EXHIBIT 10.3

                       FIRST AMENDMENT TO CREDIT AGREEMENT


        This FIRST AMENDMENT TO CREDIT AGREEMENT (this "Amendment"), dated as of
October 2, 2002, is entered into among (1) POINT.360,  a California  corporation
(the  "Borrower"),  (2) the Lenders  party to the Credit  Agreement  referred to
below and (3) UNION BANK OF CALIFORNIA,  N.A., as administrative  agent for such
Lenders (in such capacity, the "Agent").

                                    RECITALS

        A. The Borrower,  the Lenders and the Agent previously entered into that
certain Third Amended and Restated Credit Agreement dated as of May 2, 2002 (the
"Credit  Agreement").  Capitalized  terms used herein and not defined shall have
the meanings assigned to them in the Credit Agreement.

        B. The  Borrower  has  informed  the Agent and the Lenders  that R. Luke
Stefanko  desires to resign as an officer of the  Borrower  and,  in  connection
therewith,  sell all of his Capital Stock in the Borrower.  Section  7(k)(ii) of
the Credit  Agreement  requires that R. Luke Stefanko own stock  representing at
least 14% of the  votes  that may be cast in an  election  of  directors  of the
Borrower,  at all  times.  The  Borrower  has asked the  Lenders  to waive  such
provision and the Lenders have agreed,  subject to the terms and  conditions set
forth herein.

        NOW,  THEREFORE,  in  consideration  of  the  premises  and  the  mutual
covenants herein contained, the parties hereto hereby agree as follows:

        SECTION 1. Amendment to Credit Agreement. The Credit Agreement is hereby
amended as follows:

        (a)   Section  7(k)(ii) is deleted  and  replaced  with  "[Intentionally
              omitted]".

        SECTION 2. Conditions  Precedent.  This Amendment shall become effective
as of the date first set forth above upon receipt by
the Agent of the following:

        (a)   this  Amendment,  duly  executed by the  Borrower and the Majority
              Lenders;

        (b)   evidence   of  the   Guarantors'   consent   to  this   Amendment,
              substantially in the form of Exhibit A hereto;

        (c)   an  amendment  fee,  in the  amount  of  $20,000,  in  immediately
              available  funds,  to be shared pro rata by each Lender  executing
              this Amendment;

        (d)   a prepayment of the Loans, in immediately  available funds, in the
              principal amount of at least $500,000; and

        (e)   copies of the following  agreements relating to R. Luke Stefanko's
              separation  from the Borrower,  in each case in form and substance
              reasonably  satisfactory to the Majority Lenders:  the Resignation
              and General Release  Agreement,  the Consulting  Agreement and the
              Noncompetition Agreement.

        SECTION 3. Reference to and Effect on the Credit Agreement and the Other
Loan Documents.(a)  Upon the effectiveness of this Amendment,  each reference in
the Credit Agreement to "this Agreement," "hereunder," "hereof" or words of like
import referring to the Credit  Agreement,  and each reference in the other Loan
Documents to "the Credit  Agreement,"  "thereunder,"  "thereof" or words of like
import referring to the Credit  Agreement,  shall mean and be a reference to the
Credit Agreement, as amended hereby.

        (b)   Except as specifically  amended herein,  the Credit  Agreement and
              all other  Loan  Documents  are and shall  continue  to be in full
              force and  effect  and are  hereby in all  respects  ratified  and
              confirmed.

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        (c)   The execution,  delivery and effectiveness of this Amendment shall
              not operate as a waiver of any right, power or remedy of the Agent
              or the  Lenders  under the  Credit  Agreement  or any  other  Loan
              Documents,  nor constitute a waiver of any provision of the Credit
              Agreement or any other Loan Documents,  except as specifically set
              forth herein.

        SECTION  4.   Representations   and  Warranties.   The  Borrower  hereby
represents  and  warrants,  for the  benefit of the  Lenders  and the Agent,  as
follows: (i) the Borrower has all requisite power and authority under applicable
law and under its  charter  documents  to  execute,  deliver  and  perform  this
Amendment,  and to perform  the Credit  Agreement  as amended  hereby;  (ii) all
actions, waivers and consents (corporate, regulatory and otherwise) necessary or
appropriate for the Borrower to execute, deliver and perform this Amendment, and
to  perform  the Credit  Agreement  as amended  hereby,  have been taken  and/or
received;  (iii) this Amendment,  and the Credit  Agreement,  as amended by this
Amendment,  constitute the legal,  valid and binding  obligation of the Borrower
enforceable  against it in accordance with the terms hereof; (iv) the execution,
delivery and  performance of this  Amendment,  and the performance of the Credit
Agreement,  as amended  hereby,  will not (a) violate or contravene any material
Requirement  of Law,  (b)  result in any  material  breach or  violation  of, or
constitute a material  default  under,  any agreement or instrument by which the
Borrower or any of its  property  may be bound,  or (c) result in or require the
creation of any Lien upon or with  respect to any  properties  of the  Borrower,
whether  such  properties  are  now  owned  or  hereafter   acquired;   (v)  the
representations  and warranties  contained in the Credit Agreement and the other
Loan  Documents  are correct in all  material  respects on and as of the date of
this  Amendment,  before and after giving  effect to the same, as though made on
and as of such date; and (vi) no Default has occurred and is continuing.

        SECTION 5. Execution in Counterparts.  This Amendment may be executed in
any  number  of  counterparts  and  by  different  parties  hereto  in  separate
counterparts, each of which when so executed and delivered shall be deemed to be
an original and all of which taken  together  shall  constitute  but one and the
same agreement.  Delivery of an executed counterpart of a signature page to this
Amendment by  telecopier  shall be effective as delivery of a manually  executed
counterpart of this Amendment.

        SECTION 6.  Governing  Law.  This  Amendment  shall be governed  by, and
construed  and  interpreted  in  accordance  with,  the  laws  of the  State  of
California (without reference to its choice of law rules).

         IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed and delivered by their proper and duly authorized officers as of
the day and year first above written.


                                      POINT.360


                                        By:   /s/  Alan R. Steel
                                           ----------------------------------
                                        Name:      Alan R. Steel
                                              -------------------------------
                                        Title:     Chief Financial Officer
                                               ------------------------------


                                      UNION BANK OF CALIFORNIA, N.A.,
                                        as Agent and as a Lender

                                        By:   /s/  Bette J. McCole
                                           ----------------------------------
                                        Name:      Bette J. McCole
                                              -------------------------------
                                        Title:     Vice President
                                               ------------------------------


                                      BANK OF THE WEST
                                      (formerly United California Bank),
                                        as a Lender

                                        By:
                                           ----------------------------------
                                        Name:
                                              -------------------------------
                                        Title:
                                               ------------------------------


                                      U.S. BANK NATIONAL ASSOCIATION,
                                        as a Lender

                                        By:   /s/ David C. Larsen
                                           ----------------------------------
                                        Name:     David C. Larsen
                                              -------------------------------
                                        Title:    Vice President
                                               ------------------------------


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                                                                     Exhibit A


                               GUARANTORS' CONSENT

        Each of the  undersigned  is a  "Guarantor"  under that  certain  Second
Amended and Restated  Guaranty dated as of September 28, 2000, as amended by the
First Amendment to Second Amended and Restated  Guaranty dated as of May 2, 2002
(the  "Guarantee") made by the undersigned in favor of Union Bank of California,
N.A., as agent (the  "Agent") for the benefit of the lenders  referred to below,
which Guarantee was delivered pursuant to that certain Credit Agreement dated as
of even date therewith among Point.360 (the "Borrower"), the lenders referred to
therein (the "Lenders"), and the Agent (as amended, the "Credit Agreement").

        In connection  herewith,  the Credit  Agreement is being amended by that
certain First Amendment dated as of even date herewith (the  "Amendment").  Each
Guarantor hereby acknowledges that it has received a copy of the Amendment. Each
Guarantor hereby consents to the Amendment,  and hereby confirms and agrees that
the Guarantee is and shall continue to be in full force and effect and is hereby
ratified and  confirmed in all respects  except that, on and after the effective
date  of  the  Amendment,  each  reference  in  the  Guarantee  to  "the  Credit
Agreement," "thereunder," "thereof," "therein" or words of like import referring
to the Credit  Agreement shall mean and be a reference to the Credit  Agreement,
as amended by the Amendment.


Dated: October 2, 2002                  MULTI-MEDIA SERVICES, INC.

                                        By:    /s/  Alan R. Steel
                                            ---------------------------------
                                        Name:       Alan R. Steel
                                              -------------------------------
                                        Title:      Secretary
                                               ------------------------------


                                        VDI MULTIMEDIA, INC.

                                        By:    /s/  Alan R. Steel
                                            ---------------------------------
                                        Name:       Alan R. Steel
                                              -------------------------------
                                        Title:      Secretary
                                               ------------------------------


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