DIGITAL LIFESTYLES GROUP INC
LETTER AGREEMENT WITH A. TENG
<DOCUMENT>
<TYPE>EX-10.1
<SEQUENCE>5
<FILENAME>dlfgex10_1.txt
<DESCRIPTION>LETTER AGREEMENT WITH A. TENG
<TEXT>
Exhibit 10.1
                  Digital Lifestyles Group Inc.


                    727 Brea Canyon Road, #6
                    Walnut, California 91789
                          909.869.0595




                       September 29, 2005



Andy Teng


Re:  Outstanding  amounts owed to Andy Teng ("Teng")  by  Digital
     Lifestyles Group Inc. ("Digital")

Dear Andy:

     On behalf of the Board of Directors of Digital, I am writing
this  letter as an offer of settlement on any and all outstanding
amounts owed by Digital to you (in the aggregate principal amount
of  $_,000,000 (the "Debt")) as of the date hereof  (the  "Letter
Agreement").

     In  connection  with  resolving  this  issue,  I  hereby  am
authorized to offer to you the following:

1.  For satisfaction of $_________ of the Debt, Digital will pay
to you the amount of $_______ (the "Cash Payment").

Said payment shall be made by check or wire transfer of immediate-
ly  available funds within ____ days after your acceptance of this
Letter Agreement.

2.  For satisfaction of the remaining  $1,000,000 of the Debt, you
agree to accept in lieu of payment 1,000,000 shares ofcommon stock
of Digital, par value $0.03 per share, which shall be evidenced by
a stock certificate issued in your name with a  purchase price per
share of $1.00 (the "Stock Payment").You agree and understand that
such shares issued in satisfaction of  the Stock Payment are being
acquired for your own account as an investment and not with a view
to distribution thereof and the stockissued hereunder has not been
registered under the Securities  Act  or any state securities laws
and no transferof the shares shall be permitted unless accompanied
by an opinion of counsel reasonably  satisfactory to  Digital that
an exemption from registration of such shares under the Securities
Act is available for such transfer,    except that no such opinion
shall be required after the  registration for resale of the shares
has become effective. Stop transfer instructions have been or will
be  imposed with respect to the shares so as to restrict resale or
other transfer thereof.   The certificates representing the shares
shall  bear  a restrictive  legend substantially identical to that
set forth as follows:

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                    "THE    SECURITIES   REPRESENTED   BY    THIS
                    CERTIFICATE  HAVE  NOT BEEN REGISTERED  UNDER
                    THE  SECURITIES ACT OF 1933, AS  AMENDED,  OR
                    APPLICABLE   STATE  SECURITIES   LAWS.    THE
                    SECURITIES  HAVE BEEN ACQUIRED FOR INVESTMENT
                    AND  MAY  NOT  BE  OFFERED  FOR  SALE,  SOLD,
                    TRANSFERRED OR ASSIGNED IN THE ABSENCE OF  AN
                    EFFECTIVE  REGISTRATION  STATEMENT  FOR   THE
                    SECURITIES UNDER THE SECURITIES ACT OF  1933,
                    AS  AMENDED,  OR APPLICABLE STATE  SECURITIES
                    LAWS,  OR  AN  OPINION  OF  COUNSEL,   IN   A
                    GENERALLY  ACCEPTABLE FORM, THAT REGISTRATION
                    IS  NOT REQUIRED UNDER SAID ACT OR APPLICABLE
                    STATE SECURITIES LAWS OR UNLESS SOLD PURSUANT
                    TO RULE 144 UNDER SAID ACT."

     Upon your receipt of the Cash Payment and the Stock Payment,
you  agree  that  both  represents full  and  final  payment  and
satisfaction of the Debt owed to you as of the date hereof.

     Upon  your acceptance of this Letter Agreement, you and your
representatives,  agents,  consultants,  shareholder,   officers,
directors,  employees,  heirs,  devisees,  legatees,  affiliates,
successors  and  assigns  hereby fully and  forever  release  and
discharge  Digital  and  all  of  its  representatives,   agents,
shareholders, consultants, officers, directors, employees, heirs,
devisees,  legatees, parents, affiliates, successors and  assigns
from  any and all claims, demands, losses, costs, damages, rights
and   causes   of  action,  debts,  liabilities  and  obligations
whatsoever, at law or in equity, which either party ever had, now
has  or  hereafter can, shall or may have for, upon, or by reason
of any matter, cause or thing, whether or not previously asserted
or  assertable,  known or unknown relating to the  Debt  owed  by
Digital  to  you  as  of the date hereof, other  than  claims  to
enforce this Letter Agreement, if any.

     This Letter Agreement may be signed in counterparts and when
executed   by   all  parties  shall  constitute  one   integrated
agreement.    A   party's   signature  delivered   by   facsimile
transmission shall be deemed an original and is binding  on  such
party.  Each of the signatories hereto represents and warrants to
be  duly  authorized to fully and completely resolve the disputes
described in this Letter Agreement, make the release contained in
this Letter Agreement, and to bind the party on whose behalf  the
signatory has agreed to act to the terms and conditions contained
in  this  Letter  Agreement.   This  Letter  Agreement  shall  be
construed  and  interpreted in accordance with the  laws  of  the
State of California without regard to any conflicts of law.

     If  you  agree to this Letter Agreement, please  acknowledge
and  sign  below in duplicate.  Please remit one copy to  me  and
retain  the other copy for your records.  I look forward to  your
prompt reply.


                         Sincerely,

                         /s/ Jay Furrow

                         Jay Furrow
                         Director


Acknowledged and Agreed to this the ____ day of ___________,
2005:

Andy Teng

/s/ Andy Teng
Name: Andy Teng

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