UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended September 30, 2009
	For the quarterly period ended March 31, 2010
	or
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from _________ to _________

Commission File Number: 1-8356

DVL, INC.

(Exact name of registrant as specified in its charter)

Delaware		13-2892858
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

70 East 55th Street, New York, New York		10022
(Address of principal executive offices)		(Zip Code)

(212) 350-9900
(registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

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

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). o Yes o No

Indicate by check mark whether the registrant is a large 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 (Do not check if a smaller reporting company) o	Smaller reporting company x

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

The number of shares outstanding of the issuer’s classes of common equity, as of ~~November~~ 16May 14, ~~2009~~2010 was:

Class		Number of Shares

Common Stock, $.01 par value		44,770,345

Table of Contents

DVL, INC. AND SUBSIDIARIES

INDEX

Part I	Financial Information:	~~Pages~~	Pages
	Item 1. – Financial Statements:
	Consolidated Balance Sheets – September 30, 2009 (unaudited) and December 31, 2008	2 – 3
	Consolidated Balance Sheets – March 31, 2010 (unaudited) and December 31, 2009		2 – 3
	Consolidated Statements of Operations – Three Months Ended September 30, 2009 (unaudited) and 2008 (unaudited)	4
	Consolidated Statements of Operations – Three Months Ended March 31, 2010 (unaudited) and 2009 (unaudited)		4 – 5
	Consolidated Statements of Operations – Nine Months Ended September 30, 2009 (unaudited) and 2008 (unaudited)	5
	Consolidated Statement of Shareholders’ Equity – Three Months Ended March 31, 2010 (unaudited)		6
	Consolidated Statement of Stockholders’ Equity – Nine Months Ended September 30, 2009 (unaudited)	6
	Consolidated Statements of Cash Flows – Three Months Ended March 31, 2010 (unaudited) and 2009 (unaudited)		7 – 8
	Consolidated Statements of Cash Flows – Nine Months Ended September 30, 2009 (unaudited) and 2008 (unaudited)	7 – 8
	Notes to Consolidated Financial Statements (unaudited)		9 – 14
	Notes to Consolidated Financial Statements (unaudited)	9 – 16
	Item 2. – Management’s Discussion and Analysis of Financial Condition and Results of Operations		15 – 20
	Item 2. – Management’s Discussion and Analysis of Financial Condition and Results of Operations	17 – 27
	Item 3. – Quantitative and Qualitative Disclosures About Market Risk		20
	Item 3. – Quantitative and Qualitative Disclosures About Market Risk	27
	Item 4T. - Controls and Procedures		20
	Item 4. - Controls and Procedures	27 – 28
Part II	Other Information:
Part II	Other Information:
	Item 6. – Exhibits		21 – 25
	Item 1. – Legal Proceedings	29
	Signatures		26
	Item 1A. – Risk Factors	29
	Item 2. – Unregistered Sales of Equity Securities and Use of Proceeds	29
	Item 3. – Defaults Upon Senior Securities	29
	Item 4. – Submission of Matters to a Vote of Security Holders	29
	Item 5. – Other Information	29
	Item 6. – Exhibits and Report on Form 8-K	29
	Signature	30

Table of Contents

Part I – FINANCIAL INFORMATION

Item 1. Financial Statements

DVL, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(in thousands)

	September 30,			December 31,
	March 31,			December 31,
	2009			2008
	2010			2009
	(unaudited)
ASSETS
Residual interests in securitized portfolios	$	4540,~~443~~805		$	4542,~~789~~699
Mortgage loans receivable from affiliated partnerships (net of unearned interest of $4,342 for 2009 and $5,181 for 2008)		13,716			14,279
Mortgage loans receivable from affiliated partnerships (net of unearned interest of $3,721 for 2010 and $4,037 for 2009)		13,308			13,326
Allowance for loan losses		(2,~~405~~884	)		(2,~~180~~884	)
Net mortgage loans receivable		1110,~~311~~424			1210,~~099~~442
Cash (including restricted cash of $299 for 2009 and $0 for 2008)		1,702			496
Cash (including restricted cash of $269 for 2010 and $274 for 2009)		1,199			1,067
Investments
Real estate at cost (net of accumulated depreciation and amortization of $1,535 for 2009 and $1,359 for 2008)		9,150			9,320
Real estate at cost (net of accumulated depreciation and
Affiliated limited partnerships (net of allowance for losses of $448, for 2009 and 2008)		657			657
amortization of $1,618 for 2010 and $1,564 for 2009)		9,272			9,564
Net deferred tax asset		2,105			2,257
Affiliated limited partnerships (net of allowance for
Other assets		3,237			3,552
losses of $375 for 2010 and 2009)		657			657
Assets of discontinued operations		-			895
Net deferred tax asset		1,969			2,068
Total assets	$	73,605		$	75,065
Other assets		1,682			1,762
Assets of discontinued operations		-			212
Total assets	$	66,008		$	68,471

(continued)

See notes to consolidated financial statements.

Table of Contents

DVL, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(in thousands except share data)

(continued)

	September 30,			December 31,
	March 31,			December 31,
	2009			2008
	2010			2009
	(unaudited)
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Notes payable - residual interests	$	3125,~~762~~551		$	3428,~~172~~155
Underlying mortgages payable		2,~~919~~545			32,~~626~~708
Debt - other		1110,~~610~~544			1110,~~195~~694
Debt - affiliates		1,~~380~~162			1,~~527~~129
Interest rate swaps		~~202~~174			~~231~~176
Redeemed notes payable - litigation settlement		770			775
Security deposits, accounts payable and accrued
Security deposits, accounts payable and accrued liabilities (including deferred income of $199 for 2009 and $21 for 2008)		415			616
liabilities (including deferred income of $210
Total liabilities		49,058			52,142
for 2010 and $71 for 2009)		1,263			1,194
Total liabilities		41,239			44,056
Commitments and contingencies
Stockholders' equity:
Shareholders' equity:
Preferred stock, $10.00 par value, authorized, issued and outstanding 100 shares		1			1
Preferred stock, $10.00 par value, authorized, issued
Preferred stock, $.01 par value, authorized 5,000,000 shares, issued and outstanding -0-		-			-
and outstanding 100 shares		1			1
Common stock, $.01 par value, authorized - 90,000,000 shares, issued and outstanding 44,770,345 for 2009 and 2008		448			448
Preferred stock, $.01 par value, authorized 5,000,000
shares, issued and outstanding -0-		-			-
Common stock, $.01 par value, authorized 90,000,000
shares, issued and outstanding 44,770,345 for 2010 and
2009		448			448
Additional paid-in-capital		97,003			97,003
Deficit		(72,~~703~~535	)		(7472,~~298~~861	)
Accumulated other comprehensive loss		(~~202~~148	)		(~~231~~176	)
Total stockholders' equity		24,547			22,923
Total shareholders' equity		24,769			24,415
Total liabilities and stockholders' equity	$	73,605		$	75,065
Total liabilities and shareholders' equity	$	66,008		$	68,471

See notes to consolidated financial statements.

Table of Contents

DVL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands)

(unaudited)

	Three Months Ended
	September 30,
	March 31,
	2009			2008
	2010			2009
Income from affiliates:
Interest on mortgage loans	$	~~557~~486		$	~~353~~528
Partnership management fees		5960			6553
Management fees		13121			15153
Transaction and other fees from partnerships		1			-25
Distributions from partnerships		2752			~~176~~76
Income from others:
Interest income - residual interests		1,~~601~~592			1,~~502~~542
Net rental income (including depreciation and amortization of $41 for 2009 and $55 for 2008)		163			157
Net rental income (including depreciation and
Other income and interest		51			19
amortization of $25 for 2010 and $50 for 2009)		128			66
		2,472			2,287
Other income and interest		8			21
		2,448			2,464
Operating expenses:
General and administrative		~~364~~480			~~392~~584
Asset servicing fee - NPO Management LLC		195			~~196~~195
Legal and professional fees		~~115~~214			~~119~~73
Provision for loan losses		~~100~~-			50100
Provision for impairment		245			-
Interest expense:
Underlying mortgages		5750			8064
Notes payable - residual interests		~~669~~542			~~705~~689
Affiliates		4234			45
Others		~~214~~213			~~267~~344
		1,756			1,854
		1,973			2,094
Income from continuing operations before income tax expense		~~716~~475			~~433~~370
Income tax expense		(4499	)		~~(189~~-	)
Income from continuing operations		~~672~~376			~~244~~370
(Loss) income from discontinued operations - net of tax of $-0- in both periods		(116	)		61
(Loss) income from discontinued operations - net of tax of $-0- in
Net income	$	556		$	305
both periods		(50	)		7
Net income	$	326		$	377

(continued)

See notes to consolidated financial statements.

Table of Contents

DVL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands)

(unaudited)

	Nine Months Ended
	September 30,
	2009			2008
Income from affiliates:
Interest on mortgage loans	$	1,686		$	1,478
Gain on satisfaction of mortgage loans		-			999
Partnership management fees		168			189
Management fees		43			52
Transaction and other fees from partnerships		27			88
Distributions from partnerships		133			230
Income from others:
Interest income - residual interests		4,684			4,466
Net rental income (including depreciation and amortization of $137 for 2009 and $148 for 2008)		267			362
Other income and interest		76			57
		7,084			7,921
Operating expenses:
General and administrative		1,111			1,154
Asset servicing fee - NPO Management LLC		586			579
Legal and professional fees		274			291
Provision for loan losses		225			150
Interest expense:
Underlying mortgages		182			267
Notes payable - residual interests		2,034			2,177
Affiliates		128			142
Others		770			835
		5,310			5,595
Income from continuing operations before income tax expense		1,774			2,326
Income tax expense		(77	)		(432	)
Income from continuing operations		1,697			1,894
Loss from discontinued operations - net of tax of $-0- in both periods		(102	)		(48	)
Net income	$	1,595		$	1,846

(continued)

	Three Months Ended
	March 31,

	2010		2009

Basic earnings per share:

Income from continuing operations	$	0.01	$	0.01
(Loss) income from discontinued operations		-		-

Net Income	$	0.01	$	0.01


Diluted earnings per share:
Income from continuing operations	$	0.01	$	0.01
(Loss) income from discontinued operations		-		-

Net Income	$	0.01	$	0.01


Weighted average shares outstanding - basic		44,770,345		44,770,345
Effect of diluted securities		55,317		34,445

Weighted average shares outstanding - diluted		44,825,662		44,804,790

See notes to consolidated financial statements.

Table of Contents

DVL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF ~~STOCKHOLDERS~~SHAREHOLDERS’ EQUITY

(in thousands except share data)

																			~~Accumulated~~	Accumulated
	Preferred Stock					~~Common Stock~~	Common Stock					~~Additional~~	Additional						~~Other~~	Other
												~~Paid-In~~	Paid-In						~~Comprehensive~~	Comprehensive						~~Comprehensive~~	Comprehensive
	Shares		~~Amount~~	Amount		~~Shares~~	Shares		~~Amount~~	Amount		~~Capital~~	Capital		~~Deficit~~	Deficit			~~Income (Loss)~~	Income (Loss)			~~Total~~	Total		~~Income~~	Income
Balance - January 1, 2009		100	$	1			44,770,345		$	448		$	97,003		$	(74,298	)		$	(231	)		$	22,923		$	-
Balance - January 1, 2010		100		$	1			44,770,345		$	448		$	97,003		$	(72,861	)		$	(176	)		$	24,415		$	-
Unrealized gain on valuation of interest rate swap agreements		-		-			-			-			-			-				29				29			29
Amortization of deferred loss on interest rate swap agreements		-			-			-			-			-			-				28				28			28
Net income		-		-	-		-	-		-	-		-	-		~~1,595~~	326			-	-			~~1,595~~	326		~~1,595~~	326
Balance - September 30, 2009		100	$	1			44,770,345		$	448		$	97,003		$	(72,703	)		$	(202	)		$	24,547		$	1,624
Balance - March 31, 2010		100		$	1			44,770,345		$	448		$	97,003		$	(72,535	)		$	(148	)		$	24,769		$	354

See notes to consolidated financial statements.

Table of Contents

DVL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)

	Nine Months Ended
	Three Months Ended
	September 30,
	March 31,
	2009			2008
	2010			2009
Cash flows from operating activities:
Continuing operations:
Income from continuing operations	$	1,697		$	1,894
Net Income	$	326		$	377
Adjustments to reconcile income to net cash provided by (used in) operating activities from continuing operations
Loss (gain) from discontinued operations		50			(7	)
Interest accretion on residual interests		(204	)		-
Adjustments to reconcile income to net cash provided by
Net (decrease) increase in accrued interest on debt		27			(5	)
(used in) operating activities from continuing operations
Gain on satisfaction of mortgage loans		-			(999	)
Interest accretion on residual interests		(53	)		(59	)
Depreciation		176			140
Net decrease in accrued interest on debt		(5	)		(7	)
Provision for loan losses		225			(187	)
Depreciation and amortization		79			61
Amortization of unearned interest on loan receivables		(839	)		(668	)
Provision for loan losses		-			100
Net decrease in deferred tax asset		152			335
Provision for impairment		245			-
Net decrease (increase) in other assets		383			(985	)
Amortization of unearned interest on loans receivable		(316	)		(298	)
Net decrease in accounts payable, security deposits and accrued liabilities		(379	)		62
Net decrease in deferred tax asset		99			-
Net increase in deferred income		178			213
Net decrease in other assets		80			345
Net cash provided by (used in) continuing operations		1,416			(200	)
Net (decrease) increase in accounts payable, security deposits
and accrued liabilities		(70	)		156
Net increase in deferred income		139			100
Net cash provided by continuing operations		574			768
Discontinued operations:
Loss from discontinued operations		(102	)		(48	)
(Loss) gain from discontinued operations		(50	)		7
Gain on sale of discontinued asset		(47	)		-
Loss (gain) on sale of discontinued assets		50			(120	)
Net decrease (increase) in assets and liabilities of discontinued operations		28			(441	)
Net decrease in assets and liabilities of
Cash used in discontinued operations		(121	)		(489	)
discontinued operations		-			5
Net cash provided by (used in) operating activities		1,295			(689	)
Cash used in discontinued operations		-			(108	)
Net cash provided by operating activities		574			660

(continued)

See notes to consolidated financial statements.

Table of Contents

DVL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)

(continued)

	Nine Months Ended
	Three Months Ended
	September 30,
	March 31,
	2009			2008
	2010			2009
Cash flows from investing activities:
Collections on loans receivable	$	~~1,402~~334		$	~~3,675~~467
Principal collections on retained interests		1,~~618~~427			~~518~~388
Real estate acquisitions and capital improvements		(6	)		(166	)
Real estate capital improvements		(6	)		(6	)
Net proceeds from the sale of discontinued assets		~~914~~162			-595
Net cash provided by investing activities		31,~~928~~917			41,~~027~~444
Cash flows from financing activities:
Proceeds from new borrowings		~~6,450~~-			4,~~050~~250
Principal payments on debt		(~~6,209~~112	)		(4,~~062~~623	)
Payments of prepaid financing costs		~~(68~~-	)		-(68	)
Repurchase of common stock		-			(62	)
Payments on underlying mortgages payable		(163	)		(296	)
Payments on underlying mortgages payable		(707	)		(1,483	)
Payments on notes payable - residual interest		(2,084	)		(986	)
Payments on notes payable - residual interest		(3,478	)		(2,222	)
Payments related to debt redemptions		-			(5	)
Payments related to debt redemptions		(5	)		-
Net cash used in financing activities		(2,359	)		(1,728	)
Net cash used in financing activities		(4,017	)		(3,779	)
Net increase in cash		132			376
Net increase (decrease) in cash		1,206			(441	)
Cash, beginning of period		1,067			496
Cash, beginning of period		496			1,028
Cash, end of period	$	1,199		$	872
Cash, end of period	$	1,702		$	587
Supplemental disclosure of cash flow information:
Cash paid during the period for interest	$	~~2,878~~813		$	~~3,157~~972
Cash paid for income taxes	$	26-		$	~~166~~-
Supplemental disclosure of non-cash investing and financing activities:
Supplemental disclosure of non-cash investing and
Residual interests in securitized portfolios - increase / (decrease)	$	1,068		$	(565	)
financing activities:
Notes payable - residual interests - increase / (decrease)	$	1,068		$	(565	)
Residual interests in securitized portfolios -
increase / (decrease)	$	(520	)	$	498
Notes payable - residual interests -
increase / (decrease)	$	(520	)	$	498

See notes to consolidated financial statements.

Table of Contents

DVL, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Dollars in thousands unless otherwise noted

(except share and per share amounts)

1.	Basis of Presentation

~~In the opinion of~~ DVL, Inc. (“DVL” or the “Company”) is a Delaware corporation headquartered in New York, New York. DVL is a commercial finance company which is primarily engaged in (a) the ~~accompanying~~ownership ~~consolidated~~of residual interests in securitized portfolios, (b) the ownership and servicing of a portfolio of secured commercial mortgage loans made to limited partnerships in which DVL serves as general partner, which we refer to as an Affiliated Limited Partnership, (c) the ownership of real estate and (d) the performance of real estate asset management and administrative services. In the opinion of DVL, the accompanying consolidated financial statements contain all adjustments (consisting of only ~~normal~~ normal accruals) necessary in order to present a fair presentation of the ~~consolidated~~ consolidated financial position of DVL and the consolidated results of its operations for the periods set forth herein. The results of the Company’s operations for the ~~nine~~ three months ended ~~September~~March 3031, ~~2009~~2010 should not be regarded as indicative of the results that may be expected from its operations for the full year. For further information, refer to the consolidated financial statements and the accompanying notes included in DVL’s Annual Report on Form 10-K for the year ended December 31, ~~2008. Subsequent events have been evaluated through November 17,~~ 2009~~, the date the financial statements were issued (see note 16)~~.

2.	Reclassifications

Certain amounts from ~~2008~~2009 have been reclassified to conform to the ~~2009~~2010 presentation. During the quarter ended September 30, 2009 the Company reclassified, in all periods presented, certain assets in the consolidated balance sheets out of discontinued operations and into real estate and other assets as they no longer met the criteria for discontinued operations. Additionally, the amounts in the consolidated statements of operations and cash flows have been reclassified for all periods presented.

3. ~~Recent~~Residual ~~Accounting~~Interests ~~Pronouncements~~in Securitized Portfolios

~~In May~~The ~~2009~~Company, ~~the~~through ~~Financial~~its ~~Accounting~~wholly-owned ~~Standards~~consolidated ~~Board~~subsidiary, S2 Holdings, Inc. (“~~FASB~~S2”), ~~issued~~owns ~~Statement No~~99. ~~165,~~9% ~~Subsequent Events~~Class ~~which~~B ismember ~~codified~~interests in ~~FASB~~Receivables ~~Accounting~~II-A ~~Standards~~LLC, ~~Codification~~a ~~(“ASC”~~limited orliability ~~“Codification”) 855,~~company ~~Subsequent Events~~ (“~~ASC 855~~Receivables II-A”)~~. ASC 855~~ ~~provides~~and ~~guidance~~Receivables onII-B, ~~management’s~~LLC, a limited ~~assessment~~liability ofcompany ~~subsequent~~(“Receivables ~~events~~II-B”). The ~~new~~Class ~~standard~~B ~~clarifies~~member ~~that management must evaluate~~interests, which asare ofconsolidated ~~each~~into ~~reporting~~S2 ~~period,~~for ~~events~~financial orstatement ~~transactions~~reporting ~~that occur after~~purposes, entitle the ~~balance~~Company ~~sheet~~to ~~date~~be ~~“through~~allocated ~~the~~99.9% ~~date~~of ~~that~~all ~~the~~items ~~financial~~of ~~statements~~income, ~~are~~loss and ~~issued~~distribution orof ~~are~~Receivables ~~available~~II-A toand beReceivables ~~issued~~II-B.~~” Management must perform its assessment~~ Receivables ~~for~~II-A ~~both interim~~ and ~~annual~~Receivables ~~financial~~II-B ~~reporting~~receive ~~periods. ASC 855~~all ~~does not significantly change~~ the ~~Company’s~~residual ~~practice~~cash ~~for~~flow ~~evaluating~~from ~~such events.~~five ~~ASC 855~~securitized isreceivable ~~effective~~pools ~~prospectively~~after ~~for~~payment ~~interim~~to ~~and~~the ~~annual~~securitized ~~periods ending~~note ~~after~~holders. The ~~June 15,~~Company ~~2009~~considered ~~and~~whether ~~requires~~member ~~disclosure~~interests ofshould ~~the date subsequent events~~be ~~are~~considered ~~evaluated~~variable ~~through.~~interest ~~The~~entities, ~~Company~~when ~~adopted~~consolidating ~~ASC 855~~S2’s ~~during~~ownership ~~the~~of ~~quarter ended~~its ~~June 30,~~member ~~2009.~~interests ~~The~~and ~~adoption~~determined ofthat ~~ASC 855~~S2’s ~~did~~member ~~not~~interests ~~have~~do ~~any~~not ~~impact~~meet on the ~~Company’s~~definition ~~results~~ of ~~operations~~variable ~~and~~interest ~~financial condition~~entities.

In ~~June~~ ~~2009,~~accordance with the ~~FASB~~purchase ~~issued~~agreements ~~Statement~~entered ofinto ~~Financial~~with ~~Accounting~~respect ~~Standards~~to ~~No. 167,~~the ~~Amendments~~residual ~~to FASB Interpretation No. 46(R) (“FAS 167”)~~interests, ~~which~~adjustments ~~modifies~~are ~~how~~made ~~a company~~to ~~determines~~the ~~when~~receivables anand ~~entity~~notes ~~that is insufficiently capitalized or is not~~payable ~~controlled~~based ~~through~~on ~~voting~~the ~~(or~~performance ~~similar~~of ~~rights) should be consolidated. The amendments will significantly affect~~ the ~~overall~~underlying ~~consolidation~~periodic ~~under~~payment ~~FASB ASC 810~~receivables, ~~Consolidation~~both increases ~~(“ASC 810”),~~ and ~~clarifies that the determination of whether a company is required to consolidate an entity is based on~~decreases, ~~among other things, an entity’s purpose~~ and ~~design~~could ~~and~~be amaterial ~~company’s~~in ~~ability to direct~~ the ~~activities of the entity that most significantly impact the entity’s economic performance~~future. ~~ASC 810 requires an ongoing reassessment of~~Permanent ~~whether~~impairments aare ~~company~~recorded isimmediately ~~the~~through ~~primary~~results ~~beneficiary~~ of ~~a variable interest entity~~operations. ~~ASC 810~~ ~~also requires additional disclosures about a company’s involvement~~Favorable ~~in variable interest entities and any significant~~ changes in ~~risk~~future ~~exposure~~cash ~~due to~~flows ~~that~~are ~~involvement.~~recognized ~~FAS~~through ~~167~~results isof ~~effective~~operations ~~for fiscal years beginning after~~as ~~November~~interest ~~15,~~over ~~2009. The Company is currently assessing~~ the ~~impact~~remaining life of the ~~standard on~~retained ~~its consolidated financial statements~~interest.

~~In June 2009, the FASB issued Statement No~~4. ~~168,~~ The FASB Codification and the Hierarchy of Generally Accepted Accounting Principles — a replacement of FASB Statement 162 (SFAS No. 168), which is codified in FASB ASC 105, Generally Accepted Accounting Principles (“ASC 105”). ASC 105 establishes the Codification as the source of authoritative United States accounting and reporting standards for all non-governmental entities (other than guidance issued by the SEC). The Codification is a reorganization of current GAAP into a topical format that eliminates the current GAAP hierarchy and establishes two levels of guidance — authoritative and nonauthoritative. According to the FASB, all “non-grandfathered, non-SEC accounting literature” that is not included in the Codification would be considered nonauthoritative. The FASB has indicated that the Codification does not change current GAAP. Instead, the changes aim to (1) reduce the time and effort it takes for users to research accounting questions and (2) improve the usability of current accounting standards. ASC 105 is effective for interim and annual periods ending on or after September 15, 2009. The Company adopted the requirements of ASC 105 beginning with the quarter ended September 30, 2009.Investments

9Real Estate

4.The Owned ~~Residual~~Site-Kearny ~~Interests in Securitized Portfolios~~Property

In accordance with the purchase agreements entered into with respect to the residual interests from the acquisition dates through September 30, 2009, the residual interest in securitized portfolios and the notes payable were increased by a total of approximately $7,648 as a result of purchase price adjustments. Adjustments to the receivables based on the performance of the underlying periodic payment receivables, both increases and decreases, could be material in the future. Permanent impairments are recorded immediately through results of operations. Favorable changes (increases) in future cash flows are recognized through results of operations as interest over the remaining life of the retained interest.

The Company’s wholly owned subsidiary, S2 Holdings, Inc. (“S2”), owns 99.9% Class B member interests in Receivables II-A, LLC, a limited liability company (“Receivables II-A”) and Receivables II-B, LLC, a limited liability company (“Receivables II-B”) which own five securitized receivable pools. Receivables II A, and Receivables II B, are consolidated into S2 for financial statement reporting purposes.

The Company considered Financial Accounting Standards Board Interpretation No. 46R “Consolidation of Variable Interest Entities,” which is codified in FASB ASC 810, when consolidating S2’s ownership of its member interests. The Company determined that S2’s member interests do not meet the definition of variable interest entities.

5. Real Estate

The Company currently owns eight buildings totaling 347,000 square feet on eight and one half acres located in an industrial park in Kearny, NJ leased to various unrelated tenants (the “Owned Site”). The Owned Site represents a portion of the Passaic River Development area designated for redevelopment by the town of Kearny, New Jersey (the “Property”). The Company continues to lease such Property to multiple tenants until such time as it can redevelop the Property as described below.

In connection with the redevelopment of the Property, on December 11, 2007, DVL, and its wholly owned subsidiary, DVL Kearny Holdings, LLC (“DVL Holdings”), entered into a Redeveloper Agreement (the “Redeveloper Agreement”) with the Town of Kearny, a body corporate and politic of the state of New Jersey, County of Hudson (the “Town of Kearny”). Pursuant to the Redeveloper Agreement, the Town of Kearny has agreed to designate DVL and DVL Holdings (collectively, the “Redeveloper”) as the redeveloper of the Property, a substantial portion of which is currently owned by the Redeveloper. Pursuant to the Redeveloper Agreement, the Redeveloper is obligated to redevelop the Property, at its expense, in accordance with the plans and specifications described therein, subject to review and approval of the Planning Board of the Town of Kearny. The initial plans and specifications provide for the development of up to approximately 150,000 square feet of retail space.9

~~The~~Table ~~term~~ of the Redeveloper Agreement along with the Redeveloper’s rights thereunder, originally set to expire on December 31, 2009, was extended to May 1, 2011. If the Redeveloper is in default of any terms or conditions of the Redeveloper Agreement and does not cure within the appropriate time as set forth in the agreement (to the extent that a cure period is provided for such default), the Town of Kearny is afforded a number of rights including the right to terminate the Redeveloper Agreement.Contents

~~The~~In ~~Company~~connection ~~has~~with ~~capitalized~~the ~~costs~~redevelopment ~~exclusive~~ of ~~land~~the ~~and~~Kearny ~~building~~Property, on December 11, 2007, we entered into a Redeveloper Agreement with the Town of Kearny. Pursuant $1to the Redeveloper Agreement,~~116~~ ~~and~~the ~~$856~~Town of Kearny designated us as the redeveloper of the Kearny Property. As redeveloper, we are obligated to redevelop the Kearny Property, at ~~September~~our 30expense, in ~~2009~~accordance with the plans and atspecifications described therein, subject to review and approval of the Planning Board of the Town of Kearny. The initial plans and specifications provide for the development of up to approximately 150,000 square feet of retail space. The term of the Redeveloper Agreement along with our rights there under which were originally set to expire on December 31, ~~2008~~2009, ~~respectively~~was ~~related~~extended to May 1, 2011. If we are in default of any terms or conditions of the Redeveloper Agreement and do not cure within the ~~development~~appropriate time as set forth in the agreement (to the extent that a cure period is provided for such default), the Town of Kearny is afforded a number of rights including the ~~project~~right to terminate the Redeveloper Agreement.

~~In order~~The toCompany ~~undertake~~has ~~and~~capitalized ~~complete~~costs ~~the~~exclusive ~~redevelopment~~ of ~~the~~land ~~Property, DVL Holdings~~ and ~~the~~ ~~Company will need to obtain additional construction financing and~~building, ~~potentially~~ ~~additional~~of ~~loan or equity financing~~$1,064 and ~~given current economic~~ ~~conditions~~$1,058 ~~there~~at ~~can~~March be31, no2010 ~~assurance~~and ~~that any such additional financing will be obtained on acceptable terms or~~ at ~~all.~~December ~~Additionally~~31, ~~given~~2009, ~~the~~respectively, ~~current~~related ~~economic conditions~~to ~~there can be no assurance that~~ the ~~redevelopment will occur in the~~ ~~five~~development ~~year~~of ~~period~~this ~~required under the Redevelopment Agreement or at all~~project.

In order to undertake and complete the redevelopment of the Property, we will need to obtain additional construction financing and, additional loan and equity financing. Given the current economic conditions, there can be no assurance that any such additional financing will be obtained on acceptable terms or at all. Additionally, given the current economic conditions there can be no assurance that the redevelopment will occur in the five year period required under the Redevelopment Agreement or at all.

The Bogota Property

In October 2004, we entered into an agreement with Bogota Associates and Industrial Associates, the owners of the land underlying the Bogota, New Jersey leasehold, pursuant to which the leasehold was cancelled in consideration of the aforementioned partnerships agreeing to repay certain of our out-of-pocket expenses including real estate taxes and environmental remediation costs as well as $50 upon completion of a sale of the property to a third party. In addition, we own an 8.25% limited partner interest in one of these partnerships. As of March 31, 2010, the sale has not yet been consummated. The sale of the property is subject to environmental remediation which needs to be completed, which will require the Company to expend additional amounts in excess of the $721 previously expended. The Company cannot currently estimate the future amounts to be expended. There can be no assurance that the sale will be consummated and the Company will receive its reimbursements. The third party continues to lease space. The net expenses to be reimbursed to us are approximately $721 as of March 31, 2010 not including the $50 fee or any amounts to be received as a limited partner.

Foreclosed Properties

The following table identifies the properties we have acquired through foreclosure and which were held at March 31, 2010.

Location	Sq. Ft.	Acreage	Tenant

Brent, AL	34,875	5.34	Vacant
Fort Edward, NY (1)	31,000	6.00	Vacant
Soddy Daisy, TN	56,127	5.91	Vacant
Kennedy, TX	44,752	5.52	Vacant

(1)

In 2002 the Company acquired the Fort Edward property through foreclosure from an affiliated limited partnership. The Company subsequently discovered that the property had contamination which required environmental remediation. To date the Company has expended $1,050 for environmental remediation costs. The environmental remediation will require the Company to expend additional amounts in excess of the amounts previously expended. The Company cannot currently estimate the future amounts to be expended. The property cannot be sold or otherwise developed until the environmental remediation is completed. The Company has filed a lawsuit against the parties it believes are responsible for causing the environmental contamination. The litigation is ongoing, however there can be no assurance the Company will be successful in recovering any funds as a result of the litigation.

~~The Company~~Table ~~also owns an 89,000 square foot building on approximately eight acres~~ of ~~land~~ ~~leased to K-Mart in Kearny, NJ which adjoins the Property described above.~~Contents

During 2008, the Company, through direct ownership or through its investment in various limited partnerships, foreclosed on five affiliated limited partnerships for nonpayment of amounts due on mortgage loans and took title to the five vacant Wal-Mart stores5. AtTransactions ~~the~~with time of the foreclosure, the five mortgages had a combined carrying value of $1,776. As of September 30, 2009, three of the properties have been sold which represented $997 of the carrying value and are included in discontinued operations.Affiliates

The Company owns a vacant 31,000 square foot former Grand Union Supermarket and approximately six acres of land underlying the building located in Fort Edward, NY. The entire property, which was acquired through foreclosure on a mortgage, was recorded at $416, which was the net carrying value of the mortgage at the date of foreclosure and was less than the fair value at that date.

As of September 30, 2009, the Company has capitalized approximately $1,000 of environmental remediation costs in connection with the cleaning of the site. The Company anticipates that it will eventually recover a substantial portion of the capitalized remediation costs on the property through the net proceeds received from any potential future sale and reimbursement from certain companies that it believes dumped chemicals on the site. Litigation on this issue is proceeding through the judicial system. However, the Company’s ability to recover such costs depends on many factors, including the outcome of litigation and there can be no assurance that the Company will recover all of the costs of such remediation within the foreseeable future or at all. Such inability to recover all of such remediation costs could have an adverse effect on the Company’s financial condition. The Company currently accounts for the property as a component of real estate in its consolidated financial statements at a carrying value of $762 after recording a provision for losses of $350.

6. Other Assets

In October 2004, DVL entered into an Agreement with Bogota Associates and Industrial Associates, the owners of the land underlying the Bogota New Jersey leasehold, (the “owners”) pursuant to which the leasehold was cancelled in consideration of the owners agreeing to repay to DVL certain out-of-pocket expenses including real estate taxes and environmental remediation costs as well as $50 upon completion of a sale of the property to a third party. In addition DVL owns an 8.25% limited partner interest in each of these partnerships. DVL will also receive a percentage of the net sales proceeds. As of September 30, 2009, the third party continues to lease space. The total expenses to be reimbursed to DVL are approximately $703 as of September 30, 2009 not including the $50 fee or any amounts to be received as a limited partner. Activity related to this receivable is included in other assets. DVL sued the prior tenants of the Property for environmental contamination and has received $400 toward the cleanup costs for the Property.

7. Discontinued Operations

As of September 30, 2009 and 2008, the activities of three of the five affiliated limited partnership properties described in Footnote 5 have been included in discontinued operations. These three properties were sold for net proceeds of $1,134 which resulted in a gain from the sale of discontinued operations of approximately $137.

8. Debt

On April 24, 2009, the Company entered into a loan agreement with an unaffiliated third party bank, evidenced by a term note for $2,200. The principal amount bears interest at an annual rate of Libor plus 4% and self amortizes with a portion of the principal payable monthly through February 1, 2014. The repayment of the obligations under the term note and the loan documents is secured by certain collateral assignments from DVL Holdings to the lender with respect to mortgage notes and mortgages held by DVL Holdings with respect to mortgage financings provided to affiliated limited partnerships. Additionally, the Company guaranteed the obligations of DVL Holdings under such loan documents. The majority of the loan proceeds were used to paydown the existing loan.

On January 21, 2009, DVL Holdings entered into a loan agreement, evidenced by a note, with an unaffiliated third party bank in an aggregate amount of up to $6,450 pursuant to a first note in the amount of $4,250 and a second note in the amount of $2,200. DVL Holdings borrowed $4,240 pursuant to the first note and such funds were used to repay outstanding borrowings. Borrowings under the second note will be advanced by the lender in the future upon the satisfaction of certain conditions specified in such note and such funds will be used in accordance with the terms of the agreement and second note.

9. Transactions with Affiliates

Management Fee Income Earned

The Company has provided management, accounting, ~~and~~ administrative services toand office space to certain entities which are affiliated with NPO Management, LLC (“NPO”) which are entities engaged in real estate ownership, lending and management. As ~~transactions~~compensation, ~~and~~the ~~are affiliated~~Company ~~with~~recorded ~~certain~~fees ~~stockholders~~of $121 and $153 ~~insiders~~during of the ~~Company.~~three ~~The~~months ~~fee~~ended ~~income from~~March ~~the~~31, ~~management~~2010 ~~service~~and ~~contract is as follows:~~2009, respectively

Fee Income For The Three Months Ended 09/30/09	Fee Income For The Three Months Ended 09/30/08	Fee Income For The Nine Months Ended 09/30/09	Fee Income For The Nine Months Ended 09/30/08
$ 13	$ 15	$ 43	$ 52

Management and Other Fees and Expenses Incurred

A. The Company incurred fees to NPO of $~~586~~195 ~~and~~for ~~$579~~each ~~for~~of the ~~nine~~three ~~months~~month ~~September~~periods ~~30,~~ended ~~2009~~March 31, 2010 and ~~2008~~2009, ~~respectively,~~ under an Asset Servicing Agreement (the “Asset Servicing Agreement”) between the Company and NPO, pursuant to which NPO provides the Company with asset management, advisory and administrative services relating to the assets of the Company and its affiliated limited partnerships. During ~~2009~~2010 and ~~2008~~2009, the Company provided office space ~~required~~ under the Asset Servicing Agreement to NPO consisting of approximately 500 square feet of the Company’s New York location.

~~B. Millennium~~The ~~Financial~~Millennium ~~Services~~Group, an affiliate of NPO, received ~~fees~~approximately ~~from~~$27 ~~the~~for ~~Company~~each of ~~representing~~the ~~compensation~~three ~~for~~month ~~collection~~periods ~~services~~ended ~~and~~March ~~reimbursement~~31, ~~for~~2010 ~~other services~~and ~~provided~~2009, torespectively, representing ~~the~~additional ~~Company~~management asand ~~follows:~~analytical services.

Fees Recorded For The Three Months Ended 09/30/09	Fees Recorded For The Three Months Ended 09/30/08	Fees Recorded For The Nine Months Ended 09/30/09	Fees Recorded For The Nine Months Ended 09/30/08
$ 27	$ 27	$ 81	$ 81

Interest expense on amounts due to Pemmil Funding LLC, members of which are our President and Chief Executive Officer and members of NPO and their affiliates, with respect to its loan to DVL were $34 and $45 for the three months ended March 31, 2010 and 2009, respectively.

C6. ~~Interest expense~~ onCommitments, ~~amounts~~Contingent ~~due~~Liabilities toand ~~affiliates~~Legal ~~was as follows:~~Proceedings

	Three Months Ended 09/30/09	Three Months Ended 09/30/08	Nine Months Ended 09/30/09	Nine Months Ended 09/30/08
Pemmil Funding	$ 42	$ 45	$ 128	$ 142

Pursuant to the terms of the Limited Partnership Settlement, a fund has been established into which DVL is required to deposit 20% of the cash flow received on certain of its mortgage loans from Affiliated Limited Partnerships after repayment of certain creditors, 50% of DVL’s receipts from certain loans to, and general partnership investments in, Affiliated Limited Partnerships and a contribution of 5% of DVL’s net income (based on accounting principles generally accepted in the United States of America) in the years 2004 through 2012 subject to certain adjustments.

7.	Cash Flow Hedges

The Company uses derivatives to manage risks related to interest rate movements on its floating rate loans. Interest rate swap contracts designated and qualifying as cash flow hedges are reported at fair value, the Company has established accounting and reporting standards for derivative instruments. Specifically, all derivatives are recognized as either assets or liabilities on the balance sheet and those instruments are measured at fair value. As of January 1, 2010, the Company decided to discontinue the use of hedge accounting. Accordingly, changes in the fair value of derivatives will be reported as a component of interest expense in the Consolidated Statements of Operations. Additionally, the balance that existed in other comprehensive income in the Consolidated Statement of Shareholders’ Equity as of December 31, 2009 will be amortized through the income statement over the remaining lives of the swap transactions on a straight-line basis.

Hedge Type	Notional Value	Rate	Termination Date	Fair Value

Interest rate swap agreement	$ 3,689	5.94%	July 1, 2011	$ (148)

Interest rate swap agreement	$ 1,814	6.09%	February 1, 2014	$ (26)

Table of Contents

8.	Earnings per share

The following table presents the computation of basic and diluted per share data for the three months ended March 31, 2010 and 2009.

	Three Months Ended March 31,

	2010						2009

			Weighted Average						Weighted Average
			Number of		Per Share				Number of		Per Share
	Amount		Shares		Amount		Amount		Shares		Amount

Basic EPS,
Net income available to common shareholders	$	326		44,770,345	$	0.01	$	377		44,770,345	$	0.01

Effect of dilutive stock options		-		55,317				-		34,445

Diluted EPS,
Net income available to common shareholders	$	326		44,825,662	$	0.01	$	377		44,804,790	$	0.01

9.	Segment Information

The Company has two reportable segments; real estate and residual interests. The real estate business is comprised of real estate assets, mortgage loans on real estate, real estate management and investments in affiliated limited partnerships which own real estate. The residual interests business is comprised of investments in residual interests in securitized receivables portfolios. The corporate/other net income of $2 in 2010 includes $99 of deferred income tax expense.

	Three Months Ended
	March 31,

	2010			2009

Revenues
Residual interests	$	1,592		$	1,542
Real estate		848			901
Corporate / other		8			21
Total consolidated revenues	$	2,448		$	2,464

Net income (loss)
Residual interests	$	1,043		$	846
Real estate		(669	)		(562	)
Corporate / other		2			86
Total income from continuing operations	$	376		$	370

	As of			As of
	March 31, 2010			December 31, 2009

Assets
Residual interests	$	40,805		$	42,699
Real estate		23,234			23,704
Corporate / other		1,969			2,068
Total consolidated assets	$	66,008		$	68,471

~~10.~~Table ~~Contingent~~of ~~Liabilities~~Contents

~~Pursuant~~10. toFair ~~the~~Value ~~terms~~ of ~~the~~Financial Limited Partnership Settlement, a fund has been established into which DVL is required to deposit 20% of the cash flow received on certain of its mortgage loans from Affiliated Limited Partnerships after repayment of certain creditors, 50% of DVL’s receipts from certain loans to, and general partnership investments in, Affiliated Limited Partnerships and in the years 2004 through 2012 a contribution of 5% of DVL’s net income (based on accounting principles generally accepted in the United States of America) subject to certain adjustments. The adjustments to DVL’s net income were significant enough that no amounts were accrued for the nine months ended September 30, 2009 and 2008. Instruments

~~11.~~Assets ~~Stockholder’s~~and ~~Equity~~Liabilities Recorded at Fair Value

~~In July~~The ~~2008,~~Company ~~the~~uses ~~Company~~a ~~purchased~~three-level ~~522,500~~fair ~~shares~~value ofhierarchy ~~its~~that ~~common~~categorizes ~~stock,~~assets ~~par~~and liabilities measured at fair value ~~$0.01~~based on whether the inputs utilized in the ~~per~~valuation ~~share,~~are observable: Level 1 - inputs are quoted prices in active markets for athe ~~total~~identical ~~purchase~~assets ~~price~~or ofliabilities; ~~$63~~Level 2 - inputs other than quoted prices that are directly or ~~$0.12~~indirectly ~~per~~observable ~~share~~through market-corroborated inputs; and Level 3 - inputs are unobservable, inor aobservable ~~privately~~but cannot be ~~negotiated~~market-corroborated, ~~transaction~~requiring ~~with~~the anCompany ~~unaffiliated~~to ~~seller~~make assumptions about pricing by market participants. The following table sets forth information for the Company’s financial assets and liabilities that are measured at fair value on a recurring basis:

12. Cash Flow Hedges

			March 31, 2010
Description	Carrying Value		Level 1		Level 2		Level 3

Liabilities:

Interest Rate Swaps	$	174	$	-	$	174	$	-


			December 31, 2009
Description	Carrying Value		Level 1		Level 2		Level 3

Liabilities:

Interest Rate Swaps	$	176	$	-	$	176	$	-

~~The Company~~Fair ~~uses~~Value derivatives to manage risks related to interest rate movements. Interest rate swap contracts designated and qualifying as cash flow hedges are reported at fair value. In accordance with SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities” (the “Statement”), as amended by SFAS No. 138 and SFAS No. 149, which is codified in FASB ASC 815, Derivatives and Hedging (“ASC 815”), the Company established accounting and reporting standards for derivative instruments. Specifically, ASC 815 requires an entity to recognize all derivatives as either assets or liabilities in the statement of ~~financial position and to measure those instruments at fair~~Financial value. Changes in the fair value of those instruments designated as cash flow hedges are recorded in other comprehensive income, to the extent the hedge is effective, and in the results of operations, to the extent the hedge is ineffective or no longer qualifies as a hedge. The interest rate swap agreements are generally accounted for on a held to maturity basis and in cases where they are terminated early, any gain or loss is generally amortized over the remaining life of the hedged item.Instruments

~~During September~~In ~~2008,~~addition ~~the Company entered into an interest rate swap agreement related~~ to ~~one of its loans. Valued separately,~~ the ~~interest~~above ~~rate swap agreement~~liabilities ~~represents~~which aare ~~liability~~recorded asat offair ~~September 30~~value, ~~2009 and December 31, 2008, in~~ the ~~amount~~ ofCompany ~~$180~~is ~~and~~also ~~$231~~required ~~respectively.~~to ~~During~~disclose ~~April 2009,~~ the ~~Company entered~~ ~~into~~fair anvalue ~~interest rate swap agreement related to another~~ of ~~their~~financial ~~loans. Valued separately~~instruments, ~~the~~whether ~~interest~~or ~~rate~~not ~~swap~~recognized ~~agreement~~in ~~represents~~the ~~a liability as of~~financial ~~September 30~~statements, ~~2009,~~for inwhich ~~the~~it ~~amount~~is ofpracticable ~~$22.~~to ~~This~~estimate that value. In ~~represents~~cases ~~the~~where ~~fair~~quoted ~~value of~~market ~~the~~prices ~~current~~are ~~difference~~not ~~in interest paid and received under the swap agreement~~available, ~~over~~fair ~~the~~values ~~remaining~~are ~~term~~estimated ofusing ~~the~~present ~~agreement.~~value ~~Because~~or ~~the~~other ~~swaps are considered to be~~valuation atechniques. Those ~~cash~~assumptions ~~flow hedge and they~~ are ~~effective,~~significantly ~~the~~affected ~~value~~by of the assumptions ~~swaps~~used, ~~are~~including ~~recorded in~~ the ~~Consolidated~~estimated ~~Statements~~market ofdiscount ~~Stockholders’~~rate ~~Equity as a separate component~~ and ~~represents~~ the ~~only~~estimated future ~~amount~~cash ~~reflected~~flows. The infollowing ~~accumulated~~table ~~other~~details ~~comprehensive loss. Changes in~~ the ~~swaps~~ fair value ~~are~~of ~~reported currently in other comprehensive~~the ~~loss.~~Company’s ~~Payments~~financial ~~are recognized in current operating results as settlements occur under the agreement as a component of interest expense.~~instruments:

The following table summarizes the notional values of the Company’s derivative financial instruments. The notional value provides an indication of the extent of the Company’s involvement in these instruments on September 30, 2009, but does not represent exposure to credit, interest rate or market risks. The fair values of the interest rate swap agreements are based on significant other observable inputs and therefore, are level 2 in the fair value hierarchy under FASB ASC 820.

	March 31, 2010				December 31, 2009
	Carrying Value		Fair Value		Carrying Value		Fair Value

Residual Interests in Securitized Portfolios	$	40,805	$	40,689	$	42,699	$	41,203

Notes Payable - Residual Interests		25,551		25,551		28,155		28,155

Hedge Type	Notional Value	Rate	Termination Date	Fair Value
Interest rate swap agreement	$ 3,723	5.94%	July 1, 2011	$ (180)
Interest rate swap agreement	$ 2,046	6.09%	February 1, 2014	$ (22)

11.	Discontinued Operations

During 2010 and 2009, the Company disposed of certain real estate properties. The sale and operation of these properties for all periods presented have been recorded as discontinued operations in compliance with our accounting policy.

~~13.~~Table ~~Earnings~~of ~~per share~~Contents

~~The~~As of ~~following~~March ~~table~~31, ~~presents~~2010, the ~~computation~~activities of ~~basic~~our ~~and~~Iowa ~~diluted~~Park, ~~per~~Texas ~~share~~property ~~data~~which was previously foreclosed on have been included in discontinued operations. This property was sold during January 2010 for net proceeds of $162 which resulted in a loss from the ~~three~~sale ~~and~~of ~~nine~~discontinued ~~months~~operations ~~ended~~of ~~September~~approximately $50. As 30of March 31, 2009, ~~and~~the ~~2008~~activities of four foreclosed properties have been included in discontinued operations.

	Three Months Ended September 30,
	2009						2008
			Weighted Average						Weighted Average
			Number of		Per Share				Number of		Per Share
	Amount		Shares		Amount		Amount		Shares		Amount
Basic EPS,
Net income available to common stockholders	$	556		44,770,345	$	0.01	$	305		45,051,691	$	0.01
Effect of dilutive stock options		-		13,725				-		161,653
Diluted EPS,
Net income available to common stockholders	$	556		44,784,070	$	0.01	$	305		45,213,344	$	0.01

Discontinued operations for the three months ended March 31, 2010 and 2009 are summarized as follows:

	Nine Months Ended September 30,
	Three Months Ended March 31,
	2009								2008
	2010			2009
				Weighted Average							Weighted Average
Income	$	-		$	16
				Number of			Per Share				Number of		Per Share
Expenses		-			129
	Amount			Shares			Amount		Amount		Shares		Amount
Loss from discontinued operations before gain on sale		-			(113	)
Basic EPS,
(Loss) gain on sale		(50	)		120
Net income available to common stockholders	$	1,595			44,770,345		$	0.04	$	1,846		45,129,819	$	0.04
(Loss) gain from discontinued operations	$	(50	)	$	7
Effect of dilutive stock options		-			23,143					-		125,036
Diluted EPS,
Net income available to common stockholders	$	1,595			44,793,488		$	0.04	$	1,846		45,254,855	$	0.04

~~14.~~Table ~~Segment~~of ~~Information~~Contents

ITEM 2.

The Company has two reportable segments; real estate and residual interests. The real estate business is comprised of real estate assets, mortgage loans on real estate, real estate management and investments in affiliated limited partnerships which own real estate. The residual interests business is comprised of investments in residual interests in securitized receivables portfolios. The corporate/other net income (loss) of 104 and $(171) in 2009 and 2008 respectively, include $152 and $335 of deferred income tax expense in 2009 and 2008, respectively.

	Nine Months Ended
	September 30,
	2009			2008
Revenues
Residual interests	$	4,684		$	4,466
Real estate		2,324			3,398
Corporate / other		76			57
Total consolidated revenues	$	7,084		$	7,921
Net income (loss)
Residual interests	$	2,643		$	2,282
Real estate		(1,050	)		(217	)
Corporate / other		104			(171	)
Total income from continuing operations	$	1,697		$	1,894
	As of			As of
	September 30, 2009			December 31, 2008
Assets
Residual interests	$	45,443		$	45,789
Real estate		26,057			27,019
Corporate / other		2,105			2,257
Total consolidated assets	$	73,605		$	75,065

15. Discontinued Operations

The Company classifies certain real estate holdings as held for sale. The Company’s properties located in Fairbury, Nebraska, Checotah, Oklahoma and Alma, Arkansas are included in assets of discontinued operations. The operation of such assets for all periods presented have been recorded as discontinued operations in accordance with the provisions of Statement of Financial Accounting Standards (“SFAS”) No. 144 “Accounting for the Impairment or Disposal of Long Lived Assets,” which is codified in FASB ASC 360.

Discontinued operations for the nine months ended September 30, 2009 and 2008 are summarized as follows:

	Nine Months Ended September 30,
	2009			2008
Income	$	-		$	178
Expenses		149			226
Loss from discontinued operations before gain on sale		(149	)		(48	)
Gain on sale		47			-
Loss from discontinued operations	$	(102	)	$	(48	)

Assets and liabilities of discontinued operations at September 30, 2009 and December 31, 2008 are summarized as follows:

	September 30,		December 31,
	2009		2008
Assets of discontinued operations	$	-	$	895

16. Subsequent Events

During October 2009, the Company successfully negotiated an extension of the $1,358 loan with an unaffiliated bank. The new maturity date is June 5, 2012.

On November 1, 2009, the Company foreclosed on the Iowa Park property.

On November 2, 2009, the Company entered into an agreement (the “Agreement”) with Real Estate Systems Implementation Group, LLC (“RESIG”), an affiliate of Imowitz Koenig & Co., LLP, the Company’s former independent registered public accountants, pursuant to which RESIG will provide substantially all of the Company’s internal accounting, financial statement preparation and bookkeeping functions on an outsourced consulting basis. A requirement of the Agreement was the appointment of Neil H. Koenig as Chief Financial Officer, Principal Financial Officer and Principal Accounting Officer of the Company.

On November 6, 2009, the Company sold the Port Isabel, Texas property for net proceeds of $874 which resulted in a net loss of approximately $68 in the fourth quarter of 2009.

ITEM 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

(in thousands)

This Quarterly Report on Form 10-Q for the quarter ended ~~September~~March 3031, ~~2009~~2010 contains statements which constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Those statements include statements regarding the intent, belief or current expectations of DVL, Inc., a Delaware corporation ~~(“DVL” or the “Company”)~~ and its management team. DVL’s ~~stockholders~~ shareholders and prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and that actual results may differ materially from those projected in the forward-looking statements. Such risks and uncertainties include, among other things, general economic conditions and other risks and uncertainties that are discussed herein and in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, ~~2008~~2009. All references to “DVL”, “we”, “us”, “our”, or the “Company” refer to DVL, Inc. and its consolidated subsidiaries.

This Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) should be read in conjunction with the consolidated financial statements and accompanying financial statement notes appearing elsewhere herein and in conjunction with our Annual Report on Form 10-K for the year ended December 31, ~~2008~~2009.

None of the recently adopted accounting standards had a material effect on the Company’s consolidated financial statements.

~~The Company~~We ~~currently~~are ~~owns eight buildings totaling 347,000 square feet on eight and~~a ~~one~~commercial ~~half~~finance ~~acres~~company ~~located~~which inis anprimarily ~~industrial~~engaged ~~park~~ in ~~Kearny, NJ leased to various unrelated tenants~~ (~~the “Owned Site”~~a). ~~This~~the ~~site~~ownership ~~represents a portion~~ of ~~the~~ ~~Passaic~~residual ~~River~~interests ~~Development~~in ~~area~~securitized ~~designated for redevelopment by the town of Kearny~~portfolios, ~~New Jersey~~ (~~the “Property”~~b). ~~To date,~~ the ~~Company~~ownership ~~has~~and ~~not~~servicing ~~commenced~~of ~~construction~~a ~~with~~portfolio ~~respect to the redevelopment~~ of ~~the~~secured ~~Property~~commercial ~~and~~mortgage ~~given~~loans ~~the current~~made ~~economic~~to ~~environment~~Affiliated ~~there can be no assurance that the Company will~~Limited ~~commence construction in the near future or at all. In addition~~Partnerships, ~~there~~(c) ~~can be no assurance that~~ the ~~Company~~ownership ~~will~~of bereal ~~able~~estate toand ~~obtain~~(d) the ~~necessary~~performance ~~financing~~of toreal ~~commence~~estate orasset ~~complete~~management ~~redevelopment. The Company continues to lease such property to multiple tenants~~ and ~~currently~~administrative ~~receives a positive cash flow from the property and believes it will continue to receive such positive cash flow until such time as it can redevelop the Property as described below~~services.

~~In connection~~We ~~with~~expect ~~the~~that ~~redevelopment~~anticipated ofcash ~~the~~flow provided ~~Property~~by ~~(as~~operations ~~defined~~and ~~above),~~other ~~on December~~sources ~~11,~~will ~~2007,~~be ~~DVL,~~sufficient ~~and~~to ~~its~~meet ~~wholly~~our ~~owned~~current cash ~~subsidiary,~~requirements ~~DVL~~through ~~Kearny~~at ~~Holdings, LLC~~least ~~(“DVL~~the ~~Holdings”),~~next ~~entered~~twelve ~~into~~months. We ahave ~~Redeveloper~~in the ~~Agreement~~past ~~(the~~and ~~“Redeveloper Agreement”)~~expect ~~with~~in the ~~Town~~future ofto ~~Kearny,~~continue ato ~~body~~be ~~corporate~~required ~~and~~to ~~politic~~augment ofour ~~the state~~cash offlow ~~New~~provided ~~Jersey,~~by ~~County~~operations ofwith ~~Hudson~~additional ~~(the~~cash ~~“Town~~generated offrom ~~Kearny”).~~either ~~Pursuant to~~ the sale ~~Redeveloper~~or ~~Agreement,~~refinancing ~~the~~of ~~Town~~portions of ~~Kearny~~our ~~has~~assets ~~agreed~~and/or toborrowings. We currently ~~designate~~do ~~DVL~~not ~~and~~generate ~~DVL Holdings~~sufficient ~~(collectively,~~cash ~~the~~flow ~~“Redeveloper”)~~from asoperations ~~the~~to ~~redeveloper~~meet ofour ~~the~~cash requirements ~~Property,~~or ~~a substantial~~to ~~portion~~permit ofus ~~which~~to ispay ~~currently~~a ~~owned~~dividend byon ~~the~~our ~~Redeveloper~~common stock. Excluding ~~Pursuant~~proceeds to generated from the ~~Redeveloper~~sale ~~Agreement~~of assets, ~~the~~our ~~Redeveloper~~cash flow iswould ~~obligated~~have tobeen ~~redevelop~~a ~~the Property,~~net atdecrease ~~its~~in ~~expense,~~cash inof ~~accordance~~$30 ~~with~~for the ~~plans~~three ~~and~~months ~~specifications~~ended ~~described~~March ~~therein~~31, ~~subject~~2010. Cash toflow ~~review~~in ~~and~~any ~~approval~~given ofquarter ~~the~~is ~~Planning~~not ~~Board~~necessarily indicative of the ~~Town~~ ofcash ~~Kearny.~~flow ~~The~~from ~~initial~~any ~~plans~~other ~~and~~quarter ~~specifications~~because ~~provide~~of ~~for~~ the ~~development of~~seasonality ~~up to approximately 150,000 square feet~~ of cash ~~retail~~receipts ~~space~~and disbursements.

~~The~~Many ~~term~~of the mortgages currently held by us have underlying loans or are pledged to secure debt, which are serviced by much if not all of the ~~Redeveloper~~cash ~~Agreement~~flow ~~along~~generated ~~with~~from the ~~Redeveloper’s~~repayment ~~rights~~of ~~thereunder~~our mortgage portfolio. During 2008 and 2009, we foreclosed on six of our mortgage ~~originally~~loans ~~set~~due to ~~expire~~the Affiliated Limited Partnerships’ failure to pay amounts due on such ~~December~~loans. At ~~31,~~the ~~2009~~time of the foreclosure, ~~was~~the ~~extended~~mortgages tohad ~~May~~a combined 1,carrying ~~2011~~value of $2,760. During If the ~~Redeveloper~~quarter isended inMarch ~~default~~31, 2010 we sold one of ~~any~~these ~~terms~~properties orfor ~~conditions~~net proceeds of ~~the~~$162, ~~Redeveloper~~which resulted in ~~Agreement~~a loss of $50. During the quarter ended March 31, 2009, we sold one of these properties and ~~does~~received ~~not~~net ~~cure~~proceeds ~~within~~of ~~the~~$595, ~~appropriate~~which ~~time~~resulted asin ~~set~~a ~~forth~~gain inof $120. All of the ~~agreement~~properties ~~(to~~are ~~the~~being ~~extent~~held ~~that~~for alease ~~cure~~or ~~period~~sale isand at ~~provided~~March 31, 2010 remain vacant and unsold. As a result, we are obligated for ~~such~~all costs at these properties including property taxes and ~~default),~~insurance. Considering the ~~Town~~status of ~~Kearny~~the isproperty ~~afforded~~markets aand ~~number~~the location of ~~rights~~our ~~including~~properties ~~the~~there ~~right~~can be no assurance regarding future leasing or tosale ~~terminate~~of the ~~Redeveloper Agreement~~properties.

~~The Company~~Our ~~has~~current ~~capitalized~~strategy ~~costs~~is ~~exclusive~~to ofcontinue ~~land~~to maximize ~~and~~the ~~building,~~value of ~~$1,116~~our assets and ~~$856~~meet our short-term working capital needs asby ofcontinuing ~~September~~to 30manage, ~~2009~~administer and ~~December~~service 31our existing portfolio and develop, ~~2008~~lease and refinance or sell an 8.5 acre retail site located in Kearny, NJ ~~respectively~~which we have owned for many years and for which we have been designated as developer by the Town of Kearny. However, ~~related~~because toof the current economic conditions, the development of ~~this~~the Kearny property will take longer than originally projected. In the current economic market there is no assurance that the project will be successful or that the redevelopment can be completed. In addition, in order for us to undertake the redevelopment of such property, we need to obtain construction financing, and, additional loan and equity financing. Given current economic conditions, there can be no assurance that any such financing will be obtained on acceptable terms or at all.

1715

InTable ~~order to undertake and complete the redevelopment~~ of the Property, DVL Holdings and DVL will need to obtain additional construction financing and, potentially additional loan or equity financing, and given current economic conditions, there can be no assurance that any such additional financing will be obtained on acceptable terms or at all. Additionally, given the current economic conditions, there can be no assurance that the redevelopment will occur in the five year period required under the Redevelopment Agreement or at all.Contents

The Company also owns an 89,000 square foot building on approximately eight acres of land leased to K-Mart in Kearny, NJ which adjoins the Property described above.

During 2008, the Company, through direct ownership or through its investment in various limited partnerships, foreclosed on five affiliated limited partnerships for nonpayment of amounts due on mortgage loans and took title to the five vacant Wal-Mart Stores. At the time of foreclosure, the five mortgages had a combined carrying value of $1,776. As of September 30, 2009, three of the properties have been sold which represented $997 of the carrying value and are included in discontinued operations.

In October 2004, DVL entered into an Agreement with Bogota Associates and Industrial Associates, the owners of the land underlying the Bogota, New Jersey leasehold, pursuant to which the leasehold was cancelled in consideration of the aforementioned partnerships agreeing to repay to DVL certain out-of-pocket expenses including real estate taxes and environmental remediation costs as well as $50 upon completion of a sale of the property to a third party. In addition DVL owns an 8.25% limited partner interest in each of these partnerships. DVL will also receive a percentage of the net sales proceeds. As of September 30, 2009, the sale has not yet been consummated and the third party continues to lease space. The total expenses to be reimbursed to DVL are approximately $703 as of September 30, 2009 not including the $50 fee or any amounts to be received as a limited partner. Activity related to the real estate lease interest is included in other assets. DVL has sued the prior tenants of the property for environmental contamination and has received $400 towards the cleanup costs for the property.

Discontinued Operations

As of September 30, 2009 and 2008, the activities of three of the five affiliated limited partnership properties described above have been included in discontinued operations. These three properties were sold for net proceeds of $1,134 which resulted in a gain from the sale of discontinued operations of approximately $137.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

There have been no material changes to the Critical Accounting Policies and Estimates described in our Annual Report on Form 10-K for the year ended December 31, ~~2008~~2009 filed with the SEC on ~~April~~March 1531, ~~2009~~2010.

RESULTS OF OPERATIONS

Three Months Ended ~~September 30~~March 31, 2010 ~~2009~~ Compared to Three Months Ended ~~September~~March 3031, ~~2008~~2009

~~DVL~~We had income or losses from continuing operations offrom ~~$716~~each ~~and~~of ~~$433~~our ~~for~~business ~~the three months ended~~segments ~~September~~as ~~30, 2009 and 2008, respectively.~~follows:

Interest income on mortgage loans increased to $557 as a result of accretion on certain mortgage loans. Interest expense on underlying mortgages decreased to $57 reflecting the application of a greater portion of each monthly payment to the outstanding principal balances, payoff of loan balances and anticipated loan maturities.

	2010			2009

Residual interests segment	$	1,043		$	846
Real estate segment		(669	)		(562	)
Corporate / other		2			86
Income from continuing operations	$	376		$	370

	Three Months Ended September 30, 2009	Three Months Ended September 30, 2008
Interest income on mortgage loans	$ 557	$ 353
Interest expense on underlying mortgages	$ 57	$ 80

Interest income on mortgage loans from affiliates decreased to $486 as a result of principal amortization on certain mortgage loans. Interest expense decreased as a result of anticipated loan maturities and the application of a greater percentage of each payment to mortgage principal balances.

Partnership management fees decreased as a result of a decrease in the number of partnerships being managed.

	2010		2009

Interest on mortgage loans	$	486	$	528
Interest expense on underlying mortgages	$	50	$	64

	Three Months Ended September 30, 2009	Three Months Ended September 30, 2008
Partnership management fees	$ 59	$ 65

Interest income on residual interest increased due to favorable changes in future cash flow which are recognized as interest over the remaining life of the retained interests. Interest expense on the related notes payable decreased as a result of principal amortization.

Management fees decreased as a result of the loss of a property managed by an affiliate of the Company.

	2010		2009

Interest income on residual interests	$	1,592	$	1,542
Interest expense on related notes payable	$	542	$	689

	Three Months Ended September 30, 2009	Three Months Ended September 30, 2008
Management fees	$ 13	$ 15

Net rental income increased primarily as a result of increased gross rental income and lower expenses on vacant properties held for lease.

Transaction and other fees were earned by the Company in connection with sales of partnership properties. The amount of fees vary depending on the size and number of transactions.

	2010		2009

Net rental income from others	$	128	$	66
Gross rental income from others	$	320	$	306

	Three Months Ended September 30, 2009	Three Months Ended September 30, 2008
Transaction and other fees from partnerships	$ 1	$ 0

General and administrative expenses decreased primarily as a result of a decrease in the number of employees and a reduction in overall employment costs.

Distributions from partnerships decreased in 2009 compared to 2008 as a result of distributions on sold partnerships being received in 2008.

	2010		2009

General and administrative	$	480	$	584

	Three Months Ended September 30, 2009	Three Months Ended September 30, 2008
Distributions from partnerships	$ 27	$ 176

Table of Contents

The asset servicing fee paid to NPO Management LLC, the entity which is engaged by us to provide us with management services, is calculated pursuant to the terms of the Asset Servicing Agreement, which calls for an adjustment to reflect changes in the consumer price index.

	2010		2009

Asset servicing fee	$	195	$	195

Legal and professional fees increased primarily as a result of hiring RESIG as our outsourced accounting function and a change in our independent registered public accounting firm during the fourth quarter of 2009.

	2010		2009

Legal and professional	$	214	$	73

We recorded an additional provision for losses on our mortgage portfolio of $100 for the three months ended March 31, 2009 due to underlying changes in the value of the collateral. No such loss was recorded for the three months ended March 31, 2010.

	2010		2009

Provision for loan losses	$	0	$	100

We recorded a provision for impairment on our real estate portfolio of $245 for the three months ended March 31, 2010 due to a potential transaction on the Brent, Alabama property.

	2010		2009

Provision for impairment	$	245	$	0

Interest expense to affiliates decreased for the three months ended March 31, 2010 compared to the three months ended March 31, 2009 as a result of decreased amount of outstanding debt owed to affiliates.

	2010		2009

Interest expense to affiliates	$	34	$	45

Interest expense relating to other debts decreased for the three months ended March 31, 2010 as compared to the three months ended March 31, 2009 as a result of deferred financing costs being fully amortized.

	2010		2009

Interest expense – others	$	213	$	344

We recognized $99 of deferred income tax expense for the three months ended March 31, 2010. The deferred tax impact resulted primarily from the deferred expense related to the changes in the components of deferred tax assets. No such deferred income tax was recognized for the three months ended March 31, 2009.

	2010		2009

Income tax expense	$	99	$	0

Discontinued operations consist of the operations of business segments we consider as held for sale or have disposed of.

Table of Contents

	2010			2009

(Loss) gain from discontinued operations	$	(50	)	$	7

Liquidity and Capital Resources

Our cash balance was $1,199 at March 31, 2010, compared with $1,067 at December 31, 2009. This increase was due to $574 of net cash provided by operating activities and $1,917 of net cash provided by investing activities, offset by $2,359 of net cash used in financing activities.

Our cash flow from operating activities is generated principally from rental income from our ownership of real estate, distributions in connection with our residual interests in securitized portfolios, interest on our mortgage portfolio, management fees and transaction and other fees received as a result of the sale and/or refinancing of partnership properties and mortgages.

Our cash flow from investing activities is generated primarily from principal collections on retained interests and to a lesser extent from collections of loan receivables and net proceeds from the sale of our Iowa Park, Texas property.

Our cash used in financing activities consisted primarily of payments on notes payable relating to residual interests and to a lesser extent principal payments on our debt and underlying mortgages.

We expect that anticipated cash flow provided by operations and other sources will be sufficient to meet our current cash requirements through at least the next twelve months. We have in the past and expect in the future to continue to be required to augment our cash flow provided by operations with additional cash generated from either the sale or refinancing of portions of our assets and/or borrowings. We currently do not generate sufficient cash flow from operations to meet our cash requirements or to permit us to pay a dividend on our common stock. Excluding proceeds generated from the sale of assets, our cash flow would have been a net decrease in cash of $30 for the three months ended March 31, 2010. Cash flow in any given quarter is not necessarily indicative of the cash flow from any other quarter because of the seasonality of cash receipts and disbursements.

With respect to our residual interests, pursuant to the terms of the purchase agreements, there are annual minimum and maximum levels of cash flow that we are entitled to retain, after the payment of interest and principal on the notes payable. Effective January 1, 2010 through the final payment to the holder of the notes payable (expected to be 2014 and 2018 for Receivables II-A and Receivables II-B, respectively), the annual minimum and maximum levels are $1,050 and $1,150, respectively.

Table of Contents

Outstanding Financings

Outstanding loans payable as of March 31, 2010 which are scheduled to become due through 2014 are as follows:

Creditor	Original Loan Amount	Outstanding Balance Including Accrued Interest at March 31, 2010	Interest Rate	Annual Debt Service	Maturity	Amount due at Maturity

Pemmil (1)	$ 2,500	$ 1,162	12%	(1)	12/31/11	$ 1,162

Unaffiliated Bank (2)	$ 2,200	$ 1,824	LIBOR + 4%	(2)	02/01/14	$ -0-

Unaffiliated Bank (3)	$ 1,500	$ 1,357	6.25%	(3)	06/05/12	$ 1,050

Unaffiliated Bank (4)	$ 6,450	$ 3,498	>of 6% or Prime +1%	(4)	01/21/11	$ 3,498

Unaffiliated Bank	$ 250	$ 157	7.5%	$60	02/01/13	$ -0-

Unaffiliated Bank (5)	$ 3,800	$ 3,708	LIBOR + 2.1%	(5)	07/01/11	$ 3,598

(1)

Pemmil is an affiliated entity. Loan requires payments only to the extent of 50% of the proceeds from capital transactions. If proceeds are insufficient to satisfy monthly interest payments, interest is added to principal. Loan is secured by a subordinated lien on our interest in S-2 Holdings Inc. and a first priority lien on two mortgages.

(2)	Loan is secured by first priority interest in four first mortgages and contains a restriction on pledging mortgages for additional debt. Requires monthly payments of interest plus a fixed principal payment of $39.

(3)	Loan requires monthly payments of interest only as well as an annual principal payment of $100.

(4)	Initial advance under the loan was $4,250 with an additional $2,200 to be advanced upon the satisfaction of certain conditions, if at all. Requires payments of interest only. One year extension option subject to certain terms and conditions.

(5)	Secured by a certain building on the Owned-Site. Requires annual debt service of approximately $292.

We use derivatives to manage risks related to interest rate movements on our floating rate debt. Interest rate swap contracts designated and qualifying as cash flow hedges are reported at fair value. During September 2008, the Company entered into an interest rate swap agreement related to one of its floating rate loans. Valued separately, the interest rate swap agreement represents a liability as of March 31, 2010, in the amount of $148. During April 2009, the Company entered into a second interest rate swap agreement related to another of its floating rate loans. Valued separately, the interest rate swap agreement represents a liability as of March 31, 2010 in the amount of $26. This value represents the fair value of the current difference in interest paid and received under the swap agreements over the remaining term of the agreements. As of January 1, 2010 we decided to discontinue the use of hedge accounting. Accordingly, changes in the fair value of derivatives will be reported as a component of interest expense in the consolidated statements of operations. Additionally, the balance that existed in other comprehensive income in the Consolidated Statement of Shareholders’ Equity as of December 31, 2009 will be amortized through the income statement over the remaining lives of the swap transactions on a straight-line basis. The following table summarizes the notional values of our derivative financial instruments. The notional value provides an indication of the extent of our involvement in these instruments on March 31, 2010, but does not represent exposure to credit, interest rate or market risks.

~~Interest income~~Table ~~on residual interests increased as a result~~ of accretion and purchase price adjustments pursuant to the purchase agreements entered into by the Company’s wholly owned subsidiary, S2 Holdings, Inc. (“S2”), that owns a 99.9% Class B member interests in Receivables II-A, LLC, a limited liability company (“Receivables II-A”) and Receivables II-B, LLC, a limited liability company (“Receivables II-B”). Interest expense on the related notes payable decreased as a result of principal amortization.Contents

	Three Months Ended September 30, 2009	Three Months Ended September 30, 2008
Hedge Type	Notional Value	Rate	Termination Date	Fair Value
Interest income on residual interests	$ 1,601	$ 1,502
Interest rate swap agreement	$ 3,689	5.94%	July 1, 2011	$ (148)
Interest expense on related notes payable	$ 669	$ 705

~~Net~~The ~~rental~~outstanding ~~income~~principal ~~and~~of ~~gross~~the ~~rental~~Note ~~income~~is ~~were~~payable ~~consistent~~in ~~for~~monthly installments of $5 beginning on August 1, 2008 and continuing on the ~~three-~~first day of each month thereafter. Annual debt service is approximately $292. The final monthly installment of the Note is due and payable at maturity on July 1, 2011 or before, at the option of the Bank upon any defaults after the expiration of all applicable notice and cure periods as specified therein.

	Three Months Ended September 30, 2009	Three Months Ended September 30, 2008
Hedge Type	Notional Value	Rate	Termination Date	Fair Value
Net rental income from others	$ 163	$ 157
Interest rate swap agreement	$ 1,814	6.09%	February 1, 2014	$ (26)
Gross rental income from others	$ 316	$ 312

~~General~~The ~~and~~outstanding ~~administrative~~principal ~~expenses~~of ~~decreased~~the Note is payable in monthly installments of $39 beginning on June 1, 2009 ~~from~~and ~~2008~~continuing ~~primarily~~on asthe afirst ~~result~~day of each month ~~decreased~~thereafter. The ~~employee~~final ~~costs~~monthly installment of the Note is due and payable ~~insurance~~at ~~costs~~maturity on February 1, 2014 or before, at the option of the Bank upon any defaults after the expiration of all applicable notice and cure periods as specified therein.

	Three Months Ended September 30, 2009	Three Months Ended September 30, 2008
General and administrative	$ 364	$ 392

IMPACT OF INFLATION AND CHANGES IN INTEREST RATES

~~The asset~~Our ~~servicing~~portfolio ~~fee~~of ~~paid~~mortgage loans made to ~~NPO~~Affiliated ~~Management,~~Limited ~~LLC~~Partnerships ~~pursuant~~consists primarily toof ~~the~~loans ~~terms~~made ofat ~~the~~fixed ~~Asset~~rates of interest. Therefore, ~~Servicing~~increases ~~Agreement~~or ~~which~~decreases ~~calls~~in ~~for~~market aninterest ~~adjustment~~rates toare ~~reflect~~generally ~~changes~~not inexpected ~~the~~to ~~consumer~~have ~~price~~an ~~index.~~effect Ason aour ~~result~~earnings. Other ofthan as a ~~decrease~~factor in ~~the~~determining market ~~consumer~~interest ~~price index~~rates, ~~there~~ ~~was~~inflation nohas ~~increase~~not inhad ~~the~~a ~~fee~~significant effect on our net income.

	Three Months Ended September 30, 2009	Three Months Ended September 30, 2008
Asset servicing fee	$ 195	$ 196

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

~~Legal~~We ~~and~~are a ~~professional~~smaller ~~fees~~reporting ~~were~~Company ~~similar~~as ~~for~~defined ~~the~~by ~~three~~Rule 12b-~~month~~2 ~~periods~~of the Securities Exchange Act of 1934 (the “Exchange Act”) and are not required to provide the information under this item.

	Three Months Ended September 30, 2009	Three Months Ended September 30, 2008
Legal and professional fees	$ 115	$ 119

ITEM 4T. CONTROLS AND PROCEDURES

~~The Company recorded~~ (a) ~~provision~~Disclosure ~~for~~Controls ~~loan~~and ~~losses on its mortgage portfolio of $100 during the three months ended September 30, 2009.~~Procedures

	Three Months Ended September 30, 2009	Three Months Ended September 30, 2008
Provision for loan losses	$ 100	$ 50

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in company reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Exchange Act, is accumulated and communicated to management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

As required by Rule 13a-15 under the Exchange Act, we are required to carry out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report. This evaluation was carried out with the participation of our principal executive officer and principal financial officer. Based upon that evaluation, our principal executive officer concluded that our disclosure controls and procedures were effective at a reasonable assurance level such that the information relating to us and our consolidated subsidiaries required to be disclosed in our Exchange Act reports (i) is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and (ii) is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

~~Interest expense~~Table ~~to affiliates decreased in 2009 compared to 2008 as a result~~ of ~~a decreased amount of debt owed to affiliates.~~Contents

	Three Months Ended September 30, 2009	Three Months Ended September 30, 2008
Interest expense – affiliates	$ 42	$ 45

(b)	Changes in Internal Control Over Financial Reporting.

~~Interest~~There has ~~expense~~been ~~relating~~no tochange ~~other~~in ~~debts~~our ~~decreased~~internal control over financial reporting (as adefined ~~result~~in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of ~~lower~~1934) ~~interest~~during the ~~rates~~period onended March 31, 2010 that has materially affected, or is reasonably ~~new~~likely ~~borrowings~~to ~~and~~materially ~~lower~~affect, ~~outstanding~~our ~~balances~~internal oncontrol ~~existing~~over financial ~~borrowings~~reporting.

	Three Months Ended September 30, 2009	Three Months Ended September 30, 2008
Interest expense – others	$ 214	$ 267

PART II. OTHER INFORMATION

~~The~~Item ~~Company accrued expenses of $0 and $32 for alternative minimum taxes during each of the three months ended September 30, 2009 and 2008~~6. The Company recognized $152 of deferred income tax expense during the three months ended September 30, 2009 and $157 of deferred tax expense during the three months ended September 30, 2008, as a result of changes in deferred tax assets. The Company also recorded current refunds receivable of $108 for the three months ended September 30, 2009. This resulted in income tax expense as follows: Exhibits

	Three Months Ended September 30, 2009	Three Months Ended September 30, 2008
Income tax expense	$ 44	$ 189

Exhibits required by Item 601 of Regulation S-K are filed herewith or incorporated herein by reference and are listed in the attached Exhibit Index.

~~Discontinued~~EXHIBIT ~~operations consist of the operations of business segments the Company considers as held for sale or has disposed of.~~INDEX

	Three Months EndedSeptember 30, 2009				Three Months EndedSeptember 30, 2008
Income		$	-			$	61
Expenses			43				-
(Loss) income from discontinued operations before loss on sale			(43	)			61
Loss on sale			(73	)			-
(Loss) income from discontinued operations		$	(116	)		$	61

3.	ARTICLES OF INCORPORATION AND BY-LAWS.

~~Nine~~(a) ~~Months~~DVL’s ~~Ended~~Certificate ~~September 30~~of Incorporation, ~~2009~~filed ~~Compared~~March 28, 1977 (Incorporated by reference to ~~Nine~~Exhibit ~~Months~~6(d) ~~Ended~~to ~~September~~DVL’s 30Form S-1 Registration Statement No. 2-58847 dated April 28, ~~2008~~1977.)

(b) DVL’s ~~had income~~Certificate ~~from~~of ~~continuing~~Amendment ~~operations~~to Certificate of $1Incorporation,~~697~~ ~~and~~filed $1July 13,~~894~~ ~~for~~1977 ~~the~~(Incorporated ~~nine~~by ~~months~~reference ~~ended September~~to ~~30,~~Exhibit ~~2009~~6(e) ~~and~~to ~~2008~~Amendment No. 1 to DVL’s Form S-1 Registration Statement No. 2-58847 dated August 25, ~~respectively~~1977.)

~~Interest income~~(c) onDVL’s ~~mortgage~~Certificate ~~loans~~of ~~increased~~Amendment to ~~$1,686~~Certificate ~~as a result~~ of ~~accretion~~Incorporation, onfiled ~~certain mortgage~~August ~~loans~~3, 1982. ~~Interest~~(Incorporated ~~expense~~by onreference ~~underlying~~to ~~mortgages~~Exhibit ~~decreased~~3(c) to ~~$182 reflecting~~DVL’s ~~the~~Form ~~application~~10-K offor athe ~~greater~~fiscal ~~portion~~year ofended ~~each~~December ~~monthly payment to the outstanding principal~~31, ~~payoff of loan balances and anticipated loan maturities~~1982.)

	Nine Months Ended September 30, 2009	Nine Months Ended September 30, 2008
Interest income on mortgage loans	$ 1,686	$1,478
Interest expense on underlying mortgages	$ 182	$ 267

(d)	DVL’s Certificate of Amendment to Certificate of Incorporation, filed May 27, 1983. (Incorporated by reference to Exhibit 3(d) to DVL’s Form 10-K for the fiscal year ended December 31, 1983.)

(e)	DVL’s Certificate of Amendment to Certificate of Incorporation, filed July 24, 1987. (Incorporated by reference to Exhibit 3(e) to DVL’s Form 10-K for the fiscal year ended December 31, 1987.)

(f)	DVL’s Certificate of Amendment to Certificate of Incorporation, filed December 20, 1983. (Incorporated by reference to DVL’s Form 10-K for the fiscal year ended December 31, 1993.)

(g)	DVL’s Certificate of Amendment to Certificate of Incorporation, filed December 4, 1995. (Incorporated by reference to DVL’s proxy statement dated October 13, 1995 – Exhibit A.)

(h)	DVL’s Certificate of Amendment to Certificate of Incorporation, filed September 17, 1996. (Incorporated by reference to DVL’s proxy statement dated July 31, 1996 – Exhibit I.)

(i)	DVL’s Certificate of Amendment to Certificate of Incorporation, filed February 7, 2000. (Incorporated by reference to DVL’s Form 10-K for the fiscal year ended December 31, 1999.)

(j)	DVL’s By-Laws, as in full force and effect at all times since March 28, 1977. (Incorporated by reference to Exhibit 3(c) to DVL’s Form 10-K for the fiscal year ended December 31, 1980.)

(k)	DVL’s First Amendment to By-Laws dated as of January 1, 1994. (Incorporated by reference to Exhibit 3(d) to DVL’s Form 10-K for the fiscal year ended December 31, 1995.)

~~The~~Table ~~gain on satisfaction~~ of ~~mortgage loans results when the net proceeds on the satisfaction of mortgage loans are greater than their carrying value.~~Contents

	Nine Months Ended September 30, 2009	Nine Months Ended September 30, 2008
Gain on satisfaction of mortgage loans	$ -	$ 999

(l)	DVL’s Second Amendment to By-Laws, effective September 17, 1996. (Incorporated by reference to DVL’s proxy statement dated July 31, 1996 – Exhibit J.)

~~Partnership management~~(m) ~~fees~~DVL’s ~~decreased~~Third asAmendment ato ~~result~~the ofBy-Laws, aeffective ~~decrease~~February in1, 2000. (Incorporated by reference to DVL’s Form 10-K for the ~~number~~fiscal ~~of partnerships~~year ~~being~~ended ~~managed~~December 31, 1999.)

	Nine Months Ended September 30, 2009	Nine Months Ended September 30, 2008
Partnership management fees	$ 168	$ 189

10.	MATERIAL CONTRACTS.

~~Management fees~~10.1 ~~decreased~~Stipulation asof aSettlement ~~result~~ of ~~the~~IN ~~loss~~RE ofKENBEE aLIMITED ~~property~~PARTNERSHIP ~~managed~~LITIGATION dated August 12, 1992. (Incorporated by anreference ~~affiliate~~to of Exhibit 10(b)(25) to DVL’s Form 10-K for the ~~Company~~fiscal year ended December 31, 1995.)

	Nine Months Ended September 30, 2009	Nine Months Ended September 30, 2008
Management fees	$ 43	$ 52

10.2	Stipulation of Partial Settlement and Order IN RE DEL-VAL FINANCIAL CORPORATION SECURITIES LITIGATION Master File #MDL872. (Incorporated by reference to Exhibit 10(b)(28) to DVL’s Form 10-K for the fiscal year ended December 31, 1995.)

~~Transaction and~~10.3 ~~other~~Asset ~~fees~~Servicing ~~were~~Agreement ~~earned~~between byDVL, ~~the~~PSC, ~~Company~~KENBEE inRealty ~~connection~~and ~~with~~NPO ~~sales~~dated as of ~~partnership~~ ~~properties~~March 27, 1996. ~~The~~(Incorporated ~~amount~~by ofreference ~~fees~~to ~~vary~~Exhibit ~~depending~~10(b)(34) onto DVL’s Form 10-K for the ~~size~~fiscal ~~and~~year ~~number of~~ended ~~transactions~~December 31, 1995.)

	Nine Months Ended September 30, 2009	Nine Months Ended September 30, 2008
Transaction and other fees from partnerships	$ 27	$ 88

10.4	Asset Servicing Agreement between DVL and NPO. (Incorporated by reference to DVL’s Proxy Statement dated July 31, 1996 - Exhibit C.)

~~Distributions from~~10.5 ~~partnerships~~Common ~~decreased~~Stock inWarrant ~~2009~~issued ~~compared~~by DVL to ~~2008~~NPO. as(Incorporated aby ~~result~~reference ~~of distributions~~to onDVL’s ~~sold~~Proxy ~~partnerships~~Statement ~~being~~dated ~~received~~July in31, ~~2008~~1996 - Exhibit F.)

	Nine Months Ended September 30, 2009	Nine Months Ended September 30, 2008
Distributions from partnerships	$ 133	$ 230

10.6	DVL 1996 Stock Option Plan. (Incorporated by reference to DVL’s Proxy Statement dated July 31, 1996 – Exhibit K.)

~~Interest income~~10.7 onAmendment ~~residual interests increased as a result of accretion and purchase price adjustments pursuant~~ to ~~the~~DVL ~~purchase~~1996 ~~agreements~~Stock ~~entered~~Option ~~into~~Plan byeffective ~~the Company’s~~February ~~wholly owned subsidiary~~1, ~~S2, that owns a 99~~2000.9% ~~Class~~(Incorporated Bby ~~member interests~~reference into ~~Receivables~~DVL’s ~~II-A~~Form ~~and Receivables II~~10-B,K ~~LLC. Interest expense~~for on the ~~related~~fiscal ~~notes~~year ~~payable~~ended ~~decreased~~December as31, ~~a result of principal amortization~~1999.)

	Nine Months Ended September 30, 2009	Nine Months Ended September 30, 2008
Interest income on residual interests	$ 4,684	$ 4,466
Interest expense on related notes payable	$ 2,034	$ 2,177

10.8	Promissory Note dated as of October 20, 1997, in the original Principal amount of $1,760,000 from DVL to Blackacre. (Incorporated by reference to Exhibit 10.2 to DVL’s Form 10-Q for the quarter ended September 30, 1997.)

10.9	Subordination Agreement, dated as of October 20, 1997 among DVL, Blackacre, NPM, and NPO. (Incorporated by reference to Exhibit 10.3 to DVL’s Form 10-Q for the quarter ended September 30, 1997.)

10.10

Agreement among Members dated April 10, 1998, by and among Blackacre, PNM, Pemmil and DVL. (Incorporated by reference to DVL’s Form 10-K for the fiscal year ended December 31, 1998.)

10.11

Management Services Agreement dated June 1, 1998, by and between DVL and PBD Holdings, L.P. (“PBD”). (Incorporated by reference to DVL’s Form 10-K for the fiscal year ended December 31, 1998.)

10.12

Loan Agreement, Promissory Note and Pledge, Collateral Agreement and Security Agreement, each dated as of March, 2000, each relating to a loan from Pennsylvania Business Bank to DVL in the original principal amount of $1,000,000. (Incorporated by reference to DVL’s Form 10-K for the quarter ended June 30, 2000.)

10.13

Term Loan Note and Term Loan Agreement, each dated as of March, 2000, each relating to a loan from Bank Philadelphia to DVL in the original principal amount of $1,450,000. (Incorporated by reference to DVL’s Form 10-Q for the quarter year ended June 30, 2000.)

10.14

First Amendment to Loan Agreement, Pledge Agreement, Promissory Note and other documents dated August 2000, relating to a loan from Pennsylvania Business Bank to DVL, Inc. in the original principal amount of $1,000,000. (Incorporated by reference to DVL’s Form 10-Q for the quarter ended September 30, 2000.)

~~Net rental~~Table ~~income decreased primarily as a result~~ of decreased gross rental income resulting from decreased occupancy in anticipation of the Kearny redevelopment project. Operating expenses for vacant Wal-Mart stores that the Company took title to in 2008 are included for the nine months ended September 30, 2009. There were no similar expenses for the same period in 2008.Contents

	Nine Months Ended September 30, 2009	Nine Months Ended September 30, 2008
Net rental income from others	$ 267	$ 362
Gross rental income from others	$ 878	$ 906

10.15

Purchase Agreement, dated April 27, 2001, by and among J.G. Wentworth Receivables II LLC, Receivables II-A LLC, Receivables II-A Holding Company, LLC, J.G. Wentworth S.S.C., Limited Partnership, J.G. Wentworth Management Company, Inc., S2 Holdings, Inc., and DVL, Inc. for the purchase of residual interests in securitized portfolios. (Incorporated by reference to DVL’s Form 8-K dated May 9, 2001.)

~~General and~~10.16 ~~administrative~~Non-Negotiable, ~~expenses~~Secured ~~decreased~~Purchase Money Promissory Note dated April 27, 2001 in ~~2009~~the ~~from~~original ~~2008~~principal ~~primarily~~amount asof a$22,073,270 ~~result~~payable to the order of ~~decreased~~ ~~employee~~J.G. ~~costs~~Wentworth S.S.C., Limited Partnership from S2 Holdings, Inc. (Incorporated by reference to DVL’s Form 8-K dated May 9, 2001.)

	Nine Months Ended September 30, 2009	Nine Months Ended September 30, 2008
General and administrative	$1,111	$ 1,154

10.17

Non-Negotiable, Secured Purchase Money Promissory Note dated April 27, 2001 in the original principal amount of $3,252,730 payable to the order of J.G. Wentworth S.S.C., Limited Partnership from S2 Holdings, Inc. (Incorporated by reference to DVL’s Form 8-K dated May 9, 2001.)

~~The~~10.18 ~~asset servicing~~Guaranty ~~fee~~and ~~paid~~Surety toAgreement ~~NPO~~dated ~~Management~~April 27, ~~LLC~~2001 ~~increased~~by ~~pursuant~~and tofrom ~~the~~DVL, ~~terms~~Inc. in favor of ~~the Asset~~J.G. ~~Servicing~~Wentworth ~~Agreement~~S.S.C., ~~which~~Limited ~~calls~~Partnership ~~for~~from anS2 ~~adjustment~~Holdings, Inc. (Incorporated by reference to ~~reflect~~DVL’s ~~changes~~Form ~~in the~~8-K ~~consumer~~dated ~~price~~May ~~index~~9, 2001.)

	Nine Months Ended September 30, 2009	Nine Months Ended September 30, 2008
Asset servicing fee	$ 586	$ 579

10.19

Common Stock Warrant dated April 27, 2001. (Incorporated by Reference to DVL’s Form 8-K dated May 9, 2001.)

~~Legal~~10.20 Purchase Agreement, dated as of August 20, 2001, by and ~~professional~~ ~~fees~~among ~~remained~~J.G. ~~relatively~~Wentworth ~~constant~~Receivables ~~from~~II ~~period~~LLC, Receivables II-B LLC, Receivables II-B Holding Company LLC, J.G. Wentworth S.S.C. Limited Partnership, J.G. Wentworth Management Company, Inc., S2 Holding, Inc. and DVL, Inc. for the purchase of residual interests in securitized portfolios. (Incorporated by reference to ~~period~~ DVL’s Form 8-K dated August 28, 2001.)

	Nine Months Ended September 30, 2009	Nine Months Ended September 30, 2008
Legal and professional fees	$ 274	$ 291

10.21

Non-Negotiable, Secured Purchase Money Promissory Note dated as of August 15, 2001 in the original principal amount of $7,931,560.00 payable to the order of J.G. Wentworth S.S.C., Limited Partnership from S2 Holdings, Inc. (Incorporated by reference to DVL’s Form 8-K dated August 28, 2001.)

~~The Company~~10.22 ~~recorded~~Non-Negotiable, aSecured ~~provision~~Purchase ~~for~~Money ~~loan~~Promissory ~~losses~~Note ondated ~~its~~as ~~mortgage~~of ~~portfolio~~August 15, 2001 in the original principal amount of $~~225 during~~1,168,440.00 payable to the ~~nine~~order ~~months~~of ~~ended~~J.G. ~~September~~Wentworth 30S.S.C., ~~2009~~Limited Partnership from S2 Holdings, Inc. (Incorporated by reference to DVL’s Form 8-K dated August 28, 2001.)

	Nine Months Ended September 30, 2009	Nine Months Ended September 30, 2008
Provision for loan losses	$ 225	$ 150

10.23

Guaranty & Surety Agreement dated as of August 20, 2001 by and from DVL, Inc. in favor of J.G. Wentworth S.S.C., Limited Partnership. (Incorporated by reference to DVL’s Form 8-K dated

~~Interest~~August ~~expense~~28, ~~to affiliates decreased in 2009 compared to 2008 as a result of a decreased amount of debt owed to affiliates~~2001.)

	Nine Months Ended September 30, 2009	Nine Months Ended September 30, 2008
Interest expense – affiliates	$ 128	$ 142

10.24

Pledge Agreement, dated as of August 20, 2001 by S2 Holdings, Inc. for the benefit of J.G. Wentworth S.S.C. Limited Partnership. (Incorporated by reference to DVL’s Form 8-K dated August 28, 2001.)

~~Interest expense~~10.25 ~~relating~~Common toStock ~~other~~Warrant ~~debts~~dated ~~decreased~~ as aof ~~result~~August of15, ~~lower~~2001. ~~interest~~(Incorporated ~~rates~~by ~~on new~~reference ~~borrowings~~to DVL’s Form 8-K dated August 28, 2001.)

	Nine Months Ended September 30, 2009	Nine Months Ended September 30, 2008
Interest expense – others	$ 770	$ 835

10.26

Client Service Agreement between the Company and Compensation Solutions, Inc. dated March 28, 2003. (Incorporated by reference to DVL’s Form 10-Q for the quarter ended March 31, 2003.)

10.27

$1,450,000 Promissory Note issued by DVL, Inc. in favor of Pennsylvania Business Bank, dated April 28, 2004. (Incorporated by reference to Exhibit 10.1 to DVL’s Form 10-Q for the quarter ended June 30, 2004.)

10.28

Loan Agreement between DVL, Inc. and Pennsylvania Business Bank dated April 28, 2004. (Incorporated by reference to Exhibit 10.2 to DVL’s Form 10-Q for the quarter ended June 30, 2004.)

~~The Company~~Table ~~accrued expenses~~ of $33 and $97 for alternative minimum taxes during the nine months ended September 30, 2009 and 2008, respectively. The Company recognized $152 of deferred income tax expense during the nine months ended September 30, 2009 and $335 of deferred tax expense during the nine months ended September 30, 2008, as a result of changes in deferred tax assets. The Company also recorded current refunds receivable of $108 for the nine months ended September 30, 2009. This resulted in income tax expense as follows:Contents

	Nine Months Ended September 30, 2009	Nine Months Ended September 30, 2008
Income tax expense	$ 77	$ 432

10.29

Promissory Note, dated December 28, 2004, issued by DVL Mortgage Holdings, LLC and DVL, Inc. in favor of Harleysville National Bank and Trust Company. (Incorporated by reference to Exhibit 10.29 to DVL’s Form 10-KSB filed for the year ended December 31, 2005.)

~~Discontinued operations~~10.30 ~~consist~~Assignment ofAgreement, ~~the~~dated ~~operations~~as of ~~business~~December ~~segments~~28, ~~the~~2004, ~~Company~~between ~~considers as~~Rumson ~~held~~Mortgage Holdings LLC and DVL Mortgage Holdings LLC, Inc. (Incorporated by reference to Exhibit 10.30 to DVL’s Form 10-KSB filed for ~~sale~~the oryear ~~has~~ended ~~disposed~~December of31, 2005.)

	Nine Months EndedSeptember 30, 2009				Nine Months EndedSeptember 30, 2008
Income		$	-			$	178
Expenses			149				226
Loss from discontinued operations before gain on sale			(149	)			(48	)
Gain on sale			47				-
Loss from discontinued operations		$	(102	)		$	(48	)

10.31

Loan Agreement, dated December 28, 2004, by and among Harleysville National Bank and Trust Company and DVL Mortgage Holdings LLC. (Incorporated by to Exhibit 10.31 to DVL’s Form 10-KSB filed for the year ended December 31, 2005.)

~~Liquidity~~10.32 Stock Repurchase Agreement dated March 16, 2007 between DVL, Inc., Blackacre Bridge Capital, L.L.C. and Blackacre Capital ~~Resources~~ Group, L.P. (Incorporated by reference to Exhibit 10.33 to DVL’s Form 10-KSB for fiscal year ended December 31, 2006.)

~~The Company’s~~10.33 ~~cash~~Loan ~~flow~~and ~~from~~Security ~~operations is generated principally from rental income from its ownership of real estate~~Agreement, ~~distributions~~dated inJune ~~connection with residual interests in securitized portfolios~~5, ~~interest~~2006 onby ~~its~~and ~~mortgage~~between ~~portfolio~~DVL, ~~management~~ ~~fees~~Inc. and ~~transaction~~First ~~and~~Penn ~~other~~Bank. ~~fees~~(Incorporated ~~received~~by asreference ato ~~result~~Exhibit of10.1 ~~the~~to ~~sale and/or~~DVL’s ~~refinancing~~Form of10-QSB ~~partnership~~filed ~~properties~~on ~~and~~August ~~mortgages~~14, 2006.)

~~The Company’s~~10.34 ~~cash~~Change ~~balance~~in ~~was~~Terms $1Agreement,~~702~~ atdated September 301, ~~2009,~~2006 ~~compared~~by toand ~~$496~~between ~~at December 31~~DVL, ~~2008~~Inc. ~~The Company places cash~~ and ~~cash~~Pennsylvania ~~equivalents~~Business ~~with~~Bank. ~~high~~(Incorporated ~~credit quality~~by ~~institutions~~reference to ~~minimize~~Exhibit ~~credit risk exposure~~10. As1 ~~of,~~to ~~and~~DVL’s ~~for the~~Form ~~period~~10-QSB ~~ended~~filed ~~September 30, 2009, the Company had bank balances in excess of federally insured amounts. The Company has not experienced any losses~~ on ~~its demand~~November ~~deposits~~14, ~~commercial papers or money market investments~~2006.)

~~The Company~~10.35 ~~believes~~Agreement ~~that~~between ~~its~~the ~~anticipated~~Town ~~cash~~of ~~flow~~Kearny, ~~provided~~New byJersey ~~operations~~ and ~~other sources~~DVL, isInc. ~~sufficient~~approved toon ~~meet~~October ~~its~~24, ~~current~~2006. ~~operating~~(Incorporated ~~cash~~by ~~requirements~~reference ~~for~~to ~~the next~~Exhibit ~~twelve months~~10.34 ~~The Company has in the past and expects in the future~~ to ~~continue~~ toDVL’s ~~augment~~Form ~~its~~10-KSB ~~cash~~for ~~flow from operations with additional cash generated from either~~ the ~~sale~~fiscal oryear ~~refinancing~~ended ofDecember ~~its~~31, ~~assets and/or borrowings~~2006.)

~~The~~10.36 ~~cash flow~~Agreement ~~from~~of ~~the~~Sale ~~Company’s~~dated ~~member~~April ~~interests~~27, in2006 ~~Receivables~~by ~~II-A~~ and ~~Receivables II-B~~between ~~should~~DVL, ~~continue~~Inc. toand ~~provide~~354 ~~liquidity~~Broadway toAssociates, ~~the Company beyond twelve months~~LLC. ~~The~~ ~~purchase~~(Incorporated ~~agreements~~by ~~with~~reference ~~respect~~ to ~~the~~Exhibit ~~acquisition~~10.38 ofto ~~such~~DVL’s ~~member~~Form ~~interests contain~~10-KSB ~~annual~~for ~~minimum and maximum levels of cash flow that will be retained by~~ the ~~Company~~fiscal ~~after~~year ~~the~~ended ~~payment~~December ~~of interest and principal on the notes payable~~31, ~~which~~ ~~are as follows:~~2006.)

Years	Minimum	Maximum
2009	$ 743	$ 880
2010 to final payment on the notes*	$ 1,050	$ 1,150

10.37

First Amendment of Agreement of Sale dated June 28, 2006 by and between DVL, Inc. and 354 Broadway Associates, LLC. (Incorporated by reference to Exhibit 10.39 to DVL’s Form 10-KSB for the fiscal year ended December 31, 2006.)

*10.38 ~~Final payment~~Second onAmendment ~~the~~of ~~notes~~Agreement ~~payable~~of ~~expected~~Sale indated ~~2014~~September ~~related~~25, to2006 ~~the~~by ~~Receivables~~and ~~II-A transaction~~between DVL, Inc. and ~~2018~~354 Broadway Associates, LLC. (Incorporated by reference to Exhibit 10.40 to DVL, Inc.’s Form 10-KSB for the ~~Receivables~~fiscal ~~II-B~~year ~~transaction~~ended December 31, 2006.)

~~The~~ 10.39 Loan Extension Agreement between Pennsylvania Business Bank and Del Toch, LLC, Delborne Land Company ~~believes~~LLC, itand ~~will~~Delbrook ~~continue~~Holding, LLC dated March 2, 2007. (Incorporated by reference to ~~receive~~Exhibit ~~significant~~10.1 ~~cash~~to ~~flow~~DVL’s ~~after~~Form ~~final payment~~10-QSB offor the ~~notes~~quarter ~~payable~~ended March 31, 2007.)

10.40

Loan Extension Agreement between Pennsylvania Business Bank and Del Toch, LLC, Delborne Land Company, LLC and Delbrook Holding LLC, dated June 1, 2007. (Incorporated by reference to Exhibit 10.1 to DVL’s Form 10-QSB for the quarter ended June 30, 2007.)

10.41

Construction Loan Agreement dated August 2007 between DVL Kearny Holdings LLC, CapMark Bank, Urban Development Fund II LLC, and Paramount Community Development Fund. (Incorporated by reference to Exhibit 10.43 to DVL’s Form 10-KSB for the year ended December 31, 2007.)

10.42

Asset Servicing Extension Agreement dated October 31, 2007 between DVL, Inc., Professional Services Corporation, K.M. Realty Corporation, and NPO Management, LLC. (Incorporated by reference to Exhibit 10.44 to DVL’s Form 10-KSB for the year ended December 31, 2007.)

~~Outstanding Financings~~Table of Contents

~~Outstanding loans~~10.43 ~~payable~~First asAmendment ofto ~~September~~Lease 30dated August 10, ~~2009~~2007 ~~which~~to ~~are~~that ~~scheduled~~certain lease dated November 7, 2002 between DVL, Inc. and Amstad Property, Inc. (Incorporated by reference to ~~become~~Exhibit ~~due~~10.45 ~~through 2014~~to ~~are~~DVL’s asForm ~~follows:~~10-KSB for the year ended December 31, 2007.)

Purpose	Creditor	Original Loan Amount	Outstanding Balance Including Accrued Interest at September 30, 2009	Due Date
Repurchase of Notes Issued by the Company	Pemmil (1)	$ 2,500	$ 1,380	12/31/09
Purchase of Mortgages	Unaffiliated Bank (2)	$ 2,200	$ 2,056	02/01/14
Refinancing of Repurchase of Notes Issued by the Company	Unaffiliated Bank (3)	$ 1,500	$ 1,358	06/05/12
Construction Financing	Unaffiliated Bank (4)	$ 4,250	$ 4,272	01/21/11
General Corporate Purposes	Unaffiliated Bank (5)	$ 250	$ 182	02/01/13
Refinancing of Notes Issued by the Company to Acquire Property	Unaffiliated Bank (6)	$ 3,800	$ 3,742	07/01/11

10.44

Construction Loan Agreement between Capmark Bank, Urban Development Fund II, LLC, Paramount Community Development Fund, LLC, and DVL Kearny Holdings, LLC (dated August 14, 2007). (Incorporated by reference to DVL’s Form 10-QSB for the quarter ended September 30, 2007.)

~~(1)~~10.45 ~~Pemmil~~Asset ~~Funding,~~Servicing ~~LLC~~Extension ~~(“Pemmil”) previously made a loan to the Company in the original principal amount of $2,500 pursuant to the terms of that certain Loan and Security~~ Agreement, ~~dated December 27, 2005 (the “Pemmil Loan Agreement”)~~ between Pemmil and the Company evidenced by the Original Term Note (which has subsequently been amended and restated pursuant to the Amendment No.1). The Pemmil Loan Agreement provided that the principal and unpaid interest were originally due on December 27DVL, ~~2008 and provided for interest at a rate of 12% per annum, compounded monthly~~Inc. ~~Interest is payable monthly on the loan~~, ~~but~~Professional ~~the~~Services ~~Company may elect not to make any such interest payment when due~~Corporation, ~~and~~KM ~~such~~Realty ~~amount~~Corporation ~~of unpaid monthly interest shall be added to principal. The Company is required to prepay the loan (plus any accrued~~ and ~~unpaid~~NPO interest) to the extent that the Company consummates certain capital transactions (as defined in the Pemmil Loan Agreement) that result in net proceeds (as defined in the Pemmil Loan Agreement) to the Company. Pemmil mayManagement, inLLC ~~its~~dated ~~sole discretion~~October, ~~accelerate~~2007. ~~the Loan after the occurrence and during the continuance of an event of default~~ (asIncorporated ~~defined in the Pemmil Loan Agreement). The obligations under the Pemmil Loan Agreement are secured~~ by areference ~~subordinated~~to ~~pledge of the Company~~DVL’s ~~equity~~Form ~~interest~~10-QSB infor ~~S2. The Company may prepay all or a portion of~~ the ~~loan~~quarter ~~at any time prior to maturity without penalty or premium. During the nine months~~ ended September 30, ~~2009, the Company paid $275 of interest previously accrued to Pemmil~~2007. On November 10, 2008 the Pemmil Loan Agreement was amended to extend the due date for the payment of the principal and unpaid interest to December 31, 2009. The Company is currently in discussions to extend the due date. The inability of the Company to refinance or extend such loan on or prior to its maturity date would have a material adverse effect on the Company’s financial condition.)

~~(2)~~10.46 OnRedeveloper ~~April~~Agreement ~~24,~~dated ~~2009~~December ~~the~~11, ~~Company~~2007 ~~entered~~between ~~into~~DVL, ~~a loan agreement~~Inc., ~~evidenced~~DVL byKearny aHoldings, ~~term note for $2~~LLC,~~200.~~ ~~The principal amount bears interest at an annual rate of Libor plus 4%~~ and ~~self~~the ~~amortizes~~Town ~~with a portion~~ of ~~the principal payable monthly through February 1~~Kearny, ~~2014~~New Jersey. ~~The~~(Incorporated ~~repayment of the obligations under the term note and the loan documents is secured~~ by ~~certain~~reference ~~collateral assignments from DVL Holdings~~ to ~~the lender with respect to mortgage notes and mortgages held by~~ DVL’s ~~Holdings~~Current ~~with~~Event ~~respect~~Report toon ~~mortgage~~Form ~~financings~~8-K ~~provided~~dated toDecember ~~affiliated limited partnerships. Additionally~~11, ~~the Company guaranteed the obligations of DVL Holdings under such loan documents~~2007. ~~The majority of the loan proceeds were used to paydown the existing loan.~~)

10.47

Developer Services Agreement between DVL, Inc., P&A Associates, and Pemmil Management, LLC. (Incorporated by reference to DVL’s Current Event Report on Form 8-K dated December 11, 2007.)

10.48

Mortgage Note for the principal amount of $3,800,000 in favor of Delbrook Holding, LLC. (Incorporated by reference to DVL’s Form 10-Q for the period ended June 30, 2008.)

10.49

Amendment No. 2 to the Construction Loan Agreement. (Incorporated by Reference to DVL’s Form 10-Q for the period ended September 30, 2008.)

10.50

Pledge and Security Agreement dated as of August 1, 2008. (Incorporated by reference to DVL’s Form 10-Q for the period ended September 30, 2008.)

10.51

Amendment No. 2 to the Loan and Security Agreement with Pemmil Funding, LLC, dated November 10, 2008. (Incorporated by reference to DVL’s Form 10-Q for the period ended September 30, 2008.)

10.52

Mortgage, Security Agreement and Agreement of Leases and Rents dated January 21, 2009 by DVL Kearny Holdings LLC in favor of Signature Bank.

10.53

Guaranty dated January 21, 2009 by DVL, Inc. to Signature Bank.

10.54

Amended and Restated Loan and Security Agreement, dated as of December 31, 2009, by and between DVL, Inc. and Pemmil Funding, LLC. (Incorporated by reference to DVL’s Form 10-K for the year ended December 31, 2009.)

31.1	Chief Executive Officer’s Certificate, pursuant to Section 302 of The Sarbanes-Oxley Act of 2002.

31.2	Chief Financial Officer’s Certificate, pursuant to Section 302 of The Sarbanes-Oxley Act of 2002.

32.1	Certification of Chief Executive Officer and Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

~~(3)~~Table ~~Interest rate is fixed at 7.75% per annum payable monthly. Monthly payments are interest only. An annual principal payment~~ of ~~$50 is required. During November 2009, the Company negotiated an extension of the maturity of the loan until June 5, 2012.~~Contents

(4) On January 21, 2009, DVL Holdings entered into a loan agreement, evidenced by a note, with an unaffiliated third party bank in an aggregate amount of up to $6,450 pursuant to the first note in the amount of $4,250 and the second note in the amount of $2,200. DVL Holdings borrowed $4,250 and such funds were used to repay outstanding borrowings. Borrowings under the second note will be advanced by the lender in the future upon the satisfaction of certain conditions specified in such note and such funds will be used in accordance with the terms of the agreement and second note.SIGNATURES

(5) On January 30, 2008, the Company entered into a loan agreement with an unaffiliated third party bank for $250. The loan bears interest at a rate of 7.5% per annum. Principal and interest payments of $5 are due monthly through the scheduled maturity date of February 1, 2013.

(6) On June 6, 2008, Delbrook Holding LLC (“Delbrook”), a Delaware limited liability Company and 100% owned subsidiary of DVL borrowed an aggregate of $3,800 pursuant to a Mortgage Note (the “Mortgage Note”) with an unaffiliated third party bank in the principal amount of $3,800. The Mortgage Note is secured by a mortgage on certain of the Company’s property located in Kearny, New Jersey and by an assignment of leases on such property. The principal amount outstanding under the Note, bears interest, which is payable monthly, at an annual rate equal to the one month LIBOR plus 2.1%.

The Company uses derivatives to manage risks related to interest rate movements. Interest rate swap contracts designated and qualifying as cash flow hedges are reported at fair value. In accordance with SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities” (the “Statement”), as amended by SFAS No. 138 and SFAS No. 149, which is codified in FASB ASC 815, Derivatives and Hedging (“ASC 815”), the Company established accounting and reporting standards for derivative instruments. Specifically, ASC 815 requires an entity to recognize all derivatives as either assets or liabilities in the statement of financial position and to measure those instruments at fair value. Changes in the fair value of those instruments designated as cash flow hedges are recorded in other comprehensive income, to the extent the hedge is effective, and in the results of operations, to the extent the hedge is ineffective or no longer qualifies as a hedge. The interest rate swap agreements are generally accounted for on a held to maturity basis and in cases where they are terminated early, any gain or loss is generally amortized over the remaining life of the hedged item.

During September 2008, the Company entered into an interest rate swap agreement related to one of their loans. Valued separately, the interest rate swap agreement represents a liability as of September 30, 2009 and December 31, 2008, in the amount of $180 and $231, respectively. During April 2009, the Company entered into an interest rate swap agreement related to another of their loans. Valued separately, the interest rate swap agreement represents a liability as of September 30, 2009, in the amount of $22. This value represents the fair value of the current difference in interest paid and received under the swap agreement over the remaining term of the agreement. Because the swaps are considered to be a cash flow hedge and they are effective, the value of the swaps are recorded in the Consolidated Statements of Stockholders’ Equity as a separate component and represents the only amount reflected in accumulated other comprehensive loss. Changes in the swaps fair value are reported currently in other comprehensive loss. Payments are recognized in current operating results as settlements occur under the agreement as a component of interest expense.

Hedge Type	Notional Value	Rate	Termination Date	Fair Value
Interest rate swap agreement	$ 3,740	5.94%	July 1, 2011	$ (180)

The outstanding principal of the Mortgage Note is payable in monthly installments of $5 beginning on August 1, 2008 and continuing on the first day of each month thereafter. The final monthly installment of the Mortgage Note is due and payable at maturity on July 1, 2011 or before, at the option of the Bank upon any defaults after the expiration of all applicable notice and cure periods as specified therein.

Hedge Type	Notional Value	Rate	Termination Date	Fair Value
Interest rate swap agreement	$ 2,161	6.09%	February 1, 2014	$ (22)

The outstanding principal of the Mortgage Note is payable in monthly installments of $39 beginning on June 1, 2009 and continuing on the first day of each month thereafter. The final monthly installment of the Mortgage Note is due and payable at maturity on February 1, 2014 or before, at the option of the Bank upon any defaults after the expiration of all applicable notice and cure periods as specified therein.

IMPACT OF INFLATION AND CHANGES IN INTEREST RATES

The Company’s portfolio of mortgage loans made to affiliated limited partnerships consists primarily of loans made at fixed rates of interest. Therefore, increases or decreases in market interest rates are generally not expected to have an effect on the Company’s earnings. Other than as a factor in determining market interest rates, inflation has not had a significant effect on the Company’s net income.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are a smaller reporting Company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 (the “Exchange Act”) and are not required to provide the information under this item.

ITEM 4. CONTROLS AND PROCEDURES

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in company reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in Company reports filed under the Exchange Act, is accumulated and communicated to management, including the Company’s principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

As required by Rule 13a-15 under the Exchange Act, the Company is required to carry out an evaluation of the effectiveness of the design and operation of the Company’s disclosure controls and procedures as of the end of the period covered by this report. This evaluation was carried out with the participation of the Company’s principal executive officer and principal financial officer. Based upon that evaluation, the Company’s principal executive officer concluded that the Company’s disclosure controls and procedures were not effective as of September 30, 2009 because of the material weaknesses discussed below and which were previously discussed in our Annual Report on Form 10-K.

Management’s Report on Internal Control Over Financial Reporting

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our “disclosure controls and procedures” (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of the end of the period covered by this report. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of such period, our disclosure controls and procedures were not effective as of September 30, 2009 because of a material weakness. The basis for this determination was that, as discussed below, we identified a material weakness in our internal control over financial reporting, which we view as an integral part of our disclosure controls and procedures.

Management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15(d)-15(f)) includes those policies and procedures that: (a) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (b) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”), and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (c) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.

Management assessed our internal control over financial reporting as of September 30, 2009, the end of our fiscal quarter. Management based its assessment on the criteria set forth in the Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis. Because of its inherent limitations, internal controls over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risks that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Our control environment did not sufficiently promote effective internal control over financial reporting throughout the organization. Specifically, we had a shortage of support and resources in our accounting department, which resulted in insufficient; (i) documentation and communication of certain business transactions and (ii) application of technical accounting rules as of September 30, 2009. No misstatements occurred as a result of the material weakness.

As previously disclosed in an 8-K dated November 5, 2009, the Company engaged Real Estate Systems Implementation Group, LLC (“RESIG”), an affiliate of Imowitz Koenig & Co., LLP, the Company’s former independent registered public accountants, pursuant to which RESIG will provide substantially all of the Company’s material accounting, financial statement preparation and bookkeeping functions on an outsourced consulting basis. We believe this arrangement will positively impact the effectiveness of our internal control over financial reporting in the future.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

None

Item 1A. Risk Factors

We are a smaller reporting Company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

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

None

Item 3. Defaults Upon Senior Securities

None

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

None

Item 5. Other Information

None

Item 6. Exhibits and Report on Form 8-K:

a. Index to Exhibits

Exhibit No.	Description of Document
10.1	Accounting Services Agreement between DVL, Inc. and Real Estate Systems Implementation Group, LLC dated November 2, 2009.
10.2	Amendment to Redeveloper Agreement between the Town of Kearny, New Jersey and DVL, Inc.
31.1	Principal Executive Officer’s Certificate, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Principal Financial Officer’s Certificate, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of Chief Executive Officer and Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to the Section 908 of Sarbanes-Oxley Act of 2002.

b. Report on Form 8-K:

A Current Report on Form 8-K, dated November 5, 2009, reporting an Item 4 “Change in Registrant’s Certifying Accountant” and an Item 5 “Departure of Directors; Election of Directors; Appointment of Principal Officers” was filed with the Securities and Exchange Commission.

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

	DVL, Inc.


	By:	/s/ Neil Koenig
		Neil Koenig, Executive Vice President and Chief Financial Officer

~~November 18,~~May ~~2009~~14, 2010

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