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

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

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

----

**DIGITAL      CREATIVE DEVELOPMENT CORPORATION AND SUBSIDIARY**

**FOR      THE QUARTERLY PERIOD ENDED**

**DECEMBER      31, 2005**

**INDEX**

|                                                |                                                                                                                |     |
|-----------------------------------------------------|---------------------------------------------------------------------------------------------------------------------|----------|
| **Part                  I - FINANCIAL INFORMATION** |                                                                                                                |
|                                                |                                                                                                                |     |
| Item                  1.                            | INTERIM                  FINANCIAL STATEMENTS                                                                       |  1  |
|                                                |                                                                                                                |     |
|                                                | Consolidated                  Balance Sheets as of December 31, 2005 (Unaudited)                                    |     |
|                                                | and                  June 30, 2005                                                                                  | 2        |
|                                                |                                                                                                                |     |
|                                                | Consolidated                  (Unaudited) Statements of Operations and                                              |     |
|                                                | Comprehensive                  Income for the three month periods and six month periods                  ended      |     |
|                                                | December                  31, 2005 and December 31, 2004                                                            | 3        |
|                                                |                                                                                                                |     |
|                                                | Consolidated                  (Unaudited) Statement of Stockholders’ Equity                                   |     |
|                                                | for                  the six month period ended December 31, 2005                                                   | 4        |
|                                                |                                                                                                                |     |
|                                                | Consolidated                  Statements of Cash Flow for the six month periods ended December                  31, |     |
|                                                | 2005                  and December 31, 2004                                                                         |  5  |
|                                                |                                                                                                                |     |
|                                                | Notes                  to Interim Financial Statements                                                              |  6  |
|                                                |                                                                                                                |     |
| Item                  2.                            | MANAGEMENT'S                  DISCUSSION AND ANALYSIS AND                                                           |     |
|                                                | PLAN                  OF OPERATION                                                                                  |  12 |
|                                                |                                                                                                                |     |
| Item                  3.                            | QUANTITATIVE                AND                QUALITATIVE DISCLOSURES ABOUT MARKET RISK                            |  14 |
|                                                |                                                                                                                |     |
| Item                  4.                            | CONTROLS                  AND PROCEDURES                                                                            |  15 |
|                                                |                                                                                                                |     |
| **Part                  II - OTHER INFORMATION**    |  15                                                                                                            |
|                                                |                                                                                                                |     |
| Item                  6.                            | EXHIBITS                  AND REPORTS ON FORM 8-K                                                                   |  16 |
|                                                |                                                                                                                |     |
|                                                | Signatures.                                                                                                         |  17 |
|                                                |                                                                                                                |     |
|                                                | Certifications                                                                                                      |     |
|                                                |                                                                                                                |     |

----

**Part      I - FINANCIAL INFORMATION**

----

**DIGITAL        CREATIVE DEVELOPMENT CORPORATION AND SUBSIDIARY**

**CONSOLIDATED          BALANCE SHEETS**

**DECEMBER        31,2005 AND JUNE 30, 2005 **

| **ASSETS**                                                                                                                                       |   |                                   |        |                               |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------|-------------|------------------------------------|--------|
|                                                                                                                                             |   | **December                  31, 2005** |        | **June                  30, 2005** |   |
|                                                                                                                                             |   | **(Unaudited)**                        |        | **(Audited)**                      |   |
|                                                                                                                                             |   | **(in                  thousands)**    |        |
| **CURRENT                  ASSETS**                                                                                                              |   |                                   |        |                               |   |
| Cash                  and cash equivalents                                                                                                  |   | $                                      | -           |                               | $      | 111.5 |   |
| Marketable                  securities                                                                                                      |   |                                   | 814.9       |                               |   | 1,120.1 |   |
|  **TOTAL                  CURRENT ASSETS**                                                                                                  |   |                                   | 814.9       |                               |   | 1,231.6 |   |
|  .                                                                                                                                          |   |                                   |        |                               |   |   |   |
| **OTHER                  ASSETS**                                                                                                                |   |                                   |        |                               |   |   |   |
| Marketable                  securities and non-marketable securities and advances, net of $                  300,000                        |   |                                   |        |                               |   |   |   |
| at                  December 31,2005 and June 30,2005                                                                                       |   |                                   | 6,153.0     |                               |   | 7,834.8 |   |
|                                                                                                                                             |   |                                   |        |                               |   |   |   |
| **TOTAL                  ASSETS**                                                                                                                |   | **$**                                  | **6,967.9** |                               | **$**  | **9,066.4** |   |
|                                                                                                                                             |   |                                   |        |                               |   |   |   |
| **LIABILITIES                  AND STOCKHOLDERS' EQUITY**                                                                                        |   |                                   |        |                               |   |   |   |
|                                                                                                                                             |   |                                   |        |                               |   |   |   |
| **CURRENT                  LIABILITIES**                                                                                                         |   |                                   |        |                               |   |   |   |
| Accrued                  expenses and other liabilities                                                                                     |   | $                                      | 594.8       |                               | $      | 607.1 |   |
| Current                  portion of notes payable--related parties                                                                          |   |                                   | 888.4       |                               |   | 938.6 |   |
|  **TOTAL                  CURRENT LIABILITIES**                                                                                             |   |                                   | 1,483.2     |                               |   | 1,545.7 |   |
|                                                                                                                                             |   |                                   |        |                               |   |   |   |
| **NOTES                  PAYABLE - RELATED PARTIES**                                                                                             |   |                                   |        |                               |   |   |   |
| **NET                  OF CURRENT MATURITIES**                                                                                              |   |                                   | -           |                               |   | - |   |
| **TOTAL                  LIABILITIES**                                                                                                           |   |                                   | 1,483.2     |                               |   | 1,545.7 |   |
|                                                                                                                                             |   |                                   |        |                               |   |   |   |
| **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: 51,689,165 Shares at December 31, 2005 and 51,649,165                  Shares at June 30, 2005  |   |                                   | 516.9       |                               |   | 516.5 |   |
| Additional                  paid in capital                                                                                                 |   |                                   | 38,370.1    |                               |   | 38,364.9 |   |
| Accumulated                  other comprehensive income                                                                                     |   |                                   | 3,715.4     |                               |   | 5,587.6 |   |
| Accumulated                  deficit                                                                                                        |   |                                   | (38,372.6   | )                                  |   | (38,203.2 | ) |
|  **TOTAL                  STOCKHOLDERS' EQUITY**                                                                                            |   |                                   | 5,484.7     |                               |   | 7,520.7 |   |
|                                                                                                                                             |   |                                   |        |                               |   |   |   |
| **TOTAL                  LIABILITIES AND STOCKHOLDERS' EQUITY**                                                                                  |   | $                                      | **6,967.9** |                               | **$**  | **9,066.4** |   |
|                                                                                                                                             |   |                                   |        |                               |   |   |   |

----

**DIGITAL        CREATIVE DEVELOPMENT CORPORATION AND SUBSIDIARY**

**CONSOLIDATED        STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME**

|                                                                   |   | **For                  the Six Months Ended December 31,** |       | **For                  the Three Months Ended December 31,** |   |
|------------------------------------------------------------------------|--------|------------------------------------------------------------|------------|--------------------------------------------------------------|--------|
|                                                                   |   | **2005**                                                   |       | **2004**                                                     |   | **2005** |   | **2004** |   |
|                                                                   |   | **(in                  thousands)**                        |       | **(in                  thousands)**                          |   |
| **TOTAL                  REVENUE**                                     |   |                                                       |       |                                                         |   |   |   |   |   |
| Dividends,                  interest income, and other income          |   | $                                                          | 0.2        |                                                         | $      | - |   | $ | 0.2 |   | $ | - |   |
|                                                                   |   |                                                       |       |                                                         |   |   |   |   |   |   |   |   |   |
|                                                                   |   |                                                       |       |                                                         |   |   |   |   |   |   |   |   |   |
| **OPERATING                  EXPENSES**                                |   |                                                       |       |                                                         |   |   |   |   |   |   |   |   |   |
| General                  and administrative expenses                   |   |                                                       | 125.3      |                                                         |   | 216.0 |   |   | 38.3 |   |   | 76.1 |   |
|                                                                   |   |                                                       |       |                                                         |   |   |   |   |   |   |   |   |   |
| **(LOSS)                  FROM OPERATIONS**                            |   |                                                       | (125.1     | )                                                            |   | (216.0 | ) |   | (38.1 | ) |   | (76.1 | ) |
|                                                                   |   |                                                       |       |                                                         |   |   |   |   |   |   |   |   |   |
|                                                                   |   |                                                       |       |                                                         |   |   |   |   |   |   |   |   |   |
| **OTHER                  INCOME (EXPENSE)**                            |   |                                                       |       |                                                         |   |   |   |   |   |   |   |   |   |
| Interest                  expense, net and other                       |   |                                                       | (74.3      | )                                                            |   | (54.7 | ) |   | (52.8 | ) |   | (14.4 | ) |
| Realized                  and unrealized gains on investments          |   |                                                       | 30.0       |                                                         |   | 123.8 |   |   | 30.0 |   |   | 13.4 |   |
|                                                                   |   |                                                       |       |                                                         |   |   |   |   |   |   |   |   |   |
| **TOTAL                  OTHER INCOME (EXPENSE)**                      |   |                                                       | (44.3      | )                                                            |   | 69.1 |   |   | (22.8 | ) |   | (1.0 | ) |
|                                                                   |   |                                                       |       |                                                         |   |   |   |   |   |   |   |   |   |
| **NET                  LOSS**                                          |   | **$**                                                      | **(169.4** | **)**                                                        | **$**  | **(146.9** | **)** | **$** | **(60.9** | **)** | **$** | **(77.1** | **)** |
|                                                                   |   |                                                       |       |                                                         |   |   |   |   |   |   |   |   |   |
| **UNDECLARED                  PREFERRED STOCK DIVIDENDS**              |   |                                                       | (72.8      | )                                                            |   | (72.8 | ) |   | (36.4 | ) |   | (36.4 | ) |
|                                                                   |   |                                                       |       |                                                         |   |   |   |   |   |   |   |   |   |
| **Net                  Loss available to common shareholders**         |   | **$**                                                      | **(242.2** | **)**                                                        | **$**  | **(219.7** | **)** | **$** | **(97.3** | **)** | **$** | **(113.5** | **)** |
|                                                                   |   |                                                       |       |                                                         |   |   |   |   |   |   |   |   |   |
|                                                                   |   |                                                       |       |                                                         |   |   |   |   |   |   |   |   |   |
| **BASIC                  AND DILUTED LOSS PER SHARE**                  |   | $                                                          | (0.005     | )                                                            | $      | (0.004 | ) | $ | (0.002 | ) | $ | (0.002 | ) |
|                                                                   |   |                                                       |       |                                                         |   |   |   |   |   |   |   |   |   |
| **WEIGHTED                  AVERAGE NUMBER OF OUTSTANDING SHARES FOR** |   |                                                       |       |                                                         |   |   |   |   |   |   |   |   |   |
| **BASIC                  AND DILUTED EARNINGS PER SHARE**              |   |                                                       | 51,679.3   |                                                         |   | 51,649.2 |   |   | 51,689.2 |   |   | 51,649.2 |   |
|                                                                   |   |                                                       |       |                                                         |   |   |   |   |   |   |   |   |   |
|                                                                   |   |                                                       |       |                                                         |   |   |   |   |   |   |   |   |   |
| **NET                  INCOME LOSS**                                   |   | $                                                          | (169.4     | )                                                            | $      | (146.9 | ) | $ | (60.9 | ) | $ | (77.1 | ) |
| **Other                  comprehensive operations**                    |   |                                                       |       |                                                         |   |   |   |   |   |   |   |   |   |
| **Gain                  (Loss) on marketable securities**              |   |                                                       | (1,872.2   | )                                                            |   | (1,689.3 | ) |   | (1,619.0 | ) |   | 524.3 |   |
| **Comprehensive                  net income (loss)**                   |   | $                                                          | (2,041.6   | )                                                            | $      | (1,836.2 | ) | $ | (1,679.9 | ) | $ | 447.2 |   |
|                                                                        |   |                                                       |       |                                                         |   |   |   |   |   |   |   |   |   |

**See        accompanying Notes to Consolidated Financial Statements**

----

**DIGITAL        CREATIVE DEVELOPMENT CORPORATION AND SUBSIDIARY**

**CONSOLIDATED        STATEMENTS OF STOCKHOLDERS' EQUITY **

**FOR          THE SIX MONTHS ENDED DECEMBER 31, 2005 **

| **(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, 2005**                 |   | **$** | **2.2** |   | **$** | **852.7** |   | **$** | **400.0** |   | **$** | **516.5** |   | **$** | **38,364.9** |   | **$** | **5,587.6** |   | **$** | **(38,203.2** | **)** | **$** | **7,520.7** |   |
|                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Unrealized                  gain (loss) on investments   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (1,872.2 | ) |   |   |   |   | (1,872.2 | ) |
| Issuance                  of common stock for services        |   |   |   |   |   |   |   |   |   |   |   | .4 |   |   | 5.2 |   |   |   |   |   | - |   |   | 5.6 |   |
| Net                  loss                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (169.4 | ) |   | (169.4 | ) |
|                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Balance                  at December 31,2005**              |   | **$** | **2.2** |   | **$** | **852.7** |   | **$** | **400.0** |   | **$** | **516.9** |   | **$** | **38,370.1** |   | **$** | **3,715.4** |   | **$** | **(38,372.6** | **)** | **$** | **5,484.7** |   |
|                                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

**See        accompanying Notes to Consolidated Financial Statements**

----

**DIGITAL        CREATIVE DEVELOPMENT CORPORATION AND SUBSIDIARY**

**CONSOLIDATED        STATEMENTS OF CASH FLOWS**

|                                                                                                                    |   | **For                  the Six Months Ended December 31,** |   |
|-------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------------------------|--------|
|                                                                                                                    |   | **2005**                                                   |   | **2004** |   |
|                                                                                                                    |   | **(in                  thousands)**                        |   |
|                                                                                                                    |   |                                                       |   |   |   |
| CASH                  FLOWS FROM OPERATING ACTIVITES:                                                                   |   |                                                       |   |   |   |
| Net                  loss                                                                                               |   | $                                                          | (169.4 | ) | $ | (146.9 | ) |
| Adjustments                  to reconcile net loss to net cash used in operating                  activities:      |   |                                                       |   |   |   |   |   |
| Amortization                  of debt discount                                                                          |   |                                                       | -      |   |   | 16.1 |   |
| Realized                  (gain) loss on investments net of unrealized gains                                            |   |                                                       | (30.0  | ) |   | (159.8 | ) |
| Issuance                  of common stock for services                                                                  |   |                                                       | 5.6    |   |   |   |   |
| Changes                  in assets and liabilities:                                                                |   |                                                       |   |   |   |   |   |
|  Increase                  (decrease) in accounts payable, accrued expenses and other                  liabilities |   |                                                       | (12.3  | ) |   | 222.9 |   |
|                                                                                                                    |   |                                                       |   |   |   |   |   |
| NET                  CASH USED IN OPERATING ACTIVITIES                                                                  |   |                                                       | (206.1 | ) |   | (67.7 | ) |
|                                                                                                                    |   |                                                       |   |   |   |   |   |
| CASH                  FLOWS FROM INVESTING ACTIVITES:                                                                   |   |                                                       |   |   |   |   |   |
| Proceeds                  from sale of investments                                                                 |   |                                                       | 144.8  |   |   | 250.7 |   |
| Purchase                  of investments                                                                           |   |                                                       | -      |   |   | (153.2 | ) |
| NET                  CASH PROVIDED BY INVESTING ACTIVITIES                                                              |   |                                                       | 144.8  |   |   | 97.5 |   |
|                                                                                                                    |   |                                                       |   |   |   |   |   |
| CASH                  FLOWS FROM FINANCING ACTIVITES:                                                                   |   |                                                       |   |   |   |   |   |
|                                                                                                                    |   |                                                       |   |   |   |   |   |
| Payments                  of note payable                                                                          |   |                                                       | (50.2  | ) |   | - |   |
| Payments                  of note payable to related parties                                                       |   |                                                       |   |   |   | (25.0 | ) |
|                                                                                                                    |   |                                                       |   |   |   |   |   |
| NET                  CASH PROVIDED BY FINANCING ACTIVITIES                                                              |   |                                                       | (50.2  | ) |   | (25.0 | ) |
|                                                                                                                    |   |                                                       |   |   |   |   |   |
| NET                  CHANGE IN CASH AND CASH EQUIVALENTS                                                                |   | $                                                          | (111.5 | ) | $ | 4.8 |   |
|                                                                                                                    |   |                                                       |   |   |   |   |   |
| CASH                  AND EQUIVALENTS, beginning of period                                                              |   |                                                       | 111.5  |   |   | 5.1 |   |
|                                                                                                                    |   |                                                       |   |   |   |   |   |
| CASH                  AND EQUIVALENTS, end of period                                                                    |   | $                                                          | -      |   | $ | 9.9 |   |
|                                                                                                                    |   |                                                       |   |   |   |   |   |

**See        accompanying Notes to Consolidated Financial        Statements**

----

**DIGITAL      CREATIVE DEVELOPMENT CORPORATION AND SUBSIDIARY**

**NOTES      TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS**

**December      31, 2005**

**(Unaudited**

**NOTE      1- BASIS OF PRESENTATION **

**NOTE      2- PRINCIPLES OF CONSOLIDATION **

----

**DIGITAL      CREATIVE DEVELOPMENT CORPORATION AND SUBSIDIARY**

**NOTES      TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS**

**December      31, 2005**

**(Unaudited)**

**NOTE      3- MARKETABLE SECURITIES **

|                                                    |   | December                31, 2005 |      | June                30, 2005 |   |
|---------------------------------------------------------|--------|----------------------------------|-----------|------------------------------|--------|
|                                                    |   |                             |      |                         |   |
| Marketable                Securities - current:         |   |                             |      |                         |   |
| Broadcaster                (formerly IMSI)              |   | $                                | 380,400   |                         | $      | 380,400 |   |
|                                                    |   |                             |      |                         |   |   |   |
| Other                marketable securities              |   |                             | 100       |                         |   | 91,100 |   |
|                                                    |   |                             | 380,500   |                         |   | 471,500 |   |
| Unrealized                gain on marketable securities |   |                             | 434,400   |                         |   | 648,600 |   |
| Total                                                   |   | $                                | 814,900   |                         | $      | 1,120,100 |   |
|                                                    |   |                             |      |                         |   |   |   |
|                                                    |   |                             |      |                         |   |   |   |
| Marketable                Securities - non-current:     |   |                             |      |                         |   |   |   |
| Broadcaster                (formerly IMSI)              |   | $                                | 2,872,300 |                         | $      | 2,896,000 |   |
| Access                Propeller Holdings , Inc.         |   |                             | 300,000   |                         |   | 300,000 |   |
| Sub                total                                |   |                             | 3,172,300 |                         |   | 3,196,000 |   |
| Unrealized                gain on marketable securities |   |                             | 3,280,700 |                         |   | 4,938,800 |   |
| Less:                allowance for impairments          |   |                             | (300,000  | )                            |   | (300,000 | ) |
| Total                                                   |   | $                                | 6,153,000 |                         | $      | 7,834,800 |   |

----

**DIGITAL      CREATIVE DEVELOPMENT CORPORATION AND SUBSIDIARY**

**NOTES      TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS**

**December      31, 2005**

**(Unaudited)**

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

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

|                                                                                                |   | December                31, 2005 |                 | June                30, 2005 |   |
|-----------------------------------------------------------------------------------------------------|--------|----------------------------------|----------------------|------------------------------|--------|
|                                                                                                |   |                             |                 |                         |   |
| Secured                Promissory Note with Interest at 15%                                         |   | $                                | 325,000              |                         | $      | 325,000 |   |
| $345,000                Secured Promissory Notes with Interest at 10%, net of discount              |   |                             | 345,000              |                         |   | 345,000 |   |
| Notes                payable to certain former executives                                           |   |                             | 115,100              |                         |   | 115,000 |   |
| Debt                due to former employees in conjunction with settlement                agreement |   |                             | 103,350              |                         |   | 153,600 |   |
|                                                                                                |   |                             | 888,450              |                         |   | 938,600 |   |
|                                                                                                |   |                             |                 |                         |   |   |   |
| Less:                Current portion                                                                |   |                             | 888,450              |                         |   | 938,600 |   |
| Long-term                portion                                                                    |   | $                                | -0-                - |                         | $      | —0- |   |

----

**DIGITAL      CREATIVE DEVELOPMENT CORPORATION AND SUBSIDIARY**

**NOTES      TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS**

**December      31, 2005**

**(Unaudited)**

----

**DIGITAL      CREATIVE DEVELOPMENT CORPORATION AND SUBSIDIARY**

**NOTES      TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS**

**December      31, 2005**

**(Unaudited)**

**NOTE      6-- COMMITMENTS AND CONTINGENCIES **

**NOTE      7- SUBSEQUENT EVENTS **

----

**DIGITAL      CREATIVE DEVELOPMENT CORPORATION AND SUBSIDIARY**

**NOTES      TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS**

**December      31, 2005**

**(Unaudited)**

----

**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. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

**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 July 11, 2007 | By:                                             | Gary              Herman |
|                | Name:              Gary Herman                            |
|                | Title:              Chief Executive Officer and President |

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

----