UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2008

o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______________ to ________________

Commissions file number 000-31143

DCI USA, INC.

(Exact name of registrant as specified in its charter)

Delaware		22-3742159
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification Number)

8 Bond Street

Great Neck, New York 11021

(Address of principal executive offices)

(212) 994-9594

(Registrant’s telephone number, including area code)

Indicate by check mark whether the issuer (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	o	Accelerated filer	o
Non-accelerated filer	o	Smaller reporting company	x
(Do not check if a smaller reporting company)

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

The number of shares of common stock outstanding as of May 19, 2008 was 53,464,557.

TABLE OF CONTENTS

		Page
PART I	FINANCIAL INFORMATION
Item 1.	Financial Statements	3
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	20
Item 3.	Quantitative and Qualitative Disclosure About Market Risk	23
Item 4.	Controls and Procedures	23

PART II	OTHER INFORMATION
Item 1.	Legal Proceedings	23
Item 1A.	Risk Factors	23
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	24
Item 3.	Defaults Upon Senior Securities	24
Item 4.	Submission of Matters to a Vote of Security Holders	24
Item 5.	Other Information	24
Item 6.	Exhibits	24

SIGNATURES		25
CERTIFICATIONS

DCI USA, INC.

MARCH 31, 2008

PART 1

FINANCIAL INFORMATION

Item 1. Financial Statements.

DCI USA, INC. AND SUBSIDIARIES

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

	Page(s)

Consolidated Balance Sheets as of March 31, 2008 (unaudited) and December 31, 2007	4-5

Consolidated Statements of Operations for the three months ended March 31, 2008 and 2007 (unaudited)	6

Consolidated Statements of Changes in Stockholders’ Equity (Deficit) (unaudited)	7

Consolidated Statements of Cash Flows for the three months ended March 31, 2008 and 2007 (unaudited)	8

Notes to Consolidated Financial Statements	9-20

DCI USA, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

	March 31,		December 31,
	2008		2007
	(Unaudited)
ASSETS
Current Assets:
Cash	$	11,623	$	21,565
Interest receivable-related party		21,729		5,474
Interest receivable		6,970		14,812
Loan receivable- related party		306,670		217,270
Loan receivable - Senergy		100,000		100,000
Deferred tax asset, current portion		158,516		173,693
Total current assets		605,508		532,814

Fixed assets, net		2,410		2,559

Investments in equity interest		3,934,652		3,872,513
Goodwill		195,706		195,706
Deferred tax asset, less current portion		48,444		18,328

Total assets	$	4,786,720	$	4,621,920

See accompanying notes to consolidated financial statements.

DCI USA, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS - (CONTINUED)

	March 31,			December 31,
	2008			2007
	(Unaudited)
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

Current Liabilities:
Accounts payable and accrued expenses	$	132,938		$	108,239
Accrued interest		59,664			26,554
Accrued interest - related parties		67,132			37,367
Loan payable - WGS		399,970			399,970
Advance on account of dividend from related party		300,000			225,000
Convertible notes		465,000			465,000
Convertible debentures		200,000			200,000
Convertible debentures - related parties		400,000			400,000
Current maturities of long term bank loan		183,000			165,000
Total current liabilities		2,207,704			2,027,130

Commitments and contingencies

Long term bank loan		1,436,000			1,371,000
Loan payable - related party		1,469,731			1,335,761
Total liabilities		5,113,435			4,733,891

Stockholders' equity
Preferred Stock, par value $.001, 1,000,000 shares
Series A Preferred authorized, none issued
and outstanding		-			-
Common stock, par value $.001,100,000,000 shares
authorized , 54,917,681 shares issued, and 53,464,557 shares outstanding as
of March 31, 2008 and December 31, 2007		54,917			54,917
Additional paid-in-capital		2,898,802			2,898,802
Accumulated deficit		(3,198,786	)		(2,984,042	)
		(245,067	)		(30,323	)

Treasury stock, at cost - 1,453,124 common stock shares		(81,648	)		(81,648	)
Total stockholders' equity (deficit)		(326,715	)		(111,971	)

Total liabilities and stockholders' equity (deficit)	$	4,786,720		$	4,621,920

See accompanying notes to consolidated financial statements.

DCI USA, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

	Three Months Ended March 31,
	2008			2007
	(Unaudited)
Operating Income:
Revenue	$	-		$	-
Interest income		8,413			6,252
Total income		8,413			6,252


Expenses:
General and administrative expense		30,760			80,405
Interest expense		227,875			63,816
Professional fees		41,600			54,624
Consulting fees		-			89,256
Total expenses		300,235			288,101

Loss from operations		(291,822	)		(281,849	)

Net income (loss) on investments		62,139			(30,811	)
Net loss before income taxes		(229,683	)		(312,660	)

Provision for income taxes		14,939			-

Net loss	$	(214,744	)	$	(312,660	)

Basic and Diluted
Loss per share		($0.00	)		($0.01	)

Weighted average number of
Common Stock outstanding		53,464,557			53,292,681

See accompanying notes to consolidated financial statements.

DCI USA, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)

	Common Stock				Treasury Stock						Additional Paid-in		Accumulated
	Shares		Amount		Shares			Amount			Capital		Deficit			Total

Balance, December 31, 2007		54,917,681	$	54,917		(1,453,124	)	$	(81,648	)	$	2,898,802	$	(2,984,042	)	$	(111,971	)

Net loss														(214,744	)	$	(214,744	)
Balance, March 31, 2008		54,917,681	$	54,917		(1,453,124	)	$	(81,648	)	$	2,898,802	$	(3,198,786	)	$	(326,715	)

See accompanying notes to consolidated financial statements.

DCI USA, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

	Three Months Ended March 31,
	2008			2007
	(Unaudited)
Cash flows from operating Activities
Net loss	$	(214,744	)	$	(312,660	)
Adjustments required to reflect cash flows from
Operating Activities
Cost of stock option		-			89,256
Net loss (income) on equity investments		(62,139	)		30,811
Depreciation		149			223
Amortization of note receivable discount		-			(7,515	)
Long term bank loan - currency fluctuations		128,143			-
Changes in operating liabilities and assets
Prepaid expanse		-			(2,732	)
Interest receivable		(8,413	)		(4,047	)
Deferred tax asset		(14,939	)		-
Accounts payable and accrued expenses		87,574			(9,702	)
Net cash used in operating activities		(84,369	)		(216,366	)

Cash flows from investing activities
Proceeds from loan receivable		-			150,000
Loans to third parties		-			(211,000	)
Loans to related parties		(89,400	)		-
Net cash used in investing activities		(89,400	)		(61,000	)

Cash flows from financing activities
Proceeds from loans		133,970			270,000
Payment of loan payable		-			(65,126	)
Advance on account of dividend		75,000			-
Payment of long term bank loan		(45,143	)		-
Net cash provided by financing activities		163,827			204,874

Decrease in cash		(9,942	)		(72,492	)

Cash at the beginning of the period		21,565			74,755

Cash at the end of the period	$	11,623		$	2,263

		Three Months Ended March 31,
		2008		2007
Supplemental disclosures:
Interest paid	$	45,143	$	27,764
Cash paid for income taxes	$	325	$	91

See accompanying notes to consolidated financial statements.

DCI USA, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - DESCRIPTION OF THE COMPANY

The accompanying unaudited interim consolidated financial statements of DCI USA, INC. (“the Company”) have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the Securities and Exchange Commission (“SEC”), and should be read in conjunction with the audited consolidated financial statements and notes thereto contained in the Company’s Annual Report filed with the SEC on Form 10-K. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim periods presented have been reflected herein. The results of operations for interim periods are not necessarily indicative of the results to be expected for the full year. Notes to the consolidated financial statements that would substantially duplicate the disclosures contained in the audited financial statements for 2007 as reported in the 10-K have been omitted.

The unaudited consolidated financial statements include the accounts of the Company and the Company’s wholly-owned subsidiaries. All inter-company accounts and transactions have been eliminated. The Company operates in one business segment, which is the development of clean energy technologies and the renovation and conversion of buildings to commercial condominiums.

As of March 31, 2008, the Company had $11,623 in cash. In April 2008, the Company received gross proceeds from the sale of Gunther Wind Energy, Ltd. (“Gunther”) in the amount of $1,250,350, and partial return on the loan to Gunther in the amount of $684,650. Accordingly, the Company currently has sufficient funds to fund its operation over the next twelve months.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation and Basis of Presentation. The consolidated financial statements include the accounts of the Company and it’s wholly- owned subsidiaries, Norman LLC and Gunther. . All material intercompany transactions have been eliminated in consolidation. Investments in entities in which the Company can exercise significant influence, but does not own a majority equity interest or otherwise control, are accounted for using the equity method and are included as investments in equity interests on the consolidated balance sheets. The Company has included the results of operations of acquired companies from the date of acquisition. Certain prior year amounts have been reclassified to conform to the current year presentation.

Use of Estimates. In preparing consolidated financial statements in accordance with accounting principles generally accepted in the United States of America, management makes certain estimates and assumptions, where applicable, that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting period. While actual results could differ from those estimates, management does not expect such variances, if any, to have a material effect on the consolidated financial statements.

Revenue Recognition. Revenues have been derived primarily from the lending of funds and consist primarily of investment income. Revenues are reported as the investment income is earned.

Concentration of Credit Risk. Financial instruments that potentially subject the Company to significant concentration of credit risk consist primarily of cash and loans receivables. As of March 31, 2008, substantially all of the Company’s cash was managed by two financial institutions. Loan receivables are typically unsecured and are derived from short-term related parties loans. On an ongoing basis, the Company evaluates its estimates, including those related to the fair values of our loans receivables. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities.

DCI USA, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - (CONTINUED)

Deferred Income Taxes. Deferred tax assets and liabilities are determined based on temporary differences between financial reporting and the tax bases of assets and liabilities. Deferred tax assets are also recognized for tax net operating loss carryforwards. These deferred tax assets and liabilities are measured using the enacted tax rates and laws that are expected to be in effect when such amounts are expected to reverse or be utilized. The realization of total deferred tax assets is contingent upon the generation of future taxable income. Valuation allowances are provided to reduce such deferred tax assets to amounts more likely than not to be ultimately realized. See Note 9 “Income Taxes” for additional information.

Cash and Cash Equivalents. For purposes of reporting cash flows, the Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents.

Notes Receivable. The allowance for loan losses on notes receivable is determined primarily on the basis of management's best estimate of probable losses, including specific allowance for troubled accounts. All accounts or portions thereof deemed to be uncollectible or to require excessive collection costs are written off to the allowance for loan losses. There were no allowances for loan losses at March 31, 2008 and December 31, 2007.

Fixed Assets. The value of fixed assets is at historical cost as required by generally accepted accounting principles. Depreciation is calculated on a straight-line over the expected useful life of the asset as follows:

Leasehold improvements

Equipment

Furniture and fixtures

Remaining lease term or useful life

5 to 7 years

Goodwill. Goodwill is carried at cost. Goodwill is not amortized but is subject to an annual test for impairment and between annual tests in certain circumstances.

Investments in Equity Interests. Investments in entities in which the Company can exercise significant influence but does not own a majority equity interest or otherwise control, are accounted for using the equity method and included as investments in equity interests on the consolidated balance sheets. The Company monitors its investments for other-than-temporary impairment by considering factors including the current economic and market conditions and the operating performance of the companies and records reductions in carrying values when necessary. The fair value of privately held investments is estimated using the best available information as of the valuation date, including current earnings trends, undiscounted cash flows, quoted stock prices of comparable public companies, and other company specific information, including recent financing rounds.

Net Loss Per Share. Basic net loss per share is computed on the basis of the weighted average number of shares outstanding each period and excludes any dilutive effects of options, warrants, and convertible securities. Dilutive earnings per share is computed giving effects to dilutive stock equivalents. There were 27,300,000 and 27,600,000 potentially dilutive common shares outstanding on March 31, 2008 and 2007, respectively, which were excluded from the calculation of diluted earnings per share, consisting primarily of shares issuable upon the conversion of debt and equity and the exercise of stock options.

Fair Value. The Company's financial instruments consist primarily of cash, notes receivable, accounts payable, accrued expenses and debt. The carrying amounts of the Company's financial instruments, excluding debt, approximate fair value due to the short maturity of these instruments. The Company's debt approximates fair value based on borrowing rates currently available to the Company.

DCI USA, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - (CONTINUED)

Recently Issued Accounting Pronouncements.

In March, 2008 the Financial Accounting Standards Board (“FASB”) issued SFAS No. 161, Disclosures about Derivative Instruments and Hedging Activities. SFAS No. 161 requires enhanced disclosures about an entity’s derivative and hedging activities and is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008. Early application is encouraged. The Company is currently evaluating the impact of SFAS No. 161 on its consolidated financial statements.

In December 2007, FASB issued SFAS No. 141 (R) (revised 2007), “Business Combinations,” which establishes principles and requirements for how the acquirer recognizes, measures, and discloses the identifiable assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree; and the goodwill acquired or a gain from a bargain purchase. SFAS No. 141(R) (revised 2007) is effective for business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008.

In December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in Consolidated Financial Statements - An amendment of ARB No. 51,” which establishes accounting and reporting standards for the noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary. SFAS No. 160 is effective for fiscal years, and the interim periods within those fiscal years, beginning on or after December 15, 2008.

In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities - Including an amendment to FASB Statement No. 115,” which permits entities to choose to measure many financial instruments and certain other items at fair value. SFAS No. 159 is effective as of the beginning of an entity’s first fiscal year that begins after November 15, 2007.

Management believes the adoption of the preceding pronouncements will have no significant impact on the Company’s financial condition or results of operations.

NOTE 3 - AQUISITIONS

GUNTHER WIND ENERGY, LTD.

On August 1, 2006, the Company entered into a loan, pledge and option agreement with Gunther Wind Energy, Ltd. (“Gunther”) in Israel to invest in the upgrade of an existing wind farm at Tel Assaniya and in the development of a new site, Nimrod. On June 20, 2007, the Company exercised its option to purchase all the outstanding shares of Gunther pursuant to and in accordance with the loan, pledge and option agreement. The aggregate exercise price of the option was $23,883 of which was paid through the cancellation of outstanding loans previously made by the Company to Gunther.

Gunther owns 25% of the outstanding share capital of ARI, Ltd., an Israeli based corporation formerly known as Green Wind Energy Ltd. (“ARI”), as a result of its acquisition, on March 5, 2006, of 334 shares of ARI’s preferred stock in consideration of $3,000,000. As of April 8, 2008, Gunther had paid an aggregate of $2,655,000 of the purchase price to ARI using funds previously loaned to Gunther by the Company and the proceeds from a $1,500,000 bank loan obtained by Gunther. The remaining portion of the $3,000,000 purchase price was paid by Gunther to ARI on or about April 28, 2008.

DCI USA, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 3 - ACQUISITIONS - (CONTINUED)

On December 2006 Gunther signed agreement with Nimrod Wind Energy, Ltd (“Nimrod”) in which Gunther received an irrevocable option to purchase 25% of Nimrod’s issued and fully paid for share capital. The aggregate purchase price to be paid by Gunther to the Nimrod upon exercise of such option shall be an amount equal to $2,750,000. As of March 31, 2008 Gunther did not exercise its option.

On September 13, 2006, ARI signed an agreement to purchase a wind farm known as Tel Assaniya Windfarm, which is located in Northern Israel. The completion of the purchase agreement is expected by December 31, 2007 upon payment of the outstanding balance. The Tel Assaniya Windfarm is planned to be upgraded from the current capacity of 6MW to seven wind turbines with a capacity of 2.3MW each. The Company expect this upgrade to be completed between April and June 2008. Until such upgrade is completed, Gunther will receive a minimum of a 10% preferred return on its investment on quarterly installments in anticipation of the payment of future dividend. After the upgrade is completed, Gunther will receive a minimum of a 12.5% preferred return. As of November 14, 2007, Gunther has appointed one director and has not yet exercised its right to appoint a second director. As of March 31, 2008 Gunther was paid $300,000 advance on account of dividend.

The investment in Gunther is recorded in the financial statements included herein at the aggregate purchase price and its results of operations from the date of acquisition are reflected in the statement of operations for the periods ended March 31, 2008.

231 NORMAN AVE, LLC

The Company lent $1,370,000 to Norman LLC in part pursuant to an agreement which provided the Company the option of supplanting the 100% membership interest holder in Norman LLC. The Company exercised this option as of November 2006 and now owns 100% interest in Norman LLC. As a result of the Company acquiring Norman LLC, the Company controls 30% of the membership interests of 231 NAPD. See not 4 for the investment in equity interest at 231 NAPD.

NOTE 4 - INVESTMENTS IN EQUITY INTEREST

	March 31,		December 31,
	2008		2007
Investment in 231 NAPD	$	1,227,652	$	1,198,513
Investment in ARI		2,707,000		2,674,000
	$	3,934,652	$	3,872,513

The Company’s share of income (loss) in its equity interest, net of tax:

	Three Months Ended March 31,
	2008		2007
Net income (loss) on investment - 231 NAPD	$	29,139	$	(30,811	)
Net income on investment - ARI		33,000		—
	$	62,139	$	(30,811	)

DCI USA, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 4 - INVESTMENTS IN EQUITY INTEREST - (CONTINUED)

231 NAPD

231 NAPD is a New York limited liability company engaged in owning, developing and operating income producing real property. 231 NAPD owns fee simple title to the real property located at 231 Norman Avenue, Brooklyn, New York. In March 2005, 231 NAPD consummated a $10,000,000 refinancing and construction loan with Washington Mutual with respect to the property at 231 Norman Avenue and received capital contributions from investors of $1,750,000.

As a result of the Company acquiring Norman LLC, the Company controls 30% of the membership interests of 231 NAPD. In November 2006, the Company purchased an option to acquire an additional 20% interest in 231 NAPD for $100,000. The option price was required to be paid by December 31, 2006. The option, which if exercised prior to March 30, 2007, gives the Company the right to purchase the 20% interest in exchange for 18,000,000 shares of the Company’s common stock and a promissory note in the amount of $1,400,000. The promissory note would bear interest at the rate of 8% and would mature in November 2011. The payment of the option price has been extended to June 30, 2007 and the exercise of the option has been extended to July 31, 2007. The Company did not exercise the option prior to its expiration on July 31, 2007.

The Company and Jonathan Ilan Ofir, a former officer, director and majority shareholder of the Company, guaranteed to North Fork Bank the obligations of 231 NAPD. On September 5, 2007, 231 NAPD entered into a Consolidated Mortgage Extension and Security Agreement (the “Agreement”) with North Fork Bank pursuant to which 231 NAPD borrowed the principal sum of $2,426,497 from said bank and consolidated a previous loan of $11,411,003, for an aggregate consolidated principal loan amount of $13,837,500 (the “North Fork Loan”).

On September 5, 2007, and simultaneous with the execution of the Agreement, 231 NAPD issued a Restated Promissory Note to North Fork Bank in the aggregate principal amount of $13,837,500 (the “Note”). Pursuant to the Note, principal plus all accrued and unpaid interest thereon shall be paid on March 5, 2009. Interest accrues on the principal amount at a daily rate of interest equal to 7.25% to be computed on 360-day basis, and is to be paid on a monthly basis. Under specified conditions, 231 NAPD may, at its option, extend the loan for an additional six months in which case the rate of interest shall be 2% above the one year Treasury Index as of the three days prior to the Maturity Date. Upon providing 10 days prior written notice, 231 NAPD has the right to prepay the North Form Bank Loan, in multiples of $25,000 or more, at any time, without penalty. The obligations to North Fork Bank are secured by a lien on the property owned by 231 NAPD.

In connection with the consolidation of the loan with North Fork, the Company, Mr. Ofir, Amir Yerushalmi, Vision Real Estates Group, LLC and YIZ Oxford Capital, LLC, collectively, executed a Guaranty in favor of North Fork Bank (the “Guaranty”). In accordance with the Guaranty, the Guarantors guaranteed full performance of 231 NAPD’s obligations to North Fork Bank. In the event 231 NAPD defaults under the terms and provisions of the Agreement, upon written demand, the Guarantors, jointly and severally, shall pay to North Fork Bank all amounts remaining unpaid under the Agreement. As added security for the North Fork Loan, and in accordance with the Guaranty, all property of the Guarantors held by North Fork Bank shall be subject to a lien as security for the liabilities of the Guarantors. In the event the Guarantors fail to make payment to North Fork Bank when due, any such payment shall bear interest at the rate of 24% per annum.

On November 28, 2007, the Company and Norman LLC, entered into a share acquisition option agreement with World Group Capital (58) Ltd., formally known as World Group Shipping Ltd., a public company in Israel ("WGS"). See Note 5 (a).

DCI USA, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 4 - INVESTMENTS IN EQUITY INTEREST - (CONTINUED)

The Company involved in the renovation and conversion of certain buildings to commercial condominiums. The Company’s development at 231 Norman Avenue, in Brooklyn, New York is the underlying asset comprising the collateral on the loan discussed below. The construction ended at the end of 2007, and the company received Certificate of Occupancy on January 10, 2008. Approvals needed for the commercial condominium plan offering have been obtained and the 44 commercial condos are currently on the market for sale. As of the date of filing, 24 contracts to purchase condominium units have been signed and deposits received, 9 units of which were closed and were occupied. The Company is actively involved in managing the construction, financing, and sales of the 231 Norman Avenue Project.

ARI

Gunther owns 25% of the outstanding shares of capital stock of ARI. See note 3 for additional information.

NOTE 5 - NOTES PAYABLE

	Annual	March 31,		December 31,
	interest rate	2008		2007
Short-term	%
Loan payable - WGS (a)	18%		399,970		399,970
Long-term
Loan payable - related party (b)	6%		1,469,731		1,335,761
		$	1,869,701	$	1,735,731

(a) WGS. On December 5, 2007, the Company and 231 Norman entered into a share acquisition option agreement with WGS, a public company in Israel in which Mr. Ofir is a director. Pursuant to the agreement, WGS agreed to loan $1,000,000 to the Company and 231 Norman. The aggregate principal amount, plus interest accruing at a rate of 1.5% per month, shall be due and payable six months from the closing of the agreement. As of December 31, 2007 and February 28, 2008, WGS had transferred $399,970 of the $1,000,000 loan to the Company. While the Company expected the balance of the loan to be transferred by December 31, 2007, no such transfer occurred, and no additional funds are expected.

Pursuant to this agreement, the Company granted WGS with the following:

An irrevocable option to purchase 100% of the Company’s issued and fully paid for share capital in Gunther. The aggregate purchase price to be paid by WGS to the Company upon exercise of such option shall be an amount equal to $2,450,000. The option is exercisable by WGS, in its sole and absolute discretion, for a period ending February 28, 2008.

ii.

On December 12, 2007, Norman LLC gave WGS a promissory note evidencing the loan, as well as an option to purchase units in the Company’s 231 Norman Avenue project at a price equal to 20% less than the then current market price for such units. The promissory note may be repaid, in whole or in part, at any time or from time to time upon ten days prior written notice to WSG. This option expired on December 5, 2007, as a result of WGS’s failure to advance the full principal amount of the loan.

iii.

The Company gave WGS an option, at WGS’s discretion, to either purchase the 30% membership interests the Company owns, through Norman LLC, in 231 NAPD for the sum of $2,000,000, or to purchase the 100% ownership interest the Company has in Norman LLC, for the sum of $2,000,000. Each of these options expires on the later of either six months from November 28, 2007, or the date on which the loan and any accrued interest is repaid. In connection with the sale of Gunther on April 23, 2008, WGS forfeited this option without payment from the Company.

DCI USA, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 5 - NOTES PAYABLE - (CONTINUED)

As of December 31, 2007 WGS only transferred $399,970 of the $1,000,000, as such WGS is not eligible for any one of the above options.

(b) RUSSULL BROTHERS. In March 2005, the Company issued a promissory note totaling $100,000 to NY2K, Inc. The note was assigned by NY2K, Inc. to Russull Brothers. Such note was cancelled as of June 8, 2005 in consideration for the Company's issuance of 2,000,000 shares of its Common Stock to Russull Brothers, which issuance was made pursuant to the exemption from registration provided by Regulation E under the Securities Act of 1933, as amended. Subsequent to the receipt by the Company of a letter from the Staff of the Securities and Exchange Commission ("SEC") in which the Staff raised questions with respect to the Company's compliance with the provisions of the Investment Company Act of 1940 applicable to business development companies, the Company and Russull Brothers rescinded the cancellation of the Company's $100,000 Note and issuance of 2,000,000 shares of Common Stock. In July 2006, the Company and Russull Brothers entered into an agreement whereby the note owed to Russull Brothers was cancelled in consideration for the Company’s issuance of 2,000,000 shares of its restricted common stock to Russull Brothers.

On November 14, 2007, Mr. Ofir assigned to Russull Brothers an aggregate principal amount of $1,078,317 plus accrued interest of $19,868 relating to a series of loans Mr. Ofir made to the Company. In addition, Russull Brothers assumed the Company's obligation to Hypothecators in the amount of $249,203. On April 20, 2008 the Company and Russull Brothers executed a loan agreement. Pursuant to the loan agreement the Company’s debt to Russull Brothers, is payable upon demand and will accrue interest at an annual rate of 6%. Interest may, at the Company’s option, be paid, no later than the tenth business day of January, or added to the principal outstanding amount of the Company’s debt to Russull Brothers.

As of March 31, 2008 and December 31, 2007, the Company owes $1,469,731 and $1,335,761, respectively, in principal; $21,784 and $418, respectively, in accrued interest relating to the loans.

NOTE 6 - CONVERTIBLE NOTES AND CONVERTIBLE DEBENTURES

	Annual	March 31,		December 31,
	interest rate	2008		2007
	%
Convertible notes (a)	10%	$	465,000	$	465,000
Convertible debentures (b)	8%		200,000		200,000
Convertible debentures - related parties (b)	8%		400,000		400,000
		$	1,065,000	$	1,065,000

(a) CONVERTIBLE NOTES. In October 2006, the Company initiated a convertible note offering whereby the Company would issue up to $1,300,000 of convertible notes. The notes incur interest at the rate of 10% per annum, payable quarterly, and are due November 25, 2007. The notes can be converted at anytime at the option of the note holder at a conversion price of $.05 per share, plus an adjustment based upon the profitability of 231NAPD. The Company can force conversion of the notes anytime the shares are registered and the average computed market price is greater than 250% of the conversion price. The Company measured for a beneficial conversion feature on the date of issuance and on December 31, 2006 and determined there to be no beneficial conversion feature on those dates. Since the conversion price can vary over time based on the profitability of Norman Property LLC, the Company is required to determine whether a beneficial conversion feature exists for each reporting period the notes are outstanding. The Company did not make the quarterly payments of December 31, 2006 and of March 31, 2007 of interest

DCI USA, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 6 - CONVERTIBLE NOTES AND CONVERTIBLE DEBENTURES - (CONTINUED)

‘timely, causing a default on the notes. However, such interest payments were made during January and May, 2007, respectively.

None of the note holders has notified the Company of their intention to exert any of their rights regarding this default. Interest payments for June, September and December 2007 were made in a timely manner. Accordingly, the Company is current on its payments.

On November 25, 2007, an aggregate of $465,000 in principal and $725 in accrued interest became due and payable on the convertible notes. As of the date of this report, none of the noteholders has notified the Company of their intention to enforce any of their rights regarding this default. Notwithstanding, the failure by the Company to make such payments constitutes an event of default pursuant to the terms of the 10% Convertible Notes. As an event of default has occurred, the interest rate increases to 12% per annum on the outstanding principal and any overdue interest payment on each of the 10% Convertible Notes. In addition, any noteholder representing 25% or more of the aggregate principal amount of the note, may at their option and upon written notice, declare the principal and any accrued interest thereon be due and payable immediately.

On April 29, 2008 the Company made payments of the principal to three of the noteholders of $135,000 plus interest of $4,438. The Company is negotiating with the remainder noteholders to extend the terms of the notes. The company is current with the interest payments to regular to all the noteholders. As of the date of this Report, none of the debentures holders and none of the noteholders has notified the Company of their intention to enforce any of their rights in connection with this default.

The Company is currently negotiating with the noteholders to extend the maturity date of the 10% Convertible Notes, and it is expected to be paid in full shortly.

(b) CONVERTIBLE DEBENTURES. On December 6, 2004, the Company entered into a Securities Purchase Agreement whereby the Company issued a $250,000 principal amount convertible debenture to Cornell Capital Partners, L.P. and the Company agreed to issue a second $250,000 principal amount convertible debenture to Cornell Capital Partners, L.P. within five business days of filing a registration statement with the Securities and Exchange Commission. The outstanding $250,000 principal amount convertible debenture bears interest at 8%, matures two years from the date of issuance, and is convertible into our common stock, at the holder's option, at the lower of: (a) $.074 or (b) 77% of the lowest daily volume weighted average price for the five days immediately prior to conversion. The Company has the right to redeem a portion or the entire outstanding debenture at a price equal to $0.072. The Company granted Cornell Capital Partners, L.P. a security interest in all our assets. In addition, Apros and Chay, Ltd. pledged to Cornell Capital Partners all of its shares (a total of 48,500,000 shares) in Technoprises Ltd., an Israeli company. The Company has recorded a cost for the beneficial conversion feature granted to Cornell totaling $74,675. The beneficial conversion feature is reflected as a discount on the debentures and is being amortized as additional interest expense over the term of the debenture.

As of April 20, 2006, Cornell had elected to convert $13,500 principal amount of the $250,000 Debenture which the Company issued to Cornell in December 2004. As a result, on or about June 2, 2006, the Company issued to Cornell 350,649 restricted shares of Common Stock. The Company believes such issuance was exempt from registration under Section 4(2) of the Securities Act of 1933, as amended.

On March 1, 2005, the Company issued a second 8% Secured Convertible Debenture in the original principal amount of $250,000 to Cornell. The debenture has a term of two years, accrues interest at 8% and is convertible into common stock at a price per share equal to the lesser of (a) $0.36 per share, or (b) 77%

DCI USA, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 6 - CONVERTIBLE NOTES AND CONVERTIBLE DEBENTURES - (CONTINUED)

of the lowest daily volume weighted average price for the five days immediately prior to conversion. The Company has the right to redeem a portion or the entire outstanding debenture at a price equal to $0.35 per share. The Company has recorded a cost for the beneficial conversion feature granted to Cornell totaling $74,675. The beneficial conversion feature is reflected as a discount on the debentures and is being amortized as additional interest expense over the term of the debenture.

On November 1, 2006, four parties acquired the debentures in the principal amount of $250,000 and $236,500, with interest accrued to that date, (the “Debentures”) previously held by Cornell Capital Partners LP (“Cornell”). Concurrently with such acquisitions the Company and such individuals entered into a Debenture Modification Agreement wherein the parties modified certain terms of the Debentures. Specifically, the parties agreed that the Debentures will no longer be secured by a lien on any of the Company’s assets, that the due date of the Debentures shall be June 4, 2007, and that the interest rate on the Debentures shall be eight percent (8%) per annum until the due date, and paid at the due date, increasing to fourteen (14%) per annum until such time as the Debentures are paid in full. At September 30, 2007, there was $600,000 outstanding on the Debentures. The agreement was amended to extend the due date to December 31, 2007.

As of March 31, 2008, four outstanding convertible debentures, amounting in the aggregate to $600,000, plus accrued interest of approximately $64,734 thereon, became due and payable. As of December 31, 2007, two of the Debentures, amounting in the aggregate to $200,000, were amended to extend the maturity date to April 15, 2008, of which on April 29, 2008 the two individual were paid the aggregate principal amount of $100,000 plus the accrued interest thru April 30, 2008 of $29,934.. These Debentures are currently in default, but it is expected that they will be paid in full shortly. The other two Debentures, amounting in the aggregate to $400,000, which were assigned to Russull Brothers, the majority shareholder of the Company as of March 31, 2008, were extended to April 30, 2008, and are currently in default. The Company currently negotiates the extension of the Debentures maturity date with Russull Brothers.

NOTE 7 - LONG-TERM BANK LOAN

On March 5, 2007, Gunther obtained a $1,500,000 bank loan from Bank Hapoalim, Ltd., which matured on January 3, 2015. The bank loan bears interest at the Israeli prime rate plus 2% per annum. Principal and interest payments on the bank loan are due quarterly. Classified by linkage terms and interest rates, the total amount of the loan is as follows:

	Annual	March 31,			December 31,
	interest rate	2008			2007
	*% ()**
Bank Loan	Israeli Prime + 2%	$	1,619,000		$	1,536,000
Less- current maturities			(183,000	)		(165,000	)
Long-Term portion		$	1,436,000		$	1,371,000

DCI USA, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 8 - RELATED PARTY TRANSACTIONS

Interest income for the three months ended March 31, 2008 and 2007 in amounts of approximately $8,000 and $0, respectively, earned from notes receivable from related parties. Interest expenses for the three months ended March 31, 2008 and 2007 in amounts of approximately $29,000 and $6,000, respectively. The Company believes that the transactions set forth above were made on terms no less favorable to us than could have been obtained from unaffiliated third parties. In addition, we intend that all such transactions be on terms no less favorable to us than could be obtained from unaffiliated third parties.

NOTE 9 - INCOME TAXES

Domestic (US):

Based on the Company's history of recurring losses, there is uncertainty as to the realization of the net operating loss carryforwards. Accordingly, a valuation allowance has been provided for those deferred tax assets which management believes it is more likely than not that the tax benefit will not be realized. At March 31, 2008, the Company had approximately $2,211,000 of net operating loss carryforwards to offset future taxable income for both federal and state income tax purposes, expiring in various years through 2028 for federal purposes and 2013 for state purposes. The Company has reported a valuation allowance of approximately $744,000. The valuation allowance account increased during the three months ended March 31, 2008 by $27,000.

Deferred income taxes (benefit) reflect the tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes, and the tax effects of net operating losses that are available to offset future taxable income.

A reconciliation of the difference between the expected income tax rate using the statutory federal tax rate and the Company’s effective rate is as follows:

	Three Months Ended March 31,
	2008			2007

U.S. Statutory Rate		34	%		34	%
State income taxes		9	%		9	%
Valuation allowance		-43	%		-43	%
		0	%		0	%

DCI USA, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 9 - INCOME TAXES - (CONTINUED)

Significant components of the Company’s net deferred tax assets are as follows:

	March 31,			December 31,
	2008			2007

Deferred tax assets:
Net operating loss carryforwards	$	950,788		$	908,985
Total deferred tax assets		950,788		$	908,985

Deferred liabilities		-
Total deferred tax liabilities		-			-
Valuation allowance for net deferred tax assets		(743,828	)		(716,964	)

Net deferred tax assets	$	206,960		$	192,021


Current asset		158,516			173693
Long term asset		48,444			18,328
Net deferred tax assets	$	206,960		$	192,021

Foreign (Israel):

The Company and its Israeli subsidiary have accumulated losses for Israel income tax purposes as of March 31, 2008, in the amount of approximately $93,000. These losses may be carryforward (linked to the Israeli Consumer Price Index (“CPI”)) and offset against taxable income in the future for an indefinite period.

Reduction in corporate tax rate: In June 2004, an amendment to the Income Tax Ordinance (No. 140 and Temporary Provision), 2004 was passed by the “Knesset” (Israeli parliament) and on July 25, 2005, another law was passed, the amendment to the Income Tax Ordinance (No. 147) 2005, according to which the corporate tax rate is to be progressively reduced to the following tax rates: 2004 - 35%, 2005 - 34%, 2006 - 31%, 2007 - 29%, 2008 - 27%, 2009 - 26%, 2010 and thereafter - 25%.

NOTE 10 - SUBSEQUENT EVENTS

On February 27, 2008, Russull Brothers purchased all 3,150,000 shares of the Company’s common stock owned by Direct Capital, for an aggregate purchase price of $130,000. The transaction was effected pursuant to a verbal agreement between Direct Capital and Russull Brothers. As of April 8, 2008, Russull Brothers owned an aggregate of 40,687,997 shares representing 76.10% of the Company’s issued and outstanding common stock.

DCI USA, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 10 - SUBSEQUENT EVENTS - (CONTINUED)

On April 23, 2008, the Company, Gunther, and Tobias Jewelry Ltd., an Israeli corporation (“Tobias”), executed a share sale agreement, pursuant to which Tobias agreed to purchase all of the share capital of Gunther. In consideration therefore, Tobias agreed to pay the Company $2,607,000, of which (i) $1,250,350 plus applicable value added taxes Tobias agreed to pay to the Company at closing (the “Cash Consideration”), and (ii) $1,356,650, the amount of Gunther’s pre-existing debt to the Company, Tobias agreed to lend to Gunther at closing. Tobias also agreed to make two additional loans to Gunther, one in the amount of $355,000, and a second loan in the amount of $30,000. The transactions contemplated by the agreement were consummated on April 28, 2008. Pursuant to the Agreement, Tobias paid $777,549 to the Company, on behalf of the Company, Tobias paid $472,801 WGS in full satisfaction of the Company’s pre-existing debt to WGS. Tobias also loaned $684,650 to Gunther, which funds were paid directly to the Company in partial satisfaction of Gunther’s pre-existing debts to the Company. Tobias also agreed to lend Gunther $672,000, the remaining outstanding balance of Gunther’s debts to the Company, on or before April 21, 2009, at which time Gunther is obligated, pursuant to the agreement, to repay the entire remaining outstanding balance of its debt to the Company. Twenty-five percent of Gunther’s outstanding share capital will be held in escrow in order to secure repayment of the balance of Gunther’s debt to the Company. The remaining seventy-five percent of Gunther’s share capital was transferred to Tobias on or about April 28, 2008. Pursuant to the agreement, Tobias also loaned Gunther $355,000, an amount equal to the outstanding portion of Gunther’s pre-existing commitment to invest in Green Wind Energy Ltd., and $30,000, an amount equal to Gunther’s outstanding obligations to its suppliers.

The Consideration amount that was paid by Tobias to WGS was in amount of $472,801 however the Company’s liability to WGS as of the payment day was $435,584, as such WGS committed to transfer $37,217 to the Company.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

As used throughout this report, the terms "DCI," the "Company," "we," "us," and "our" refer to DCI USA, Inc., and unless indicated otherwise, include our subsidiaries.

This Management’s Discussion and Analysis or Financial Condition and Results of Operations should be read in conjunction with the financial statements and the notes thereto.

Forward Looking Statements

This report on Form 10-Q (the “Report”) contains a number of forward-looking statements that reflect management's current views and expectations with respect to our business, strategies, future results and events and financial performance. All statements made in this Report other than statements of historical fact, including statements that address operating performance, events or developments that management expects or anticipates will or may occur in the future, including statements related to distributor channels, volume growth, revenues, profitability, adequacy of funds from operations, statements expressing general optimism about future operating results and non-historical information, are forward looking statements. In particular, the words "believe," "expect," "intend," " anticipate," "estimate," "may," "will," variations of such words, and similar expressions identify forward-looking statements, but are not the exclusive means of identifying such statements and their absence does not mean that the statement is not forward-looking. These forward-looking statements are subject to certain risks and uncertainties, including those discussed below. Our actual results, performance or achievements could differ materially from historical results as well as those expressed in, anticipated or implied by these forward-looking statements. We do not undertake any obligation to revise these forward-looking statements to reflect any future events or circumstances.

Readers should not place undue reliance on these forward-looking statements, which are based on management's current expectations and projections about future events, are not guarantees of future performance, are subject to risks, uncertainties and assumptions (including those described below) and apply only as of the date of this Report. Our actual results, performance or achievements could differ materially from the results expressed in, or implied by, these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in "Risk Factors" on the Company’s Annual Report of Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on May 12, 2008, as well as those discussed elsewhere in this Report, and the risks discussed in our press releases and other communications to shareholders issued by us from time to time which attempt to advise interested parties of the risks and factors that may affect our business. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Overview

We are presently engaged in the renovation and conversion of buildings to commercial condominiums. We had considered expanding our business focus to include the field of alternative energy, with our acquisition on August 1, 2006 of an interest in Gunther Wind Energy, Ltd., a corporation that invests in wind farms in Israel, and our January 2007 loan to Senergy, Ltd., an Israeli limited liability company that operates in the areas of solar heating and cooling and solar-based energy generation. However, our agreement with Senergy was terminated on February 28, 2008 and, as disclosed in our Current Report on Form 8-K filed May 1, 2008 and amended on May 2, 2008, on April 3, 2008 we executed a share sale agreement with Tobias Jewelry Ltd., an Israeli corporation, pursuant to which Tobias Jewelry acquired all of the share capital of Gunther.

231 Norman Avenue

The Company remains involved in the renovation and conversion of certain buildings, located at 231 Norman Avenue, Brooklyn, New York, to commercial condominiums. Construction has been completed and a Certificate of Occupancy was obtained on January 10, 2008. Approvals needed for the commercial condominium plan offering have been obtained and 44 commercial condos are currently on the market for sale. The Company is actively involved in managing the construction, financing, and sales of the 231 Norman Avenue project. As of the date of filing, 24 contracts to purchase condominium units have been signed and deposits received, 9 units of which were closed and occupied.

Material Changes in Financial Condition

As a result of the termination, on February 28, 2008, of our agreement to extend a loan to Senergy, Ltd., we expect repayment of $100,000 previously loaned to Senergy by the Company.

Under the terms of the April 23, 2008 share sale agreement, pursuant to which we sold Gunther Wind Energy to Tobias Jewelry, $684,650 of the Company’s loans to Gunther Wind Energy has been repaid to the Company and the balance of $672,000 will be repaid in April 2009. Accordingly, we expect that our June 30, 2008 balance sheet will reflect repayment of $684,650 of our loans to Gunther Wind Energy, and we expect that our June 30, 2009 balance sheet will reflect repayment of the remaining outstanding balance of $672,000. As a result and assuming no unforeseen developments, we anticipate revenues of approximately $840,000 in the quarter ended June 30, 2008 and approximately $386,000 in the second quarter of 2009. However, there can be no assurance that we will realize these revenues.

Material Changes in Results of Operations

Comparison of the results of operations: three months ended March 31, 2008 to three months ended March 31, 2007.

Our total income for the three months ended March 31, 2008 was $8,413, as compared to $6,252 of total income for the three months ended March 31, 2007. The income for the quarters ended March 31, 2008 and March 31, 2007 both consisted of interest income generated from the loans the Company made to 321 Norman Avenue Property Development LLC and Senergy.

Our general and administrative expenses decreased to $30,760 for the three months ended March 31, 2008, from $80,405 for the three months ended March 31, 2007. The decrease was a result of decreased travel expenses and the completion, in June 2007, of our acquisition of Gunther Wind Energy. Interest expense increased to $227,875 for the quarter ended March 31, 2008, from $63,816 for the quarter ended March 31, 2007.The increase was a result of interest payments on our outstanding 10% Convertible Notes and our outstanding debentures in the principal amount of $600,000 , and other payables needed to finance an investment in ARI Ltd., an Israeli company in which Gunther Wind Energy had invested and in which the Company indirectly held a 25% interest as a result of the Company’s ownership of Gunther Wind Energy.

Professional fees decreased from $54,624 for the quarter ended March 31, 2007 to $41,600 for the quarter ended March 31, 2008.

Our net income on investments increased, from a loss of $30,811 in the three months ended March 31, 2007 to income of $62,139 in the three months ended March 31, 2008. This is attributed mainly to the earnings of 231 Norman Avenue Property Development, LLC in 2008, as a result of the completion of sales of seven commercial condominium units in 2008, and investments in Ari Ltd. which contributed income of $33,000 to the Company in first quarter of 2008.

Total loss from operations during the quarter ended March 31, 2008 was $291,822. The loss is attributed mainly to interest expense.

Liquidity and Capital Resources

Our cash as of March 31, 2008 was $11,623. On April 28, 2008, the Company received gross proceeds from the sale of Gunther Wind Energy in the amount of $1,250,350 and partial return on the loan to Gunther in the amount of $684,650. Accordingly, the Company currently has sufficient funds to fund its expenses over the next twelve months.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Smaller reporting companies are not required to provide the information required by this Item 3.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Our disclosure controls and procedures are designed to ensure that information required to be disclosed in reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the United States Securities and Exchange Commission. Our principal executive and financial officers have reviewed the effectiveness of our “disclosure controls and procedures” (as defined in the Securities Exchange Act of 1934 Rules 13a-15(e) and 15d-15(e)) as of the end of the period covered by this report and have concluded that our disclosure controls and procedures are effective to ensure that material information relating to the Company is recorded, processed, summarized, and reported in a timely manner. There were no significant changes in our internal controls or in other factors that could significantly affect these controls subsequent to the last day they were evaluated by our principal executive and financial officers.

Changes in Internal Controls

There have been no changes in the Company’s internal control over financial reporting during the last quarterly period covered by this report that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II

OTHER INFORMATION

Item 1. Legal Proceedings.

There are no pending legal proceedings to which the Company is a party or in which any director, officer or affiliate of the Company, any owner of record or beneficially of more than 5% of any class of voting securities of the Company, or security holder is a party adverse to the Company or has a material interest adverse to the Company. The Company’s property is not the subject of any pending legal proceedings.

Item 1A. Risk Factors.

There have been no material changes to the risks to our business described in our Annual Report on Form 10-K for the year ended December 31, 2007 filed with the SEC on May 12, 2008.

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

None.

Item 3. Defaults Upon Senior Securities.

As of the date of this report, the following outstanding notes and debentures are in default. Neither the debentures holders nor any of the note holders has notified the Company of their intention to enforce any of their rights in connection with this default.

Debentures - As of March 31, 2008, three outstanding convertible debentures, amounting in the aggregate to $600,000, plus accrued interest of approximately $71,934. $200,000 of which held by two individuals became due and payable on April 15, 2008 and $400,000 held by Russull Brothers, Inc, the Company's major shareholder, became due and payable on April 30, 2008. On April 29, 2008 the two individual were paid the aggregate principal amount of $100,000 plus the accrued interest thru April 30, 2008 of $29,934.

The balance of the principal owed to the two debenture holders and the principal balance of owed to Russull Brothers are being negotiated to extend the maturity date.

10% Convertible Notes - On November 25, 2007, an aggregate of $465,000 in principal and $725 in accrued interest became due and payable on the convertible notes, which were issued by the Company in October 2006. The note holders have agreed verbally, but not in a signed agreement, to extend the maturity date of the notes to April 30, 2008. On April 29, 2008 the Company made payments of the principal to three of the note holders of $135,000 plus interest of $4,438. The Company is negotiating with the remainder note holders to extend the terms of the notes. The company is current with the interest payments to regular to all the note holders.

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

None.

Item 5. Other Information.

On May 19, 2008 Greg Bitterman informed the Company that he resigned as a member of the Board of Directors of the Company for personal reasons..

Item 6. Exhibits.

The following exhibits are filed as part of this report:

Exhibit No.		Description of Exhibit
31.1		Section 302(a) Certifications
32.1		Section 906 Certifications

SIGNATURES

In accordance with the requirements of the Securities Exchange Act of 1934, the Registrant has caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Dated: May 20, 2008		By:	/s/ Ofer Arbib
			Ofer Arbib Chief Executive Officer (Principal Executive Officer)

Dated: May 20, 2008		By:	/s/ Jonathan Rigbi
			Jonathan Rigbi Chief Financial Officer (Principal Financial and Accounting Officer)

DCI USA, INC 10-Q