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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



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Form 10-KSB/A



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(Amendment No. 2)



ANNUAL REPORT UNDER

SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



For fiscal year ended March 31, 2004



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Dreams, Inc.

(Name of small business issuer in its charter)



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|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|Utah                                                           |  | 87-0368170                          
|(State or other jurisdiction of incorporation or organization) |  | (I.R.S. Employer Identification No.)



|                                              |  |           
|--------------------------------------------- |  | ----------
|2 South University Drive, Plantation, Florida |  | 33324     
|(Address of principal executive offices)      |  | (Zip Code)



Issuers
telephone number ( 954 ) 377 - 0002



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Securities registered pursuant to Section 12(b) of the Act:



|                    |  |                                          
|------------------- |  | -----------------------------------------
|Title of each class |  | Name of each exchange on which registered
|None                |  | N/A                                      



Securities
registered pursuant to Section 12(g) of the Act:



Common
Stock, no par value

(Title of class)



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Check whether the issuer (1)
filed all reports required to be filed by Section 13 or 15(d) of the 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 ̈



Check if disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be contained, to the best of registrants knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-KSB or any amendment
to this Form 10-KSB.    x



State issuers revenues for its most recent fiscal year: $21,770,000



The aggregate market value of the common equity held by non-affiliates as of June 4, 2004 was $11,482,000.



The number of shares outstanding of the issuers common stock as of June
4, 2004 is 56,363,195.



Transitional Small Business Disclosure
Format (check one): ̈Y    x  N



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Explanatory Note



The following sets forth an explanatory note of the changes to the Companys Form 10-KSB/A filed on January 26, 2005.



The Results of Operations in Managements Discussion and
Analysis was revised to clarify large one time events which occurred in fiscal 2003 as compared to fiscal 2004. The number in income tax benefits was corrected from $261,000 to $283,000 during fiscal 2004. The Statement of Cash Flows was
revised to reflect borrowings under the line of credit on a gross rather than net basis. Footnote 1 to the audited financial statements Revenue Recognition was revised to reflect the Companys source of revenue
generation.



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SIGNATURES



In accordance with
Section 13 or 15(d) of the Exchange Act, the Company caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.



DREAMS, INC., a Utah corporationBy:

/s/ Ross TannenbaumRoss Tannenbaum,President, Chief Executive Officer, Principal Accounting OfficerDated:

February 10, 2005




In accordance
with the Exchange Act, this report has been signed below by the following persons on behalf of the Company and in the capacities and on the dates indicated.



By:

/s/ Sam BattistoneSam Battistone, DirectorDated:

February 10, 2005By:

/s/ Dale E. LarssonDale E. Larsson, DirectorDated:

February 10, 2005