Forward-Looking Statements

This quarterly report contains forward-looking statements. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as "may", "should", "expects", "plans", "anticipates", "believes", "estimates", "predicts", "potential" or "continue" or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks in the section entitled "Risk Factors", that may cause our or our industry's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.

Our unaudited financial statements are stated in United States Dollars (US$) and are prepared in accordance with United States Generally Accepted Accounting Principles. The following discussion should be read in conjunction with our financial statements and the related notes that appear elsewhere in this quarterly report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed below and elsewhere in this quarterly report, particularly in the section entitled "Risk Factors".

In this quarterly report, unless otherwise specified, all dollar amounts are expressed in United States dollars. All references to "CDN$" refer to Canadian dollars and all references to "common stock" refer to the common shares in our capital stock.

As used in this quarterly report, the terms "we", "us" and "our" refer to Dussault Apparel Inc. and our wholly-owned subsidiaries, unless the context clearly requires or states otherwise.

Corporate Overview

The address of our principal executive office is 2250 East Hastings Street, Vancouver, BC V5L 1V4. Our telephone number is (604) 569 - 2619.

Our common stock is quoted on the OTC Bulletin Board under the symbol "DUSS".

Corporate History

We were incorporated on August 1, 2006 in the State Nevada under the name Release Your Lease Inc. Our initial business plan was to create a web-based service for buyers and sellers of leased automobiles. A decision was made by new management, to change the corporate direction of our company and to pursue opportunities in the retail fashion industry.

Effective June 11, 2007, we completed a merger with our subsidiary Dussault Apparel Inc. As a result, we changed our name from "Release Your Lease Inc." to "Dussault Apparel Inc." We changed the name of our company to better reflect the anticipated direction and business of our company. On June 11, 2007, our symbol changed to "DUSS".

Effective July 11, 2007 we effected a fourteen (14) for one (1) forward stock split of our authorized, issued and outstanding shares. As a result, our authorized capital has increased from 75,000,000 shares of common stock with a par value of $0.001 to 10,050,000,000 shares of common stock with a par value of $0.001. Our issued and outstanding share capital increased from 3,060,000 shares of common stock to 49,000,000 shares of common stock.

Under the letter of intent, both companies had the right to conduct due diligence on each other while we negotiated the terms of the formal agreement. We have not entered into a formal agreement with Dussault Jeans Inc. and the letter of intent terminated without prejudice to either party on November 30, 2007.

On November 8, 2007, we opened our first retail location on Melrose Avenue, California. Our Melrose location features women's and men's Ready-To-Wear collections as well as jewelry, luggage and headwear.

On October 31, 2008, we elected to close our store located on Melrose Avenue in Los Angeles, California and ceased all operations relating to this location. Given the losses associated with our Melrose location, and the current market circumstances for retailers, management was of the view such closure was necessary to prevent further losses and conserve working capital. We will continue to focus on our remaining operations and distribution arrangements and will seek additional opportunities in the apparel retail sector.

On April 15, 2009, our company entered into an assignment of royalty with Jason Dussault. The assignment of royalty provides for the payment by Jason Dussault of 5% of the royalties received by him pursuant to a merchandising license agreement with Gene Simmons Company and USPA Accessories LLC for the license of "Moneybag" intellectual property and related products, pursuant to and in accordance with the terms and conditions of a merchandising license agreement. Jason Dussault has agreed to provide sales and design services under a merchandising license agreement in consideration for royalty payments from 4.5% to 7.5% of gross income from sales derived under a merchandising license agreement. From any royalty payments that may become payable to Jason Dussault, Mr. Dussault has agreed to assign to our company 5% of the gross income and has agreed to assign to our company to his rights, title and interest in and to the amount of the royalty.

Our Current Business

Our principal products are limited edition high fashion streetwear, specifically hoodies. We design, market, distribute and sell our products under the Dussault Custom Ink trademark. Our products are sold in Canada and abroad to upscale retailers and boutiques and we also produce private collections for custom orders. Samples of our products can be viewed on our website located at www.Dussaultapparel.com.

We currently sell men's styles and women's styles. Our products are made with high quality materials that are effected with a variety of processes including bleaching, washing, painting and hand finishing. Although we operate in a highly competitive market, what distinguishes our brand is the attention to detail and the exclusivity of our products.

Our hoodies are inspired hand finished pieces of art, these hoodies for men and women are lined with silk and accented with tattoo inspired artwork on the back. Skulls, lions, flames or a bloody cleaver toting panda give these hoodies an edge.

Our products can be found in major Canadian cities. Our products are sold to fashion conscious, affluent customers who shop in high-end boutiques and stores to customers who want to wear and be seen in the latest, trendiest streetwear.

Competition

The apparel industry is intensely competitive and fragmented. We compete against other small apparel companies, as well as large companies that have a similar business and large marketing companies, importers and distributors that sell products similar to or competitive with ours.

Our operations are subject to the effects of international treaties and regulations such as the North American Free Trade Agreement (NAFTA). We are also subject to the effects of international trade agreements and embargoes by entities such as the World Trade Organization. Generally, these international trade agreements benefit our business rather than burden it because they tend to reduce trade quotas, duties, taxes and similar impositions. However, these trade agreements may also impose restrictions that could have an adverse impact on our business, by limiting the countries from whom we can purchase our fabric or other component materials, or limiting the countries where we might market and sell our products.

Labeling and advertising of our products is subject to regulation by the Federal Trade Commission. We believe that we are in substantial compliance with these regulations.

Research and Development

We do not currently have a formal research and development effort but we plan to continue to develop new products.

Purchase of Significant Equipment

We do not intend to purchase any significant equipment over the twelve months ending January 31, 2010.

Corporate Offices

Our principal office is located at 2250 East Hastings Street, Vancouver, BC V5L 1V4. We sublease space at this location from Dayton Boot Co. Ltd. for $2,500 per month, on a month to month basis. We believe that this space is sufficient to meet our present needs and do not anticipate any difficulty in securing alternative or additional space, as needed, on terms acceptable to us.

Employees

Currently, our only employees are our directors and officers, who include Jason Dussault, our president, chief executive officer, secretary and treasurer, Robert Mintak, our chief operating officer and chief financial officer and Jason Sundar, our VP corporate finance.

We expect to hire no new employees over the next 12 month period.

Critical Accounting Policies

Our financial statements and accompanying notes are prepared in accordance with generally accepted accounting principles used in the United States. Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. These estimates and assumptions are affected by management's application of accounting policies. We believe that understanding the basis and nature of the estimates and assumptions involved with the following aspects of our consolidated financial statements is critical to an understanding of our financials.

Use of Estimates

The preparation of financial statements in accordance with generally accepted accounting principles in the United States of America requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities known to exist as of the date the financial statements are published, and the reported amounts of revenues and expenses during the reporting period. Uncertainties with respect to such estimates and assumptions are inherent in the preparation of our company's financial statements; accordingly, it is possible that the actual results could differ from these estimates and assumptions and could have a material effect on the reported amounts of our company's financial position and results of operations.

The Financial Accounting Standards Board issued Statement of Financial Accounting Standards ("SFAS") No. 107, "Disclosures About Fair Value of Financial Instruments." SFAS No. 107 requires disclosure of fair value information about financial instruments when it is practicable to estimate that value. The carrying amounts of our company's financial instruments as of April 30, 2009 approximate their respective fair values because of the short-term nature of these instruments. Such instruments consist of cash, accounts payable and accrued expenses. The fair value of related party payables is not determinable.

Financial instruments

Our financial instruments consist of cash and cash equivalents, accounts payable and accrued liabilities, amounts due to officers and directors. The fair value of these financial instruments approximate their carrying value due to the short maturities of these instruments, unless otherwise noted.

Income Taxes

Our company utilizes SFAS No. 109, "Accounting for Income Taxes," which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are determined based on the difference between the tax basis of assets and liabilities and their financial reporting amounts based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. The Company generated deferred tax credits through net operating loss carryforwards. However, a valuation allowance of 100% has been established, as the realization of the deferred tax credits is not reasonably certain, based on going concern considerations outlined below.

Development-Stage Company

Our company is considered a development-stage company, with limited operating revenues during the periods presented, as defined by Statement of Financial Accounting Standards ("SFAS") No. 7. SFAS. No. 7 requires companies to report their operations, shareholders deficit and cash flows since inception through the date that revenues are generated from management's intended operations, among other things. Management has defined inception as August 1, 2006. Since inception, our company has incurred operating losses totaling $1,796,526. Our working capital has been generated through the sales of common stock. Management has provided financial data since August 1, 2006 "Inception" in the financial statements, as a means to provide readers of our company's financial information to make informed investment decisions.

Inventory

Inventories are stated at the lower of cost or market value. Market value represents net realizable value. Inventories are priced by the Retail Inventory (average cost) method in a perpetual inventory system. On October 1, 2008 inventory was marked down by $1,791,526 to net realizable value of $181,847.50. Wholesale sales since the beginning of the fiscal year have reduced inventory to $11,044.

Note Receivable

On April 16, 2008 our company entered into a bridge loan agreement under a promissory note from Dayton Boot Co. Enterprises Ltd. of Vancouver, Canada for $C 300,000. The terms were that the principal amount, plus 6% simple interest, would be due and payable when a merger transaction was concluded between the two parties, or December 31, 2008, the earlier. The anticipated merger did not take place. Terms of a payout are being negotiated and interest is not accrued, being unlikely to be paid.

Loss Per Share

Net loss per share is calculated in accordance with SFAS 128, Earnings Per Share, for the periods presented. Basic net loss per share is based upon the weighted average number of common shares outstanding. Diluted net loss per share is based on the assumption that all dilutive convertible shares and stock options were converted or exercised. Our company has no potentially dilutive securities as of April 30, 2009.

On June 11, 2007 a forward stock split of Common Stock occurred on a 14 for 1 basis. The loss per share for the periods presented has been calculated accordingly, giving retroactive effect to the forward stock split.

The following is a reconciliation of the numerators and denominators of the basic and diluted earnings per share computations for the six months ended April 30, 2009 and 2008:

                                                         2009           2008

Basic and diluted net loss per share
Numerator                                           $   (278,501 ) $   (837,421 )
Comprehensive Net (Loss)

Denominator
Basic and diluted weighted average number of shares   51,687,000     56,487,000

Basic and Diluted Net Loss Per Share                $     (0.006 ) $     (0.015 )

Going Concern

We have suffered recurring losses from operations and are dependent on our ability to raise capital from stockholders or other sources to meet our obligations and repay our liabilities arising from normal business operations when they become due. In their report on our audited financial statements for the year ended October 31, 2008, our independent auditors included an explanatory paragraph regarding concerns about our ability to continue as a going concern. Our financial statements contain additional note disclosure describing the circumstances that lead to this disclosure by our independent auditors.

Results of Operations

The following summary of our results of operations should be read in conjunction with our financial statements for the quarter ended April 30, 2009 which are included herein.

Three month Summary ended April 30, 2009 and 2008

                                           Three Months Ended
                                                April 30
                                           2009         2008
                    Sales              $  142,399   $   129,430
                    Cost of Sales      $   60,239   $    41,418
                    Operating Expenses $  153,751   $   224,693
                    Net Loss           $  (62,420 ) $  (136,681 )

Our sales for the three months ended April 30, 2009 were $142,399, compared to our sales for the three months ended April 30, 2008, which were $129,430, representing approximately a 10% increase. The increase in sales is due to greater demand for the 2009 collection.

Cost of Sales

Our cost of sales for the three months ended April 30, 2009 was $60,239 (42% of product sales), compared to our cost of sales for the three months ended April 30, 2008, which was $41,418 (32% of product sales). The increase in our cost of sales is mainly due to domestic production. We expect that our cost of sales will decrease over the next twelve months, mainly due to sampling and literature support in place related to these sales.

Future cost of sales may be impacted by, the effects of inflation and changing prices from our suppliers and fluctuations in foreign currency rates as certain costs are incurred in foreign currencies.

Total Operating Costs

Our total operating expenses consist of salaries and wages, professional fees and general and administrative costs. For the three months ended April 30, 2009, our total operating expenses were $153,751 while they were $224,693 for the three months ended April 30, 2008. The decrease in our total operating costs is mainly due to a reduction in salary and wages, development costs and the reduction of administrative expenses. We expect to continue to increase our business activities, but we expect our total operating expenses to continue to decrease over the coming twelve months.

Six month Summary ended April 30, 2009 and 2008

                                            Six months Ended
                                                April 30
                                           2009          2008
                    Sales              $   399,790   $   280,248
                    Cost of Sales      $   267,840   $   145,724
                    Operating Expenses $   433,803   $   971,945
                    Net Loss           $  (278,501 ) $  (837,421 )

Sales

Our sales for the six months ended April 30, 2009 were $399,790, compared to our sales for the six months ended April 30, 2008, which were $280,248, representing approximately a 42% increase. The increase in sales is due to liquidation of dated inventory and demand for new products.

Cost of Sales

Our cost of sales for the six months ended April 30, 2009 was $267,840 (67% of product sales), compared to our cost of sales for the six months ended April 30, 2008, which was $145,724 (52% of product sales). The increase in our cost of sales is mainly due to domestic production. We expect that our cost of sales will decrease over the next twelve months, mainly due to sampling and literature support in place related to these sales.

Future cost of sales may be impacted by, the effects of inflation and changing prices from our suppliers and fluctuations in foreign currency rates as certain costs are incurred in foreign currencies.

Total Operating Costs

Our total operating expenses consist of salaries and wages, professional fees and general and administrative costs. For the six months ended April 30, 2009, our total operating expenses were $433,803 while they were $971,945 for

Liquidity and Financial Condition

Working Capital

                         At             At
                      April 30,     October 31,
                        2009           2008
Current assets      $   203,490   $     404,247
Current liabilities $    26,651   $       6,437
Working capital     $   176,839   $     397,810



Cash Flows
                                                         Six Months Ended
                                                     April 30,     April 30,
                                                       2009           2008
Net Cash (Used by) Operating Activities            $   (48,207 ) $   (757,785 )
Net Cash (Used by) Investing Activities            $    51,515   $    (55,577 )
Net Cash (Used by)Provided by Financing Activities $    11,015   $  1,089,168
Net increase (decrease) in cash during period      $    28,482   $    275,806

We had cash in the amount of $191,696 as of April 30, 2009 as compared to $163,214 as of October 31, 2008. We had a working capital surplus of $176,839 as of April 30, 2009 compared to a working capital surplus of $397,810 as of October 31, 2008.

Our principal source of funds has been cash flows from private placement financings.

Future Financings

Presently, our revenues may not be sufficient to meet our operating and capital expenses.

Our capital requirements are difficult to plan in light of our current strategy to limit our operations and our products. Since our inception, we have been dependent on investment capital as an important source of liquidity. Our operations presently are generating negative cash flow, and we do not expect positive cash flow from operations in the near term. We need to secure additional working capital in the short-term in order to sustain our operations and execute our business plan. We have incurred operating losses since inception, and this is likely to continue into the year ended October 31, 2009.

There can be no assurance that additional financing will be available to us when needed or, if available, that it can be obtained on commercially reasonable terms. If we are not able to obtain the additional financing on a timely basis should it be required, or generate significant material revenues from operations, we will not be able to meet our other obligations as they become due and we will be forced to scale down or perhaps even cease our operations.

As a "smaller reporting company", we are not required to provide tabular disclosure obligations.

Off-Balance Sheet Arrangements

We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to stockholders.

Recently Issued Accounting Standards

In February 2007, the Financial Accounting Standards Board (FASB) issued SFAS Statement No. 159, "The Fair Value Option for Financial Assets and Financial Liabilities - Including an amendment of FASB Statement No. 115" (SFAS 159). SFAS 159, which becomes effective for the Company on January 1, 2008, permits companies to choose to measure many financial instruments and certain other items at fair value and report unrealized gains and losses in earnings. Such accounting is optional and is generally to be applied instrument by instrument.

FASB Statement of Financial Accounting Standards (SFAS) No. 157 "Fair Value Measurements" establishes a formal framework for measuring fair value under GAAP. It defines and codifies the many definitions of fair value included among various other authoritative literature, clarifies and, in some instances, expands on the guidance for implementing fair value measurements, and increases the level of disclosure required for fair value measurements. Although SFAS No. 157 applies to and amends the provisions of existing FASB and AICPA pronouncements, it does not, of itself, require any new fair value measurements, nor does it establish valuation standards. SFAS No. 157 applies to all other accounting pronouncements requiring or permitting fair value measurements, except for SFAS 123(r) Share-Based Payment, and related pronouncements, the practicability exceptions to fair value determination allowed by various other authoritative pronouncements, and AICPA Statements of Position 97-2 and 98.9 that deal with software revenue recognition. This statement is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years.

Our company does not believe that the adoption of the above recent pronouncements will have a material effect on our consolidated financial position, results of operations, or cash flows.