THE DOW(R) INDUSTRIALS ("DIAMONDS(R)")

                           DIAMONDS(R) TRUST, SERIES 1

                             A UNIT INVESTMENT TRUST

                               SEMI-ANNUAL REPORT

                                 APRIL 30, 2008

                                   (UNAUDITED)

"Dow Jones Industrial Average(SM)", "DJIA(R)", "Dow Jones(R)", "The Dow(R)" and
"DIAMONDS(R)" are trademarks and service marks of Dow Jones & Company, Inc.
("Dow Jones") and have been licensed for use for certain purposes by State
Street Global Markets, LLC pursuant to a "Licence Agreement" with Dow Jones and
have been sublicensed for use for certain purposes to DIAMONDS Trust, Series 1
(the "Trust"), PDR Services LLC and the American Stock Exchange LLC pursuant to
separate "Sublicenses." The Trust is not sponsored, endorsed, sold or promoted
by Dow Jones and Dow Jones makes no representation regarding the advisability of
investing in the Trust.



DIAMONDS TRUST, SERIES 1
SCHEDULE OF INVESTMENTS
APRIL 30, 2008 (UNAUDITED)

--------------------------------------------------------------------------------



COMMON STOCKS                                               SHARES           VALUE
--------------------------------------------------------------------------------------

                                                                  
3M Co. .................................................  5,807,438     $  446,591,982
Alcoa, Inc. ............................................  5,807,438        201,982,694
American Express Co. ...................................  5,807,438        278,873,173
American International Group, Inc. .....................  5,807,438        268,303,636
AT&T, Inc. .............................................  5,807,438        224,805,925
Bank of America Corp. ..................................  5,807,438        218,011,222
Boeing Co. .............................................  5,807,438        492,819,189
Caterpillar, Inc. ......................................  5,807,438        475,513,024
Chevron Corp. ..........................................  5,807,438        558,385,164
Citigroup, Inc. ........................................  5,807,438        146,753,958
Coca-Cola Co. ..........................................  5,807,438        341,883,875
Du Pont (E.I.) de Nemours & Co. ........................  5,807,438        284,041,792
Exxon Mobil Corp. ......................................  5,807,438        540,498,255
General Electric Co. ...................................  5,807,438        189,903,223
General Motors Corp. ...................................  5,807,438        134,732,562
Hewlett-Packard Co. ....................................  5,807,438        269,174,751
Home Depot, Inc. .......................................  5,807,438        167,254,214
Intel Corp. ............................................  5,807,438        129,273,570
International Business Machines Corp. ..................  5,807,438        700,957,767
Johnson & Johnson.......................................  5,807,438        389,621,015
JPMorgan Chase & Co. ...................................  5,807,438        276,724,421
McDonald's Corp. .......................................  5,807,438        346,007,156
Merck & Co., Inc. ......................................  5,807,438        220,914,941
Microsoft Corp. ........................................  5,807,438        165,628,132
Pfizer, Inc. ...........................................  5,807,438        116,787,578
Procter & Gamble Co. ...................................  5,807,438        389,388,718
United Technologies Corp. ..............................  5,807,438        420,865,032
Verizon Communications, Inc. ...........................  5,807,438        223,470,214
Wal-Mart Stores, Inc. ..................................  5,807,438        336,715,255
Walt Disney Co. ........................................  5,807,438        188,335,214
                                                                        --------------
Total Common Stocks -- (Cost $10,401,251,241)...........                $9,144,217,652
                                                                        ==============





See accompanying notes to financial statements.


                                        1



DIAMONDS TRUST, SERIES 1
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 2008 (UNAUDITED)

--------------------------------------------------------------------------------



                                                                 
ASSETS
  Investments in securities, at value..........................      $9,144,217,652
  Cash.........................................................           9,309,948
  Dividends receivable.........................................          13,247,953
                                                                    ---------------
TOTAL ASSETS...................................................       9,166,775,553
                                                                    ---------------

LIABILITIES
  Income distribution payable..................................          11,771,675
  Payable for DIAMONDS redeemed in-kind........................               7,331
  Accrued Trustee expense......................................             470,236
  Accrued expenses and other liabilities.......................           6,594,674
                                                                    ---------------
TOTAL LIABILITIES..............................................          18,843,916
                                                                    ---------------
NET ASSETS.....................................................      $9,147,931,637
                                                                    ===============

NET ASSETS REPRESENTED BY:
  Paid in surplus..............................................      10,729,722,020
  Undistributed net investment income..........................          17,687,346
  Accumulated net realized loss on investments.................        (342,444,140)
  Net unrealized depreciation on investments...................      (1,257,033,589)
                                                                    ---------------
NET ASSETS.....................................................      $9,147,931,637
                                                                    ===============

NET ASSET VALUE PER DIAMOND....................................             $128.10
                                                                            =======
UNITS OF FRACTIONAL UNDIVIDED INTEREST
  ("DIAMONDS") OUTSTANDING, UNLIMITED UNITS AUTHORIZED, $0.00
     PAR VALUE.................................................          71,414,560
                                                                    ---------------

COST OF INVESTMENTS............................................     $10,401,251,241
                                                                    ===============





See accompanying notes to financial statements.


                                        2



DIAMONDS TRUST, SERIES 1
STATEMENTS OF OPERATIONS


--------------------------------------------------------------------------------



                                   FOR THE SIX MONTHS ENDED
                                        APRIL 30, 2008       FOR THE YEAR ENDED  FOR THE YEAR ENDED  FOR THE YEAR ENDED
                                          (UNAUDITED)         OCTOBER 31, 2007    OCTOBER 31, 2006    OCTOBER 31, 2005
                                   ------------------------  ------------------  ------------------  ------------------
                                                                                         
INVESTMENT INCOME
     Dividend income.............        $ 108,860,905         $  172,683,551      $  154,659,959       $ 177,120,908
                                         -------------         --------------      --------------       -------------

EXPENSES
     Trustee expense.............            2,670,014              4,232,050           4,562,765           4,928,790
     Marketing expense...........            2,609,120              4,437,144           3,903,738           4,307,114
     DJIA license fee............            1,758,751              2,555,000           2,555,000           2,655,783
     Legal and audit services....               56,728                174,890             100,378             149,889
     SEC registration fee........                   --                     --                  --             324,223
     Printing and postage
          expense................               95,269                119,920             275,241             403,199
     Other expenses..............               52,779                 98,163             109,678             120,310
                                         -------------         --------------      --------------       -------------
Total expenses...................            7,242,661             11,617,167          11,506,800          12,889,308
     Trustee earnings credits....             (284,406)              (965,742)           (418,803)           (280,392)
                                         -------------         --------------      --------------       -------------
Net expenses after Trustee
  earnings credits...............            6,958,255             10,651,425          11,087,997          12,608,916
                                         -------------         --------------      --------------       -------------
NET INVESTMENT INCOME............          101,902,650            162,032,126         143,571,962         164,511,992
                                         -------------         --------------      --------------       -------------

REALIZED AND UNREALIZED GAIN
  (LOSS) ON INVESTMENTS
     Net realized gain on
          investment
          transactions...........          153,059,160            854,766,927         413,807,291         651,853,900
     Net change in unrealized
          appreciation
          (depreciation).........         (808,851,524)           139,514,977         517,345,427        (297,315,375)
                                         -------------         --------------      --------------       -------------
NET REALIZED AND UNREALIZED GAIN
  (LOSS) ON INVESTMENTS..........         (655,792,364)           994,281,904         931,152,718         354,538,525
                                         -------------         --------------      --------------       -------------

NET INCREASE (DECREASE) IN NET
  ASSETS RESULTING FROM
  OPERATIONS.....................        $(553,889,714)        $1,156,314,030      $1,074,724,680       $ 519,050,517
                                         =============         ==============      ==============       =============





See accompanying notes to financial statements.


                                        3



DIAMONDS TRUST, SERIES 1
STATEMENTS OF CHANGES IN NET ASSETS


--------------------------------------------------------------------------------



                              FOR THE SIX MONTHS ENDED
                                   APRIL 30, 2008       FOR THE YEAR ENDED  FOR THE YEAR ENDED  FOR THE YEAR ENDED
                                     (UNAUDITED)         OCTOBER 31, 2007    OCTOBER 31, 2006    OCTOBER 31, 2005
                              ------------------------  ------------------  ------------------  ------------------
                                                                                    
INCREASE (DECREASE) IN NET
  ASSETS RESULTING FROM
  OPERATIONS:
     Net investment income..       $  101,902,650         $  162,032,126      $   143,571,962     $   164,511,992
     Net realized gain on
          investment
          transactions......          153,059,160            854,766,927          413,807,291         651,853,900
     Net change in
          unrealized
          appreciation
          (depreciation)....         (808,851,524)           139,514,977          517,345,427        (297,315,375)
                                   --------------         --------------      ---------------     ---------------

NET INCREASE (DECREASE) IN
  NET ASSETS RESULTING FROM
  OPERATIONS................         (553,889,714)         1,156,314,030        1,074,724,680         519,050,517
                                   --------------         --------------      ---------------     ---------------

NET EQUALIZATION CREDITS AND
  CHARGES...................              (72,729)           (13,594,558)          (1,800,594)         (2,410,446)
                                   --------------         --------------      ---------------     ---------------

DISTRIBUTIONS TO UNITHOLDERS
  FROM NET INVESTMENT
  INCOME....................         (102,050,316)          (147,731,248)        (141,435,357)       (168,178,022)
                                   --------------         --------------      ---------------     ---------------

NET INCREASE (DECREASE) IN
  NET ASSETS FROM ISSUANCE
  AND REDEMPTION OF
  DIAMONDS..................          464,053,606          1,785,284,683       (1,781,857,294)     (1,129,366,247)
                                   --------------         --------------      ---------------     ---------------

NET INCREASE (DECREASE) IN
  NET ASSETS DURING PERIOD..         (191,959,153)         2,780,272,907         (850,368,565)       (780,904,198)

NET ASSETS AT BEGINNING OF
  YEAR......................        9,339,890,790          6,559,617,883        7,409,986,448       8,190,890,646
                                   --------------         --------------      ---------------     ---------------

NET ASSETS END OF YEAR*.....       $9,147,931,637         $9,339,890,790      $ 6,559,617,883     $ 7,409,986,448
                                   ==============         ==============      ===============     ===============

*INCLUDES UNDISTRIBUTED NET
  INVESTMENT INCOME.........       $   17,687,346         $   17,835,012      $     3,534,134     $     1,397,529
                                   --------------         --------------      ---------------     ---------------





See accompanying notes to financial statements.


                                        4



DIAMONDS TRUST, SERIES 1
FINANCIAL HIGHLIGHTS
SELECTED DATA FOR A DIAMOND OUTSTANDING DURING EACH PERIOD

--------------------------------------------------------------------------------



                             FOR THE SIX
                                MONTHS       FOR THE YEAR   FOR THE YEAR   FOR THE YEAR   FOR THE YEAR     FOR THE YEAR
                                ENDED            ENDED          ENDED          ENDED          ENDED            ENDED
                              04/30/08*        10/31/07       10/31/06       10/31/05       10/31/04         10/31/03
                             -----------     ------------   ------------   ------------   ------------     ------------
                                                                                         
NET ASSET VALUE, BEGINNING
  OF YEAR..................   $   139.17      $   120.69     $   104.31     $   100.48     $    98.20       $    84.12
                              ----------      ----------     ----------     ----------     ----------       ----------
INVESTMENT OPERATIONS:
  Net investment
     income(1).............         1.48            2.85           2.45           2.39(5)        1.94             1.91
  Net realized and
     unrealized gain (loss)
     on investments........       (11.02)          18.57          16.37           3.91           2.28            14.06
                              ----------      ----------     ----------     ----------     ----------       ----------
TOTAL FROM INVESTMENT
  OPERATIONS...............        (9.54)          21.42          18.82           6.30           4.22            15.97
                              ----------      ----------     ----------     ----------     ----------       ----------
NET EQUALIZATION CREDITS
  AND CHARGES(1)...........        (0.00)(2)       (0.24)         (0.03)         (0.03)          0.00(2)         (0.01)
                              ----------      ----------     ----------     ----------     ----------       ----------
LESS DISTRIBUTIONS FROM:
  Net investment income....        (1.53)          (2.70)         (2.41)         (2.44)         (1.94)           (1.88)
                              ----------      ----------     ----------     ----------     ----------       ----------
NET ASSET VALUE, END OF
  PERIOD...................   $   128.10      $   139.17     $   120.69     $   104.31     $   100.48       $    98.20
                              ==========      ==========     ==========     ==========     ==========       ==========
TOTAL INVESTMENT
  RETURN(3)................        (6.84)%         17.72%         18.23%          6.23%          4.27%           19.22%
RATIOS AND SUPPLEMENTAL
  DATA
Ratio to average net
  assets:
  Net investment income....         2.34%           2.19%          2.21%          2.27%          1.89%            2.12%
  Total expenses...........         0.17%           0.16%          0.18%          0.18%          0.18%            0.18%
  Net expenses excluding
     trustee earnings
     credit................         0.16%           0.14%          0.17%          0.17%          0.18%            0.18%
  Net expenses excluding
     rebates, trustee
     earnings credit and
     waivers...............         0.16%           0.14%          0.17%          0.17%          0.18%            0.18%
Portfolio turnover
  rate(4)..................         8.76%           1.45%          0.01%          7.69%         13.88%            8.71%
NET ASSET VALUE, END OF
  YEAR (000'S).............   $9,147,932      $9,339,891     $6,559,618     $7,409,986     $8,190,891       $5,991,092




--------------------------------------------------------------------------------
   *   Unaudited

   (1) Per share numbers have been calculated using the average shares method.

   (2) Amount shown represents less than $0.005.

   (3) Total return is calculated assuming a purchase of shares at net asset
       value per share on the first day and a sale at net asset value per share
       on the last day of each period reported. Distributions are assumed, for
       the purposes of this calculation, to be reinvested at the net asset value
       per share on the respective payment dates of the Fund. Total return for a
       period of less than one year is not annualized. Broker commission charges
       are not included in the calculation.

   (4) Portfolio turnover ratio excludes securities received or delivered from
       processing creations or redemptions of DIAMONDS

   (5) Net investment income per unit reflects receipt of a one time dividend
       from a portfolio holding (Microsoft Corp.). The effect of this dividend
       amounted to $0.22 per share.

See accompanying notes to financial statements.


                                        5



DIAMONDS TRUST, SERIES 1
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 2008 (UNAUDITED)

--------------------------------------------------------------------------------

NOTE 1 -- ORGANIZATION
DIAMONDS Trust, Series 1 is a unit investment trust created under the laws of
the State of New York and registered under the Investment Company Act of 1940,
as amended. The Trust was created to provide investors with the opportunity to
purchase units of beneficial interest in the Trust representing proportionate
undivided interests in the portfolio of securities consisting of substantially
all of the component common stocks, which comprise the Dow Jones Industrial
Average (the "DJIA"). Each unit of fractional undivided interest in the Trust is
referred to as a "DIAMOND" and collectively as "DIAMONDS". The Trust commenced
operations on January 14, 1998 upon the initial issuance of 500,000 DIAMONDS
(equivalent to ten "Creation Units" -- see Note 4) in exchange for a portfolio
of securities assembled to reflect the intended portfolio composition of the
Trust.

Under the Trust Agreement, the Sponsor and Trustee (each as defined below) are
indemnified against certain liabilities arising from the performance of their
duties to the Trust. Additionally, in the normal course of business, the Trust
enters into contracts with service providers that contain general
indemnification clauses. The Trust's maximum exposure under these arrangements
is unknown as this would involve future claims that may be made against the
Trust that have not yet occurred. However, based on experience the Trust expects
the risk of loss to be remote.

NOTE 2 -- SIGNIFICANT ACCOUNTING POLICIES
The preparation of financial statements in accordance with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts and disclosures in
the financial statements. Actual results could differ from these estimates. The
following is a summary of significant accounting policies followed by the Trust.

SECURITY VALUATION
Portfolio securities are valued based on the closing sale price on the exchange
which is deemed to be the principal market for the security, except for
securities listed on the NASDAQ which are valued at the NASDAQ official closing
price. If there is no closing sale price available or official closing price,
valuation will be determined by the Trustee in good faith based on available
information.

In September, 2006, Statement of Financial Accounting Standards No. 157, Fair
Value Measurements ("SFAS 157"), was issued and is effective for fiscal years
beginning after November 15, 2007. SFAS 157 defines fair value, establishes a
framework for measuring fair value and expands disclosures about fair value
measurements. The Trustee is currently evaluating the impact, if any, the
adoption of SFAS 157 will have on the Fund's financial statements. The Trustee
does not anticipate SFAS 157 will have a material impact on the Trust's
financial statements.

INVESTMENT RISK
The Trust invests in various investments which are exposed to risks, such as
market risk. Due to the level of risk associated with certain investments it is
at least reasonably possible that changes in the values of investment securities
will occur in the near term and that such changes could materially affect the
amounts reported in the financial statements.


                                        6



DIAMONDS TRUST, SERIES 1
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
APRIL 30, 2008 (UNAUDITED)

--------------------------------------------------------------------------------


INVESTMENT TRANSACTIONS
Investment transactions are recorded on the trade date. Realized gains and
losses from the sale or disposition of securities are recorded on the identified
cost basis. Dividend income is recorded on the ex-dividend date.

DISTRIBUTIONS TO UNITHOLDERS
The Trust declares and distributes dividends from net investment income to its
unitholders monthly. The Trust will distribute net realized capital gains, if
any, at least annually.

EQUALIZATION
The Trust follows the accounting practice known as "Equalization" by which a
portion of the proceeds from sales and costs of reacquiring the Trust's units,
equivalent on a per unit basis to the amount of distributable net investment
income on the date of the transaction, is credited or charged to undistributed
net investment income. As a result, undistributed net investment income per unit
is unaffected by sales or reacquisitions of the Trust's units.

FEDERAL INCOME TAX
The Trust has qualified and intends to qualify as a "regulated investment
company" under Subchapter M of the Internal Revenue Code of 1986, as amended. By
so qualifying and electing, the Trust will not be subject to federal income
taxes to the extent it distributes its taxable income, including any net
realized capital gains, for each fiscal year. In addition, by distributing
during each calendar year substantially all of its net investment income and
capital gains, if any, the Trust will not be subject to federal excise tax.
Income and capital gain distributions are determined in accordance with income
tax regulations which may differ from generally accepted accounting principles.
These differences are primarily due to differing treatments for income
equalization, in-kind transactions and losses deferred due to wash sales. Net
investment income per share calculations in the financial highlights for all
years presented exclude these differences.

During the six months ended April 30, 2008, the Trust reclassified $197,138,304
of non-taxable security gains realized in the in-kind redemption of Creation
Units (Note 4) as an increase to paid in surplus in the Statements of Assets and
Liabilities.

At April 30, 2008, the Trust had the following capital loss carryforwards which
may be used to offset any net realized gains, expiring October 31:


                                         
2008......................................  $  5,816,675
2010......................................     2,065,467
2011......................................    68,716,435
2012......................................   221,460,585
2014......................................        52,316



On July 13, 2006, the Financial Accounting Standards Board ("FASB") released
FASB Interpretation No. 48 "Accounting for Uncertainty in Income Taxes" ("FIN
48"). FIN 48 provides guidance for how uncertain tax positions should be
recognized, measured, presented and disclosed in the financial statements. FIN
48 requires the evaluation of tax positions taken or expected to be taken in the
course of preparing the Fund's tax returns to

                                        7



DIAMONDS TRUST, SERIES 1
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
APRIL 30, 2008 (UNAUDITED)

--------------------------------------------------------------------------------


determine whether the tax positions are "more-likely-than-not" of being
sustained by the applicable tax authority. Tax positions not deemed to meet the
more-likely-than-not threshold would be recorded as a tax benefit or expense in
the current year. Adoption of FIN 48 is required for fiscal years beginning
after December 15, 2006 and is to be applied to all open tax years as of the
effective date.

In adopting FIN 48 with respect to the Trust, management evaluated the
implications of FIN 48 and determined that all of the Trust's tax positions meet
the "more-likely-than-not" threshold. As a result, the financial statements have
not been impacted by the adoption of FIN 48. However, management's conclusions
regarding FIN 48 are subject to review and adjustment at a later date based on
factors including, but not limited to, further implementation guidance expected
from FASB and on-going analysis of tax laws, regulation, and interpretations
thereof.

NOTE 3 -- TRANSACTIONS WITH THE TRUSTEE AND SPONSOR
In accordance with the Trust Agreement, State Street Bank and Trust Company (the
"Trustee") maintains the Trust's accounting records, acts as custodian and
transfer agent to the Trust, and provides administrative services, including
filing of regulatory reports. The Trustee is also responsible for determining
the composition of the portfolio of securities which must be delivered and/or
received in exchange for the issuance and/or redemption of Creation Units of the
Trust, and for adjusting the composition of the Trust's portfolio from time to
time to conform to changes in the composition and/or weighting structure of the
DJIA. For these services, the Trustee received a fee at the following annual
rates for the six months ended April 30, 2008:



                                        FEE AS A PERCENTAGE OF NET ASSET VALUE
NET ASSET VALUE OF THE TRUST            OF THE TRUST
----------------------------            --------------------------------------
                                     
$0 - $499,999,999                       10/100 of 1% per annum plus or minus
                                        the Adjustment Amount
$500,000,000 - $2,499,999,999           8/100 of 1% per annum plus or minus
                                        the Adjustment Amount
$2,500,000,000 - and above              6/100 of 1% per annum plus or minus
                                        the Adjustment Amount



The Adjustment Amount is the sum of (a) the excess or deficiency of transaction
fees received by the Trustee, less the expenses incurred in processing orders
for creation and redemption of DIAMONDS and (b) the amounts earned by the
Trustee with respect to the cash held by the Trustee for the benefit of the
Trust. During the six months ended April 30, 2008, the Adjustment Amount reduced
the Trustee's fee by $521,872. The Adjustment Amount included an excess of net
transaction fees from processing orders of $237,466 and a Trustee earning credit
of $284,406.

PDR Services LLC (the "Sponsor", a wholly-owned subsidiary of the American Stock
Exchange LLC) agreed to reimburse the Trust for, or assume, the ordinary
operating expenses of the Trust which exceeded 18.00/100 of 1% per annum of the
daily net asset value of the Trust. There were no such reimbursements by the
Sponsor for the fiscal years ended October 31, 2005, October 31, 2006, October
31, 2007 and six months ended April 30, 2008.

Dow Jones, the American Stock Exchange LLC (the "AMEX"), the Sponsor and State
Street Global Markets, LLC ("SSGM") have entered into a License Agreement. The
License Agreement grants SSGM, an affiliate of the Trustee, a license to use the
DJIA as a basis for determining the composition of the Portfolio and to use
certain trade names and trademarks of Dow Jones in connection with the
Portfolio. The Trustee on behalf of the Trust, the

                                        8



DIAMONDS TRUST, SERIES 1
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
APRIL 30, 2008 (UNAUDITED)

--------------------------------------------------------------------------------



Sponsor and the Exchange have each received a sublicense from SSGM for the use
of the DJIA and such trade names and trademarks in connection with their rights
and duties with respect to the Trust. The License Agreement may be amended
without the consent of any of the Beneficial Owners of DIAMONDS. Currently, the
License Agreement is scheduled to terminate on December 31, 2017, but its term
may be extended without the consent of any of the Beneficial Owners of DIAMONDS.
The Trust pays an annual sub-license fee to Dow Jones of an amount equal to
0.05% on the first $1 billion of the then rolling average asset balance, and
0.04% on any excess rolling average asset balance over and above $1 billion. The
minimum annual fee for the Trust is $1 million.

NOTE 4 -- TRUST TRANSACTIONS IN DIAMONDS
Transactions in DIAMONDS were as follows:



                                                     SIX MONTHS ENDED APRIL 30,
                                                               2008*
                                                  -------------------------------
                                                    DIAMONDS          AMOUNTS
                                                  ------------   ----------------
                                                           
DIAMONDS sold...................................   169,550,000   $ 21,493,580,429
DIAMONDS issued upon dividend reinvestment......         5,490            693,444
DIAMONDS redeemed...............................  (165,250,000)   (21,030,292,996)
Net income equalization.........................            --             72,729
                                                  ------------   ----------------
Net Increase....................................     4,305,490   $    464,053,606
                                                  ============   ================







                                                    YEAR ENDED OCTOBER 31, 2007
                                                  -------------------------------
                                                    DIAMONDS          AMOUNTS
                                                  ------------   ----------------
                                                           
DIAMONDS sold...................................   283,800,000   $ 37,094,855,531
DIAMONDS issued upon dividend reinvestment......         9,870          1,275,186
DIAMONDS redeemed...............................  (271,050,000)   (35,324,440,592)
Net income equalization.........................            --         13,594,558
                                                  ------------   ----------------
Net Increase....................................    12,759,870   $  1,785,284,683
                                                  ============   ================







                                                    YEAR ENDED OCTOBER 31, 2006
                                                  -------------------------------
                                                    DIAMONDS          AMOUNTS
                                                  ------------   ----------------
                                                           
DIAMONDS sold...................................   142,300,000   $ 15,848,129,501
DIAMONDS issued upon dividend reinvestment......        12,974          1,429,406
DIAMONDS redeemed...............................  (159,000,000)   (17,633,216,795)
Net income equalization.........................            --          1,800,594
                                                  ------------   ----------------
Net Decrease....................................   (16,687,026)  $ (1,781,857,294)
                                                  ============   ================




--------

   * Unaudited



                                        9



DIAMONDS TRUST, SERIES 1
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
APRIL 30, 2008 (UNAUDITED)

--------------------------------------------------------------------------------




                                                    YEAR ENDED OCTOBER 31, 2005
                                                  -------------------------------
                                                    DIAMONDS          AMOUNTS
                                                  ------------   ----------------
                                                           
DIAMONDS sold...................................   117,800,000   $ 12,383,980,226
DIAMONDS issued upon dividend reinvestment......        16,090          1,702,587
DIAMONDS redeemed...............................  (128,300,000)   (13,517,459,506)
Net income equalization.........................            --          2,410,446
                                                  ------------   ----------------
Net Decrease....................................   (10,483,910)  $ (1,129,366,247)
                                                  ============   ================




Except for under the Trust's dividend reinvestment plan, DIAMONDS are issued and
redeemed by the Trust only in Creation Unit size aggregations of 50,000
DIAMONDS. Such transactions are only permitted on an in-kind basis, with a
separate cash payment which is equivalent to the undistributed net investment
income per DIAMOND (income equalization) and a balancing cash component to
equate the transaction to the net asset value per unit of the Trust on the
transaction date. Transaction fees at scheduled amounts ranging from $1,000 to
$4,000 are charged in connection with each creation or redemption of Creation
Units through the DIAMONDS Clearing Process per Participating party per day,
regardless of the number of Creation Units created or redeemed. Transaction fees
are received by the Trustee and used to offset the expense of processing orders.

NOTE 5 -- INVESTMENT TRANSACTIONS
For the six months ended April 30, 2008, the Trust had net in-kind
contributions, net in-kind redemptions, purchases and sales of investment
securities of $15,363,109,221, $14,899,917,713, $759,145,315 and $755,070,720
respectively. At April 30, 2008, the cost of investments for federal income tax
purposes was substantially the same as the cost for financial reporting
purposes. Accordingly, the cost was $10,401,251,241, gross unrealized
appreciation was $79,178,481 and gross unrealized depreciation was
$1,336,212,070, resulting in net unrealized depreciation of $1,257,033,589.


                                       10



DIAMONDS TRUST, SERIES 1
OTHER INFORMATION
APRIL 30, 2008 (UNAUDITED)

--------------------------------------------------------------------------------

                FREQUENCY DISTRIBUTION OF DISCOUNTS AND PREMIUMS

                       BID/ASK PRICE(1) VS NET ASSET VALUE
                              AS OF APRIL 30, 2008



                                             BID/ASK PRICE               BID/ASK PRICE
                                               ABOVE NAV                   BELOW NAV
                                       -------------------------   -------------------------
                                        50-99   100-199     200     50-99   100-199     200
                                        BASIS    BASIS     BASIS    BASIS    BASIS     BASIS
                                       POINTS    POINTS   POINTS   POINTS    POINTS   POINTS
                                       ------   -------   ------   ------   -------   ------
                                                                    
2008.................................     0        0         0        0        0         0
2007.................................     1        0         0        6        0         0
2006.................................     0        0         0        0        0         0
2005.................................     0        0         0        0        0         0
2004.................................     0        0         0        0        0         0



          COMPARISON OF TOTAL RETURNS BASED ON NAV AND BID/ASK PRICE(1)

The table below is provided to compare the Trust's total pre-tax returns at NAV
with the total pre-tax returns based on bid/ask price and the performance of the
Dow Jones Industrial Average. Past performance is not necessarily an indication
of how the Trust will perform in the future.

                             CUMULATIVE TOTAL RETURN



                                                 1 YEAR   5 YEAR   10 YEAR   SINCE FIRST TRADE(2)
                                                 ------   ------   -------   --------------------
                                                                 
Return Based on NAV(3), (4)....................   0.33%    67.78%   70.41%           96.89%
Return Based on Bid/Ask Price(3), (4)..........   0.25%    68.00%   70.00%           96.68%
DJIA...........................................   0.47%    69.40%   73.09%          100.15%



                           AVERAGE ANNUAL TOTAL RETURN



                                                 1 YEAR   5 YEAR   10 YEAR   SINCE FIRST TRADE(2)
                                                 ------   ------   -------   --------------------
                                                                 
Return Based on NAV(3), (4)....................   0.33%    10.90%    5.48%           6.82%
Return Based on Bid/Ask Price(3), (4)..........   0.25%    10.93%    5.45%           6.80%
DJIA...........................................   0.47%    11.12%    5.64%           6.99%



--------

   (1) Currently, the Bid/Ask Price is calculated based on the best bid and best
       offer on the AMEX at 4:00 p.m. However, prior to April 3, 2001, the
       calculation of the Bid/Ask Price was based on the midpoint of the best
       bid and best offer at the close of trading on the AMEX, ordinarily 4:15
       p.m.

   (2) The Trust commenced trading on the AMEX on January 20, 1998.

   (3) Does not include any transaction fees which are payable to the Trustee
       only by persons purchasing and redeeming Creation Units. See Note 4 to
       the financial statements. If these amounts were reflected, returns would
       be less than those shown.

   (4) Does not include brokerage commissions and charges incurred only by
       persons who make purchases and sales of DIAMONDS in the secondary market.
       If these amounts were reflected, returns would be less than those shown.


                                       11



DIAMONDS TRUST, SERIES 1



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SPONSOR
PDR Services LLC
c/o American Stock Exchange LLC
86 Trinity Place
New York, NY 10006

TRUSTEE
State Street Bank and Trust Company
One Lincoln Street
Boston, MA 02111

DISTRIBUTOR
ALPS Distributors, Inc.
1290 Broadway, Suite 1100
Denver, CO 80203

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
PricewaterhouseCoopers LLP
125 High Street
Boston, MA 02110

LEGAL COUNSEL
Katten Muchin Rosenman LLP
575 Madison Avenue
New York, NY 10022

DIASAR