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November 15, 2005

Mr. Jeffrey Gordon

Staff Accountant

Division of Corporation Finance

United States Securities and Exchange Commission

450 Fifth Street, N.W., Stop 4-5

Washington, D.C. 20549-7010

            Re:

            Obsidian Enterprises, Inc.

Form 8-K Item 4.01 filed October 20, 2005

File No. 0-17430

Dear Mr. Gordon:

We have received your letter dated October 21, 2005, and received by fax in our office on November 3, 2005, detailing the Staff’s review of the above-referenced filing (the “Form 8-K”). This letter responds to the Staff’s comments on the Form 8-K. For your convenience, the subheadings and order of responses set forth below correspond with the subheadings and order set forth in the Staff’s comment letter. The Staff’s comments are in bold.

            1.

            Regarding the material weaknesses that were disclosed in your Form 8-K, please describe the nature of each material weakness and the amounts involved, as applicable. Also, tell us:

            a.

            In what period each material weakness and accounting error or misapplication of GAAP occurred,

            b.

            The amount of each accounting error and misapplication of GAAP,

            c.

            The reason(s) for each error or misapplication of accounting,

            d.

            Whether or not you intend to restate any prior period for any adjustments. If not, tell us why not, and

            e.

            In detail, all the steps you have taken (or plan to take) and procedures you have implemented (or plan to implement) to correct each concern.

Mr. Jeffrey Gordon

November 15, 2005

Page 2

Material Weaknesses Communicated by McGladrey & Pullen, LLP (“M&P”)

in Connection with their October 31, 2003 Audit

Material Weakness 1:  The Company lacked the financial infrastructure to account for complex transactions and related party activities on a consolidated basis, which resulted in a greater than normal risk that material errors may occur in the financial statements and not be detected timely. In addition, the lack of an adequate financial reporting system resulted in the Company not being able to timely prepare all required SEC financial reports and certain complex accounting transactions for their proper reporting.

Company’s Response:  M&P’s communication of this material weakness did not provide a reference to any specific situation. Based upon my conversations with representatives of M&P, it is my understanding the comment related to recording a transaction during the first quarter of fiscal year 2003, to consolidate newly restructured entities in which the Company’s prior Chief Financial Officer (Barry Baer) did not analyze the effects of FIN 46 on a timely basis which caused the Company to request an extension of time for the filing of the quarterly report on Form 10-Q for the fiscal quarter ended January 31, 2003. The filing was made without delay within the extension period.

The responses to the Staff’s specific questions, as requested above, are as follows:

            a., b. and c.:

            The material weakness comment related to the fiscal quarter ended January 31, 2003, which is the first quarter of our fiscal year ended October 31, 2003. There was no accounting error or misapplication of GAAP related to this comment.

            d.

            We do not intend to restate any prior period because the transaction was reported in the proper period.

            e.

            The steps we have taken to correct the concern are as follows:

i.

A complete review of the reporting process was performed and a new centralized accounting
system was implemented throughout the fiscal year ended October 31, 2004.

ii.

In addition, throughout fiscal
2003 and 2004, the Company retained additional accounting personnel, including the hiring
of a new Chief Financial Officer in March of 2003.

Material Weakness 2: Each of the Company’s
operating subsidiaries had a limited number of on-site accounting personnel
which resulted in a lack of segregation of duties necessary for a good system of
internal control. The Company did not have an effective method of accounting for
non-routine account estimates at each of the subsidiaries. They also lacked
adequate supervision and review of these transactions.

Mr. Jeffrey Gordon

November 15, 2005

Page 3

Company’s Response: As noted above, the Company
performed a complete review of the reporting process and implemented a new
centralized accounting system during the fiscal year ended October 31, 2004. In
conjunction with this process, I visited each subsidiary and performed an
evaluation on the segregation of duties at each subsidiary. In addition, I
presented a report to the Audit Committee regarding my evaluation of the three
primary subsidiaries of the Company at that time (United Expresslines, Inc., US
Rubber Reclaiming, Inc. and Danzer Industries, Inc.), which is attached as
Exhibit A to this letter. The
fourth subsidiary of the Company at that time, Pyramid Coach, Inc., was a
smaller operation when compared to the other three subsidiaries and was not
covered in my report to the Audit Committee.

The responses to the Staff’s specific questions, as requested above, are as follows:

            a., b. and c.

            M&P provided this comment in connection with the fiscal year 2003 audit, but did not note any specific period in connection with this material weakness comment. There was no accounting error or misapplication of GAAP.

            d.

            No restatement of any prior period is required as a result of this material weakness.

            e.

            The Company performed a complete review of the reporting process and implemented a new centralized accounting system throughout the fiscal year ended October 31, 2004. The report that I provided to the Audit Committee regarding my evaluation of the segregation of duties at each subsidiary is attached to this letter as Exhibit A.

Material Weakness 3:  The Company’s systems for recording inventory at one of its operating subsidiaries resulted in an unfavorable adjustment of approximately $600,000 as a result of the audit.

Company’s Response: This comment was addressed
during the Staff’s review of the annual report on Form 10-K for the fiscal
year ended October 31, 2003 with the Company’s written response addressed
to Ms. Pamela A. Long of the Division of Corporation Finance dated August
30, 2004 (the “August 2004 Letter”). To summarize, United
Expresslines, Inc., one of the Company’s subsidiaries, performed periodic
physical inventories throughout the fiscal year and had an unfavorable
adjustment of $600,000 for inventory variance during the fourth quarter of the
fiscal year ended October 31, 2003. Upon further review and analysis, it was
determined that approximately $160,000 of the $600,000 adjustment related to the
third quarter of fiscal 2003. During fiscal 2004, procedures were implemented at
United to require quarterly inventory counts. The financial statements for the
third quarter of fiscal 2003 were not restated because the financial statement
effects were considered immaterial, which was detailed as follows in the August
2004 Letter:

Mr. Jeffrey Gordon

November 15, 2005

Page 4

To expand on our determination of materiality for reporting purposes we analyzed
both the quantitative and qualitative aspects of the estimated $160,000
inventory adjustment using the criteria as set forth in SAB 99, which does not
rely solely on a numeric threshold.

The following details the differences for financial reporting using the disclosures used in our 10-K and 10-Q:

SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)

(dollars in thousands, except per share amounts)

Year Ended October 31, 2003, as reported in Form 10-K

            First Qtr.

Ended 1/31/03

Second Qtr.

Ended 4/30/03

            Third Qtr.

Ended 7/31/03

            Fourth Qtr.

Ended 10/31/03

            Net sales

            $

            10,899

            $

            15,107

            $

            16,795

            $

            16,494

            Gross profit

            1,160

            1,791

            2,405

            2,203

            Loss from continuing operations

            (1,517

            )

            (909

            )

            (307

            )

            (1,091

            )

            Loss from continuing operations per basic common and common equivalent share

            (.04

            )

            (.03

            )

            .00

            (.05

            )

The following table shows the changes to the Year Ended October 31, 2003, based
upon the estimated $160 inventory adjustment related to the 3rd
quarter. Note the loss from continuing operations includes tax effects.

            First Qtr.

Ended 1/31/03

            Second Qtr.

Ended 4/30/03

            Third Qtr.

Ended 7/31/03

            Fourth Qtr.

Ended 10/31/03

            Net sales

            $

            10,899

            $

            15,107

            $

            16,795

            $

            16,494

            Gross profit

            1,160

            1,791

            2,245

            2,363

            Loss from continuing operations

            (1,517

            )

            (909

            )

            (402

            )

            (996

            )

            Loss from continuing operations per basic common and common equivalent share

            (.04

            )

            (.03

            )

            (.01

            )

            (.04

            )

Mr. Jeffrey Gordon

November 15, 2005

Page 5

In summary the overall financial statement differences for the $160 inventory
adjustment would have the following effects:

            •

            The gross profit as reported for the quarter ended July 31, 2003 would decrease by .9% and gross profit would increase by 1.0% for the quarter ended October 31, 2003.

            •

            Loss from continuing operations, net of tax benefit would increase by $95 for the quarter ended July 31, 2003 and decrease by the same for the quarter ended October 31, 2003.

            •

            Loss from continuing operations per basic common and common equivalent share would increase (.01) for the quarter ended July 31, 2003 and decrease by the same to (.04) for the quarter ended October 31, 2003. Also there would be no change in the year to date earnings per share calculations for July 31, 2003 and October 31, 2003.

In reviewing the business segment data, the following would have affected only
the “Trailer Manufacturing segment”. The effects of the $160
adjustment are as follows for the quarter ended July 31, 2003:

BUSINESS SEGMENT DATA AND GEOGRAPHIC DATA

            Trailer Manufacturing Segment

            3 months ended

July 31, 2003

as reported

            3 months ended

July 31, 2003

with estimated

inventory adjustment

            9 months ended

July 31, 2003

as reported

            9 months ended

July 31, 2003

with estimated

inventory adjustment

            Sales:

            Domestic

            $

            10,402

            $

            10,402

            $

            27,391

            $

            27,391

            Foreign

            1,132

            1,132

            2,355

            2,355

            Total

            $

            11,534

            $

            11,534

            $

            29,746

            $

            29,746

            Cost of goods sold

            $

            10,378

            $

            10,538

            $

            27,132

            $

            27,292

            Income (loss) before taxes

            $

             (427

            )

            $

             (587

            )

            $

             (2,317

            )

            $

             (2,477

            )

            Identifiable assets

            $

            20,163

            $

            20,163

            $

            20,163

            $

            20,163

            Depreciation and amortization expense

            $

            176

            $

            176

            $

            364

            $

            364

            Interest expense

            $

            357

            $

            357

            $

            1,038

            $

            1,038

Mr. Jeffrey Gordon

November 15, 2005

Page 6

In summary, the effects on the inventory adjustment on the business segment data
for the quarter ended July 31, 2003 are as follows:

            •

            Cost of goods sold and gross profits would be reduced by $160 for the quarter end July 31, 2003 and increased by the same for the quarter ended October 31, 2003. The gross profit as a percent of sales would be decreased additionally by 1.4% to 8.6% for the quarter ended July 31, 2003 and decreased by .6% to 8.2% for the nine months ended July 31, 2003.

            •

            Loss before taxes would also be increased for three and none months end July 31, 2003 by $160.

Additionally the following circumstances were also noted:

            1.

            The inventory adjustment would not have changed the earnings trends of the company as net losses were reported for each quarter.

            2.

The segment information as reported for the quarter end July 31, 2003 would not
have caused additional narrative analysis other than the numeric changes and
noted above. The company’s financial trends would remain the
same.

            3.

The inventory adjustment would not have affected the compliance with regulatory
requirements.

            4.

            The inventory adjustment would not have affected the loan covenants or other contractual requirements.

            5.

            The inventory adjustment would not have any affect on management’s compensation.

            6.

            The company did not have multiple misstatements, which in the aggregate would have caused a larger adjustment.

In conclusion, based upon the facts and circumstances of the inventory
adjustment in both a quantitative and qualitative basis as summarized above,
further adjustment and restatement of the financial statements for the quarter
ended July 31, 2003 was not deemed material or necessary as the changes would
not substantially change our financial statement disclosures or affect any
additional regulatory or contractual obligations including loan
covenants.

Mr. Jeffrey Gordon

November 15, 2005

Page 7

The responses to the Staff’s specific questions, as requested above, are as
follows:

            a.

            As noted above the accounting error occurred during the forth quarter of the fiscal year ended October 31, 2003. A portion, which was deemed immaterial for financial reporting purposes, occurred in the third quarter.

            b.

            The amount of the accounting error was $600,000.

            c.

            Besides the annual physical inventory, the Company performed physical inventories periodically.

            d.

            Based on the analysis above and as explained in prior correspondence with the Staff in connection with the August 2004 Letter, no further restatement of any prior period is deemed material or necessary.

            e.

            The Company implemented procedures to require a physical inventory at the end of each reporting period including the annual year end.

Material Weaknesses Communicated by M&P in Connection with their

October 31, 2004 Audit

Material Weakness 1:  The Company did not have effective controls in place to detect and disclose all related party transactions. The Company did not follow the Board policy that all related party transactions are approved by the Board.

Company’s Response: This comment relates to
attorney’s fees paid t