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Proc-Type: 2001,MIC-CLEAR
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<SEC-DOCUMENT>0001166904-06-000028.txt : 20060508
<SEC-HEADER>0001166904-06-000028.hdr.sgml : 20060508
<ACCEPTANCE-DATETIME>20060505173750
ACCESSION NUMBER:		0001166904-06-000028
CONFORMED SUBMISSION TYPE:	SC 13G/A
PUBLIC DOCUMENT COUNT:		1
FILED AS OF DATE:		20060508
DATE AS OF CHANGE:		20060505

SUBJECT COMPANY:	

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			SUNSET FINANCIAL RESOURCES INC
		CENTRAL INDEX KEY:			0001270436
		STANDARD INDUSTRIAL CLASSIFICATION:	REAL ESTATE INVESTMENT TRUSTS [6798]
		IRS NUMBER:				161685692
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		SC 13G/A
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	005-79769
		FILM NUMBER:		06814261

	BUSINESS ADDRESS:	
		STREET 1:		10245 CENTURION PARKWAY NORTH
		STREET 2:		SUITE 305
		CITY:			JACKSONVILLE
		STATE:			FL
		ZIP:			32256
		BUSINESS PHONE:		904-425-4099

	MAIL ADDRESS:	
		STREET 1:		10245 CENTURION PARKWAY NORTH
		STREET 2:		SUITE 305
		CITY:			JACKSONVILLE
		STATE:			FL
		ZIP:			32256

FILED BY:		

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			NORTH SOUND CAPITAL LLC
		CENTRAL INDEX KEY:			0001166904
		IRS NUMBER:				522324837

	FILING VALUES:
		FORM TYPE:		SC 13G/A

	BUSINESS ADDRESS:	
		STREET 1:		20 HORSENECK LANE
		CITY:			GREENWICH
		STATE:			CT
		ZIP:			06830
		BUSINESS PHONE:		2033405700

	MAIL ADDRESS:	
		STREET 1:		20 HORSENECK LANE
		CITY:			GREENWICH
		STATE:			CT
		ZIP:			06830

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	DMG ADVISORS LLC
		DATE OF NAME CHANGE:	20020211
</SEC-HEADER>
<DOCUMENT>
<TYPE>SC 13G/A
<SEQUENCE>1
<FILENAME>sunsetfinancial13ga1.txt
<DESCRIPTION>NORTH SOUND 13G/A1 FILING ON SUNSET FINANCIAL
<TEXT>
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                  SCHEDULE 13G
                                 Amendment No. 1

                    Under the Securities Exchange Act of 1934


                         Sunset Financial Resources Inc.
- -------------------------------------------------------------------------------

                                (Name of Issuer)

                    Common Stock, par value $0.001 per share
- -------------------------------------------------------------------------------
                         (Title of Class of Securities)

                                    867708109
- -------------------------------------------------------------------------------
                                 (CUSIP Number)

                                   May 1, 2006
- -------------------------------------------------------------------------------
             (Date of Event Which Requires Filing of this Statement)



             Check the appropriate box to designate the rule pursuant to which
             this Schedule is filed:

                  [X]      Rule 13d-1(b)
                           Rule 13d-1(c)
                           Rule 13d-1(d)


             *The remainder of this cover page shall be filled out for a
             reporting person's initial filing on this form with respect to the
             subject class of securities, and for any subsequent amendment
             containing information which would alter the disclosures provided
             in a prior cover page.

             The information required in the remainder of this cover page shall
             not be deemed to be "filed" for the purpose of Section 18 of the
             Securities Exchange Act of 1934 ("Act") or otherwise subject to
             the liabilities of that section of the Act but shall be subject to
             all other provisions of the Act (however, see the Notes).

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

CUSIP No. 867708109               SCHEDULE 13G               Page 2 of 5 Pages

- -------------------------------------------------------------------------------
1       NAME OF REPORTING PERSON
        S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON

                North Sound Capital LLC (1)
- -------------------------------------------------------------------------------

2       CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*

                (a)[x]
                (b)[ ]
- -------------------------------------------------------------------------------
3       SEC USE ONLY
- -------------------------------------------------------------------------------
4       CITIZENSHIP OR PLACE OF ORGANIZATION

                Delaware
- -------------------------------------------------------------------------------
                       5      SOLE VOTING POWER

    NUMBER OF                        0
      SHARES           --------------------------------------------------------
    BENEFICIALLY       6      SHARED VOTING POWER
      OWNED BY
       EACH                          0
     REPORTING         --------------------------------------------------------
      PERSON           7      SOLE DISPOSITIVE POWER
       WITH
                                     0
                       --------------------------------------------------------
                       8      SHARED DISPOSITIVE POWER

                                     0
- -------------------------------------------------------------------------------
9       AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

                0
- -------------------------------------------------------------------------------
10      CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (9) EXCLUDES CERTAIN SHARES*

                [ ]
- -------------------------------------------------------------------------------
11      PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 9

                0%
- -------------------------------------------------------------------------------
12      TYPE OF REPORTING PERSON*

                IA
- -------------------------------------------------------------------------------
(1)  The Reporting Person may be deemed the beneficial owner of the shares in
     its capacity as the managing member of North Sound Legacy Institutional
     Fund LLC and the investment advisor of North Sound Legacy International
     Ltd. (the "Funds"), who are the holders of such shares. As the managing
     member or investment advisor, respectively, of the Funds, the Reporting
     Person has voting and investment control with respect to the shares of
     common stock held by the Funds. The ultimate managing member of North
     Sound Capital LLC, the Reporting Person, is Thomas McAuley.

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

CUSIP No. 867708109                SCHEDULE 13G               Page 3 of 5 Pages

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

Item 1(a).        Name of Issuer:

                  Sunset Financial Resources Inc.

Item 1(b).        Address of Issuer's Principal Executive Offices:

                      10245 Centurion Parkway
                      Third Floor
                      Jacksonville, FL 32256

Item 2(a).        Name of Person Filing.
Item 2(b).        Address of Principal Business Office or, if None, Residence.
Item 2(c).        Citizenship.

                  North Sound Capital LLC 20 Horseneck Lane Greenwich, CT 06830
                  Delaware limited liability company

Item 2(d).        Title of Class of Securities:

                  Common Stock, par value $0.001 per share

Item 2(e).        CUSIP Number:

                  867708109

Item 3.           If this statement is filed pursuant to ss.ss.240.13d-1(b) or
                  240.13d-2(b) or (c), check whether the person filing is a:

                  [X] An investment adviser in accordance with
                      ss.13d-1(b)(1)(ii)(E).

Item 4.           Ownership.

                  The following is information regarding the aggregate number
                  and percentage of the class of securities of the issuer
                  identified in Item 1 as of May 5, 2006:

                  (a) Amount beneficially owned: 0

                  (b) Percent of Class: 0%

                  (c) Number of shares as to which such person has:

                           (i) sole power to vote or direct the vote: 0

                           (ii) shared power to vote or direct the vote: 0

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

CUSIP No. 867708109               SCHEDULE 13G               Page 4 of 5 Pages

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

                           (iii) sole power to dispose or direct the
                                 disposition of: 0

                           (iv) shared power to dispose or direct the
                                disposition of: 0

Item 5.           Ownership of Five Percent or Less of a Class.

                  [X]

Item 6.           Ownership of More than Five Percent on Behalf of Another
                  Person.

                  Not Applicable

Item 7.           Identification and Classification of the Subsidiary Which
                  Acquired the Security Being Reported on By the Parent Holding
                  Company.

                  Not Applicable

Item 8.           Identification and Classification of Members of the Group.

                  Not Applicable

Item 9.           Notice of Dissolution of Group.

                  Not Applicable

Item 10.          Certification.

                  Certification pursuant to ss.240.13d-1(b):

                  By signing below I certify that, to the best of my knowledge
                  and belief, the securities referred to above were acquired
                  and are held in the ordinary course of business and were not
                  acquired and are not held for the purpose of or with the
                  effect of changing or influencing the control of the issuer
                  of the securities and were not acquired and are not held in
                  connection with or as a participant in any transaction having
                  that purpose or effect.

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

CUSIP No. 867708109               SCHEDULE 13G               Page 5 of 5 Pages

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

                                    SIGNATURE

         After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.

         Dated:  May 5, 2006


                                         NORTH SOUND CAPITAL LLC


                                         By: /s/ Thomas E. McAuley
                                            --------------------------
                                         Name: Thomas McAuley
                                         Title:Chief Investment Officer







</TEXT>
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