FORM 6-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Report of Foreign Issuer

Pursuant to Rule 13a-16 or 15d-16 of

the Securities Exchange Act of 1934

For the month of December 2006

Tyler Resources Inc.

(Translation of registrant's name into English)

#500, 926 - 5th Ave. S.W.

Calgary, Alberta T2P 0N7

(Address of principal executive offices)

[Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.

Form 20-F     X       Form 40-F          

[Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes             No     X    

[If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-               

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Tyler Resources Inc. 

(Registrant) 

Date December 29, 2006

“Barbara O’Neill”

Barbara O'Neill, Secretary 

Yes             No     X    

[If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-        

TYLER RESOURCES INC.

INTERIM CONSOLIDATED

FINANCIAL STATEMENTS

1st Quarter Reports

October 31, 2006

#500, 926-5^th Avenue S.W.

Calgary, Alberta

T2P 0N7

Phone: (403) 269-6753

Fax:  (403) 266-2606

www.tylerresources.com

In accordance with national instrument 51-102 released by the Canadian Securities Administrators, the Company discloses that its auditors have not reviewed the unaudited interim consolidated balance sheet as at October 31, 2006 nor the unaudited interim consolidated statements of operations and cash flows and unaudited interim consolidated schedule of mineral properties for the three month periods ended October 31, 2006 and October 31, 2005.

	TYLER RESOURCES INC.
	INTERIM CONSOLIDATED BALANCE SHEETS
	(Unaudited - prepared by management)				October 31			July 31
	(Canadian dollars)				2006			2006
	ASSETS
	Current
	Cash and cash equivalents			$	1,321,657		$	2,224,922
	Accounts receivable Note 2				698,359			1,386,180
	Prepaids				47,470			30,969
					2,067,486			3,642,071
	OTHER ASSETS  Note 3				118,095			35,750
	CAPITAL ASSETS  Note 4				63,847			67,999
	MINERAL PROPERTIES  Schedule				17,489,416			16,268,836
				$	19,738,844		$	20,014,656
	LIABILITIES
	Current
	Accounts payable and accrued liabilities			$	821,500		$	948,213
	Asset retirement obligation Note 5				55,590			55,590
	SHAREHOLDERS' EQUITY
	CAPITAL STOCK Note 6
	Authorized:
	i)  an unlimited number of common voting shares
	ii) an unlimited number of preferred shares
	Issued:
	90,384,199 common shares,(July 31,2005-90,384,199)				23,109,538			23,109,538
	CONTRIBUTED SURPLUS Note 7				2,382,987			2,332,070
	WARRANTS  Note 8(iii)				3,417,961			3,417,961
	DEFICIT				(10,048,732)			(9,848,716)
					18,861,754			19,010,853
				$	19,738,844		$	20,014,656
	Commitments Note 10
	Subsequent Events Note 11
	Approved on behalf of the Board
	"Gregory Smith"	Director	"Jean Pierre Jutras"			Director
See accompanying notes to the interim consolidated financial statements.

TYLER RESOURCES INC. INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS AND DEFICIT
(Unaudited - prepared by management)
(Canadian dollars)
Three months ended October 31,		2006		2005
INTEREST INCOME	$	14,081	$	73,525
EXPENSES
General and administrative		184,502		120,407
Professional fees		23,681		45,337
Reporting to shareholders		1,547		-
Stock exchange, filing and transfer agent fees		10,994		8,580
Depreciation		4,152		4,897
Overhead recoveries		(8,119)		-
Write-down of investments		17,000		-
Foreign exchange (gain)/loss		(19,660)		55,433
		214,097		234,654
NET LOSS	$	(200,016)	$	(161,129)
DEFICIT, beginning of year		(9,848,716)		(7,185,046)
DEFICIT, end of year	$	(10,048,732)	$	(7,346,175)
LOSS PER SHARE
Basic and diluted	$	(0.00)	$	(0.00)
WEIGHTED AVERAGE NUMBER OF SHARES
OUTSTANDING, basic and diluted		90,336,196		88,284,523
See accompanying notes to the interim consolidated financial statements.

TYLER RESOURCES INC.
INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited - prepared by management)
(Canadian dollars)
Three months ended October 31,		2006		2005
(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS:
OPERATING ACTIVITIES
Interest and other income received	$	22,200	$	73,525
Cash operating expenses		(200,635)		(49,837)
		(178,435)		23,688
INVESTING ACTIVITIES
Mineral property expenditures		(1,744,490)		(1,512,056)
Proceeds on sale of property		1,000,000		-
Capital asset expenditures		-		(757)
		(744,490)		(1,512,813)
FINANCING ACTIVITIES
Exercise of warrants and options		-		868,200
EFFECT OF EXCHANGE ON CASH AND
CASH EQUIVALENTS		19,660		(55,433)
DECREASE IN CASH AND CASH
EQUIVALENTS		(903,265)		(676,358)
CASH AND CASH EQUIVALENTS:
Beginning of year		2,224,922		10,268,934
End of year	$	1,321,657	$	9,592,576
Cash and cash equivalents consist of:
Balances with banks		1,166,123		527,177
Short term deposits		155,534		9,065,399
	$	1,321,657	$	9,592,576
See accompanying notes to the interim consolidated financial statements.

TYLER RESOURCES INC.
INTERIM CONSOLIDATED SCHEDULE OF MINERAL PROPERTIES
(Unaudited - prepared by management)
(Canadian dollars)
FOR THE THREE MONTHS ENDED OCTOBER 31, 2006 AND OCTOBER 31, 2005
				Mexico
		Total		Bahuerachi		Other
October 31, 2006
Exploration and development expenditures:
Balance July 31, 2006	$	14,578,069	$	13,772,405	$	805,664
Geological consulting		181,302		181,302		-
Drilling		669,095		669,095		-
Drilling advances		814		814		-
Camp costs		236,503		236,503		-
Site preparation		169,484		169,484		-
Project field costs		114,721		114,721		-
Geophysical		-		-		-
Geochemical		146,901		146,901		-
Environmental		1,190		1,190		-
Asset retirement obligation		-		-		-
Sale of property		(795,927)		-		(795,927)
Balance October 31, 2006		15,302,152		15,292,415		9,737
Property acquisition costs:
Balance July 31, 2006		1,690,767		1,391,054		299,713
Costs incurred		787,570		787,570		-
Sale of property		(291,073)		-		(291,073)
Balance October 31, 2006		2,187,264		2,178,624		8,640
Total mineral properties October 31, 2006	$	17,489,416	$	17,471,039	$	18,377
				Mexico
		Total		Bahuerachi		Other
October 31, 2005
Exploration and development expenditures:
Balance July 31, 2005	$	7,734,565	$	5,993,397	$	1,741,168
Geological consulting		2,266		2,266		-
Geochemical		-		-		-
Geophysical		-		-		-
Drilling		(3,585)		(3,585)		-
Drilling advances		-		-		-
Camp costs		476		476		-
Site preparation		(499)		(499)		-
Project field costs		18		18		-
Environmental		-		-		-
Balance October 31, 2005		7,733,241		5,992,073		1,741,168
Property acquisition costs:
Balance July 31, 2005		2,099,590		1,208,365		891,225
Costs incurred		-		-		-
Balance October 31, 2005		2,099,590		1,208,365		891,225
Total mineral properties October 31, 2005	$	9,832,831	$	7,200,438	$	2,632,393
See accompanying notes to the interim consolidated financial statements.

TYLER RESOURCES INC.

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

OCTOBER 31, 2006

(Canadian dollars)

(Unaudited – prepared by management)

1.

Accounting Policies

Basis of presentation

The interim consolidated financial statements, that were not subject to audit or review by the Company’s external accountants, follow the same accounting policies and methods of computation as the audited consolidated financial statements for the year ended July 31, 2006.  These interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements for the year ended July 31, 2006 as not all disclosures required by Generally Accepted Accounting Principles for annual financial statements are presented.

These interim consolidated financial statements have been prepared in accordance with Canadian generally accepted accounting principles and include the accounts of the Company and its wholly-owned Mexican subsidiary Recursos Tyler S.A. de C.V.

2.

Accounts Receivable

	October 31, 2006	July 31, 2006
Value added tax receivable (“IVA”) (a)	$     610,231	$  1,218,101
Due from related parties	6,037	21,301
Other accounts receivable	82,091	146,778
	$    698,359	$  1,386,180

a)

The Company pays a 15% recoverable goods and services value added tax to the Government of Mexico, which is recoverable.  The balance is net of an allowance of $108,000.

3.

Other Assets

	October 31, 2006	July 31, 2006
Long-term investment (fair value $18,750; July 31, 2006 - $18,000)	$      18,750	$    35,750
Long-term prepaid rent	12,345	-
Warrants received on sale of property (a)	87,000	-
	$     118,095	$    35,750

a)

The Company sold the Weedy Lake property located in Saskatchewan to Golden Band Resources Inc. (“Golden Band”) in August 2006 for $1 million CAD plus 500,000 warrants, with each warrant exercisable to acquire one common share of Golden Band at a price of $0.55 per share until August 29, 2008.  The warrants received on the sale were valued using the Black-Scholes Option Pricing Model to be $87,000.

4.

Capital Assets

	October 31, 2006	July 31, 2006
Cost	$     115,112	$          115,112
Accumulated amortization	51,265	47,113
Net book value	$       63,847	$            67,999

5.

Asset Retirement Obligation

The Company’s environmental permit for its Bahuerachi project establishes reclamation requirements for land disturbed during exploration.  Although the ultimate amount of future site restoration costs to be incurred for existing exploration interests is uncertain, the Company has estimated the present value of its future reclamation obligation to be $55,590 at October 31, 2006.  The present value of the future reclamation obligation assumes a risk free rate of 4.12% and commencement of reclamation activities is expected to be fiscal 2007 to 2008.

TYLER RESOURCES INC.

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

OCTOBER 31, 2006

 (Canadian dollars)

(Unaudited – prepared by management)

6.

Capital Stock

a)

Common Shares Issued:

There were no changes to capital stock during the period from July 31, 2006 to October 31, 2006:

	Number of shares	Capital Stock
Balance October 31, 2006	90,314,099	$ 23,109,538

During April, 2005 the Company completed a private placement of 7,910,400 units at $1.25 per unit for gross proceeds of $9,888,000.  Officers, directors or their immediate family subscribed to 232,800 units.  Each unit was comprised of one common share plus one warrant that may be exercised at $1.75 to acquire one common share in accordance with the terms detailed under note 10 Warrants, below.  The warrants were allocated a value of $3,600,000.   Finders’ fees of $115,500 were included in the $164,706 issue costs that were deducted from the private placement proceeds.  

b)

Employee and Consultant Options Outstanding

The Company has an option plan, (the Plan), under which up to 10% of the issued and outstanding common shares are reserved for issuance.  Under the Plan, the options that have been granted expire at the earlier of five years from the grant date, the date at which the Directors determine, or not more than 60 days from the date on which the optionee ceases to be a director, officer, employee or consultant.  The Board shall, at the time an option is granted under this Plan, fix the exercise price to not be less than that permitted under the rules of any stock exchange or exchanges on which the shares are then listed.  

The 200,000 options exercisable at $1.18 per share to June 13, 2010 vest in increments of 50,000 every six months commencing six months from the date of employment of June 13, 2005.  The 100,000 options exercisable at $1.35 per share to October 11, 2010 vest in twelve equal monthly instalments and were fully vested as of October 12, 2006.  The remainder of the options outstanding vested on the grant date.

There were no changes to stock options during the period from July 31, 2006 to October 31, 2006:

	Number of Options	Weighted-Average Exercise Price
As at July 31, 2005	6,350,000	$0.50
Granted	640,000	$1.12
Exercised	(1,166,800)	$0.33
Expired	(575,000)	$1.20
As at July 31, 2006	5,248,200	$0.54
As at October 31, 2006	5,248,200	$0.54
Exercisable at October 31, 2006	5,139,867

The following summarizes stock options outstanding at October 31, 2006:

Expiry Date	Number of shares	Exercise Price
January 29, 2007	58,200	$0.12
July 22, 2007	1,125,000	$0.35
May 2, 2008	375,000	$1.54
December 15, 2008	730,000	$0.10
January 5, 2009	40,000	$1.05
January 29, 2009	1,175,000	$0.20
February 9, 2009	200,000	$1.09
April 6, 2009	50,000	$0.94
December 16, 2009	925,000	$0.65
February 7, 2010	70,000	$1.54
June 13, 2010	200,000	$1.18
July 20, 2010	200,000	$1.00
October 11, 2010	100,000	$1.35
	5,248,200

TYLER RESOURCES INC.

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

OCTOBER 31, 2006

 (Canadian dollars)

(Unaudited – prepared by management)

6.

Capital Stock (continued)  

b)

Employee and Consultant Options Outstanding (continued)

i)  Stock-Based Compensation

Stock based compensation expense during the three months ended October 31, 2006 was valued at $50,917 (July 31, 2006 - $499,250) of which $Nil (July 31, 2006 - $118,000) is included in geological consulting in mineral properties and $50,917 (July 31, 2006 - $381,250) is included in general and administrative expenses.  The stock based compensation expense for the three months ended October 31, 2006 relate to options that vested and not for options granted during the year, therefore no valuations were calculated during the period.  

The valuations were calculated in accordance with the Black-Scholes Option Pricing Model using the following assumptions:

	July 31, 2006
Risk-free interest rate	3.66%
Expected life of options	2 to 3 years
Expected stock price volatility	101.96%
Expected dividend yield	0.00%

7.

Contributed Surplus  

	Contributed Surplus
As at July 31, 2005	$       1,900,660
Warrants cancelled during the year	182,039
Stock-based compensation          Note 6b)i)	499,250
Options exercised during the year	(249,879)
As at July 31, 2006	$        2,332,070
Stock-based compensation          Note 6b)i)	50,917
As at October 31, 2006	$         2,382,987

8.

Warrants

There were no changes to warrants during the period from July 31, 2006 to October 31, 2006:

i)  Warrants Outstanding

Issue Date	Expiry Date	Number of Warrants	Exercise Price	Fair Value Assigned
		October 31, 2006
April 25, 2005	April 26, 2007	3,617,800	$1.75	$1,828,489
April 27, 2005	April 28, 2007	3,892,600	$1.75	$1,771,511
		7,510,400

ii)  Warrant Transactions

	Number of Warrants	Weighted-Average Exercise Price
As at July 31, 2005	10,070,170	$1.45
Granted	120,400	$0.35
Exercised	(2,277,670)	$0.35
Expired	(402,500)	$1.74
As at July 31, 2006	7,510,400	$1.75
As at October 31, 2006	7,510,400	$1.75
Exercisable at October 31, 2006	7,510,400

TYLER RESOURCES INC.

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

OCTOBER 31, 2006

 (Canadian dollars)

(Unaudited – prepared by management)

8.   Warrants (continued)

iii)  Warrant Values

	Warrant Values
As at July 31, 2005	$     3,600,000
Warrants cancelled during the year	(182,039)
As at July 31, 2006	$      3,417,961
As at October 31, 2006	$      3,417,961

Pursuant to the April, 2005 private placement, warrants exercisable at $1.75 per share were issued that may be exercised to acquire 4,017,800 and 3,892,600 common shares to April 26, 2007 and April 28, 2007 respectively.  The Company has the option to demand early exercise of these warrants on or after October 26 and 28, 2005 respectively if the trading price of the common shares on the TSX Venture Exchange has exceeded $2.50 for a period of thirty consecutive trading days prior to the demand being made.  Once demand to exercise has been made, the warrant holders have thirty days to exercise the warrants.  Directors, officers and control persons subscribed to 232,800 of the Units pursuant to the April, 2005 private placements.

During the prior year, a total of 400,000 warrants at a price of $1.75 were tendered back to Tyler for immediate cancellation.

There were no warrants granted in the three months ended October 31, 2006.  Warrants granted in 2006 related to the Agent’s Options exercised were valued as $Nil.

9.

Related Party Transactions

During the three months ended October 31, 2006 and October 31, 2005, companies, related by virtue of certain common officers and directors, and corporations in which certain of the Company’s officers or directors are shareholders, have provided services for consideration summarized below:

	October 31, 2006	October 31, 2005
Geological and exploration	$    10,000	$   29,000
Direct administrative	71,000	57,000
Office lease and operating	16,000	11,000
	$   97,000	$   97,000

Included in the above related party transactions are amounts receivable at October 31, 2006 of $6,000 (July 31, 2006 - $21,000).  These amounts are included in accounts receivable.  Included in the above related party transactions are amounts unpaid at October 31, 2006 of $3,000 (July 31, 2006 - $6,000).  These amounts are included in accounts payable and accrued liabilities.  

Related party transactions are in the normal course of operations and are measured at the exchange amount, which is the amount of consideration established and agreed to by the related parties.    

Overhead recoveries for the three months ended October 31, 2006 of $8,000 (October 31, 2005 - $Nil) were charged to companies related by virtue of certain common officers and directors.

See also Notes 6b) and 8iii).

TYLER RESOURCES INC.

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

OCTOBER 31, 2006

(Canadian dollars)

(Unaudited – prepared by management)

10.

Commitments

The Company is committed, pursuant to a sublease with a company related by virtue of certain common officers and directors, to pay its share of base office rent.  The base rent for which it is committed aggregates $37,414 in fiscal 2007 and $52,332 in fiscal 2008 to 2011.   The Company is also required to pay its share of annual associated lease operating costs which are expected to approximate $15,871 in fiscal 2007 and $22,488 in fiscal 2008 to 2011.

The Company is under drilling contracts with third party drilling companies for diamond drilling and/or reverse circulation drilling.  As of October 31, 2006, approximately $304,000 USD remains on contract.    

Pursuant to an occupation agreement signed in June 2006, the Company is required to make annual surface rights payments of $166,000 Pesos (approximately $17,000) in June of each year for 10 years (to 2016) to a third party.  The first payment also included paying for the previous two years and totaled $498,000 Pesos (approximately $49,000), which was paid in June 2006.

11.

Subsequent Event

On November 21, 2006 the Company closed a brokered private placement with Jennings Capital Inc. for aggregate gross proceeds of $2,000,180 by selling 2,041 units at $980 per unit with each unit consisting of a convertible debenture having a face value of $1,000 and 500 warrants of the Company.  Net proceeds of the financing are $1,800,000 after deducting the agent’s commission and legal fees.  The proceeds from the offering will be used to further the Company’s Bahuerachi project in Mexico and for working capital purposes.    

12.

Comparative Amounts

Certain comparative amounts have been reclassified to conform to presentation adopted in the current year.

TYLER RESOURCES INC.

MANAGEMENT DISCUSSION AND ANALYSIS

FOR THE THREE MONTHS ENDED OCTOBER 31, 2006

The information included in this document should be read in conjunction with the Company’s unaudited interim consolidated financial statements including notes for the three months ended October 31, 2006 and the Company’s audited consolidated financial statements for the year ended July 31, 2006 and related notes thereto.  The consolidated financial information in this Management Discussion and Analysis, (MD&A), is derived from the Company’s consolidated financial statements prepared in accordance with Canadian Generally Accepted Accounting Principles.  The effective date of this MD&A is December 19, 2006.  All dollar amounts are in Canadian Dollars unless otherwise stated.

Forward Looking Statements

This Management Discussion and Analysis is based on a review of the Company’s operations, financial position and plans for the future based on facts and circumstances as of December 19, 2006.  Except for statements of fact relating to the Company certain information contained herein constitutes forward looking statements.  Forward looking statements are based on the opinions, plans and estimates of management at the date the statements are made and are subject to a variety of risks, uncertainties and other factors that could cause the actual results to differ materially from those projected by such statements.  The primary risk factors affecting the Company are discussed further in Note 15, “Risks”, below.  The Company disclaims any intention and assumes no obligation to update forward looking statements if circumstances or management’s estimates, plans or opinions should change.  The reader is cautioned not to place undue relia nce on forward looking statements.  

Use of Mineral Reserve and Resource Terminology

The Company is incorporated under the Business Corporations Act (Alberta) in Canada. The mineral resources described in this MD&A are estimates and have been prepared in compliance with National Instrument 43-101 of the Canadian Securities Administrators. The definitions of proven and probable reserves used in National Instrument 43-101 differ from the definitions in Securities and Exchange Commission ("SEC") Industry Guide 7. In addition, the terms "mineral resource", "measured mineral resource", "indicated mineral resource" and "inferred mineral resource" are defined in and required to be disclosed by National Instrument 43-101; however, these terms are not defined terms under SEC Industry Guide 7 and normally are not permitted to be used in reports and registration statements filed with the SEC. Accordingly, information contained in this MD&A containing descriptions of the Company's mineral deposits may not be comparable to similar informati on made public by U.S. companies subject to the reporting and disclosure requirements under the United States federal securities laws and the rules and regulations thereunder.

 Cautionary Note to U.S. Investors Concerning Estimates of Inferred and Indicated Mineral Resources

This document uses the term "inferred mineral resources" and “indicated mineral resources”. The Company advises U.S. investors that while these terms are recognized and required by Canadian regulations, the U.S. Securities and Exchange Commission do not recognize them. "Inferred resources" have a great amount of uncertainty as to their existence, and great uncertainty as to their economic and legal feasibility. It cannot be assumed that all or any part of an inferred mineral resource will ever be upgraded to a higher category. Under Canadian rules, estimates of inferred mineral resources may not form the basis of a feasibility or other economic study. Under U.S. Securities and Exchange Commission, U.S. investors are cautioned not to assume that any part or all of an inferred resource exists or is economically or legally mineable or that any part or all of mineral deposits in the indicated category will ever be converted into reserves.

TYLER RESOURCES INC.

MANAGEMENT DISCUSSION AND ANALYSIS

FOR THE THREE MONTHS ENDED OCTOBER 31, 2006

1)

Principal Business of the Company

The Company is engaged exclusively in the business of acquisition, exploration and, if warranted, the development of natural resource properties. The Company’s primary property is the Bahuerachi property in Mexico.  The Company is an “exploration company” as its properties have not yet reached commercial production being at the advanced exploration stage. At this time all efforts planned by the Company are directed to increasing understanding of the characteristics and economics of the Bahuerachi mineralization.

The recoverability of the amounts comprising mineral properties is dependent upon the size of economically recoverable mineral reserves; the acquisition and maintenance of appropriate permits, licenses and rights; the ability of the Company to obtain financing to complete the development of the Bahuerachi property where necessary and upon future profitable production; or, alternatively, upon the Company’s ability to recover its costs through a disposition of its interests.

2)

Overall Performance of the Company

The Company has no operating income and no earnings; exploration and operating activities are financed primarily by the issuance of common shares.  None of the Company’s properties are in production.  Consequently, the Company’s net income is not a meaningful indicator of its performance or potential.

During the 2006 fiscal year and the three months ended October 31, 2006, the Company continued exploration on its primary project, Bahuerachi, located in Mexico.  The Company streamlined its focus on the Bahuerachi project by writing off the properties in Northwest Territories and by selling its Saskatchewan Weedy Lake property interest.

The Company completed the first three months of fiscal 2007 with $1,246,000 in working capital.  The Company closed a private placement financing in November 2006 where the net proceeds of $1.8 million will be used to further the Company’s Bahuerachi project in Mexico and for working capital purposes.

3)

Mineral Properties

Mexico

The principal exploration property in Mexico, Bahuerachi, is owned by the Company’s wholly-owned subsidiary Recursos Tyler SA de CV.  Bahuerachi is located in the state of Chihuahua roughly eight kilometres north of the town of La Reforma, Sinaloa.  Substantially all of the Company’s current efforts and resources are devoted to the exploration of this project.  The base and precious metals of interest on the property include copper, gold, zinc, molybdenum and silver.  

At July 31, 2006 the Company held a 95% interest in 2 of the 6 titles on the property.  Pursuant to an option agreement with a Mexican national, (the “Optioner”), the remaining 5% property interest was convertible by the Company into a 10% net profits interest, which could be purchased by the Company for $700,000 USD.  Under the terms of this option agreement the Company was required to pay $50,000 USD annually to the Optioner until the property commenced production. In October 2006, the Company purchased the 10% net profits interest extinguishing all future royalty obligations.  All titles for the Bahuerachi project are now fully owned by the Company’s Mexican subsidiary.

As of June 4, 2006, the Company formalized their working relationship with the local Community for a fixed period of 10 years for exploration purposes (to 2016).  In a formally called and legally constituted Assembly Meeting of the Community at Bahuerachi, Tyler was formally granted an occupation agreement which will protect its rights to explore on all priority exploration targets identified to date.  The Agreement gives Tyler secure rights to access the areas it needs for exploration, the right to build roads, conduct trenching and drilling, maintain its camp and build further infrastructure as needed, as well as access to water.

TYLER RESOURCES INC.

MANAGEMENT DISCUSSION AND ANALYSIS

FOR THE THREE MONTHS ENDED OCTOBER 31, 2006

3)  

Mineral properties – Mexico (continued)

The Phase II Drilling Program at Bahuerachi was designed to cover approximately 11,000 meters of drilling.  It commenced during the year ended July 31, 2005, with expenditures totaling approximately $4 million. This Program was subsequently substantially expanded, to an ultimate total of 35,000 meters (ongoing) of combined diamond drilling and reverse circulation drilling based on encouraging results within the areas drilled to date.  Expenditures on the program throughout the three months ended October 31, 2006 totaled approximately $1.7 million.  This program has largely been funded by the proceeds of a private placement netting $9.7 million concluded in April 2005.

The Company expanded its Bahuerachi property in fiscal 2006 by staking three new areas contiguous to its previously existing claim block.  These three new titles cover an additional 3,476 hectares, bringing the total area under title to the Company and forming the Bahuerachi project to 6,488 hectares.

In September 2006, the Company reported results of the initial NI 43-101 compliant independent resource estimate, incorporating the bulk of drilling conducted at Bahuerachi to July 31, 2006.  The estimate was prepared by Associated Mining Consultants Ltd. for work conducted to July 15^th, 2006 within the Main Zone of the Bahuerachi Project.  The Company noted that a significant portion of the material as defined in this initial resource estimate has been classified as an Indicated Resource, which exceeded management’s expectation for this initial round of modeling.  This increase in confidence level for a portion of the resources on a first pass basis is largely due to the relatively uniform and predictable distribution of mineralization within the bulk tonnage porphyry and skarn units, allowing for greater confidence levels in projecting data from existing drill holes within the model space.  

A summary of both Inferred and Indicated Resources defined to date at various cut-off grades has been provided by the Company’s Independent Consultants and results, as released on September 25^th 2006, are again presented below:

BAHUERACHI MAIN ZONE Initial Indicated and Inferred Resources.

Copper % cutoff	Category		In Situ Tonnes	Cu %	Au g/t	Ag g/t	Mo %	Zn %	CuEq(1) %
0.0	Indicated		202,006,507	0.36	0.04	3.28	0.008	0.06	0.55
	Inferred		237,569,006	0.26	0.02	1.61	0.005	0.02	0.35
0.1	Indicated		176,589,593	0.41	0.04	3.64	0.009	0.07	0.61
	Inferred		202,525,959	0.29	0.02	1.78	0.005	0.02	0.40
0.2 (2)	Indicated		134,693,967	0.49	0.05	4.25	0.009	0.08	0.72
	Inferred		134,221,239	0.36	0.03	2.11	0.005	0.02	0.48
0.3		Indicated	92,244,570	0.60	0.06	5.20	0.007	0.11	0.85
		Inferred	75,565,829	0.46	0.04	2.57	0.004	0.03	0.59
0.4		Indicated	63,082,536	0.71	0.07	6.33	0.006	0.16	1.01
		Inferred	40,482,465	0.55	0.05	3.22	0.004	0.04	0.71
0.5		Indicated	45,894,555	0.81	0.08	7.42	0.007	0.20	1.16
		Inferred	22,161,619	0.64	0.06	3.81	0.004	0.05	0.82

(1)

Copper equivalents calculated using US$1.50/lb Cu, $10.00/lb Mo, $7.00/oz Ag. Gold and Zinc were not factored in the copper equivalent calculation and copper equivalents have not been adjusted for metallurgical recoveries at this time.

(2)

A 0.2% copper cutoff is consistent with, and in the case of oxide material, above cut off grades currently being used in Mexico at other operations in this type of environment.

(3)

For modeling purposes, all metal values were capped at the 99^th percentile of their normal population distribution.

TYLER RESOURCES INC.

MANAGEMENT DISCUSSION AND ANALYSIS

FOR THE THREE MONTHS ENDED OCTOBER 31, 2006

3)

Mineral properties (continued)

BAHUERACHI MAIN ZONE, Contained metals, Initial estimate, based on Inferred and Indicated categories.

Copper % cutoff	Category	Copper Million lbs	Gold Ounces	Silver Million Ounces	Molybdenum Million lbs	Zinc Million lbs
0.0	Indicated	1,608.78	240,306	21.32	35.55	275.54
	Inferred	1,332.76	152,763	12.29	26.13	104.53
0.1	Indicated	1,581.18	232,781	20.66	34.97	268.06
	Inferred	1,301.03	143,252	11.56	22.28	93.57
0.2	Indicated	1,440.15	216,529	18.39	26.67	248.92
	Inferred	1,074.84	120,831	9.10	14.76	70.87
0.3	Indicated	1,209.51	183,878	15.43	14.21	231.35
	Inferred	756.41	87,463	6.25	6.65	48.21
0.4	Indicated	988.12	150,085	12.84	8.33	216.50
	Inferred	492.51	61,173	4.19	3.56	33.84
0.5	Indicated	818.85	123,948	10.94	7.07	200.93
	Inferred	313.50	40,614	2.72	1.95	25.35

A full Independent Technical Report on the Mineral Resource Estimate was filed on Sedar on November 17, 2006.

The Company continues to be encouraged by the widespread mineralization encountered to date on the project, with grades and widths confirming open pit style, bulk tonnage mining potential.  With the confirmation, through an initial resource estimate study, of a significant new mineral deposit identified at the Bahuerachi property in Mexico, the Company plans to conduct a preliminary economic assessment for a mining operation based on the current resource base as well as to expand the resource area with continued drilling in fiscal 2007.  Bahuerachi’s copper grades continue to fall well within the range of grades that are considered to have economic potential in the context of this property, and the presence of numerous additional metals, (gold, silver, zinc and molybdenum), could add considerable value to the complex.

The Company plans to perform infill drilling within the Bahuerachi main zone porphyry/skarn complex in order to continue increasing the overall amount of the defined resource base, upgrading classification of inferred material to the indicated category, expanding the resource area where open potential to do so exists, as well as testing additional targets on site over the forthcoming fiscal year.   The Company is also currently soliciting bids to conduct a scoping study on its current resource base, which will outline economic parameters for a mining operation at Bahuerachi.

Canada

a)

Northwest Territories

The Company has a 29.91% interest in the Carat property located in the Northwest Territories.  The Company does not intend to carry out any future development on the property and therefore wrote off the property in fiscal 2006.

TYLER RESOURCES INC.

MANAGEMENT DISCUSSION AND ANALYSIS

FOR THE THREE MONTHS ENDED OCTOBER 31, 2006

3)

Mineral properties (continued)

Canada

b)

Saskatchewan-Weedy Lake

As of July 31, 2006, the Company held a 50.1% interest in the Weedy Lake property located in Saskatchewan.  In August 2006, the property interest was sold to Golden Band Resources Inc. (“Golden Band”) for $1 million CAD plus 500,000 warrants, with each warrant exercisable to acquire one common share of Golden Band at a price of $0.55 per share until August 29, 2008.  The warrants received on the sale were valued using the Black-Scholes Option Pricing Model for $87,000.

4)

Operating Results

The net loss for the three months ended October 31, 2006 of $200,000 represents a $39,000 increase over the prior comparative period’s loss.  The increase is primarily due to the $64,000 increase in general and administrative costs and the $59,000 decrease in interest income, which was offset by the $75,000 change in the foreign exchange loss.  Interest income is earned on the Company’s investments in treasury bills and bankers acceptances and the Company had less cash invested versus the comparable period.  The foreign exchange gain of $21,000 was principally due to unrealized gains associated with holding large monetary balances in U.S. dollars and Mexican Pesos, and the strengthening of the Canadian dollar relative to the U.S. dollar and Mexican Pesos in the three months ended October 31, 2006.  The Cdn$/US$ exchange rate at October 31, 2006 was 1.1227 as compared to 1.1801 on October 31, 2005.  The Cdn$/pesos$ exchange rate at October 31, 2006 was 0.1043 as compared to 0.1094 on October 31, 2005.  

“General and administrative” expenses have increased approximately $64,000 from the comparative period.  An increase in salaries and stock based compensation was offset by the decrease in consulting costs and office and secretarial expenses.  The increase of approximately $62,000 in salaries and benefits is due to the hiring of three employees.  Stock options vested during the period ended October 31, 2006 valued at $51,000 increased from the prior period’s value of $Nil.  The decrease in consulting costs of $33,000 is due to the past CEO leaving in December 2005 and the new CEO’s compensation being included in salaries as of February 2006 instead of consulting.  Office and secretarial costs reduced by $24,000 from the comparable period as the staff that was being billed through related parties became employees of the Company in June 2006 and therefore their compensation is not being included in salaries instead of office and se cretarial.  

5)

Liquidity and Capital Resources

At October 31, 2006, the Company had positive working capital of $1,246,000 and cash and cash equivalents of $1,322,000.  Cash was provided through the sale of the Weedy Lake property in Saskatchewan during August 2006 totaling $1 million and $14,000 through interest income on portfolio investments.  The largest use of cash during the three months ended October 31, 2006 related to mineral property expenditures on the Bahuerachi property in Mexico of $1,744,000.  Further, cash was expended on operating expenditures in excess of interest and other income in the amount of $178,000.  The increase in operating activities of $151,000 over the comparative amount was largely due to the increase in general and administrative expenditures, the decrease in interest income and the change in the foreign exchange loss discussed in Note (4) above.  There were no warrants or options exercised in the three months ended October 31, 2006 compared to the $868,000 brou ght in the three months ended October 31, 2005.

The Company plans to perform further infill drilling within the Bahuerachi Main Zone porphyry/skarn complex in order to continue increasing the overall amount of the resource base, upgrade classification of inferred material to the indicated category, expand the resource area where open potential to do so exists, as well as test additional targets on site over fiscal 2007.   The Company is also currently soliciting bids to conduct a scoping study on its current resource base.  The scoping study will provide the necessary economic and technical parameters required to determine whether the project, or parts of the project, justify moving to the mining feasibility stage to convert the existing resource base to a mineable reserve base and provide a comprehensive economic analysis of the deposit’s potential.

Management and the Board of Directors review the approved work plan and budget for the Bahuerachi project at regular intervals throughout the year, and make revisions to the budget in response to exploration success (or the lack thereof) on the project as well as working capital available for further exploration and development expenditures.

TYLER RESOURCES INC.

MANAGEMENT DISCUSSION AND ANALYSIS

FOR THE THREE MONTHS ENDED OCTOBER 31, 2006

5)

Liquidity and Capital Resources (continued)

On November 21, 2006 the Company closed a brokered private placement with Jennings Capital Inc. for aggregate gross proceeds of $2,000,180 by selling 2,041 units at $980 per unit with each unit consisting of a convertible debenture having a face value of $1,000 and 500 warrants of the Company.  Net proceeds of the financing are $1,800,000 after deducting the agent’s commission and legal fees.  The proceeds from the offering will be used to further the Company’s Bahuerachi project in Mexico and for working capital purposes.  On conversion, a total of 5,462,467 common shares could be issued.  Interest on the debentures of 10% is payable semi-annually in equal payments and the payments can be made in cash or shares at the option of the Company.  The planned activities for 2007 are subject to financing.  

Other than the financing discussed above, the Company has no debt, does not have any unused lines of credit or other arrangements in place to borrow funds, and has no off-balance sheet financing arrangements.  The Company does not use hedging or other financial derivatives.

Significant changes in working capital amounts were as follows:

Total accounts receivables (combined related and non-related) decreased from July 31, 2006 by a total of $688,000 mainly due to the Value Added Tax receivable starting to be recovered.  The Company pays a 15% recoverable goods and services value added tax to the Government of Mexico.  Other receivables decreased from July 31, 2006 by $65,000 which was mainly due to a $50,000 USD advance to a third party drilling company being recovered.  Payables and accrued liabilities, (combined related and non-related) decreased by approximately $127,000.  The decrease is primarily attributable to the drilling and exploration activity at the Bahuerachi property in Mexico at period end and the timing of billings received by the Company from a third party drilling company.

Table of Contractual Commitments

The following table lists as of October 31, 2006 information with respect to the Company’s known contractual obligations.

	Payments due by period
Contractual Obligations	Total	Less than 1 year	1- 3 years	3 – 5 years	More than 5 years
Long-Term Debt Obligations	-	-	-	-	-
Capital (Finance) Lease Obligations	-	-	-	-	-
Operating Lease Obligations	352,565	53,285	224,460	74,820	-
Occupation Agreement	170,000	17,000	51,000	51,000	51,000
Other Long-Term Liabilities Reflected on  the Company's Balance Sheet under the  GAAP of the primary financial statements	-	-	-	-	-
Total	522,565	70,285	275,460	125,820	51,000

For additional information related to the Company’s obligations and commitments see Note 10 in the Company’s unaudited interim consolidated financial statements attached.

TYLER RESOURCES INC.

MANAGEMENT DISCUSSION AND ANALYSIS

FOR THE THREE MONTHS ENDED OCTOBER 31, 2006

6)  

Selected Annual Financial Information

The following selected financial data has been extracted from the audited consolidated financial statements, prepared in accordance with Canadian Generally Accepted Accounting Principals, for the fiscal years indicated and should be read in conjunction with those audited financial statements.  

For the years ended or as at July 31,	2006	2005	2004
Financial Results
Interest income	$         226,308	$         74,665	$          25,460
Net Loss	$   (2,663,670)	$   (1,631,597)	$   (1,144,770)
Basic and diluted  loss per share	$ (0.03)	$ (0.02)	$      (0.02)
Financial Position
Working capital	$      2,693,858	$      9,983,280	$     2,317,383
Total assets	$    20,014,656	$    20,254,992	$     8,139,341
Share Capital	$    23,109,538	$    21,620,259	$   13,051,242
Contributed Surplus	$      2,332,070	$      1,900,660	$        593,050
Warrants	$      3,417,961	$      3,600,000	$                    -
Deficit	$ ( 9,848,716)	$ (   7,185,046)	$  (  5,553,449)

The Company’s earnings can vary significantly depending on the amount and timing of the mineral property write-offs and the amount and vesting of stock options.  Mineral property write-offs and proceeds received on mineral properties in excess of their carrying cost aggregated $1,528,000 in fiscal 2006, (2005 - $Nil; 2004 - $262,000).  The Company commenced accounting for stock option expense as compensation cost in the statement of earnings effective August 1, 2002.  The stock option expense in the year ended July 31, 2006 was $499,000 (2005 - $1,401,000; 2004 - $596,000) of which $118,000 (2005 - $208,000; 2004 - $Nil) was capitalized to geological consulting in mineral properties and $381,000 (2005 -$1,193,000; 2004 - $596,000) was included in general and administrative expenses.  

The remaining variations in earnings can be primarily attributed to fluctuations in general and administrative costs that increase as exploration activity increase.  The Company had limited cash resources in 2004, hence conducted less exploration and reduced general and administrative support costs.  See Operating Results Note 4 and Liquidity and Capital Resources Note 5 above for more information on these changes from comparative years.

7)  

Selected Quarterly Information

The following selected financial data has been extracted from the unaudited interim consolidated financial statements, prepared in accordance with Canadian Generally Accepted Accounting Principals, for the fiscal periods indicated and should be read in conjunction with those unaudited financial statements.  

Three months ended:	Oct 31 2006 Q1 2007	July 31 2006 Q4 2006	Apr 30 2006 Q3 2006	Jan 31 2006 Q2 2006	Oct 31 2005 Q1 2006	July 31 2005 Q4 2005	Apr 30 2005 Q3 2005	Jan 31 2005 Q2 2005
Interest and other	$  22,200	$    38,522	$    57,805	$    56,456	$ 73,525	$    45,487	$     9,886	$      8,814
Net loss before mineral property write-offs and stock option compensation	$(250,933)	$(56,135)	$(253,643)	$(283,126)	$(161,129)	$(106,568)	$(120,996)	$(108,906)
Stock option compensation expense	$(50,917)	$(64,750)	$(194,000)	$(122,500)	-	$(486,900)	-	$(706,000)
Mineral property write-offs	-	$(1,528,387)	-	-	-	-	-	-
Net Loss	$(200,016)	$(1,649,272)	$(447,643)	$(405,626)	$(161,129)	$(593,468)	$(120,996)	$(814,906)
Basic and diluted loss per share	(0.00)	(0.03)	$   ( 0.00)	$   ( 0.00)	$  0.00	(0.01)	0.00	$  (0.01)

TYLER RESOURCES INC.

MANAGEMENT DISCUSSION AND ANALYSIS

FOR THE THREE MONTHS ENDED OCTOBER 31, 2006

7)  

Selected Quarterly Information (continued)

Interest revenues vary with the amount of invested cash and interest rates.  Interest revenues increased in the fourth quarter of fiscal 2005 as a financing was completed in April 2005.  The most significant influence on net income/loss is the amount and timing of mineral property write-offs and the recognition of stock option compensation expense.  The quarter ended April 30, 2005 had a higher loss due to a sharp increase in consulting costs and promotional costs associated with marketing the Company to achieve equity financing.  The higher losses starting Q1 of 2006 are primarily due to the increase in exploration activity and efforts to boost the Company’s profile in the investment community after the financing revenues were received at the end of Q3 2005.  Further, expenses increased as a result of new regulatory requirements including fees associated with US filings.  The decrease in net loss in Q4 2006 is due to an adjustment on the exchange rate used on foreign exchange currency transactions.  See Operating Results Note 4 and Liquidity and Capital Resources Note 5 above for more information.

8)

Off-Balance Sheet Arrangements

At the date of this report, the Company had no off-balance sheet arrangements.

9)  

Related Party Transactions

The following related party transactions occurred during the three months ended October 31, 2006:

·

$12,938 was paid to Dr. Ebert, an Officer and Director of the Company, for geological consulting and director services.

·

Pursuant to an office lease agreement, a total of $8,690 was paid to a Company related by virtue of certain common officers and directors, for rent of shared office space and $6,881 for lease operating costs and miscellaneous office expenses.

·

Included in revenue and related party accounts payables are overhead recoveries of $8,148 charged to companies related by virtue of certain common officers and directors.

The following compensation was paid to officers and directors of the Company during the three months ended October 31, 2006:

·

$36,000 was paid to Mr. Jutras, an Officer and Director of the Company, for geological consulting and management services.

·

$21,250 was paid to Ms. Munro, an Officer of the Company, for corporate accounting and management services.

·

$10,833 was paid to Ms. O’Neill, an Officer of the Company, for corporate secretary services provided.

·

Effective December 2004, the outside directors were entitled to receive $500 per director or committee meeting attended in person and $300 per director or committee meeting attended by telephone.  The Directors suspended payment of these fees as of August 1, 2006.

·

Effective January 2006, the outside directors were entitled to receive monthly compensation of $1,000 per director and an additional $250 for the chairman. The Directors suspended payment of these fees as of August 1, 2006.

The purpose of paying related companies for rent and office expenses is to realize certain economies experienced by sharing office and administrative services.  

10)  

Professional Fees

Professional fees for the three months ended October 31, 2006 and October 31, 2005 were comprised of the following:

	October 31, 2006	October 31, 2005
Audit and accounting fees	$ 15,000	$   27,500
US filing legal and accounting	-	12,953
Legal	8,681	4,884
Total	$   23,681	$  45,337

TYLER RESOURCES INC.

MANAGEMENT DISCUSSION AND ANALYSIS

FOR THE THREE MONTHS ENDED OCTOBER 31, 2006

11)  

Capital Stock, Contributed Surplus and Warrants

a)

Authorized and Issued

Authorized:  Unlimited number of common voting shares

Unlimited number of preferred shares

Issued:

Changes to capital stock from October 31, 2006 to December 19, 2006 were as follows:

	Number of Shares	Capital Stock
Balance October 31, 2006	90,314,099	$ 23,109,538
Warrants issued on private placement (Note 5)		(88,000)
Balance December 19, 2006	90,314,099	$ 23,021,538

b)

Contributed Surplus

Changes to contributed surplus from October 31, 2006 to December 19, 2006 were as follows:

	Contributed Surplus
Balance October 31, 2006	$     2,382,987
Stock-based compensation	13,833
Balance December 19, 2006	$     2,396,820

c)

Warrants

i)  Warrants Outstanding

Issue Date	Expiry Date	Number of Warrants	Exercise Price	Fair Value Assigned
		December 19, 2006
April 25, 2005	April 26, 2007	3,617,800	$1.75	$1,828,489
April 27, 2005	April 28, 2007	3,892,600	$1.75	$1,771,511
November 21, 2006	November 22, 2008	1,298,827	$0.60	$     88,000
		8,809,227

ii)

Warrant Tansactions

	Number of Warrants	Weighted-Average Exercise Price
As at October 31, 2006	7,510,400	$1.75
Granted	1,298,827	$0.60
As at December 19, 2006	8,809,227	$1.58
Exercisable at December 19, 2006	7,510,400

iii)  Warrant Values

	Warrants
As at October 31, 2006	$      3,417,961
Warrants issued	88,000
As at December 19, 2006	$      3,505,961

d)

Stock Options

There were no changes to stock options during the period from October 31, 2006 to December 19, 2006.

e)  

Escrow Shares

There are no escrowed shares.

TYLER RESOURCES INC.

MANAGEMENT DISCUSSION AND ANALYSIS

FOR THE THREE MONTHS ENDED OCTOBER 31, 2006

11)  

Capital Stock, Contributed Surplus and Warrants (continued)

f)  

Fully Diluted

Assuming all “in-the-money” outstanding options and warrants were converted into common shares effective December 19, 2006, the Company’s outstanding common shares would aggregate 102,281,626.

12)

 Officers and Directors

Alan Craven

Director

Shane Ebert

Director, Vice President Exploration

Lesley Hayes

Director

Jean Pierre Jutras

Director, CEO and President

Jennifer Munro

Chief Financial Officer

Barbara O’Neill

Corporate Secretary

Theodore Renner

Director, Chairman

Gregory Smith

Director

13)

Contractual Obligations

The Company is committed, pursuant to a sublease with a company related by virtue of certain common officers and directors, to pay its share of base office rent.  The base rent for which it is committed aggregates $37,414 in fiscal 2007 and $52,332 in fiscal 2008 to 2011.   The Company is also required to pay its share of annual associated lease operating costs, which are expected to approximate $15,871 in fiscal 2007 and $22,488 in fiscal 2008 to 2011.

During the prior fiscal year, the Company entered into drilling contracts with third party drilling companies and committed to a minimum of 35,000 meters drilled estimated to cost $2,651,000 USD.  During the three months ended October 31, 2006, the Company met its minimum obligations on two of the three drilling contracts.  As of December 19, 2006, $2,379,000 USD has been incurred, leaving an estimated $272,000 USD remaining on contract.

Pursuant to an occupation agreement signed in June 2006, the Company is required to make annual surface rights payments of $166,000 Pesos (approximately $17,000) in June of each year for 10 years (to 2016) to a third party.

14)

Investor Relations

The Company did not use an investor relations service during the period of this report.

15)

Risks

The success of the Company’s business is subject to a number of factors including, but not limited to, those risks normally encountered in the mineral exploration industry such as operating hazards, exploration uncertainty, increasing environmental regulation, competition with companies having greater resources, lack of operating cash flow, and foreign currency fluctuations.  

There is intense competition within the minerals industry to acquire properties of merit, and Tyler competes with other companies possessing greater technical and financial resources.  Even if desirable properties are secured, there can be no assurances that the Company will be able to execute its exploration and development programs on its proposed schedules and within its cost estimates, whether due to weather conditions in the areas where it operates, increasingly stringent environmental regulations and other permitting restrictions, or other factors related to exploring, such as the availability of essential supplies and services.  

There can be no assurances the Company will continue to be able to access the capital markets for the funding necessary to acquire and maintain exploration properties and to carry out its desired exploration programs.  As the Company relies on the sale of its common shares to finance operations and exploration, the state of the markets will affect its ability to raise additional capital.  The state of the markets is dependent on investor confidence and the price of mineral resources at any point in time, among other things.

TYLER RESOURCES INC.

MANAGEMENT DISCUSSION AND ANALYSIS

FOR THE THREE MONTHS ENDED OCTOBER 31, 2006

15)

Risks (continued)

The economics of any potential mineral deposits may be affected by many factors beyond the capacity of the Company to anticipate and control, such as the marketability of the minerals, government regulations relating to health, safety and the environment, the scale and scope of royalties and taxes on production, and demands for “value added” processing of minerals.

The Company is exposed to fluctuations in the exchange rate between the Canadian dollar, U.S. dollar and Mexican peso.   The majority of the mineral exploration costs are denominated in U.S. dollars.  When appropriate, the Company purchases and holds U.S. dollars to try to mitigate this risk factor.

16)

Outlook

With the receipt of the Initial Resource Estimate in September 2006, the Company has clearly achieved an important milestone in determining a significant resource base that justifies proceeding with the next logical step of work at Bahuerachi.

The Company plans to perform infill drilling within the Bahuerachi main zone porphyry/skarn complex in order to continue increasing the overall amount of the resource base, upgrade classification of inferred material to the indicated category, expand the resource area where open potential to do so exists, as well as test additional on site targets over fiscal 2007.   The Company is also currently soliciting bids to conduct a scoping study on its current resource base.  The scoping study will provide the necessary economic and technical parameters required to determine whether the project, or parts of the project, justify moving to the mining feasibility stage to convert the existing resource base to a mineable reserve base and provide a comprehensive economic analysis of the deposit’s potential.  The Company plans to raise additional funds this year to fully implement these plans.   

17)

Proposed Transactions

At the date of this report, the Company had no proposed transactions.

18)

Critical Accounting Estimates

Preparation of our consolidated financial statements requires the use of estimates and assumptions that can affect reported amounts of assets, liabilities, revenues and expenses.  Accounting policies relating to asset impairments, amortization of property and equipment, and site reclamation accruals are subject to estimates and assumptions.

Decisions to write-off or not to write-off, all or a portion of our investment in various properties, especially exploration properties, subject to impairment analysis are based on our judgment as to the actual value of the properties and are therefore subjective in most cases.  Exploration properties found to be impaired were written-off in 2006.

Listed below are the accounting estimates that we believe are critical to our financial statements due to the degree of uncertainty regarding the estimates or assumptions involved and the magnitude of the asset, liability, revenue or expense being reported:

·

The most significant accounting estimate for the Company relates to the carrying value of its mineral property assets.  Mineral properties consist of exploration and mining concessions.  Acquisition and leasehold costs and exploration costs are capitalized and deferred until such time as the property is put into production or the properties are disposed of either through sales or abandonments.  The estimated values of all properties are assessed by management on a quarterly basis by reference to the timing of the exploration and/or development work, the work programs and exploration results experienced by the Company and others, and the extent to which optionees have committed, or are expected to commit to, exploration on the property.  When carrying value of the property exceeds its estimated net recoverable amount, an impairment provision is recognized to write the property down to the estimated fair val ue.

TYLER RESOURCES INC.

MANAGEMENT DISCUSSION AND ANALYSIS

FOR THE THREE MONTHS ENDED OCTOBER 31, 2006

18)

Critical Accounting Estimates (continued)

·

Another significant accounting estimate relates to accounting for stock-based compensation.  The Company uses the Black-Scholes Option Pricing Model.  Option pricing models require the input of highly subjective assumptions including the expected price volatility of the underlying stock.  Changes in the subjective input assumptions can materially affect the fair value estimate, and therefore the existing models do not necessarily provide a reliable single measure of the fair value of the Company’s stock options granted and vested during the year.

·

Accounting for reclamation obligations requires management to make estimates of reclamation and closure costs to be incurred in the future as required to complete the reclamation and environmental remediation work mandated by existing laws and regulations.  Actual costs incurred in future periods could differ from amounts estimated.  Additionally, future changes to environmental laws and regulations could increase the extent of reclamation and remediation work required.

19)

Changes in Accounting Policies Including Initial Adoption

There have been no changes in the Company’s existing accounting policies.

20)

Financial Instruments and Other Instruments

The carrying amount of marketable securities, accounts receivables, accounts payable and accrued liabilities are all considered representative of their respective values.

21)

Shares Outstanding

At October 31, 2006, the issued and outstanding common shares of the Company were 90,384,199.  There were no changes in the issued and outstanding common shares as of the date of this MD&A.

22)

No Significant Revenues

The Company has not had significant revenue from operations in either of its last two financial years.

Refer to the Interim Consolidated Schedule of Mineral Properties included in the unaudited interim consolidated financial statements for the capitalized exploration and mineral claim costs.

The following are the significant expenditures included in the general and administrative expenses financial statement category in the Statement of Operations for the three months ended October 31, 2006 and October 31, 2005:

	October 31, 2006	October 31, 2005
Administrative consulting fees	$    4,093	$ 36,915
Salaries and benefits	84,137	21,657
Insurance	5,141	6,250
Directors and officers insurance	8,000	1,490
Occupancy costs	18,296	10,347
Office and secretarial	6,538	30,944
Website and networking	961	1,361
Travel and promotion	6,419	3,848
Investor relations	-	7,595
Stock based compensation	50,917	-
Total General and    Administrative Expense	$ 184,502	$ 120,407

TYLER RESOURCES INC.

MANAGEMENT DISCUSSION AND ANALYSIS

FOR THE THREE MONTHS ENDED OCTOBER 31, 2006

23)

Controls and Procedures

Disclosure Controls and Procedures

Prior to the filing date of this report, management, including the Company’s Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness and operation of the Company’s disclosure controls and procedures. The Chief Executive Officer and Chief Financial Officer concluded that, as of October 31, 2006, the disclosure controls and procedures were effective, in all material respects, to ensure that information required to be disclosed in the reports the Company files and submits under the Exchange Act is recorded, processed, summarized and reported as and when required. The Company’s Chief Executive Officer and Chief Financial Officer have concluded that the Company’s disclosure controls and procedures are also effective to ensure that information required to be disclosed in the reports that it files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including its Chief Executive Officer an d Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

The Company’s management, including the Company’s chief executive officer and chief financial officer, has evaluated the Company’s internal control over financial reporting to determine whether any changes occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect the Company’s internal control over financial reporting.  

During the three months ended October 31, 2006, the Company established an effective program to ensure that the code of conduct and ethics guidelines are fully communicated and distributed appropriately to the employees, consultants and directors.

Other than noted above, there has been no such change in the Company’s internal control over financial reporting that occurred during the first three months of fiscal 2007.

It should be noted that while management believes that current disclosure and internal controls and procedures provide a reasonable level of assurance, it cannot be expected that existing disclosure controls and procedures or internal financial controls will prevent all human error and circumvention or overriding of the controls and procedures.  A control system, no matter how well conceived or operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met.

24)

Other

Additional information relating to the Company may be found on SEDAR at www.sedar.com and at their website www.tylerresources.com.

Forward-Looking Information

This MD&A contains certain forward-looking information.  All information, other than historical facts included herein, including without limitation data regarding potential mineralization, exploration results and future plans and objectives of Tyler Resources Inc., is forward-looking information that involves risk and uncertainties.  There can be no assurance that such information will prove to be accurate and future events and actual results could differ materially from those anticipated in the forward-looking information.