SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

____________________

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): July ~~May 16~~13, 2006

Axial Vector Engine Corporation

(Exact name of registrant as specified in its charter)

Nevada	000-49698	20-3362479
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

121 S W Salmon Street Suite 1100, Portland, OR	97204
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: 503-595-5088

___________________________________________________

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[ ]	Written communications pursuant to Rule 425 under the Securities Act (17CFR 230.425)

[ ]	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[ ]	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[ ]	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

SECTION 1 - Registrant’s Business and Operations

Item 18.01 ~~Entry~~Other ~~Into a Materially Definitive Agreement~~Events

On ~~May~~July 1613, 2006, ~~the~~we ~~Company~~ entered into aan ~~Confidential~~agreement ~~Settlement~~titled “Distribution Agreement” ~~and Mutual Release~~ (the “~~Settlement~~ Agreement”) with ~~Patricia~~Dynamic ~~Wilks~~Engines ~~and~~Limited, ~~Dennis Palmer~~a ~~(the~~New Zealand company (“~~Defendants~~DEL”)., pursuant ~~The~~to ~~Settlement~~which ~~Agreement~~DEL ~~provides~~has ~~for~~become athe ~~mutual reconciliation~~exclusive distributor of ~~all~~our ~~disputes~~GENSETS product ~~between~~in the ~~parties~~country ~~and~~of ~~the~~New ~~end~~Zealand for a period of ~~litigation~~twenty years. In exchange ~~brought~~for in the ~~United~~exclusive ~~States~~distribution ~~District Court~~rights, ~~Central~~DEL ~~District~~has agreed to pay a licensing fee of $1,000 ~~California~~and to contribute and transfer to us certain application development ~~(the~~work ~~“Court”)~~ that ~~(Case~~has ~~No.~~enhanced ~~CV04-8790-CBM)~~the value of our intellectual property.

~~Under~~The ~~the Settlement~~ Agreement, ~~the~~is ~~Defendants~~renewable ~~acknowledged~~upon ~~and~~consent ~~agreed~~of ~~that~~the onparties orfor ~~about~~additional terms of ~~June~~twenty ~~30,~~years. ~~2003~~Under the ~~Company~~Agreement, ~~acquired~~DEL ~~all~~has the first right, ~~title,~~to ~~assets,~~negotiate for and purchase ~~interest~~exclusive distribution rights for our other products and to negotiate ~~Dyna-Cam~~for ~~Engine~~and ~~Corporation,~~purchase ~~including~~exclusive ~~related~~distribution ~~web~~rights ~~sites~~to ~~and~~the ~~domain~~additional ~~names (i.e.,~~territories ~~www.dynacam.com).~~of ~~Defendants~~Australia, ~~also~~the ~~agreed~~Cook ~~that~~Islands, ~~they~~Tonga, ~~would~~Samoa ~~cease~~Niue, and ~~desist~~Fiji. ~~from~~In ~~sending~~the ~~out~~event ~~emails~~that ~~concerning~~DEL declines ~~the~~or ~~Company~~is ~~and~~unable ~~those~~to ~~acting~~meet onthe ~~its~~terms ~~behalf.~~offered ~~Further~~by ~~under~~us ~~the~~for these additional ~~Settlement~~product ~~Agreement,~~and/or ~~the~~territorial ~~parties~~distribution ~~agreed~~rights, towe ~~permanently~~will ~~maintain~~be aentitled ~~November~~to offer ~~17, 2005~~those ~~preliminary~~rights ~~injunction~~to ~~restraining~~other ~~Defendants from:~~parties.

1.In order to ~~displaying,~~maintain ~~controlling~~its rights under the Agreement, DEL must annually purchase a minimum number of GENSETS to be determined and~~/or~~ ~~operating~~periodically ~~the~~reviewed ~~website~~by orboth ~~any~~parties. The ~~other~~Agreement ~~domain~~requires ~~containing~~us to exert reasonable efforts to supply DEL’s requirements for the ~~words~~GENSETS. ~~“dyna-cam~~Under the Agreement,” ~~dynacam~~DEL is obligated to promote our products through product shows,” ~~“Dyna-Cam~~advertising,” ~~“Dynacam”;~~a website presence, and showroom and/or product demonstration sites. DEL will be responsible for obtaining all licenses and permits necessary to sell our products in New Zealand.

2.The above description ~~exhibiting~~of ~~any~~the ~~display~~Distribution Agreement and the transactions contemplated thereby is a summary of terms, ~~product~~is not intended to be complete, and ~~advertisement~~is ~~bearing~~qualified in its entirety by the ~~mark~~complete ~~Dyna-Cam,~~text ~~“Dyna-Cam~~of ~~Engine~~that agreement,” ora ~~“Dyna-Cam~~copy ~~Engine~~of ~~Corporation”;~~which ~~and~~is attached as Exhibit 99.1 to this Current Report.

3. making, using, selling, marketing, and offering for sale, and conducting business certain products using the name(s) and mark(s) containing the words “dyna-cam,” dynacam,” “Dyna-Cam,” “Dynacam.”

In addition, the parties entered into a mutual release of claims, agreed to extinguish the pending litigation, bear their respective fees and costs, and provide for liquidated damages in the event of a breach of the Settlement Agreement.

On June 12, 2006, the Court signed a stipulation among the parties to convert the November 17, 2005 preliminary injunction into a permanent injunction. Thereafter, on June 22, 2006, the Court signed a stipulation among the parties to dismiss the action.

A copy of the Settlement Agreement is filed as Exhibit 10.1 to this Current Report.

SECTION 9 - FINANCIAL STATEMENTS AND EXHIBITS

Item 9.01

Exhibit 1099.~~1 Confidential~~l Distribution ~~Settlement~~ Agreement ~~and Mutual Release~~

SIGNATURES

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 hereunto duly authorized.

Axial Vector Engine Corporation.

/s/ Raymond Brouzes

Raymond Brouzes

Chief Executive Officer, Chief Financial Officer, ~~and Director~~

~~Date:~~ ~~June~~and ~~28, 2006~~Director

Date: July 18, 2006

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