UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

~~WASHINGTON~~Washington, D.C. 20549

____________________________

FORM 10-Q

x QUARTERLY REPORT UNDER SECTION 13 OR 15(Dd) OF THE SECURITIES EXCHANGE ACT OF 1934

~~EXCHANGE~~For ~~ACT~~the OFquarterly ~~1934~~period ended November 30, 2010

~~For~~o ~~the~~TRANSITION ~~Quarter~~REPORT ~~Ended~~UNDER ~~May~~SECTION ~~31,~~13 ~~2010~~OR 15(d) OF THE EXCHANGE ACT

ORFor the transition period from ______ to _______

oCommission ~~TRANSITION~~File ~~REPORT~~Number: ~~PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934~~000-52268

FOR THE TRANSITION PERIOD FROM _______________________ TO _______________________

Commission File # 000-52268

ASIAN DRAGON GROUP INC.

(~~Exact~~Name ~~name~~ of registrant as specified in its charter)

Nevada

Nevada		98-0418754
(State of incorporation)		(I.R.S. Employer Identification No.)

(State or other jurisdiction of incorporation or organization)

98-0418754

(IRS Employer Identification Number)

#108 - 1312 North Monroe Street

Spokane, Washington 99201

(Address of principal executive offices) ~~(Zip Code)~~

(509) 252-8428

(Registrant’s telephone ~~no., including area code~~number)

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

~~Indicate by check mark whether the registrant is a large accelerated filer~~Carrillo, anHuettel ~~accelerated~~& ~~filer~~Zouvas, ~~or a non-accelerated file.~~LLP

~~Large~~3033 ~~accelerated~~Fifth ~~filer~~Ave. oSuite ~~Accelerated filer o Non-accelerated filer o Smaller reporting company x~~400

~~Indicate~~San byDiego, ~~check~~CA ~~mark whether the registrant is a shell company as defined in Rule 12b-2 of the Exchange Act. Yes o No x~~92103

~~The~~Telephone ~~issuer~~(619) ~~had 38,775,000 shares of common stock issued and outstanding as of June 25, 2010.~~546-6100

Facsimile: (619) 546-6060

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 (§232.405 of this chapter) 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 (Not required)

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

	Large Accelerated Filer	o	Accelerated Filer	o
	Non-Accelerated Filer	o	Smaller Reporting Company	x

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

As of January 19, 2011, there were 38,775,000 shares of the Registrant’s common stock issued and outstanding.

Table of Contents

ASIAN DRAGON GROUP, INC. ~~AND SUBSIDIARY~~*

~~(An~~TABLE ~~Exploration~~OF ~~Stage Company)~~CONTENTS

		PAGE

PART I	FINANCIAL INFORMATION	3

ITEM 1.	FINANCIAL STATEMENTS (UNAUDITED)	3

ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	9

ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	11

ITEM 4.	CONTROLS AND PROCEDURES	11

PART II	OTHER INFORMATION	12

ITEM 1.	LEGAL PROCEEDINGS	12

ITEM 1.A.	RISK FACTORS	12

ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	12

ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	12

ITEM 4.	[REMOVED AND RESERVED]	13

ITEM 5.	OTHER INFORMATION	13

ITEM 6.	EXHIBITS	13

Special Note Regarding Forward-Looking Statements

Information included in this Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (“Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (“Exchange Act”). This information may involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Asian Dragon Group, Inc. (the “Company”), to be materially different from future results, performance or achievements expressed or implied by any forward-looking statements. Forward-looking statements, which involve assumptions and describe future plans, strategies and expectations of the Company, are generally identifiable by use of the words “may,” “will,” “should,” “expect,” “anticipate,” “estimate,” “believe,” “intend,” or “project” or the negative of these words or other variations on these words or comparable terminology. These forward-looking statements are based on assumptions that may be incorrect, and there can be no assurance that these projections included in these forward-looking statements will come to pass. Actual results of the Company could differ materially from those expressed or implied by the forward-looking statements as a result of various factors. Except as required by applicable laws, the Company has no obligation to update publicly any forward-looking statements for any reason, even if new information becomes available or other events occur in the future.

*Please note that throughout this Quarterly Report, and unless otherwise noted, the words "we," "our," "us," the "Company," or "Asian Dragon" refers to Asian Dragon Group, Inc.

Table of Contents

			Page
PART I. Financial Information
	Item 1. Financial Statements.
		Consolidated Balance Sheets at May 31, 2010 (unaudited) and August 31, 2009 (audited)	1
		Unaudited Consolidated Statements of Operations for the three month and nine month periods ended May 31, 2010 and May 31, 2009 and the Exploration Stage Period of August 15, 2006 to May 31, 2010	2
		Unaudited Consolidated Statements of Cash Flows for the nine month periods ended May 31, 2010 and May 31, 2009 and the Exploration Stage Period of August 15, 2006 to May 31, 2010	3
		Unaudited Consolidated Supplemental Disclosure of Non-cash Investing and Financing Activities for the nine month periods ended May 31, 2010 and May 31, 2009 and the Exploration Stage Period of August 15, 2006 to May 31, 2010	4
		Notes to Consolidated Unaudited Financial Statements	5
	Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		7
	Item 3. Quantitative and Qualitative Disclosures about Market Risk		10
	Item 4. Controls and Procedures		10
PART II. Other Information			12
	Item 1. Legal Proceedings		12
	Item 1A. Risk Factors		12
	Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		16
	Item 3. Defaults Upon Senior Securities		16
	Item 4. Submission of Matters to a Vote of Security Holders		16
	Item 5. Other Information		16
	Item 6. Exhibits		16
Signatures			17

Table of Contents

PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS ~~(unaudited)~~

ASIAN DRAGON GROUP INC. ~~AND SUBSIDIARY~~

(An Exploration Stage Company)

Consolidated Financial Statements

November 30, 2010

(expressed in U.S. dollars)

(unaudited)

	Index
Consolidated Balance Sheets	F–1
Consolidated Statements of Operations	F–2
Consolidated Statements of Cash Flows	F–3
Notes to the Consolidated Financial Statements	F–4

Table of Contents

ASIAN DRAGON GROUP INC.

(An Exploration Stage Company)

Consolidated Balance Sheets

	May 31, 2010 (Unaudited)			August 31, 2009
ASSETS
CURRENT ASSETS
Cash	$	897		$	3,829
Prepaid expenses		7,847			502
Total current assets		8,744			4,331
Total assets	$	8,744		$	4,331
LIABILITIES AND STOCKHOLDERS’ (DEFICIT)
CURRENT LIABILITIES
Accounts payable		23,023			25,185
Note payable (Note 3)		26,068			25,125
Shareholder loans (Note 3 and 4)		340,499			284,185
Total current liabilities	$	389,590		$	334,495
Total liabilities	$	389,590		$	334,495
COMMITMENTS AND CONTINGENCIES		-			-
STOCKHOLDERS’ EQUITY (DEFICIT)
Common shares, 100,000,000 shares par value $0.001 authorized, 38,775,000 issued and outstanding		38,775			38,775
Paid-in Capital		22,984,342			22,984,342
Accumulated deficit in the exploration stage		(23,188,858	)		(23,138,176	)
Accumulated deficit		(215,105	)		(215,105	)
Total stockholders’ (deficit)		(380,846	)		(330,164	)
Total liabilities and stockholders’ equity	$	8,744		$	4,331

(Expressed in U.S. dollars)

The accompanying notes to financial statements are an integral part of these financial statements

	November 30, 2010 $			August 31, 2010 $
	(unaudited)

ASSETS

Current Assets

Cash		735			25
Prepaid expenses and deposits		570			570

Total Assets		1,305			595

LIABILITIES AND STOCKHOLDERS’ DEFICIT

Current Liabilities

Accounts payable		23,523			23,523
Loans payable (Note 3)		26,695			26,382
Due to related party (Note 4)		349,483			344,643

Total Liabilities		399,701			394,548

Nature of Operations and Continuance of Business (Note 1)

Stockholders’ Deficit

Common stock, 100,000,000 shares authorized, $0.001 par value 38,775,000 shares issued and outstanding		38,775			38,775
Additional paid-in capital		22,984,342			22,984,342
Accumulated deficit		(215,105	)		(215,105	)
Deficit accumulated during the exploration stage		(23,206,408	)		(23,201,965	)

Total Stockholders’ Deficit		(398,396	)		(393,953	)

Total Liabilities and Stockholders’ Deficit		1,305			595

1(The accompanying notes are an integral part of these consolidated financial statements)

F-1

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ASIAN DRAGON GROUP INC. ~~AND SUBSIDIARY~~

(An Exploration Stage Company)

Consolidated Statements of Operations

	Three Months ended May 31, 2010			Three Months ended May 31, 2009			Nine Months ended May 31, 2010			Nine Months ended May 31, 2009			August 15, 2006 (inception) through May 31, 2010
EXPENSES:
Exploration licenses	$	-		$	-		$	-		$	-		$	13,372,593
Exploration expenses		-			22,635			-			22,635			72,850
Agent fees		-			-			-			-			1,852,500
Professional and consultant fees		2,381			9,500			27,641			50,560			531,616
Stock-based compensation		-			-			-			-			6,975,491
Investor relations		-			1,842			-			1,842			137,956
Administrative expenses		1,517			2,840			10,401			10,927			200,029
Total expenses	$	3,898		$	36,817		$	38,042		$	85,964		$	23,143,035
Net loss from operations	$	(3,898	)	$	(36,817	)	$	(38,042	)	$	(85,964	)	$	(23,143,035	)
Interest expense		(4,461	)		(3,794	)		(12,640	)		(9,497	)		(45,823	)
Net Income (Loss) from continuing operations:		(8,359	)		(40,611	)		(50,682	)		(95,461	)		(23,188,858	)
Net loss from discontinued operations :
– terminated subsidiary		-			-			-			-			(68,995	)
– change from Development to Exploration Stage		-			-			-			-			(146,110	)
Net loss from discontinued operations		-			-			-			-			(215,105	)
Net Income (Loss)	$	(8,359	)	$	(40,611	)	$	(50,682	)	$	(95,461	)	$	(23,403,963	)
Earnings (Loss) per common share, basic and diluted:	$	Nil		$	Nil		$	Nil		$	Nil
Weighted average shares outstanding , basic and diluted		38,775,000			38,775,000			38,775,000			38,775,000

(Expressed in U.S. dollars)

~~The accompanying notes to financial statements are an integral part of these financial statements~~(unaudited)

							Accumulated from
	Three Months			Three Months			August 15, 2006
	Ended			Ended			(Date of Inception)
	November 30,			November 30,			to November 30,
	2010			2009			2010
	$			$			$

Revenue		–			–			–

Expenses

General and administrative		30			9,160			9,706,271
Mineral exploration costs		–			–			72,850
Mineral property costs		–			–			13,372,593

Total Expenses		30			9,160			23,151,714

Loss Before Other Expense		(30	)		(9,160	)		(23,151,714	)

Other Expense

Interest expense		(4,413	)		(3,891	)		(54,694	)

Net Loss From Continuing Operations		(4,443	)		(13,051	)		(23,206,408	)

Discontinued operations		–			–			(215,105	)

Net loss		(4,443	)		(13,051	)		(23,421,513	)


Net Loss Per Share, Basic and Diluted		–			–


Weighted Average Shares Outstanding		38,775,000			38,775,000

(The accompanying notes are an integral part of these consolidated financial statements)

F-2

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ASIAN DRAGON GROUP INC. ~~AND SUBSIDIARY~~

(An Exploration Stage Company)

Consolidated Statements of Cash Flows

	Nine Months ended May 31, 2010			Nine Months ended May 31, 2009			August 15, 2006 (inception) through May 31, 2010
Cash flows from operating activities:
Net Income (Loss) for period	$	(50,682	)	$	(95,461	)	$	(23,403,963	)
Reconciling adjustments:
Adjustments to reconcile net loss to net cash used in operating activities:
Accrued interest on shareholder loans		11,697			8,599			43,352
Accrued interest on Note payable		943			899			2,471
Common stock issued for compensation		-			-			1,150,000
Additional Paid-In Capital relating to Options – compensation expense		-			-			5,825,491
Common stock issued for license fee payments		-			-			7,050,000
Common stock issued for agent fee payments		-			-			1,762,500
Accrued interest on shareholder loans related to discontinued operations		-			-			8,761
Depreciation related to discontinued operations		-			-			318
Common stock issued for shareholder debt Conversion related to discontinued operations		-			-			10,000
Change in operating assets and liabilities:
Subscription receivable		-			-			-
Prepaid expenses		(7,345	)		197			(7,847	)
Accounts payable		(2,162	)		17,528			23,023
Prepaid expenses related to discontinued operations		-			-			9,500
Accounts payable and accrued expenses related to discontinued operations		-			-			(9,220	)
Net cash provided (used) by operating activities		(47,549	)		(68,238	)		(7,535,614	)
Cash flows from investing activities:
Purchase (sale) of property and equipment related to discontinued operations		-			-			(318	)
Net Cash provided (used) by investing activities		-			-			(318	)
(continued)

(Expressed in U.S. dollars)

~~The accompanying notes to financial statements are an integral part of these financial statements~~(unaudited)

							Accumulated from
	Three Months			Three Months			August 15, 2006
	Ended			Ended			(Date of Inception)
	November 30,			November 30,			to November 30,
	2010			2009			2010
	$			$			$

Operating Activities

Net loss from continuing operations		(4,443	)		(13,051	)		(23,206,408	)

Adjustments to reconcile net loss to net cash used in operating activities:

Shares issued for mineral property licenses		–			–			8,812,500
Stock-based compensation		–			–			6,975,491

Changes in operating assets and liabilities

Prepaid expenses and deposits		–			(14,298	)		(570	)
Accounts payable		–			344			23,523
Accrued interest on note payable		313			316			3,098
Due to related party		4,100			3,575			70,357

Net Cash Used In Operating Activities		(30	)		(23,114	)		(7,322,009	)

Financing Activities

Proceeds from loans payable		–			–			23,597
Advances from related party		740			19,617			288,774
Proceeds from common stock issued		–			–			7,225,126

Net Cash Provided by Financing Activities		740			19,617			7,537,497

Discontinued Operations

Operating activities		–			–			(214,507	)
Investing activities		–			–			(318	)
Financing activities		–			–			–

Net Cash Provided by Discontinued Operations		–			–			(214,825	)

Decrease in Cash		710			(3,497	)		663

Cash, Beginning of Period		25			3,829			72

Cash, End of Period		735			332			735

Non-cash Investing and Financing Activities

Shares issued to settle related party debt		–			–			10,000

Supplemental Disclosures

Interest paid		–			–			–
Income taxes paid		–			–			–

(The accompanying notes are an integral part of these consolidated financial statements)

F-3

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ASIAN DRAGON GROUP INC. ~~AND SUBSIDIARY~~

(An Exploration Stage Company)

~~Consolidated~~Notes ~~Statements~~to ofthe ~~Cash~~Consolidated ~~Flows~~Financial Statements

	Nine Months ended May 31, 2010			Nine Months ended May 31, 2009		August 15, 2006 (inception) through May 31, 2010
(continued)
Cash flows from financing activities:
Common stock issued for cash		-			-		7,193,860
Loans by stockholders		44,617			78,068		135,345
Note payable		-			-		23,597
Common stock issued for cash related to discontinued operations		-			-		31,266
Shareholder loans related to discontinued operations		-			-		152,689
Net cash provided by financing activities		44,617			78,068		7,536,757
Net increase (decrease) in cash		(2,932	)		9,830		825
Cash, beginning of period		3,829			4,423		72
Cash, end of period	$	897		$	14,253	$	897

November 30, 2010

~~Consolidated~~(Expressed ~~Supplemental~~in ~~Disclosure~~U.S. ~~of Non-cash Investing and Financing Activities~~dollars)

	Nine Months ended May 31, 2010		Nine Months ended May 31, 2009		August 15, 2006 (inception) through May 31, 2010
Common stock issued for compensation		-		-		1,150,000
Additional Paid-In Capital relating to Options		-		-		5,825,491
Common stock issued for license fee payments		-		-		7,050,000
Common stock issued for agent fee payments		-		-		1,762,500
Common stock issued shareholder debt conversion related to discontinued operations		-		-		10,000

(unaudited)

~~The~~1. ~~accompanying~~Basis ~~notes to financial statements are an integral part~~ of ~~these financial statements~~Presentation

4The accompanying consolidated financial statements of Asian Dragon Group Inc.(the “Company”) should be read in conjunction with the financial statements and accompanying notes filed with the U.S. Securities and Exchange Commission in the Company’s Annual Report on Form 10-K for the fiscal year ended August 31, 2010. In the opinion of management, the accompanying financial statements reflect all adjustments of a recurring nature considered necessary to present fairly the Company’s financial position and the results of its operations and its cash flows for the periods shown.

The preparation of financial statements in accordance with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported. Actual results could differ materially from those estimates. The results of operations and cash flows for the periods shown are not necessarily indicative of the results to be expected for the full year.

These financial statements have been prepared on a going concern basis, which implies the Company will continue to realize its assets and discharge its liabilities in the normal course of business. The Company has never generated revenues since inception of the exploration stage and is unlikely generate earnings in the immediate or foreseeable future. The continuation of the Company as a going concern is dependent upon the continued financial support from its shareholders, the ability of the Company to obtain necessary equity financing to continue operations, and the attainment of profitable operations. As at November 30, 2010, the Company has a working capital deficiency of $398,396 and has accumulated losses of $23,421,513 since inception. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. These financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

2.	Summary of Significant Accounting Policies

a) Recent Accounting Pronouncements

In January 2010, the FASB issued an amendment to ASC 820, “Fair Value Measurements and Disclosures”, to require reporting entities to separately disclose the amounts and business rationale for significant transfers in and out of Level 1 and Level 2 fair value measurements and separately present information regarding purchase, sale, issuance, and settlement of Level 3 fair value measures on a gross basis. This standard, for which the Company is currently assessing the impact, is effective for interim and annual reporting periods beginning after December 15, 2009 with the exception of disclosures regarding the purchase, sale, issuance, and settlement of Level 3 fair value measures which are effective for fiscal years beginning after December 15, 2010. The adoption of the applicable standard on September 1, 2010 did not have a material effect on the Company’s consolidated financial statements.

The Company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

b) Reclassifications

Certain comparative figures have been reclassified to conform to the current year's presentation.

3.	Loan Payable

As at November 30, 2010, the Company owes $26,695 (August 31, 2010 – $26,382) to a non-related party which bears interest at 5% per annum, is unsecured, and due on demand. Included in this balance is $3,098 (2010 - $2,785) in accrued interest payable.

4.	Related Party Transactions

As at November 30, 2010, the Company owes $349,483 (August 31, 2010 - $344,643) to the President of the Company which bears interest at 5% per annum, is unsecured, and due on demand. Included in this balance is $19,941 (August 31, 2010 - $15,841) in accrued interest payable.

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ASIAN DRAGON GROUP INC. ~~AND SUBSIDIARY~~

(An Exploration Stage Company)

Notes to the Consolidated Financial Statements

~~NOTE~~November 130, ~~– Nature of Business and Basis of Presentation~~2010

~~Asian Dragon Group Inc.~~ (~~“Asian~~Expressed ~~Dragon”,~~in ~~“ADG”, “We”, the “Registrant”, or the “Company”) was incorporated as a Nevada corporation on June 11, 2003~~U. ~~Asian Dragon was established to develop projects which focus on China’s growing precious and base metals reserves and markets~~S. dollars)

~~On April 10, 2008 the Company incorporated a British Columbia company named Asian Dragon Silver Inc.~~ (~~“ADSI”~~unaudited) ~~as a wholly owned subsidiary. The financial statements of the Company are presented on a consolidated basis and include all accounts of both the Company and its subsidiary.~~

~~The~~5. ~~Company~~Stock ~~is currently evaluating new opportunities and plans to develop a strategic plan based in the mineral exploration industry.~~Options

~~Our~~A ~~fiscal~~summary ~~year~~of ~~end~~the Company’s stock option activity is ~~August~~as ~~31st.~~follows:

The financial statements included herein have been prepared by the Company in accordance with accounting principles generally accepted in the United States for interim financial information. Certain information and footnote disclosures normally included in the financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted as allowed by such rules and regulations, and the Company believes that the disclosures are adequate to make the information presented not misleading. It is suggested that these financial statements be read in conjunction with the August 31, 2009 audited financial statements and the accompanying notes included in the Company’s Form 10-K filed with the Commission. While management believes the procedures followed in preparing these financial statements are reasonable, the accuracy of the amounts are in some respects dependent upon the facts that will exist, and procedures that will be followed by the Company later in the year. The results of operations for the interim periods are not necessarily indicative of the results for the full year. In management’s opinion all adjustments necessary for a fair presentation of the Company’s financial statements are reflected in the interim periods included, and are of a normal recurring nature.

Number of Options

Weighted Average Exercise

Price

Weighted Average Remaining Contractual Life (years)

Aggregate

Intrinsic

Value

Outstanding and exercisable, August 31, 2010 and November 30, 2010

2,500,000

2.13

6.8

–

~~Exploration Stage Activities~~8

The Company has been in the exploration stage since August 15, 2006 and has not yet realized any revenues from its operations.

Reclassifications

Certain prior period account balances have been reclassified to conform to current period presentation.

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ASIAN DRAGON GROUP INC. AND SUBSIDIARY

(An Exploration Stage Company)

Notes to Consolidated Financial Statements

NOTE 2 – Going Concern

Generally accepted accounting principles in the United States of America contemplate the continuation of the Company as a going concern. However, the Company has an operating loss from continuing operations for the nine month period ending May 31, 2010 of $(50,682) and has accumulated net losses since its inception in the amount of $(23,403,963). Additionally the Company has a deficit in working capital and stockholders equity and has had limited business operations, which raises substantial doubt about the Company’s ability to continue as a going concern. The continuation of the Company is dependent on many factors, many of which have a high degree of uncertainty.

The Company’s ability to continue as a going concern is contingent upon the successful completion of additional financing arrangements and its ability to successfully fulfill its business plan. Management is attempting to raise additional funds to finance the operating and capital requirements of the Company through a combination of equity and debt financings. While the Company is making its best efforts to achieve the above plans, there is no assurance that any such activity will generate funds that will be available for operations. The accompanying financial statements do not include any adjustments that might result from the resolution of these matters.

NOTE 3 – Shareholder Loan and Note Payable

At May 31, 2010, the Company had a shareholder loan outstanding from a related party totaling $340,499 which included $43,352 of accrued interest. This loan is uncollateralized and has no fixed repayment dates. During the nine months ended May 31, 2010, this shareholder loan increased by $44,617, excluding accrued interest.

At May 31, 2010, the Company had one Note Payable outstanding of $26,068, which included $2,471 of accrued interest. This loan is uncollateralized, has no fixed repayment date and is callable at any time.

NOTE 4 – Related Party Transactions

During the three months ending May 31, 2010 related party transactions included the shareholder loan activity recorded in Note 3.

NOTE 5 – Subsequent Events

Subsequent events have been evaluated through June 25, 2010, which is the date the financial statements were filed.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS

Certain information included herein contains forward-looking statements that involve risks and uncertainties within the meaning of Sections 27A of the Securities Act, as amended; Section 21E of the Securities Exchange Act of 1934. These sections provide that the safe harbor for forward looking statements does not apply to statements made in initial public offerings. The words, such as "may," "would," "could," "anticipate," "estimate," "plans," "potential," "projects," "continuing," "ongoing," "expects," "believe," "intend" and similar expressions and variations thereof are intended to identify forward-looking statements. These statements appear in a number of places in this Form 10-Q and include all statements that are not statements of historical fact regarding intent, belief or current expectations of the Company, our directors or our officers, with respect to, among other things: (i) our liquidity and capital resources; (ii) our financing opportunities and plans; (iii) continued development of business opportunities; (iv) market and other trends affecting our future financial condition; (v) our growth and operating strategy. Investors 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 as a result of various factors. The factors that might cause such differences include, among others, the following: (i) we have incurred significant losses since our inception; (ii) any material inability to successfully develop our business plans; (iii) any adverse effect or limitations caused by government regulations; (iv) any adverse effect on our ability to obtain acceptable financing; (v) competitive factors; and (vi) other risks including those identified in our other filings with the Securities and Exchange Commission.

General

Asian Dragon was established to develop projects which focus on China’s growing precious and base metals reserves and markets.

Asian Dragon Group Inc. (“Asian Dragon”, “ADG”, “we”, the “Registrant”, or the “Company”) was incorporated in Nevada on June 11, 2003 and on August 10, 2006 filed Articles of Amendment with the Nevada Secretary of State to change its name to Asian Dragon Group Inc. Our fiscal year end is August 31st.

On April 10, 2008 the Company incorporated a British Columbia company named Asian Dragon Silver Inc. (“ADSI”) as a wholly owned subsidiary. The financial statements of the Company are presented on a consolidated basis and include all accounts of both the Company and its subsidiary.

The Company’s common stock is traded in the NASD Over-The-Counter market under the symbol “AADG” and the Company is also listed on the Frankfurt Stock Exchange under the trading symbol “P2J1”.

RESULTS OF OPERATIONS FOR THE THREE MONTH PERIODS ENDED ~~MAY~~NOVEMBER 3130, 2010 AND ~~MAY~~NOVEMBER 3130, 2009 AND THE EXPLORATION STAGE PERIOD FROM AUGUST 15, 2006 TO ~~MAY~~NOVEMBER 3130, 2010

Revenues

~~ADG~~We ~~did~~have not ~~earn~~generated any revenues during the periods included in the financial statements in this report.

7Operations and Net Loss

We incurred net losses for the three month periods ended November 30, 2010 and 2009 of $4,443 and $13,051, respectively. The net loss since the inception of the exploration stage was $23,421,513. The net loss for the current period is made up of mostly interest accrued on the loan payable and related party debt. In the comparable period, the Company incurred general and administrative expenses of $9,160 and interest expense of $3,891.

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Expenses

Our operating expenses are classified into seven categories:

- Exploration Licenses

- Exploration Expenses

- Agent Fees

- Professional and Consultant Fees

- Stock Based Compensation – officers and directors

- Investor Relations

- Administrative Expenses

Exploration Licenses

Expenditures for Exploration Licenses were $nil and $nil respectively for the three month and nine month periods ended May 31, 2010 versus $nil and $nil respectively for the same periods ended May 31, 2009. For the period of August 15, 2006 (inception) to May 31, 2010 (the “Exploration Stage”) costs for Exploration Licenses totaled $13,372,593. We cannot predict how these expenses may vary during the next twelve months.

Exploration Expenses

Exploration Expenses were $nil and $nil respectively for the three and nine month periods ended May 31, 2010 versus $22,635 and $22,635 respectively for the same periods ended May 31, 2009. Expenses for the Exploration Stage totaled $72,850. We cannot predict how these expenses may vary during the next twelve months.

Agent Fees

Agent Fees were $nil and $nil for the three and nine month periods ended May 31, 2010 versus $nil and $nil respectively for the same periods ended May 31, 2009. Agent Fees for the Exploration Stage totaled $1,852,500. We cannot predict how these expenses may vary during the next twelve months.

Professional and Consultant Fees

Professional & Consultant Fees are comprised of fees audit, accounting, legal and other professionals. During the three and nine month periods ended May 31, 2010 versus the same periods ended May 31, 2009, these fees were $2,381 and $27,641 versus $9,500 and $50,560, respectively. For the Exploration Stage, these costs totaled $531,616. We anticipate Professional & Consultant Fees will remain at current levels in the upcoming twelve months.

Stock Based Compensation – officers and directors

Stock Based Compensation expenses totaled $nil and $nil for the three and nine month periods ended May 31, 2010 versus $nil and $nil respectively for the same periods ended May 31, 2009. During the Exploration Stage these costs totaled $6,975,491. Past expenses have related to stock and option issuances to our officers and directors. We do not anticipate incurring stock based compensation expenses during the next twelve months.

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Investor Relations

Investor Relations expenses comprise costs for press releases, maintenance of the Company’s website and other investor information initiatives. During the three and nine month periods ended May 31, 2010 versus the same periods ended May 31, 2009, these expenses totaled $nil and $nil versus $1,842 and $1,842, respectively. For the Exploration Stage, Investor Relations expenses totaled $137,956. We cannot predict how expenses may vary during the next twelve months.

Administrative Expenses

Administrative Expenses were $1,517 and $10,401 versus $2,840 and $10,957 for the three and nine month periods ended May 31, 2010 versus the three and nine month periods ended May 31, 2009, respectively. For the Exploration Stage, Administrative Expenses totaled $200,029. These expenses are composed of travel, Edgar agent filing fees, stock transfer agent fees and general office expenses. We anticipate administrative expenses will remain at current levels in the upcoming twelve months.

Net Income (Loss)

We incurred net losses for the three and nine month periods ended May 31, 2010 of $(8,359) and $(50,682), respectively and net losses for the three and nine month periods ended May 31, 2009 of $(40,611) and $(95,461), respectively. The Net Loss for the Exploration Stage was $(23,403,963).

Liquidity and Capital Resources

Since its inception, the Company has financed its cash requirements from sale of common stock and shareholder loans. Uses of funds have included activities to establish and develop our business. The Company’s principal sources of liquidity as of ~~May~~November 3130, 2010, consisted of cash resources of $~~897,~~735 ~~prepaid expenses of $7,847,~~ and shareholder loans from a related party. Under the shareholder loans, loan advances to or on behalf of ADG or ADSI, bear interest at 5% per annum, calculated and compounded annually, not in advance. ADG or ADSI are required to repay the outstanding principal and interest at any time on demand. Prepayment of all or a portion of the outstanding principal and interest may be made by ADG or ADSI at any time without notice, bonus or penalty. The amount outstanding under the shareholder loan was $~~340~~349,~~499~~483 including accrued interest as of ~~May~~November 3130, 2010. We also have a loan outstanding to a private company totaling $26,~~068~~695 including accrued interest. This loan ~~bear~~bears interest at 5% per annum, is calculated and compounded annually, not in advance. ADG may be required to repay the outstanding principal and interest at any time on demand. Prepayment of all or a portion of the outstanding principal and interest may be made by ADG at any time without notice, bonus or penalty. Since ~~Exploration Stage~~ inception through to and including ~~May~~November 3130, ~~2008~~2010, we have executed cash sales of our common shares totaling $7,~~193~~225,~~860~~126 through private placements.

Material Events and Uncertainties

Our operating results are difficult to forecast. Our prospects should be evaluated in light of the risks, expenses and difficulties commonly encountered by comparable early stage companies in rapidly evolving markets. There can be no assurance that we will successfully address such risks, expenses and difficulties.

Employees

As of ~~May~~November 3130, 2010, we had no employees and used contracted services to perform geological work, legal services and our bookkeeping. Additionally our CEO was engaged on a consulting basis. Going forward, the Company will use consultants with specific skills to assist with various aspects of its project evaluation, due diligence, acquisition initiatives, corporate governance and property management.

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Critical Accounting Policies

Asian Dragon’s financial statements are prepared on a consolidated basis which includes the accounts of both the Company and its subsidiary and include related public financial information based on the application of accounting principles generally accepted in the United States (“GAAP”). GAAP requires the use of estimates; assumptions, judgments and subjective interpretations of accounting principles that have an impact on the assets, liabilities, revenues and expense amounts reported. These estimates can also affect supplemental information contained in our external disclosures including information regarding contingencies, risk and financial condition. We believe our use if estimates and underlying accounting assumptions adhere to GAAP and are consistently and conservatively applied. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ materially from these estimates under different assumptions or conditions. We continue to monitor significant estimates made during the preparation of our financial statements.

Our significant accounting policies are summarized in ~~NOTE~~Note 2 of the consolidated financial statements included with our Report on Form 10-K for fiscal ~~2009~~2010. While all these significant accounting policies impact its financial condition and results of operations, Asian Dragon views certain of these policies as critical. Policies determined to be critical are those policies that have the most significant impact on Asian Dragon’s financial statements and require management to use a greater degree of judgment and estimates. Actual results may differ from those estimates. We have expensed all development costs related to our establishment.

~~ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK~~10

~~EXCHANGE~~Table ~~RATE~~of ~~FLUCTUATION RISK~~Contents

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK EXCHANGE RATE FLUCTUATION RISK

Our reporting currency is United States Dollars (“USD”). We have not entered into derivative contracts either to hedge existing risk or for speculative purposes.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in the Company's Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to the Company's management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure based closely on the definition of "disclosure controls and procedures" in Rule 13a-15(e). The Company's disclosure controls and procedures are designed to provide a reasonable level of assurance of reaching the Company's desired disclosure control objectives. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. The Company's certifying officer has concluded that the Company's disclosure controls and procedures are not effective in reaching that level of assurance.

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As of the end of the period being reported upon, the Company carried out an evaluation, under the supervision and with the participation of the Company's management, including the Company's Chief Executive Officer and the Company's Chief Financial Officer, of the effectiveness of the design and operation of the Company's disclosure controls and procedures. Based on the foregoing, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective.

Management's Report on Internal Control over Financial Reporting

Management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Section 13a-15(f) of the Securities Exchange Act of 1934, as amended). Internal control over financial reporting is a process designed by, or under the supervision of, the Company's CFO to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the Company's financial statements for external reporting purposes in conformity with U.S. generally accepted accounting principles and include those policies and procedures that (i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and disposition of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (iii) 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.

As of ~~May~~November 3130, 2010, management conducted an assessment of the effectiveness of the Company's internal control over financial reporting based on the framework established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on the criteria established by COSO management concluded that the Company's internal control over financial reporting was not effective as of ~~May~~November 3130, 2010, as a result of the identification of the material weaknesses described below.

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A material weakness is a deficiency or combination of deficiencies in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis.

Specifically, management identified the following control deficiencies. (1) The Company has not properly segregated duties as one or two individuals initiate, authorize, and complete all transactions. The Company has not implemented measures that would prevent the individuals from overriding the internal control system. The Company does not believe that this control deficiency has resulted in deficient financial reporting because the Chief Financial Officer is aware of his responsibilities under the SEC's reporting requirements and personally certifies the financial reports. (2) The Company has installed accounting software that does not prevent erroneous or unauthorized changes to previous reporting periods and does not provide an adequate audit trail of entries made in the accounting software.

Accordingly, while the Company has identified certain material weaknesses in its system of internal control over financial reporting, it believes that it has taken reasonable steps to ascertain that the financial information contained in this report is in accordance with generally accepted accounting principles. Management has determined that current resources would be appropriately applied elsewhere and when resources permit, they will alleviate material weaknesses through various steps.

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Changes in Internal Control over Financial Reporting

During the quarter ended ~~May~~November 3130, 2010, no material changes were made to the Company’s internal control over financial reporting

Remediation Plan

Addition of staff

We have identified that additional staff will be required to properly segment the accounting duties of the Company. However, we do not currently have resources to fulfill this part of our plan and will be addressing this matter once sufficient resources are available.

PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

There is no litigation pending or threatened by or against us.

ITEM 1A. RISK FACTORS

~~The~~We ~~following~~are ~~risk~~a ~~factors~~smaller ~~should~~reporting becompany ~~considered~~as indefined ~~connection~~by ~~with~~Rule an12b-2 ~~evaluation~~of the Securities Exchange Act of ~~our~~1934 ~~business:~~and are not required to provide the information under this item.

THE COMPANY'S LIMITED OPERATING HISTORY MAKES IT DIFFICULT FOR YOU TO JUDGE ITS PROSPECTS.

The Company has a limited operating history upon which an evaluation of the Company, its current business and its prospects can be based. You should consider any purchase of the Company's shares in light of the risks, expenses and problems frequently encountered by all companies in the early stages of its corporate development.

LIQUIDITY AND CAPITAL RESOURCES ARE UNCERTAIN.

For the three months ended May 31, 2010, the Company had a Net Loss of $(8,359). The Company may need to raise additional capital by way of an offering of equity securities, an offering of debt securities, or by obtaining financing through a bank or other entity. The Company has not established a limit as to the amount of debt it may incur nor has it adopted a ratio of its equity to debt allowance. If the Company needs to obtain additional financing, there is no assurance that financing will be available from any source, that it will be available on terms acceptable to us, or that any future offering of securities will be successful. If additional funds are raised through the issuance of equity securities, there may be a significant dilution in the value of the Company’s outstanding common stock. The Company could suffer adverse consequences if it is unable to obtain additional capital which would cast substantial doubt on its ability to continue its operations and growth.

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THE VALUE AND TRANSFERABILITY OF THE COMPANY'S SHARES MAY BE ADVERSELY IMPACTED BY THE LIMITED TRADING MARKET FOR ITS SHARES AND THE PENNY STOCK RULES.

There is only a limited trading market for the Company's shares. The Company's common stock is traded in the over-the-counter market and "bid" and "asked" quotations regularly appear on the OTC Bulletin Board under the symbol "AADG" and the Company is also listed on the Frankfurt Stock Exchange under the trading symbol “P2J1”. There can be no assurance that the Company's common stock will trade at prices at or above its present level and an inactive or illiquid trading market may have an adverse impact on the market price. In addition, holders of the Company's common stock may experience substantial difficulty in selling their securities as a result of the "penny stock rules" which restrict the ability of brokers to sell certain securities of companies whose assets or revenues fall below the thresholds established by those rules.

FUTURE SALES OF SHARES MAY ADVERSELY IMPACT THE VALUE OF THE COMPANY'S STOCK.

If required, the Company may seek to raise additional capital through the sale of common stock. Future sales of shares by the Company or its stockholders could cause the market price of its common stock to decline.

MINERAL EXPLORATION AND DEVELOPMENT ACTIVITIES ARE SPECULATIVE IN NATURE.

Resource exploration and development is a speculative business, characterized by a number of significant risks including, among other things, unprofitable efforts resulting not only from the failure to discover mineral deposits but from finding mineral deposits which, though present, are insufficient in quantity and quality to return a profit from production. The marketability of minerals acquired or discovered by the Company may be affected by numerous factors which are beyond the control of the Company and which cannot be accurately predicted, such as market fluctuations, the proximity and capacity of milling facilities, mineral markets and processing equipment and such other factors as government regulations, including regulations relating to royalties, allowable production, importing and exporting of minerals and environmental protection, the combination of which factors may result in the Company not receiving an adequate return of investment capital.

Substantial expenditures are required to establish ore reserves through drilling, to develop metallurgical processes to extract the metal from the ore and, in the case of new properties, to develop the mining and processing facilities and infrastructure at any site chosen for mining. Although substantial benefits may be derived from the discovery of a major mineralized deposit, no assurance can be given that minerals will be discovered in sufficient quantities and grades to justify commercial operations or that funds required for development can be obtained on a timely basis. Estimates of reserves, mineral deposits and production costs can also be affected by such factors as environmental permitting regulations and requirements, weather, environmental factors, unforeseen technical difficulties, unusual or unexpected geological formations and work interruptions. In addition, the grade of ore ultimately mined may differ from that indicated by drilling results. Short term factors relating to reserves, such as the need for orderly development of ore bodies or the processing of new or different grades, may also have an adverse effect on mining operations and on the results of operations. Material changes in ore reserves, grades, stripping ratios or recovery rates may affect the economic viability of any project.

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THE COMPANY WILL BE SUBJECT TO OPERATING HAZARDS AND RISKS WHICH MAY ADVERSELY AFFECT THE COMPANY'S FINANCIAL CONDITION.

Mineral exploration involves many risks, which even a combination of experience, knowledge and careful evaluation may not be able to overcome. The Company's operations will be subject to all the hazards and risks normally incidental to exploration, development and production of metals, such as unusual or unexpected formations, cave-ins or pollution, all of which could result in work stoppages, damage to property and possible environmental damage. The Company does not have general liability insurance covering its operations and does not presently intend to obtain liability insurance as to such hazards and liabilities. Payment of any liabilities as a result could have a materially adverse effect upon the Company's financial condition

THE COMPANY'S ACTIVITIES WILL BE SUBJECT TO ENVIRONMENTAL AND OTHER INDUSTRY REGULATIONS WHICH COULD HAVE AN ADVERSE EFFECT ON THE FINANCIAL CONDITION OF THE COMPANY.

The Company's activities are subject to environmental regulations promulgated by government agencies from time to time. Environmental legislation generally provides for restrictions and prohibitions on spills, releases or emissions of various substances produced in association with certain mining industry operations, such as seepage from tailing disposal areas, which would result in environmental pollution. A breach of such legislation may result in imposition of fines and penalties. In addition, certain types of operations require the submission and approval of environmental impact assessments. Environmental legislation is evolving in a manner which means stricter standards and enforcement, fines and penalties for non-compliance are more stringent. Environmental assessments of proposed projects carry a heightened degree of responsibility for companies and directors, officers and employees. The cost of compliance with changes in governmental regulations could have an adverse effect on the financial condition of the Company.

The operations of the Company include exploration and development activities and commencement of production on its properties, require permits from various federal, state, provincial and local governmental authorities and such operations are and will be governed by laws and regulations governing prospecting, development, mining, production, exports, taxes, labor standards, occupational health, waste disposal, toxic substances, land use, environmental protection, mine safety and other matters. Companies engaged in the development and operation of mines and related facilities generally experience increased costs and delays in production and other schedules as a result of the need to comply with applicable laws, regulations and permits.

Failure to comply with applicable laws, regulations, and permitting requirements may result in enforcement actions, including orders issued by regulatory or judicial authorities causing operations to cease or be curtailed, and may include corrective measures requiring capital expenditures, installation of additional equipment, or remedial actions. Parties engaged in mining operations may be required to compensate those suffering loss or damage by reason of the mining activities and may have civil or criminal fines or penalties imposed for violations of applicable laws or regulations and, in particular, environmental laws.

COMPETITION MAY HAVE AN IMPACT ON THE COMPANY'S ABILITY TO ACQUIRE ATTRACTIVE PRECIOUS METALS PROPERTIES, WHICH MAY HAVE AN ADVERSE IMPACT ON THE COMPANY'S OPERATIONS.

Significant and increasing competition exists for the limited number of precious metals acquisition opportunities available. As a result of this competition, some of which is with large established mining companies with substantial capabilities and greater financial and technical resources than the Company, the Company may be unable to acquire attractive precious metals properties on terms it considers acceptable. Accordingly, there can be no assurance that any exploration program intended by the Company on properties it intends to acquire will yield any reserves or result in any commercial mining operation.

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DOWNWARD FLUCTUATIONS IN METAL PRICES MAY SEVERELY REDUCE THE VALUE OF THE COMPANY.

The Company has no control over the fluctuations in the prices of the metals for which it is exploring. A significant decline in such prices would severely reduce the value of the Company.

THE COMPANY CURRENTLY RELIES ON CERTAIN KEY INDIVIDUALS AND THE LOSS OF ONE OF THESE CERTAIN KEY INDIVIDUALS COULD HAVE AN ADVERSE EFFECT ON THE COMPANY.

The Company's success depends to a certain degree upon certain key members of the management. These individuals are a significant factor in the Company's growth and success. The loss of the service of members of the management and advisory board could have a material adverse effect on the Company. In particular, the success of the Company is highly dependent upon the efforts of the President & CEO, CFO, PAO, Treasurer & Secretary, Chair & Director of the Company, John Karlsson, the loss of whose services would have a material adverse effect on the success and development of the Company.

THE COMPANY DOES NOT MAINTAIN KEY MAN INSURANCE TO COMPENSATE THE COMPANY FOR THE LOSS OF CERTAIN KEY INDIVIDUALS.

The Company does not anticipate having key man insurance in place in respect of its senior officers or personnel, although the Board has discussed and investigated the prospect of obtaining key man insurance for John Karlsson.

WE ARE AN EXPLORATION STAGE COMPANY, AND THERE IS NO ASSURANCE THAT A COMMERCIALLY VIABLE DEPOSIT OR "RESERVE" EXISTS ON ANY PROPERTIES FOR WHICH THE COMPANY HAS, OR MIGHT OBTAIN, AN INTEREST.

The Company is an exploration stage company and cannot give assurance that a commercially viable deposit, or “reserve,” exists on any properties for which the Company currently has (through an option) or may have (through potential future joint venture agreements or acquisitions) an interest. Therefore, determination of the existence of a reserve depends on appropriate and sufficient exploration work and the evaluation of legal, economic, and environmental factors. If the Company fails to find a commercially viable deposit on any of its properties, its financial condition and results of operations will be materially adversely affected.

WE REQUIRE SUBSTANTIAL FUNDS MERELY TO DETERMINE WHETHER COMMERCIAL PRECIOUS METAL DEPOSITS EXIST ON OUR PROPERTIES.

Any potential development and production of the Company’s exploration properties depends upon the results of exploration programs and/or feasibility studies and the recommendations of duly qualified engineers and geologists. Such programs require substantial additional funds. Any decision to further expand the Company’s operations on these exploration properties is anticipated to involve consideration and evaluation of several significant factors including, but not limited to:

§ Costs of bringing each property into production, including exploration work, preparation of production feasibility studies, and construction of production facilities;

§ Availability and costs of financing;

§ Ongoing costs of production;

§ Market prices for the precious metals to be produced;

§ Environmental compliance regulations and restraints; and

§ Political climate and/or governmental regulation and control.

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GENERAL MINING RISKS

Factors beyond our control may affect the marketability of any substances discovered from any resource properties the Company may acquire. Metal prices, in particular gold and silver prices, have fluctuated widely in recent years. Government regulations relating to price, royalties, and allowable production and importing and exporting of precious metals can adversely affect the Company. There can be no certainty that the Company will be able to obtain all necessary licenses and permits that may be required to carry out exploration, development and operations on any projects it may acquire and environmental concerns about mining in general continue to be a significant challenge for all mining companies.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

There have been no unregistered sales of equity securities during the three months ended ~~May~~November 3130, 2010.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

The Company has no senior securities outstanding.

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ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

During the quarter, no matters were submitted to a vote of the Company's security holders, through the solicitation of proxies or otherwise.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

Number	Exhibit Description
Exhibit Number		Description of Exhibit	Filing
31.1	Certificate of President (chief executive officer) pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
3.01		Articles of Incorporation	Filed with the SEC on March 22, 2005 as part of our Registration Statement on Form SB-2.
31.2	Certificate of Chief Financial Officer (principal financial officer) pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
3.02		Bylaws	Filed with the SEC on March 22, 2005 as part of our Registration Statement on Form SB-2.
32.1	Certificate of President (chief executive officer) and Treasurer (principal financial officer) pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
31.01		Certification of Principal Executive Officer and Principal Financial Officer Pursuant to Rule 13a-14	Filed herewith.
32.01		CEO and CFO Certification Pursuant to Section 906 of the Sarbanes-Oxley Act	Filed herewith.

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SIGNATURES

Pursuant to the requirements of ~~Section 13 or 15(d) of~~ the ~~Securities~~ Exchange Act ~~of 1934~~, the registrant ~~has duly~~ caused this report to be signed on its behalf by the undersigned, ~~there~~thereunto ~~unto~~ duly authorized.

ASIAN DRAGON GROUP INC.

	ASIAN DRAGON GROUP INC.

Dated: January 19, 2011	By: /s/ John Karlsson
		John Karlsson
		Chief Executive Officer, Chief Financial Officer, President, Secretary, Treasurer & Director

~~/s/ John Karlsson~~13

John Karlsson

President and CEO, CFO, Principal Accounting Officer, Secretary and Treasurer, Director

and Board Chair

Dated: June 28, 2010

Filing Compare · ASIAN DRAGON GROUP INC.