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<SEC-DOCUMENT>0001010549-04-000670.txt : 20041022
<SEC-HEADER>0001010549-04-000670.hdr.sgml : 20041022
<ACCEPTANCE-DATETIME>20041022171932
ACCESSION NUMBER:		0001010549-04-000670
CONFORMED SUBMISSION TYPE:	8-K/A
PUBLIC DOCUMENT COUNT:		2
CONFORMED PERIOD OF REPORT:	20041014
ITEM INFORMATION:		Financial Statements and Exhibits
FILED AS OF DATE:		20041022
DATE AS OF CHANGE:		20041022

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			DGSE COMPANIES INC
		CENTRAL INDEX KEY:			0000701719
		STANDARD INDUSTRIAL CLASSIFICATION:	RETAIL-JEWELRY STORES [5944]
		IRS NUMBER:				880097334
		STATE OF INCORPORATION:			NV
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		8-K/A
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-11048
		FILM NUMBER:		041092536

	BUSINESS ADDRESS:	
		STREET 1:		2817 FOREST LANE
		STREET 2:		STE 202
		CITY:			DALLAS
		STATE:			TX
		ZIP:			75234
		BUSINESS PHONE:		9724843662

	MAIL ADDRESS:	
		STREET 1:		2817 FOREST LN
		CITY:			DALLAS
		STATE:			TX
		ZIP:			75234

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	DALLAS GOLD & SILVER EXCHANGE INC /NV/
		DATE OF NAME CHANGE:	19930114

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	AMERICAN PACIFIC MINT INC
		DATE OF NAME CHANGE:	19920703

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	CANYON STATE CORP
		DATE OF NAME CHANGE:	19860819
</SEC-HEADER>
<DOCUMENT>
<TYPE>8-K/A
<SEQUENCE>1
<FILENAME>dgse8ka101404.txt
<TEXT>

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
================================================================================
                                  FORM 8-K/A-1
                          AMENDMENT NO. 1 TO FORM 8-K
                             FILED OCTOBER 14, 2004

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

                DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED):
                                OCTOBER 14, 2004

                              DGSE Companies, Inc.
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

                                     NEVADA
                 (STATE OR OTHER JURISDICTION OF INCORPORATION)

                   1-11048                     88-0097334
           (COMMISSION FILE NUMBER) (IRS EMPLOYER IDENTIFICATION NO.)

                                2817 FOREST LANE
                               DALLAS, TEXAS 75234
           (ADDRESS OF PRINCIPAL EXECUTIVE OFFICE, INCLUDING ZIP CODE)

                                 (972) 484-3662
              (REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)

================================================================================

[_]  Check the  appropriate  box below if the Form 8-K  filing  is  intended  to
simultaneously  satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):

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

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

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

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



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

<PAGE>

This  amended  Form  8-K/A-1 is being filed to  incorporate  as Exhibit 16.2 the
letter dated October 20, 2004 from the Registrant's former accountants CF & Co.,
L.L.P.



Item 9.01 Financial Statements, Pro Forma Financial Information and Exhibits.


     (C) Exhibit No 16.2
         Letter - CF & Co., L.L.P. dated October 20, 2004


                                    SIGNATURE

In accordance with section 13 and 15(d) of the Securities  Exchange Act of 1934,
the  Registrant  has dully  caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.


                            DGSE COMPANIES, Inc.
                            /s/ John Benson
                            ------------------------------------
                            John Benson
                            Director and Chief Financial Officer

Dated: October 22, 2004



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-16.2
<SEQUENCE>2
<FILENAME>dgse8kaex162101404.txt
<DESCRIPTION>LETTER FROM CF & CO., L.L.P.
<TEXT>

Exhibit 16.2

                                  LETTERHEAD OF
                                  CT& Co., L.Lx
                          CERTIFIED PUBLIC ACCOUNTANTS
                                  & CONSULTANTS


                                                            October 20, 2004



Securities and Exchange Commission
450 Fifth Street,
N.W. Washington, D.C. 20549

         Re:      DGSE  Companies,  Inc., SEC File No.  1-11048 (the  "Company")
                  Gentlemen:

         We have read the statements  that the Company has included under Item 4
of its Form 8-K report filed on October 14, 2004, regarding its recent of change
of auditors. We agree with the statements made regarding our firm, except as set
forth herein.

         A. Disagreements with Former Accountant.

         We had disagreements  with management on specific matters of accounting
principles and practices and related financial statement  disclosure,  which, if
not resolved to our satisfaction,  would have caused us to make reference to the
subject matter of the  disagreements in connection with our audit report for the
Company's  fiscal  year  ended  December  31,  2003.  These  disagreements  with
management, which are not disclosed in the Form 8-IC, are described below:

         o        Management stated in their "Summary of Significant  Accounting
                  Policies"  contained in Note 1 to the  Company's  consolidated
                  financial statements that "the Company continually reviews its
                  investments to determine whether a decline in fair value below
                  the cost basis is other than temporary. If the decline in fair
                  value is judged to be other than temporary,  the cost basis of
                  the  security is written  down to fair value and the amount of
                  the  write-down is included in the  consolidated  statement of
                  operations."  At December  31,  2003,  the  unrealized  losses
                  incurred  in the  Company's  marketable  securities  had  been
                  significant  for several  years and our  research and analysis
                  regarding the investments did not reveal a near-term  recovery
                  of values. We concluded that the Company should follow its own
                  policy   articulated  above  and  write-down  certain  of  its
                  marketable securities to fair value in the Company's statement
                  of operations for the year ended December 31, 2003. Management
                  of the  Company  disagreed  that the loss  resulting  from the
                  write-down  of marketable  securities  should be taken through
                  the Company's statement of operations.  However, the Company's








<PAGE>

United States Securities and Exchange Commission
October 18, 2004
Page 2

                  management  was not able to provide any objective  evidence as
                  required by professional  standards,  to support  management's
                  assertion  that the  recovery of value would occur in the near
                  term. Therefore,  this disagreement was ultimately resolved to
                  our satisfaction  when management of the Company agreed to the
                  proposed   write-down  through  the  Company's   statement  of
                  operations as an other than temporary decline in fair value.

         o        A second  disagreement arose when management proposed that the
                  write-down  described above should be disclosed as a loss from
                  discontinued operations. Management took the position that the
                  loss  was a  loss  related  to  the  activities  of one of the
                  Company's  subsidiaries,  DLS Financial Services,  Inc., which
                  had  been  inactive  for  several  years.  We  disagreed  with
                  management's  position for several reasons.  The securities in
                  question  had been  reported  in  prior  years  for  financial
                  accounting  purposes  as  "available-for-sale"  rather than as
                  "trading  securities." This financial  statement  reporting of
                  these securities evidenced an intent on the part of management
                  to  segregate  the  securities  from  the  operations  of  the
                  Company.  Furthermore,  the extended  duration of the holdings
                  was   further   evidence   that   the   securities   were  not
                  "operational" in nature. We interpreted professional standards
                  to require  that a  discontinued  operation  be an  "operating
                  segment." We expressed the view that to reflect the loss as an
                  operating  activity  during the year ended  December  31, 2003
                  could be  misleading.  Furthermore,  we expressed  the view to
                  management that to make such a change in accounting  after the
                  end of  the  year  ended  December  31  2003,  without  proper
                  approval  from the board of  directors  and  audit  committee,
                  could have created a breach of fiduciary responsibilities. The
                  matter was resolved to our satisfaction when management agreed
                  with us that the write-down  should not be disclosed as a loss
                  from discontinued operations.

The foregoing  disagreements  with management were reported in our letter to the
Company's audit committee dated March 22, 2004.

         B.       Other Reportable  Events  Contemplated by Regulation S-B, Item
                  304(a)(1)(iv)(B)(3).

         In addition to the foregoing "disagreements" which are omitted from the
disclosures  contained  in Item 4 of the  Company's  Form  8-K,  there are other
events   which   occurred   during'  the  time  period   specified   in  12  CFR
ss.228.304(a)(1)  which  were  not  resolved  to our  satisfaction  prior to our
dismissal. These reportable events, which are not disclosed in the Form 8-K, are
set forth below.

         o        In a  letter  dated  March  22,  2004 to the  Company's  audit
                  committee,   we  described   various   reportable   conditions
                  involving   matters  corning  to  our  attention   related  to
                  significant  deficiencies  in the design or  operation  of the
                  Company's  internal  control  that,  in  our  judgment,  could






<PAGE>

United States Securities and Exchange Commission
October 18, 2004
Page 3

                  adversely  effect the Company's  ability to initiate,  record,
                  process  and  report   financial  data   consistent  with  the
                  assertions   of   management   in  the   Company's   financial
                  statements.

         o        In a letter to the Company's  audit  committee dated September
                  13,  2004,  we  advised  the  audit   committee  that  we  had
                  identified  factual  errors in  disclosures  made in the proxy
                  statement filed by the Company on May 5, 2004.

Prior to our  dismissal by the Company we had received no formal  response  from
the audit committee to either of these matters.

         C.       Additional Comments.

         We have no basis to agree or disagree with other  statements made wider
Item 4 of Company's Form 8-K filed October 14, 2004,  except we note that (a) we
were  first  formally  notified  of our  dismissal  as the  Company's  principal
auditors on October 8, 2004,  rather  than  October 5, 2004,  (b) the  successor
auditors  identified  in the Form 8-K as having  been  engaged by the Company on
October 11, 2004, have never  communicated with us as predecessor  auditors,  as
required  by SAS No.  84;  and (c) the  Company  does not  state in its Form 8-K
whether it has authorized us, as its former accountants, to respond fully to the
inquiries  of  successor  accountants,  as  required  by  Regulation  S-B,  Item
304(a)(1)(iv)(E).

         Finally,  we call your attention to the fact that the Company's  latest
Form 10-Q filing with the Securities and Exchange Commission was for the quarter
ended June 30,  2004.  We have not  reviewed  or been  consulted  regarding  any
financial  statements of the Company for any period  subsequent to the filing of
the June 30, 2004 Form 10-Q.

                                  Yours truly,

                                  /s/ CF & Co., L.L.P.
                                  CF & Co., L.L.P.


cc:   Mr. John Benson Chief
      Financial Officer












</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
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