075Total
                  contractual cash obligations
              
              $
              4,385,813
  10
 **Item
        3 – Quantitative and Qualitative Disclosures About Market
        Risk**
 
 None
 
 **Item
        4. Controls and Procedures.**
  As
        required by Rule 13a-15 under the Securities Exchange Act of 1934, as of
        the end
        of the period covered by this report, we have carried out an evaluation of
        the
        effectiveness of the design and operation of our company’s disclosure controls
        and procedures.  Under
        the
        direction of our Chief Executive Officer and Chief Financial Officer, we
        evaluated our disclosure controls and procedures and internal control over
        financial reporting and concluded that (i) our disclosure controls and
        procedures were effective as of March 31, 2008 and (ii) no change in internal
        controls over financial reporting occurred during the quarter ended March
        31,
        2008, that has materially affected, or is reasonably likely to materially
        affect, our internal control over financial reporting.
 
 Disclosure
        controls and procedures and other procedures are designed to ensure that
        information required to be disclosed in our reports or submitted under the
        Securities Exchange Act of 1934 is recorded, processed, summarized and reported
        within the time period specified in the Securities and Exchange Commission’s
        rules and forms. Disclosure controls and procedures include, without limitation,
        controls and procedures designed to ensure that information required to be
        disclosed in our reports filed under the Securities Exchange Act of 1934
        is
        accumulated and communicated to management including our president and financial
        officer as appropriate, to allow timely decisions regarding required
        disclosure.
  11
  **PART
        II**
  **OTHER
        INFORMATION**
  **Item
        1. Legal Proceedings.**
  On
        March
        27, 2008, Gary Miller received a default judgment against ETotalSource in
        the
        amount of $266,940.78. The breakdown of the judgment is as follows: principal
        was $175,000, and interest was $91,140.78. Principal and interest have been
        recorded prior to the issuance of this judgment.
  **Item
        2. Unregistered Sales of Equity Securities and use of
        Proceeds.**
  None.
  **Item
        3. Defaults Upon Senior Securities.**
 
 As
        of
        March 31, 2008, the Company is in default under the following notes payable:
 
 The
        Company has a Convertible
        notes payable with interest at 6% payable monthly, due in 2001, unsecured.
        Principal ($50,000 at March 31, 2008) and accrued interest ($19,248 at March
        31,
        2008) are convertible to common stock at $.50 per share. The note and interest
        are in default.
 
 The
        Company has Convertible
        notes payables with interest ranging from 6% - 8% payable monthly, due in
        between the years of 2001 and 2003, unsecured. Principal ($175,000 at March
        31,
        2008) and accrued interest ($91,941 at March 31, 2008) are convertible to
        common
        stock at $.50 per share. Warrants also issued to note holders to purchase
        73,748
        shares of common stock for five years at $.50 per share. The notes and interest
        are in default. The note holder received a judgment against the Company on
        March
        27, 2008 in the amount of $266,94 for the principal and interest outstanding.
 
 The
        Company has a Note
        payable with interest at 6% payable monthly, due in 2001, unsecured. Principal
        ($25,000 at March 31, 2008) and accrued interest ($9,624 at March 31, 2008)
        are
        due. Warrants also issued to note holder to purchase 18,750 shares of common
        stock for five years at $.50 per share. The note and interest are in default.
 
 The
        Company has a Note payable to an unrelated individual; principal and interest
        at
        12%, due October 15, 2006. Principal ($25,000 at March 31, 2008) and unpaid
        interest ($4,998 at March 31, 2008) are due. The note and interest are
        default.
 
 The
        Company has a Note payable; interest at 15% payable monthly through December
        18,
        2003. Principal ($172,000 at March 31, 2008) and unpaid interest ($61,257
        at
        March 31, 2008) are due. The note and interest are in default.
 
 The
        Company has a note payable; interest at 10% and principal due January 17,
        2003,
        extended to December 17, 2003. Principal ($110,000 at March 31, 2008) and
        unpaid
        interest ($41,129 at March 31, 2008) (with interest increased to 18% and
        due
        monthly beginning February 17, 2003) are due. The note and interest are in
        default.
 
 The
        Company has a note payable; interest at 15% payable monthly through December
        18,
        2003. Principal ($40,000 at March 31, 2008) and unpaid interest ($14,246
        at
        March 31, 2008) are due. The note and interest are in default.
 
 The
        Company has a note payable ;
        stated
        interest rate of 10% due June 2003, extended to June 2004. As consideration
        for
        forbearance, the note holder received 50,000 shares of common stock in 2004,
        valued at $.525 per share ($26,250). In October 2004, the note was extended
        to
        April 2005. In December 2005, the note was extended to June 2006. Principal
        ($52,483 at March 31, 2008) and unpaid interest ($10,511 at March 31, 2008)
        are
        due. This note and interest are in default.
 
 The
        Company has a note payable; principal and interest at 10% due monthly. This
        note
        is a revolving credit obligation and the Company can repay and borrow up
        to the
        amount of the note. In October 2004, the note was extended to April 2005.
        In
        December 2005, the note was extended to June 2006. Principal ($262,631 at
        March
        31, 2008) and unpaid interest ($52,598 at March 31, 2008) are due. This note
        and
        interest are in default.
 
 The
        Company has a note payable;
        principal and interest at 9.2%, due December 4, 2002, extended to May 1,
        2003.
        Principal ($20,000 at March 31, 2008) and unpaid interest ($11,677 at March
        31,
        2008) are due, unsecured. The note and interest are in default .
  The
        Company has a note payable
        to YA Global; principal and interest at 10%, due August 1, 2005. Principal
        ($25,000 at March 31, 2008) and unpaid interest ($6,904 at March 31, 2008)
        are
        due. The note and interest are in default.
  12
 The
        Company has a note payable to YA Global; principal and interest at 12%, due
        August 1, 2005. Principal ( $100,000 at March 31, 2008) and unpaid interest
        ($35,375) at March 31, 2008) are due. The note and interest are in
        default.
 
 The
        Company has a Convertible debentures payable to a YA Global, principal and
        interest at 12%, payable November 1, 2008, secured by 225,000,000 shares
        of
        common stock and 7 million warrants. Principal and accrued interest convertible
        to common stock at a
        conversion price equal to the lower of (i) $.024 price per share of common
        stock
        or (ii) 80% of the lowest closing bid price of our common stock, as quoted
        by
        Bloomberg, L.P., for the five trading days immediately preceding the conversion
        date. At the due date the Company has the option to repay the debt or issue
        common stock. The principal balance as of March 31, 2008 was $849,250. The
        debenture is in default.
 
 The
        Company has a Convertible
        debentures payable to a YA Global,, principal and interest at 12%, payable
        December 21, 2008. Principal and accrued interest convertible to common stock
        at
        a conversion price equal to the lower of (i) $.0018 price per share of common
        stock or (ii) 80% of the lowest closing bid price of our common stock, as
        quoted
        by Bloomberg, L.P., for the five trading days immediately preceding the
        conversion date. At the due date the Company has the option to repay the
        debt or
        issue common stock. The principal balance as of March 31, 2008 was $7,642.
        The
        debenture is in default.
 
 On
        April
        13, 2007, the Company issued a convertible debenture to YA Global, in the
        principal amount of $72,000(principal and interest at 12% payable April 13,
        2009). Principal and accrued interest convertible to common stock at a
        conversion price equal to the lower of (i) $.0018 price per share of common
        stock or (ii) 80% of the lowest closing bid price of our common stock, as
        quoted
        by Bloomberg, L.P., for the five trading days immediately preceding the
        conversion date. The principal balance as of March 31, 2008 was $72,000.
        The
        debenture is in default.
 
 On
        December 4, 2007, the Company issued a convertible debenture to YA Global,
        in
        the principal amount of $17,620(principal and interest at 15% payable November
        9, 2008). Principal and accrued interest convertible to common stock at a
        conversion price equal to the lower of (i) $.002 price per share of common
        stock
        or (ii) 95% of the lowest volume weighted average price of our common stock,
        as
        quoted by Bloomberg, L.P., for the thirty trading days immediately preceding
        the
        conversion date. The principal balance as of March 31, 2008 was $17,620.
        The
        debenture is in default.
 
 **Item
        4. Submission of Matters to a Vote of Security Holders.**
  None.
 
 **Item
        5. Other Information**
  None.
  **Item
        6. Exhibits**
 31.1
                Certification
                    of CEO Pursuant to 13a-14(a) under the Exchange Act32.1
                Certification
                    of the CEO pursuant to 18 U.S.C Section
                    1350
  13
  **SIGNATURES**
  In
        accordance with the requirements of the Exchange Act, the Registrant has
        caused
        this Report to be signed on its behalf by the undersigned, thereunto duly
        authorized.
 eTotalSource,
                    Inc.May
                    7, 2008
                By:
                /s/
                    Frank J. OrlandoFrank
                    J. OrlandoChief
                    Restructuring Officer andChief
                    Financial Officer
  14