|   | Form 10-QSB/A |   |
|--------|---------------|--------|

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

|   | 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 June 30, 2005 |   |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------|--------|

| 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) |   |
|--------|--------------------------------------------------------|--------|

| This amended Quarterly Report on Form 10-QSB for the period ended June 30, 2005, is beingfiled inasmuch as the original report was filed without review by Registrant’s independentauditor and the result of identified errors within the previously reported financial statements ofRegistrant.  (See Note 8 to the financial statements).  The original report was filed without thereview of Registrant’s independent auditor, inasmuch as Registrant determined it to beadvisable to file this Quarterly Report on Form 10-QSB as it believed the financial statementsincluded herein were substantially accurate, and, further, deemed the filing of this substantiallycompliant Quarterly Report on Form 10-QSB to be advisable. |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Indicate by check mark whether Registrant (1) has filed all reports required to be filed bySection 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months(or for such shorter period that Registrant as required to file such reports), and (2) has beensubject to such filing requirements for the past 90 days: Yes [ X ]     No [   ] |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 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 3-15-06 |   |
|--------|-------|--------|---------------------------|--------|

|   | Common Stock, $.001 par value |   | 233,311,321 |   |
|--------|-------------------------------|--------|-------------|--------|

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

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

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

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

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

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

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

|   | Consolidated Balance Sheet as of June 30, 2005 (unaudited) | 3 |
|--------|------------------------------------------------------------|---|

|   | Consolidated Statements of Revenues and Expenses for the Three Months andSix Months Ended June 30, 2005 and 2004, and Period from June 17, 2003(Inception), Through June 30, 2005 (unaudited) | 4 |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---|

|   | Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2005and 2004, and Period from June 17, 2003 (Inception), Through June 30, 2005(unaudited) | 6 |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|---|

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

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

|   | DIAMOND I, INC. AND SUBSIDIARIES |   |
|--------|----------------------------------|--------|

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

|   | CONSOLIDATED BALANCE SHEET |   |
|--------|----------------------------|--------|

|   | June 30, 2005(restated)(unaudited) |   |
|--------|------------------------------------|--------|

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

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

|   | Cash | $8 |   |
|--------|------|----|--------|

|   | Total Current Assets | 8 |   |
|--------|----------------------|---|--------|

| Equipment, net of accumulated depreciation of $63,876 | 38,240 |   |
|-------------------------------------------------------|--------|--------|

|   | Total Assets | $38,248 |   |
|--------|--------------|---------|--------|

| LIABILITIES AND STOCKHOLDERS' EQUITY |
|--------------------------------------|

| Current Liabilities: |   |   |
|----------------------|--------|--------|

|   | Accounts payable | $17,696 |   |
|--------|------------------|---------|--------|

|   | Accrued liabilities | 12,360 |   |
|--------|---------------------|--------|--------|

|   | Total current liabilities | 30,056 |   |
|--------|---------------------------|--------|--------|

|   | Commitments |   |   |
|--------|-------------|--------|--------|

| Stockholders’ Equity: |   |   |
|-----------------------------|--------|--------|

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

|   | Common stock, $.001 par value; 700,000,000 sharesauthorized, 196,262,772 shares issued andoutstanding | 196,237 |   |
|--------|-------------------------------------------------------------------------------------------------------|---------|--------|

|   | Additional paid-in capital | 24,837,906 |   |
|--------|----------------------------|------------|--------|

|   | Subscription receivable | (26,400) |   |
|--------|-------------------------|----------|--------|

|   | Deficit accumulated during the development stage | (25,000,051) |   |
|--------|--------------------------------------------------|--------------|--------|

|   | Total Stockholders' Equity | 8,192 |   |
|--------|----------------------------|-------|--------|

|   | Total Liabilities and Stockholders’ Equity | $38,248 |   |
|--------|--------------------------------------------------|---------|--------|

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

|   | DIAMOND I, INC. AND SUBSIDIARIES |   |
|--------|----------------------------------|--------|

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

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

|   | Three Months and Six Months Ended June30, 2005 and 2004, and Period from June 17,2003 (Inception), Through June 30, 2005(Unaudited) |   |
|--------|-------------------------------------------------------------------------------------------------------------------------------------|--------|

|   | Three Months Ended

June 30, |   | Six Months Ended

June 30, |   | Inceptionthrough |
|--------|------------------------------|--------|----------------------------|--------|------------------|

|   | 2005 |   | 2004 |   | 2005 |   | 2004 |   | 6/30/05 |
|--------|------|--------|------|--------|------|--------|------|--------|---------|

|   | (restated) |   | (restated) |   | (restated) |
|--------|------------|--------|------------|--------|------------|

| Revenues | $1,455 |   | $1,407 |   | $2,121 |   | $1,625 |   | $10,215 |
|----------|--------|--------|--------|--------|--------|--------|--------|--------|---------|

| Internet accesscosts | (543) |   | 0 |   | (6,725) |   | 0 |   | (32,789) |
|----------------------|-------|--------|---|--------|---------|--------|---|--------|----------|

| Gross profit (loss) | 912 |   | 1,407 |   | (4,604) |   | 1,625 |   | (22,574) |
|---------------------|-----|--------|-------|--------|---------|--------|-------|--------|----------|

| OPERATINGEXPENSES |   |   |   |   |   |   |   |   |   |
|-------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|

|   | General andadministrative | 977,575 |   | 1,004,584 |   | 2,897,267 |   | 1,770,849 |   | 8,170,094 |
|--------|---------------------------|---------|--------|-----------|--------|-----------|--------|-----------|--------|-----------|

|   | Impairmentexpense | 0 |   | 0 |   | 16,306,527 |   | 0 |   | 16,808,527 |
|--------|-------------------|---|--------|---|--------|------------|--------|---|--------|------------|

|   | TotalOperatingExpenses | 977,575 |   | 1,004,583 |   | 19,203,794 |   | 1,770,849 |   | 24,978,621 |
|--------|------------------------|---------|--------|-----------|--------|------------|--------|-----------|--------|------------|

| LOSS FROMOPERATIONS | (976,663) |   | (1,003,177) |   | (19,208,398) |   | (1,769,224) |   | (25,001,195) |
|---------------------|-----------|--------|-------------|--------|--------------|--------|-------------|--------|--------------|

| OTHER INCOME | 0 |   | 0 |   | 45 |   | 0 |   | 1,144 |
|--------------|---|--------|---|--------|----|--------|---|--------|-------|

| NET LOSS | (976,663) |   | (1,003,177) |   | (19,208,353) |   | (1,769,224) |   | (25,000,051) |
|----------|-----------|--------|-------------|--------|--------------|--------|-------------|--------|--------------|

| Deemed Dividendon Preferred Stock | 0 |   | 0 |   | 0 |   | (165,442) |   | (165,442) |
|-----------------------------------|---|--------|---|--------|---|--------|-----------|--------|-----------|

| Net Loss Availableto CommonShareholders | $(976,663) |   | $(1,003,177) |   | $(19,208,353) |   | $(1,934,666) |   | $(25,165,493) |
|-----------------------------------------|------------|--------|--------------|--------|---------------|--------|--------------|--------|---------------|

| Net loss per share applicable to commonshareholders |   |   |   |   |   |   |
|-----------------------------------------------------|--------|--------|--------|--------|--------|--------|

|   | Basic anddiluted | $(0.01) |   | $(0.01) |   | $(0.11) |   | $(0.02) |   |   |
|--------|------------------|---------|--------|---------|--------|---------|--------|---------|--------|--------|

| Weighted average number of shares outstanding |   |   |   |   |   |
|-----------------------------------------------|--------|--------|--------|--------|--------|

|   | Basic anddiluted | 190,682,829 |   | 81,752,880 |   | 176,937,509 |   | 82,154,144 |   |   |
|--------|------------------|-------------|--------|------------|--------|-------------|--------|------------|--------|--------|

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

|   | DIAMOND I, INC. AND SUBSIDIARIES |   |
|--------|----------------------------------|--------|

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

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

|   | Six Months Ended June 30, 2005 and 2004, andPeriod from June 17, 2003 (Inception), ThroughJune 30, 2005 (Unaudited) |   |
|--------|---------------------------------------------------------------------------------------------------------------------|--------|

|   | Six Months Ended June 30, |   | Inceptionthrough |
|--------|---------------------------|--------|------------------|

|   | 2005 |   | 2004 |   | June 30, 2005 |
|--------|------|--------|------|--------|---------------|

|   | (restated) |   | (restated) |
|--------|------------|--------|------------|

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

| Net loss | $(19,208,353) |   | $(1,769,224) |   | $(25,000,051) |
|----------|---------------|--------|--------------|--------|---------------|

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

|   | Depreciation | 11,370 |   | 9,473 |   | 63,877 |
|--------|--------------|--------|--------|-------|--------|--------|

|   | Stock issued for services and salary | 1,375,540 |   | 1,503,899 |   | 5,531,914 |
|--------|--------------------------------------|-----------|--------|-----------|--------|-----------|

|   | Impairment expense and write-down of assets | 16,306,527 |   | 0 |   | 16,808,527 |
|--------|---------------------------------------------|------------|--------|---|--------|------------|

|   | Stock option expense | 1,171,685 |   | 0 |   | 1,171,685 |
|--------|----------------------|-----------|--------|---|--------|-----------|

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

|   | Accounts payable | 3,856 |   | (154,719) |   | 19,812 |
|--------|------------------|-------|--------|-----------|--------|--------|

|   | Accrued expenses | (5,457) |   | 0 |   | 12,360 |
|--------|------------------|---------|--------|---|--------|--------|

| CASH FLOWS USED IN OPERATINGACTIVITIES | (344,832) |   | (410,571) |   | (1,391,876) |
|----------------------------------------|-----------|--------|-----------|--------|-------------|

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

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

|   | Purchase of equipment | (5,352) |   | (50,328) |   | (102,116) |
|--------|-----------------------|---------|--------|----------|--------|-----------|

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

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

|   | Issuance of note payable | 0 |   | 0 |   | 55,000 |
|--------|--------------------------|---|--------|---|--------|--------|

|   | Payment on note payable | (55,000) |   | (512) |   | (55,000) |
|--------|-------------------------|----------|--------|-------|--------|----------|

|   | Issuance of preferred shares | 0 |   | 209,558 |   | 209,558 |
|--------|------------------------------|---|--------|---------|--------|---------|

|   | Issuance of warrants | 0 |   | 290,442 |   | 290,442 |
|--------|----------------------|---|--------|---------|--------|---------|

|   | Sale of common stock, net | 394,000 |   | 0 |   | 994,000 |
|--------|---------------------------|---------|--------|---|--------|---------|

| CASH FLOWS PROVIDED BYFINANCING ACTIVITIES | 339,000 |   | 499,488 |   | 1,494,000 |
|--------------------------------------------|---------|--------|---------|--------|-----------|

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

| NET CHANGE IN CASH | (11,184) |   | 38,589 |   | 8 |
|--------------------|----------|--------|--------|--------|---|

| Cash, beginning of period | 11,192 |   | 98,709 |   | 0 |
|---------------------------|--------|--------|--------|--------|---|

| Cash, end of period | $8 |   | $137,298 |   | $8 |
|---------------------|----|--------|----------|--------|----|

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

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

|   | Interest paid | $6,600 |   | $0 |   | $6,600 |
|--------|---------------|--------|--------|----|--------|--------|

|   | Income taxes paid | $0 |   | $0 |   | $0 |
|--------|-------------------|----|--------|----|--------|----|

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

| Non-cash Financial Activities: |
|--------------------------------|

|   | Stock issued in acquisition | $0 |   | $381,100 |   |   |
|--------|-----------------------------|----|--------|----------|--------|--------|

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

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

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

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

|   | June 30, 2005(Unaudited) |   |
|--------|--------------------------|--------|

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

| NOTE 1 - BASIS OF PRESENTATION |   |
|--------------------------------|--------|

| The consolidated balance sheet as of June 30, 2005, the statements of revenues and expensesfor the three months and six months and the statements of cash flows for the six months endedJune 30, 2005 and 2004, have been prepared by Diamond I, Inc. (together with its subsidiaries,“Diamond I”) without audit.  In the opinion of management, all adjustments necessary topresent fairly the financial position, results of operations and cash flows of Diamond I at June30, 2005, and for all other periods presented, have been made.  The results of operations forinterim periods are not necessarily indicative of the results to be expected for the full year.Certain information and disclosures normally included in financial statements prepared inaccordance with generally accepted accounting principles have been omitted in accordancewith the Securities and Exchange Commission’s rules for interim reporting.  Accordingly,these financial statements should be read in conjunction with the financial statements andaccompanying notes thereto in Diamond I’s Annual Report on Form 10-KSB for the fiscal yearended December 31, 2004. |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| NOTE 2 - CRITICAL ACCOUNTING POLICIES |   |
|---------------------------------------|--------|

| Consolidation |   |
|---------------|--------|

| As of June 30, 2005, Diamond I had two wholly owned subsidiaries, Diamond I Technologies,Inc. (formerly Air-Q Corp.) and AirRover Networks, Inc.  All material inter-company balancesand inter-company transactions have been eliminated for the purpose of presenting theaccompanying consolidated financial statements. |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Goodwill and Other Intangible Assets |   |
|--------------------------------------|--------|

| Goodwill and other intangible assets are stated on the basis of cost and are amortized,principally on a straight-line basis, over the estimated future periods to be benefitted (generallythree years).  Goodwill and other intangible assets are periodically reviewed for impairment toensure they are appropriately valued. Conditions which may indicate an impairment issueexists include a negative economic downturn or a change in the assessment of futureoperations.  In the event that a condition is identified which may indicate an impairment issueexists, an assessment is performed using a variety of methodologies, including cash flowanalysis, estimates of sales proceeds and independent appraisals. |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| For the six months ended June 30, 2005, the entire value of associated with the acquisition ofDiamond I Technologies, Inc. was impaired in the amount of $16,306,527.  See Note 3 fordetails. |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| NOTE 3 - ACQUISITION |   |
|----------------------|--------|

| On January 18, 2005, pursuant to an agreement and plan of reorganization, Diamond Iacquired all of the outstanding capital stock of Diamond I Technologies, Inc., a Nevadacorporation (“DITech”), by issuing a total of 70,591,026 shares of its common stock to theshareholders of DITech.  The reorganization agreement provides for further issuances of sharesof Diamond I’s common stock, upon DITech’s satisfying certain performance standards, asfollows:  (a) an additional 35,295,513 shares to the shareholders of DITech, if, on or before thedate which is two years from the consummation of the reorganization agreement, DITech shallhave completed the design and installation of a hand-held Wi-Fi-based gaming system in afirst-class hotel/casino with no fewer than 400 guest rooms located in the State of Nevada (the“Target System”), to the effect that the Target System is 100% operational and ready for useby guests of the host hotel/casino, which readiness shall include the approval of the NevadaGaming Commission; and (b) an additional 35,295,513 shares to the shareholders of DITech,if, on or before the date which is five years from the consummation of the reorganizationagreement, the Target System shall have operated at a profit, as determined by generallyaccepted accounting principles, for a period of three consecutive months. |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| In determining the number of shares of our common stock to be issued to the shareholders ofDITech, Diamond I’s board of directors did not employ any standard valuation formula or anyother standard measure of value.  Rather, the number shares issued to the shareholders ofDiamond I was determined through arm’s-length negotiations. |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| The following represents the allocation of the purchase price over the historical net bookvalues of Diamond I Technologies, Inc. on the date of the acquisition.  The allocation made isas follows: |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Tangible assets acquired at fair value | $0 |   |
|--------|----------------------------------------|----|--------|

|   | Cost in excess of net tangible assets | 16,306,527 |   |
|--------|---------------------------------------|------------|--------|

|   | Total purchase price | $16,306,527 |   |
|--------|----------------------|-------------|--------|

| For the six months ended June 30, 2005, the entire value of associated with the acquisition ofDiamond I Technologies, Inc. was written-down in the amount of $16,306,527. |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| DITech has developed a hand-held Wi-Fi-based gaming system for on-premises use bycasinos/resorts.  DITech’s gaming system, based on a patent-pending security system, wouldpermit casino patrons to secure a PDA device from the casino that would enable the patrons toenjoy in-room and pool-side gaming action, as well as other casino services.  Diamond I haspreviewed the system for private audiences in client-and-regulatory-specific presentations(where necessary, DITech intends to seek regulatory approval of its gaming system). |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| NOTE 4 - NOTE PAYABLE |   |
|-----------------------|--------|

| During the six months ended June 30, 2005, Diamond I paid in full its note payable in theprincipal amount of $55,000, plus all accrued and unpaid interest of approximately $6,600. |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| NOTE 5 - CAPITAL STOCK |   |
|------------------------|--------|

| On January 18, 2005, Diamond I amended its Amended and Restated Certificate ofIncorporation to increase the authorized number of shares of common stock to 700,000,000. |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

| During the first six months of 2005, Diamond I issued a total of 15,065,745 shares of commonstock to third-party consultants for services, resulting in $1,375,540 in non-cash compensationexpense included in professional and legal expenses and consulting fees in the accompanyingstatement of revenues and expenses.  Included in these amounts are 4,300,000 shares ofcommon stock issued as bonuses to officers and directors, which shares were valued, in theaggregate, at $483,000. |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| NOTE 6 - OPTIONS |   |
|------------------|--------|

| In January 2005, Diamond I entered into a consulting agreement with a third party.  Pursuantto this consulting agreement, the consultant has the right to purchase up to $150,000 worth ofDiamond I’s common stock each month, at a purchase price equal to 70% of the market pricefor Diamond I’s common stock, at the time of issue.  During the first six months of 2005,Diamond I issued a total of 7,445,500 shares upon the exercise of these options, for cash in theamount of $394,000 and a subscription receivable in the amount of $26,400.  A stock optionexpense of $1,171,685 was recorded as of June 30, 2005. |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| NOTE 7 - SUBSEQUENT EVENTS |   |
|----------------------------|--------|

| In July 2005, Diamond I entered into an agreement and waiver with the former owners ofDiTech, a company acquired in January 2005.  This waiver agreement relates to certainprovisions contained in the agreement pursuant to which we acquired DiTech.  The waiveragreement nullifies certain provisions of the acquisition agreement, as executed. As a result ofthe waiver agreement, Diamond I will not be required to return ownership of DiTech to theformer owners under any circumstance.  Pursuant to the waiver agreement, Diamond I issued atotal of 1,000,000 shares of common stock to the former owners, which shares were valued at$.038 per share, an aggregate value of $38,000. |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| In August 2005, Diamond I entered into an option agreement with the owners of TouchdevLimited, a U.K. corporation, pursuant to which Diamond I purchased an option to acquire allof the outstanding capital stock of Touchdev Limited.  As amended, the option agreementrequires Diamond I to issue a total of 1,300,000 shares of common stock in payment of theoption.  The option expires in December 2005. |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| In October 2005, Diamond I entered into a letter of intent with The Palms Resort and Casino,whereby the parties agreed to continue to develop a working relationship relating to DiamondI’s WifiCasino GS(TM) wireless gaming system, which is designed for gaming in public areasin Nevada casinos.  Diamond I will continue to assure its prospective casino clients that it’sWifiCasino GS maintains its “best-in-breed” status relative to its competitors and thatDiamond I will, once appropriate licensing has been obtained, provide product servicing inline with other gaming machine vendors. On that assurance, The Palms stated that it intends topursue an opportunity with Diamond I. |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| In November 2005, Diamond I retained Northeast Securities, Inc. as its investment banker.Northeast Securities’ engagement will begin on December 1, 2005.  Pursuant to the agreementwith Northeast Securities, Diamond I will pay a total cash fee of $10,000 and has issued awarrant to purchase up to 3,500,000 shares of common stock at an exercise price of $.04 pershare. |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| NOTE 8 - RESTATEMENT OF PREVIOUSLY REPORTED FINANCIALSTATEMENTS |   |
|-----------------------------------------------------------------|--------|

| There were several misstatements in the originally prepared June 30, 2005, financials.  See thenotes below. |
|-------------------------------------------------------------------------------------------------------------|

|   | PreviouslyReported |   | Increase(Decrease) |   | Restated |
|--------|--------------------|--------|--------------------|--------|----------|

| As of June 30, 2005: |   |   |   |   |   |
|----------------------|--------|--------|--------|--------|--------|

| Balance Sheet: |   |   |   |   |   |
|----------------|--------|--------|--------|--------|--------|

|   | Cash | $0 | (3) | $8 |   | $8 |
|--------|------|----|-----|----|--------|----|

|   | Equipment, net of accumulateddepreciation | 39,855 | (3) | (1,615) |   | 38,240 |
|--------|-------------------------------------------|--------|-----|---------|--------|--------|

|   | Total assets | $39,855 |   | $(1,607) |   | $38,248 |
|--------|--------------|---------|--------|----------|--------|---------|

|   | Bank overdraft | $9,791 | (3) | $(9,791) |   | $0 |
|--------|----------------|--------|-----|----------|--------|----|

|   | Accounts payable | 4,849 | (3) | 12,847 |   | $17,696 |
|--------|------------------|-------|-----|--------|--------|---------|

|   | Accrued liabilities | 11,997 | (3) | 363 |   | 12,360 |
|--------|---------------------|--------|-----|-----|--------|--------|

|   | Preferred stock | 500 |   | 0 |   | 500 |
|--------|-----------------|-----|--------|---|--------|-----|

|   | Common stock | 196,264 | (3) | (27) |   | 196,237 |
|--------|--------------|---------|-----|------|--------|---------|

|   | Paid-in capital | 25,051,734 |   |   |   | 24,837,906 |
|--------|-----------------|------------|--------|--------|--------|------------|

|   |   |   | (1) | 75,196 |   |   |
|--------|--------|--------|-----|--------|--------|--------|

|   |   |   | (2) | (363,529) |   |   |
|--------|--------|--------|-----|-----------|--------|--------|

|   |   |   | (3) | 48,105 |   |   |
|--------|--------|--------|-----|--------|--------|--------|

|   |   |   | (4) | 26,400 |   |   |
|--------|--------|--------|-----|--------|--------|--------|

|   | Subscription receivable | 0 | (4) | (26,400) |   | (26,400) |
|--------|-------------------------|---|-----|----------|--------|----------|

|   | Accumulated deficit | (25,235,280) |   | 235,229 |   | (25,000,051) |
|--------|---------------------|--------------|--------|---------|--------|--------------|

|   | Total liabilities and equity | $39,855 |   | $(1,607) |   | $38,248 |
|--------|------------------------------|---------|--------|----------|--------|---------|

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

|   | PreviouslyReported |   | Increase(Decrease) |   | Restated |
|--------|--------------------|--------|--------------------|--------|----------|

| For the three months ended June 30, 2005: |   |   |   |   |   |
|-------------------------------------------|--------|--------|--------|--------|--------|

| Statement of Revenues andExpenses: |   |   |   |   |   |
|------------------------------------|--------|--------|--------|--------|--------|

|   | Revenue | $1,454 | (3) | $1 |   | $1,455 |
|--------|---------|--------|-----|----|--------|--------|

|   | Cost of sales | (522) | (3) | (21) |   | (543) |
|--------|---------------|-------|-----|------|--------|-------|

|   | Gross profit (loss) | 932 |   | (20) |   | 912 |
|--------|---------------------|-----|--------|------|--------|-----|

|   | General and administrative | 1,261,633 |   |   |   | 970,434 |
|--------|----------------------------|-----------|--------|--------|--------|---------|

|   |   |   | (1) | 75,196 |   |   |
|--------|--------|--------|-----|--------|--------|--------|

|   |   |   | (2) | (363,529) |   |   |
|--------|--------|--------|-----|-----------|--------|--------|

|   |   |   | (3) | (2,866) |   |   |
|--------|--------|--------|-----|---------|--------|--------|

|   | Depreciation and amortization | 4,228 | (3) | 2,913 |   | 7,141 |
|--------|-------------------------------|-------|-----|-------|--------|-------|

|   | Impairment loss | 0 |   | 0 |   | 0 |
|--------|-----------------|---|--------|---|--------|---|

|   | Total operating expenses | 1,265,861 |   | (288,286) |   | 977,575 |
|--------|--------------------------|-----------|--------|-----------|--------|---------|

|   | Loss from operations | (1,264,929) |   | 288,265 |   | (976,663) |
|--------|----------------------|-------------|--------|---------|--------|-----------|

|   | Other income (loss) | 0 |   | 0 |   | 0 |
|--------|---------------------|---|--------|---|--------|---|

|   | Net loss | $(1,264,929) |   | $288,265 |   | $(976,663) |
|--------|----------|--------------|--------|----------|--------|------------|

|   | Basic and diluted net loss per commonshare | $(.007) |   |   |   | $(.005) |
|--------|--------------------------------------------|---------|--------|--------|--------|---------|

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

|   | Basic and diluted | 190,248,337 |   | 432,492 |   | 190,682,829 |
|--------|-------------------|-------------|--------|---------|--------|-------------|

| Restatement notes: |
|--------------------|

| (1) | Costs of common stock issued to consultants for services were not recorded at theircorrect fair value on the date of issuance.  The consulting expense and additional paid-in capital were understated by $75,196. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | Compensation expense to a consultant was calculated by using the inappropriate fairvalue.  Consulting expense and additional paid-in capital were overstated by $363,529. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | There were several minor accounting miscalculations and erroneous classifications.These errors resulted in various balance sheet account adjustments.  Revenue, cost ofsales, depreciation and general and administrative accounts were understated by a netof $67 for the three months ended June 30, 2005. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (4) | The previous report accounted for the $26,400 subscription receivable in the additionalpaid-in capital account.  The restated balance sheet breaks out the receivable portion onthe face of the balance sheet. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

|   | PreviouslyReported |   | Increase(Decrease) |   | Restated |
|--------|--------------------|--------|--------------------|--------|----------|

| For the six months ended June 30, 2005: |   |   |   |   |   |
|-----------------------------------------|--------|--------|--------|--------|--------|

| Statement of Revenues andExpenses: |   |   |   |   |   |
|------------------------------------|--------|--------|--------|--------|--------|

|   | Revenue | $2,166 | (3) | $(45) |   | $2,121 |
|--------|---------|--------|-----|-------|--------|--------|

|   | Cost of sales | (6,704) | (3) | (21) |   | (6,725) |
|--------|---------------|---------|-----|------|--------|---------|

|   | Gross profit (loss) | (4,538) |   | (66) |   | (4,604) |
|--------|---------------------|---------|--------|------|--------|---------|

|   | General and administrative | 3,177,097 |   |   |   | 2,885,898 |
|--------|----------------------------|-----------|--------|--------|--------|-----------|

|   |   |   | (1) | 75,196 |   |   |
|--------|--------|--------|-----|--------|--------|--------|

|   |   |   | (2) | (363,529) |   |   |
|--------|--------|--------|-----|-----------|--------|--------|

|   |   |   | (3) | (2,866) |   |   |
|--------|--------|--------|-----|---------|--------|--------|

|   | Depreciation and amortization | 8,456 | (3) | 2,913 |   | 11,369 |
|--------|-------------------------------|-------|-----|-------|--------|--------|

|   | Impairment loss | 16,306,527 |   | 0 |   | 16,306,527 |
|--------|-----------------|------------|--------|---|--------|------------|

|   | Total operating expenses | 19,492,080 |   | (288,286) |   | 19,203,794 |
|--------|--------------------------|------------|--------|-----------|--------|------------|

|   | Loss from operations | (19,496,618) |   | (288,220) |   | (19,208,398) |
|--------|----------------------|--------------|--------|-----------|--------|--------------|

|   | Impairment loss | 45 |   | 0 |   | 45 |
|--------|-----------------|----|--------|---|--------|----|

|   | Net loss | $(19,496,573) |   | $(288,220) |   | $(19,208,353) |
|--------|----------|---------------|--------|------------|--------|---------------|

|   | Basic and diluted net loss per commonshare | $(.11) |   |   |   | $(.11) |
|--------|--------------------------------------------|--------|--------|--------|--------|--------|

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

|   | Basic and diluted | 177,668,037 |   | (730,528) |   | 176,937,509 |
|--------|-------------------|-------------|--------|-----------|--------|-------------|

| Restatement notes: |
|--------------------|

| (1) | Costs of common stock issued to consultants for services were not recorded at theircorrect fair value on the date of issuance.  The consulting expense and additional paid-in capital were understated by $75,196. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | Compensation expense to a consultant was calculated by using the inappropriate fairvalue.  Consulting expense and additional paid-in capital were overstated by $363,529. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | There were several minor accounting miscalculations and erroneous classifications.These errors resulted in various balance sheet account adjustments.  Revenue, cost ofsales, depreciation and general and administrative accounts were understated by a netof $113. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

|   | PreviouslyReported |   | Increase(Decrease) |   | Restated |
|--------|--------------------|--------|--------------------|--------|----------|

| For the period from June 17, 2003(inception), through June 30, 2005: |   |   |   |   |   |
|----------------------------------------------------------------------|--------|--------|--------|--------|--------|

| Statement of Revenues andExpenses: |   |   |   |   |   |
|------------------------------------|--------|--------|--------|--------|--------|

|   | Revenue | $10,260 | (3) | $(45) |   | $10,215 |
|--------|---------|---------|-----|-------|--------|---------|

|   | Cost of sales | (32,768) | (3) | (21) |   | (32,789) |
|--------|---------------|----------|-----|------|--------|----------|

|   | Gross profit (loss) | (22,508) |   | (66) |   | (22,574) |
|--------|---------------------|----------|--------|------|--------|----------|

|   | General and administrative | 8,410,867 |   |   |   | 8,119,668 |
|--------|----------------------------|-----------|--------|--------|--------|-----------|

|   |   |   | (1) | 75,196 |   |   |
|--------|--------|--------|-----|--------|--------|--------|

|   |   |   | (2) | (363,529) |   |   |
|--------|--------|--------|-----|-----------|--------|--------|

|   |   |   | (3) | (2,866) |   |   |
|--------|--------|--------|-----|---------|--------|--------|

|   | Depreciation and amortization | 47,513 | (3) | 2,913 |   | 50,426 |
|--------|-------------------------------|--------|-----|-------|--------|--------|

|   | Impairment loss | 16,808,527 |   | 0 |   | 16,808,527 |
|--------|-----------------|------------|--------|---|--------|------------|

|   | Total operating expenses | 25,266,907 |   | (288,286) |   | 24,978,621 |
|--------|--------------------------|------------|--------|-----------|--------|------------|

|   | Loss from operations | (25,289,415) |   | 288,220 |   | (25,001,195) |
|--------|----------------------|--------------|--------|---------|--------|--------------|

|   | Other income (loss) | 1,144 |   | 0 |   | 1,144 |
|--------|---------------------|-------|--------|---|--------|-------|

|   | Net loss | $(25,288,271) |   | 288,220 |   | $(25,000,051) |
|--------|----------|---------------|--------|---------|--------|---------------|

|   | Deemed dividend on preferred stock | $(165,442) |   | $0 |   | $(165,442) |
|--------|------------------------------------|------------|--------|----|--------|------------|

|   | Net loss | $(25,453,713) |   | $288,220 |   | $(25,165,493) |
|--------|----------|---------------|--------|----------|--------|---------------|

| Restatement notes: |
|--------------------|

| (1) | Costs of common stock issued to consultants for services were not recorded at theircorrect fair value on the date of issuance.  The consulting expense and additional paid-in capital were understated by $75,196. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | Compensation expense to a consultant was calculated by using the inappropriate fairvalue.  Consulting expense and additional paid-in capital were overstated by $363,529. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | There were several minor accounting miscalculations and erroneous classifications.These errors resulted in various balance sheet account adjustments.  Revenue, cost ofsales, depreciation and general and administrative accounts were understated by a netof $113 for the period from June 17, 2003 (inception), through June 30, 2005. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|         |
|--------------|
| <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.Certain important risks could cause results to differ materially from those anticipated by someof the forward-looking statements. Some, but not all, of the important risks that could causeactual results to differ materially from those suggested by the forward-looking statementsinclude, among other 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 gamingproducts; |
|---|----------------------------------------------------------------------------------------|

| - | 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 beyondour control. |
|---|-----------------------------------------------------------------------------------------------------|

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

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

| Item 2. Management’s Discussion and Analysis of Financial Condition and Results ofOperations. |   |
|-----------------------------------------------------------------------------------------------------|--------|

| Recent Acquisition; Change in Business Plan |   |
|---------------------------------------------|--------|

| During the last half of 2004, our Wi-Fi (wireless fidelity) Internet access, or “hotspot”,business did not expand as we had expected.  This lack of growth was in line with the rest ofthe hotspot industry.  To date, Wi-Fi hotspot use by consumers has not met, by a wide margin,forecasts made during 2002 and 2003, with several well-known telecommunicationscompanies abandoning their efforts to develop a hotspot business. |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| During the last quarter of 2004, our management determined to change the direction of ourcompany, to focus on the development of products that embody Wi-Fi technologies rather thanon the provision of hotspot Internet access.  In conjunction with this determination, we began asearch for Wi-Fi-related products that offered growth potential and were available foracquisition. |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| As a result, on January 18, 2005, pursuant to an agreement and plan of reorganization, weacquired all of the outstanding capital stock of Diamond I Technologies, Inc., a Nevadacorporation (DITech). |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| DITech has developed a hand-held Wi-Fi-based gaming system for on-premises use bycasinos/resorts, known as “WiFiCasino GS”(TM). |
|---------------------------------------------------------------------------------------------------------------------------------------------|

| Our management has determined to focus all of our available resources, financial andotherwise, on the exploitation of this wireless gaming system and will not pursue additionalWi-Fi hotspot locations, unless that industry regains its pervious vitality. |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Sales of Equity |   |
|-----------------|--------|

| In March 2004, we entered into a securities purchase agreement.  Under this agreement, weissued securities for cash in the amount of $500,000, as follows: 500,000 shares of our SeriesA preferred stock, convertible into 100,000 shares of our common stock after September 2,2004, 250,000 common stock purchase warrants to purchase a like number of shares at anexercise price of $3.50 per share and 250,000 common stock purchase warrants to purchase alike number of shares at an exercise price of $4.50 per share.  These warrants expire March 1,2007. |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| During 2004, we obtained $150,000 from the exercise of certain options, which funds wereused for operating expenses. |
|----------------------------------------------------------------------------------------------------------------------|

| During the first half of 2005, we obtained a total of $394,000 from the exercise of certainoptions, which funds were used to pay costs associated with our wireless gaming business andfor operating expenses.   Since June 30, 2005, we have obtained a total of approximately$76,400 from the exercise of certain options, which funds have been used to pay costsassociated with the development of our wireless gaming business and for operating expenses.We are actively seeking capital for use in our business.  We can make no assurance that wewill obtain enough to continue our business operations. |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

| There were no material changes to our critical accounting policies during the period endedJune 30, 2005. |
|----------------------------------------------------------------------------------------------------------|

| Management's Discussion and Analysis discusses the results of operations and financialcondition as reflected in our financial statements, which have been prepared in accordancewith accounting principles generally accepted in the United States of America. The preparationof financial statements in conformity with accounting principles generally accepted in theUnited States of America requires management to make estimates and assumptions that affectthe reported amounts of assets and liabilities,  disclosure of contingent assets and liabilities atthe date of the financial statements and reported amounts of revenues and expenses during thereporting period. On an ongoing basis, management evaluates its estimates and judgments,including those related to accounts receivable, inventory valuation, amortization andrecoverability of long-lived assets,  including  goodwill,  litigation accruals and revenuerecognition. Management bases its estimates and judgments on our historical experience andother relevant factors, the results of which form the basis for making judgments about thecarrying values of assets and liabilities that are not readily apparent from other sources. |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| While we believe that the historical experience and other factors considered provide ameaningful basis for the accounting  policies applied in the preparation of our consolidatedfinancial statements, we cannot guarantee that our estimates and assumptions will be accurate.If such estimates and assumptions prove to be inaccurate, we may be required to makeadjustments to these estimates in future periods. |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

| During the six months ended June 30, 2005 and 2004, we generated $2,121 and $1,625,respectively, in revenues from our business operations.  Our revenues for the remainder of2005 and the first half of 2006 will likely be less than for 2004, due to our determination todevelop our wireless gaming products rather than to pursue further development of our hotspotbusiness.  We currently lack the capital necessary to pursue aggressively our businessobjectives, and we may never possess enough capital with which to do so.  In thiscircumstance, it is likely that we would never earn a profit. |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| For the six months ended June 30, 2005, the entire value associated with the acquisition ofDiamond I Technologies, Inc. was written-down in the amount of $16,306,527 and is includedin our operating expenses for the period then ended. |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| As an additional non-cash expense during the first half of 2005, we recorded a stock optionexpense of $1,171,685.  This option expense relates to a consulting agreement pursuant towhich the consultant has the right to purchase up to $150,000 worth of our common stock eachmonth, at a purchase price equal to 70% of the market price for Diamond I’s common stock, atthe time of issue.  During the first six months of 2005, we issued a total of 7,445,500 sharesupon the exercise of these options, for cash in the amount of $394,000 and a subscriptionreceivable in the amount of $26,400. |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Due to our severe lack of capital during both interim periods, we issued shares of our commonstock to consultants.  During the first six months of 2004, we issued shares of common stockto third-party consultants for services, resulting in $1,503,899 in non-cash compensationexpense included in general and administrative expense in the accompanying statement ofrevenues and expenses.  During the first six months of 2005, we issued a total of 15,065,745shares of common stock to third-party consultants for services, resulting in $1,375,540 innon-cash compensation expense included in professional and legal expenses and consultingfees in the accompanying statement of revenues and expenses.  Issuing shares of our commonstock was the only means by which we could obtain the consultants' services.  The full value ofthe consulting services received by us under each agreement has been expensed. |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| It is possible that we will incur significant consulting expenses during the remainder 2005.Our management may, if necessary, hire consultants and pay them in cash, shares of ourcommon stock or a combination thereof. |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| During the first six months of 2004, we issued no shares of common stock as a bonus to any ofour officers and directors.  During the first six months of 2005, we issued, as bonuses tocertain of its officers and directors, a total of 4,300,000 shares of common stock, valued at$483,000. |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| You should note that we measured the foregoing stock transactions at the respective dates ofissuance at the then-quoted market price.  There are no performance commitments or penaltiesfor non-performance, therefore, we recorded the expense at the date of issuance. |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

| Since our inception, we have lacked adequate capital with which to accomplish our businessobjectives.  Currently, we are in a substantially illiquid position, with a working capital deficitof $30,048.  In general, we are able to pay our operating expenses as they are incurred.Following our acquisition of DITech, we have focused on the development of our wirelessgaming products and its related business. |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| During 2004, we obtained $209,558 from the sale of preferred stock, the proceeds of whichequity sale were used to develop our hotspot business and for working capital.  We alsoobtained $290,442 from the exercise of certain options, which funds were used for operatingexpenses. |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| During the first half of 2005, we obtained a total of $394,000 from the exercise of certainoptions, which funds were used to pay costs associated with our wireless gaming business andfor operating expenses.   Since June 30, 2005, we have obtained a total of approximately$76,400 from the exercise of certain options, which funds have been used to pay costsassociated with the development of our wireless gaming business and for operating expenses.We are actively seeking capital for use in our business.  We can make no assurance that wewill obtain enough to continue our business operations. |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Our management has made this determination because of its desire not to over-commit ourresources.  Our management’s philosophy is to make capital and related commitments only tothe extent our available capital permits.  Our management’s philosophy may, in the future,prove to have been flawed, to the extreme detriment to our business and, ultimately, ourshareholders. |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Our Capital Needs |   |
|-------------------|--------|

| Our current level of operations can be maintained for the next six months.  However, to beginthe aggressive pursuit of our wireless gaming business objectives, we will requireapproximately $2 million. |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Currently, we do not possess enough capital to pursue aggressively our business objectives. |
|---------------------------------------------------------------------------------------------|

| Management's Plans Relating to Future Liquidity |   |
|-------------------------------------------------|--------|

| We will be able to sustain our current level of operations for the next six months, due toexpected exercise of certain options.  However, this level of funding will not be adequate forus to aggressively pursue the exploitation of our wireless gaming products.  We continue toseek capital for these purposes. |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

| For the six months ended June 30, 2005, we made only small expenditures for neededequipment. We currently have limited capital with which to make any significant capitalexpenditures. Should we obtain significant funding, of which there is no assurance, we wouldbe able to make significant expenditures on equipment. The amount of these equipmentpurchases cannot be predicted due to the uncertainty of funding levels and timing. However,without additional capital, we will make no significant 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 ExchangeAct of 1934 Rules 240.13a-14(c) and 15d-14(c)) as of the end of the period covered by thisreport and has concluded that such disclosure controls and procedures are not effective intimely alerting him and other members of management to material information about ourcompany required to be disclosed by us in our periodic reports that we file or submit under theSecurities Exchange Act of 1934.  In addition, our chief executive officer and acting chieffinancial officer has concluded that our disclosure controls and procedures are also noteffectively designed to ensure information required to be disclosed by us in our periodic filingsunder the Securities Act of 1934 is recorded, processed, summarized and reported within theperiods specified in the SEC’s rules and forms. |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| However, in the review and evaluation of the effectiveness of our disclosure controls andprocedures, our chief executive officer and acting financial officer detected a materialweakness in the assimilation of financial information into the preparation process associatedwith our periodic reports filed under the Securities Exchange Act of 1934, in that we were latein filing this report, there were material adjustments required by our auditors, and this reportcontains a restatement of results.  Our management has determined that our filing this reportwithout independent auditor review was the primary cause of the material weakness in theassimilation of financial information.  We believe necessary corrections to these processeshave been implemented, effective for the third quarter of 2005.  Specifically, beginning duringthe third quarter of 2005, we utilize more extensively the services of our outside consultingcertified public accounting firm.  This firm has aided in our establishing more effective andmore timely financial reporting procedures. |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| There have not been any significant changes in our internal controls over financial reporting(as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of1934) during the fiscal quarter to which this report relates that have materially affected, or arereasonably likely 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. Changes in Securities. |   |
|--------------------------------|--------|

| During the three months ended June 30, 2005, we issued restricted securities as follows: |
|------------------------------------------------------------------------------------------|

| 1.     | (a) | Securities Sold. In April 2005, 50,000 shares of our common stock were issued.                                                                                                                                                     |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | (b) | Underwriter or Other Purchasers. Such shares of common stock were issued toYCOM.                                                                                                                                                   |
|   | (c) | Consideration. Such shares of common stock were issued pursuant to a consultingagreement and were valued, in the aggregate, at $4,500.                                                                                             |
|   | (d) | Exemption from Registration Claimed. These securities were sold to a singlenon-U.S. purchaser and are exempt from registration under the Securities Act of1933, as amended, pursuant to the provisions of Regulation S thereunder. |

| 2.     | (a) | Securities Sold. In April 2005, 500,000 shares of our common stock were issued.                                                                                                                                                                                                                                                                            |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | (b) | Underwriter or Other Purchasers. Such shares of common stock were issued toThe George Miller Company.                                                                                                                                                                                                                                                      |
|   | (c) | Consideration. Such shares of common stock were issued pursuant to a consultingfee and were valued, in the aggregate, at $29,500.                                                                                                                                                                                                                          |
|   | (d) | Exemption from Registration Claimed. These securities are exempt fromregistration under the Securities Act of 1933, as amended, pursuant to theprovisions of Section 4(2) thereof and Rule 506 thereunder, as a transaction notinvolving a public offering. This purchaser was a sophisticated investor capable ofevaluating an investment in our company. |

| 3.     | (a) | Securities Sold. In May 2005, 5,000,000 shares of our common stock were issued.                                                                                                                                                                                                                                                                            |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | (b) | Underwriter or Other Purchasers. Such shares of common stock were issued toU.S. BioDefense, Inc.                                                                                                                                                                                                                                                           |
|   | (c) | Consideration. Such shares of common stock were issued pursuant to a consultingagreement and were valued, in the aggregate, at $300,000.                                                                                                                                                                                                                   |
|   | (d) | Exemption from Registration Claimed. These securities are exempt fromregistration under the Securities Act of 1933, as amended, pursuant to theprovisions of Section 4(2) thereof and Rule 506 thereunder, as a transaction notinvolving a public offering. This purchaser was a sophisticated investor capable ofevaluating an investment in our company. |

| 4.     | (a) | Securities Sold. In May 2005, 500,000 shares of our common stock were issued.                                                                                                                                                                                                                                                                              |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | (b) | Underwriter or Other Purchasers. Such shares of common stock were issued toVictor Nostas.                                                                                                                                                                                                                                                                  |
|   | (c) | Consideration. Such shares of common stock were issued pursuant to a consultingagreement and were valued, in the aggregate, at $49,500.                                                                                                                                                                                                                    |
|   | (d) | Exemption from Registration Claimed. These securities are exempt fromregistration under the Securities Act of 1933, as amended, pursuant to theprovisions of Section 4(2) thereof and Rule 506 thereunder, as a transaction notinvolving a public offering. This purchaser was a sophisticated investor capable ofevaluating an investment in 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) orRule 15d-14(b) |   |
|------|--------|--------------------------------------------------------------------------------------|--------|

| 31.2 |   | Certification of Chief Accounting Officer required by Rule 13a-14(a) orRule 15d-14(b) |   |
|------|--------|---------------------------------------------------------------------------------------|--------|

| 32.1 |   | Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section1350 |   |
|------|--------|----------------------------------------------------------------------------|--------|

| 32.2 |   | Certification of Chief Accounting Officer Pursuant to 18 U.S.C. Section1350 |   |
|------|--------|-----------------------------------------------------------------------------|--------|

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

| During the three months ended June 30, 2005, we filed one Current Report on Form 8-K, asfollows: |
|--------------------------------------------------------------------------------------------------|

| - | Date of Event: April 29, 2005, wherein we reported a change in our independentauditor; this Current Report on Form 8- K, as amended on June 7, 2005, isincorporated herein by this reference. |
|---|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Subsequent to June 30, 2005, we have filed three Current Reports on Form 8-K, as follows: |
|-------------------------------------------------------------------------------------------|

| - | Date of Event: July 13, 2005, wherein we reported our entry into a material contractand information pursuant to Regulation FD; this Current Report on Form 8- K isincorporated herein by this reference. |
|---|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| - | Date of Event: August 23, 2005, wherein we reported entering into a material contract;this Current Report on Form 8- K is incorporated herein by this reference. |
|---|------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| - | Date of Event: November 11, 2005, wherein we reported our entry into a materialcontract and information pursuant to Regulation FD; this Current Report on Form 8- Kis incorporated herein by this reference. |
|---|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| - | Date of Event: January 20, 2006, wherein we reported non-reliance on previouslyissued financial statements; this Current Report on Form 8- K is incorporated herein bythis reference. |
|---|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

| 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: March 20, 2005. | DIAMOND I, INC. |
|-----------------------|-----------------|

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

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

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