| Utah                                             |   | 34-1413104                                           |
|--------------------------------------------------|--------|------------------------------------------------------|
| (State                  or other jurisdiction of |   | (I.R.S.                  Employer Identification No) |
| Incorporation                  or organization)  |   |                                                 |

----

----

----

| **Part                  I - FINANCIAL INFORMATION** |
|-----------------------------------------------------|
|                                                |   |   |
| Item                  1.                            | INTERIM                  FINANCIAL STATEMENTS |   |
|                                                |   |   |
|                                                | Consolidated                    Balance Sheets as of September 30, 2004 (Unaudited) and June                    30,                    2004 | 3 |
|                                                |   |   |
|                                                | Consolidated                    Statements of Operations and Comprehensive Income for the three                    month                    periods ended September                    30, 2004 and 2003 (Unaudited) | 4 |
|                                                |   |   |
|                                                | Consolidated                    Statement of Stockholders’ Equity for the three month period ended                    September 30,2004 (Unaudited) | 5 |
|                                                |   |   |
|                                                | Consolidated                    Statements of Cash Flow for the three month periods ended September                    30,2004 and 2003 (Unaudited) | 6 |
|                                                |   |   |
|                                                | Notes                  to Interim Financial Statements | 7 |
|                                                |   |   |
| Item                  2.                            | MANAGEMENT'S                  DISCUSSION AND ANALYSIS AND PLAN OF OPERATION | 11 |
|                                                |   |   |
| Item                  3.                            | Quantitative                  and Qualitative Disclosures About Market Risk | 13 |
|                                                |   |   |
| Item                  4.                            | CONTROLS                  AND PROCEDURES | 14 |
|                                                |   |   |
| **Part                  II - OTHER INFORMATION**    |
|                                                |   |   |
| Item                  6.                            | EXHIBITS                  AND REPORTS ON FORM 8-K | 15 |
|                                                |   |   |
|                                                | Signatures | 16 |
|                                                |   |   |
|                                                | Certifications | 17,18 |

----

**Part      I - FINANCIAL INFORMATION**

**Item      1**

**INTERIM      FINANCIAL STATEMENTS**

| **DIGITAL                  CREATIVE DEVELOPMENT CORPORATION AND                  SUBSIDIARY**              |
|------------------------------------------------------------------------------------------------------------|
| **CONSOLIDATED                  BALANCE SHEETS**                                                           |
|                                                                                                       |   |   |   |   |   |
|                                                                                                       |   |   |   |   |   |
| **ASSETS**                                                                                                 |   |   |   |   |   |
|                                                                                                       |   | **September                  30,** |   | **June                  30,** |   |
|                                                                                                       |   | **2004** |   | **2004** |   |
|                                                                                                       |   | **(in                  thousands)** |   |
|                                                                                                       |   | **(Unaudited)** |   | **(Audited)** |   |
| **CURRENT                  ASSETS**                                                                        |   |   |   |   |   |
| Cash                  and cash equivalents                                                                 |   | $ | 122.9 |   | $ | 5.1 |   |
| Marketable                  securities                                                                     |   |   | 1,500.0 |   |   | 1,905.3 |   |
| **TOTAL                  CURRENT ASSETS**                                                                  |   |   | 1,622.9 |   |   | 1,910.4 |   |
| .                                                                                                          |   |   |   |   |   |   |   |
| **OTHER                  ASSETS**                                                                          |   |   |   |   |   |   |   |
| Marketable                  securities and non-marketable securities and advances, net of                  |   |   |   |   |   |   |   |
| $                  3,560,000 at June 30,2004                                                               |   |   | 6,285.8 |   |   | 8,155.9 |   |
|                                                                                                       |   |   |   |   |   |   |   |
| **TOTAL                  ASSETS**                                                                          |   | **$** | **7,908.7** |   | **$** | **10,066.3** |   |
|                                                                                                       |   |   |   |   |   |   |   |
| **LIABILITIES                  AND STOCKHOLDERS' EQUITY**                                                  |   |   |   |   |   |   |   |
|                                                                                                       |   |   |   |   |   |   |   |
| **CURRENT                  LIABILITIES**                                                                   |   |   |   |   |   |   |   |
| Accrued                  expenses and other liabilities                                                    |   | $ | 399.2 |   | $ | 264.8 |   |
| Current                  portion of notes payable--related parties                                         |   |   | 386.0 |   |   | 240.1 |   |
| **TOTAL                  CURRENT LIABILITIES**                                                             |   |   | 785.2 |   |   | 504.9 |   |
|                                                                                                       |   |   |   |   |   |   |   |
| **NOTES                  PAYABLE - RELATED PARTIES**                                                       |   |   |   |   |   |   |   |
| **NET                  OF CURRENT MATURITIES**                                                             |   |   | 570.0 |   |   | 724.8 |   |
| **TOTAL                  LIABILITIES**                                                                     |   |   | 1,355.2 |   |   | 1,229.7 |   |
|                                                                                                       |   |   |   |   |   |   |   |
| **STOCKHOLDERS'                  EQUITY**                                                                  |   |   |   |   |   |   |   |
| Preferred                  Stock 2,000,000 Shares Authorized                                               |   |   |   |   |   |   |   |
| Series                  A Convertible, Par Value $ 1 ;2,200 Shares Issued and                              |   |   |   |   |   |   |   |
| Outstanding;                  Involuntary Liquidation Preference of $ 1 Per Share                          |   |   |   |   |   |   |   |
| Plus                  Accrued and Unpaid Dividends                                                         |   |   | 2.2 |   |   | 2.2 |   |
| Series                  C, Par Value $ 100 ;9,900 Shares Issued and                                        |   |   |   |   |   |   |   |
| Outstanding;                  Involuntary Liquidation Preference of $ 100 Per Share                        |   |   |   |   |   |   |   |
| Plus                  Accrued and Unpaid Dividends                                                         |   |   | 852.7 |   |   | 852.7 |   |
| Series                  D, Par Value $ 100 ;4,000 Shares Issued and                                        |   |   |   |   |   |   |   |
| Outstanding;                  Involuntary Liquidation Preference of $ 100 Per Share                        |   |   |   |   |   |   |   |
| Plus                  Accrued and Unpaid Dividends                                                         |   |   | 400.0 |   |   | 400.0 |   |
| Common                  Stock, Par Value $ .01; Authorized 75,000,000 Shares;                  Issued      |   |   |   |   |   |   |   |
| and                  Outstanding: 51,649,165 Shares at September 30,2004 and June                  30,2004 |   |   | 516.5 |   |   | 516.5 |   |
| Additional                  paid in capital                                                                |   |   | 37,916.9 |   |   | 37,916.9 |   |
| Accumulated                  other comprehensive income                                                    |   |   | 4,096.4 |   |   | 6,309.7 |   |
| Accumulated                  deficit                                                                       |   |   | (37,231.2 | ) |   | (37,161.4 | ) |
| **TOTAL                  STOCKHOLDERS' EQUITY**                                                            |   |   | 6,553.5 |   |   | 8,836.6 |   |
|                                                                                                       |   |   |   |   |   |   |   |
| **TOTAL                  LIABILITIES AND STOCKHOLDERS' EQUITY**                                            |   | **$** | **7,908.7** |   | **$** | **10,066.3** |   |
|                                                                                                       |   |   |   |   |   |   |   |
|                                                                                                       |   |   |   |   |   |   |   |
| **See                  accompanying Notes to Consolidated Financial                  Statements**          |

----

| **DIGITAL                  CREATIVE DEVELOPMENT CORPORATION AND                  SUBSIDIARY**        |
|------------------------------------------------------------------------------------------------------|
| **CONSOLIDATED                  STATEMENTS OF OPERATIONS AND COMPREHENSIVE                  INCOME** |
| **(Unaudited)**                                                                                      |
|                                                                                                 |   |   |   |   |   |
|                                                                                                 |   | **For                  the Three Months Ended****September                  30,** |   |
|                                                                                                 |   | **2004** |   | **2003** |   |
|                                                                                                 |   | **(in                  thousands)** |   |
| **REVENUE**                                                                                          |   |   |   |   |   |
| Dividend                  interest income, and other income                                          |   | $ | — |   | $ | 0.3 |   |
|                                                                                                 |   |   |   |   |   |   |   |
| **OPERATING                  EXPENSES**                                                              |   |   |   |   |   |   |   |
| General                  and administrative expenses                                                 |   |   | 139.9 |   |   | 68.2 |   |
| **(LOSS)                  FROM OPERATIONS**                                                          |   |   | (139.9 | ) |   | (67.9 | ) |
|                                                                                                 |   |   |   |   |   |   |   |
| **OTHER                  INCOME (EXPENSE)**                                                          |   |   |   |   |   |   |   |
| Interest                  expense, net and other                                                     |   |   | (40.3 | ) |   | (58.9 | ) |
| Net                  realized and unrealized gains on marketable securities                          |   |   | 110.4 |   |   | — |   |
|                                                                                                 |   |   |   |   |   |   |   |
| **TOTAL                  OTHER INCOME (EXPENSE)**                                                    |   |   | 70.1 |   |   | (58.9 | ) |
|                                                                                                 |   |   |   |   |   |   |   |
| **NET                  LOSS**                                                                        |   | **$** | **(69.8** | **)** | **$** | **(126.8** | **)** |
|                                                                                                 |   |   |   |   |   |   |   |
| **UNDECLARED                  PREFERRED STOCK DIVIDENDS**                                            |   |   | (36.4 | ) |   | (36.4 | ) |
| **Net                  Loss available to common shareholders**                                       |   | **$** | **(106.2** | **)** | **$** | **(163.2** | **)** |
|                                                                                                 |   |   |   |   |   |   |   |
| **WEIGHTED                  AVERAGE NUMBER OF OUTSTANDING SHARES FOR**                               |   |   |   |   |   |   |   |
| **BASIC                  AND DILUTED EARNINGS PER SHARE**                                            |   |   | 51,149.2 |   |   | 49,775.6 |   |
|                                                                                                 |   |   |   |   |   |   |   |
| **BASIC                  AND DILUTED LOSS PER SHARE**                                                |   | $ | — |   | $ | — |   |
|                                                                                                 |   |   |   |   |   |   |   |
| **NET                  INCOME (LOSS)**                                                               |   | $ | (69.8 | ) | $ | (126.8 | ) |
| **Other                  comprehensive operations**                                                  |   |   |   |   |   |   |   |
| **Unrealized                  gain (loss) on marketable securities**                                 |   |   | (2,213.3 | ) |   | 3,912.5 |   |
| **Comprehensive                  net income (loss)**                                                 |   | $ | (2,283.1 | ) | $ | 3,785.7 |   |
|                                                                                                 |   |   |   |   |   |   |   |
|                                                                                                 |   |   |   |   |   |   |   |
| **See                  accompanying Notes to Consolidated Financial                  Statements**    |

----

| **DIGITAL                  CREATIVE DEVELOPMENT CORPORATION AND                  SUBSIDIARY**     |
|---------------------------------------------------------------------------------------------------|
| **CONSOLIDATED                  STATEMENTS OF STOCKHOLDERS' EQUITY**                              |
| **FOR                  THE THREE MONTHS ENDED SEPTEMBER 30,2004**                                 |
| **(Unaudited)**                                                                                   |
| **(in                  thousands)**                                                               |
|                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                              |   |   |   |   |   |   |   |   |   |   |   | **Accumulated** |   |   |   |   |   |
|                                                                                              |   |   |   |   |   |   |   |   |   | **Additional** |   | **Other** |   |   |   |   |   |
|                                                                                              |   | **Preferred                  Stock** |   | **Common** |   | **Paid-in** |   | **Comprehensive** |   | **Accumulated** |   |   |   |
|                                                                                              |   | **Series                  A** |   | **Series                  C** |   | **Series                  D** |   | **Stock** |   | **Capital** |   | **Operations** |   | **Deficit** |   | **Total** |   |
|                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Balance                  at June 30, 2004**                                                     |   | **$** | **2.2** |   | **$** | **852.7** |   | **$** | **400.0** |   | **$** | **516.5** |   | **$** | **37,916.9** |   | **$** | **6,309.7** |   | **$** | **(37,161.4** | **)** | **$** | **8,836.6** |   |
|                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Unrealized                  gains and losses on investments                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (2,213.3 | ) |   |   |   |   | (2,213.3 | ) |
|                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                  loss                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (69.8 | ) |   | (69.8 | ) |
| **Balance                  at September 30,2004**                                                 |   | **$** | **2.2** |   | **$** | **852.7** |   | **$** | **400.0** |   | **$** | **516.5** |   | **$** | **37,916.9** |   | **$** | **4,096.4** |   | **$** | **(37,231.2** | **)** | **$** | **6,553.5** |   |
|                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **See                  accompanying Notes to Consolidated Financial                  Statements** |

----

| **DIGITAL                  CREATIVE DEVELOPMENT CORPORATION AND                  SUBSIDIARY**                       |
|---------------------------------------------------------------------------------------------------------------------|
| **CONSOLIDATED                  STATEMENTS OF CASH FLOWS**                                                          |
| **(Unaudited)**                                                                                                     |
|                                                                                                                |   |   |   |   |   |
|                                                                                                                |   | **For                  the Three Months Ended****September                  30,** |   |
|                                                                                                                |   | **2004** |   | **2003** |   |
|                                                                                                                |   | **(in                  thousands)** |   |
|                                                                                                                |   |   |   |   |   |
| CASH                  FLOWS FROM OPERATING ACTIVITES:                                                               |   |   |   |   |   |
| Net                  loss                                                                                           |   | $ | (69.8 | ) | $ | (126.8 | ) |
| Adjustments                  to reconcile net loss to net cash used in operating                  activities:  |   |   |   |   |   |   |   |
|  Amortization                  of debt discount                                                                |   |   | 16.2 |   |   | 24.3 |   |
|  Net                  realized and unrealized gains on marketable securities                                   |   |   | (137.9 | ) |   | — |   |
|                                                                                                                |   |   |   |   |   |   |   |
| Changes                  in assets and liabilities:                                                            |   |   |   |   |   |   |   |
|  Increase                  in accounts payable, accrued expenses and other                  liabilities        |   |   | 134.4 |   |   | 24.5 |   |
| NET                  CASH USED IN OPERATING ACTIVITIES                                                              |   |   | (57.1 | ) |   | (78.0 | ) |
|                                                                                                                |   |   |   |   |   |   |   |
| CASH                  FLOWS FROM INVESTING ACTIVITES:                                                               |   |   |   |   |   |   |   |
| Proceeds                  from sale of investments                                                             |   |   | 200.0 |   |   | — |   |
| Purchase                  of investments                                                                       |   |   | — |   |   | (300.0 | ) |
| NET                  CASH (USED IN) PROVIDED BY INVESTING ACTIVITIES                                                |   |   | 200.0 |   |   | (300.0 | ) |
|                                                                                                                |   |   |   |   |   |   |   |
| CASH                  FLOWS FROM FINANCING ACTIVITES:                                                               |   |   |   |   |   |   |   |
| Proceeds                  from issuance of common stock                                                        |   |   | — |   |   | 40.0 |   |
| Proceeds                  from issuance of notes payable--related parties                                      |   |   | — |   |   | 350.0 |   |
| Payments                  of note payable to related parties                                                   |   |   | (25.1 | ) |   | (2.4 | ) |
| NET                  CASH (USED IN )PROVIDED BY FINANCING ACTIVITIES                                                |   |   | (25.1 | ) |   | 387.6 |   |
|                                                                                                                |   |   |   |   |   |   |   |
| NET                  CHANGE IN CASH AND CASH EQUIVALENTS                                                            |   | $ | 117.8 |   | $ | 9.6 |   |
|                                                                                                                |   |   |   |   |   |   |   |
| CASH                  AND EQUIVALENTS, beginning of period                                                          |   |   | 5.1 |   |   | 1.0 |   |
|                                                                                                                |   |   |   |   |   |   |   |
| CASH                  AND EQUIVALENTS, end of period                                                                |   | $ | 122.9 |   | $ | 10.6 |   |
|                                                                                                                |   |   |   |   |   |   |   |
|                                                                                                                |   |   |   |   |   |   |   |
| **See                  accompanying Notes to Consolidated Financial                  Statements**                   |

----

**DIGITAL      CREATIVE DEVELOPMENT CORPORATION AND SUBSIDIARY**

**NOTES      TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS**

**September      30, 2004**

**(Unaudited)**

**NOTE      1 - BASIS OF PRESENTATION **

**NOTE      2 - PRINCIPLES OF CONSOLIDATION **

----

**NOTE      3 - MARKETABLE SECURITIES **

|                                                    |   | September                30, 2005 |      | June                30, 2004 |   |
|---------------------------------------------------------|--------|-----------------------------------|-----------|------------------------------|--------|
|                                                    |   |                              |      |                         |   |
| Marketable                Securities-current:           |   |                              |      |                         |   |
| IMSI                                                    |   | $                                 | 679,200   |                         | $      | 679,200 |   |
| Thinking                Tools, Inc.                     |   |                              | 216,000   |                         |   | 216,000 |   |
|                                                    |   |                              | 895,200   |                         |   | 895,200 |   |
| Unrealized                gain on marketable securities |   |                              | 604,800   |                         |   | 1,010,100 |   |
| Total                                                   |   | $                                 | 1,500,000 |                         | $      | 1,905,300 |   |
|                                                    |   |                              |      |                         |   |   |   |
| Marketable                Securities - non-current:     |   |                              |      |                         |   |   |   |
| IMSI                                                    |   | $                                 | 2,710,300 |                         | $      | 2,800,900 |   |
| Access                Propeller Holdings Inc.           |   |                              | 300,000   |                         |   | 300,000 |   |
|                                                    |   |                              | 3,010,300 |                         |   | 3,100,900 |   |
| Unrealized                gain on marketable securities |   |                              | 3,275,500 |                         |   | 5,055,000 |   |
| Total                                                   |   | $                                 | 6,285,800 |                         | $      | 8,155,900 |   |

----

**NOTE      4 - ACCOUNTS PAYABLE AND ACCRUED EXPENSES**

**NOTE      5 - NOTES PAYABLE - RELATED PARTIES **

|                                                                                                |   | September                30, 2004 |    | June                30, 2004 |   |
|-----------------------------------------------------------------------------------------------------|--------|-----------------------------------|---------|------------------------------|--------|
|                                                                                                |   |                              |    |                         |   |
| Secured                Promissory Note with Interest at 15%                                         |   | $                                 | 325,000 |                         | $      | 350,000 |   |
| $345,000                Secured Promissory Notes with Interest at 10%, net of discount              |   |                              | 345,000 |                         |   | 328,800 |   |
| Notes                payable to certain former executives                                           |   |                              | 111,100 |                         |   | 111,100 |   |
| Debt                due to former employees in conjunction with settlement                agreement |   |                              | 175,000 |                         |   | 175,000 |   |
|                                                                                                |   |                              |    |                         |   |   |   |
|                                                                                                |   |                              | 956,100 |                         |   | 964,900 |   |
| Less:                Current portion                                                                |   |                              | 386,000 |                         |   | 240,100 |   |
| Long-term                portion                                                                    |   | $                                 | 570,100 |                         | $      | 724,800 |   |

**NOTE      6 - COMMITMENTS AND CONTINGENCIES **

----

**NOTE      7 - SUBSEQUENT EVENTS **

----

**ITEM      2. **

**MANAGEMENT'S      DISCUSSION AND ANALYSIS OR PLAN OF OPERATION**

**PLAN      OF OPERATION**

| ·   | unforeseen                obligations or liabilities; |
|--------------------|-------------------------------------------------------|

| ·   | difficulty                assimilating the acquired operations and                personnel; |
|--------------------|----------------------------------------------------------------------------------------------|

| ·   | risks                of entering markets in which we have little or no direct prior                experience; |
|--------------------|----------------------------------------------------------------------------------------------------------------|

| ·   | potential                impairment of relationships with employees or customers as a result                of                changes in management; and |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Potential                dilutive issuances of equity, large and immediate write-offs, the                incurrence of debt, and amortization of goodwill or other intangible                assets. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**RESULTS      OF OPERATIONS**

**Three      Month Period Ended September 30, 2004 Compared To The Three Month Period Ended      September 30, 2003.**

**LIQUIDITY      AND CAPITAL RESOURCES**

----

**ITEM      3. **
**QUANTITATIVE      AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK**

----

**ITEM      4. CONTROLS AND PROCEDURES**

**Evaluation      of Disclosure Controls and Procedures**

**Changes      in Internal Controls**

**PART      II. OTHER INFORMATION**

**Item      1.**
** **
**Legal      Proceedings.**

**Item      2.**
** **
**Unregistered      Sales of Equity Securities and Uses of Proceeds.**

**Item      3. Defaults upon Senior Securities**

**Item      4.**
** **
**Submission      of Matters to a Vote of Security Holders**

**Item      5.**
** **
**Other      Information.**

----

**Item      6.**
** **
**Exhibits      And Reports On Form 8-K**

|  | 31 | Certification                pursuant to Rule 13a-14(a) of the Exchange                Act |
|--|----|--------------------------------------------------------------------------------------------|

|  | 32 | Certification                pursuant to Rule 13a-14(b) of the Exchange Act and 18 U.S.C. Section                1350,                as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of                2002 |
|--|----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**SIGNATURES**

|                        |                                                           |                                      |
|-----------------------------|----------------------------------------------------------------|-------------------------------------------|
|                        | DIGITAL              CREATIVE              DIGITAL CORPORATION |
|                   |                                                      |                                 |
| Dated February 8, 2006 |                                                           |                                      |
|                        | By:                                                  | /s/              Gary              Herman |
|                        | Name:              Gary Herman                                 |
|                        | Title:              Chief Executive Officer and President      |

|   |                                          |                                  |
|--------|-----------------------------------------------|---------------------------------------|
|   | By:                                 | /s/                Skuli Thorvaldsson |
|   | Name:                Skuli Thorvaldsson       |
|   | Title:                Chief Financial Officer |

----