|   | Form 10-QSB |   |
|--------|-------------|--------|

|   |
|--------|

|   | SECURITIES AND EXCHANGECOMMISSION Washington, D.C. |   |
|--------|----------------------------------------------------|--------|

|   |
|--------|

|   | [ X ]  Quarterly Report Pursuant to Section 13 or 15(d) of the SecuritiesExchange Act of 1934 For the quarterly period ended March 31, 2007 |   |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------|--------|

| OR |
|----|

|   | [   ]  Transition Report Pursuant to Section 13 or 15(d) of the SecuritiesExchange Act of 1934 For the transition period from _______ to _______. |   |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------|--------|

|   |
|--------|

|   | Commission File No. 33-19961 |   |
|--------|------------------------------|--------|

|   |
|--------|

|   | Diamond I, Inc.                                                  |   |
|--------|------------------------------------------------------------------|--------|
|   | (Exact Name of Small Business Issuer as Specified in itsCharter) |   |

|   |
|--------|

|   | DELAWARE |   | 01-0623010 |   |
|--------|----------|--------|------------|--------|

|   | (State or Other Jurisdiction ofincorporation or organization) |   | (I.R.S. Employer IdentificationNumber) |   |
|--------|---------------------------------------------------------------|--------|----------------------------------------|--------|

|   | 8733 Siegen Lane, Suite 309, Baton Rouge, LA 70810 |   |
|--------|----------------------------------------------------|--------|

|   | (Address of Principal Executive Offices, including Zip Code) |   |
|--------|--------------------------------------------------------------|--------|

|   | (225) 341-4004 |   |
|--------|----------------|--------|

|   | (Issuer’s telephone number, including area code) |   |
|--------|--------------------------------------------------------|--------|

|   |
|--------|

| Indicate by check mark whether Registrant (1) has filed all reports required to be filed by Section13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for suchshorter period that Registrant is required to file such reports), and (2) has been subject to suchfiling requirements for the past 90 days: Yes [ X ]   No [   ] |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of theExchange Act). Yes [  ] No [ X ] |
|-----------------------------------------------------------------------------------------------------------------------------------|

| Indicate the number of shares outstanding of each of the issuer’s classes of common stock asof the latest practicable date: |
|-----------------------------------------------------------------------------------------------------------------------------------|

|   | Class |   | Outstanding as of 5-18-07 |   |
|--------|-------|--------|---------------------------|--------|

|   | Common Stock, $.001 par value |   | 322,516,707 |   |
|--------|-------------------------------|--------|-------------|--------|

|         |
|--------------|
| <PAGE> |
|         |

| PART I - FINANCIAL INFORMATION |
|--------------------------------|

|   |
|--------|

| Item 1.  Financial Statements. |   |
|--------------------------------|--------|

| INDEX TO CONSOLIDATED FINANCIAL STATEMENTS |
|--------------------------------------------|
| Diamond I, Inc.                            |

|   |   | Page |
|--------|--------|------|

|   | Balance Sheet as of March 31, 2007 (unaudited), and December 31, 2006 | 3 |
|--------|-----------------------------------------------------------------------|---|

|   | Statement of Revenues and Expenses for the Three Months Ended March 31, 2007and 2006, and Period from June 17, 2003 (Inception), Through March 31, 2007(unaudited) | 4 |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|---|

|   | Statement of Stockholders’ Equity for the Three Months Ended March 31, 2007(unaudited) | 5 |
|--------|----------------------------------------------------------------------------------------------|---|

|   | Statement of Cash Flows for the Three Months Ended March 31, 2007 and 2006,and Period from June 17, 2003 (Inception), Through March 31, 2006 (unaudited) | 6 |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------|---|

|   | Notes to Consolidated Financial Statements | 8 |
|--------|--------------------------------------------|---|

|         |
|--------------|
| <PAGE> |
|         |

|   | DIAMOND I, INC. |   |
|--------|-----------------|--------|

|   | (a development stage company) |   |
|--------|-------------------------------|--------|

|   | CONSOLIDATED BALANCE SHEETS |   |
|--------|-----------------------------|--------|

|   | March 31, 2007,and December 31, 2006 |   |
|--------|--------------------------------------|--------|

|   | 3/31/07(unaudited) |   | 12/31/06 |
|--------|--------------------|--------|----------|

| ASSETS |
|--------|

| Current assets: |   |   |
|-----------------|--------|--------|

|   | Cash | $13,142 |   | $         35 |
|--------|------|---------|--------|--------------|

|   | Total current assets | 13,142 |   | 35 |
|--------|----------------------|--------|--------|----|

| Equipment, net of accumulated depreciation of $96,926and $92,870 | 5,189 |   | 9,245 |
|------------------------------------------------------------------|-------|--------|-------|

| Intangible assets - Pending patent, net of accumulatedamortization of $133,898 and $94,479 | 727,235 |   | 766,654 |
|--------------------------------------------------------------------------------------------|---------|--------|---------|

|   | Total Assets | $745,566 |   | $775,934 |
|--------|--------------|----------|--------|----------|

| LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) |
|------------------------------------------------|

| Current liabilities: |   |   |
|----------------------|--------|--------|

|   | Accounts payable | $1,500 |   | $1,500 |
|--------|------------------|--------|--------|--------|

|   | Accrued expenses | 394,725 |   | 336,586 |
|--------|------------------|---------|--------|---------|

|   | Short-term note payable - related party | 41,640 |   | 41,640 |
|--------|-----------------------------------------|--------|--------|--------|

|   | Dividend payable on preferred stock | 90,000 |   | 82,500 |
|--------|-------------------------------------|--------|--------|--------|

|   | Total current liabilities | 527,865 |   | 462,226 |
|--------|---------------------------|---------|--------|---------|

| Stockholders’ equity (deficit): |   |   |
|---------------------------------------|--------|--------|

|   | Preferred stock, $.001 par value, 50,000,000 sharesauthorized, 500,000 Series A shares issued andoutstanding | 500 |   | 500 |
|--------|--------------------------------------------------------------------------------------------------------------|-----|--------|-----|

|   | Common stock, $.001 par value; 700,000,000 sharesauthorized, 298,153,756 and 288,513,756 sharesissued and outstanding | 298,154 |   | 288,514 |
|--------|-----------------------------------------------------------------------------------------------------------------------|---------|--------|---------|

|   | Subscription receivable | (128,000) |   | (128,000) |
|--------|-------------------------|-----------|--------|-----------|

|   | Additional paid-in capital | 29,437,999 |   | 29,219,021 |
|--------|----------------------------|------------|--------|------------|

|   | Deficit accumulated during the development stage | (29,390,952) |   | (29,066,327) |
|--------|--------------------------------------------------|--------------|--------|--------------|

|   | Total stockholders' equity | 217,701 |   | 313,708 |
|--------|----------------------------|---------|--------|---------|

|   | Total liabilities and stockholders’ equity | $745,566 |   | $775,934 |
|--------|--------------------------------------------------|----------|--------|----------|

|   |
|--------|

| The accompanying notes are an integral part of these statements. |
|------------------------------------------------------------------|

|         |
|--------------|
| <PAGE> |
|         |

|   | DIAMOND I, INC. |   |
|--------|-----------------|--------|

|   | (a development stage company) |   |
|--------|-------------------------------|--------|

|   | STATEMENTS OF REVENUES ANDEXPENSES |   |
|--------|------------------------------------|--------|

|   | For the Three Months Ended March 31, 2007 and 2006, andthe Period from June 17, 2003 (Inception), Through March 31, 2007(unaudited) |   |
|--------|-------------------------------------------------------------------------------------------------------------------------------------|--------|

|   | Three Months Ended March31, |   |   |
|--------|-----------------------------|--------|--------|

|   | 2007 |   | 2006 |   | Inceptionthrough3/31/2007 |
|--------|------|--------|------|--------|---------------------------|

| Revenues | $ --- |   | $ --- |   | $10,784 |
|----------|-------|--------|-------|--------|---------|

| Internet access costs | --- |   | --- |   | (32,850) |
|-----------------------|-----|--------|-----|--------|----------|

| Gross profit (loss) | --- |   | --- |   | (22,066) |
|---------------------|-----|--------|-----|--------|----------|

| OPERATING EXPENSES |   |   |   |   |   |
|--------------------|--------|--------|--------|--------|--------|

|   | Professional and consulting fees | 202,100 |   | 165,632 |   | 3,964,188 |
|--------|----------------------------------|---------|--------|---------|--------|-----------|

|   | Compensation expense | 78,000 |   | 288,576 |   | 4,953,576 |
|--------|----------------------|--------|--------|---------|--------|-----------|

|   | Depreciation and amortization | 43,475 |   | 4,579 |   | 230,825 |
|--------|-------------------------------|--------|--------|-------|--------|---------|

|   | Impairment loss | --- |   | --- |   | 16,808,527 |
|--------|-----------------|-----|--------|-----|--------|------------|

|   | General and administrative (excludingprofessional and consulting fees,compensation expense, depreciationand impairment loss) | 213 |   | 4,189 |   | 3,384,841 |
|--------|------------------------------------------------------------------------------------------------------------------------------|-----|--------|-------|--------|-----------|

|   | Total Operating Expenses | 323,788 |   | 462,976 |   | 29,341,957 |
|--------|--------------------------|---------|--------|---------|--------|------------|

| LOSS FROM OPERATIONS | (323,788) |   | (462,976) |   | (29,364,023) |
|----------------------|-----------|--------|-----------|--------|--------------|

| OTHER INCOME (EXPENSE) | (837) |   | (1,743) |   | (26,929) |
|------------------------|-------|--------|---------|--------|----------|

| NET LOSS | (324,625) |   | (464,719) |   | (29,390,952) |
|----------|-----------|--------|-----------|--------|--------------|

| Deemed Dividend on Preferred Stock | --- |   | --- |   | (165,442) |
|------------------------------------|-----|--------|-----|--------|-----------|

| Cumulative Preferred Dividends | (7,500) |   | (7,500) |   | (90,000) |
|--------------------------------|---------|--------|---------|--------|----------|

| Net Loss Charged to CommonShareholders | (332,125) |   | (472,219) |   | (29,646,394) |
|----------------------------------------|-----------|--------|-----------|--------|--------------|

| Net loss applicable to commonshareholders |   |   |   |   |   |
|-------------------------------------------|--------|--------|--------|--------|--------|

|   | Basic and diluted | $(.001) |   | $(0.002) |   |   |
|--------|-------------------|---------|--------|----------|--------|--------|

| Weighted average number of sharesoutstanding |   |   |   |   |   |
|----------------------------------------------|--------|--------|--------|--------|--------|

|   | Basic and diluted | 289,677,312 |   | 232,617,472 |   |   |
|--------|-------------------|-------------|--------|-------------|--------|--------|

|   |
|--------|

| The accompanying notes are an integral part of these statements. |
|------------------------------------------------------------------|

|         |
|--------------|
| <PAGE> |
|         |

|   | CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY (DEFICIT) |   |
|--------|----------------------------------------------------------------|--------|

|   |  For the Three Months Ended March 31, 2007(unaudited) |   |
|--------|------------------------------------------------------------|--------|

|   | Preferred Stock |   | Common Stock |   |
|--------|-----------------|--------|--------------|--------|

|   | Shares |   | Amount |   | Shares |   | Amount |   | AdditionalPaid-inCapital |   | SubscriptionReceivable |   | DeficitAccumulatedDuring theDevelopmentStage |   | Total |   |   |
|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------------------------|--------|------------------------|--------|----------------------------------------------|--------|-------|--------|--------|

| Balance,December 31,2006 | 500,000 |   | $500 |   | 288,513,756 |   | $288,514 |   | $29,219,021 |   | $(128,000) |   | $(29,066,327) |   | $313,708 |   |   |
|--------------------------|---------|--------|------|--------|-------------|--------|----------|--------|-------------|--------|------------|--------|---------------|--------|----------|--------|--------|

| Stock issuedfor services: |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|---------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|

| February2007 | --- |   | --- |   | 2,040,000 |   | 2,040 |   | 35,658 |   | --- |   | --- |   | 37,698 |   |   |
|--------------|-----|--------|-----|--------|-----------|--------|-------|--------|--------|--------|-----|--------|-----|--------|--------|--------|--------|

| March 2007 | --- |   | --- |   | 7,600,000 |   | 7,600 |   | 163,400 |   | --- |   | --- |   | 171,000 |   |   |
|------------|-----|--------|-----|--------|-----------|--------|-------|--------|---------|--------|-----|--------|-----|--------|---------|--------|--------|

| Contributionto capitalfromshareholder | --- |   | --- |   | --- |   | --- |   | 2,220 |   | --- |   | --- |   | 2,220 |   |   |
|---------------------------------------|-----|--------|-----|--------|-----|--------|-----|--------|-------|--------|-----|--------|-----|--------|-------|--------|--------|

| Contributionto capitalfrom contractparty | --- |   | --- |   | --- |   | --- |   | 25,200 |   | --- |   | --- |   | 25,200 |   |   |
|------------------------------------------|-----|--------|-----|--------|-----|--------|-----|--------|--------|--------|-----|--------|-----|--------|--------|--------|--------|

| Dividendpayable onpreferredstock | --- |   | --- |   | --- |   | --- |   | (7,500) |   | --- |   | --- |   | (7,500) |   |   |
|----------------------------------|-----|--------|-----|--------|-----|--------|-----|--------|---------|--------|-----|--------|-----|--------|---------|--------|--------|

| Net loss | --- |   | --- |   | --- |   | --- |   | --- |   | --- |   | (324,625) |   | (324,625) |   |   |
|----------|-----|--------|-----|--------|-----|--------|-----|--------|-----|--------|-----|--------|-----------|--------|-----------|--------|--------|

| Balance,March 31,2007 | 500,000 |   | 500 |   | 298,153,756 |   | $298,154 |   | $29,437,999 |   | $(128,000) |   | $(29,390,952) |   | $217,701 |   |   |
|-----------------------|---------|--------|-----|--------|-------------|--------|----------|--------|-------------|--------|------------|--------|---------------|--------|----------|--------|--------|

|   |
|--------|

| The accompanying notes are an integral part of these statements. |
|------------------------------------------------------------------|

|         |
|--------------|
| <PAGE> |
|         |

|   | DIAMOND I, INC. |   |
|--------|-----------------|--------|

|   | (a development stage company) |   |
|--------|-------------------------------|--------|

|   | STATEMENTS OF CASH FLOWS |   |
|--------|--------------------------|--------|

|   | For the Three Months Ended March 31, 2007 and 2006,and the Period from June 17, 2003 (Inception), Through March 31, 2007(unaudited) |   |
|--------|-------------------------------------------------------------------------------------------------------------------------------------|--------|

|   |
|--------|

|   | Three Months Ended March31, |   |   |
|--------|-----------------------------|--------|--------|

|   | 2007 |   | 2006 |   | Inceptionthrough3/31/2007 |
|--------|------|--------|------|--------|---------------------------|

| CASH FLOWS FROM OPERATINGACTIVITIES |   |   |   |   |   |
|-------------------------------------|--------|--------|--------|--------|--------|

| Net loss | $(324,625) |   | $(464,719) |   | $(29,390,952) |
|----------|------------|--------|------------|--------|---------------|

|   | Adjustments to reconcile net loss tocash used in operating activities: |   |   |   |   |   |
|--------|------------------------------------------------------------------------|--------|--------|--------|--------|--------|

|   | Depreciation and amortization | 43,475 |   | 4,579 |   | 230,825 |
|--------|-------------------------------|--------|--------|-------|--------|---------|

|   | Stock issued for services andbonuses | 191,000 |   | 268,458 |   | 7,745,278 |
|--------|--------------------------------------|---------|--------|---------|--------|-----------|

|   | Impairment loss and write-down ofassets | --- |   | --- |   | 16,808,527 |
|--------|-----------------------------------------|-----|--------|-----|--------|------------|

|   | Warrant expense | --- |   | 53,575 |   | 2,200,389 |
|--------|-----------------|-----|--------|--------|--------|-----------|

|   | Donated capital, officers’ salaries | --- |   | --- |   | 279,808 |
|--------|-------------------------------------------|-----|--------|-----|--------|---------|

|   | Loss on debt extinguishment | --- |   | --- |   | 23,000 |
|--------|-----------------------------|-----|--------|-----|--------|--------|

|   | Changes in assets and liabilities: |   |   |   |   |   |
|--------|------------------------------------|--------|--------|--------|--------|--------|

|   | Accrued expenses | 75,837 |   | 109,036 |   | 412,423 |
|--------|------------------|--------|--------|---------|--------|---------|

|   | Accounts payable | --- |   | (9,954) |   | (1,500) |
|--------|------------------|-----|--------|---------|--------|---------|

| CASH FLOWS USED IN OPERATINGACTIVITIES | (14,313) |   | (39,025) |   | (1,689,202) |
|----------------------------------------|----------|--------|----------|--------|-------------|

|   |
|--------|

| CASH FLOWS FROM INVESTINGACTIVITIES |   |   |   |   |   |
|-------------------------------------|--------|--------|--------|--------|--------|

|   | Purchase of equipment | --- |   | --- |   | (102,116) |
|--------|-----------------------|-----|--------|-----|--------|-----------|

| CASH FLOWS USED IN INVESTINGACTIVITIES | --- |   | --- |   | (102,116) |
|----------------------------------------|-----|--------|-----|--------|-----------|

|   |
|--------|

| The accompanying notes are an integral part of these statements. |
|------------------------------------------------------------------|

|         |
|--------------|
| <PAGE> |
|         |

| CASH FLOWS FROM FINANCINGACTIVITIES |   |   |   |   |   |
|-------------------------------------|--------|--------|--------|--------|--------|

|   | Repayment of related partyadvances | --- |   | (4,000) |   | (59,000) |
|--------|------------------------------------|-----|--------|---------|--------|----------|

|   | Proceeds from related partyadvances | --- |   | 9,740 |   | 100,640 |
|--------|-------------------------------------|-----|--------|-------|--------|---------|

|   | Sale of preferred stock andwarrants | --- |   | --- |   | 500,000 |
|--------|-------------------------------------|-----|--------|-----|--------|---------|

|   | Proceeds from exercise of warrants | --- |   | 100,000 |   | 742,400 |
|--------|------------------------------------|-----|--------|---------|--------|---------|

|   | Shareholder contributions to capital | 2,220 |   | --- |   | 2,220 |
|--------|--------------------------------------|-------|--------|-----|--------|-------|

|   | Contract party contributions tocapital | 25,200 |   | --- |   | 25,200 |
|--------|----------------------------------------|--------|--------|-----|--------|--------|

|   | Proceeds from short-term debt | --- |   | --- |   | 25,000 |
|--------|-------------------------------|-----|--------|-----|--------|--------|

|   | Subscription receivable | --- |   | (34,600) |   | --- |
|--------|-------------------------|-----|--------|----------|--------|-----|

|   | Sale of common stock, net | --- |   | --- |   | 468,000 |
|--------|---------------------------|-----|--------|-----|--------|---------|

| CASH FLOWS PROVIDED BYFINANCING ACTIVITIES | 27,420 |   | 71,140 |   | $1,804,460 |
|--------------------------------------------|--------|--------|--------|--------|------------|

|   |
|--------|

| NET CHANGE IN CASH | 13,107 |   | 32,115 |   | 13,142 |
|--------------------|--------|--------|--------|--------|--------|

| Cash, beginning of period | 35 |   | --- |   | --- |
|---------------------------|----|--------|-----|--------|-----|

| Cash, end of period | $13,142 |   | $32,115 |   | $13,142 |
|---------------------|---------|--------|---------|--------|---------|

|   |
|--------|

| Supplemental information: |   |   |   |   |   |
|---------------------------|--------|--------|--------|--------|--------|

|   | Income taxes paid | $ --- |   | $ --- |   | $ --- |
|--------|-------------------|-------|--------|-------|--------|-------|

|   | Interest paid | $ --- |   | $ --- |   | $ --- |
|--------|---------------|-------|--------|-------|--------|-------|

|   |
|--------|

| Non-cash Investing and FinancingActivities: |   |   |   |   |   |
|---------------------------------------------|--------|--------|--------|--------|--------|

|   | Cumulative dividends on preferredstock | $7,500 |   | $7,500 |   | $90,000 |
|--------|----------------------------------------|--------|--------|--------|--------|---------|

|   | Stock issued in acquisition | $ --- |   | $ --- |   | $16,687,627 |
|--------|-----------------------------|-------|--------|-------|--------|-------------|

|   | Stock issued for wi-fi hotspots | $ --- |   | $ --- |   | $120,900 |
|--------|---------------------------------|-------|--------|-------|--------|----------|

|   | Warrants issued for patent | $ --- |   | $485,133 |   | $485,133 |
|--------|----------------------------|-------|--------|----------|--------|----------|

|   | Stock issued for software | $ --- |   | $ --- |   | $376,000 |
|--------|---------------------------|-------|--------|-------|--------|----------|

|   | Stock issued for payment of notepayable | $ --- |   | $ --- |   | $25,000 |
|--------|-----------------------------------------|-------|--------|-------|--------|---------|

|   |
|--------|

| The accompanying notes are an integral part of these statements. |
|------------------------------------------------------------------|

|         |
|--------------|
| <PAGE> |
|         |

|   | DIAMOND I, INC. |   |
|--------|-----------------|--------|

|   | (a development stage company) |   |
|--------|-------------------------------|--------|

|   | NOTES TO CONSOLIDATED FINANCIALSTATEMENTS |   |
|--------|-------------------------------------------|--------|

|   | March 31, 2007(unaudited) |   |
|--------|---------------------------|--------|

|   |
|--------|

| Note 1 | Basis of Presentation |
|--------|-----------------------|

| The consolidated balance sheet as of March 31, 2007, the statement of revenues and expenses andthe statement of cash flows for the three months ended March 31, 2007 and 2006, and the periodfrom inception (June 17, 2003) through March 31, 2007, have been prepared by Diamond I, Inc.(together with its subsidiaries, “Diamond I”) without audit.  In the opinion of management, alladjustments necessary to present fairly the financial position, results of operations and cash flowsof Diamond I at March 31, 2007, and for all other periods presented, have been made.  The resultsof operations for interim periods are not necessarily indicative of the results to be expected for thefull year.  Certain information and disclosures normally included in financial statements preparedin accordance with generally accepted accounting principles have been omitted in accordance withthe Securities and Exchange Commission’s rules for interim reporting.  Accordingly, thesefinancial statements should be read in conjunction with the financial statements and accompanyingnotes thereto in Diamond I’s Annual Report on Form 10-KSB for the fiscal year ended December31, 2006. |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Note 2 | Going Concern |
|--------|---------------|

| Diamond I has incurred losses totaling $29,390,952 through March 31, 2007, and had limitedworking capital at March 31, 2007.  Because of these conditions, Diamond I will requireadditional working capital to continue operations and develop the business.  Diamond I intendsto raise additional working capital either through private placements, public offerings and/or bankfinancing. |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| There are no assurances that Diamond I will be able to achieve a level of revenues adequate togenerate sufficient cash flow from operations or obtain additional financing through privateplacements, public offerings and/or bank financing necessary to support Diamond I’s workingcapital requirements.  To the extent that funds generated from any private placements, publicofferings and/or bank financing are insufficient, Diamond I will have to raise additional workingcapital.  No assurance can be given that additional financing will be available, or if available, willbe on terms acceptable to Diamond I.  If adequate working capital is not available Diamond I maynot continue its operations or execute its business plan. |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| These conditions raise substantial doubt about Diamond I's ability to continue as a going concern.The financial statements do not include any adjustments relating to the recoverability andclassification of asset carrying amounts or the amount and classification of liabilities that mightbe necessary should Diamond I be unable to continue as a going concern. |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Note 3 | Intangible Assets |
|--------|-------------------|

| In March 2006, Diamond I purchased pending patent rights from Larson Tech Ventures, LLC andLarry Shultz related to: |
|---------------------------------------------------------------------------------------------------------------------|

| 1. | Methods and apparatus for pari-mutuel, sports book and electronic casino gaming usingspeech recognition and concomitant video. |
|----|--------------------------------------------------------------------------------------------------------------------------------|

| 2. | Biometrically-secured portable wireless entertainment, shopping and gaming system. |
|----|------------------------------------------------------------------------------------|

| As consideration, Diamond I issued 6,500,000 warrants to purchase common stock exercisableat $0.35 per share and expiring March 31, 2011.  The fair value of these warrants was calculatedusing the Black-Scholes Model and used as the value of the patent at $485,133.  The model wasbased on a term of five years, a volatility rate of 236.74% and a discount rate of 4.83%. |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| In May 2006, Diamond I acquired all of the capital stock of Touchdev Limited for 8,000,000shares of Diamond I common stock.  Diamond I analyzed the accounting treatment of thistransaction under SFAS 141, “Business Combinations and EITF 98-3, “Determining WhetherNonmonetary Transaction Involves Receipt of Productive Assets or of a Business”.  Thistransaction was accounted for as an asset purchase and not a business combination based onTouchdev Limited’s never having engaged in active business operations.  The only material assetheld by Touchdev Limited at the date of the agreement was proprietary software and thecopyrights, documentation and internet domains related to this software. The software wasrecorded at $376,000, which was estimated to be equal to the fair value of the stock issued to theoriginal shareholders of Touchdev Limited based on the market price at the date of the agreementand will be amortized over 3 years. |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Note 4 | Capital Stock |
|--------|---------------|

| Stock for Services and Bonuses |
|--------------------------------|

| During the first three months of 2007, Diamond I issued a total of 9,640,000 shares of commonstock to third-party consultants for services, resulting in $191,000 in non-cash compensationexpense included in professional and legal expenses and consulting fees in the accompanyingstatement of revenues and expenses. |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| During the first three months of 2006, Diamond I issued a total of 4,107,142 shares of commonstock to third-party consultants for services, resulting in $117,819 in non-cash compensationexpense included in professional and legal expenses and consulting fees in the accompanyingstatement of revenues and expenses. |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| During the first three months of 2006, Diamond I issued, as bonuses to certain of its officers anddirectors, a total of 5,100,000 shares of common stock, valued at $150,640. |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Diamond I measured the transactions at the respective dates of issuance at the then-quoted marketprice.  There are no performance commitments or penalties for non-performance, thereforeDiamond I recorded the expense at the date of issuance. |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Note 5 | Agreement with NewMarket Technology, Inc. |
|--------|-------------------------------------------|

| In March 2007, Diamond I entered into a securities purchase agreement (the “PurchaseAgreement”) with DiTech, NewMarket Technology, Inc. and NewMarket Technology AcquisitionSubsidiary, pursuant to which NewMarket Technology Acquisition Subsidiary is to purchase2,000,000 shares of a new series of Diamond I’s preferred stock, to be designated “Series B”.  Theclosing under the Purchase Agreement is to occur on or before June 7, 2007.  The closing issubject to the final agreement of terms and conditions of the transaction and the ability of eachparty to perform its respective obligations.  Any, or all, parties to the Purchase Agreement canelect not to close without penalty.  The Purchase Agreement contains the following materialprovisions: |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| - | The Series B preferred stock to be issued to NewMarket Acquisition Subsidiary will possessvoting rights that give such entity voting control of Diamond I. |
|---|------------------------------------------------------------------------------------------------------------------------------------------------------------|

| - | Diamond I will receive following in consideration of the 2,000,000 shares of its Series Bpreferred stock: |
|---|-----------------------------------------------------------------------------------------------------------|

| - | A $2,000,000 promissory note (the “Dividend Note”) bearing 8% interest per annum withpayments continuing for a period of five years, on a quarterly basis.  The funds receivedby Diamond I pursuant to the Dividend Note will be distributed pro rata to Diamond Ishareholders of record on the closing date of the Purchase Agreement. |
|---|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| - | 100% of the outstanding common stock of Diamond I Technologies, Inc. is to bedistributed, as a dividend pursuant to an effective registration statement filed with theSEC, to Diamond I’s shareholders of record on the closing date of the PurchaseAgreement. |
|---|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| - | A $250,000 credit line. |
|---|-------------------------|

| - | A commitment for an additional $750,000 in funding (the terms of which fundingcommitment are to be negotiated prior to the closing under the Purchase Agreement) forDiTech. |
|---|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| - | A commitment for an additional $1,000,000 in funding (the terms of which fundingcommitment are to be negotiated prior to the closing under the Purchase Agreement) forDiamond I, to be applied to the revival of its WiFi division. |
|---|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| - | NewMarket Technology, Inc. and David Loflin, Diamond I’s president, will enter into anemployment agreement, the terms of which are to be negotiated prior to the closing underthe Purchase Agreement. |
|---|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Pursuant to the terms of Diamond I’s Series B preferred stock to be issued under the PurchaseAgreement, the Series B preferred stock will possess voting rights that are equivalent to the voteof 60% of the then-outstanding shares of Diamond I’s common stock on all matters; provided,however, that, at any time payments are in arrears under the Dividend Note referred to above, thevoting rights granted to the Series B preferred stock shall be suspended until payments under theDividend Note are current. |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Note 6 | Subsequent Event |
|--------|------------------|

| Stock Issued for Accrued Salary |
|---------------------------------|

| In April 2007, Diamond I issued a total of 16,162,951 shares of common stock in payment of$339,422 in accrued and unpaid salaries of two of its officers. |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------|

|         |
|--------------|
| <PAGE> |
|         |

| FORWARD-LOOKING STATEMENTS |
|----------------------------|

| This report by Diamond I, Inc. contains forward-looking statements. These are statementsregarding financial and operating performance and results and other statements that are nothistorical facts. The words "expect", "project", "estimate", "believe", "anticipate", "intend", "plan","forecast" and similar expressions are intended to identify forward-looking statements. Certainimportant risks could cause results to differ materially from those anticipated by some of theforward-looking statements. Some, but not all, of the important risks that could cause actualresults to differ materially from those suggested by the forward-looking statements include, amongother things: |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| - | Events that deprive us of the services of our president and largest shareholder, DavidLoflin; |
|---|-----------------------------------------------------------------------------------------------|

| - | Whether or not we can successfully establish a market for our wireless gaming products; |
|---|-----------------------------------------------------------------------------------------|

| - | Whether we are able to obtain adequate capital with which to pursue our full businessplan; and |
|---|------------------------------------------------------------------------------------------------|

| - | Other uncertainties, all of which are difficult to predict and many of which are beyond ourcontrol. |
|---|-----------------------------------------------------------------------------------------------------|

| We do not intend to update forward-looking statements. |
|--------------------------------------------------------|

|   |
|--------|

| Item 2. | Plan of Operations. |
|---------|---------------------|

| In March 2007, we entered into a securities purchase agreement (the “Purchase Agreement”) withDiamond I Technologies, Inc., our subsidiary, NewMarket Technology, Inc. and NewMarketTechnology Acquisition Subsidiary, pursuant to which NewMarket Technology AcquisitionSubsidiary is to purchase 2,000,000 shares of a new series of our preferred stock, to be designated“Series B”.  The closing under the Purchase Agreement is to occur on or before June 7, 2007.  ThePurchase Agreement contains the following material provisions: |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| - | The Series B preferred stock to be issued to NewMarket Acquisition Subsidiary willpossess voting rights that give such entity voting control of Diamond I. |
|---|------------------------------------------------------------------------------------------------------------------------------------------------------------|

| - | We will receive following in consideration of the 2,000,000 shares of our Series Bpreferred stock: |
|---|----------------------------------------------------------------------------------------------------|

| - | a $2,000,000 promissory note bearing 8% interest per annum, with NewMarketAcquisition Subsidiary as Maker and NewMarket Technology, Inc. as Guarantor;payments continuing for a period of five years, Maker shall, on a quarterly basis, deliverto Holder equal payments of principal, plus all accrued and unpaid interest, until paid.  Thefunds received by us pursuant to this promissory note will be distributed pro rata to ourshareholders of record on the closing date of the Purchase Agreement; |
|---|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| - | 100% of the outstanding common stock of Diamond I Technologies, Inc. is to bedistributed as a dividend, pursuant to an effective registration statement filed with theSEC, to our shareholders of record on the closing date of the Purchase Agreement; |
|---|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| - | a $250,000 credit line, $25,200 of which has already been accessed by us; |
|---|---------------------------------------------------------------------------|

| - | a commitment for an additional $750,000 in funding (the terms of which fundingcommitment are to be negotiated prior to the closing under the Purchase Agreement) forour gaming subsidiary, Diamond I Technologies, Inc.; |
|---|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| - | a commitment for an additional $1,000,000 in funding (the terms of which fundingcommitment are to be negotiated prior to the closing under the Purchase Agreement) forour revived Wi-Fi division; and |
|---|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| - | NewMarket Technology, Inc. and David Loflin, our president, will enter into anemployment agreement, the terms of which are to be negotiated prior to the closing underthe Purchase Agreement. |
|---|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Pursuant to the terms of our Series B preferred stock to be issued under the Purchase Agreement,the Series B preferred stock will possess voting rights that are equivalent to the vote of 60% ofthe then-outstanding shares of our common stock on all matters; provided, however, that, at anytime payments are in arrears under the promissory note referred to above, the voting rights grantedto the Series B preferred stock shall be suspended until payments under that promissory note arecurrent. |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| In addition, in order to comply with the terms of the Purchase Agreement, we are attempting tore-acquire or otherwise retire our currently outstanding shares of Series A preferred stock, so therewill be no superior security to the Series B preferred stock.  Inasmuch as we do not possessenough cash to redeem these shares of Series A preferred stock, we expect to issue shares of ourcommon stock to purchase such shares of Series A preferred stock, then cancel them. |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Our Company After the NewMarket Technology Agreement |
|------------------------------------------------------|

| Assuming the consummation of the Purchase Agreement, our company would have the followingstructure: |
|-----------------------------------------------------------------------------------------------------|

|   |
|--------|

|   | Shareholders |   |
|--------|--------------|--------|

|   |   |   |
|--------|--------|--------|

| NewMarket Acquisition Subsidiary(60% Voting control of Diamond I, Inc.through ownership of Series “B”Preferred Stock) |   | Holders of Common Stock of Diamond I,Inc.(As of the date of this Annual Report onForm10-KSB, 297,153,756 shares outstanding) |
|-----------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------------------------------------------------------------------------------------------|

|   |   |   |
|--------|--------|--------|

|   | DIAMOND I, INC.A company focused on the developmentof Wifi Internet access services with acommitment for $1,000,000 in funding(the terms of which are to be negotiatedprior to the closing under the PurchaseAgreement) |   |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|

|   | 100% Ownedby Diamond I |
|--------|------------------------|

|   | Diamond I Technologies, Inc.A company focused on the commercial exploitation of theWifiCasino GS, including the GS2 wireless hand-heldgaming unit, and owner of all wireless gaming-relatedassets, including patent rights, with a $250,000 credit lineand a commitment for an additional $750,000 in funding(the terms of commitment are to be negotiated prior to theclosing under the Purchase Agreement) |   |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|

|   | 100% Ownedby Diamond ITechnologies |
|--------|------------------------------------|

|   | Touchdev LimitedOwner of software for online and mobilegaming |   |
|--------|---------------------------------------------------------------|--------|

|   |
|--------|

| Assuming we implement fully the transactions contemplated in the Purchase Agreement, ourcompany would have the following structure: |
|-------------------------------------------------------------------------------------------------------------------------------------|

|   |
|--------|

|   | Shareholders |   |   | Shareholders |   |
|--------|--------------|--------|--------|--------------|--------|

|   |   |   |   |   |
|--------|--------|--------|--------|--------|

| NewMarketAcquisitionSubsidiary(60% Votingcontrol of DiamondI, Inc. throughownership of Series“B” PreferredStock) |   | Holders ofCommon Stock ofDiamond I, Inc.(As of the date ofthis Annual Reporton Form 10-KSB,297,153,756 sharesoutstanding) |   |   | Holders of CommonStock of Diamond ITechnologies, Inc.who obtained theirshares as a dividendon their shares ofDiamond I, Inc. |   |
|------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------------------------|--------|--------|------------------------------------------------------------------------------------------------------------------------------|--------|

|   |   |   |   |   |   |
|--------|--------|--------|--------|--------|--------|

|   | DIAMOND I, INC.A company focused on thedevelopment of Wifi Internetaccess services with acommitment for $1,000,000 infunding (the terms of whichfunding commitment are to benegotiated prior to the closingunder the Purchase Agreement) |   |   |   | DIAMOND ITECHNOLOGIES, INC.A company focused on thecommercial exploitation ofthe WifiCasino GS,including the GS2 wirelesshand-held gaming unit, andowner of all wirelessgaming-related assets,including patent rights,with a $250,000 credit lineand a commitment for anadditional $750,000 infunding (the terms ofwhich are to be negotiatedprior to the closing underthe Purchase Agreement) |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |   | 100%Ownedby DiamondITechnologies |
|--------|--------|----------------------------------|

|   |   | Touchdev Limited(100% owned byDiamond ITechnologies, Inc. andowner of softwarerelated to onlinegaming and mobilegaming) |   |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------|--------|

|   |
|--------|

| Following the dividend distribution of 100% of the outstanding common stock of Diamond ITechnologies, Inc., our company would no longer be involved in the gaming business.  Rather,with the funds to be paid to us by NewMarket, we would be focused on the revitalization anddevelopment of our Wi-Fi Internet access services, in conjunction with NewMarket and itsaffiliated companies. |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Our Company Now |
|-----------------|

| Due to an increasing number of inquiries regarding our company’s previous Wi-Fi (wirelessfidelity) Internet access business, during the fourth quarter of 2006, our management determinedto reinstate this previously dormant segment of our company.  Following this determination, webegan discussions with NewMarket, which eventually led to our entering into the PurchaseAgreement with that company.  Currently, we are following a course of action consistent with theprovisions of the Purchase Agreement.  Primarily, we have, with funds received underNewMarket’s pre-closing obligations, begun the final stages of the development of our GS2(TM)wireless hand-held gaming unit and the WifiCasino(TM) wireless gaming system.  Until theclosing under the Purchase Agreement, we expect that our business activities will be focused onthese activities. |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| It is expected that our company will not begin its full-scale efforts with respect to our Wi-FiInternet access business, unless and until we consummate the Purchase Agreement and after ourmanagement and NewMarket’s representatives have completed development of what is to becomeour future business plan. |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Business Development |
|----------------------|

| Entering into the Purchase Agreement with NewMarket Technology has the potential to changesignificantly our future business operations.  Until the closing under the Purchase Agreement, wewill continue vigorously to pursue the development and, if opportunities are available, marketingof our WifiCasino wireless gaming system.  As soon as is practicable following the closing underthe Purchase Agreement, we will divest ourselves of the gaming business, by distributing all ofthe common stock of Diamond I Technologies, Inc. (“DiTech”) to our shareholders, as part of ouragreement with NewMarket. |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Wireless Gaming. |
|------------------|

| We have not generated any revenues from this line of business since acquiring DiTech. |
|---------------------------------------------------------------------------------------|

| The development of our business has been significantly impaired by our lack of adequate capital.However, our agreement with NewMarket has permitted us to begin the final stages of our productdevelopment activities.  We expect that our product development will be greatly enhanced by ourrelationship with Quest Entertainment, a Houston, Texas-based provider of superior-quality, fast-playing, innovative gaming devices.  We recently executed a letter of intent to sign a definitivedevelopment agreement with Quest, whereby our companies would join forces to bring ourWifiCasino (and the GS2) to the gaming industry.  The definitive agreement is expected to besigned in the near future. |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Our business prospects in the State of Nevada were greatly enhanced in March 2006, with theadoption of final regulations implementing Nevada Law AB471, which authorizes the use ofmobile communication devices, such as our WifiCasino GS wireless gaming system, for gamingin public areas in Nevada casinos. |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| In furtherance of our plan to develop the business potential of our WifiCasino GS products, wehave, to the extent permitted by our capital position, taken the following actions: |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| - | completed final design and three-dimensional model of the first generation of ourWifiCasino GS that embodies our finger-print security technology; |
|---|----------------------------------------------------------------------------------------------------------------------------------------------------|

| - | begun preparation of the application for a license from the Nevada Gaming Commissionwith respect our WifiCasino GS; |
|---|---------------------------------------------------------------------------------------------------------------------|

| - | signed a letter of intent with The Palms Resort and Casino, a premier Las Vegas property,wherein The Palms has agreed to continue to develop our working relationship relating toour WifiCasino GS wireless gaming system; |
|---|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| - | signed a letter of intent with Quest Entertainment (as described above); |
|---|--------------------------------------------------------------------------|

| - | pursued numerous potential opportunities to install and operate one of our WifiCasino GSsystems on a cruise ship; |
|---|-------------------------------------------------------------------------------------------------------------------|

| - | pursued numerous potential opportunities with the owners of certain horse racingfacilities, with respect to our installing and operating one of our WifiCasino GS systemson such a facility; and |
|---|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| - | acquired Touchdev Limited, a developer of an array of internally-derived and copyrightedgaming software products, with wireless PDA and cellular-phone-based capabilities.Touchdev has created 12 different games, including Texas Hold’em Poker. |
|---|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| In March 2006, we acquired the rights to pending patents relating to voice-recognition, or “voice-print” security technology.  Our board of directors, with the recommendation of management,determined to acquire these patent rights, due to its belief that the security provided by our “voice-print” technology, when coupled with our patent-pending finger-print security technology, wouldbe a significant point in our favor, as we solicit venues.  We will be able to assure venues (and thelocal government) that those who cannot game legally will not be able to do so. |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| We believe our acquisition of Touchdev and its proprietary software products will allow us tofurther enhance our WifiCasino GS products.  We believe that these features will provide acompetitive advantage, when we begin our full-scale WifiCasino GS as we implement ourmarketing strategy. |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Our marketing plan in Nevada revolves around establishing a greater physical presence of ourpersonnel, who are to conduct our marketing activities on a face-to-face basis with the owners oftarget venues, i.e., casinos.  The success of our WifiCasino GS marketing efforts in Nevada will,like other gaming sales efforts, be largely dependent on our ability to establish positive personalrelationships with appropriate decision-makers.  Our management believes that it has alreadyestablished a positive relationship with a number of such persons. |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| To accomplish any of our business plan, we must obtain substantial capital.  Without capital, wewill not be successful in doing so. |
|-------------------------------------------------------------------------------------------------------------------------------------|

| Also, we cannot make any assurance  that we will be able to achieve a level of revenues adequateto generate sufficient cash flow from operations or obtain additional financing through privateplacements, public offerings and/or bank financing necessary to support our working capitalrequirements. |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Wi-Fi Internet Access. |
|------------------------|

| Only if we are able to consummate the Purchase Agreement with NewMarket will we be able tore-establish our Wi-Fi Internet access services business.  The following information regardingthese proposed Wi-Fi Internet access activities is summary in nature and we cannot assure you thatthe statements concerning our expectations regarding such Wi-Fi Internet access businessoperations will prove to be accurate.  Should we consummate the Purchase Agreement withNewMarket, our Current Report on Form 8-K relating to such event would contain more specificinformation regarding our future Wi-Fi Internet access services business. |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| In its public announcements regarding the Purchase Agreement, NewMarket has stated that itintends to consolidate its own Wi-Fi-related assets into our company, as part of its plan to builda comprehensive wireless broadband offering with applications in multiple market segments.NewMarket has stated that it intends, initially, to focus on the municipal government andcasino/gaming sectors. |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| With respect to the municipal government sector, it is expected that we will, in conjunction withcertain of NewMarket’s affiliated companies, offer our Wi-Fi Internet access services over entiretowns or wide large areas of large cities.  To provide this type of broad coverage, it will benecessary to deploy a large number of integrated antennae that effectively “blankets” the targetedcoverage area with radio frequencies.  We will be dependent on the funding expected to beobtained from NewMarket pursuant to the Purchase Agreement.  Without such funding, it is likelythat we will be unable to implement these plans. |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Critical Accounting Policies |
|------------------------------|

| There were no material changes to our critical accounting policies during the period endedMarch 31, 2006. |
|-----------------------------------------------------------------------------------------------------------|

| Results of Operations |
|-----------------------|

| During the three months ended March 31, 2007 and 2006, we had no revenues from operationsand we do not expect to generate any revenues from our operations for the remainder of 2007,unless the Wi-Fi Internet access marketing plan of NewMarket is successful.  We cannot assureyou that NewMarket’s business plan will be successful. |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Liquidity and Capital Resources |
|---------------------------------|

| We have incurred losses from inception of $29,390,952 and we have lacked adequate capital withwhich to accomplish our business objectives.  At March 31, 2007, we had a working capital deficitof $514,723. |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Our agreement with NewMarket requires NewMarket to provide the following sources of funding,provided closing occurs: |
|----------------------------------------------------------------------------------------------------------------------|

| - | a $250,000 credit line, $25,200 of which has been accessed and $5,000 of which is to beavailable in each of April and May, 2007; |
|---|----------------------------------------------------------------------------------------------------------------------------------|

| - | a commitment for an additional $750,000 in funding (the terms of which fundingcommitment are to be negotiated prior to the closing under the Purchase Agreement) forDiTech; and |
|---|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| - | a commitment for an additional $1,000,000 in funding (the terms of which fundingcommitment are to be negotiated prior to the closing under the Purchase Agreement) forour revived Wi-Fi division. |
|---|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| In addition, the funds received by us pursuant to a $2,000,000 promissory note will be distributedpro rata to our shareholders of record on the closing date of the Purchase Agreement.  Thispromissory note is to bear 8% interest per annum, with payments of principal and interestcontinuing for a period of five years on a quarterly basis, until paid. |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| With these funds, assuming their receipt, there are no assurances that we will be able to achievea level of revenues adequate to generate sufficient cash flow from operations or obtain additionalfinancing to sustain our business.  Further, we cannot assure you that additional financing will beavailable or, if available, that any such financing will be on terms acceptable to us.  If we do notobtain adequate financing, we may not be able to continue our operations or execute our businessplan. |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Our Capital Needs.  Our current level of operations can be maintained for the next twelve months.We anticipate our capital needs will be met through the exercise of options and issuance of sharesfor services.  However, to begin the aggressive  pursuit of our wireless gaming businessobjectives, we will require approximately $2 million. |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Capital Expenditures |
|----------------------|

| During the quarter ended March 31, 2007, we made no capital expenditure.  During the 2006period, we purchased $458,133 in patents and equipment.  We currently have limited capital withwhich to make any significant capital expenditures.  Without additional capital, we intend to makeno capital expenditures. |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |
|--------|

| Item 3. | Controls and Procedures. |
|---------|--------------------------|

| Our Chief Executive Officer and Acting Chief Financial Officer has reviewed and evaluated theeffectiveness of our disclosure controls and procedures (as defined in the Securities Exchange Actof 1934 Rules 240.13a-14(c) and 15d-14(c)) as of the end of the period covered by this report andhas concluded that such disclosure controls and procedures are not effective in timely alerting himand other members of management to material information about our company required to bedisclosed by us in our periodic reports that we file or submit under the Securities Exchange Actof 1934.  The deficiencies in our disclosure controls and procedures are a result of our lack ofaccounting personnel, due to our limited financial resources.  We are seeking additional financingthat would allow us to obtain the necessary resources to execute our business plan, includingpersonnel and other resources to improve our disclosure controls and procedures. |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| There have not been any significant changes in our internal controls over financial reporting (assuch term is defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934)during the fiscal quarter to which this report relates that have materially affected, or are reasonablylikely to materially affect, our internal control over financial reporting. |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |
|--------|

| PART II - OTHER INFORMATION |
|-----------------------------|

| Item 1. | Legal Proceedings. |
|---------|--------------------|

| We are not currently involved in any legal proceeding. |
|--------------------------------------------------------|

|   |
|--------|

| Item 2. | Item 2. Unregistered Sales of Equity Securities and Use of Proceeds. |
|---------|----------------------------------------------------------------------|

| During the three months ended March 31, 2007, we issued restricted securities as follows: |
|-------------------------------------------------------------------------------------------|

| 1.     | (a) | Securities Sold. In March 2007, 3,000,000 shares of our common stock were issued.                                                                                                                                                                                                                                                                            |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | (b) | Underwriter or Other Purchasers. Such shares of common stock were issued to TheGeorge Miller Company.                                                                                                                                                                                                                                                        |
|   | (c) | Consideration. Such shares of common stock were issued for consulting services andwere valued, in the aggregate, at $69,000.                                                                                                                                                                                                                                 |
|   | (d) | Exemption from Registration Claimed. These securities are exempt from registrationunder the Securities Act of 1933, as amended, pursuant to the provisions of Section4(2) thereof and Rule 506 thereunder, as a transaction not involving a public offering.These purchasers were sophisticated investors capable of evaluating an investmentin our company. |

|   |
|--------|

| Item 3. | Defaults upon Senior Securities. |
|---------|----------------------------------|

| None. |
|-------|

|   |
|--------|

| Item 4. | Submission of Matters to a Vote of Security Holders. |
|---------|------------------------------------------------------|

| None. |
|-------|

|   |
|--------|

| Item 5. | Other Information. |
|---------|--------------------|

| None. |
|-------|

|   |
|--------|

| Item 6. | Exhibits and Reports on Form 8-K. |
|---------|-----------------------------------|

| (a) Exhibits |
|--------------|

| ExhibitNo. |   | Description |
|------------|--------|-------------|

| 31.1 |   | Certification of Chief Executive Officer required by Rule 13a-14(a) or Rule15d-14(b) |
|------|--------|--------------------------------------------------------------------------------------|

| 31.2 |   | Certification of Chief Accounting Officer required by Rule 13a-14(a) or Rule15d-14(b) |
|------|--------|---------------------------------------------------------------------------------------|

| 32.1 |   | Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350 |
|------|--------|-----------------------------------------------------------------------------|

| 32.2 |   | Certification of Chief Accounting Officer Pursuant to 18 U.S.C. Section 1350 |
|------|--------|------------------------------------------------------------------------------|

| (b) Reports on Form 8-K |
|-------------------------|

| During the three months ended March 31, 2006, we filed one Current Report on Form 8-K, asfollows: |
|---------------------------------------------------------------------------------------------------|

| - | Date of event: March 9, 2007, as amended, wherein we reported information pursuant toItem 1.01 - Entry Into a Material Definitive Agreement and Item 7.01 - Regulation FDDisclosure. |
|---|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Since March 31, 2006, we have not filed one Current Report on Form 8-K, as follows: |
|-------------------------------------------------------------------------------------|

| - | Date of event: April 30, 2007, as amended, wherein we reported information pursuant toItem 4.01 - Change in Registrant's Certifying Accountant. |
|---|-------------------------------------------------------------------------------------------------------------------------------------------------|

|   |
|--------|

| SIGNATURES |
|------------|

| In accordance with the requirements of the Securities Exchange Act of 1934, Registrant hasduly caused this report to be signed on its behalf by the undersigned, thereunto dulyauthorized. |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |
|--------|

| Date: May 21, 2007 | DIAMOND I, INC. |
|--------------------|-----------------|

|   |
|--------|

|   |   | By: | /s/ DAVID LOFLIN |   |
|--------|--------|-----|------------------|--------|

|   | David Loflin, President andActing Chief Financial Officer[Principal Accounting Officer] |   |
|--------|-----------------------------------------------------------------------------------------|--------|