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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 August 5, 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)



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Dollarama Group L.P.

(Exact name of registrant as specified in its charter)



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|                                               |  |                                  
|---------------------------------------------- |  | ---------------------------------
|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)



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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  x    No ̈

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                                                     |  | 3   
|                              |  |                                                                                      
|Item 2.                       |  | Managements Discussion and Analysis of Financial Condition and Results of Operations |  | 12  
|                              |  |                                                                                      
|Item 3.                       |  | Quantitative and Qualitative Disclosures about Market Risk                            |  | 24  
|                              |  |                                                                                      
|Item 4.                       |  | Controls and Procedures                                                               |  | 25  
|                              | 
|PART II. OTHER INFORMATION    |  |                                                                                      
|                              |  |                                                                                      
|Item 1.                       |  | Legal Proceedings                                                                     |  | 25  
|                              |  |                                                                                      
|Item 1A.                      |  | Risk Factors                                                                          |  | 25  
|                              |  |                                                                                      
|Item 6.                       |  | Exhibits                                                                              |  | 30  
|                              |  |                                                                                      
|                              |  | Signatures                                                                            |  | 31  



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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 atAugust 5, 2007$ |   |  | As at February 4, 2007 $
|                                              |  | (unaudited)          |   |  |                         
|Assets                                        |  |                      |   |  |                         
|                                              |  |                     
|Current assets                                |  |                      |   |  |                         
|Cash and cash equivalents                     |  | 12,626               |   |  | 47,695                  
|Accounts receivable                           |  | 3,328                |   |  | 5,760                   
|Income taxes recoverable                      |  | 1,735                |   |  | 1,054                   
|Deposits and prepaid expenses                 |  | 12,056               |   |  | 8,598                   
|Derivative financial instruments (note 5)     |  |                     |   |  | 7,224                   
|Merchandise inventories                       |  | 194,394              |   |  | 166,017                 
|                                              |  |                      |   |  |                         
|                                              |  | 224,139              |   |  | 236,348                 
|                                              |  |                     
|Property and equipment                        |  | 96,493               |   |  | 84,665                  
|                                              |  |                     
|Goodwill                                      |  | 727,782              |   |  | 727,782                 
|                                              |  |                     
|Other intangible assets                       |  | 118,877              |   |  | 120,379                 
|                                              |  |                      |   |  |                         
|                                              |  | 1,167,291            |   |  | 1,169,174               
|                                              |  |                      |   |  |                         
|Liabilities                                   |  |                      |   |  |                         
|                                              |  |                     
|Current liabilities                           |  |                      |   |  |                         
|Bank indebtedness (note 3)                    |  | 10,000               |   |  |                        
|Accounts payable                              |  | 8,693                |   |  | 15,780                  
|Accrued expenses and other                    |  | 33,382               |   |  | 32,726                  
|Derivative financial instruments (note 5)     |  | 76,738               |   |  | 12,409                  
|Current portion of long-term debt (note 2)    |  | 24,448               |   |  | 13,496                  
|                                              |  |                      |   |  |                         
|                                              |  | 153,261              |   |  | 74,411                  
|Long-term debt(note 2)                        |  | 511,801              |   |  | 578,066                 
|                                              |  |                     
|Other liabilities                             |  | 26,316               |   |  | 25,413                  
|                                              |  |                      |   |  |                         
|                                              |  | 691,378              |   |  | 677,890                 
|                                              |  |                      |   |  |                         
|                                              |  |                     
|Commitments and contingencies(note 4)         |  |                      |   |  |                         
|                                              |  |                     
|Partners Capital                             |  |                      |   |  |                         
|                                              |  |                     
|General partner                               |  | 374                  |   |  | 374                     
|                                              |  |                     
|Limited partner                               |  | 359,800              |   |  | 389,313                 
|                                              |  |                     
|Contributed surplus                           |  | 2,205                |   |  | 1,337                   
|                                              |  |                     
|Retained earnings                             |  | 125,913              |   |  | 93,478                  
|                                              |  |                     
|Accumulated other comprehensive income (loss) |  | (12,379              | ) |  | 6,782                   
|                                              |  |                      |   |  |                         
|                                              |  | 475,913              |   |  | 491,284                 
|                                              |  |                      |   |  |                         
|                                              |  | 1,167,291            |   |  | 1,169,174               
|                                              |  |                      |   |  |                         

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-week period ended August 5, 2007 $ |  | For the three-month period ended July 31, 2006 $ |   |  | For the 26-week period ended August 5, 2007 $ |  | For the six-month period ended July 31, 2006 $
|Sales                                                                               |  | 233,205                                       |  | 208,142                                          |   |  | 449,080                                       |  | 393,083                                       
|                                                                                    |  |                                               |  |                                                  |   |  |                                               |  |                                               
|Cost of sales and expenses                                                          |  |                                               |  |                                                  |   |  |                                               |  |                                               
|Cost of sales                                                                       |  | 152,117                                       |  | 138,594                                          |   |  | 297,413                                       |  | 265,701                                       
|General, administrative and store operating expenses                                |  | 41,526                                        |  | 36,791                                           |   |  | 84,843                                        |  | 69,977                                        
|Amortization                                                                        |  | 4,239                                         |  | 3,024                                            |   |  | 8,338                                         |  | 5,834                                         
|                                                                                    |  |                                               |  |                                                  |   |  |                                               |  |                                               
|                                                                                    |  | 197,882                                       |  | 178,409                                          |   |  | 390,594                                       |  | 341,512                                       
|                                                                                    |  |                                               |  |                                                  |   |  |                                               |  |                                               
|Operating income                                                                    |  | 35,323                                        |  | 29,733                                           |   |  | 58,486                                        |  | 51,571                                        
|Amortization of deferred financing costs                                            |  | 1,078                                         |  | 1,015                                            |   |  | 2,146                                         |  | 2,035                                         
|Interest expense                                                                    |  | 10,836                                        |  | 12,018                                           |   |  | 21,863                                        |  | 23,336                                        
|Foreign exchange loss (gain) on derivative financial instruments and long-term debt |  | 976                                           |  | (167                                             | ) |  | 1,842                                         |  | 14                                            
|                                                                                    |  |                                               |  |                                                  |   |  |                                               |  |                                               
|Earnings before income taxes                                                        |  | 22,433                                        |  | 16,867                                           |   |  | 32,635                                        |  | 26,186                                        
|Provision for current income taxes                                                  |  | 158                                           |  | 421                                              |   |  | 200                                           |  | 843                                           
|                                                                                    |  |                                               |  |                                                  |   |  |                                               |  |                                               
|Net earnings for the period                                                         |  | 22,275                                        |  | 16,446                                           |   |  | 32,435                                        |  | 25,343                                        
|                                                                                    |  |                                               |  |                                                  |   |  |                                               |  |                                               



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Dollarama Group L.P.

Interim Consolidated Statement of Partners Capital

(Unaudited)

(expressed in thousands of Canadian dollars)



|                                                                                         |  |                         |  |                         |   |  |                     |  |                   |  |                                             |   |  |         |  
|---------------------------------------------------------------------------------------- |  | ----------------------- |  | ----------------------- | - |  | ------------------- |  | ----------------- |  | ------------------------------------------- | - |  | ------- | -
|                                                                                         |  | Generalpartnercapital $ |  | Limitedpartnercapital $ |   |  | Contributedsurplus$ |  | Retainedearnings$ |  | Accumulatedothercomprehensiveincome (loss)$ |   |  | Total $ |  
|Balance  January 31, 2006                                                               |  | 374                     |  | 394,876                 |   |  | 800                 |  | 11,800            |  | (6,030                                      | ) |  | 401,820 |  
|                                                                                         |  |                         |  |                         |   |  |                     |  |                   |  |                                             |   |  |         |  
|Other comprehensive income                                                               |  |                         |  |                         |   |  |                     |  |                   |  |                                             |   |  |         |  
|Net earnings for the period                                                              |  |                        |  |                        |   |  |                    |  | 25,343            |  |                                            |   |  | 25,343  |  
|Unrealized loss on derivative financial instruments, net of reclassification adjustments |  |                        |  |                        |   |  |                    |  |                  |  | (268                                        | ) |  | (268    | )
|                                                                                         |  |                         |  |                         |   |  |                     |  |                   |  |                                             |   |  |         |  
|Total comprehensive income (loss)                                                        |  |                        |  |                        |   |  |                    |  | 25,343            |  | (6,298                                      | ) |  | 25,075  |  
|                                                                                         |  |                         |  |                         |   |  |                     |  |                   |  |                                             |   |  |         |  
|Stock-based compensation (note 6)                                                        |  |                        |  |                        |   |  | 308                 |  |                  |  |                                            |   |  | 308     |  
|Capital distributions                                                                    |  |                        |  | (2,881                  | ) |  |                    |  |                  |  |                                            |   |  | (2,881  | )
|                                                                                         |  |                         |  |                         |   |  |                     |  |                   |  |                                             |   |  |         |  
|Balance  July 31, 2006                                                                  |  | 374                     |  | 391,995                 |   |  | 1,108               |  | 37,143            |  | (6,298                                      | ) |  | 424,322 |  
|                                                                                         |  |                         |  |                         |   |  |                     |  |                   |  |                                             |   |  |         |  
|Balance  February 4, 2007                                                               |  | 374                     |  | 389,313                 |   |  | 1,337               |  | 93,478            |  | 6,782                                       |   |  | 491,284 |  
|                                                                                         |  |                         |  |                         |   |  |                     |  |                   |  |                                             |   |  |         |  
|Other comprehensive income                                                               |  |                         |  |                         |   |  |                     |  |                   |  |                                             |   |  |         |  
|Net earnings for the period                                                              |  |                        |  |                        |   |  |                    |  | 32,435            |  |                                            |   |  | 32,435  |  
|Unrealized loss on derivative financial instruments, net of reclassification adjustments |  |                        |  |                        |   |  |                    |  |                  |  | (19,161                                     | ) |  | (19,161 | )
|                                                                                         |  |                         |  |                         |   |  |                     |  |                   |  |                                             |   |  |         |  
|Total comprehensive income (loss)                                                        |  |                        |  |                        |   |  |                    |  | 32,435            |  | (19,161                                     | ) |  | 13,274  |  
|                                                                                         |  |                         |  |                         |   |  |                     |  |                   |  |                                             |   |  |         |  
|Stock-based compensation (note 6)                                                        |  |                        |  |                        |   |  | 868                 |  |                  |  |                                            |   |  | 868     |  
|Capital distributions                                                                    |  |                        |  | (29,513                 | ) |  |                    |  |                  |  |                                            |   |  | (29,513 | )
|                                                                                         |  |                         |  |                         |   |  |                     |  |                   |  |                                             |   |  |         |  
|Balance  August 5, 2007                                                                 |  | 374                     |  | 359,800                 |   |  | 2,205               |  | 125,913           |  | (12,379                                     | ) |  | 475,913 |  
|                                                                                         |  |                         |  |                         |   |  |                     |  |                   |  |                                             |   |  |         |  

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 Cash Flows

(Unaudited)

(expressed in thousands of Canadian dollars)



|                                                         |  |                                               |   |  |                                                  |   |  |                                               |   |  |                                                |  
|-------------------------------------------------------- |  | --------------------------------------------- | - |  | ------------------------------------------------ | - |  | --------------------------------------------- | - |  | ---------------------------------------------- | -
|                                                         |  | For the 13-week period ended August 5, 2007 $ |   |  | For the three-month period ended July 31, 2006 $ |   |  | For the 26-week period ended August 5, 2007 $ |   |  | For the six-month period ended July 31, 2006 $ |  
|Operating activities                                     |  |                                               |   |  |                                                  |   |  |                                               |   |  |                                                |  
|Net earnings for the period                              |  | 22,275                                        |   |  | 16,446                                           |   |  | 32,435                                        |   |  | 25,343                                         |  
|Adjustments for                                          |  |                                               |   |  |                                                  |   |  |                                               |   |  |                                                |  
|Amortization of property and equipment                   |  | 4,101                                         |   |  | 2,747                                            |   |  | 8,057                                         |   |  | 5,255                                          |  
|Amortization of intangible assets                        |  | 918                                           |   |  | 1,085                                            |   |  | 1,848                                         |   |  | 2,200                                          |  
|Change in fair value of derivative financial instruments |  | 17,608                                        |   |  | (6,674                                           | ) |  | 52,392                                        |   |  | 4,027                                          |  
|Amortization of deferred financing costs                 |  | 1,078                                         |   |  | 1,015                                            |   |  | 2,146                                         |   |  | 2,035                                          |  
|Foreign exchange loss (gain) on long-term debt           |  | (22,893                                       | ) |  | 6,031                                            |   |  | (56,134                                       | ) |  | (3,294                                         | )
|Amortization of unfavourable lease rights                |  | (780                                          | ) |  | (808                                             | ) |  | (1,567                                        | ) |  | (1,621                                         | )
|Deferred lease inducements                               |  | 425                                           |   |  | 945                                              |   |  | 1,134                                         |   |  | 1,557                                          |  
|Deferred leasing costs                                   |  | (420                                          | ) |  | (304                                             | ) |  | (420                                          | ) |  | (384                                           | )
|Deferred tenant allowances                               |  | 527                                           |   |  | 1,638                                            |   |  | 1,767                                         |   |  | 2,180                                          |  
|Amortization of deferred tenant allowances               |  | (227                                          | ) |  | (125                                             | ) |  | (431                                          | ) |  | (217                                           | )
|Stock-based compensation                                 |  | 125                                           |   |  | 154                                              |   |  | 868                                           |   |  | 308                                            |  
|Amortization of deferred leasing costs                   |  | 37                                            |   |  | 32                                               |   |  | 74                                            |   |  | 64                                             |  
|Loss on disposal of property and equipment               |  | 11                                            |   |  |                                                 |   |  | 24                                            |   |  | 20                                             |  
|                                                         |  |                                               |   |  |                                                  |   |  |                                               |   |  |                                                |  
|                                                         |  | 22,785                                        |   |  | 22,182                                           |   |  | 42,193                                        |   |  | 37,473                                         |  
|Changes in non-cash working capital components           |  | (29,371                                       | ) |  | (2,349                                           | ) |  | (36,515                                       | ) |  | 19,999                                         |  
|                                                         |  |                                               |   |  |                                                  |   |  |                                               |   |  |                                                |  
|                                                         |  | (6,586                                        | ) |  | 19,833                                           |   |  | 5,678                                         |   |  | 57,472                                         |  
|                                                         |  |                                               |   |  |                                                  |   |  |                                               |   |  |                                                |  
|Investing activities                                     |  |                                               |   |  |                                                  |   |  |                                               |   |  |                                                |  
|Purchase of property and equipment                       |  | (9,383                                        | ) |  | (11,091                                          | ) |  | (20,002                                       | ) |  | (19,991                                        | )
|Proceeds on disposal of property and equipment           |  | 55                                            |   |  | 28                                               |   |  | 93                                            |   |  | 103                                            |  
|                                                         |  |                                               |   |  |                                                  |   |  |                                               |   |  |                                                |  
|                                                         |  | (9,328                                        | ) |  | (11,063                                          | ) |  | (19,909                                       | ) |  | (19,888                                        | )
|                                                         |  |                                               |   |  |                                                  |   |  |                                               |   |  |                                                |  
|Financing activities                                     |  |                                               |   |  |                                                  |   |  |                                               |   |  |                                                |  
|Increase in bank indebtedness                            |  | 10,000                                        |   |  |                                                 |   |  | 10,000                                        |   |  |                                               |  
|Repayment of long-term debt                              |  | (650                                          | ) |  | (3,688                                           | ) |  | (1,325                                        | ) |  | (7,377                                         | )
|Capital distributions                                    |  | (28,481                                       | ) |  | (1,605                                           | ) |  | (29,513                                       | ) |  | (2,881                                         | )
|                                                         |  |                                               |   |  |                                                  |   |  |                                               |   |  |                                                |  
|                                                         |  | (19,131                                       | ) |  | (5,293                                           | ) |  | (20,838                                       | ) |  | (10,258                                        | )
|                                                         |  |                                               |   |  |                                                  |   |  |                                               |   |  |                                                |  
|Increase (decrease) in cash and cash equivalents         |  | (35,045                                       | ) |  | 3,477                                            |   |  | (35,069                                       | ) |  | 27,326                                         |  
|Cash and cash equivalents  Beginning of period          |  | 47,671                                        |   |  | 54,732                                           |   |  | 47,695                                        |   |  | 30,883                                         |  
|                                                         |  |                                               |   |  |                                                  |   |  |                                               |   |  |                                                |  
|Cash and cash equivalents  End of period                |  | 12,626                                        |   |  | 58,209                                           |   |  | 12,626                                        |   |  | 58,209                                         |  
|                                                         |  |                                               |   |  |                                                  |   |  |                                               |   |  |                                                |  

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)

August 5, 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 Canadian generally accepted accounting principles (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 a 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)

August 5, 2007

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



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

Long-term debt consists of the
following:



|                                                                                                                                                                                                                                                                                                                                                                                                                                                          |  |                       |  |                       
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | --------------------- |  | ----------------------
|                                                                                                                                                                                                                                                                                                                                                                                                                                                          |  | As atAugust 5, 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                                                                                                                                                                                                                                                                                                         |  | 210,900               |  | 237,100               
|Term bank loan (US$240,411,466; 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                          |  | 253,514               |  | 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                
|                                                                                                                                                                                                                                                                                                                                                                                                                                                          |  |                       |  |                       
|                                                                                                                                                                                                                                                                                                                                                                                                                                                          |  | 552,414               |  | 611,550               
|Less: Current portion                                                                                                                                                                                                                                                                                                                                                                                                                                     |  | 24,448                |  | 13,496                
|                                                                                                                                                                                                                                                                                                                                                                                                                                                          |  |                       |  |                       
|                                                                                                                                                                                                                                                                                                                                                                                                                                                          |  | 527,966               |  | 598,054               
|Less: Deferred financing costs                                                                                                                                                                                                                                                                                                                                                                                                                            |  | 16,165                |  | 19,988                
|                                                                                                                                                                                                                                                                                                                                                                                                                                                          |  |                       |  |                       
|                                                                                                                                                                                                                                                                                                                                                                                                                                                          |  | 511,801               |  | 578,066               
|                                                                                                                                                                                                                                                                                                                                                                                                                                                          |  |                       |  |                       



|3 | Bank indebtedness
|- | -----------------

The Partnership has available a
$75,000,000 revolving credit loan facility bearing interest at rates varying from 1.75% to 2.25% per annum above the bankers acceptance rate. As at August 5, 2007, $10,000,000 (February 4, 2007  nil) was borrowed
under this facility and is repayable at maturity on August 31, 2007.



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Dollarama Group L.P.

Notes to Interim Consolidated Financial Statements

(Unaudited)

August 5, 2007

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



|4 | Commitments and contingencies
|- | -----------------------------

As at August 5,
2007, there were contractual obligations for operating leases amounting to approximately $384,526,000. 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.

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



|           |  |        
|---------- |  | -------
|           |  | $      
|2008       |  | 53,695 
|2009       |  | 50,017 
|2010       |  | 46,878 
|2011       |  | 43,910 
|2012       |  | 39,936 
|Thereafter |  | 150,090

A legal proceeding has been instituted against the Partnership for alleged copyright infringement
pertaining to the sale of certain products. The Partnership has denied this claim and believes it is without merit. It is not possible at this time to determine the outcome of this matter and accordingly, no provision has been made in the accounts
for this claim.

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.



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##### Table of Contents

Dollarama Group L.P.

Notes to Interim Consolidated Financial Statements

(Unaudited)

August 5, 2007

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



|5 | Derivative financial instruments
|- | --------------------------------

The fair value of
derivative financial instruments is as follows:



|                                                       |  |                      |   |  |                        |   |  |                            |  |                             
|------------------------------------------------------ |  | -------------------- | - |  | ---------------------- | - |  | -------------------------- |  | ----------------------------
|                                                       |  | Fair value           |   |  |                        |   | 
|                                                       |  | As atAugust 5,2007 $ |   |  | As atFebruary 4,2007 $ |   |  | Qualifyfor hedgeaccounting |  | Natureof hedgingrelationship
|Foreign currency and interest rate swaps               |  | (38,142              | ) |  | (6,011                 | ) |  | No                         |  |                            
|Foreign exchange forward contracts                     |  | (8,481               | ) |  | 7,224                  |   |  | Yes                        |  | Cash flow hedge             
|Foreign currency swap agreements                       |  | (30,115              | ) |  | (6,398                 | ) |  | Yes                        |  | Cash flow hedge             
|                                                       |  |                      |   |  |                        |   |  |                            |  |                             
|                                                       |  | (76,738              | ) |  | (5,185                 | ) |  |                            |  |                             
|                                                       |  |                      |   |  |                        |   |  |                            |  |                             
|Derivative financial instruments  current assets      |  |                     |   |  | 7,224                  |   |  |                            |  |                             
|Derivative financial instruments  current liabilities |  | (76,738              | ) |  | (12,409                | ) |  |                            |  |                             
|                                                       |  |                      |   |  |                        |   |  |                            |  |                             
|                                                       |  | (76,738              | ) |  | (5,185                 | ) |  |                            |  |                             
|                                                       |  |                      |   |  |                        |   |  |                            |  |                             



|6 | 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 Bcommon share options |   |  | Number of Class Bpreferred 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  August 5, 2007   |  | 739,048                               |   |  | 1,478,096                                |   |  | 2,109,848  |   |  | 4,219,696   |  
|                               |  |                                       |   |  |                                          |   |  |            |   |  |             |  
|Exercisable  August 5, 2007   |  | 252,851                               |   |  |                                         |   |  | 721,625    |   |  |            |  
|                               |  |                                       |   |  |                                          |   |  |            |   |  |             |  



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Dollarama Group L.P.

Notes to Interim Consolidated Financial Statements

(Unaudited)

August 5, 2007

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



|7 | Related party transactions
|- | --------------------------

Included in expenses
are management fees of $1,624,300 for the 26-week period ended August 5, 2007 (for the 6-month period ended July 31, 2006  $1,543,000) charged by an affiliate of Bain Capital Partners VIII, LP, the private equity firm that
controls the Partnerships parent. Included in expenses are management fees of $790,000 for the 13-week period ended August 5, 2007 (for the three-month period ended July 31, 2006  $764,000) charged by an affiliate of Bain
Capital Partners VIII, LP.

Expenses charged by related parties, which mainly comprise rent, total $3,285,000 for the 26-week period ended
August 5, 2007 (for the six-month period ended July 31, 2006  $3,400,000). Expenses charged by related parties, which mainly comprise rent, total $1,634,000 for the 13-week period ended August 5, 2007 (for the three-month
period ended July 31, 2006  $1,759,000).

Included in accrued expenses and other is $862,000 as at August 5, 2007 (as
at July 31, 2006  $763,000) payable to Bain Capital Partners VIII, LP.

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



|8 | Comparative figures
|- | -------------------

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



|9 | 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.



|10 | 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 have 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 accompanying notes thereto appearing in this report along with the
consolidated financial statements for the fiscal year ended February 4, 2007 and related notes and Managements Discussion and Analysis presented in our Annual Report on Form 10-K. 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, we
changed our fiscal year end from January 31 to February 4, 2007 for fiscal year 2007 and to a floating year ending on the Sunday closest to January 31 for all subsequent fiscal years. We decided to change the year end date of our
fiscal year 2007 to February 4, 2007 even though it is not the Sunday closest to January 31 because, as is traditional with the retail calendar, every 5 to 6 years, a week is added to the retail calendar. The week ended February 4,
2007 is therefore equivalent to our 53rd week in the retail calendar, leaving the 53rd week year behind us and the rest of our fiscal year end dates to fall on the Sunday closest to January 31. Our fiscal year 2008 began February 5, 2007
and will end February 3, 2008. There is one less day of transactions included in the 13-week period ended August 5, 2007 when compared to the three-month period ended July 31, 2006. There is one additional day included in the 26-week
period ended August 5, 2007 when compared to the six-month period ended July 31, 2006.

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 August 5, 2007, we operated 486 Dollarama stores, including 381 stores located in Ontario and Québec. 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.



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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 takes 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. Before changing our fiscal calendar to a floating year end, in order to provide more meaningful results, we used to measure comparable store sales over periods containing an integral number of weeks, beginning on a
Monday and ending on a Sunday, that best approximated the analyzed fiscal period. We include sales from relocated stores and expanded stores in comparable store sales. The primary drivers of comparable store sales performance are changes in store
traffic and the average number of items purchased by customers per visit. To increase comparable store sales, we try to offer 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 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 may be able to redesign some of our direct sourced products to attempt to mitigate the impact of increasing unit costs.

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 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.



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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. During the last three fiscal years,
the negative impact of these cost increases on our product margins has been offset primarily by the favorable foreign currency fluctuations, specifically the relative strengthening of the Canadian dollar against the U.S. dollar.

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.

Economic or Industry-Wide Factors Affecting the Company

We operate in the Canadian discount
retail merchandise business, which is highly competitive with respect to price, store location, merchandise quality, assortment and presentation, in-stock consistency, and customer service. We compete with discount stores and with many other
retailers, including mass merchandise, grocery, drug, convenience, variety and other specialty stores. These other retail companies operate stores in many of the areas where we operate and many of them engage in extensive advertising and marketing
efforts. Additionally, we compete with a number of companies for prime retail site locations, as well as in attracting and retaining quality employees. We, along with other retail companies, are influenced by a number of factors including, but not
limited to: cost of goods, consumer debt levels and buying patterns, economic conditions, interest rates, customer preferences, unemployment, labor costs, inflation, currency exchange fluctuations, fuel prices, weather patterns, catastrophic events,
competitive pressures and insurance costs.

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.



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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.

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.



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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 expenses 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

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

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 period-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



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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

13-Week Period Ended August 5, 2007
Compared to Three-Month Period Ended July 31, 2006

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-WeekPeriodEndedAugust 5,2007 |  | Three-Month PeriodEndedJuly 31, 2006
|Sales                                                                               |  | 100.0%                          |  | 100.0%                              
|Cost of sales                                                                       |  | 65.2%                           |  | 66.6%                               
|General administrative and store operating expenses                                 |  | 17.8%                           |  | 17.7%                               
|Amortization                                                                        |  | 1.8%                            |  | 1.5%                                
|Amortization of deferred financing costs                                            |  | 0.5%                            |  | 0.5%                                
|Interest expense                                                                    |  | 4.6%                            |  | 5.8%                                
|Foreign exchange loss (gain) on derivative financial instruments and long-term debt |  | 0.4%                            |  | (0.1)%                              
|Taxes                                                                               |  | 0.1%                            |  | 0.2%                                
|Net earnings                                                                        |  | 9.6%                            |  | 7.9%                                

Sales

Our sales increased $25.1 million, or 12.0%, from $208.1 million for the three-month period ended July 31, 2006, to $233.2 million for the 13-week period ended August 5, 2007. This sales growth was driven
primarily by the opening of 58 new stores for the 52 week period ended August 5, 2007 which accounted for approximately $22.4 million or 89.3% of the sales increase and offset by the temporary closure of 4 stores during the same period.
Other sales growth factors include the incremental full 13-week effect of the stores opened during the three-month period ended July 31, 2006, comparable store sales growth of 0.7% for the 13-week period ended August 5, 2007 and offset by one less
day of transactions in the 13-week period ended August 5, 2007. Comparable store sales increase for the 13-week period ended August 5, 2007 was mainly due to an increase in the average transaction size. Our total store square footage increased 14.1%
from 4.05 million as at July 31, 2006 to 4.62 million as at August 5, 2007.

Cost of Sales

Cost of sales increased $13.5 million, or 9.8%, from $138.6 million for the three-month period ended July 31, 2006 to $152.1 million for the 13-week
period ended August 5, 2007. Our margin (sales less cost of sales) increased from 33.4% for the three-month period ended July 31, 2006 to 34.8% for the 13-week period ended August 5, 2007. The improvement in our margin was driven
mainly by favorable foreign exchange rates.

General, Administrative and Store Operating Expenses

General, administrative and store operating expenses increased $4.7 million, or 12.9%, to $41.5 million for the 13-week period ended August 5, 2007
from $36.8 million for the three-month period ended July 31, 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. As a percentage of sales, general, administrative and store operating expenses represented 17.8% for the 13-week period ended August 5, 2007 compared with 17.7% for the same period last year.



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Amortization

Amortization expense increased $1.2 million from $3.0 million for the three-month period ended July 31, 2006 to $4.2 million for the 13-week period ended August 5, 2007. This increase was due mainly to the
amortization of property and equipment resulting from the new store openings and the amortization of part of our upgraded information technology systems.

Amortization of Deferred Financing Costs

Amortization of deferred financing costs was $1.1 million
for the 13-week period ended August 5, 2007 and $1.0 million for the three-month period ended July 31, 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 $1.2 million from $12.0 million for the three-month period ended July 31, 2006 to $10.8 million for the 13-week period
ended August 5, 2007 due mainly to a lower level of debt.

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

Foreign exchange loss on derivative financial instruments and long-term debt increased $1.1 million from a $0.1 million gain for
the three-month period ended July 31, 2006, to a $1.0 million loss for the 13-week period ended August 5, 2007, due mainly to the difference in variation of debt and the related hedge.

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 July 31, 2006 to $0.2 million for the 13-week period ended August 5, 2007. Net earnings for the three-month period ended July 31,
2006 and the 13-week period ended August 5, 2007 constituted income of our partners and are therefore mainly 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 $5.9 million, from $16.4 million for the three-month period ended July 31, 2006, to $22.3 million for the 13-week period ended
August 5, 2007.



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26-Week Period Ended August 5, 2007 Compared to Six-Month Period Ended July 31, 2006

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



|                                                                             |  |                                 |  |                                  
|---------------------------------------------------------------------------- |  | ------------------------------- |  | ---------------------------------
|                                                                             |  | 26-WeekPeriodEndedAugust 5,2007 |  | Six-Month PeriodEndedJuly 31,2006
|Sales                                                                        |  | 100.0%                          |  | 100.0%                           
|Cost of sales                                                                |  | 66.2%                           |  | 67.6%                            
|General administrative and store operating expenses                          |  | 18.9%                           |  | 17.8%                            
|Amortization                                                                 |  | 1.9%                            |  | 1.5%                             
|Amortization of deferred financing costs                                     |  | 0.5%                            |  | 0.5%                             
|Interest expense                                                             |  | 4.9%                            |  | 5.9%                             
|Foreign exchange loss on derivative financial instruments and long-term debt |  | 0.4%                            |  | 0.0%                             
|Taxes                                                                        |  | 0.0%                            |  | 0.2%                             
|Net earnings                                                                 |  | 7.2%                            |  | 6.4%                             

Sales

Our sales increased $56.0 million, or 14.2%, from $393.1 million for the six-month period ended July 31, 2006, to $449.1 million for the 26-week period ended August 5, 2007. This sales growth was driven
primarily by the opening of 58 new stores for the 52 week period ended August 5, 2007 which accounted for approximately $39.6 million or 70.7% of the sales increase and offset by the temporary closure of 4 stores during the same period,
the incremental full 26-week effect of the stores opened during the six-month period ended July 31, 2006 which contributed approximately $16.2 million or 28.8% of the sales increase, one additional day of transactions in the 26-week period ended
August 5, 2007, and offset by a comparable store sales decrease.

Comparable store sales decreased 0.6% for the 26-week period ended August
5, 2007, driven mainly by a decrease in the number of transactions, which was partly offset by an increase in the average transaction size. We attribute this decrease in the number of transactions mainly to the start-up of our new ERP (Enterprise
Resource Planning) system. At the early stage of this implementation, we encountered some difficulties to properly replenish our stores.



Cost of Sales

Cost of sales
increased $31.7 million, or 11.9%, from $265.7 million for the six-month period ended July 31, 2006 to $297.4 million for the 26-week period ended August 5, 2007. Our margin (sales less cost of sales) increased from 32.4% for the six-month
period ended July 31, 2006 to 33.8% for the 26-week period ended August 5, 2007. The improvement in our margin was driven mainly by improved sourcing and favorable foreign exchange rates.

General, Administrative and Store Operating Expenses

General, administrative and store operating expenses increased $14.9 million, or 21.2%, to $84.8 million for the 26-week period ended August 5, 2007 from $70.0 million for the six-month period ended July 31,
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. As a percentage of sales, general, administrative and store
operating expenses represented 18.9% for the 26-week period ended August 5 2007, compared with 17.8% for the same period last year.



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Amortization

Amortization expense increased $2.5 million from $5.8 million for the six-month period ended July 31, 2006 to $8.3 million for the 26-week period ended August 5, 2007. This increase was due to the
amortization of property and equipment resulting from the new store openings and the amortization of part of our upgraded information technology systems due to the upgrade of our systems.

Amortization of Deferred Financing Costs

Amortization of deferred financing costs was $2.1 million for the 26-week period ended August 5, 2007 and $2.0 million for the six-month period ended July 31, 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 $1.4 million from $23.3 million for the six-month period ended July 31,
2006 to $21.9 million for the 26-week period ended August 5, 2007 due mainly to a lower level of debt.

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

Foreign exchange loss on derivative financial instruments and long-term debt
increased $1.8 million from zero for the six-month period ended July 31, 2006, to $1.8 million for the 26-week period ended August 5, 2007, due mainly to the difference in variation of debt and the related hedge.

Income Taxes

Due to a phase out of
large corporation tax, income tax expense decreased from $0.8 million for the six-month period ended July 31, 2006 to $0.2 million for the 26-week period ended August 5, 2007. Net earnings for the six-month period ended July 31, 2006
and the 26-week period ended August 5, 2007 constitute income of our partners and are therefore mainly 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 $7.1 million, from $25.3 million for the six-month period ended July 31, 2006, to $32.4 million for the 26-week period ended August 5, 2007.

Liquidity and Capital Resources

Cash Flows

Our cash position decreased $45.6 million from $58.2 million as at July 31, 2006 to $12.6 million as at August 5, 2007.
The cash flows provided by or used in operating activities, investing activities and financing activities during the 13-week and 26-week periods ended August 5, 2007 and the three-month and six-month periods ended July 31, 2006 are
discussed below.

Operating Activities

Cash flows used in operating activities were $6.6 million in the 13-week period ended August 5, 2007 and cash flows provided by operating activities were $5.7 million in the 26-week period ended August 5,
2007, compared to cash flows provided by operating activities of $19.8 million and $57.5 million, respectively, in the corresponding periods of fiscal 2007. The differences in the 13-week period and 26-week period ended August 5, 2007 compared
to those corresponding periods of fiscal 2007 are mainly the consequence of changes in non-cash working capital from operating activities, mainly an increase of inventory.

Investing Activities

Cash flows used
in investing activities were $9.3 million in the 13-week period ended August 5, 2007 and $19.9 million in the 26-week period ended August 5, 2007 versus $11.1 million in the three-month period ended July 31, 2006 and $19.9 million in
the



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six-month period ended July 31, 2006. These investing requirements were due primarily to the acquisition of property and equipment related to new stores
opened, the renovation, expansion and relocation of existing stores, and improvements to information systems and distribution capacity in the greater Montréal area. The pace of new store openings was slower during the 13-week period ended
August 5, 2007 compared with the corresponding period of fiscal 2007. Nine stores opened and one store closed during the 13-week period ended August 5, 2007 versus 18 stores opened and no stores closed during the 3-month period ended
July 31, 2006

Financing Activities

Cash flows used in financing activities were $19.1 million in the 13-week period ended August 5, 2007 and $20.8 million in the 26-week period ended August 5, 2007 versus $5.3 million in the three-month
period ended July 31, 2006 and $10.3 million in the six-month period ended July 31, 2006 respectively. The main reason for the increase in cash flow required was for capital distribution of U.S.$26 million for the repayment of U.S.$15.0
million in principal amount and the payment of U.S.$11.0 million in interest by Dollarama Group Holdings L.P. These payments were made in compliance with our existing loan covenants.

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 our 2004 acquisition of substantially all of the assets of S. Rossy Inc. and Dollar A.M.A. Inc. relating to the Dollarama business, 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 $47.5 million based on the exchange rate on August 5, 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 Dollarama Capital Corporation, 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 August 5, 2007, we and our subsidiaries had approximately $341.5 million of senior secured debt outstanding, consisting of debt outstanding under our senior credit facility, and U.S.$200.0 million ($210.9
million based on exchange rate on August 5, 2007) of senior subordinated debt outstanding, consisting of the 8.875% senior subordinated notes.

Our 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, 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.$240.4 million ($253.5 million based on
the exchange rate on August 5, 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



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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 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.



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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 and 26-week periods ended August 5, 2007 were $9.4 million and $20.0 million respectively versus $11.1 million and $20.0 million respectively for the corresponding periods of fiscal 2007. Capital spending is mainly the result of new
store openings, store expansions, renovations and relocations, and increasing capacity of our distribution center and improving our information systems. There was less spending during the 13-week period ended August 5, 2007 due to fewer store
openings compared to the corresponding period in fiscal 2007 and a lower investment in our information systems. There were higher capital expenditures required in the three-month period ended July 31, 2006 associated with our move to a new
distribution center in June 2006. We expect to make additional expenditures over the rest of fiscal 2008 to continue to improve our information technology systems and to move our head office and open a new warehouse.

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.

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. As such, the adoption of this new section had no impact on the Partnership as of February
5, 2007.

Recently, 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, resulting in no impact on its consolidated financial statements.



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Recently, 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 standard is effective for fiscal periods beginning after November 15, 2007. The Partnership is currently evaluating 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. 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.

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 $341.5 million in term loans outstanding under our senior secured credit facility based on the exchange rate on August 5, 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.



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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. There were no changes in
internal control over financial reporting that occurred during the last fiscal quarter that have materially affected our internal control over financial reporting.

PART II  OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

We are from time to time involved in legal proceedings of a nature considered normal to our
business. We believe that none of the litigation in which we are currently involved, individually or in the aggregate, is material to our consolidated financial condition or results of operations. Outstanding legal proceedings include one action
threatened against us for alleged trade-mark infringement pertaining to the sale of certain products by Framecraft Ltd who has asked that Dollarama L.P. cease selling Framecraft products. We have denied this claim and believe that it is without
merit. 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

As a fixed price retailer, we are particularly vulnerable to future increases in operating and
merchandise costs.

Our ability to provide quality merchandise at the $1.00 price point is subject to a number of factors that are
beyond our control, including foreign exchange rate fluctuations, increases in rent and occupancy costs, inflation and increases in labor and fuel costs, all of which may reduce our profitability and have an adverse impact on our cash flows. As a
fixed price retailer, we generally do not pass on cost increases to our customers by increasing the price of our merchandise. Instead, we attempt to offset a cost increase in one area of our operations by finding cost savings or operating
efficiencies in another.

Foreign exchange rate fluctuations, in particular, have a material impact on our operating and merchandise costs.
This is because while most of our sales are in Canadian dollars, we have been increasing our purchases of merchandise from low-cost foreign suppliers, principally in China, but also in Denmark, France, Hong Kong, India, Indonesia, Italy, Malaysia,
Panama, the Philippines, Taiwan, Turkey and the United States. In fiscal year 2007 and in the 13-week period ended August 5, 2007, this direct sourcing from foreign suppliers accounted for more than 50% of our purchases. Our results of
operations are particularly sensitive to the fluctuation of the Chinese renminbi against the U.S. dollar and the fluctuation of the U.S. dollar against the Canadian dollar because we purchase a majority of our imported merchandise from suppliers in
China using U.S. dollars. For example, if the Chinese renminbi were to appreciate against the U.S. dollar, our cost of merchandise purchased in China would increase, which would have a negative impact on our margins, profitability and cash flows. If
the U.S. dollar appreciates against the Canadian dollar at the same time, the negative impact would be further exacerbated.



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Labor shortages in the trucking industry and fuel cost increases or surcharges could also increase our
transportation costs. In addition, inflation and adverse economic developments in Canada, where we both buy and sell merchandise, and in China and other parts of Asia, where we buy a large portion of our imported merchandise, can have a negative
impact on our margins, profitability and cash flows. If we are unable to predict and respond promptly to these or other similar events that may increase our operating and merchandise costs, our results of operations and cash flows will be adversely
affected.

We may not be able to refresh our merchandise as often as we have done so in the past.

We adjust our merchandise mix periodically based on the results of internal analysis as slow-selling items are discontinued and quickly replaced. Our
success, therefore, depends in large part upon our ability to continually find and purchase quality merchandise at attractive prices in order to replace underperforming goods. We have very few continuing or long-term contracts for the purchase or
development of merchandise and must continually seek out buying opportunities from both our existing suppliers and new sources, for which we compete with other discount, convenience and variety merchandisers. Although we believe that we have strong
and long-standing relationships with our suppliers, we may not be successful in maintaining a continuing and increasing supply of quality merchandise at attractive prices. If we cannot find or purchase the necessary amount of competitively priced
merchandise to replace goods that are outdated or unprofitable, our results of operations and cash flows will be adversely affected.

An increase in
the cost or a disruption in the flow of our imported goods may significantly decrease our sales and profits and have an adverse impact on our cash flows.

One of our key business strategies is to source quality merchandise directly from the lowest cost supplier. As a result, we rely heavily on imported goods, principally from China but also from Denmark, France, Hong
Kong, India, Indonesia, Italy, Malaysia, Panama, the Philippines, Taiwan, Turkey and the United States. Imported goods are generally less expensive than domestic goods and contribute significantly to our profit margins. Merchandise imported directly
from overseas manufacturers and agents accounted for more than 50% of our total purchases fiscal year 2007 and in the 13-week period ended August 5, 2007. We expect direct imports to continue to account for approximately 45% to 55% of our total
purchases. Our imported merchandise could become more expensive or unavailable for a number of reasons, including (a) disruptions in the flow of imported goods due to factors such as raw material shortages, work stoppages, strikes, and
political unrest in foreign countries; (b) problems with oceanic shipping, including shipping container shortages; (c) economic crises and international disputes, such as Chinas claims to sovereignty over Taiwan; (d) increases
in the cost of purchasing or shipping foreign merchandise resulting from a failure of Canada to maintain normal trade relations with China; (e) import duties, import quotas, and other trade sanctions; and (f) increases in shipping rates
imposed by the trans-Pacific shipping cartel. If imported merchandise becomes more expensive or unavailable, we may not be able to transition to alternative sources in time to meet our demands. Products from alternative sources may also be of lesser
quality and more expensive than those we currently import. A disruption in the flow of our imported merchandise or an increase in the cost of those goods due to these or other factors would significantly decrease our sales and profits and have an
adverse impact on our cash flows.

We are dependent upon the smooth functioning of our distribution network and upon the capacity of our distribution
centers.

We must constantly replenish depleted inventory through deliveries of merchandise to our distribution centers, and from
our distribution centers to our stores by various means of transportation, including shipments by sea, train and truck on the roads and highways of Canada. Long-term disruptions to the national and international transportation infrastructure that
lead to delays or interruptions of service would adversely affect our business. In addition, a fire, flood, or other natural disaster that affects any of our warehousing or distribution centers and results in significant lost inventory or delays in
delivery of inventory to stores would have a significant effect on our financial results.



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Moreover, we anticipate that we will need additional warehouse and distribution center capacity in the
coming years. Our rapid historical and anticipated future growth places significant pressure on this critical function. We estimate that our recently opened distribution center allows us to serve approximately 600 stores. If we are unable to locate
sites for the new warehouses and distribution centers or achieve functionality of the new distribution centers on a timely basis, we may not be able to successfully execute our growth strategy.

Construction and expansion projects relating to our warehouses and distribution centers entail risks which could cause delays and cost overruns, such as
shortages of materials; shortages of skilled labor; work stoppages; unforeseen construction scheduling, engineering, environmental, or geological problems; weather interference; fires or other casualty losses; and unanticipated cost increases.
Therefore, the completion dates and anticipated costs of these projects may differ significantly from our initial expectations. We cannot guarantee that any project will be completed on time or within established budgets.

Our financial performance is sensitive to changes in overall economic conditions that may impact consumer spending.

A general slowdown in the Canadian economy may adversely affect the spending of our customers, which would likely result in lower sales than expected on a
quarterly or annual basis. Future economic conditions affecting disposable consumer income, such as employment levels, business conditions, fuel and energy costs, interest rates, and tax rates, would also adversely affect our business by reducing
consumer spending or causing consumers to shift their spending to other products.

Our sales may be affected by seasonal fluctuations.

Historically, our highest sales results have occurred during the fourth quarter, which includes the holiday selling season. During
fiscal year 2007, approximately 31.1% of our sales were generated in the fourth quarter. Accordingly, any adverse trend in sales for the fourth quarter could have a material adverse effect upon our stores profitability and adversely affect our
results of operations for the entire year.

Competition in the retail industry could limit our growth opportunities and reduce our profitability.

We compete in the discount retail merchandise business, which is highly competitive, and we expect competition to increase in the
future. This competitive environment subjects us to the risk of reduced profitability resulting from reduced margins required to maintain our competitive position. Our competitors include variety and discount stores such as Buck or Two, Dollar
Giant, Dollar Store With More, Everything For a Dollar, and Great Canadian Dollar Store, mass merchandisers such as Wal-Mart, and, to a lesser extent, other fixed price retailers operating in Canada. In addition, we expect that our expansion plans,
as well as the expansion plans of other fixed price retailers, will increasingly bring us into direct competition with them. Competition may also increase because there are no significant economic barriers to other companies becoming fixed price
retailers or to U.S. fixed price retailers such as Dollar General, Dollar Tree and Family Dollar entering the Canadian market. Some of our competitors in the retail industry are much larger and have substantially greater resources than we do, and we
remain vulnerable to the marketing power and high level of consumer recognition of major mass merchandisers such as Wal-Mart, and to the risk that these mass merchandisers or others could venture into the dollar store industry in a
significant way.

Our business is dependent on our ability to obtain competitive pricing and other terms from our suppliers and the timely receipt of
inventory.

We believe that we have generally good relations with our suppliers and that we are generally able to obtain competitive
pricing and other terms from suppliers. However, we buy products on an order-by-order basis and have very few long-term purchase contracts or other assurances of continued product supply or guaranteed product cost. If we fail to maintain good
relations with our suppliers, or if our suppliers product costs are



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increased as a result of prolonged or repeated increases in the prices of certain raw materials, we may not be able to obtain attractive pricing, in which
case our profit margins may be reduced and our results of operations may be adversely affected. In addition, if we are unable to receive merchandise from our suppliers on a timely basis because of interruptions in production or other reasons that
are beyond our control, our business may be adversely affected.

We may be unable to renew our store leases or find other locations or leases on
favorable terms.

As of August 5, 2007, we leased all our stores from unaffiliated third parties, except 17 of our stores
leased directly or indirectly from members of the Rossy family. Approximately 6%, 12% and 8% of our store leases with third party lessors will expire in fiscal year 2008, fiscal year 2009, and fiscal year 2010, respectively. Unless the terms of our
leases are extended, the properties, together with any improvements that we have made, will revert to the property owners upon expiration of the lease terms. As the terms of our leases expire, we may not be able to renew these leases or find
alternative store locations that meet our needs on favorable terms or at all. If we are unable to renew a significant number of our expiring leases or to promptly find alternative store locations that meet our needs, our profitability and cash flows
may be materially adversely affected.

If we experience significant disruptions in our information technology systems, our business may be adversely
affected.

We depend on our information technology systems for the efficient functioning of our business, including accounting, data
storage, purchasing and inventory, and store communications systems. We have undertaken the implementation of a new enterprise-wide system solution (ERP) encompassing finance, distribution and supply chain. We expect that this enterprise-wide
software solution will enable management to better and more efficiently conduct our operations and gather, analyze, and assess information across all business segments and geographic locations. However, we may experience difficulties in implementing
this software platform in our business operations, or difficulties in operating our business under this software platform could disrupt our operations, including our ability to timely ship and track product orders, project inventory requirements,
manage our supply chain, and otherwise adequately service our customers, which would have an adverse effect on our business. In the event we experience significant disruptions as a result of the current implementation in our information technology
system, we may not be able to fix our systems in an efficient and timely manner. Accordingly, such events may disrupt or reduce the efficiency of our entire operation and have a material adverse effect on our results of operations and cash flows.

In addition, costs and potential problems and interruptions associated with the implementation of the new systems could be significant.

We may not be able to successfully execute our growth strategy, particularly outside of our core markets of Ontario and Québec, or to achieve
the anticipated growth in sales and operating income when we open new stores.

We have experienced substantial growth during the
past several years, opening an average of 35 stores per year since fiscal year 2000, and we plan to continue to open new stores at a faster rate in the near future. Our ability to successfully execute our growth strategy will depend largely on our
ability to successfully open and operate new stores, particularly outside of our traditional core markets of Ontario and Québec, which, in turn, will depend on a number of factors, including whether we can:



| |  |  | supply an increasing number of stores with the proper mix and volume of merchandise;
| | - |  | ------------------------------------------------------------------------------------



| |  |  | successfully add and operate larger stores, with which we have less experience;
| | - |  | -------------------------------------------------------------------------------



| |  |  | hire, train, and retain an increasing number of qualified employees at affordable rates of compensation;
| | - |  | --------------------------------------------------------------------------------------------------------



| |  |  | locate, lease, build out, and open stores in suitable locations on a timely basis and on favorable economic terms;
| | - |  | ------------------------------------------------------------------------------------------------------------------



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| |  |  | expand into new geographic markets, where we have limited or no presence;
| | - |  | -------------------------------------------------------------------------



| |  |  | expand within our traditional core markets of Ontario and Québec, where new stores may draw sales away from our existing stores;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------



| |  |  | successfully compete against local competitors; and
| | - |  | ---------------------------------------------------



| |  |  | build, expand and upgrade warehousing and distribution centers and internal store support systems in an efficient, timely and economical manner.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------



Many of these factors are beyond our control, and
any failure by us to achieve these goals could adversely affect our ability to achieve the anticipated growth in sales and operating income. In addition, assuming that our planned expansion occurs as anticipated, our store base will include a
relatively high proportion of stores with relatively short operating histories. Comparable store sales are negatively affected when stores are opened or expanded near existing stores. If our new stores on average fail to achieve results comparable
to our existing stores, our planned expansion could produce a decrease in our overall sales per square foot and store-level operating margins.

We
are subject to environmental regulations, and compliance with such regulations could require us to make expenditures.

Under various
federal, provincial, and local environmental laws and regulations, current or previous owners or occupants of property may become liable for the costs of investigating, removing and monitoring any hazardous substances found on the property. These
laws and regulations often impose liability without regard to fault.

Certain of the facilities that we occupy have been in operation for
many years and, over such time, we and the prior owners or occupants of such properties may have generated and disposed of materials which are or may be considered hazardous. Accordingly, it is possible that additional environmental liabilities may
arise in the future as a result of any generation and disposal of such hazardous materials. Although we have not been notified of, and are not aware of, any current environmental liability, claim, or noncompliance, we could incur costs in the future
related to our owned or leased properties in order to comply with, or address any violations under, environmental laws and regulations.

In
the ordinary course of our business, we sometimes use, store, handle or dispose of commonplace household products that are classified as hazardous materials under various environmental laws and regulations. We have adopted policies regarding the
use, storage, handling and disposal of these products, and we train our employees on how to handle and dispose of them. We cannot assure you that our policies and training will successfully help us avoid potential violations of these environmental
laws and regulations in the future.

We cannot predict the environmental laws or regulations that may be enacted in the future or how
existing or future laws and regulations will be administered or interpreted. Compliance with more stringent laws or regulations, as well as more vigorous enforcement policies of the regulatory agencies or stricter interpretations of existing laws
and regulations, may require additional expenditures by us which could vary substantially from those currently anticipated.

If we lose the services
of our senior executives who possess specialized market knowledge and technical skills, it could reduce our ability to compete, to manage our operations effectively, or to develop new products and services.

Many of our senior executives have extensive experience in our industry and with our business, products, and customers. The loss of some or all of our
senior executives could negatively affect our ability to develop and pursue our business strategy. The loss of the technical knowledge and management expertise of some or all of these key personnel, particularly the named executives, could result in
a diversion of management resources, which could adversely affect our operating results.



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Fluctuations in the value of the Canadian dollar in relation to U.S. dollar may impact our financial condition and
results of operations and may affect the comparability of our results between financial periods.

Exchange rate fluctuations could
have an adverse effect on our results of operations and ability to service our U.S. dollar denominated debt. The majority of our debt and over 50% of our purchases are in U.S. dollars while the majority of our sales and operating expenses are in
Canadian dollars. Therefore, a downward fluctuation in the exchange rate of the Canadian dollar versus the U.S. dollar would increase the cash needed to service our U.S. dollar-denominated debt. In addition, for the purposes of financial reporting,
any change in the value of the Canadian dollar against the U.S. dollar during a given financial reporting period would result in a foreign currency loss or gain on the translation of U.S. dollar denominated debt into Canadian dollars under generally
accepted accounting principles (GAAP). Consequently, our reported earnings could fluctuate materially as a result of foreign exchange translation gains or losses and may not be comparable from period to period.

We are controlled by funds managed by Bain Capital Partners, LLC, and their interest as equity holders may conflict with yours as a creditor.

We are controlled by funds managed by Bain Capital Partners, LLC, which have the ability to control our policies and operations. The interests of funds
managed by Bain Capital Partners, LLC may not in all cases be aligned with interests of our creditors. In addition, Bain Capital Partners, LLC may have an interest in pursuing acquisitions, divestitures and other transactions that, in the judgment
of its management, could enhance its equity investment, even though such transactions might involve risks to you as a holder of the notes.

We may
not be able to protect our trademarks and other proprietary rights.

We believe that our trademarks and other proprietary rights are
important to our success and our competitive position. Accordingly, we protect our trademarks and proprietary rights. However, the actions taken by us may be inadequate to prevent imitation of our products and concepts by others or to prevent others
from claiming violations of their trademarks and proprietary rights by us. In addition, our intellectual property rights may not have the value that we believe they have. If we are unsuccessful in protecting our intellectual property rights, or if
another party prevails in litigation against us relating to our intellectual property rights, we may incur significant costs and may be required to change certain aspects of our operations.

Product recalls may adversely impact our operations and merchandise offerings.

We are subject to regulations by Canadian and international regulatory authorities. One or more of our suppliers might not adhere to product safety
requirements or our quality control standards, and we might not identify the deficiency before merchandise ships to our stores. If our suppliers are unable or unwilling to recall products failing to meet our quality standards, we may be required to
remove merchandise from our shelves or recall those products at a substantial cost to us.

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.                                          



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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: September 19, 2007 |  | By:                          |  | /s/ LARRY ROSSY        
|                          |  | Name:                        |  | Larry Rossy            
|                          |  | Title:                       |  | Chief Executive Officer
|                          |  |                             
|Dated: September 19, 2007 |  | By:                          |  | /s/ ROBERT COALLIER    
|                          |  | Name:                        |  | Robert Coallier        
|                          |  | Title:                       |  | Chief Financial Officer



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