UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended: ~~June~~March 3031, ~~2004~~2005

¨	TRANSITION REPORT PURSUANT SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from: to

Commission file number: 333-~~59362~~120102

USA Capital First Trust Deed Fund, LLC

(Exact name of registrant as specified in its charter)

Nevada		88-0491003
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
4484 South Pecos Road, Las Vegas, Nevada		89121
(Address of principal executive offices)		(Zip Code)

4484 South Pecos Road, Las Vegas, Nevada 89121

(Address of principal executive offices) (Zip Code)

(702) 734-2400

(Registrant’s telephone number, including area code)

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

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

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x

Applicable Only to Issuers Involved in Bankruptcy Proceedings During the Preceding Five Years

Check whether the registrant filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by court. YES ¨ NO ¨

USA CAPITAL FIRST TRUST DEED FUND, LLC

FORM 10-Q

TABLE OF CONTENTS

		PAGE	~~PAGE~~
PART I – FINANCIAL INFORMATION		1
ITEM 1.	~~ITEM~~FINANCIAL 1.STATEMENTS	~~FINANCIAL STATEMENTS.~~1	1
	USA CAPITAL FIRST TRUST DEED FUND, LLC	~~USA CAPITAL FIRST TRUST DEED FUND, LLC~~1	1
	Balance Sheets	~~Balance Sheets~~1	1
		Statements of Operations	2
	Statements of Operations (Unaudited)	2
		Statements of Cash Flows	3
	Statements of Cash Flows (Unaudited)	3
		USA CAPITAL REALTY ADVISORS, LLC	8
	Notes to Financial Statements	4
		Balance Sheets	8
	USA CAPITAL REALTY ADVISORS, LLC	8
	ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	11
	Balance Sheets	8
	ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	17
	Notes to Balance Sheets	9
	ITEM 4.	CONTROLS AND PROCEDURES	18
ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	11
PART II – OTHER INFORMATION
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	17
	ITEM 1.	LEGAL PROCEEDINGS	20
ITEM 4.	CONTROLS AND PROCEDURES	18
	ITEM 2.	CHANGES IN SECURITIES AND USE OF PROCEEDS	20
PART II – OTHER INFORMATION		19
	ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	20
ITEM 1.	LEGAL PROCEEDINGS	19
	ITEM 4.	SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS	20
ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	19
	ITEM 5.	OTHER INFORMATION	20
ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	19
	ITEM 6.	EXHIBITS AND REPORTS ON FORM 8-K	20
ITEM 4.	SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS	19
SIGNATURES			21
ITEM 5.	OTHER INFORMATION	19
ITEM 6.	EXHIBITS	19
SIGNATURES		20

- i -

PART I – FINANCIAL INFORMATION

ITEM 1.

FINANCIAL STATEMENTS.

USA CAPITAL FIRST TRUST DEED FUND, LLC

Balance Sheets

	(Unaudited) June 30, 2004		December 31, 2003
	March 31,2005		December 31,2004
	(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	3,430,891	$	4,002,283
Cash and cash equivalents	$	1,512,987	$	500,758
Investments in mortgage loans, net of allowance for loan losses of $500,000 and $500,000, respectively		55,084,793		45,875,697
Investments in mortgage loans		17,473,141		5,642,444
Unsecured advance to affiliate		560,000		560,000
Interest and other receivables		161,371		46,262
Interest receivable		576,192		484,045
Deferred registration costs		—		—
Total current assets	$	59,651,876	$	50,922,025
Total current assets	$	19,147,499	$	6,189,464
LIABILITIES AND MEMBERS’ EQUITY
Liabilities:
Accounts payable and accrued expenses	$	—	$	—169
Management fee payable		65156,~~780~~561		—
Total current liabilities		65,780		—
Due to affiliate		246,069		246,069
Total current liabilities		402,630		246,238
Commitments and contingencies		—		—
Members’ equity		1959,~~081~~249,~~719~~246		650,~~189~~675,~~464~~787
	$	1959,~~147~~651,~~499~~876	$	650,~~189~~922,~~464~~025

See Notes to Financial Statements

USA CAPITAL FIRST TRUST DEED FUND, LLC

Statements of Operations (Unaudited)

	(Unaudited) Six months ended June 30, 2004		(Unaudited) Six months ended June 30, 2003			(Unaudited) Three months ended June 30, 2004		(Unaudited) Three months ended June 30, 2003
	Three Months Ended March 31,
Revenues:
	2005		2004
Interest earned from investments in mortgage loans	$	697,828	$	—		$	387,825	$	—
Revenues:
Other income		129		—			—		—
Interest income from investments in mortgage loans	$	1,525,432	$	310,003
		697,957		—			387,825		—
Other income		204		129
Expenses:
		1,525,636		310,132
Management fees to Manager		88,280		—			53,706		—
Expenses:
Other		27		6			—		6
Management fees to Manager		209,861		34,574
		88,307		6			53,704		6
Other		—		41
Net income (loss)	$	609,650	$	(6	)	$	334,119	$	(6	)
		209,861		34,615
Net income	$	1,315,775	$	275,517

See Notes to Financial Statements

-– 2 -–

USA CAPITAL FIRST TRUST DEED FUND, LLC

Statements of Cash Flows (Unaudited)

	(Unaudited) Six months ended June 30, 2004			(Unaudited) Six months ended June 30, 2003
	Three Months Ended March 31,
	2005			2004
Cash flows from operating activities:
Interest received	$	~~582~~1,~~848~~433,286		$	—201,989
Cash paid for management fee		(22,500	)
Cash paid for management fees		(53,300	)		(2,500	)
Cash paid to vendors		~~(27~~37	)		(641	)
Net cash provided by (used in) operating activities		560,321			(6	)
Net cash provided by operating activities		1,380,023			199,357
Cash flows from investing activities:
Mortgage loans made by the fund		(13,625,991	)		—
Purchase of investments in mortgage loans		(12,772,429	)		(5,724,991	)
Mortgage loans repaid to the fund		1,795,294			—
Proceeds from sale of mortgage loans		391,000			—
Proceeds from loan payoff		3,172,331			158,063
Mortgage loans purchased and held for sale		—			—
Net cash (used in) investing activities		(119,~~830~~209,~~697~~098	)		—(5,566,928	)
Cash flows from financing activities:
Proceeds from issuance of membership units		128,~~595~~515,000			—5,875,000
Capital contributions		—			—
Members’ redemptions		(370,892	)		(10,303	)
Members’ redemptions		(15,303	)		—
Member distributions, net of reinvestments		(886,425	)		(106,580	)
Member distributions, net of reinvestments		(297,092	)		—
Net cash provided by financing activities		7,257,683			5,758,117
Net cash provided by financing activities		12,282,605			—
(Decrease) increase in cash		(571,392	)		390,546
Increase in cash		1,012,229			(6	)
Cash, beginning of period		4,002,283			500,758
Cash, beginning of period		500,758			49,829
Cash, end of period	$	3,430,891		$	891,304
Cash, end of period	$	1,512,987		$	49,823
The following is a reconciliation of net income to net cash provided by operations:
Net income	$	1,315,775		$	275,517
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
(Increase) in interest receivable		(92,146	)		(108,234	)
Increase in management fee payable		156,561			32,074
(Decrease) in accounts payable and accrued expenses		(167	)		—
Net cash provided by operating activities	$	1,380,023		$	199,357
Supplemental schedule of non-cash activities:
Reinvestment of members’ distributions	$	438,013		$	81,079

See Notes to Financial Statements

-– 3 -–

USA CAPITAL FIRST TRUST DEED FUND, LLC

Statements of Cash Flows - continued

	(Unaudited) Six months ended June 30, 2004			(Unaudited) Six months ended June 30, 2003
The following is a reconciliation of net income to net cash provided by operations:
Net income (loss)	$	609,650		$	(6	)
Adjustments to reconcile net income to net cash provided by operating activities:
(Increase) in interest receivable		(115,109	)		—
Increase in management fee payable		65,780			—
Net cash provided by (used in) operating activities		560,321			(6	)
Supplemental schedule of noncash activities:
Deferred registration costs paid by organizing members as capital contributions	$	—		$	244,348

See Notes to Financial Statements

- 4 -

USA CAPITAL FIRST TRUST DEED FUND, LLC

Notes to Financial Statements

Note 1. Financial ~~instruments~~statement ~~and~~presentation ~~concentration of credit risk~~

The financial statements of USA Capital First Trust Deed Fund, LLC (the “Fund”) have been prepared in accordance with Securities and Exchange Commission requirements for interim financial statements. Therefore, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. These financial statements should be read in conjunction with the financial statements and notes thereto contained in the Fund’s Annual Report on Form 10-K for the year ended December 31, 2004 as filed with the Securities and Exchange Commission on April 15, 2005.

The results of operations for the interim periods shown in this report are not necessarily indicative of results to be expected for the full year. In the opinion of management, the information contained herein reflects all adjustments necessary to make the results of operations for the interim periods a fair statement of such operations. All such adjustments are of a normal recurring nature.

Note 2. Financial instruments and concentration of credit risk

Financial instruments with concentration of credit risk include cash and loans secured by trust deeds.

At ~~June~~March 3031, ~~2004~~2005, approximately 7051.9% of ~~USA Capital~~the ~~First Trust Deed Funds, LLC~~Fund’s ~~(the “Fund”)~~ total portfolio value was invested in mortgage loans that were in either California or ~~Arizona~~Texas. (See Note 23.) As a result of this geographical concentration of the Fund’s mortgage loans, a downturn in the local real estate markets in California and/or Texas ~~Arizona~~ could have a material adverse effect on the Fund.

At ~~June~~March 3031, ~~2004~~ 2005, approximately 1938% of the Fund’s portfolio (approximately $320,~~340~~849,000) was not supported with independent appraisals of the underlying collateral. In these cases, management utilized alternative methods to determine the sufficiency of the loan to value ratios, such as a broker’s opinion of value or other similar information. In the event of default, if management’s estimates of value are incorrect, the ability to recover the loans through foreclosure could have a material adverse effect on the Fund.

Additionally, at ~~June~~March 3031, ~~2004~~2005, approximately 3923% of the Fund’s total portfolio value was in loans to ~~three~~two borrowers. Because the Fund has a significant concentration of credit risk with these ~~three~~two borrowers, a default by ~~any~~either ofborrower ~~the three borrowers~~ could have a material adverse effect on the Fund.

~~Note~~– 2.4 ~~Investment~~– ~~in mortgage loans~~

Investments in mortgage loans at June 30, 2004 consist of:

Loan Type	Number of loans	Balance		Averageinterest rate		Portfoliopercentage
Acquisition and development	5	$	6,666,141	12.60	%	38.15	%
Bridge	4		6,206,000	12.90	%	35.52	%
Construction	2		1,740,000	12.90	%	9.95	%
Land	5		2,311,000	12.40	%	13.23	%
Residential	2		550,000	13.00	%	3.15	%
	18	$	17,473,141	12.76	%	100.00	%

Investments in mortgage loans at December 31, 2003 consist of:

Loan Type	Number of loans	Balance		Averageinterest rate		Portfoliopercentage
Acquisition and development	2	$	1,060,000	12.00	%	18.79	%
Bridge	3		3,126,000	12.50	%	55.40	%
Construction	1		490,444	13.50	%	8.69	%
Land	3		966,000	12.00	%	17.12	%
	9	$	5,642,444	12.38	%	100.00	%

- 5 -

USA CAPITAL FIRST TRUST DEED FUND, LLC

Notes to Financial Statements (cont.)

Note 23. Investment in mortgage loans ~~- continued~~

~~The~~Investments ~~following is a schedule of contractual maturities of investments~~ in mortgage loans asat ofMarch ~~June 30~~31, ~~2004~~2005 consists of:

Through June 30, 2005	$	16,028,141
Loan type by mortgage	Number ofloans		Balance			Averageinterest rate		PortfolioPercentage
Thereafter		1,445,000
Acquisition	12		$	10,851,658		13.10	%	19.50	%
	$	17,473,141
Bridge	11			21,430,001		12.90	%	38.60	%
Construction	5			4,741,725		12.30	%	8.50	%
Development	5			12,092,909		12.50	%	21.80	%
Acquisition and development	4			6,468,500		12.80	%	11.60	%
	37			55,584,793				100.00	%
Less allowance for loan losses				(500,000	)
			$	55,084,793

The following is a schedule by geographic location of investment in mortgage loans as of June 30, 2004 and December 31, 2003:


Loan type by real property	Number of loans	Balance			Portfolio percentage
Residential	5	$	5,097,834		9.20	%
Commercial	10		11,136,225		20.00	%
Mixed use	3		10,242,909		18.40	%
Unimproved land	19		29,107,825		52.40	%

	37		55,584,793		100.00	%
Less allowance for loan losses			(500,000	)

		$	55,084,793

	June 30, 2004					December 31, 2003
	Number	Balance		PortfolioPercentage		Number	Balance		PortfolioPercentage
Arizona	3	$	6,366,000	36.43	%	2	$	2,441,000	43.26	%
California	7		5,971,000	34.17	%	2		1,535,444	27.21	%
Colorado	1		700,000	4.01	%	—		—	—
Nevada	2		466,000	2.67	%	3		966,000	17.12	%
Illinois	1		1,505,141	8.61	%	1		500,000	8.86	%
Florida	1		1,300,000	7.44	%	—		—	—
Texas	2		370,000	2.12	%	—		—	—
New Mexico	1		795,000	4.55	%	1		200,000	3.55	%
	18	$	17,473,141	100.00	%	9	$	5,642,444	100.00	%

Investments in mortgage loans at December 31, 2004 consists of:

The Fund invests in mortgage loans that have interest reserves. Loans with interest reserves require the borrowers to maintain interest reserves funded from the principal amount of the loan for a period of time. At June 30, 2004, the Fund had outstanding mortgage loans with available interest reserves of approximately $1,049,892.


Loan type by mortgage	Number of loans	Balance			Average interest rate		Portfolio percentage
Acquisition	12	$	9,146,603		13.53	%	19.72	%
Bridge	9		17,596,167		12.98	%	37.94	%
Construction	5		3,986,333		12.31	%	8.60	%
Development	5		10,646,594		12.52	%	22.96	%
Acquisition and development	2		5,000,000		12.95	%	10.78	%

	33		46,375,697		12.90	%	100.00	%
Less allowance for loan losses			(500,000	)

		$	45,875,697

~~Note~~– 3.5 ~~Management~~– ~~fees and related party transactions~~

The operating agreement provides for a management fee to USA Capital Realty Advisors, LLC (the “Manager”) based on one and one-half percent annually of net assets. For the six month ended June 30, 2004, the Fund recorded management fees of approximately $88,000 of which approximately $65,000 is unpaid and is reflected in account management fee payable.

USA Securities, LLC, a company related by common control, raised 93% of the Fund’s membership units totaling approximately $11,685,000 for the six months ended June 30, 2004. The Manager paid the commission fees associated with raising of the funds.

- 6 -

USA CAPITAL FIRST TRUST DEED FUND, LLC

Notes to Financial Statements (cont.)

Note 43. ~~Financial~~Investment ~~statement~~in ~~presentation~~mortgage loans-continued

The financial statements have been prepared in accordance with Securities and Exchange Commission requirements for interim financial statements. Therefore, they do not include all of the information and footnotes required by accounting principals generally accepted in the United States for complete financial statements. These financial statements should be read in conjunction with the financials statements and notes thereto contained in the Company’s annual report on Form 10-K for the year ended December 31, 2003.


Loan type by real property	Number of loans	Balance			Portfolio percentage
Residential	3	$	1,704,084		3.67	%
Commercial	10		9,900,833		21.35	%
Mixed use	3		8,846,594		19.08	%
Unimproved land	17		25,924,186		55.90	%

	33		46,375,697		100.00	%
Less allowance for loan losses			(500,000	)

		$	45,875,697

The ~~results~~following ofis ~~operations~~a ~~for~~schedule ~~the~~by geographic ~~interim~~location ~~periods~~of ~~shown~~investment in ~~this~~mortgage ~~report~~loans ~~are~~as ~~not necessarily indicative~~ of ~~results~~March to31, be2005 ~~expected~~and ~~for~~December ~~the full year. In the opinion of management~~31, ~~the information contained herein reflects all adjustments necessary to make the results of operations for the interim periods a fair statement of such operation~~2004. ~~All~~ ~~such adjustments are of a normal recurring nature.~~

- 7 -


	March 31, 2005						December 31, 2004
	Number of loans	Balance			Portfolio percentage		Number of loans	Balance			Portfolio percentage
Arizona	2	$	6,000,000		10.79	%	3	$	6,575,000		14.18	%
California	15		16,899,918		30.40	%	14		15,548,186		33.53	%
Florida	4		6,527,907		11.74	%	4		6,938,584		14.96	%
Illinois	1		4,992,909		8.98	%	1		4,476,594		9.65	%
Michigan	1		475,000		0.85	%	1		295,000		0.64	%
Nevada	3		3,828,834		6.89	%	3		656,000		1.41	%
New Mexico	3		4,001,225		7.20	%	3		3,245,833		7.00	%
New York	1		890,000		1.60	%	—		—		0.00	%
Texas	7		11,969,000		21.53	%	4		8,640,500		18.63	%

	37		55,584,793		100.00	%	33		46,375,697		100.00	%
Less allowance for loan losses			(500,000	)					(500,000	)

		$	55,084,793					$	45,875,697

The following is a schedule of contractual maturities of investments in mortgage loans as of March 31, 2005:


2005	$	50,985,813
2006		4,598,980

	$	55,584,793
Less allowance for loan losses		(500,000	)

	$	55,084,793

This does not necessarily indicate when the investments in mortgage loans will be realized in cash, as loans may be extended, become delinquent or be foreclosed upon during the normal course of operations.

– 6 –

USA CAPITAL FIRST TRUST DEED FUND, LLC

Notes to Financial Statements (cont.)

Note 3. Investment in mortgage loans-continued

At December 31, 2004, the Fund had one loan that was non-performing (more than 120 days past due on interest payments or past due on principal) totaling approximately $4.7 million. The Fund started foreclosure proceedings in December 2004. The first collateralized property is in negotiations to be purchased by a third party. The second collateralized property is scheduled for foreclosure sale in May 2005.

Note 4. Management fees and related party transactions

The Fund’s operating agreement provides for a management fee to USA Capital Reality Advisors, LLC (the “Manager”) based on one and one-half percent annually of net assets. For the three months ended March 31, 2005, the Fund recorded management fees of approximately $209,000.

During the period ended March 31, 2005, the Fund raised a total of $8,515,000 in membership units. USA Securities, LLC, a company related by common control, raised 69% of the Fund’s membership units during the period ended March 31, 2005 totaling approximately $5,845,000. The Manager paid the commission fees associated with raising of the funds.

During the period ended March 31, 2005, the Fund purchased approximately $8.5 million in mortgage loans from USA Capital Diversified Trust Deed Fund, LLC, a company related by common management. These transactions were recorded at the original principal balances and, accordingly, no gain or loss was recognized.

During the period ended March 31, 2005, the Manager paid approximately $207,000 in legal and accounting expenses on behalf of the fund.

At March 31, 2005, the Fund had approximately $195,000 invested in mortgage loans with Wasco Investments, LLC, a company that has common ownership and significant joint investments with Tanamera Resort Partners, LLC, an affiliate of the Manager.

At March 31, 2005, the Fund had approximately $4,890,000 invested in mortgage loans with Homes for America Holdings, LLC, a company with joint investments with Tanamera Resort Partners, LLC, an affiliate of the Manager.

At March 31, 2005, the Fund had approximately $200,000, $530,000, $1,831,000 and $2,170,000 invested in mortgage loans with Fiesta Development, LLC, Chris Pederson, Interstate Commerce, LLC and Rio Bravo Industrial Development, LLC, respectively, companies with joint investments with USA Investment Partners, LLC, an affiliate of the Manager.

– 7 –

USA CAPITAL REALTY ADVISORS, LLC

Balance Sheets

	June 30,2004 (unaudited)			December 31, 2003
	March 31,2005			December 31,2004
	(unaudited)
ASSETS
Current assets:
Cash	$	4038,~~877~~520		$	7358,~~392~~779
Total current assets		40,877			73,392
Management fee receivable from affiliate		486,693			263,292
Prepaid expense		3,213			14,429
Total current assets		528,426			336,500
Other assets:
Due from related parties		347,876			129,681
Investments in affiliates		197,751			197,751
Investments in related companies		147,751			147,751
Total assets	$	726,177		$	534,251
Prepaid expenses		7,145			—
Total other assets	$	502,772		$	277,432
	$	543,649		$	350,824
LIABILITIES AND MEMBERS’ (DEFICIT)
Current liabilities:
Accounts payable and accrued expenses	$	~~221~~158,~~978~~960		$	62184,~~033~~031
Due to related parties		375,058			367,138
Due to affiliates		912,814			876,514
Total current liabilities		~~597~~1,~~036~~071,773			~~429~~1,~~171~~060,545
Members’ (deficit)		(53345,~~387~~597	)		(78526,~~347~~294	)
	$	~~543~~726,~~649~~177		$	~~350~~534,~~824~~251

See Notes to Balance ~~Sheet~~Sheets

-– 8 -–

USA CAPITAL REALTY ADVISORS, LLC

Notes to Balance ~~Sheet~~Sheets

Note 1. ~~Investments~~Financial statement inpresentation ~~related companies~~

The financial statements have been prepared in accordance with Securities and Exchange Commission requirements for interim financial statements. Therefore, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. These financial statements should be read in conjunction with the financial statements and notes of USA Capital Realty Advisors, LLC (the “Company”) contained in the Annual Report on Form 10-K of USA Capital First Trust Deed Fund, LLC for the year ended December 31, 2004 as filed with the Securities and Exchange Commission on April 15, 2005.

The results of operations for the interim periods shown in this report are not necessarily indicative of results to be expected for the full year. In the opinion of management, the information contained herein reflects all adjustments necessary to make the results of operations for the interim periods a fair statement of such operation. All such adjustments are of a normal recurring nature.

Note 2. Investments in related companies

Investments are recorded on the equity method and consist of:

	Memberinterest inUSA CapitalDiversifiedTrust DeedFund, LLC				Memberinterest inUSA CapitalFirst TrustDeed Fund,LLC				Memberinterest inTanameraApartments,LLC			Total
	Member interest in												Total
Balance December 31, 2003	$	42,922			$	54,829			$	50,000		$	147,751
	USA CapitalDiversifiedTrust DeedFund, LLC			USA CapitalFirst TrustDeed Fund,LLC			TanameraApartments,LLC			USA Capital HighIncome RealEstate LendingFund, LLC
Contributions		—				—				—			—
Balance December 31, 2004	$	42,922		$	54,829		$	50,000		$	50,000		$	197,751
Distributions		(2,797	)			(1,757	)			—			(4,554	)
Contributions		—			—			—			—			—
Interest in earnings (loss)		2,797				1,757				—			4,554
Distributions		—			—			—			—			—
Balance June 30, 2004	$	42,922			$	54,829			$	50,000		$	147,751
Interest in earnings		—			—			—			—			—
Balance March 31, 2005	$	42,922		$	54,829		$	50,000		$	50,000		$	197,751

Note 23. Related party transactions

~~USA~~The ~~Capital Realty Advisors, LLC (the “~~Company”) owns units in and/or acts as manager for USA Capital Diversified Trust Deed Fund, LLC, USA Capital First Trust Deed Fund, LLC, Tanamera Apartments, LLC and USA ~~Securities~~Capital High Income Real Estate Lending Fund, LLC.

USA Capital Diversified Trust Deed Fund, LLC is a Nevada limited- liability company that makes or purchases entire or fractional interests in acquisition, development, construction, bridge or interim loans secured by deeds of trust on undeveloped land and residential and commercial developments located primarily in the United States. During the ~~six~~three months ended ~~June~~March 3031, ~~2004~~2005, the Company recorded approximately $~~850~~410,000 as compensation for its management services from USA Capital Diversified Trust Deed Fund, LLC. At ~~June~~March 3031, ~~2004~~2005, the Company has approximately $~~282~~330,000 of unpaid ~~management fees due from USA Capital Diversified Trust Deed Fund, LLC, which~~ ~~is included in the account due from related parties.~~

~~USA~~– ~~Capital~~9 ~~First~~– Trust Deed Fund, LLC is a Nevada limited-liability company that makes investments or purchases fractional interests in acquisition, development, construction, bridge or interim loans secured by first deeds of trust on undeveloped land, residential and commercial developments located in the United States. During the six months ended June 30, 2004, the Company recorded approximately $65,000 as compensation for its management services from USA Capital First Trust Deed Fund, LLC. At June 30, 2004, the Company has approximately $65,000 of unpaid management fees due from USA Capital First Trust Deed Fund, LLC, which is included in the account due from related parties.

USA Securities, LLC, a Nevada limited-liability company related by common control, is a registered broker-dealer, is a member of the National Association of Securities Dealers (“NASD”) and conducts limited securities business in California, Florida, Nevada, and other states. During the six months ended June 30, 2004, commissions of approximately $350,000 were charged by USA Securities, LLC for raising funds of which approximately $69,000 is unpaid and is reflected in the account due to related parties.

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USA ~~Capital~~CAPITAL ~~Realty~~REALTY ~~Advisors~~ADVISORS, LLC

Notes to Balance ~~Sheet~~Sheets - Continued

Note 3. ~~Financial~~Related ~~statement~~party ~~presentation~~transactions-continued

~~The~~ management ~~financial~~fees ~~statements~~due ~~have~~from ~~been~~USA ~~prepared~~Capital inDiversified ~~accordance~~Trust ~~with~~Deed ~~Securities~~Fund, ~~and Exchange Commission requirements for interim financial statements. Therefore~~LLC, ~~they~~which dois ~~not include~~included ~~all of the information and footnotes required by accounting principals generally accepted~~ in the ~~United~~account ~~States~~due ~~for~~from ~~complete~~related ~~financial statements~~parties. ~~These~~Additionally, ~~financial~~during ~~statements~~the period ~~should~~ended beMarch ~~read~~31, in2005, ~~conjunction with~~ the ~~financials~~Company ~~statements~~recorded ~~and notes~~approximately ~~thereto~~$22,454 ~~contained~~ in ~~the~~legal ~~Company’s~~and ~~annual~~accounting ~~report~~expenses on ~~Form~~behalf ~~10-K~~of ~~for~~USA ~~the~~Capital ~~year~~Diversified ~~ended~~Trust ~~December~~Deed 31Fund, ~~2003~~LLC.

~~The~~USA ~~results~~Capital ofFirst ~~operations~~Trust ~~for~~Deed ~~the~~Fund, ~~interim~~LLC ~~periods~~is ~~shown~~a Nevada limited liability company that makes investments or purchases fractional interests in acquisition, ~~this~~development, ~~report~~construction, ~~are~~bridge ~~not~~or ~~necessarily~~interim ~~indicative~~loans secured by first deeds of ~~results~~trust toon beundeveloped ~~expected~~land, ~~for~~residential and commercial developments located in the ~~full~~United ~~year~~States of America. InDuring the ~~opinion~~three ofmonths ended March 31, 2005, the Company recorded approximately $209,000 as compensation for its management services from USA Capital First Trust Deed Fund, LLC. At March 31, 2005, the ~~information~~Company ~~contained~~has ~~herein~~approximately $156,000 of unpaid management fees due from USA Capital First Trust ~~reflects~~Deed ~~all~~Fund, ~~adjustments~~LLC, ~~necessary~~which tois ~~make~~included in the ~~results~~account ofdue ~~operations~~from ~~for~~related parties. Additionally, during the ~~interim~~period ~~periods~~ended aMarch ~~fair~~31, ~~statement~~2005 ofthe ~~such~~Company ~~operation.~~recorded ~~All~~approximately ~~such~~$207,000 ~~adjustments~~in ~~are~~legal and accounting expenses on behalf of aUSA ~~normal~~Capital ~~recurring~~First ~~nature~~Trust Deed Fund, LLC.

-USA 10Securities, -LLC, a Nevada limited liability company related by common control, is a member of the National Association of Securities Dealers, Inc. and conducts limited securities business in Nevada and several other states. During the three months ended March 31, 2005, commissions of approximately $277,000 were charged by USA Securities, LLC for raising funds of which approximately $505,000 is unpaid and is reflected in the account due to related parties. Additionally, during the period ended March 31, 2005 the Company recorded approximately $17,000 in legal and accounting expenses on behalf of USA Securities, LLC.

– 10 –

ITEM 2.

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

FORWARD-LOOKING STATEMENTS

Certain statements contained herein constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, codified at Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements may be identified by the use of terminology such as “believe,” “may,” “will,” “expect,” “anticipate,” “intend,” “designed,” “estimate,” “should” or “continue” or the negatives thereof or other variations thereon or comparable terminology. Such forward-looking statements involve known or unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.

Such factors include, but are not limited to, the following: strict regulation and changes in regulations imposed by regulatory authorities; competition we face or may face in the future; our ability to continue to raise proceeds from our offering of membership units; our ability to identify investments; the risk of default by our borrowers; our dependence on key employees; potential fluctuations in our quarterly results; general economic and business conditions and other factors detailed from time to time in our reports filed with the Securities and Exchange Commission.

OVERVIEW

We were organized on February 16, 2001 and have conducted limited business operations. As of ~~July~~March 31, ~~2004~~2005, we ~~have~~issued, ~~sold~~net orof ~~reinvested~~redemptions ~~distributions~~and inincluding reinvestments, 511,~~007~~739.~~7985~~7180 units representing a capitalization of $2558,~~038~~698,~~992~~590.~~50.~~ The proceeds from the sale of these membership units have primarily been used to purchase fractional interests in or to otherwise invest in mortgage loans in the United States. WeAlthough ~~have~~we ~~limited~~may ~~assets~~also ~~and~~invest aup ~~brief operating history. Our operations have been limited~~ to ~~our registered~~10% ~~offering~~ of ~~membership~~our ~~units~~loan ~~and,~~portfolio ~~more recently, investing~~ in ~~mortgage~~ loans ~~where our collateral is~~ secured by real property located inoutside of the United States., Wewe ~~may~~have ~~also~~only ~~invest~~invested ~~up to 10% of our loan portfolio~~ in loans secured by real property located ~~outside~~in of the United States. ~~Our~~USA Capital Realty Advisors, LLC, our manager, has and will continue to select mortgage loans for us, and assist us by obtaining, processing and managing these loans. We believe that an adequate number of additional opportunities to invest in mortgage loans exists.

We do not anticipate hiring any employees, acquiring any fixed assets such as office equipment or furniture or incurring material office expenses during the next 12 months as we will be utilizing our manager’s personnel and office equipment. Other than the asset management and loan servicing fee we pay our manager, we will not pay our manager any overhead or other compensation for providing us with its personnel and equipment.

ACCOUNTING POLICIES

The preparation of financial statements in conformity with generally accepted accounting principles requires our manager to make estimates and assumptions that will affect reported amounts of assets, liabilities and the disclosure of contingent liabilities. Due to the inherent uncertainty of such estimates, our actual results may differ and our estimates and assumptions may require revision in future periods. We will apply key accounting policies with respect to revenue recognition, the impairment of mortgage loans, the allowance for loan losses, the fair value of financial instruments, the lack of distinction between comprehensive income and net income and income taxes.

-Revenue 11Recognition. Interest income on our mortgage loans accrues by the effective interest method. Interest revenue will generally be suspended when a loan is impaired or non-performing. A

– 11 –

~~Revenue Recognition. Interest income on our mortgage loans accrues by the effective interest~~ ~~method. Interest revenue will generally be suspended when a~~ loan ~~is impaired or non-performing. A loan~~ will be considered non-performing when the payment of principal or interest is 120 days past due. A loan will be deemed impaired when, based on ~~current~~ current information and events, it is probable that we will be unable to collect all amounts due according to the terms of the loan. We will not hold loans for resale, prepare loan documents or service any loans. As a result, there will be no revenues from loan fees, collection fees or similar charges.

Allowances for Loan Losses. When deemed necessary, we will set an allowance for possible credit losses on mortgage loans. Additions to the reserve are based on an assessment of certain factors including, but not limited to, estimated future losses on the loans and general economic conditions. Actual losses on loans will be recorded as a charge-off or reduction of the loan loss reserve. Subsequent recoveries of loan amounts previously ~~charged~~charges off will be recorded as an increase to the loan loss reserve.

Fair Value of Financial Instruments. The carrying amounts of cash, interest receivables, prepaid expenses and other current assets due from affiliates, accounts payable and accrued expenses and amounts due the manager will approximate fair value due to their short maturities. The carrying value of investments in mortgage loans, net of the allowance for the loan losses, will approximate fair value, which will be estimated based upon the projected cash flows discounted at the estimated current rates at which similar loans with similar collateral would be made.

RESULTS OF OPERATIONS

~~Six~~ Three Months Ended ~~June~~March 3031, ~~2004~~2005 and ~~2003~~2004

During the ~~six~~ three months ended ~~June~~March 3031, ~~2004~~2005, we generated revenues of $~~697~~1,~~957~~525,636, compared to $0310,132 during the ~~six~~three months ended ~~June~~March 3031, ~~2003~~2004. During the ~~six~~three months ended March 31, 2005, our revenue consisted of $1,525,432 in interest earned from investments in mortgage loans and $204 in other income. During the three months ended ~~June~~March 3031, 2004, our revenues consisted of $~~697~~310,~~828~~003 in interest earned from investments in mortgage loans and $129 in other income. The increase in revenue induring the three months ended March 31, 2005 from the three months ended March 31, 2004 resulted from ~~our~~the ~~initial~~interest ~~investment~~earned inon the additional mortgage ~~loans~~loan ~~and~~investments ~~interest~~in ~~earned from~~our ~~such~~mortgage ~~loans~~loan portfolio.

During the ~~six~~three months ended ~~June~~March 3031, ~~2004~~2005, we incurred expenses of $88209,~~307~~861, compared to $634,615 during the ~~six~~three months ended ~~June~~March 3031, ~~2003~~2004. During the ~~six~~three months ended ~~June~~March 3031, ~~2004~~2005, we paid management fees to our manager in the amount of $88209,~~280~~861, as opposed to $034,574 in the ~~six~~three months ended ~~June~~March 3031, ~~2003~~2004. ~~Accordingly,~~The increase in expenses during the ~~six~~three months ended ~~June~~March 3031, ~~2004~~2005 from the three months ended March 31, we2004 ~~generated~~reflects athe ~~net~~additional ~~income~~management fees incurred as a result of ~~$609,650~~a larger mortgage loan portfolio.

~~Three~~During ~~Months~~the ~~Ended~~three ~~June~~months 30ended March 31, 2005 and 2004, we generated a net income of $1,315,775 and ~~2003~~$275,517, respectively. The increase in net income during the three months ended March 31, 2005 from the three months ended March 31, 2004 reflects the $1,215,504 increase in revenues offset by the $175,246 increase in expenses.

During the three months ended June 30, 2004, we generated revenues of $387,825, consisting completely of interest earned from investments in mortgage loans, compared to no revenues during the three months ended June 30, 2003. The increase in revenue in 2004 resulted from our initial investment in mortgage loans and interest earned from such loans.

During the three months ended June 30, 2004, we incurred expenses of $53,692, compared to $6 during the three months ended June 30, 2003. During the three months ended June 30, 2004, we paid management fees to our manager in the amount of $53,706, as opposed to $0 in the three months ended June 30, 2003. Accordingly, during the three months ended June 30, 2004, we generated a net income of $334,133.

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LIQUIDITY AND CAPITAL RESOURCES

Since our inception, our principal capital resources have been the payment of our offering and administrative expenses by our manager and the proceeds from our registered offering of membership units. Our manager has paid and will continue to pay the registration, ~~organization~~ and ~~offering~~organization costs we incur, including accounting, legal and administrative expenses and fees. Prior to satisfying the minimum offering amount for our registered offering and breaking escrow, these deferred costs were recorded as capital contributions during the respective periods they were incurred. With respect to our registered ~~offering, as of July 31, 2004, we have issued, net of redemptions and including reinvestments, 5,007.7985 units, representing a capitalization of $25,038,992.50. As of July 31, 2004, we have~~ ~~redeemed 3.1841 units.~~

At– June 30, 2004, we held $560,321 of cash, compared to $500,758 of cash held as of December 31, 2003. The increase in cash resulted primarily from the receipt of proceeds from the sale of our units in our registered offering, less amounts invested in mortgage loans. Although a substantial portion of our assets may be classified as current assets, i.e., assets convertible into cash within 12 ~~months,~~– our current assets consist primarily of our investments in mortgage loans that mature within 12 months. As a result, although we maintain positive working capital, the working capital concept may not be particularly meaningful as it relates to our operations. As of June 30, 2004, our members’ equity was $19,147,499, compared to $6,189,464 as of December 31, 2003. The increase in members’ equity during the six months ended June 30, 2004 resulted primarily from the placement of membership units and the receipt of interest on our investments in mortgage loans.

During the six months ended June 30, 2004 and 2003, our operating activities provided net cash of $560,321 and -$6, respectively. During the six months ended June 30, 2004, the interest received from our mortgage loan investments of $582,848 was offset by the cash paid to vendors of $27 and the cash paid for management fees of $22,550.

During the six months ended June 30, 2004 and 2003, our investing activities utilized net cash of $11,830,697 and $0, respectively. During the six months ended June 30, 2003, we invested in mortgage loans in the aggregate amount of $13,625,991, while we did not invest in mortgage loans in the six months ended June 30, 2003. We will continue to invest in mortgage loans as we continue to raise funds through the offering of our membership units.

During the six months ended June 30, 2004 and 2003, our financing activities provided net cash of $12,282,605 and $0, respectively. During the six months ended June 30, 2004 and 2003, we received proceeds of $12,595,000 and $0, respectively, from our offering of membership units. During the same periods we issued distributions, net of reinvestments, of $297,092 and redeemed $15,303 in membership units. There were no distributions or redemptions during the six months ended June 30, 2003. The net cash provided by financing activities for the six months ended June 30, 2004 reflects proceeds from our offering of membership units, less distributions to members and member redemptions.

We have not maintained and do not maintain any off-balance sheet arrangements, where such arrangements include any transactions, agreements or other contractual arrangements to which an unconsolidated entity is a party and where we have an obligation under a guarantee contract, a retained or contingent interest in assets transferred to unconsolidated entity, any obligation under a contract that would be accounted for as a derivative instrument or any obligation arising out of a variable interest in an unconsolidated entity.

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offering, as of March 31, 2005, we have issued, net of redemptions and including reinvestments, 11,749.7180 units, representing a capitalization of $58,748,590. As of March 31, 2005, we have redeemed 786.5249 units.

At March 31, 2005, we held $3,430,891 of cash, compared to $4,002,283 of cash held as of December 31, 2004. The $571,392 decrease in cash resulted primarily from the additional investments in mortgage loans offset, in part, by the increase in interest received and the additional proceeds received from the sale of our units in our registered offering. Although a substantial portion of our assets may be classified as current assets, i.e., assets convertible into cash within 12 months, our current assets consist primarily of our investments in mortgage loans that mature within 12 months. As a result, although we maintain positive working capital, the working capital concept may not be particularly meaningful as it relates to our operations. As of March 31, 2005, our members’ equity was $59,249,246, compared to $50,675,787 as of December 31, 2004. The increase in members’ equity during the three months ended March 31, 2005 resulted primarily from the additional investments in mortgage made with the proceeds received from our registered offering of units.

During the three months ended March 31, 2005 and 2004, our operating activities provided net cash of $1,380,023 and $199,357, respectively. During the three months ended March 31, 2005, the interest received form our mortgage loan investments of $1,433,286 was offset by the cash paid for management fees of $53,300. During the three months ended March 31, 2004, the interest received from our mortgage loan investments of $201,989 was offset by the cash paid for management fees of $2,500 and the cash paid to vendors of $41.

During the three months ended March 31, 2005 and 2004, our investing activities used net cash of $9,209,098 and $5,566,928, respectively. During the three months ended March 31, 2005, we invested in mortgage loans in the aggregate amount of $12,772,429, while we invested in mortgage loans in the aggregate amount of $5,724,991 in the three months ended March 31, 2004. We will continue to invest in mortgage loans as we continue to raise funds through our registered offering of units.

During the three months ended March 31, 2005 and 2004, our financing activities provided net cash of $7,257,683 and $5,758,117, respectively. During the three months ended March 31, 2005 and 2004, we received proceeds of $8,515,000 and $5,875,000, respectively, from our registered offering of units. During the same periods, we issued distributions, net of reinvestments, of $886,425 and $106,580, respectively, and redeemed $370,892 and $10,303, respectively, in membership units. The net cash provided by financing activities for the three months ended March 31, 2005 reflects proceeds from our offering of membership units, less distributions to members and member redemptions.

RISK FACTORS

The following risks, if any one or more occurs, could materially harm our business, financial condition or future results of operations.

Risks Related to an Investment in USA Capital First Trust Deed Fund, LLC

We were organized as a Nevada limited-liability company on February 16, 2001~~. Due to our recent organization~~, and we have a limited operating history. Further, since our manager has only been ~~organized since January 18,~~ 2001, our manager has a limited operating history as well. In terms of selecting mortgage loan investments, our manager relies upon certain investment objectives and policies that may result in the investment in mortgage loans that underperform due to inadequate loan-to-value ratios, lack of understanding of local real estate markets in other areas, lack of mortgage insurance, lack of appraisals, properties that are difficult to determine appropriate value, such as leasehold interests, or inadequate loan diversification within our loan portfolio. Further, notwithstanding our investment criteria, since most of our mortgage loan investments require payments of interest only during the loan term and a large “balloon” payment of principal at the end of the loan term, we risk that the borrower will not be able to make such payment and default on the loan.

As– of13 ~~June~~– 30, 2004, approximately 19% of our portfolio (approximately $3,340,000) was not supported with independent appraisals of the underlying collateral. In these cases, management utilized alternative methods to determine the sufficiency of the loan to value ratios, such as a broker’s opinion of value or other similar information. In the event of default, if management’s estimates of value are incorrect, the ability to recover the loans through foreclosure could have a material adverse effect on us. Additionally, approximately 39% of our total portfolio value was in loans to three borrowers. Because we have a significant concentration of credit risk with these three borrowers, a default by any of the three borrowers could have a material adverse effect on us. Further, 70% of our total portfolio value was invested in mortgage loans with underlying collateral in California and Arizona. As a result of this geographical concentration of the Fund’s mortgage loans, a downturn in the local markets in California and/or Arizona could have a material adverse effect on us.

With respect to our management, we rely entirely on our manager and its management team, Thomas A. Hantges, Joseph D. Milanowski and Paul S. Hamilton, for the day-to-day management of our business and the selection of our loans. In fact, our manager has the ability to revise our investment policies and strategies without the prior approval of investors. Further, since our manager and its affiliates will receive substantial fees in performing services in our registered offering and in conducting our operations, our manager will face conflicts of interest that may adversely impact our financial results. These conflicts of interest include the compensation payable to our manager and its affiliates without the benefit of arm’s-length negotiation and the ability of our manager and its affiliates to devote time to other business affairs. Finally, the Nevada Revised Statutes and our operating agreement strictly limit the personal liability of our manager and its management team for decisions made and actions taken by them on our behalf.

In calculating member distributions, our manager considers the income earned, but not actually received, on loans that may be either impaired or non-performing, only to the extent that such loans have sufficient security to satisfy the amounts owed to us. Our manager evaluates each loan in light of the type and dollar amount of the loans in our portfolio, adverse situations that may affect the borrower’s ability to repay our loan, prevailing economic conditions and underlying collateral. As a result, our members receive distributions with respect to such loans and, in turn, incur the attendant tax burden during the year in which the distributions are made rather than in the year we receive the actual interest income anticipated. As a result of the discrepancy between interest earned versus interest received, we may use cash from capital contributions from investors to pay a portion of the monthly distributions

- 14 -

~~made~~ organized tosince ~~members.~~January ~~Further~~18, if2001, our manager ~~overestimates~~has a limited operating history as well. In terms of selecting mortgage loan investments, our manager relies upon certain investment objectives and policies that may result in the investment in mortgage loans that underperform due to inadequate loan-to-value ratios, lack of ~~loans~~understanding ~~characterized~~of aslocal ~~either~~real ~~impaired~~estate ormarkets in other areas, lack of mortgage ~~non-performing~~insurance, properties that are difficult to determine appropriate value, such as leasehold interests, or ifinadequate loan diversification within our ~~manager~~loan isportfolio. ~~not~~Investors ~~able~~must rely on our manager to ~~recover~~comply ~~all~~with our investment guidelines, which our manager may revise or waive for a particular mortgage loan investment without approval of ~~the~~members. ~~amounts~~Further, ~~owed~~notwithstanding toour usinvestment criteria, wesince ~~will~~our bemost ~~required~~of toour ~~offset~~mortgage ~~losses~~loan oninvestments ~~these~~require ~~loans~~payments ~~against~~of ~~future~~interest ~~income~~only ~~and,~~during asthe loan term and a ~~result~~large “balloon” payment of principal at the end of the loan term, we risk that the borrower will ~~have~~not ~~less~~be ~~cash~~able ~~available~~to ~~for~~make ~~distribution~~such payment and default on the loan.

~~Other~~With ~~factors~~respect ~~could~~to ~~also~~our ~~impair~~management, we rely entirely on our ~~ability~~manager toUSA ~~distribute~~Capital ~~cash~~Realty toAdvisors, ~~our~~LLC, which is managed by USA ~~members.~~Investment ~~During~~Partners, ~~the~~LLC, ~~delay~~which ~~between~~is managed by Joseph D. Milanowski, for the ~~sale~~day-to-day management of our ~~membership~~business ~~units~~ and the ~~investment~~selection of ~~the~~our ~~resulting~~loans. ~~proceeds~~In fact, ~~such~~our ~~proceeds~~manager ~~are~~has ~~invested~~the inability ~~liquid~~to ~~assets~~revise ~~that~~our ~~may~~investment ~~not~~policies ~~yield~~and astrategies ~~return~~without asthe ~~high~~prior approval asof ~~the~~investors. ~~anticipated~~Further, ~~return~~since on our ~~loans.~~manager ~~Lesser~~and ~~yields may~~its ~~also~~affiliates ~~result~~will ~~from~~receive ~~our~~substantial ~~manager’s~~fees ~~retention~~in ofperforming aservices ~~contingency~~in ~~reserve~~our ~~fund~~registered tooffering ~~cover~~and ~~our~~in ~~unexpected~~conducting ~~cash~~our ~~needs.~~operations, ~~These~~our ~~lesser~~manager ~~yields~~will ~~may~~face ~~adversely~~conflicts ~~affect~~of ~~the~~interest ~~investment~~that ~~return~~may toadversely impact our ~~members~~financial results. ~~Further,~~These ~~since~~conflicts weof ~~intend~~interest toinclude ~~leverage~~the ~~our~~compensation ~~portfolio~~payable ~~by obtaining~~to aour ~~credit~~manager ~~line~~and ~~secured~~its byaffiliates ~~our~~without ~~assets,~~the webenefit ~~could~~of ~~lose~~arm’s-length ~~some~~negotiation orand ~~all~~the ability of our ~~assets~~manager ifand weits ~~were~~affiliates ~~unable~~to devote time to other ~~repay~~business affairs. Finally, the ~~credit~~Nevada ~~line.~~Revised ~~Even~~Statutes ifand weour ~~were~~operating ~~repaying~~agreement ~~the~~strictly ~~indebtedness~~limit inthe apersonal ~~timely~~liability ~~manner,~~of our ~~interest~~manager ~~payments~~and onits ~~the~~management ~~borrowed~~team ~~funds~~for ~~would~~decisions ~~reduce our~~made ~~income~~ and ~~the~~actions ~~distributions~~taken ~~members~~by ~~receive~~it on our behalf.

~~Our~~In ~~primary reliance~~calculating onmember ~~the~~distributions, ~~underlying~~our ~~real~~manager ~~property~~considers orthe ~~real~~income ~~property~~earned, but ~~interests~~not ~~securing~~actually ~~our~~received, on loans ~~creates risks~~ that ~~could~~may ~~affect~~be ~~our~~either ~~profitability~~impaired or ~~ability~~non-performing, only to ~~make~~the ~~distributions~~extent tothat ~~members.~~such ~~The~~loans ~~costs~~have ~~associated~~sufficient ~~with~~security ~~enforcing~~to ~~our~~satisfy ~~security~~the ~~interest~~amounts ~~with respect~~owed to aus. ~~particular~~Our manager evaluates each loan orin ~~foreclosing~~light onof the ~~real~~type ~~property~~and ~~securing~~dollar amount of the ~~loan~~loans ~~may~~in beour ~~high~~portfolio, ~~materially~~adverse ~~affecting~~situations ~~our~~that ~~results~~may ofaffect ~~operations~~the orborrower’s ~~our~~ ability to ~~make~~repay our loan, prevailing economic conditions and underlying collateral. As a result, our members receive distributions with respect to ~~members.~~such Inloans ~~addition~~and, in turn, incur the attendant tax burden during the year in which the ~~event~~distributions ~~that~~are amade ~~borrower~~rather ~~defaults~~than ~~and~~in the year we receive the actual interest income anticipated. As a result of the discrepancy between interest earned versus interest received, ~~are~~we ~~unable~~may touse ~~recover~~cash from acapital ~~principal~~contributions orfrom ~~affiliate~~investors ofto pay a ~~borrower~~portion ~~that~~of ~~guaranteed~~the monthly distributions made to members. Further, if our manager overestimates the ~~loan~~value of loans characterized as either impaired or non-performing, weor ~~are~~if ~~often~~our ~~unlikely~~manager is not able to recover ~~the~~all ~~full~~of ~~amount~~the ~~from~~amounts ~~the~~owed ~~guarantor~~to us, ~~which~~we ~~affects~~will ~~our~~be ~~profitability.~~required ~~Investors~~to ~~should~~offset ~~note~~losses ~~that~~on ~~our~~these loans ~~are~~against ~~not~~future ~~guaranteed by~~income ~~any~~and, ~~government~~as ~~agency~~a result, will have less cash available for distribution.

Other factors could also impair our ability to distribute cash to our members. During the delay between the sale of our membership units and the investment of the resulting proceeds, such proceeds are invested in liquid assets that may not yield a return as high as the anticipated return on our loans. Lesser yields may also result from our manager’s retention of a contingency reserve fund to cover our unexpected cash needs. These lesser yields may adversely affect the investment return to our members. Further, since we intend to leverage our portfolio by obtaining a credit line, we could lose some or all of our assets if we were unable to repay the credit line. Even if we were repaying the indebtedness in a timely manner, our interest payments on the borrowed funds would reduce our income and the distributions members receive.

Our primary reliance on the underlying real property or real property interests securing our loans creates risks that could affect our profitability or ability to make distributions to members. The costs associated with enforcing our security interest with respect to a particular loan or foreclosing on the real property securing the loan may be high, materially affecting our results of operations or our ability to make distributions to members. In addition, in the event that a borrower defaults and we are unable to recover from a principal or affiliate of a borrower that guaranteed the loan, we are often unlikely to

– 14 –

recover the full amount from the guarantor, which affects our profitability. Investors should note that our loans are not guaranteed by any government agency.

In order to preserve our taxation as a partnership rather than a publicly traded partnership, members may only request a redemption of their membership units subject to certain limitations, including the restriction that we cannot redeem more than 10% of our outstanding membership units in any given calendar year. Although we have not received requests in excess of the 10% limitation as of the year ended December 31, 2004, we cannot provide any assurances that we will not receive redemption requests in excess of the 10% limitation in future calendar years.

Risks Related to Our Membership Units

There is no public market for our membership units and we do not expect one to ever develop. The transferability of our membership units is further restricted by the provisions of state and federal securities law and by our operating agreement. Our operating agreement provides that any sale or transfer of of our membership units requires the prior written consent of our manager, which may be withheld in our manager’s sole discretion. Furthermore, members have only limited rights to redeem their membership units or withdraw from us or to ~~otherwise~~ otherwise obtain the return of their then positive capital account balance. As a result, all investors in our membership units must be capable of bearing the economic risks of this investment with the understanding that their interest in our membership units may not be liquidated by resale. Members should expect to hold their respective membership units for an indefinite period of time.

Although we will provide investors with preferred returns, the preferred returns are “preferred” in that the returns are contractual rights to receive the relevant preferred return before we can make any other distributions to members. As a result, there is no assurance that we will generate sufficient cash flow from our operations to fund the payment of the preferred returns to investors on a monthly basis, if at all. Further, since the preferred return payable to an investor is fixed as of the acceptance of the investor’s subscription for our membership units and remains constant during the relative holding period for the units, the preferred returns actually paid to an investor may exceed or be less than the preferred returns paid to other investors of the same class.

Risks Related to Our Industry

The mortgage lending business is highly competitive and we compete for the availability of secured loans with many other persons, entities, institutional lenders and others engaged in the mortgage lending business that may have greater financial resources and experience. Members cannot be assured that we will find suitable investment opportunities in the future. In addition, mortgage interest rates are subject to abrupt and substantial fluctuations. If prevailing interest rates rise above the average interest rate that our loan portfolio earns, our operations will be adversely affected. Higher interest rates may have a chilling effect on the real estate market that, in turn, may result in poorer operating results.

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subject to abrupt and substantial fluctuations. If prevailing interest rates rise above the average interest rate that our loan portfolio earns, our operations will be adversely affected. Higher interest rates may have a chilling effect on the real estate market that, in turn, may result in poorer operating results.

The mortgage lending business is highly regulated. Since states have differing regulations and rules that govern the activities of lenders who make loans to borrowers within that state, our failure to comply with all such regulations and rules in any particular state may impact our ability to fund or enforce our loans in that state. For example, if one of our loans is found to be usurious according to state law, we may become subject to penalties and our profitability could be materially impacted.

Risks Related to an Investment in Real Estate

Although we do not directly invest in real estate, in the event that we acquire real property as a result of a foreclosure or otherwise, we will be exposed to risks that are traditionally related to the ownership of real property, such as the illiquidity of real estate as an investment, the impact of cyclical economic trends on real estate as an investment, construction risks, entitlement-related risks, absorption risks and environment-related risks. For example, if the properties that secure our loans contain, or become contaminated with, toxic or hazardous substances, the value and the marketability of these properties will decrease, the ability of our borrowers to repay their loans will likely decrease and our profitability may be adversely affected. Further, under certain circumstances, the liability of the borrower may extend to a lender that has undertaken certain roles in managing the property or the activities of the ~~borrower such that the lender could be characterized as an “owner” or “operator” under~~ applicable environmental laws, either pre-foreclosure or post-foreclosure. If we are required to incur such costs or satisfy such liabilities, this could have a material adverse effect on our profitability.

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borrower such that the lender could be characterized as an “owner” or “operator” under applicable environmental laws, either pre-foreclosure or post-foreclosure. If we are required to incur such costs or satisfy such liabilities, this could have a material adverse effect on our profitability.

Although our manager arranges for comprehensive title, fire and casualty insurance on improved properties securing our loans, and may arrange for earthquake insurance depending upon the relevant circumstances, losses resulting from acts of terrorism, war, earthquakes, floods, mudslides, other natural disasters or similar events are either uninsurable or not economically insurable. In the event that the property, including any improvements on the property, securing one of our loans suffers losses resulting from one or more of these uninsured events, we will experience a significant decrease in the value of our security interest and, as a result, may suffer a loss of principal and interest on the loan.

Risks Particular to Development and Construction Loans

Since we may invest a substantial portion of our assets in loans made for the development or construction of residential and commercial property, we are indirectly subject to the risks particular to construction loans. These risks include, but are not limited to, as more fully described below, competition in the residential and commercial market, the adverse effects of increased interest rates, the failure of a borrower to obtain the necessary entitlements from local, state and federal governmental and quasi-governmental agencies, unanticipated assessments related to utilities and infrastructure and the failure of a borrower to complete a development.

The residential and commercial real estate market is highly competitive. Increased interest rates, tighter credit, over development of residential homes and adverse economic conditions will most likely result in increased standing inventory for a homebuilder borrower, which, in turn, adversely affects the borrower’s ability to repay our loans. Further, in the event that the commercial real estate market is unable to absorb additional space, the borrower may not receive the projected cash flow from the lease of new space and, as a result, may not have sufficient funds to repay its obligations to us.

In the event that a borrower fails to obtain the requisite permits or entitlements for a property, the borrower risks increased costs associated with development and a diminished market value for the property, which, in turn, adversely affect the value of our collateral. The failure of local housing and development authorities to grant approvals related to building on unimproved land, or the imposition of a moratorium on building on unimproved land, would reduce the market value of the development projects securing our loans.

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property, which, in turn, adversely affect the value of our collateral. The failure of local housing and development authorities to grant approvals related to building on unimproved land, or the imposition of a moratorium on building on unimproved land, would reduce the market value of the development projects securing our loans.

If a borrower is charged with unanticipated assessments relating to utilities or infrastructure, or if a borrower is unable to obtain or loses commitments from municipalities for utilities or infrastructure, the borrower will achieve a reduced return on its development project and may not have sufficient funds to repay our loans. In addition, a project may be assessed to pay for the cost of utility facilities, such as water treatment plants or the provision of water service to a location where there are no water facilities available. Municipalities are, with increasing frequency, imposing assessments on new developments to offset the impact of such developments on public infrastructure or services, such as schools, traffic, police or fire services, open space and other recreational facilities. These assessments will increase the property tax burden for the project, and may make the project less attractive to homebuyers or prospective tenants.

In the event a borrower is unable to timely complete its development project due to factors that traditionally affect construction, the borrower may not be able to satisfy its obligations to us in a timely manner, if at all. Further, if the occurrence of one or more of these variables results in the failure of the borrower to complete a development or the bankruptcy of the borrower, we will be forced to either sell ~~the project in bulk at a price that may not be sufficient to repay the relevant loan, or identify and engage a substitute builder to complete the project.~~

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the project in bulk at a price that may not be sufficient to repay the relevant loan, or identify and engage a substitute builder to complete the project.

Federal Income Tax Risks

If we do not remain qualified as a partnership for federal income tax purposes, we will be subject to the payment of tax on our income at corporate rates, which will reduce the amount of funds available for payment of distributions to our members and may change the tax treatment of our distributions. Further, in the event we allocate income to members, but do not distribute sufficient cash to pay the associated taxes, members will be required to pay their associated taxes themselves without receiving a distribution of cash from us to pay these taxes.

ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Since we invest in mortgage loans and make distributions of preferred returns to our members, we will be exposed to market risk related primarily to changes in interest rates. The exposure to interest rate risk relates to the relationship between the interests rates earned from our mortgage loans and the preferred returns payable to our investors. Generally, we will invest in mortgage loans that will have an initial term of between one and three years and we will provide investors with fixed preferred returns over the course of the investors’ relevant holding period. We rely upon our management to adapt to prevailing interest rates by adjusting the interest rates we charge on our mortgage loan investments, to the extent possible, and the preferred returns we agree to pay to our investors. Since the rates we earn from our mortgage loan investments and the preferred returns we agree to pay to our investors are fixed through the relevant term of the mortgage loan or the holding period of an investment, our exposure to changes in interest rates is minimized. However, although we have the ability to adjust the preferred returns payable to our investors in light of the interest rates we charge on our mortgage loans, the changes in interest rates and other market conditions, we may be faced with the situation where the actual interest rates earned on our mortgage loans fall below the preferred returns payable to investors. This situation would occur if we agree to pay to our investors preferred returns that exceed the interest rates on our mortgage loans. To the extent that the interest rates earned on our mortgage loans are less than the preferred returns payable to investors, we may not have sufficient cash available for distribution to satisfy the preferred returns payable to investors.

-In 17addition, -as of March 31, 2005, we have not entered into any lines of credit, credit facilities or other loan agreements, have not dealt in any foreign currencies and do not own any options, futures, swaps or other derivative instruments.

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over the course of the investors’ relevant holding period. We rely upon our management to adapt to prevailing interest rates by adjusting the interest rates we charge on our mortgage loan investments, to the extent possible, and the preferred returns we agree to pay to our investors. Since the rates we earn from our mortgage loan investments and the preferred returns we agree to pay to our investors are fixed through the relevant term of the mortgage loan or the holding period of an investment, our exposure to changes in interest rates is minimized. However, although we have the ability to adjust the preferred returns payable to our investors in light of the interest rates we charge on our mortgage loans, the changes in interest rates and other market conditions, we may be faced with the situation where the actual interest rates earned on our mortgage loans fall below the preferred returns payable to investors. This situation would occur if we agree to pay to our investors preferred returns that exceed the interest rates on our mortgage loans. To the extent that the interest rates earned on our mortgage loans are less than the preferred returns payable to investors, we may not have sufficient cash available for distribution to satisfy the preferred returns payable to investors.

In addition, as of June 30, 2004, we have not entered into any lines of credit, credit facilities or other loan agreements, have not dealt in any foreign currencies and do not own any options, futures, swaps or other derivative instruments.

ITEM 4.

CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls

We evaluated the effectiveness of our disclosure controls and procedures as of the three months ended ~~June~~March 3031, ~~2004~~2005. This evaluation was done with the participation of our manager and its management team.

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act of 1934 are recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports that we file under the Securities Exchange Act of 1934 is accumulated and communicated to our manager, as appropriate to allow timely decisions regarding required disclosure.

Limitations on the Effectiveness of Controls

Our manager does not expect that our disclosure controls and procedures or our internal controls over financial reporting will prevent all error and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, but not absolute, assurance that the objectives of a control system are met. Further, any control system reflects limitations on resources, and the benefits of a control system must be considered relative to its costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within us have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of a control. The design of a control system is also based upon certain assumptions about the likelihood of future events, there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and may not be detected.

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Conclusions

Based on this evaluation, we concluded that, subject to the limitations noted above, our disclosure controls and procedures are effective to ensure that information we are required to disclose in reports that we file or submit under the Securities Exchange Act of 1934 are recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms.

Changes in Internal Controls

There were no changes in our internal controls over financial reporting that occurred during our last fiscal quarter, i.e., the quarter ended ~~June 30~~March 31, ~~2004~~2005, that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

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PART II – OTHER INFORMATION

ITEM 1.

LEGAL PROCEEDINGS.

InNot ~~March 1998, Thomas A~~applicable. Hantges was named as a defendant in a civil action brought by the Securities and Exchange Commission in the United States District Court for the Southern District of New York. In its findings on a motion for a preliminary injunction, the court concluded that the Securities and Exchange Commission had established a substantial likelihood of success in proving that Mr. Hantges had violated the registration requirements of the Securities Act; however, the court determined that Mr. Hantges was not likely to engage in similar violations of the Securities Act in the future. Accordingly, the preliminary injunction entered by the court against some of the defendants in the action, was not entered against Mr. Hantges. In July 2004, however, the court issued an opinion and order granting the Securities and Exchange Commission’s motion for summary judgment against Mr. Hantges, among others, issuing, with respect to Mr. Hantges, a permanent injunction against violations of Section 5(a) and (c) of the Securities Act, requiring disgorgement of proceeds derived from the transactions in question in the amount of approximately $889,000 jointly and severally with others and $305,000 individually and imposing a civil penalty of $125,000. The order has not yet been entered. We have been advised that Mr. Hantges intends to appeal the order.

ITEM 2. ~~CHANGES~~UNREGISTERED INSALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

Through our Registration Statement on Form S-11, ~~as amended~~ (File No. 333-~~59362~~120102), we registered an aggregate of 2427,000 membership units at a purchase price of $5,000 per membership unit for an aggregate offering amount of $~~120~~135,000,000. Of the 2427,000 membership units, we registered 128,000 Class A membership units, 8 7,000 Class B membership units and 412,000 Class C membership units, where such units differ only with respect to the relevant holding periods for the units and the relative preferred returns applicable to the units. Pursuant to this offering, investors are required to purchase a minimum of two units, for $10,000 and cannot purchase fractional units. The offering includes units issued under our distribution reinvestment plan. Our current offering is substantially similar to our prior offering, the registration for which expired on November 8, 2004.

As of ~~July~~March 31, ~~2004~~2005, we have issued, net of redemptions and including reinvestments, 511,~~007~~739.~~7985~~7180 units representing a capitalization of $2558,~~038~~698,~~992.50~~590, where such units consist of 23,~~069~~806.~~7696~~7011 Class A Units, ~~596~~1,953.~~0795~~8605 Class B Units and 25,~~341~~979.~~9494~~1564 Class C Units. Of our outstanding units, we issued 845.~~8901~~8787 of Class A Units, 427.~~1162~~8941 of Class B Units and 46168.~~9763~~6632 of Class C Units through our reinvestment program, and redeemed 2318.~~1205~~1776 Class A Units, 299.6841 Class B ~~Units~~Unit ~~0.0367~~ and 198.~~0269~~0298 Class C Units.

Through the proceeds from our current registered offering, our previous registered offering and other sources such as loan payoffs and interest payments, as of ~~June~~March 3031, ~~2004~~2005, we have mortgage loan investments of $1755,~~473~~084,~~141~~793, cash and cash equivalents of $13,~~512~~430,~~987~~891 and interest and other receivables of $~~161~~576,~~371~~192.

ITEM 3.

DEFAULTS UPON SENIOR SECURITIES.

Not applicable.

ITEM 4.

SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

Not applicable.

ITEM 5.

OTHER INFORMATION.

Not applicable.

ITEM 6. EXHIBITS ~~AND REPORTS ON FORM 8-K~~.

(a) Exhibits.



31.1		Certifications Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2		Certifications Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1		Certifications Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350).

~~31.1~~– ~~Certifications~~19 ~~Pursuant~~– ~~to Section 302 of the Sarbanes-Oxley Act of 2002.~~

31.2 Certifications Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1 Certification of President and Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350).

(b) Reports on Form 8-K.

Not applicable.

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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 thereunto duly authorized.

USA CAPITAL FIRST TRUST DEED FUND, LLC
By:	USA CAPITAL REALTY ADVISORS, LLC, Its sole manager
	By:	USA INVESTMENT PARTNERS, LLC, Its sole manager
		By:	/s/ Thomas A. Hantges	August 20, 2004
			Thomas A. Hantges, Co-Manager	Date
		By:	/s/ Joseph D. Milanowski	August 20, 2004
			Joseph D. Milanowski, Co-Manager	Date

USA CAPITAL FIRST TRUST DEED FUND, LLC

-By: 21USA -CAPITAL REALTY ADVISORS, LLC Its: Manager



By:	/s/ Joseph D. Milanowski	May 23, 2005
	Joseph D. Milanowski*	Date
Its:	Manager

*	Joseph D. Milanowski executes this report as the principal executive officer and principal financial officer of the registrant.

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