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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549



---

FORM 10-Q



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|x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ---------------------------------------------------------------------------------------

For the quarterly period ended May 6, 2007

OR



| ̈ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ----------------------------------------------------------------------------------------

For the transition period from  to

333-134550

(Commission File Number)

Dollarama Group L.P.

(Exact name of registrant as specified in its charter)



|                                               |  |                                  
|---------------------------------------------- |  | ---------------------------------
|Québec, Canada                                 |  | Not Applicable                   
|(State or other jurisdiction of incorporation) |  | (IRS Employer Identification No.)
|                                               | 
|5430 Ferrier, Montréal                         |  | H4P 1M2                          
|(Address of principal executive offices)       |  | (Postal Code)                    

(514) 737-1006

(Registrants telephone number, including area code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)



---

Indicate by check mark whether the registrant
(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 ̈No  x

Indicate by check mark whether the registrant is a large accelerated
filer, an accelerated filer, or a non-accelerated filer, per Rule 12b-2 of the Exchange Act.

Large accelerated
filer ̈Accelerated filer ̈Non-accelerated filer  x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes ̈No  x



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##### Table of Contents

TABLE OF CONTENTS



|                              |  |                                                                                       |  |     
|----------------------------- |  | ------------------------------------------------------------------------------------- |  | ----
|                              |  |                                                                                       |  | Page
|PART I. FINANCIAL INFORMATION |  |                                                                                      
|                              |  |                                                                                      
|Item 1.                       |  | Consolidated Financial Statements                                                     |  | 2   
|                              |  |                                                                                      
|Item 2.                       |  | Managements Discussion and Analysis of Financial Condition and Results of Operations |  | 11  
|                              |  |                                                                                      
|Item 3.                       |  | Quantitative and Qualitative Disclosures about Market Risk                            |  | 21  
|                              |  |                                                                                      
|Item 4.                       |  | Controls and Procedures                                                               |  | 22  
|                              | 
|PART II. OTHER INFORMATION    |  |                                                                                      
|                              |  |                                                                                      
|Item 1.                       |  | Legal Proceedings                                                                     |  | 22  
|                              |  |                                                                                      
|Item 1A.                      |  | Risk Factors                                                                          |  | 22  
|                              |  |                                                                                      
|Item 6.                       |  | Exhibits                                                                              |  | 23  
|                              |  |                                                                                      
|                              |  | Signatures                                                                            |  | 23  



1



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##### Table of Contents

Dollarama Group L.P. - Groupe Dollarama S.E.C.

PART I  FINANCIAL INFORMATION



|ITEM 1. | CONSOLIDATED FINANCIAL STATEMENTS
|------- | ---------------------------------

Dollarama Group L.P.

Interim Consolidated Balance Sheet

(expressed in
thousands of Canadian dollars)



|                                              |  |                    |   |  |                        
|--------------------------------------------- |  | ------------------ | - |  | -----------------------
|                                              |  | As atMay 6, 2007 $ |   |  | As at February 4,2007 $
|                                              |  | (unaudited)        |   |  |                        
|Assets                                        |  |                    |   |  |                        
|                                              |  |                   
|Current assets                                |  |                    |   |  |                        
|Cash and cash equivalents                     |  | 47,671             |   |  | 47,695                 
|Accounts receivable                           |  | 5,998              |   |  | 5,760                  
|Income taxes recoverable                      |  | 1,160              |   |  | 1,054                  
|Deposits and prepaid expenses                 |  | 11,050             |   |  | 8,598                  
|Derivative financial instruments (note 4)     |  |                   |   |  | 7,224                  
|Merchandise inventories                       |  | 163,813            |   |  | 166,017                
|                                              |  |                    |   |  |                        
|                                              |  | 229,692            |   |  | 236,348                
|                                              |  |                   
|Property and equipment                        |  | 91,277             |   |  | 84,665                 
|                                              |  |                   
|Goodwill                                      |  | 727,782            |   |  | 727,782                
|                                              |  |                   
|Other intangible assets                       |  | 119,412            |   |  | 120,379                
|                                              |  |                    |   |  |                        
|                                              |  | 1,168,163          |   |  | 1,169,174              
|                                              |  |                    |   |  |                        
|Liabilities                                   |  |                    |   |  |                        
|                                              |  |                   
|Current liabilities                           |  |                    |   |  |                        
|Accounts payable                              |  | 9,060              |   |  | 15,780                 
|Accrued expenses and other                    |  | 32,894             |   |  | 32,726                 
|Derivative financial instruments (note 4)     |  | 51,118             |   |  | 12,409                 
|Current portion of long-term debt             |  | 18,677             |   |  | 13,496                 
|                                              |  |                    |   |  |                        
|                                              |  | 111,749            |   |  | 74,411                 
|                                              |  |                   
|Long-term debt(note 2)                        |  | 540,037            |   |  | 578,066                
|                                              |  |                   
|Other liabilities                             |  | 26,371             |   |  | 25,413                 
|                                              |  |                    |   |  |                        
|                                              |  | 678,157            |   |  | 677,890                
|                                              |  |                    |   |  |                        
|Commitments and contingencies (note 3)        |  |                    |   |  |                        
|                                              |  |                   
|Partners Capital                             |  |                    |   |  |                        
|                                              |  |                   
|General partner                               |  | 374                |   |  | 374                    
|                                              |  |                   
|Limited partner                               |  | 388,281            |   |  | 389,313                
|                                              |  |                   
|Contributed surplus                           |  | 2,080              |   |  | 1,337                  
|                                              |  |                   
|Retained earnings                             |  | 103,638            |   |  | 93,478                 
|                                              |  |                   
|Accumulated other comprehensive income (loss) |  | (4,367             | ) |  | 6,782                  
|                                              |  |                    |   |  |                        
|                                              |  | 490,006            |   |  | 491,284                
|                                              |  |                    |   |  |                        
|                                              |  | 1,168,163          |   |  | 1,169,174              
|                                              |  |                    |   |  |                        

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

Approved on behalf of the Board of Directors of Dollarama Group GP Inc.

in its capacity as General Partner

Director



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##### Table of Contents

Dollarama Group L.P.

Interim Consolidated Statement of Partners Capital

(Unaudited)

(expressed in thousands of Canadian dollars)



|                                                                                         |  |                         |  |                         |   |  |                      |  |                            |   |  |                                              |   |  |         |  
|---------------------------------------------------------------------------------------- |  | ----------------------- |  | ----------------------- | - |  | -------------------- |  | -------------------------- | - |  | -------------------------------------------- | - |  | ------- | -
|                                                                                         |  | Generalpartnercapital $ |  | Limitedpartnercapital $ |   |  | Contributedsurplus $ |  | Retainedearnings(deficit)$ |   |  | Accumulatedothercomprehensiveincome (loss) $ |   |  | Total $ |  
|Balance  January 31, 2005                                                               |  | 374                     |  | 454,484                 |   |  | 202                  |  | (23,206                    | ) |  | 1,355                                        |   |  | 433,209 |  
|                                                                                         |  |                         |  |                         |   |  |                      |  |                            |   |  |                                              |   |  |         |  
|Other comprehensive income                                                               |  |                         |  |                         |   |  |                      |  |                            |   |  |                                              |   |  |         |  
|Net earnings for the year                                                                |  |                        |  |                        |   |  |                     |  | 35,006                     |   |  |                                             |   |  | 35,006  |  
|Unrealized loss on derivative financial instruments, net of reclassification adjustments |  |                        |  |                        |   |  |                     |  |                           |   |  | (7,385                                       | ) |  | (7,385  | )
|                                                                                         |  |                         |  |                         |   |  |                      |  |                            |   |  |                                              |   |  |         |  
|Total comprehensive income (loss)                                                        |  |                        |  |                        |   |  |                     |  | 35,006                     |   |  | (7,385                                       | ) |  | 27,621  |  
|                                                                                         |  |                         |  |                         |   |  |                      |  |                            |   |  |                                              |   |  |         |  
|Stock-based compensation (note 5)                                                        |  |                        |  |                        |   |  | 598                  |  |                           |   |  |                                             |   |  | 598     |  
|Capital distributions                                                                    |  |                        |  | (59,608                 | ) |  |                     |  |                           |   |  |                                             |   |  | (59,608 | )
|                                                                                         |  |                         |  |                         |   |  |                      |  |                            |   |  |                                              |   |  |         |  
|Balance  January 31, 2006                                                               |  | 374                     |  | 394,876                 |   |  | 800                  |  | 11,800                     |   |  | (6,030                                       | ) |  | 401,820 |  
|                                                                                         |  |                         |  |                         |   |  |                      |  |                            |   |  |                                              |   |  |         |  
|Other comprehensive income                                                               |  |                         |  |                         |   |  |                      |  |                            |   |  |                                              |   |  |         |  
|Net earnings for the year                                                                |  |                        |  |                        |   |  |                     |  | 81,678                     |   |  |                                             |   |  | 81,678  |  
|Unrealized gain on derivative financial instruments, net of reclassification adjustments |  |                        |  |                        |   |  |                     |  |                           |   |  | 12,812                                       |   |  | 12,812  |  
|                                                                                         |  |                         |  |                         |   |  |                      |  |                            |   |  |                                              |   |  |         |  
|Total comprehensive income                                                               |  |                        |  |                        |   |  |                     |  | 81,678                     |   |  | 12,812                                       |   |  | 94,490  |  
|                                                                                         |  |                         |  |                         |   |  |                      |  |                            |   |  |                                              |   |  |         |  
|Stock-based compensation (note 5)                                                        |  |                        |  |                        |   |  | 537                  |  |                           |   |  |                                             |   |  | 537     |  
|Capital distributions                                                                    |  |                        |  | (5,563                  | ) |  |                     |  |                           |   |  |                                             |   |  | (5,563  | )
|                                                                                         |  |                         |  |                         |   |  |                      |  |                            |   |  |                                              |   |  |         |  
|Balance  February 4, 2007                                                               |  | 374                     |  | 389,313                 |   |  | 1,337                |  | 93,478                     |   |  | 6,782                                        |   |  | 491,284 |  
|                                                                                         |  |                         |  |                         |   |  |                      |  |                            |   |  |                                              |   |  |         |  
|Other comprehensive income                                                               |  |                         |  |                         |   |  |                      |  |                            |   |  |                                              |   |  |         |  
|Net earnings for the period                                                              |  |                        |  |                        |   |  |                     |  | 10,160                     |   |  |                                             |   |  | 10,160  |  
|Unrealized loss on derivative financial instruments, net of reclassification adjustments |  |                        |  |                        |   |  |                     |  |                           |   |  | (11,149                                      | ) |  | (11,149 | )
|                                                                                         |  |                         |  |                         |   |  |                      |  |                            |   |  |                                              |   |  |         |  
|Total comprehensive income (loss)                                                        |  |                        |  |                        |   |  |                     |  | 10,160                     |   |  | (11,149                                      | ) |  | (989    | )
|                                                                                         |  |                         |  |                         |   |  |                      |  |                            |   |  |                                              |   |  |         |  
|Stock-based compensation (note 5)                                                        |  |                        |  |                        |   |  | 743                  |  |                           |   |  |                                             |   |  | 743     |  
|Capital distributions                                                                    |  |                        |  | (1,032                  | ) |  |                     |  |                           |   |  |                                             |   |  | (1,032  | )
|                                                                                         |  |                         |  |                         |   |  |                      |  |                            |   |  |                                              |   |  |         |  
|Balance  May 6, 2007                                                                    |  | 374                     |  | 388,281                 |   |  | 2,080                |  | 103,638                    |   |  | (4,367                                       | ) |  | 490,006 |  
|                                                                                         |  |                         |  |                         |   |  |                      |  |                            |   |  |                                              |   |  |         |  

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



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Dollarama Group L.P.

Interim Consolidated Statement of Earnings

(Unaudited)

(expressed in thousands of Canadian dollars)



|                                                                             |  |                                          |  |                                                  
|---------------------------------------------------------------------------- |  | ---------------------------------------- |  | -------------------------------------------------
|                                                                             |  | For the 13-weekperiod endedMay 6, 2007 $ |  | For the three-month period ended April 30, 2006 $
|Sales                                                                        |  | 215,875                                  |  | 184,941                                          
|                                                                             |  |                                          |  |                                                  
|Cost of sales and expenses                                                   |  |                                          |  |                                                  
|Cost of sales                                                                |  | 145,296                                  |  | 127,107                                          
|General, administrative and store operating expenses                         |  | 43,317                                   |  | 33,186                                           
|Amortization                                                                 |  | 4,099                                    |  | 2,810                                            
|                                                                             |  |                                          |  |                                                  
|                                                                             |  | 192,712                                  |  | 163,103                                          
|                                                                             |  |                                          |  |                                                  
|Operating income                                                             |  | 23,163                                   |  | 21,838                                           
|                                                                             |  |                                         
|Amortization of deferred financing costs                                     |  | 1,068                                    |  | 1,020                                            
|Interest expense                                                             |  | 11,027                                   |  | 11,318                                           
|Foreign exchange loss on derivative financial instruments and long-term debt |  | 866                                      |  | 181                                              
|                                                                             |  |                                          |  |                                                  
|Earnings before income taxes                                                 |  | 10,202                                   |  | 9,319                                            
|                                                                             |  |                                         
|Provision for current income taxes                                           |  | 42                                       |  | 422                                              
|                                                                             |  |                                          |  |                                                  
|Net earnings for the period                                                  |  | 10,160                                   |  | 8,897                                            
|                                                                             |  |                                          |  |                                                  

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



4



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Dollarama Group L.P.

Interim Consolidated Statement of Cash Flows

(Unaudited)

(expressed in thousands of Canadian dollars)



|                                                         |  |                                          |   |  |                                                   |  
|-------------------------------------------------------- |  | ---------------------------------------- | - |  | ------------------------------------------------- | -
|                                                         |  | For the 13-weekperiod endedMay 6, 2007 $ |   |  | For the three-month period ended April 30, 2006 $ |  
|Operating activities                                     |  |                                          |   |  |                                                   |  
|Net earnings for the period                              |  | 10,160                                   |   |  | 8,897                                             |  
|Adjustments for                                          |  |                                          |   |  |                                                   |  
|Amortization of property and equipment                   |  | 3,956                                    |   |  | 2,508                                             |  
|Amortization of intangible assets                        |  | 930                                      |   |  | 1,115                                             |  
|Change in fair value of derivative financial instruments |  | 34,784                                   |   |  | 10,701                                            |  
|Amortization of deferred financing costs                 |  | 1,068                                    |   |  | 1,020                                             |  
|Foreign exchange gain on long-term debt                  |  | (33,241                                  | ) |  | (9,325                                            | )
|Amortization of unfavourable lease rights                |  | (787                                     | ) |  | (813                                              | )
|Deferred lease inducements                               |  | 709                                      |   |  | 612                                               |  
|Deferred leasing costs                                   |  |                                         |   |  | (80                                               | )
|Deferred tenant allowances                               |  | 1,240                                    |   |  | 542                                               |  
|Amortization of deferred tenant allowances               |  | (204                                     | ) |  | (92                                               | )
|Stock-based compensation                                 |  | 743                                      |   |  | 154                                               |  
|Amortization of deferred leasing costs                   |  | 37                                       |   |  | 32                                                |  
|Loss on disposal of property and equipment               |  | 13                                       |   |  | 20                                                |  
|                                                         |  |                                          |   |  |                                                   |  
|                                                         |  | 19,408                                   |   |  | 15,291                                            |  
|Changes in non-cash working capital components           |  | (7,144                                   | ) |  | 22,348                                            |  
|                                                         |  |                                          |   |  |                                                   |  
|                                                         |  | 12,264                                   |   |  | 37,639                                            |  
|                                                         |  |                                          |   |  |                                                   |  
|Investing activities                                     |  |                                          |   |  |                                                   |  
|Purchase of property and equipment                       |  | (10,619                                  | ) |  | (8,900                                            | )
|Proceeds on disposal of property and equipment           |  | 38                                       |   |  | 75                                                |  
|                                                         |  |                                          |   |  |                                                   |  
|                                                         |  | (10,581                                  | ) |  | (8,825                                            | )
|                                                         |  |                                          |   |  |                                                   |  
|Financing activities                                     |  |                                          |   |  |                                                   |  
|Repayment of long-term debt                              |  | (675                                     | ) |  | (3,689                                            | )
|Capital distributions                                    |  | (1,032                                   | ) |  | (1,276                                            | )
|                                                         |  |                                          |   |  |                                                   |  
|                                                         |  | (1,707                                   | ) |  | (4,965                                            | )
|                                                         |  |                                          |   |  |                                                   |  
|Increase (decrease) in cash and cash equivalents         |  | (24                                      | ) |  | 23,849                                            |  
|                                                         |  |                                         
|Cash and cash equivalents  Beginning of period          |  | 47,695                                   |   |  | 30,883                                            |  
|                                                         |  |                                          |   |  |                                                   |  
|Cash and cash equivalents  End of period                |  | 47,671                                   |   |  | 54,732                                            |  
|                                                         |  |                                          |   |  |                                                   |  

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



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Dollarama Group L.P.

Notes to Interim Consolidated Financial Statements

(Unaudited)

May 6, 2007

(tabular amounts expressed in thousands of Canadian dollars, unless otherwise noted)



|1 | Basis of presentation
|- | ---------------------

The unaudited interim
consolidated financial statements are based upon accounting policies and methods of their application consistent with those used and described in the annual consolidated financial statements of Dollarama Group L.P. (the Partnership) as
contained in the most recent Annual Report on Form 10-K (Form 10-K). The unaudited interim consolidated financial statements do not include all of the financial statement disclosures included in the annual consolidated
financial statements prepared in accordance with accounting principles generally accepted in Canada (Canadian GAAP) and therefore should be read in conjunction with the Partnerships most recent Form 10-K.

In the opinion of management of Dollarama Group GP Inc., acting in its capacity as General Partner of the Partnership, the unaudited interim consolidated
financial statements reflect all adjustments, which consist only of normal and recurring adjustments, necessary to present fairly the financial position and results of operations and cash flows in accordance with Canadian GAAP. The results reported
in these financial statements are not necessarily indicative of the results that may be expected for the entire year. Historically, the last quarter of the year has presented higher level of activity and produced better results than the first three
quarters.



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Dollarama Group L.P.

Notes to Interim Consolidated Financial Statements

(Unaudited)

May 6, 2007

(tabular amounts expressed in thousands of Canadian dollars, unless otherwise noted)



|2 | Long-term debt
|- | --------------

Long-term debt consists of the
following:



|                                                                                                                                                                                                                                                                                                                                                                                                                                                          |  |                     |  |                       
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------- |  | ----------------------
|                                                                                                                                                                                                                                                                                                                                                                                                                                                          |  | As at May 6, 2007 $ |  | As atFebruary 4,2007 $
|Senior subordinated notes (US$200,000,000), maturing in August 2012, bearing interest at 87/8%, payable semi-annually commencing in February 2006                                                                                                                                                                                                                                                                                                         |  | 221,500             |  | 237,100               
|Term bank loan (May 6, 2007  US$241,019,681; February 4, 2007  US$241,628,318), maturing in November 2011, repayable in
quarterly capital installments of US$608,637. Advances under the term bank loan bear interest at rates ranging from 0.75% to 1.0% above the banks prime rate. However, borrowings under the term bank loan by way of LIBOR loans bear interest at
rates ranging from 1.75% to 2.0% per annum above the banks LIBOR            |  | 266,930             |  | 286,450               
|Term bank loan, maturing in May 2010, repayable in quarterly capital installments varying from $1,500,000 to $7,500,000 commencing in April
2005. Advances under the term bank loan bear interest at rates varying from 0.75% to 1.25% per annum above the banks prime rate. However, borrowings under the term bank loan by way of bankers acceptances bear interest at rates
varying from 1.75% to 2.25% per annum above the bankers acceptance rate |  | 88,000              |  | 88,000                
|                                                                                                                                                                                                                                                                                                                                                                                                                                                          |  |                     |  |                       
|                                                                                                                                                                                                                                                                                                                                                                                                                                                          |  | 576,430             |  | 611,550               
|Less: Current portion                                                                                                                                                                                                                                                                                                                                                                                                                                     |  | 18,677              |  | 13,496                
|                                                                                                                                                                                                                                                                                                                                                                                                                                                          |  |                     |  |                       
|                                                                                                                                                                                                                                                                                                                                                                                                                                                          |  | 557,753             |  | 598,054               
|Less: Deferred financing costs                                                                                                                                                                                                                                                                                                                                                                                                                            |  | 17,716              |  | 19,988                
|                                                                                                                                                                                                                                                                                                                                                                                                                                                          |  |                     |  |                       
|                                                                                                                                                                                                                                                                                                                                                                                                                                                          |  | 540,037             |  | 578,066               
|                                                                                                                                                                                                                                                                                                                                                                                                                                                          |  |                     |  |                       



|3 | Commitments and contingencies
|- | -----------------------------

As at May 6,
2007, there were contractual obligations for operating leases amounting to approximately $380,219,000. The leases extend over various periods up to the year 2024, and it is expected that in the normal course of operations most will be renewed under
option clauses or will be renegotiated.



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Dollarama Group L.P.

Notes to Interim Consolidated Financial Statements

(Unaudited)

May 6, 2007

(tabular amounts expressed in thousands of Canadian dollars, unless otherwise noted)



The basic annual rent, exclusive of contingent rentals, for the next five years and thereafter is as
follows:



|           |  |        
|---------- |  | -------
|           |  | $      
|2008       |  | 52,642 
|2009       |  | 49,126 
|2010       |  | 45,783 
|2011       |  | 42,926 
|2012       |  | 39,281 
|Thereafter |  | 150,461

Two legal proceedings have been instituted against the Partnership for alleged copyright
infringement pertaining to the sale of certain products. The Partnership has denied these claims and believes they are without merit. It is not possible at this time to determine the outcome of these matters and accordingly, no provision has been
made in the accounts for these claims.

Legal proceedings have been instituted against the Partnership for alleged personal injuries
sustained by customers in the Partnerships stores. The plaintiffs are claiming amounts totalling $7,400,000. The Partnership believes that the potential amount to be paid for these claims would be covered by its insurance policies other than
punitive damage. It is not possible at this time to determine the outcome of these matters and accordingly, no provision has been made in the accounts for these claims.

The Partnership believes that these suits are without substantial merit and should not result in judgments which in aggregate would have a material adverse effect on its financial statements.



|4 | Derivative financial instruments
|- | --------------------------------

The fair value of
derivative financial instruments is as follows:



|                                                       |  |                   |   |  |                        |   |  |                            |  |                              
|------------------------------------------------------ |  | ----------------- | - |  | ---------------------- | - |  | -------------------------- |  | -----------------------------
|                                                       |  | Fair value        |   |  |                        |   | 
|                                                       |  | As atMay 6,2007 $ |   |  | As atFebruary 4,2007 $ |   |  | Qualifyfor hedgeaccounting |  | Nature of hedgingrelationship
|Foreign currency and interest rate swaps               |  | (25,027           | ) |  | (6,011                 | ) |  | No                         |  |                             
|Foreign exchange forward contracts                     |  | (4,845            | ) |  | 7,224                  |   |  | Yes                        |  | Cash flow hedge              
|Foreign currency swap agreements                       |  | (21,246           | ) |  | (6,398                 | ) |  | Yes                        |  | Cash flow hedge              
|                                                       |  |                   |   |  |                        |   |  |                            |  |                              
|                                                       |  | (51,118           | ) |  | (5,185                 | ) |  |                            |  |                              
|                                                       |  |                   |   |  |                        |   |  |                            |  |                              
|Derivative financial instruments  current assets      |  |                  |   |  | 7,224                  |   |  |                            |  |                              
|Derivative financial instruments  current liabilities |  | (51,118           | ) |  | (12,409                | ) |  |                            |  |                              
|                                                       |  |                   |   |  |                        |   |  |                            |  |                              
|                                                       |  | (51,118           | ) |  | (5,185                 | ) |  |                            |  |                              
|                                                       |  |                   |   |  |                        |   |  |                            |  |                              



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Dollarama Group L.P.

Notes to Interim Consolidated Financial Statements

(Unaudited)

May 6, 2007

(tabular amounts expressed in thousands of Canadian dollars, unless otherwise noted)



|5 | Stock-based compensation
|- | ------------------------

Dollarama Capital
Corporation (DCC), a parent company of the Partnership, adopted a management option plan (the Plan) whereby managers, directors and employees of the Partnership may be granted stock options to acquire shares of DCC. The
number and characteristics of stock options granted are determined by the Board of DCC and the options will have a life not exceeding 10 years.

An option on the Class B common shares must be exercised in combination with 2.86 options on the Class B preferred shares (referred to as a Combined Option).



|                               |  |                                        |   |  |                                           |   |  |            |   |  |             |  
|------------------------------ |  | -------------------------------------- | - |  | ----------------------------------------- | - |  | ---------- | - |  | ----------- | -
|                               |  | Number of Class B common share options |   |  | Number of Class B preferred share options |  
|                               |  | Service                                |   |  | Performance                               |   |  | Service    |   |  | Performance |  
|Outstanding January 31, 2006  |  | 1,954,167                              |   |  | 3,908,334                                 |   |  | 3,906,280  |   |  | 7,812,560   |  
|Effect of the equalization     |  | (1,340,236                             | ) |  | (2,680,472                                | ) |  | (2,153,618 | ) |  | (4,307,236  | )
|                               |  |                                        |   |  |                                           |   |  |            |   |  |             |  
|Outstanding  February 4, 2007 |  | 613,931                                |   |  | 1,227,862                                 |   |  | 1,752,662  |   |  | 3,505,324   |  
|Granted                        |  | 125,117                                |   |  | 250,234                                   |   |  | 357,186    |   |  | 714,372     |  
|                               |  |                                        |   |  |                                           |   |  |            |   |  |             |  
|Outstanding  May 6, 2007      |  | 739,048                                |   |  | 1,478,096                                 |   |  | 2,109,848  |   |  | 4,219,696   |  
|                               |  |                                        |   |  |                                           |   |  |            |   |  |             |  
|Exercisable  May 6, 2007      |  | 252,851                                |   |  |                                          |   |  | 721,625    |   |  |            |  
|                               |  |                                        |   |  |                                           |   |  |            |   |  |             |  



|6 | Related party transactions
|- | --------------------------

Included in expenses
are management fees of $834,300 for the 13-week period ended May 6, 2007 (for the three-month period ended April 30, 2006  $779,000) charged by an affiliate of Bain Capital Partners VIII, LP, the private equity firm that controls the
Partnerships parent.

Expenses charged by related parties which are mainly comprised of rent total $1,642,000 for the 13-week period
ended May 6, 2007 (for the three-month period ended April 30, 2006  $1,466,000).

Included in accrued expenses and other is
$1,947,000 for the 13-week period ended May 6, 2007 (for the three-month period ended April 30, 2006  $2,173,000) payable to Bain Capital Partners VIII, LP.

These transactions were measured at the exchange amount, which is the amount of the consideration established and agreed to by the related parties.



|7 | Comparative figures
|- | -------------------

Certain comparative figures
have been reclassified to conform with the basis of presentation used in the current period.



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Dollarama Group L.P.

Notes to Interim Consolidated Financial Statements

(Unaudited)

May 6, 2007

(tabular amounts expressed in thousands of Canadian dollars, unless otherwise noted)



|8 | Reconciliation of accounting principles generally accepted in Canada and the United States
|- | ------------------------------------------------------------------------------------------

The Partnership has prepared these unaudited interim consolidated financial statements in accordance with Canadian GAAP, which conform in all material
respects to those in the United States.



|9 | Supplemental condensed consolidating financial information
|- | ----------------------------------------------------------

In connection with the issuance of the Partnerships senior subordinated notes (the Notes), all of its wholly owned subsidiaries provided guarantees for the Notes. Dollarama Group L.P. (the Parent) does not have
any independent assets or operations and the guarantees provided by the subsidiaries are full and unconditional as well as joint and several. The subsidiaries are subject to restrictions on their ability to distribute earnings to the Parent.



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|ITEM 2. | MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|------- | -------------------------------------------------------------------------------------

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited
consolidated financial statements and notes thereto appearing in this report. Any references to we, us and our refer to Dollarama Group L.P. and Dollarama Corporation.

Our functional and reporting currency is the Canadian dollar. Financial data has been prepared in conformity with Generally Accepted Accounting
Principles (GAAP) in Canada. Certain measures used in this discussion and analysis do not have any standardized meaning under Canadian GAAP. When used, these measures are defined in such terms as to allow the reconciliation to the
closest Canadian GAAP measure. It is unlikely that these measures could be compared to similar measures presented by other companies.

Accounting
Periods

On February 1, 2007, our Board of Directors approved a change to our fiscal year end, moving it from January 31 to a
floating year end ending on the Sunday closest to January 31 of each year. The change was effective beginning with our fiscal year 2007, which ended February 4, 2007. Our fiscal year 2008 began February 5, 2007 and will end
February 3, 2008. There are two additional days of transactions included in the 13-week period ended May 6, 2007 when compared to the three-month period ended April 30, 2006.



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Forward-Looking Statements

Except for historical information contained herein, the statements in this document are forward-looking. Forward-looking statements involve known and unknown risks and uncertainties, including those that are described
elsewhere in this report. Such risks and uncertainties may cause actual results in future periods to differ materially from forecasted results. Those risks include, among others, changes in customer demand for products, changes in raw material and
equipment costs and availability, seasonal changes in customer demand, pricing actions by competitors and general changes in economic conditions.

Overview

We are the leading operator of dollar discount stores in Canada with stores in each province. Our core markets are
Ontario and Québec. As at May 6, 2007, we operated 477 Dollarama stores, including 378 stores located in Ontario and Québec. We believe that we have more than 2.5 times the number of stores as our next largest competitor in
Canada. Our stores offer a varied mix consisting of both consumables and semi-durables, which are sold mainly in individual or multiple units primarily at a price of $1.00. We have a well diversified supply base, sourcing our merchandise from both
domestic and foreign suppliers. All of our stores are company-operated, and nearly all are located in high-traffic areas such as strip malls and shopping centers in metropolitan areas, mid-sized cities, or small towns.

Our strategy is to grow our sales, net earnings and cash flow by building upon our position as the leading Canadian operator of dollar stores and
continuing to offer a compelling value proposition on a wide variety of everyday merchandise to a broad base of shoppers. As a result, we continually strive to maintain and improve the efficiency of our operations.

Factors Affecting Our Results of Operations

Sales

We recognize sales at the time the customer tenders payment for and take possession of the merchandise. All
sales are final. Our sales consist of comparable store sales and new store sales. Comparable store sales is a measure of the percentage increase or decrease of the sales of stores open for at least 13 complete months relative to the same period in
the prior year. To provide more meaningful results, we measure comparable store sales over periods containing an integral number of weeks beginning on a Monday and ending on a Sunday that best approximate the fiscal period to be analyzed. We include
sales from relocated stores and expanded stores in comparable store sales. The primary drivers of comparable store sales performance are store expansions and relocations, changes in store traffic, and the average number of items purchased by
customers per visit. To increase comparable store sales, we focus on expanding our stores and offering a wide selection of merchandise that offer high quality and good value at attractive and well-maintained updated store formats, in convenient
locations.

We have historically experienced seasonal fluctuations in our sales and expect this trend to continue. We generated 31.1% of
our sales in fiscal year ended February 4, 2007 during the fourth quarter due to the holiday selling season. In anticipation of increased sales activity during the fourth quarter, we typically purchase substantial amounts of inventory and hire
a significant number of temporary employees to supplement our permanent store and warehouse staffs.

Our sales are adversely affected by
inflation and other adverse economic developments that affect the level of consumer spending in Canada where we sell our merchandise.

Cost of Sales

Our cost of sales consists of merchandise inventories (which are variable and proportional to our
sales volume), and procurement and warehousing costs (including occupancy and labor costs) and store rent and occupancy costs, which are predominantly fixed costs. We record vendor rebates consisting of volume purchase rebates, when earned. The
rebates are recorded as a reduction of inventory purchases at cost, which has the effect of reducing cost of sales. As a fixed price retailer, increases in operating and merchandise costs could negatively impact our operating results because we
generally do not pass on cost increases to our customers. We have the ability to redesign some of our direct sourced products to mitigate the impact of increasing unit costs.



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We have historically reduced our cost of sales by shifting more of our sourcing to low-cost foreign
suppliers. For the fiscal year ended February 4, 2007, the direct foreign sourcing was 53.1% of our purchases compared to 52.6% for the fiscal year ended January 31, 2006. We purchase merchandise from foreign suppliers mainly in China, but
also from Denmark, France, Hong Kong, India, Indonesia, Italy, Malaysia, Panama, the Philippines, Taiwan, Turkey, and the United States. As a result, our cost of sales is impacted by the fluctuation of foreign currencies against the Canadian dollar.
In particular, we purchase a majority of our imported merchandise from suppliers in China using U.S. dollars. Therefore, our cost of sales is impacted by the fluctuation of the Chinese renminbi against the U.S. dollar and the fluctuation of the U.S.
dollar against the Canadian dollar. While we enter into forward contracts to hedge part of our exposure to fluctuations in the value of the U.S. dollar against the Canadian dollar, we do not hedge our exposure to fluctuations in the value of the
Chinese renminbi against the U.S. dollar.

Our occupancy costs are driven by our base rent expense. We believe that we are generally able
to negotiate leases at market, or slightly favorable to market, economic terms due to the increased consumer traffic which our stores usually generate in strip malls and shopping centers. We typically enter into leases with terms of between five and
ten years with options to renew for one or more periods of five years each.

Shipping and transportation costs are also a significant
component of our cost of sales. When fuel costs increase, shipping and transportation costs increase because the carriers generally pass on such cost increases to the users. Because of the risk of continued increases in fuel costs in fiscal year
2008, we expect increased fuel surcharges from our contract carriers as compared with past quarters. Our cost of sales is also affected by general inflation in costs of merchandise and costs of certain commodities relating to raw materials used in
our products. To date, our product margins have not been adversely impacted by these cost increases, due primarily to favorable foreign currency fluctuations, specifically the relative strengthening of the Canadian dollar against the U.S. dollar
during the last three fiscal years.

General, Administrative and Store Operating Expenses

Our general, administrative and store operating expenses consist of store labor and maintenance costs such as repair costs, which are primarily fixed, and
salaries and related benefits of corporate team members, administrative office expenses, professional expenses and other related expenses. Although our average hourly wage rate is higher than the minimum wage, an increase in the mandated minimum
wage could significantly increase our payroll costs unless we realize offsetting productivity gains and cost reductions. We expect our administrative costs to increase as we build our infrastructure to effectively meet the needs generated by the
growth of our company. Administrative and general expenses also include management fees of up to $3.0 million per year plus expenses to be paid pursuant to a management agreement with Bain Capital Partners, LLC.

The Transactions

The Acquisition

On November 18, 2004, Dollarama Capital Corporation, an entity formed by funds managed by Bain Capital Partners, LLC caused
our wholly-owned subsidiary, Dollarama L.P., to purchase substantially all of the assets of S. Rossy Inc. and Dollar A.M.A. Inc. relating to the Dollarama business, for a total purchase price of $1,032.5 million. We refer to this acquisition and the
related transactions as the Acquisition. The total purchase price consisted of approximately $951.5 million of cash and $81.0 million of equity securities of our parent issued to the sellers. The cash portion of the purchase price and the
transaction expenses were financed primarily by (i) a cash investment by funds managed by Bain Capital Partners, LLC in our parent, (ii) the borrowing by us of term loans under a new senior secured credit facility, and (iii) the
borrowing by us of senior subordinated loans under a new senior subordinated bridge loan facility. The rollover equity investment made by the sellers, and cash investment made by the funds managed by Bain Capital Partners, LLC in our parent were
contributed to us as equity in connection with the asset purchase. Our historical financial data discussed herein for the periods following the Acquisition reflect the application of purchase accounting rules which required us to allocate the total
cost of the acquisition to the assets acquired and the liabilities assumed on the basis of their estimated fair values as of the closing of the Acquisition.



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The Refinancing

On August 12, 2005, Dollarama Group L.P. and Dollarama Corporation issued U.S.$200.0 million aggregate principal amount of 8.875% senior subordinated
notes due 2012. The notes bear interest at the rate of 8.875% per year. Interest on the notes is payable on February 15 and August 15 of each year, which began on February 15, 2006. The notes will mature on August 15, 2012.

The gross proceeds from the sale of the senior subordinated notes was U.S.$200.0 million (approximately $221.5 million based on the
exchange rate on May 6, 2007). We used the proceeds from the sale of the senior subordinated notes, together with additional term loan B borrowings to (i) repay the outstanding borrowings under our existing senior subordinated loan
facility, (ii) make a cash distribution to our parent and (iii) pay related fees and expenses. We refer to the sales of the senior subordinated notes and the use of proceeds there from as the Refinancing.

Critical Accounting Policies

In preparing our
financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and reported
amounts of revenues and expenses during the period. We evaluate our estimates on an ongoing basis, based on historical experience and various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ from
these estimates.

Valuation of Merchandise Inventories

The valuation of store merchandise inventories is determined by the retail inventory method valued at the lower of cost (weighted-average) or market.
Under the retail inventory method, merchandise inventories are converted to a cost basis by applying an average cost to selling ratio. Merchandise inventories that are at the distribution center or warehouses and inventories that are in-transit from
suppliers, are stated at the lower of cost and market, determined on a weighted-average cost basis. Merchandise inventories include items that have been marked down to managements best estimate of their net realizable value and are included in
cost of sales in the period in which the markdown is determined. We estimate our markdown reserve based on the consideration of a variety of factors, including but not limited to quantities of slow-moving or carryover seasonal merchandise on hand,
historical markdown statistics and future merchandising plans. The accuracy of our estimates can be affected by many factors, some of which are outside of our control, including changes in economic conditions and consumer buying trends.
Historically, we have not experienced significant differences in our estimates of markdowns compared with actual results.

Property
and Equipment

Property and equipment are carried at cost. Property and equipment are amortized over the estimated useful lives of
the respective assets as follows: (i) on the declining balance method, computer equipment and vehicles at 30%; and (ii) on the straight-line method, store and warehouse equipment at 8 to 10 years, computer software at 5 years and leasehold
improvements at the terms of the lease. Property and equipment are reviewed for impairment periodically and whenever events or changes in circumstances indicate that the carrying value of an asset might not be recoverable.

Goodwill and trade name

Goodwill and trade name are not subject to amortization and are tested for impairment annually or more frequently if events or circumstances indicate that the assets might be impaired. Impairment is identified by comparing the fair value of
the reporting unit to which it relates to its carrying value. To the extent a reporting units carrying amount exceeds its fair value, we measure the amount of impairment in a manner similar to that of a purchase price allocation, and any
excess of carrying amount over the implied fair value of goodwill is charged to earnings in the period in which the impairment is determined. Future events could cause us to conclude that impairment indicators exist and that goodwill associated with
our business is impaired. Any resulting impairment would be charged to net earnings.



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Impairment of Long-Lived Assets

Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be
recoverable. Factors which we consider could trigger an impairment review include, but are not limited to, the following: (i) significant negative industry or economic trends; and (ii) current, historical or projected losses that
demonstrate continuing losses. Impairment is assessed by comparing the carrying amount of an asset with the expected future net undiscounted cash flows from its use together with its residual value. If such assets are considered to be impaired, the
impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds their fair value. The estimates regarding their fair value include assumptions about future conditions relating to our business, as well as the
industry. If actual cash flows differ from those projected by management, additional write-offs may be required.

Operating Leases

We recognize rental expense and inducements received from landlords on a straight-line basis over the term of the leases. Any
difference between the calculated expense and the amounts actually paid is reflected as deferred lease inducements on our balance sheet. We recognize contingent rental expense when the achievement of the specified sales targets is considered
probable. Our estimates are based on individual store sales trends and are adjusted for actual results.

Financial Instruments

Fair market value of financial instruments

We estimate the fair market value of our financial instruments based on current interest rates, market value and current pricing of financial instruments with similar terms. Unless otherwise disclosed herein, the
carrying value of these financial instruments, especially those with current maturities such as cash and cash equivalents, accounts receivable, deposits, accounts payable and accrued expenses, approximates their fair market value.

Derivative financial instruments

We
use derivative financial instruments in the management of our foreign currency and interest rate exposures. When hedge accounting is used, we document relationships between hedging instruments and hedged items, as well as our risk management
objective and strategy for undertaking various hedge transactions. This process includes linking derivatives to specific assets and liabilities on the balance sheet or to specific firm commitments or forecasted transactions. We also assess whether
the derivatives that are used in hedging transactions are effective in offsetting changes in cash flows of hedged items.

Foreign
exchange forward contracts

We have significant cash flows and long-term debt denominated in U.S. dollars. We use foreign exchange
forward contracts and foreign currency swap agreements to mitigate risks from fluctuations in exchange rates. All forward contracts and foreign currency swap agreements are used for risk management purposes and are designated as hedges of specific
anticipated purchases.

Swaps and interest rate cap

Our interest rate risk is primarily in relation to our fixed rate and floating rate borrowings. We have entered into swap agreements and an interest rate cap to mitigate this risk.



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Others

In the event a derivative financial instrument designated as a hedge is terminated or ceases to be effective prior to maturity, related realized and unrealized gains or losses are deferred under current assets or
liabilities and recognized in earnings in the period in which the underlying original hedged transaction is recognized. In the event a designated hedged item is sold, extinguished or matures prior to the termination of the related derivative
financial instrument, any realized or unrealized gain or loss on such derivative financial instrument is recognized in earnings.

Derivative financial instruments which are not designated as hedges or have ceased to be effective prior to maturity are recorded at their estimated fair values under current assets or liabilities with changes in their estimated fair values
recorded in earnings. Estimated fair value is determined using pricing models incorporating current market prices and the contractual prices of the underlying instruments, the time value of money and yield curves.

Monetary assets and liabilities denominated in foreign currencies are translated at year-end exchange rates, while non-monetary assets and liabilities
are translated at historic rates. Revenues and expenses are translated at prevailing market rates in the recognition period. The resulting exchange gains or losses are recorded in the statement of earnings, except for gains or losses on foreign
exchange contracts used to hedge anticipated purchases in foreign currencies. Gains and losses on these contracts are accounted for as a separate component of partners capital in other comprehensive income. Such gains or losses are recorded in
income when the inventories are sold.

Results of Operations

The following table sets forth the major components of our consolidated statements of operations, expressed as a percentage of sales, for the periods indicated:



|                                                                             |  |                               |  |                                     
|---------------------------------------------------------------------------- |  | ----------------------------- |  | ------------------------------------
|                                                                             |  | 13-Week PeriodEndedMay 6,2007 |  | Three-Month PeriodEndedApril 30,2006
|Sales                                                                        |  | 100.0%                        |  | 100.0%                              
|Cost of sales                                                                |  | 67.3%                         |  | 68.7%                               
|General administrative and store operating expenses                          |  | 20.1%                         |  | 17.9%                               
|Amortization                                                                 |  | 1.9%                          |  | 1.5%                                
|Amortization of deferred financing costs                                     |  | 0.5%                          |  | 0.6%                                
|Interest expense                                                             |  | 5.1%                          |  | 6.1%                                
|Foreign exchange loss on derivative financial instruments and long-term debt |  | 0.4%                          |  | 0.1%                                
|Taxes                                                                        |  | 0.0%                          |  | 0.2%                                
|Net Earnings                                                                 |  | 4.7%                          |  | 4.8%                                

13-Week Period Ended May 6, 2007 Compared to Three-Month Period Ended April 30,
2006

Sales

Our
sales increased $30.9 million, or 16.7%, from $184.9 million for the three-month period ended April 30, 2006, to $215.9 million for the 13-week period ended May 6, 2007. This sales growth was driven primarily by (i) the opening of 65
new stores and offset by the temporary closure of 2 stores for the 52 week period ended May 6, 2007 and offset by (ii) a comparable store sales decrease of 1.8% (for the 13-week period ended May 6, 2007) for stores in operation during
the three-month period ended April 30, 2006. The comparable store sales were negatively impacted by bad weather, cannibalization of existing stores by new store openings and the implementation of our new integrated information system. During
the initial stage of implementation, we encountered replenishment difficulties which resulted in lower inventory levels at our stores. The situation is being addressed and we are in the process of rebuilding store inventory. Our total store square
footage increased 18.4% from 3.8 million as at April 30, 2006 to 4.5 million as at May 6, 2007.



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Cost of Sales

Cost of sales increased $18.2 million, or 14.3%, from $127.1 million for the three-month period ended April 30, 2006 to $145.3 million for the 13-week period ended May 6, 2007. Our margin (sales less cost of
sales) increased from 31.3% for the three-month period ended April 30, 2006 to 32.7% for the 13-week period ended May 6, 2007. The improvement in the margin was driven by improved sourcing and favorable foreign exchange rates.

General, Administrative and Store Operating Expenses

General, administrative and store operating expenses increased $10.1 million, or 30.5%, to $43.3 million for the 13-week period ended May 6, 2007 from $33.2 million for the three-month period ended April 30,
2006. This increase was due to an increase in the number of stores in operation, higher wages resulting from minimum wage increases, and costs to upgrade our information technology systems. This increase includes a one time expense of $0.8 million
due to a 2005 workers compensation rate adjustment. As a result, our general, administrative and store operating expenses increased from 17.9% of sales for the three-month period ended April 30, 2006 to 20.1% for the 13-week period ended
May 6, 2007.

Amortization

Amortization expense increased $1.3 million, from $2.8 million for the three-month period ended April 30, 2006 to $4.1 million for the 13-week period ended May 6, 2007. This increase was due to the amortization of property and
equipment resulting from the new store openings and the amortization of information systems due to the upgrade of our systems.

Amortization of deferred financing costs

Amortization of deferred financing costs was $1.1 million for the 13-week period
ended May 6, 2007 and $1.0 million for the three-month period ended April 30, 2006. The amortization of deferred costs represents the cost of the new financing described in Liquidity and Capital ResourcesDebt and
Commitments, which is amortized over the term of the related debt.

Interest Expense

Interest expense decreased $0.3 million, from $11.3 million for the three-month period ended April 30, 2006 to $11.0 million for the 13-week period
ended May 6, 2007 due mainly to lower interest costs on the senior subordinated debt, which was refinanced in August 2005 which offset higher interest costs on floating rate.

Foreign Exchange Loss on Derivative Financial Instruments and Long-Term Debt

Foreign exchange loss on derivative financial instruments and long-term debt increased $0.7 million from $0.2 million for the three-month period ended
April 30, 2006, to $0.9 million for the 13-week period ended May 6, 2007.

Income Taxes

Due to a phase out of large corporation tax, income tax expense decreased from $0.4 million for the three-month period ended April 30, 2006 to $0.04
million for the 13-week period ended May 6, 2007. Net earnings for the three month period ended April 30, 2006 and the 13-week period ended May 6, 2007, constitute income of our partners and are therefore subject to income tax in
their hands. Income taxes recorded in such periods represent the large corporations tax and nominal income taxes of our subsidiary companies.

Net Earnings

Net earnings increased $1.3 million, from $8.9 million for the three-month period ended April 30, 2006,
to $10.2 million for the 13-week period ended May 6, 2007.



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Liquidity and Capital Resources

Cash Flows

Our cash position decreased by $7.0 million from $54.7 million as at
April 30, 2006 to $47.7 million as at May 6, 2007. The cash flows provided by or used in operating activities, investing activities and financing activities during the 13-week period ended May 6, 2007 and the three-month period ended
April 30, 2006 are discussed below.

Operating Activities

Cash flows provided by operating activities during the 13-week period ended May 6, 2007 were $12.3 million, compared with cash flows provided by
operating activities of $37.6 million for the three-month period ended April 30, 2006. During the 13-week period ended May 6, 2007, operating cash-flow was driven mainly by earnings growth offset by a reduction of our payable and accrued
expenses. During the three-month period ended April 30, 2006, operating cash flow was affected by earnings, a decrease in merchandise inventory and an increase in payable and accrued expenses.

Investing Activities

Cash flows used
in investing activities during the 13-week period ended May 6, 2007 were $10.6 million, compared with $8.8 million for the three-month period ended April 30, 2006. Investing activities for the 13-week period ended May 6, 2007 and for
the three-month period ended April 30, 2006 were mainly impacted by the acquisition of property and equipment related to new stores opened, including the expansion and relocation of existing stores, and to improve information systems and
distribution capacity in the greater Montreal area. On an ongoing basis, we expect the primary drivers of cash flows used in investing activities to be capital expenditures associated with opening new stores, information system and distribution
infrastructure additions, and the move of our head office to a new leased facility.

Financing Activities

Cash flows used in financing activities during the 13-week period ended May 6, 2007 were $1.7 million compared with $5.0 million for the three-month
period ended April 30, 2006. The cash used in financing activities during both the 13-week period ended May 6, 2007 and the three-month period ended April 30, 2006 were a result of the repayment of long-term debt and capital
distributions.

Debt and Commitments

We are and will continue to be significantly leveraged. Our principal sources of liquidity have been cash flow generated from operations and borrowings under our senior secured credit facility. Our principal cash
requirements have been for working capital, capital expenditures and debt service. In connection with the Acquisition, we entered into the senior secured credit facility, pursuant to which we incurred $120.0 million of term loan A borrowings and
U.S.$201.3 million of term loan B borrowings ($240.0 million based on the exchange rate on the closing date of the Acquisition), and the senior subordinated bridge loan facility, pursuant to which we borrowed an aggregate of $240.0 million.

On August 12, 2005, we issued U.S.$200.0 million senior subordinated notes bearing interest at 8.875% per annum payable semi
annually and maturing in August 2012. We used the proceeds from the sale of these senior subordinated notes, together with additional term loan B borrowings of U.S.$45.0 million (approximately $49.8 million based on the exchange rate on May 6,
2007) that we incurred pursuant to an amendment to our senior secured credit facility to, (i) repay the outstanding borrowings under the senior subordinated bridge loan facility, (ii) make a cash distribution to our parent and
(iii) pay related fees and expenses. At that time, the outstanding borrowings under the senior subordinated bridge loan including the accrued interest were $240.5 million bearing interest at Canadian Bankers Acceptance rate plus
8.25% per annum and would have otherwise matured in May 2006.

As at May 6, 2007, we and our subsidiaries had approximately
$354.9 million of senior secured debt outstanding, consisting of debt outstanding under our senior credit facility, and U.S.$200.0 million ($221.5 million based on exchange rate on May 6, 2007) of senior subordinated debt outstanding,
consisting of the 8.875% senior subordinated notes.



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Our and our subsidiaries ability to make scheduled payments of principal, or to pay the interest or
additional interest, if any, on, or to refinance our indebtedness, or to fund planned capital expenditures will depend on our future performance, which to a certain extent, is subject to general economic, financial, competitive, legislative,
regulatory, or other factors that are beyond our control. Based upon the current level of our operations, we believe that cash flow from operations, together with borrowings available under our senior secured credit facility, will be adequate to
meet our future liquidity needs. Our assumptions with respect to future liquidity needs may not be correct and funds available to us from the sources described above may not be sufficient to enable us to service our indebtedness, including the
notes, or cover any shortfall in funding for any unanticipated expenses.

Senior Secured Credit Facility. Our senior secured credit
facility consists of a (i) $88.0 million term loan A facility maturing in May 2010, denominated in Canadian dollars; (ii) U.S.$241.0 million ($266.9 million based on the exchange rate on May 6, 2007) term loan B facility maturing in
November 2011, denominated in U.S. dollars; and (iii) $75.0 million revolving credit facility, denominated in Canadian dollars, which includes a $25.0 million letter of credit subfacility and a $10.0 million swingline loan subfacility. In
addition, we may, under certain circumstances and subject to receipt of additional commitments from existing lenders or other eligible institutions, request additional term loan tranches or increases to the revolving loan commitments by an aggregate
amount of up to $150.0 million (or the U.S. dollar equivalent thereof).

The interest rates per annum applicable to the loans under our
senior secured credit facility, other than swingline loans, equal an applicable margin percentage plus, at our option, (1) in the case of U.S. dollar denominated loans, (a) a U.S. base rate equal to the greater of (i) the rate of
interest per annum equal to the rate which Royal Bank of Canada establishes at its main office in Toronto from time to time as the reference rate of interest for U.S. dollar loans made in Canada and (ii) the federal funds effective rate
(converted to a rate based on a 365 or 366 day period, as the case may be) plus 1.0% per annum or (b) the rate per annum equal to the rate determined by Royal Bank of Canada to be the offered rate that appears on the page of the Telerate
screen 3750 that displays an average British Bankers Association Interest Settlement Rate for deposits in U.S. dollars for an interest period chosen by us of one, two, three, or six months (or, if available to all applicable lenders, nine or twelve
month periods) and (2) in the case of Canadian dollar denominated loans, a Canadian prime rate equal to the greater of (i) the rate of interest per annum equal to the rate which Royal Bank of Canada establishes at its main office in
Toronto from time to time as the reference rate for Canadian dollar loans made in Canada and (ii) the rate per annum determined as being the arithmetic average of the rates quoted for bankers acceptance for the appropriate interest period
as listed on the applicable Reuters Screen CDOR (Certificate of Deposit Offered Rate) page (plus 0.10% for certain lenders) plus 1.0% per annum.

The applicable margin percentage for Canadian dollar denominated loans is subject to adjustment based upon the level of the total lease-adjusted leverage ratio. Initially, the applicable margins were 1.25% for
Canadian prime rate loans and 2.25% for bankers acceptances. During the three months ended April 30, 2006, the total lease-adjusted leverage ratio level decreased the applicable margin percentage for Canadian dollar denominated loans by
0.25% to 1.00% for Canadian prime rate loans and 2.00% for bankers acceptances, effective May 25, 2006. On the last day of each calendar quarter, we also pay a commitment fee (calculated in arrears) to each revolving credit lender in
respect of any unused commitments under the revolving credit facility, subject to adjustment based upon the level of our total lease-adjusted leverage ratio. Previously, the applicable margin percentage was 2.25% for adjusted LIBOR rate loans and
1.25% for U.S. base rate loans. However, on May 25, 2006, the term B loan was amended. As a result, the margin percentage of 2.25% for adjusted LIBOR rate loans and 1.25% for U.S. base rate loans was decreased by 0.25%. The lease-adjusted
leverage ratio of less than 4.75:1 was reached at February 4, 2007, thus a further 0.25% reduction took effect May 8, 2007.

Our
senior secured credit facility contains a number of restrictive covenants that, subject to significant exceptions, limit our ability and the ability of our restricted subsidiaries, to, among other things: make investments and loans; make capital
expenditures; incur, assume, or permit to exist additional



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indebtedness, guarantees, or liens; engage in mergers, acquisitions, asset sales or sale-leaseback transactions; declare dividends, make payments on, or
redeem or repurchase equity interests; alter the nature of the business we conduct; engage in certain transactions with affiliates; enter into agreements limiting subsidiary distributions; and prepay, redeem, or repurchase certain indebtedness
including the notes.

Subject to exceptions, our senior secured credit facility requires mandatory prepayments or offer to prepay (with the
failure to do so constituting an event of default) of the loans in the event of certain asset sales or other asset dispositions, issuances of equity securities or debt securities, or if we have annual consolidated excess cash flow. Our senior
secured credit facility is guaranteed by all of our existing and future subsidiaries (other than unrestricted subsidiaries as defined in the senior secured credit facility), and is secured by a first priority security interest in substantially all
of our existing and future assets, and a first priority pledge of our capital stock and the capital stock of those subsidiaries, subject to certain exceptions agreed upon with our lenders and local law requirements.

8.875% Senior Subordinated Notes Due 2012. The 8.875% senior subordinated notes were issued by Dollarama Group L.P. and Dollarama Corporation.
Interest on the senior subordinated notes accrues at 8.875% per year and is payable on the senior subordinated notes semi-annually on February 15 and August 15 of each year, beginning February 15, 2006.

Beginning August 15, 2009, the senior subordinated notes may be redeemed, in whole or in part, initially at 104.438% of their principal amount, plus
accrued and unpaid interest, declining to 100% of their principal amount, plus accrued and unpaid interest, at any time on or after August 15, 2011. Prior to August 15, 2009, the senior subordinated notes may be redeemed, in whole or in
part, at a redemption price equal to 100% of the principal amount, plus accrued and unpaid interest and a make-whole premium. In addition, prior to August 15, 2008, we may redeem up to 35% of the aggregate principal amount of the senior
subordinated notes at a price equal to 108.875% of the principal amount thereof, plus accrued and unpaid interest, if any, to the redemption date, using proceeds from the sales of certain kinds of capital stock. Following a change of control, we
will be required to offer to purchase all of the senior subordinated notes at a purchase price of 101% of their principal amount, plus accrued and unpaid interest, if any, to the date of purchase.

The indenture governing the senior subordinated notes contains certain restrictions on us, including restrictions on our ability to incur indebtedness,
pay dividends, make investments, grant liens, sell assets and engage in certain other activities.

The senior subordinated notes constitute
general unsecured obligations and are subordinated in right of payment to all existing or future senior indebtedness. The senior subordinated notes are currently guaranteed by all of our subsidiaries.

Capital Expenditures

Capital expenditures for
the 13-week period ended May 6, 2007 were $10.6 million, offset by tenant allowances of $1.2 million as compared with $8.9 million, offset by tenant allowances of $0.5 million for the three-month period ended April 30, 2006. The increase
in capital spending is the result of the opening of new stores and store expansions, renovations and relocation. During the 13-week period ended May 6, 2007, $2.5 million was spent on projects to improve our information systems. We expect to
make additional expenditures over the next year to improve our information technology systems and to move our head office and warehouse to a new and leased facility.

We plan to open approximately 50 new stores in fiscal year 2008. In fiscal year ended February 4, 2007, the average cost to open a new store was approximately $0.5 million, including $0.3 million for capital
expenditures and $0.2 million for inventory.

Off-Balance Sheet Obligations

Other than operating lease obligations and letters of credit, we have no off-balance sheet obligations.



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Recent Accounting Pronouncements

In July 2006, the CICA released Section 1506, Accounting Changes which replaces the former Section 1506 and applies to fiscal years beginning on or after January 1, 2007. The new Section
allows for voluntary changes of accounting policy only if they result in the financial statements providing reliable and more relevant information. The Section also requires that changes in accounting policies be applied retrospectively unless doing
so is impracticable and provides additional disclosures. The adoption of this pronouncement would impact our financial statement to the extent that a change in an accounting policy would be considered beginning in the quarter ended May 6, 2007.
There was no impact in the 13-week period ended May 6, 2007.

During the year, the Financial Accounting Standards Board
(FASB) issued FIN 48, Accounting for Uncertainty in Income Taxes. This standard prescribes a recognition and measurement model for tax positions taken or expected to be taken in a tax return, and provides guidance on the
recognition, reclassification, interest and penalties, accounting in interim periods, disclosure and transition. The Partnership has applied this standard effective February 5, 2007. There was no impact in the 13-week period ended May 6,
2007.

During the year, the FASB issued SFAS No. 157, Fair Value Measurements. This standard establishes a framework for
measuring fair value in GAAP and expands disclosures about fair value measurements. The Partnership must apply this standard at the latest on February 3, 2008. The Partnership will evaluate the effect of this standard on its consolidated
financial statements.



|ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|------- | ----------------------------------------------------------

Foreign Exchange Risk

While principally all of our sales have been in Canadian dollars, we have been steadily
increasing our purchases of merchandise from low-cost foreign suppliers, including suppliers in China, Denmark, France, Hong Kong, India, Indonesia, Italy, Malaysia, Panama, the Philippines, Taiwan, Turkey, and the United States. For the fiscal year
ended February 4, 2007, this direct sourcing from foreign suppliers accounted for in excess of 50% of our purchases. Accordingly, our results of operations are impacted by the fluctuation of foreign currencies against the Canadian dollar. In
particular, we purchase a majority of our imported merchandise from suppliers in China using U.S. dollars. Therefore, our cost of sales is impacted by the fluctuation of the Chinese renminbi against the U.S. dollar and the fluctuation of the U.S.
dollar against the Canadian dollar.

We use foreign exchange forward contracts to manage risks from fluctuations in the U.S. dollar
relative to the Canadian dollar. All forward contracts are used only for risk management purposes and are designated as hedges of specific anticipated purchases of merchandise. Upon redesignation or amendment of a foreign exchange forward contract,
the ineffective portion of such contracts is recognized immediately in earnings. We estimate that in the absence of our currency risk management program, every $0.01 appreciation in the Canadian dollar relative to U.S. dollar exchange rate results
in approximately $1.0 million annual increase in operating earnings. The seasonality of our purchases will affect the quarterly impact of this variation. We periodically examine the derivative financial instruments we use to hedge exposure to
foreign currency fluctuation to ensure that these instruments are highly effective at reducing or modifying foreign exchange risk associated with the hedged item.

In addition, a majority of our debt is in U.S. dollars. Therefore, a downward fluctuation in the exchange rate of the Canadian dollar versus the U.S. dollar would reduce our funds available to service our U.S.
dollar-denominated debt. As required by the terms of our senior secured credit facility, we have entered into two swap agreements consisting of a foreign currency swap and an interest rate swap that expire on January 31, 2011 to minimize our
exposure to exchange rate and interest rate fluctuations in respect of our LIBOR-based U.S. dollar-denominated term loans. We record the fair value of the swap agreements as a reduction of foreign exchange loss on long-term debt and change in
fair value of derivative financial instruments  in our consolidated statement of operations and in derivative financial instruments on the balance sheet.



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On August 12, 2005, we entered into two additional swap agreements consisting of foreign currency
swaps to minimize our exposure to exchange rate fluctuations in respect of our senior subordinated notes. These swap agreements qualify for hedge accounting. The fair value of the swap agreements is deferred in a separate component in our
consolidated statement of partners capital and other comprehensive income until the underlying hedged transactions are reporting in our consolidated statement of earnings.

Interest Rate Risk

We use
variable-rate debt to finance certain of our operations and capital expenditures. These obligations expose us to variability in interest payments due to changes in interest rates. We have approximately $354.9 million in term loans outstanding under
our senior secured credit facility based on the exchange rate on May 6, 2007, bearing interest at variable rates. Each quarter point change in interest rates would result in a $0.9 million change in interest expense on such term loans. We also
have a revolving loan facility which provides for borrowings of up to $75.0 million which bears interest at variable rates. Assuming the entire revolver is drawn, each quarter point change in interest rates would result in a $0.2 million change in
interest expense on our new revolving loan facility. We entered into a contract that matured on January 31, 2007 that eliminated our exposure to interest due on the notional amount of $120 million in excess of the Canadian Bankers
Acceptance rate cap of 4.5%.



|ITEM 4. | CONTROLS AND PROCEDURES
|------- | -----------------------

An evaluation was carried out under the
supervision and with the participation of our management, including our Chief Executive Officer (CEO) and Chief Financial Officer (CFO), of the effectiveness of our disclosure controls and procedures (as defined in Rules
13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the Exchange Act)) as of the end of the quarter covered by this report. Based upon that evaluation, our CEO and CFO have concluded that our disclosure controls and
procedures are effective. We continued to invest in improving our internal controls over financial reporting during the 13-week period ended May 6, 2007.

PART II  OTHER INFORMATION



|ITEM 1. | LEGAL PROCEEDINGS
|------- | -----------------

Outstanding legal proceedings against us include
two actions which have been instituted against us for alleged trade-mark infringement pertaining to the sale of certain products. In one case (Just Born Inc. v. Dollarama L.P., Dollarama Group L.P., Dollarama Holdings L.P. and Dollarama Group
Holdings L.P.) filed on March 12, 2007 in Federal Court of Canada, an unspecified amount, including $100,000 in punitive damages, is being claimed. In the other, Framecraft Ltd has asked that Dollarama L.P. cease selling Framecraft
products. We have denied the claims in these two actions, and believe that they are without merit. We further note that two other actions have been instituted against us for alleged personal injuries sustained by customers in our stores. In the
first case (Pellegrino v. Dollar A.M.A. Inc. (operating as Dollarama) filed on June 17, 2004 in the Ontario Superior Court of Justice, the plaintiffs are alleging damages of $4.4 million and in the second case (Guiseppa Calvo v. S.
Rossy Inc.) filed on May 8, 2006 in the Ontario Superior Court of Justice, the plaintiffs are alleging damages of $1.0 million. We believe that our insurance policies will cover any potential amount to be paid for these claims, other than
punitive damages (in the Pellegrino case, plaintiffs have amended their claim to seek a further $2.0 million dollars in punitive damages). While we intend to vigorously defend the claims asserted against us, we cannot predict their outcome.



|ITEM 1A. | RISK FACTORS
|-------- | ------------

There have been no material changes to the risk
factors described in Item 1A. Risk Factors in the Companys Annual Report on Form 10-K, filed with the SEC on May 2, 2007.



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|ITEM 6. | EXHIBITS
|------- | --------



|               |  |                                                                                           
|-------------- |  | ------------------------------------------------------------------------------------------
|Exhibit Number |  | Description                                                                               
|31.1           |  | Rule 13a-14(a)/15d-14(a) Certification of the Chief Executive Officer, furnished herewith.
|               | 
|31.2           |  | Rule 13a-14(a)/15d-14(a) Certification of the Chief Financial Officer, furnished herewith.
|               | 
|32.1           |  | Section 1350 Certifications, furnished herewith.                                          

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.



|                     |  |  |  |                              |  |                     |  |                               
|-------------------- |  |  |  | ---------------------------- |  | ------------------- |  | ------------------------------
|                     |  |  |  | Dollarama Group L.P.        
|                     |  | 
|                     |  |  |  | By: Dollarama Group GP Inc.,
|                     |  |  |  | its general partner         
|                     |  |  | 
|Dated: June 20, 2007 |  |  |  | By:                          |  | /s/ LARRY ROSSY    
|                     |  |  |  |                              |  |                     |  | Name: Larry Rossy             
|                     |  |  |  |                              |  |                     |  | Title: Chief Executive Officer
|                     |  |  | 
|Dated: June 20, 2007 |  |  |  | By:                          |  | /s/ ROBERT COALLIER
|                     |  |  |  |                              |  |                     |  | Name: Robert Coallier         
|                     |  |  |  |                              |  |                     |  | Title: Chief Financial Officer



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