UNITED
      STATES


SECURITIES
      AND EXCHANGE COMMISSION


WASHINGTON,
      D.C. 20549




Amendment
        No. 1


to


FORM
      10-QSB


(Mark
      One)


x Quarterly
      report
      under Section 13 or 15(d) of The Securities Exchange Act Of
      1934





For
      the
      quarterly period ended September 30, 2004





o Transition
      report
      under Section 13 or 15(d) of The Securities Exchange Act Of
      1934





For
      the
      transition period from _______ to _______





Commission
      file number 0-22315





DIGITAL
      CREATIVE DEVELOPMENT CORPORATION


(Exact
      Name of Small Business Issuer as Specified in Its Charter)


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




720
      Fifth
      Avenue, New York, New York, 10019


(Address
      of principal executive offices)





(212)
      247-0581





(Issuer's
      telephone number, including area code)




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 o No
x





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





As
      of
      February 8 ,
      2006 ,
      51,689,165 shares of Common Stock, $.01 par value, were
      outstanding.





Transitional
      Small Business Disclosure Format (Check one): Yes oNo x










DIGITAL
      CREATIVE DEVELOPMENT CORPORATION AND SUBSIDIARY


FOR
      THE
      QUARTERLY PERIOD ENDED


SEPTEMBER
      30, 2004





INDEX


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




-2-







**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
              
              $
              5.1Marketable
                  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
              
              $
              264.8Current
                  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 AuthorizedSeries
                  A Convertible, Par Value $ 1 ;2,200 Shares Issued andOutstanding;
                  Involuntary Liquidation Preference of $ 1 Per SharePlus
                  Accrued and Unpaid Dividends
              
              
              2.2
              
              
              2.2Series
                  C, Par Value $ 100 ;9,900 Shares Issued andOutstanding;
                  Involuntary Liquidation Preference of $ 100 Per SharePlus
                  Accrued and Unpaid Dividends
              
              
              852.7
              
              
              852.7Series
                  D, Par Value $ 100 ;4,000 Shares Issued andOutstanding;
                  Involuntary Liquidation Preference of $ 100 Per SharePlus
                  Accrued and Unpaid Dividends
              
              
              400.0
              
              
              400.0Common
                  Stock, Par Value $ .01; Authorized 75,000,000 Shares;
                  Issuedand
                  Outstanding: 51,649,165 Shares at September 30,2004 and June
                  30,2004
              
              
              516.5
              
              
              516.5Additional
                  paid in capital
              
              
              37,916.9
              
              
              37,916.9Accumulated
                  other comprehensive income
              
              
              4,096.4
              
              
              6,309.7Accumulated
                  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**








-3-




**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**





-4-





**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**





-5-





**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
              
              
              24.3Net
                  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
              
              
              24.5NET
                  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
              
              
              —
              
              
              40.0Proceeds
                  from issuance of notes payable--related parties
              
              
              —
              
              
              350.0Payments
                  of note payable to related parties
              
              
              (25.1
              )
              
              (2.4
              )NET
                  CASH (USED IN )PROVIDED BY FINANCING ACTIVITIES
              
              
              (25.1
              )
              
              387.6NET
                  CHANGE IN CASH AND CASH EQUIVALENTS
              
              $
              117.8
              
              $
              9.6CASH
                  AND EQUIVALENTS, beginning of period
              
              
              5.1
              
              
              1.0CASH
                  AND EQUIVALENTS, end of period
              
              $
              122.9
              
              $
              10.6**See
                  accompanying Notes to Consolidated Financial
                  Statements**





-6-




**DIGITAL
      CREATIVE DEVELOPMENT CORPORATION AND SUBSIDIARY**


**NOTES
      TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS**


**September
      30, 2004**


**(Unaudited)**





**NOTE
      1 - BASIS OF PRESENTATION**




The
      consolidated financial statements include the accounts of Digital Creative
      Development Corporation and its wholly owned subsidiary (collectively, the
      "Company").





The
      accompanying condensed consolidated financial statements are unaudited and
      have
      been prepared by the Company in accordance with the rules and regulations of
      the
      Securities and Exchange Commission relating to interim financial statements.
      These condensed financial statements do not include all disclosures provided
      in
      the Company's annual financial statements. The condensed financial statements
      should be read in conjunction with the financial statements and notes thereto
      for the year ended June 30, 2004 contained in the Company's Form 10-KSB filed
      with the Securities and Exchange Commission. All adjustments of a normal
      recurring nature, which, in the opinion of management, are necessary to present
      a fair statement of results for the periods have been made. Results of
      operations are not necessarily indicative of the results to be expected for
      the
      full year.




**NOTE
      2 - PRINCIPLES OF CONSOLIDATION**





The
      consolidated financial statements include the accounts of Digital Creative
      Development Corporation and its wholly owned subsidiary, (collectively the
      "Company"). The wholly owned subsidiary at June 30, 2004 and September 30,2004
      is Digital Creative Development Company (Delaware). The Company currently has
      no
      active business. However, the Company is involved in acquiring and investing
      in
      software and high technology companies, with a focus on acquiring controlling
      interests and has entered into the software technology industry through its
      investment in International Microcomputer Software, Inc. ("IMSI"). IMSI is
      a
      leading provider of stock house plans over the Internet with the largest
      selection of plans for consumers and builders. IMSI also sells a variety of
      related content and services over the Internet. In addition, IMSI is a developer
      and publisher of software solutions which is marketed and sold to individuals
      and small business users through an array of distribution channels.




-7-





**NOTE
      3 - MARKETABLE SECURITIES**





The
      Company had investments and advances in certain marketable and non-marketable
      securities at September 30, 2004 and June 30, 2004 as follows:





September
                  30, 2004
              
              June
                  30, 2004Marketable
                  Securities-current:IMSI
              
              $
              679,200
              
              $
              679,200Thinking
                  Tools, Inc.
              
              
              216,000
              
              
              216,000895,200
              
              
              895,200Unrealized
                  gain on marketable securities
              
              
              604,800
              
              
              1,010,100Total
              
              $
              1,500,000
              
              $
              1,905,300Marketable
                  Securities - non-current:IMSI
              
              $
              2,710,300
              
              $
              2,800,900Access
                  Propeller Holdings Inc.
              
              
              300,000
              
              
              300,0003,010,300
              
              
              3,100,900Unrealized
                  gain on marketable securities
              
              
              3,275,500
              
              
              5,055,000Total
              
              $
              6,285,800
              
              $
              8,155,900





The
      table
      above excludes $ 3,560,000 of investments formally written off in June 2005
      ;
      these investments had previously been fully reserved as the result of the
      recording of an impairment loss because the Company had concluded that
      recoverability of its investments in such entities was unlikely and improbable
      based upon its review of the current financial status of each entity. The shares
      of IMSI owned by the Company are "restricted securities" as defined in Rule
      144
      under the Securities Act of 1933. Under Rule 144, the Company can publicly
      sell,
      within any three month period, a number of shares not to exceed one percent
      of
      IMSI's then outstanding shares of common stock. In the event that IMSI becomes
      listed on the NASDAQ or on a national securities exchange, the maximum amount
      that can be sold will be the greater of one percent of the outstanding shares
      and the average weekly trading volume of IMSI's common stock for the four weeks
      preceding the Company's filing of a notice of sale with the SEC. Since these
      shares are restricted, the shares, which can be sold within one year are shown
      as a current asset and the balance of the shares are shown in other assets
      on
      the balance sheet. A total of 400,000 shares of IMSI stock secures the Company's
      15% $350,000 Promissory Note which IMSI sold to Multi Mag Corporation in January
      2005 and 747,869 shares of IMSI stock secure the $345,000 note to investors.




-8-





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





Accrued
      expenses consist basically of accrued legal and other professional fees and
      general administrative expenses of the Company.





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





At
      September 30 and June 30, 2004, the Company’s long term debt consisted of the
      following:




September
                30, 2004
            
            June
                30, 2004Secured
                Promissory Note with Interest at 15%
            
            $
            325,000
            
            $
            350,000$345,000
                Secured Promissory Notes with Interest at 10%, net of discount
            
            
            345,000
            
            
            328,800Notes
                payable to certain former executives
            
            
            111,100
            
            
            111,100Debt
                due to former employees in conjunction with settlement
                agreement
            
            
            175,000
            
            
            175,000956,100
            
            
            964,900Less:
                Current portion
            
            
            386,000
            
            
            240,100Long-term
                portion
            
            $
            570,100
            
            $
            724,800







The
      Company is currently in default on the Notes related to the CineBlast
      settlement. That
      settlement included a formula whereby the total obligation due the principals
      of
      CineBlast was reduced to $153,600. Subsequent cash payments reduced this
      obligation to its current amount of $103,350, and managementof the
      Company is currently negotiating the terms to payout the remaining obligation
      of
      $103,350 . The Company's management is confident that such a payout can be
      obtained, but there can be no assurances that this will occur.





With
      regard to the $345,000 Secured Promissory Notes with Interest at 10%,
      all but
      three of the noteholders have extended their notes from December 31, 2005 to
      May
      31, 2006.





On
      December 14, 2005, the Secured Promissory Note payable to Multi-Mag was extended
      to May 31, 2006 upon the payment of accrued interest from June 18, 2005 thru
      December 23, 2005 in the amount of $22,600.





**NOTE
      6 - COMMITMENTS AND CONTINGENCIES**





The
      Company is involved in various claims and legal actions arising in the ordinary
      course of business. In the opinion of management, the ultimate disposition
      of
      these matters will not have a material adverse effect on the Company's
      consolidated results of operations or financial position.




-9-





**NOTE
      7 - SUBSEQUENT EVENTS**





On
      May
      25, 2005, the Company sold 250,000 shares of IMSI for gross proceeds of
      approximately $ 277,000. The Company used approximately $_39,000_ of this amount
      to pay accrued interest and the remainder for general working capital purposes.
      The Company has sold 77,500 shares of IMSI since June 30,2005 and has used
      the
      proceeds of approximately $84,000 for general working capital
      purposes.





In
      June,
      2005, the Company awarded to each of its current directors, Gary Herman and
      Skuli Thorvaldsson, as
      well
      as to a former director and significant shareholder, Bruce Galloway,options to purchase 1,250,000 shares of common stock at an exercise
      price
      of $.01 per share and expiring in June 2015. These options, awarded for services
      rendered in connection with the restructuring of the Company in fiscal year
      2002, were valued at approximately $290,000 and charged to earnings in the
      fiscal year ended June 30, 2005. The Company’s Board of Directors has approved
      additional compensation for services rendered to the Company by Messrs. Herman
      and Thorvaldsson subject to receipt of a fairness opinion from an independent
      advisory firm.





On
      December 16, 2005, International Microcomputer Software, Inc. (“IMSI”) filed a
      Form S-4 with the Securities & Exchange Commission for the proposed merger
      with AccessMedia Networks, Inc.  On December 14, 2005 the board of the
      Company approved the execution of a Voting Agreement and Irrevocable Proxy
      in
      support of the transaction.  Based on the proposed transaction, the
      Company's ownership stake in IMSI will be reduced from approximately 25% to
      13%
      as a result of the issuance of shares of common stock of IMSI to the
      shareholders of AccessMedia Networks.   If IMSI achieves certain
      performance milestones, the Company's ownership stake will be further
      reduced




-10-




**ITEM
      2.**





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





Statements
      contained in this Quarterly Report on Form 10-QSB, other than the historical
      financial information, constitute "forward-looking statements" within the
      meaning of the Private Securities Litigation Reform Act of 1995. All such
      forward-looking statements involve known and unknown risks, uncertainties or
      other factors which may cause actual results, performance or achievement of
      the
      Company to be materially different from any future results, performance or
      achievement expressed or implied by such forward-looking statements. Factors
      that might cause such a difference include, but are not limited to, risks and
      uncertainties related to the substantial capital requirements, development
      of
      effective internal processes and systems, the ability to attract and retain
      high
      quality employees, changing overall economy and other risks described herein
      and
      in the Company's June 30, 2004 Annual Report on Form 10-KSB.





**PLAN
      OF OPERATION**





Digital
      Creative Development Corporation (the “Company”) is principally involved in
      acquiring and investing in software and high technology companies, with a focus
      on acquiring controlling interests. . At present, the Company does not have
      an
      operating business and its most significant asset is its interest in
      International Microcomputer Software Inc. (“IMSI”) (OTCBB- IMSI).. The Company
      has since begun to search for candidates with which to enter into business
      combinations or strategic transactions.





The
      Company intends to locate and enter into a transaction with an existing, public
      or privately-held company that in management's view, has growth potential (a
      "Target Business"). A transaction with a Target Business may be structured
      as a
      merger, consolidation, exchange of the Company's common stock for stock or
      assets of the Target Business or any other form which will result in the
      combined enterprise remaining a publicly-held corporation.





Acquisitions
      or business combinations may not be available at the times or on terms
      acceptable to the Company, or at all. In addition, acquiring, or combining
      with,
      a business involves many risks, including:





·
            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.





The
      Company cannot make assurances that we will make any acquisitions or business
      combinations or that we will be able to obtain additional financing for such
      acquisitions or combinations, if necessary. If any acquisitions or combinations
      are made, we cannot make assurances that we will be able to successfully
      integrate the acquired or combined business into our operations or that the
      acquired or combined business will perform as expected.




-11-





Furthermore,
      Federal and state tax laws and regulations have a significant impact upon the
      structuring of transactions. Management will evaluate the possible tax
      consequences of any prospective transaction and will endeavor to structure
      a
      transaction so as to achieve the most favorable tax treatment. There can be
      no
      assurance that the Internal Revenue Service or relevant state tax authorities
      will ultimately assent to our tax treatment of a particular consummated
      transaction. To the extent the Internal Revenue Service or any relevant state
      tax authorities ultimately prevail in recharacterizing the tax treatment of
      a
      transaction, there may be adverse tax consequences to us, a target business
      and
      their respective stockholders. Tax considerations as well as other relevant
      factors will be evaluated in determining the precise structure of a particular
      transaction, which could be effected through various forms of a merger,
      consolidation or stock or asset acquisition.





Pending
      negotiation and consummation of a transaction, the Company anticipates that
      it
      will have, aside from carrying on its search for a transaction partner, no
      business activities, and, thus, no source of revenue. Should the Company incur
      any significant liabilities prior to a combination with a Target Business,
      it
      may not be able to satisfy ,without additional financing, such liabilities
      as
      are incurred.





**RESULTS
      OF OPERATIONS**





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





Net
      loss
      narrowed to $ 69,800 in the three month period ended September 30,2004 from
      $126,800 in the comparable 2003 period, principally due to gains on sales of
      portfolio investments of $ 110,400 in the 2004 period. General and
      administrative expenses increased to $ 139,900 in the current period from $
      68,200 due to higher professional fees, including legal , administrative and
      accounting services. Interest and other expenses totaled $ 40,300 in the 2004
      period compared with $ 58,900 for the comparable 2003 period, which included
      certain non-recurring consulting costs and higher interest
      amortization.





**LIQUIDITY
      AND CAPITAL RESOURCES**





The
      Company’s current assets exceeded its current liabilities by $ 837,700 at
      September 30, 2004, compared to current assets exceeding its current liabilities
      by $ 1,405,500 at June 30, 2004. Current marketable securities had a market
      value of $1.5 million and $1.9 million at September 30, 2004 and June 30, 2004,
      respectively. The principal reason for the decrease in both net current assets
      and other assets is the decrease in market value of the Company’s holdings in
      IMSI.




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Since
      the
      Company is inactive, except for its interest in IMSI, and it is not contemplated
      that IMSI will declare and pay dividends on its common stock, the Company
      depends upon sales of its shares of IMSI common stock (which are quoted on
      the
      OTCBB) in order to meet its expenses, unless the Company could obtain fund
      from
      third parties, of which there can be no assurance. The Company has sold 77,500
      shares of IMSI since June 30, 2005 and has used the proceeds of approximately
      $84,000 for general working capital purposes.





The
      amount of proceeds available to the Company from the sale of shares of IMSI
      depends upon the market for IMSI shares, which is subject to volatility in
      price
      and market volume.





The
      proceeds of any such sales are anticipated to be principally used by the Company
      for general working capital purposes.





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




The
      Company’s equity investments are concentrated in relatively few investees,
      principally International Microcomputer Software, Inc. ("IMSI"). At September
      30, 2004, almost 100% of the total fair value of equity investments was
      concentrated in IMSI.




The
      Company’s present preferred strategy is to hold equity investments for trading
      purposes and for long-term strategic purposes. Thus, the Company’s management is
      not necessarily troubled by short term equity price volatility with respect
      to
      its investments provided that the underlying business, economic and management
      characteristics of the investees remain favorable.




The
      carrying values of investments subject to equity price risks are based on quoted
      market prices or management’s estimates of fair value as of the balance sheet
      dates. Market prices are subject to fluctuation and, consequently, the amount
      realized in the subsequent sale of an investment may significantly differ from
      the reported market value. Fluctuation in the market price of a security may
      result from perceived changes in the underlying economic characteristics of
      the
      investee, the relative price of alternative investments and general market
      conditions. Furthermore, amounts realized in the sale of a particular security
      may be affected by the relative quantity of the security being sold.




Insofar
      as the Company’s liabilities are concerned, all loans to the Company have been
      made with fixed interest rates, and, accordingly, the market risk to the Company
      prior to the maturity of those instruments is minimal.




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**ITEM
      4. CONTROLS AND PROCEDURES**





**Evaluation
      of Disclosure Controls and Procedures**





The
      Company's chief executive officer in conjunction with the chief financial
      officer, after evaluating the effectiveness of the Company's "disclosure
      controls and procedures" (as defined in Rule 13a-15(e) under the Securities
      Exchange Act of 1934, as amended) as of a date (the "Evaluation Date") within
      90
      days before the filing date of this quarterly report, has concluded that the
      Company's disclosure controls and procedures are effective in ensuring that
      material information required to be disclosed is included in the reports that
      it
      files with the Securities and Exchange Commission.





**Changes
      in Internal Controls**





There
      were no significant changes in the Company's internal controls or, to the
      knowledge of the management of the Company, in other factors that could
      significantly affect those controls subsequent to the Evaluation
      Date.





**PART
      II. OTHER INFORMATION**





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





The
      Company is, from time to time, the subject of litigation, claims and assessments
      arising out of matters occurring during the normal operation of the Company's
      business. In the opinion of management, the liability, if any, under such
      current litigation, claims and assessments, that are material, have been
      properly accrued.





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





None.





**Item
      3. Defaults upon Senior Securities**





None.





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





None.





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





None.




-14-





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





(a)
      Exhibits: None.


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





(b)
      Reports on Form 8-K





None




-15-




**SIGNATURES**





In
      accordance with the requirements of the Exchange Act, the Registrant caused
      this
      report to be signed on its behalf by the undersigned, thereunto duly
      authorized.




DIGITAL
              CREATIVE
              DIGITAL CORPORATIONDated February 8, 2006By:
            /s/
              Gary
              HermanName:
              Gary HermanTitle:
              Chief Executive Officer and President


By:
              /s/
                Skuli ThorvaldssonName:
                Skuli ThorvaldssonTitle:
                Chief Financial Officer






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