SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

DAVE & BUSTER’S, INC.

(Exact name of registrant as specified in its charter)

Registrant’s telephone number,

Including area code (214) 357-9588

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class

Common Stock, $0.01 par value

Securities registered pursuant to Section 12(g) of the Act:

None

      Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.     Yes þ          No o

      Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulations S-K is not contained herein, and will not be contained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.     o

      Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act).     Yes þ          No o

      The aggregate market value of the voting common stock held by non-affiliates of the registrant at August 1, 2004 (the last business day of the registrant’s second fiscal quarter) was $207,488,957.

      The number of shares of common stock outstanding at April 12, 2005 was 14,022,267 shares.

DOCUMENTS INCORPORATED BY REFERENCE

      Portions of the registrant’s Proxy Statement for its 2005 Annual Meeting of Stockholders are incorporated by reference into Part III hereof, to the extent indicated herein.

FORM 10-K

TABLE OF CONTENTS

PART I

Overview

      Dave & Buster’s® is a leading operator of large format, high-volume, regional entertainment complexes. For the past twenty-two years, we have successfully operated our entertainment complexes under the Dave & Buster’s name. In the fourth quarter of fiscal 2004, the Company acquired out of bankruptcy, the operating assets of nine restaurant/entertainment complexes operating under the trade name “Jillian’s®.” The nine complexes acquired have operations similar to Dave & Buster’s and are located in major metropolitan areas. The asset purchase agreement included the purchase of the brand name and all trademarks of Jillian’s, allowing us to operate these complexes under the Jillian’s brand. The operating results of the acquired complexes are included in our consolidated results beginning on the date of acquisition. The historical results of operations of the acquired complexes were not significant compared to our historical consolidated results of operations.

      Each entertainment complex offers an extensive array of entertainment attractions such as pocket billiards, shuffleboard, state-of-the-art interactive simulators and virtual reality systems, plus traditional carnival-style games of skill. In addition, our complexes offer a full menu of high quality food and beverages. The layout of our entertainment complexes is designed to promote easy access to, and maximize guest crossover between, the multiple entertainment and dining areas within each location. We believe that the availability of multiple attractions in one large facility, the high quality food, beverages and service each entertainment complex offers, and our commitment to casual, yet sophisticated fun for adults synergistically drive repeat usage of our complexes and differentiate us from other regional entertainment offerings.

      As of January 30, 2005, we operated 43 entertainment complexes across the United States and in Canada, with an average age of 6.5 years per location. Our entertainment complexes can be separated into two categories: mega entertainment complexes, which are typically between 50,000 and 70,000 square feet in size, and intermediate entertainment complexes, which are typically between 40,000 and 49,000 square feet in size. We operate 28 complexes that are considered mega entertainment complexes. Our entertainment complexes operate seven days a week and are typically open from 11:30 a.m. to 12:00 a.m. on weekdays and 11:30 a.m. to 2:00 a.m. on weekends.

      Approximately 16.5 percent of our fiscal 2004 revenues were from private parties, business gatherings and sponsored events. Each entertainment complex has a Show Room and other special event rooms that are designed for hosting these types of functions. Each complex has a dedicated sales team responsible for selling large events to corporate, as well as, individual guests.

      In order to better serve the needs of our guests, we provide full, sit-down food service not only in the restaurant areas, but also throughout the entire entertainment complex. Our menu places special emphasis on quality, well-rounded meals, including gourmet pastas, steaks, seafood, chicken, sandwiches, salads and an outstanding selection of desserts. We routinely update our menus to reflect current trends and guest favorites. Each entertainment complex offers full bar service, including over 35 different beers, an extensive selection of wine and spirits plus a variety of non-alcoholic beverages, throughout the entertainment and restaurant areas.

      Fiscal 2004 brought several challenges and opportunities to Dave & Buster’s. During fiscal year 2004, the Company renewed its new store development effort by opening one complex in Arcadia, California and securing sites for fiscal 2005 openings in Omaha, Nebraska and Kansas City, Kansas. Subsequent to the end of the fiscal year, the lease for the third planned site for fiscal 2005 was signed. This location will be in Buffalo, New York. Additionally, as described above, the Company acquired nine operating Jillian’s restaurants. Comparable store revenue performance, which remained positive through the Company’s third quarter, was adversely impacted by severe weather during what has historically been one of the strongest portions of our fourth quarter. We estimate that approximately $2 million of revenue was lost as a result of this severe weather since it occurred over a weekend which is the highest volume period of our operating week.

      Revenues in the amusement component of our business were weaker than the food and beverage components. We were able to offset these revenue declines by maintaining operating margins. This enabled us to improve our net income to $12.9 million compared to $10.9 million last year.

      Acquisition of Certain Assets of Jillian’s Entertainment Holdings, Inc. On November 1, 2004, we completed the acquisition of nine Jillian’s locations pursuant to an asset purchase agreement. The cash requirements of the acquisition were funded from borrowings under our amended senior bank credit facility described below. The nine Jillian’s complexes acquired are located in the metropolitan areas of: Minneapolis, Minnesota; Philadelphia, Pennsylvania; Concord, North Carolina; Farmingdale, New York; Nashville, Tennessee; Houston, Texas; Arundel, Maryland; Scottsdale, Arizona and Westbury, New York. The assets acquired consist principally of the leasehold interests, as well as the related improvements, furniture, fixtures and equipment and the Jillian’s trade name and related trademarks.

      Amendment to Senior Bank Credit Facility. On November 1, 2004, we closed on the second amendment to our restated senior bank credit facility. The amended facility includes a $60 million revolving credit facility and a $55 million term debt facility. The revolving credit facility is secured by all assets of the Company and may be used for borrowings or letters of credit. On January 30, 2005, borrowings under the revolving credit facility and term debt facility were $6 million and $53 million, respectively.

Competition

      Dave & Buster’s is a regional Entertainment Complex (“EC”). Regional ECs offer multiple entertainment options designed to appeal to a broad, regional customer base. Regional ECs, such as Dave & Buster’s and theme parks, compete for customers’ discretionary entertainment dollars with each other, as well as with other providers of out-of-home entertainment, including localized single attraction facilities such as movie theaters, bowling alleys, nightclubs and restaurants. In addition, regional and localized complexes would compete with more national ECs such as Walt Disney World and Universal Studios. These three types of entertainment offerings can be distinguished from each other by factors such as:

      Visits to destination ECs may include airfare and hotel costs, which may make them more costly than regional ECs to visit. Regional ECs and localized single attraction facilities typically cost significantly less per visit and draw a majority of their customers from within a local or extended local radius.

      Although our competitors may include any EC located within the same region as one of our Dave & Buster’s entertainment complexes, we believe that we compete primarily against localized single attraction facilities. Single attraction venues offer a limited entertainment package. To the extent that regional ECs offer multiple entertainment options that appeal to a broad spectrum of customers, they are distinguishable from single attraction venues. We believe that the regional EC market is underdeveloped relative to other entertainment concepts and that attractive, un-penetrated geographic markets remain available.

Seasonality

      The fourth quarter of our fiscal year achieves the highest revenue and profitability, primarily as a result of the significant special event business during the period. This special event business is impacted by the number of holiday parties held during this time of the year. The third quarter is normally the lowest producing quarter in terms of revenue and profitability with first and second quarter being somewhat similar in results.

Strategy

      Continue to improve revenues and profitability. We have implemented a number of strategic initiatives aimed at increasing cash flow including maximizing capacity utilization, optimizing game contribution and reducing expenses. In addition, in February 2004 we introduced a new marketing program with a new advertising agency that we anticipate will, over time, have some positive impact on revenues. By continuing our operational reviews, we expect to continue to discover more efficient ways to run our business, and to improve our profitability and our cash flow.

      Continue focus on product enhancement. We will continue to emphasize guest satisfaction and promote guest loyalty by seeking to provide quality food, beverage and entertainment offerings in each of our complexes. We anticipate:

      Pursue A Disciplined Growth Strategy. As a pioneer in the regional EC market, we will continue to evaluate attractive site opportunities. We typically select new sites on the basis of demographic and transportation trends. We opened one Dave & Buster’s complex in 2004 in Arcadia, CA. We also expanded our reach through the acquisition of nine Jillian’s complexes. We anticipate returning to more normal growth patterns by opening a minimum of three complexes in 2005 and up to four annually thereafter.

Products

      Traditional Entertainment. Each Dave & Buster’s entertainment complex offers a number of traditional entertainment options. These traditional offerings include pocket billiards, shuffleboard tables, and the Show Room or other special event rooms, which are designed for hosting private social parties and business gatherings, as well as our sponsored events. Traditional entertainment games, such as pool and shuffleboard, are rented by the hour.

      Million Dollar Midway Games. The largest area in each Dave & Buster’s complex is the “Million Dollar Midway”, which is designed to provide high-energy entertainment through a broad selection of electronic, skill and sports-oriented games. A Power Card activates most midway games and can be recharged for additional play. The Power Card enables guests to activate games more easily and encourages extended play of games. By replacing coin-activation, the Power Card eliminated the technical difficulties and maintenance issues associated with coin activated equipment. Furthermore, the Power Card feature increased our flexibility in pricing and promoting our games.

      The “Million Dollar Midway” includes both fantasy/high technology games and classic midway entertainment. High-technology attractions vary among the entertainment complexes and may include large-screen interactive electronic games, such as Madden Football, Derby Owners Club, and state-of-the-art golf simulators.

      Classic midway entertainment includes sports-oriented games of skill, carnival-style games, which are intended to replicate the atmosphere found in many local county fairs, and D&B Downs, which is one of several multiple-player race games offered in each entertainment complex. At the Winner’s Circle, players can redeem coupons won from selected games of skill for a wide variety of prizes, many of which display the

Dave & Buster’s logo. The prizes include electronic equipment, sports memorabilia, stuffed animals, clothing and small novelty items.

      Our menu is offered from early lunch until late night and features moderately priced food designed to appeal to a wide variety of guests. This well-rounded fare includes gourmet pastas, steaks, seafood, chicken, sandwiches, salads and an outstanding selection of desserts. We routinely update our menu to reflect current trends and guest favorites. Other items among our guests’ favorites are the Classic BBQ Ribs, the Philly Cheesesteak sandwich, Chicken Scallopini and our Grilled Atlantic Salmon. We also feature lunch specials with an emphasis on quality food prepared quickly and an extensive offering of buffets for special events and private parties. We offer Sunday brunch with a separate menu featuring a variety of breakfast favorites.

      We believe that the location of our entertainment complexes is critical to our long-term success. Significant time and resources are devoted to analyzing each prospective site. In general, we target high-profile sites within metropolitan areas between 500,000 and one million people for intermediate-size models and over one million people for mega-size models. We carefully analyze demographic information such as average income levels for each prospective site, and we also consider other factors including the following:

      We also carefully study the entertainment and restaurant competition in prospective areas. In addition, we must select a site of sufficient size to accommodate our prototype facility with ample, convenient guest parking. We continually seek to identify and evaluate new locations for expansion. The typical cost of opening a mega-size Dave & Buster’s has ranged from approximately $7.5 million to $13.0 million, excluding pre-opening expenses and developer allowances, depending upon the location and condition of the premises. For intermediate-size models, the typical cost has ranged from approximately $6.5 million to $12.5 million, excluding pre-opening expenses and developer allowances, depending upon the location and condition of the premises. Our typical complex would currently range from $8 million to $9 million excluding pre-opening expenses and developer allowances.

      In fiscal year 2005, we plan to open three new entertainment complexes. We anticipate that two of the openings in 2005 will be smaller facilities, which are a further refinement of our mega size complex. We plan to build a smaller facility in these markets. We expect these facilities to contain approximately 60 percent of the square footage of the current mega complex. The investment should also be approximately 60 percent of a typical mega facility and the resulting revenue generated is expected to also be approximately 60 percent of an mega store. We do, however, expect the return on investment to be similar to a typical intermediate facility since we anticipate lower operating costs for these stores. This strategy potentially allows the Company to enter smaller metropolitan areas, which, we believe opens up a greater number of potential Dave & Buster’s locations.

      We base our decision of owning or leasing a site on the projected unit economics and availability of the site for purchase. Opening a leased facility reduces our capital investment in an entertainment complex because we do not incur land and site improvement costs and may also receive a construction allowance from the landlord for improvements. The exterior and interior layout of an entertainment complex is flexible and can be readily adapted to different types of buildings. We open entertainment complexes in both new and existing structures, and in both urban and suburban areas.

Marketing, Advertising And Promotion

      We operate our marketing, advertising, and promotional programs through our corporate marketing department with the assistance of an external advertising agency and a national public relations firm. Our corporate marketing department is also responsible for controlling media and production costs. During fiscal 2004, our expenditures for advertising and promotions were approximately 3.4 percent of our revenues. We anticipate maintaining this level of expenditures in fiscal 2005.

      In order to expand our guest base, we focus marketing efforts in three key areas:

      We continue to conduct market research to better understand the brand, our guests and to develop engaging messages and promotional programs. In addition, we develop marketing and media plans that are highly localized and designed to support individual market opportunities and local store marketing initiatives. We continue to utilize in-store promotions, emails and customer communications to increase visit frequency and check average.

      Our corporate and group sales programs are initiated and controlled by our Sales Department, which provides direction, training, and support to our Special Events Managers and their team within each entertainment complex. Primary focus for the Special Events Sales team is to identify and contact corporations, associations, organizations, and community groups within the team’s marketplace for the purposes of booking group events. The Special Events Sales teams pursue corporate and social group bookings through a variety of sales initiatives including outside sales calls and cultivation of repeat business. We develop and maintain a database of corporate and group bookings. Each Dave & Buster’s location hosts events for many multi-national, national and regional businesses. Many of our corporate and group guests schedule repeat events. A significant number of our guests are introduced to the Dave & Buster’s concept through these special events.

Foreign Operations

      As of October 6, 2003, we acquired the operations of Funtime Hospitality Corp, our former Canadian licensee located in Toronto for $4.1 million. This acquisition generated revenue of $8.8 million in fiscal 2004, representing approximately 2.3% of our consolidated revenue. As of January 30, 2005 we had approximately 1.6% of our long-lived assets located outside the United States. Our foreign activities are subject to various risks of doing business in a foreign country, including currency fluctuations, political changes, changes in laws and regulations and economic stability. We do not believe there is any material risk associated with the Canadian operations or any dependence by our domestic business upon the Canadian operations.

Suppliers

      The principal goods used by us are games, prizes and food and beverage products, which are available from a number of suppliers. We have also expanded our contacts with amusement merchandise suppliers through our direct import program. Federal and state mandated increases in the minimum wage could have the repercussion of increasing our expenses, as our suppliers may be severely impacted by higher minimum wage standards.

Intellectual Property

      We have registered the trademarks “Dave & Buster’s” and “Power Card” with the United States Patent and Trademark Office and in various foreign countries. We have also registered and/or applied for certain additional trademarks with the United States Patent and Trademark Office and in various foreign countries. We consider our trade name and our signature “bulls-eye” logo to be important features of our goodwill and seek to actively monitor and protect our interest in this property in the various jurisdictions where we operate.

In connection with our acquisition of nine Jillian’s locations, we also acquired the Jillian’s tradename and certain other related marks.

Government Regulation And Environmental Matters

      We are subject to various federal, state, and local laws affecting our business. Each entertainment complex is subject to licensing and regulation by a number of governmental authorities, which may include alcoholic beverage control, amusement, health and safety, and fire agencies in the state, county or municipality in which the entertainment complex is located. Each entertainment complex is required to obtain a license to sell alcoholic beverages on the premises from a state authority and, in certain locations, county and municipal authorities. Typically, licenses must be renewed annually and may be revoked or suspended for cause at any time. Alcoholic beverage control regulations relate to numerous aspects of the daily operations of each entertainment complex, including minimum age of patrons and employees, hours of operation, advertising, wholesale purchasing, inventory control and handling, and storage and dispensing of alcoholic beverages. We have not encountered any material problems relating to alcoholic beverage licenses to date. The failure to receive or retain a liquor license, or any other required permit or license, in a particular location, or to continue to qualify for, or renew our licenses, could materially adversely affect our operations and our ability to obtain such a license or permit in other locations. The failure to comply with other applicable federal, state or local laws, such as federal and state wage and hour laws, may also adversely affect our business.

      We are also subject to “dram-shop” statutes in certain states in which our entertainment complexes are located. These statutes generally provide a person injured by an intoxicated person the right to recover damages from an establishment that wrongfully served alcoholic beverages to the intoxicated individual. We carry liquor liability coverage as part of our existing comprehensive general liability insurance, which we believe is consistent with coverage carried by other entities in our industry. Although we are covered by insurance, a judgment against us under a “dram-shop” statute in excess of our liability coverage could have a material adverse effect on our operations.

      As a result of operating certain entertainment games and attractions, including operations that offer redemption prizes, we are subject to amusement licensing and regulation by the states, counties and municipalities in which we have entertainment complexes. Certain entertainment attractions are heavily regulated and such regulations vary significantly between communities. From time to time, existing entertainment complexes may be required to modify certain games, alter the mix of games, or terminate the use of specific games as a result of the interpretation of regulations by state or local officials. We have, in the past, had to seek changes in state or local regulations to enable us to open a given location. To date, we have been successful in obtaining all such regulatory changes.

      We are subject to federal and state environmental regulations, but these have not had a materially negative effect on our operations. More stringent and varied requirements of local and state governmental bodies with respect to zoning, land use, and environmental factors could delay or prevent development of new complexes in particular locations. We are subject to the Fair Labor Standards Act, which governs such matters as minimum wages, overtime and other working conditions, along with the Americans With Disabilities Act and various family-leave mandates. Although we expect increases in payroll expenses as a result of federal and state mandated increases in the minimum wage, such increases are not expected to be material. However, we are uncertain of the repercussion, if any, of increased minimum wages on our other expenses, as our suppliers may be more severely impacted by higher minimum wage standards.

Employees

      As of January 30, 2005, we employed approximately 7,400 persons, approximately 175 of whom served in administrative or executive capacities, approximately 600 of whom served as entertainment complex management personnel, and the remainder of whom were hourly entertainment complex personnel.

      None of our employees are covered by collective bargaining agreements, and we have never experienced an organized work stoppage, strike, or labor dispute. We believe our working conditions and compensation

packages are competitive with those offered by our competitors and consider relations with our employees to be good.

Executive Officers Of The Registrant

      David O. Corriveau, 53, a co-founder of the Dave & Buster’s concept in 1982, has served as President since June 1995 and as a director of the Company since May 1995. He previously served as Co-Chief Executive Officer and as Co-Chairman of the Board from February 1996 to April 2003. Mr. Corriveau served as President and Chief Executive Officer of D&B Holding (a predecessor of the Company) from 1989 through June 1995. From 1982 to 1989, Messrs. Corriveau and Corley operated the Company’s business.

      James W. Corley, 54, a co-founder of the Dave & Buster’s concept in 1982, has served as Chief Executive Officer since April 2003, as Chief Operating Officer since June 1995, and as a director of the Company since May 1995. He previously served as Co-Chief Executive Officer and as Co-Chairman of the Board from February 1996 to April 2003. Mr. Corley served as Executive Vice President and Chief Operating Officer of D&B Holding from 1989 through June 1995. From 1982 to 1989, Messrs. Corley and Corriveau operated the Company’s business.

      Nancy J. Duricic, 50, has served as Senior Vice President — Human Resources of the Company since December 2002 and as Corporate Secretary of the Company since June of 2004. Previously, she served as Vice President of Human Resources from December 1997 to December 2002. From June 1989 to June 1997, she served in human resources positions of increasing responsibilities in other companies, most recently as Vice President of Human Resources for Eljer Industries, Inc.

      William C. Hammett, Jr., age 58, has served as Senior Vice President of the Company since December 2002 and as Chief Financial Officer of the Company since December 2001. He has served as Vice Chairman of the Board of Directors of Pegasus Solutions, Inc. since March 2001 and as a Director of Pegasus since October 1995. From May 1998 to March 2001, he served as Chairman of the Board of Directors of Pegasus. From October 1995 to May 1998, he served as Vice Chairman of the Board of Directors of Pegasus. From August 1996 through September 1997, he served as Senior Vice President and Chief Financial Officer of La Quinta Inns, Inc. From June 1992 through August 1996, he served as Senior Vice President, Accounting and Administration of La Quinta Inns, Inc.

      Michael J. Metzinger, 48, has served as Vice President — Accounting and Controller of the Company since January 2005. Prior to joining Dave & Buster’s, he served as Executive Director — Financial Reporting with Carlson Restaurants Worldwide, Inc. From 1986 to 2005, Mr. Metzinger served in various positions in finance of increasing responsibility with Carlson Restaurants. Prior to that, he served in auditing positions with Arthur Andersen.

      Maria M. Miller, 48, has served as Senior Vice President — Marketing since May 2003. Prior to joining Dave & Buster’s she was principal and co-founder of a marketing consulting firm and engaged with an internet start-up company. From 1998 to 2000, Ms. Miller served as Senior Vice President of Marketing for Avis Rent-A-Car. Prior to that, she held various senior management positions with American Express from 1987 to 1996. She began her career in brand management, spending a combined 7 years with the General Foods Corporation and The Shulton Group.

      J. Michael Plunkett, 54, has served as Senior Vice President — Food and Beverage and Operations Strategy since June 2003 and as Senior Vice President of Operations for Jillian’s since June 2004. Previously, he served as Vice President of Kitchen Operations from November 2000 to June 2003, Vice President of Information Systems from November 1996 to November 2000, as Vice President, Director of Training from June 1995 until November 1996 and as Vice President and Director of Training of D&B Holding from November 1994 to June 1995. From 1982 to November 1994, he served in operating positions of increasing responsibilities for the Company and its predecessors.

      Sterling R. Smith, 52, has served as Senior Vice President — D&B Operations of the Company since December 2002. Previously, he served as Vice President of Operations from June 1995 to December 2002 and as Vice President and Director of Operations of D&B Holding from November 1994 to June 1995. From 1983

to November 1994, Mr. Smith served in operating positions of increasing responsibility for the Company and its predecessors.

      Bryan L. Spain, 57, has served as Senior Vice President — Procurement and Development of the Company since December 2002. Previously, he served as Vice President of Real Estate from March 1997 to December 2002. From 1993 until joining the Company in March 1997, Mr. Spain managed the Real Estate Acquisition and Development Program for Incredible Universe and Computer City Divisions of Tandy Corporation. In addition, from 1991 to 1993, Mr. Spain served as Director, Real Estate Financing for Tandy Corporation.

Risk Factors

      Our results of operations are dependent upon discretionary spending by consumers, particularly by consumers living in communities in which the entertainment complexes are located. A significant weakening in any of the local economies in which we operate may cause our guests to curtail discretionary spending, which in turn could materially affect our profitability. The ongoing conflict in Iraq, potential for future terrorist attacks, the national and international responses, and other acts of war or hostility may create economic and political uncertainties that could materially adversely affect our business, results of operations and financial condition in ways we currently cannot predict. In addition, seasonality is a factor in our results of operations due to typically lower third quarter revenues in the fall season and higher fourth quarter revenues associated with the year-end holidays.

      As of January 30, 2005, we operated 43 entertainment complexes. The combination of the relatively limited number of locations and the significant investment associated with each new entertainment complex may cause our operating results to fluctuate significantly. Due to this relatively limited number of locations, poor results of operations at any single entertainment complex could materially affect our profitability. Historically, new entertainment complexes experience a drop in revenues after their first year of operation, and we do not expect that, in subsequent years, any increases in comparable revenues will be meaningful. Additionally, because of the substantial up-front financial requirements to open new entertainment complexes, the investment risk related to any single entertainment complex is much larger than that associated with most other companies’ restaurant or entertainment venues.

      The out-of-home entertainment market is highly competitive. There are a great number of businesses that compete directly and indirectly with us. Many of these entities are larger and have significantly greater financial resources and a greater number of units than we have. Although we believe most of our competition comes from localized single attraction facilities that offer a limited entertainment package, we may encounter increased competition in the future, which may have an adverse effect on our profitability. In addition, the legalization of casino gambling in geographic areas near any current or future entertainment complex would create the possibility for entertainment alternatives, which could have a material adverse effect on our business.

      Various federal, state and local laws and permitting and license requirements affect our business, including alcoholic beverage control, amusement, health and safety and fire agencies in the state, county or municipality in which each entertainment complex is located. For example, each entertainment complex is required to obtain a license to sell alcoholic beverages on the premises from a state authority and, in certain locations, county and municipal authorities. The failure to receive or retain a liquor license, or any other required permit or license, in a particular location, or to continue to qualify for or renew our licenses, could

adversely affect our operations and our ability to obtain such a license or permit in other locations. The failure to comply with other applicable federal, state or local laws, such as federal and state minimum wage and overtime pay laws, may also adversely affect our business.

      The operation of our business requires qualified executives, managers and skilled employees. From time to time there may be a shortage of skilled labor in certain of the communities in which our entertainment complexes are located. While we believe that we will continue to be able to attract, train and retain qualified employees, shortages of skilled labor will make it increasingly difficult and expensive to attract, train and retain the services of a satisfactory number of qualified employees.

      We opened a new Dave & Buster’s entertainment complex in Arcadia, California and acquired 9 Jillian’s entertainment complexes in fiscal 2004. Our ability to expand depends upon our access to sufficient capital, locating and obtaining appropriate sites, hiring and training additional management personnel, and constructing or acquiring, at reasonable cost, the necessary improvements and equipment for these complexes. We intend to open three new complexes in fiscal 2005. Based on our current liquidity and capital resources and operating performance, we may not be able to generate sufficient cash flow or obtain sufficient additional funding to open any new complexes in fiscal 2006 or thereafter. In particular, the capital resources required to develop each new entertainment complex are significant. There is no assurance that we will be able to expand or that new entertainment complexes, if developed, will perform in a manner consistent with our most recently opened entertainment complexes or make a positive contribution to our operating performance.

      Certain of the regions in which our entertainment complexes are located, including six in California, have been, and may in the future be, subject to adverse local conditions, events or natural disasters, such as earthquakes. Depending upon its magnitude, a natural disaster could severely damage our entertainment complexes, which could adversely affect our business and operations. We currently maintain property and business interruption insurance through our aggregate property policy for each of our entertainment complexes. However, there is no assurance that our coverage will be sufficient if there is a major disaster. In addition, upon the expiration of our current policies, we cannot assure you that adequate coverage will be available at economically justifiable rates, if at all.

Available Information.

      We post on our website at www.daveandbusters.com our annual report on Form 10-K, our quarterly reports on Form 10-Q, our current reports on Form 8-K and all amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC.

      The Company operates a total of 34 Dave & Buster’s and 9 Jillian’s entertainment complexes located in 18 states and in Toronto, Canada. We are currently utilizing all available land at our owned locations. Our real estate leases are with unaffiliated third parties except as noted in “Certain relationships and related transactions.” Of these, we lease the building for 37 sites, own the building and lease the land for two sites and own the land and building for four sites. Our leases generally have an initial term of 10 to 20 years, with renewal terms that range from 5 to 20 years, and provide for a fixed rental plus, in certain instances, percentage rentals based on gross sales. In addition, our leases in many instances include escalation of rent payments during the initial term and/or during the renewal terms.

      The following table sets forth the number of restaurant/entertainment complexes which we operated in each state/country as of January 30, 2005.

      We also lease a 47,000 square foot office building and 30,000 square foot warehouse facility in Dallas, Texas, for use as our corporate headquarters and distribution center. This lease expires in October 2021, with options to renew until October 2041. The rent for these facilities is approximately $0.9 million per year for the first year of the lease and increases annually at 1.35 percent.

      We are named as a defendant in routine litigation incidental to our business, including negligence claims for personal injury, consumer claims, claims under federal or state laws governing access to public accommodations and employment-related claims. We are not currently subject to any pending legal proceedings that depart from the normal kind of such actions. In the opinion of management, the amount of ultimate liability with respect to all actions will not materially affect the consolidated results of operations or financial condition of the Company.

      There were no matters submitted for a vote of security holders during the fourth quarter ended January 30, 2005.

PART II

      The Company’s Common Stock trades on the New York Stock Exchange (“NYSE”) under the symbol DAB. The following table summarizes the high and low sales prices per share of Common Stock for the applicable periods indicated, as reported on the Nasdaq National Market and by the NYSE.

      At April 12, 2005 there were approximately 1,666 holders of record of the Common Stock.

      The Company has never paid cash dividends on its Common Stock and does not currently intend to do so as cash flows are reinvested into the Company to further pay down debt and fund capital expenditures for the entertainment complex business. Payment of dividends in the future will depend upon the Company’s growth, profitability, financial condition and such other factors that the Board of Directors may deem relevant.

      The following table sets forth selected consolidated financial data for the Company. This data should be read in conjunction with the Consolidated Financial Statements of the Company and the Notes thereto included in Item 8 hereof and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in Item 7 hereof.

General

      Our fiscal year ends on the Sunday after the Saturday closest to January 31. Fiscal years 2004, 2003 and 2002 each contained 52 weeks.

Restatement of Previously Issued Financial Statements

      On February 7, 2005, the Chief Accountant of the Securities and Exchange Commission issued a letter to the American Institute of Certified Public Accountants, which clarified existing generally accepted accounting principles applicable to leases. The Company has reviewed the principles covered in the letter with its Audit Committee, specifically the accounting for construction allowances and rent holidays. As a result, management and our Audit Committee determined that previously issued financial statements should be restated.

      Historically, the Company has recognized straight line rent expense for leases beginning on the opening date of our entertainment complexes and other facilities. This had the effect of excluding the construction period of these facilities from the calculation of the period over which it calculates rent. The Company now includes the construction period in the calculations of straight-line rent. Rent incurred during the construction period is capitalized as a component of the cost of the facilities and is amortized over a period equal to the lesser of the initial non-cancelable lease term plus any periods covered by renewal options that the Company considers reasonably assured of exercising, or the useful life of the related assets. Rent incurred during the pre-opening period is included in pre-opening costs.

      Additionally, the Company has changed its classification of construction allowances in its consolidated balance sheets to include the allowances as a component of deferred lease liabilities, which are being amortized as a reduction to rent expense over the terms of the respective leases. Historically, construction allowances have been recorded as a reduction of property and equipment and the related amortization has been classified as a reduction to depreciation and amortization expense. Furthermore, construction allowances are now presented as a component of cash flows from operating activities in the consolidated statements of cash flows. The Company’s consolidated statements of cash flows have historically reflected construction allowances as a reduction of capital expenditures within investing activities.

      The cumulative effect of the restatement adjustments through the Company’s February 1, 2004 balance sheet was to increase property and equipment, net and deferred lease liabilities by approximately $44,312 and $49,327, respectively, and to reduce deferred tax liabilities and stockholders’ equity by approximately $1,931

and $3,105, respectively. Adjustments to rent expense, depreciation expense, net of the related tax effects, resulted in decreases in net income of $108 and $68 and in diluted earnings per share of $0.01 in both 2004 and 2003.

      See Note 2 to the Consolidated Financial Statements of this Report for a summary of the effects of these changes on the Company’s consolidated balance sheets as of February 1, 2004 and February 2, 2003, as well as on the Company’s consolidated statements of operations and cash flows for fiscal years 2003 and 2002. The accompanying Management’s Discussion and Analysis gives effect to these corrections.

      Acquisitions — November 1, 2004, we completed the acquisition of nine Jillian’s locations pursuant to an asset purchase agreement for cash and the assumption of certain liabilities. The cash requirements of the acquisition were funded from our amended senior bank credit facility. The results of the acquired complexes are included in our consolidated results beginning on the date of acquisition. The historical results of operations of the acquired complexes were not significant compared to our historical consolidated results of operations.

      On October 6, 2003, we completed the purchase of the Dave & Buster’s complex in Toronto, Canada from a party that operated the facility under a license agreement with us. The results of the acquired Toronto operations are included in our consolidated results beginning on the date of acquisition.

      See Note 3 of Notes to Consolidated financial Statements for additional information on these acquisitions.

Overview of Operations

      Our management monitors and analyzes a number of key performance indicators in order to manage our business and evaluate our financial and operating performance. Those indicators include:

      Revenues — We derive revenues from food, beverage and amusement sales. Comparable store sales are a key performance indicator used within our industry and are indicative of acceptance of our initiatives as well as local economic and consumer trends.

      The food component of our business represents approximately 35 percent of our revenue. We continually monitor the market for new menu options and evaluate our ability to adjust prices where competitively appropriate. In the beverage component, we offer fully licensed facilities, which means that we have full beverage service throughout the complex. This component constitutes approximately 19 percent of our revenue. The promotional activity around the beverage component resulted in positive same store beverage sales in every quarter of fiscal 2004.

      The amusement component offers traditional games of skill such as billiards and shuffleboard as well as high-energy technology games and classic redemption games that dispense tickets, which may be redeemed for prizes. This component represents approximately 44 percent of our revenue. We invested approximately $5,300 in new games and $3,600 in Winner’s Circle capital improvements during 2004. We will continue to add the latest in new games as they become available and prove to be attractive to our guests.

      Special event business is a very important component in that we believe over 30 percent of the guests attending a special event are in a Dave & Buster’s for the first time. This is a very advantageous way to introduce the concept to new guests. Accordingly, we place considerable emphasis on this segment through our in-store sales teams.

      Cost of products — Cost of product includes the cost of food, beverages and amusement items. Our cost of food averages 26 percent of food revenue and our cost of beverage products average 25 percent of beverage revenue. Our amusement cost of product averages 12 percent of revenues. We strive to control our cost of product and thereby maintain or improve our gross margins for all components of our business. Our cost of product is driven by product mix and by pricing movements from third party suppliers. We continually strive to gain efficiencies in both the acquisition and use of food and beverage products while maintaining high

standards of product quality. In 2004, we began purchasing a number of our amusement items direct from Asia, which contributed to a reduction in our overall amusement cost of product.

      Operating payroll and benefits — Operating payroll and benefits were approximately 28 percent of revenue during fiscal 2004. Operating payroll and benefits consist of wages, employer taxes and benefits for our store personnel. We continually review the opportunity for cost reductions principally through variable labor scheduling refinements.

      Other store operating expenses — Other store operating expenses consist of store-related occupancy, restaurant expenses, utilities, repair and maintenance and marketing costs.

      Liquidity and cash flows — Our primary source of cash flow is from net income and availability under our revolving credit facility.

      Quarterly fluctuations, seasonality, and inflation — As a result of the substantial revenues associated with each new complex, the timing of new complex openings will result in significant fluctuations in quarterly results. We expect seasonality to be a factor in the operation and results of our business in the future with historically anticipated lower third quarter revenues and higher fourth quarter revenues associated with the year-end holidays. The effects of supplier price increases are expected to be partially offset by selected menu price increases where competitively appropriate. We believe that low inflation rates in our market areas have contributed to reasonably stable food and labor costs in recent years. However, there is no assurance that low inflation rates will continue, the cost of our products will remain stable or that the Federal minimum wage rate will not increase.

      As we look ahead to fiscal 2005, we continue to focus on improving same store revenue, implementing an effective marketing program, the resumption of growth through new store construction and continued improvement in operational cost efficiencies.

Results of Operations

      The following table sets forth, for the periods indicated, a year-over-year comparison of our revenues:

      The acquisition of nine Jillian’s locations in the fourth quarter of fiscal 2004 contributed approximately $11,300 of the food and beverage revenue increase and $8,500 of the increase in amusement and other revenue.

      Comparable store total revenues for fiscal 2004 were down approximately $800 (0.2%) from results achieved in 2003. Food and beverage revenues were up approximately 0.7% over 2003 driven primarily by a 2.8% increase in comparable beverage revenues. Food revenues were down 0.4% from fiscal 2003 at our comparable stores. Amusement revenues declined by 1.6% from 2003. Management believes this decline results primarily from the impact of the economic conditions on our guests’ discretionary income.

      Revenue from non-comparable Dave & Buster’s stores (stores not included in the comparable base) increased primarily from the 53 additional store weeks in 2004 at our Toronto location, which was acquired in

2003 and additionally, the opening of a new Dave & Buster’s in Arcadia, California. In 2004, our revenue mix was 54 percent for food and beverage and 46 percent for amusements and other revenue. This compares to 53 percent and 47 percent, respectively, for 2003. Continued emphasis on special events and party business had a positive impact with comparable store party sales at 16.1 percent of total revenues compared to 15.5 percent last year.

      In 2003, our revenue mix was 53 percent for food and beverage and 47 percent for amusements and other revenue. This compares to 52 percent and 48 percent, respectively, for 2002. Emphasis on our special events and party business had a positive impact with comparable store party sales at 15.5 percent of total revenues compared to 13.6 percent in 2002.

      The following table sets forth, for the periods indicated, a year-over-year comparison of our cost of product:

      During 2004 the costs of food and beverage were up approximately 30 basis points driven principally by increases in the price of cooking oil and other groceries. The costs of amusements declined approximately 70 basis points. This reduction was significantly influenced by reduced costs achieved through our direct import of merchandise from Asia.

      During 2003, amusement costs were up 20 basis points, while food and beverage costs were up 70 basis points. We expanded the beverage component promotional activity resulting in positive comparable store revenue with a corresponding increase in cost as a percentage of revenue. Amusement cost increased primarily as a result of a product mix shift toward higher redemption game play.

      The following table sets forth, for the periods indicated, a year-over-year comparison of our operating payroll and benefits:

      In 2004 compared to 2003, the increase in absolute dollars was attributed to the addition of Jillian’s approximately 1,600 employees at the acquired Jillian’s locations, the opening of the new store in California and a full year of payroll from the Toronto location. However, as a percentage of revenues, this cost declined due to continued labor control initiatives.

      During 2003, the decrease in absolute dollars over the prior year and as a percentage of revenues was attributed to cost reduction initiatives, consisting of a reduction in workforce in the fourth quarter of 2002 and scheduling refinements implemented in the first quarter of 2003, partially offset by the addition of the Toronto location.

      The following table sets forth, for the periods indicated, a year-over-year comparison of our other store operating expenses:

      During 2004, store operating expenses increased both in absolute dollars and as a percentage of revenues primarily as a result of an increase of approximately $4,174 in marketing expenses and expenses associated with an additional 117 weeks of non-comparable store operations over fiscal 2003.

      The 2003 decrease in both absolute dollars and as a percentage of revenues is primarily attributed to a $4,000 reduction in the marketing costs for 2003. In fiscal 2004 we substantially increased our marketing budget to approximately 3.3 percent of revenues to implement new initiatives.

      The following table sets forth, for the periods indicated, a year-over-year comparison of our general and administrative expenses:

      General and administrative expenses consist primarily of personnel, facilities and professional expenses for the various departments at corporate headquarters. The increase in absolute dollars in 2004 compared to 2003 is primarily attributable to expenditures related to compliance with the requirements of the Sarbanes-Oxley Act of 2002.

      The decrease in absolute dollars and as a percentage of total revenues in 2003 compared to 2002 was attributed to a reduction in workforce in the fourth quarter of 2002 offset by higher costs from insurance premiums and employee benefits. The increase in these costs as a percentage of revenue was due to the revenue decline.

      The following table sets forth, for the periods indicated, a year-over-year comparison of our depreciation and amortization expenses:

      Expenditures that substantially increase the useful lives of the property and equipment are capitalized, whereas, costs incurred to maintain the appearance and functionality of such assets are charged to repair and maintenance expense. Interest and rent costs incurred during construction are capitalized and depreciated based on the estimated useful life of the underlying asset. Property and equipment, excluding most games, are depreciated using the straight-line method over the estimated useful life of the assets. New property and equipment lives are estimated as follows: buildings, shorter of 40 years or the term of the related ground lease, including renewal options that we are reasonably assured of exercising; leasehold and building improvements, shorter of 20 years or lease life (also impacted by lease renewals); furniture, fixtures and equipment, 5 to 10 years; games 5 years. Used property and equipment are depreciated over shorter lives depending on the

assets condition and related estimates of useful life. Games are generally depreciated on the 150 percent declining-balance method over the estimated useful life of the assets.

      Depreciation increased in 2004, primarily as a result of the addition of new stores through acquisition and construction. Depreciation was relatively flat in 2003 compared to 2002, due to one new store opening late in 2002 and the acquisition of the Toronto location late in 2003.

      All start-up and preopening costs related to new store openings are expensed as incurred. Preopening costs totaled $1,295 in 2004. The Company opened one new store (Arcadia, California) in 2004, no new stores were opened in 2003 and one store (Islandia, New York) opened in 2002, which had preopening costs of $1,520.

      The following table sets forth, for the periods indicated, a year-over-year comparison of our interest expenses:

      Debt reductions prior to the Jillian’s acquisition and increased interest capitalization as a result of new store construction and other capital projects contributed to the overall reduction in interest expense in fiscal year 2004 from prior year amounts.

      Interest expense was essentially flat in 2003 as compared to 2002 in both absolute dollars and as a percentage of revenues. At the end of 2003, our total outstanding debt was $53,500, down $14,300 from the end of 2002. The reduction in outstanding debt was attributed to repayments from cash flows resulting from increased earnings and no new store openings in 2003.

      The following table sets forth, for the periods indicated, a year-over-year comparison of our provision for income taxes:

      Our effective tax rate differs from the statutory rate primarily due to state income taxes, offset by the deduction for FICA tip credits.

Liquidity and Capital Resources

      The increase in 2004 was attributed primarily to the increase in net income complimented by the changes in the components of our working capital and deferred rent. The increase in 2003 to 2002 is primarily attributed to the higher level of net income.

      The investing activities for 2004 included the acquisition of the nine Jillian’s locations, which required cash of $47,876 and $34,234 of other capital expenditures, including the opening of our Arcadia, California store, installation of MICROS point-of-sale systems at all Dave & Buster’s locations, completion of our Winner’s Circle conversion projects and normal capital expenditures. The investing activities for 2003 included over $9,000 in games, the $3,600 acquisition of the Toronto complex from a licensee and normal capital expenditures at previously existing stores.

      The 2004 cash provided by financing activity was the result of increased debt used to fund the Jillian’s acquisition, net of debt pay down during the first three quarters of 2004. Cash used in financing activities in fiscal 2003 and 2002 was used to reduce outstanding debt balances and payment of debt fee costs.

      On November 1, 2004, we amended our current credit facility by entering into a Second Amended and Restated Revolving Credit and Term Loan Agreement with Bank of America, N.A. and certain other lending institutions. This agreement amends certain terms of our previous credit facility described in the Amended and Restated Revolving Credit and Term Loan Agreement dated October 29, 2003.

      The maximum principal amount of the credit facility was increased to $115,000, comprised of a $60,000 revolving credit facility and a $55,000 term debt facility. Borrowings on the credit facility bear interest at a floating rate based upon the bank’s prime interest rate (5.25 percent at January 30, 2005) or, at our option, the applicable EuroDollar rate (2.41 percent at January 30, 2005), plus a margin, in either case, based upon financial performance as prescribed in the amended facility. The interest rate on the credit facility at January 30, 2005 was 4.91 percent. The amended credit facility is secured by all of the assets of Dave & Buster’s and its subsidiaries. The facility has certain financial covenants, including a maximum leverage ratio, a minimum fixed charge coverage ratio, a minimum consolidated tangible net worth, and a maximum amount of permitted capital expenditures. Management does not believe that the capital expenditure limits established in the credit facility will be an impediment to future development. The maximum permitted capital expenditures for fiscal year 2005, which excludes amounts to be reimbursed by landlords, is $47,500. The Company currently anticipates that the cash requirements for new locations and normal capital expenditures will be in the range of $32,000 to $36,000 in 2005.

      Any outstanding borrowings under the revolving credit facility are due at maturity on November 1, 2009. Borrowings under the term debt facility are repayable in 20 consecutive quarterly payments which increase annually to maturity, with the final payment due on November 1, 2009. On January 30, 2005, $47,580 was available under the revolving credit facility.

      In 2001, we entered into an interest rate swap agreement that expires in 2007, to change a portion of our variable rate debt to fixed-rate debt. Pursuant to the swap agreement, the interest rate on notional amounts aggregating $31,030 at January 30, 2005 is fixed at 5.44 percent. We are exposed to credit losses for periodic settlements of amounts due under the agreements if the LIBOR rate decreases. As a result of the swap agreement, we recorded additional interest expense of $1,577, $1,863, and $1,803 in 2004, 2003 and 2002, respectively.

      The market risks associated with the amended agreements are mitigated because increased interest payments under the agreement resulting from reductions in the LIBOR rate are partially offset by a corresponding decrease in interest expense under the debt obligation as a result of lower EuroDollar rates.

      We expect to open three new locations in fiscal 2005, in addition to our otherwise normal expenses for acquiring new games for amusement operations and other normal capital expenditures. We believe that available cash and cash flow from operations, together with borrowings under the credit facility, will be

sufficient to cover our working capital, planned capital expenditures and debt service needs in the foreseeable future. Our ability to make scheduled payments of principal or interest on, or to refinance, our indebtedness, or to fund planned capital expenditures, will depend on our future performance, which is subject to general economic conditions, competitive environment and other factors. We may not generate sufficient cash flow from operations, realize anticipated revenue growth and operating improvements or obtain future capital in a sufficient amount or on acceptable terms, to enable us to service our indebtedness or to fund our other liquidity needs.

Contractual Obligations and Commercial Commitments

      The following tables set forth the Company’s contractual obligations and commercial commitments, excluding interest:

      As of January 30, 2005, we have $6,420 in letters of credit commitments associated with our insurance policies.

Accounting Policies

      Management believes the following critical accounting policies, among others, affect its more significant judgments and estimates used in the preparation of its consolidated financial statements.

      Property and Equipment — Expenditures for new facilities and those that substantially increase the useful lives of the property, including interest and rent during construction, are capitalized along with equipment purchases at cost. These costs are depreciated over various methods based on an estimate of the depreciable life, resulting in a charge to the operating results of the Company. The actual results may differ from these estimates under different assumptions or conditions.

      Reviews are performed regularly to determine whether facts or circumstances exist that indicate the carrying values of our property and equipment are impaired. We assess the recoverability of our property and equipment by comparing the projected future undiscounted net cash flows associated with these assets to their respective carrying amounts. Impairment, if any, is based on the excess of the carrying amount over the estimated fair market value of the assets. Changes in the estimated future cash flows could have a material impact on our assessment of impairment.

      Income Taxes — We use the liability method for recording income taxes which recognizes the amount of current and deferred taxes payable or refundable at the date of the financial statements as a result of all events that are recognized in the financial statements and as measured by the provisions of enacted tax laws.

      The calculation of our tax liabilities involves significant judgment and evaluation of uncertainties in the interpretation of complex tax regulations. As a result, we have established reserves for taxes that may become payable in future years as a result of audits by tax authorities. Tax reserves are reviewed regularly pursuant to Statement of Financial Accounting Standard No. 5 “Accounting for Contingencies.” Tax reserves are adjusted as events occur that affect our potential liability for additional taxes, such as the expiration of statutes of limitations, conclusion of tax audits, identification of additional exposure based on current calculations, identification of new issues, or the issuance of statutory or administrative guidance or rendering of a court

decision affecting a particular issue. Accordingly, we may experience significant changes in our tax reserves in the future if, or when, such events occur.

      Accounting for Amusements Operations — Deposits on power cards used by customers to activate most of our midway games are generally recognized at the time of sale rather than when utilized, as the estimated amount of unused deposits which will be used for future game activations has historically not been material to our financial position or results of operations. Certain of our midway games allow customers to earn coupons which may be redeemed for prizes. The cost of these prizes is included in the cost of amusement products and is generally recorded when the coupons are redeemed, as the estimated amount of earned coupons which will be redeemed in future periods has historically not been material to our financial position or results of operations.

Recent Accounting Pronouncements

      Stock Based Compensation — In December 2004, the FASB issued SFAS No. 123R, “Share-Based Payment”. SFAS No. 123R is a revision of SFAS No. 123, “Accounting for Stock Based Compensation”, and supersedes APB 25. Among other items, SFAS 123R eliminates the use of APB 25 and the intrinsic value method of accounting, and requires companies to recognize in the financial statements the cost of employee services received in exchange for awards of equity instruments, based on the grant date fair value of those awards. The effective date of SFAS 123R is the first reporting period beginning after June 15, 2005, which is within the second quarter of the Company’s fiscal year ending January 29, 2006. The Company currently expects to adopt SFAS 123R effective August 1, 2005 using the “modified prospective” method. Under the modified prospective method, compensation cost is recognized in the financial statements beginning with the effective date, based on the requirements of SFAS 123R for all share-based payments granted after that date, and based on the requirements of SFAS 123 for all unvested awards granted prior to the effective date of SFAS 123R. Financial information for periods prior to the date of adoption of SFAS 123R would not be restated. The Company currently utilizes a standard option pricing model (i.e., Black-Scholes) to measure the fair value of stock options granted to employees. While SFAS 123R permits entities to continue to use such a model, the standard also permits the use of a “lattice” model. The Company has not yet determined which model it will use to measure the fair value of awards of equity instruments to employees upon the adoption of SFAS 123R.

      The adoption of SFAS 123R will have a significant effect on the Company’s future results of operations. However, it will not have an impact on the Company’s consolidated financial position. The impact of SFAS 123R on the Company’s results of operations cannot be predicted at this time, because it will depend on the number of equity awards granted in the future, as well as the model used to value the awards.

Market Risk

      The Company has market risk associated with the interest rates on our long term debt and with our foreign operations. Our interest rate risk exposure relates to changes in the general level of interest rates. The Company’s earnings are affected by changes in interest rates due to the impact those changes have on its interest expense from variable-rate debt. Our agreement to fix a portion of its variable-rate debt mitigates this exposure.

      Our market risk associated with our foreign operations is considered by management to be immaterial due to the limited size of our investment in the Toronto operations compared to our total portfolio of operating restaurant/entertainment complexes.

      See additional discussions in Item 7A.

“Safe Harbor” Statement Under the Private Securities Litigation Reform Act of 1995

      Certain information contained in this 10-K includes forward-looking statements. Forward-looking statements include statements regarding our expectations, beliefs, intentions, plans, projections, objectives, goals, strategies, future events or performance and underlying assumptions and other statements which are

other than statements of historical facts. These statements may be identified, without limitations, by the use of forward looking terminology such as “may,” “will,” “anticipates,” “expects,” “projects,” “believes,” “intends,” “should,” or comparable terms or the negative thereof. All forward-looking statements included in this press release are based on information available to us on the date hereof. Such statements speak only as of the date hereof. These statements involve risks and uncertainties that could cause actual results to differ materially from those described in the statements. These risks and uncertainties include, but are not limited to, the following: our ability to open new high-volume restaurant/entertainment complexes; our ability to raise and access sufficient capital in the future; changes in consumer preferences, general economic conditions or consumer discretionary spending; the outbreak or continuation of war or other hostilities involving the United States; potential fluctuation in our quarterly operating results due to seasonality and other factors; the continued service of key management personnel; our ability to attract, motivate and retain qualified personnel; the impact of federal, state or local government regulations relating to our personnel or the sale of food or alcoholic beverages; the impact of litigation; the effect of competition in our industry; additional costs associated with compliance with the Sarbanes-Oxley Act and related regulations and requirements; and other risk factors described from time to time in our reports filed with the SEC.

      We have market risk exposure relating to changes in the general level of interest rates. Our earnings are affected by changes in interest rates due to the impact those changes have on its interest expense from variable-rate debt. Our agreement to fix a portion of its variable-rate debt mitigates this exposure. The result of an immediate 10 percent increase in the underlying interest rates of our borrowings would not be material to operating results or financial position.

      We are also subject to market risk related to our complex in Canada. We have $2,500 debt denominated in Canadian dollars and have market risk exposure to fluctuations in foreign exchange rates, but that risk has not been material. The result of an immediate 10 percent devaluation of the U.S. dollar in 2005 from January 30, 2005 levels relative to our foreign currency translation would result in a decrease in the U.S. dollar equivalent of foreign currency denominated net income and would be insignificant.

      See Item 15(a) (1).

      None.

Disclosure Controls and Procedures

      An evaluation was performed under the supervision and with the participation of our management, including our chief executive officer and chief financial officer, of the effectiveness of the design and operation, as of January 30, 2005, of our disclosure controls and procedures, as that term is defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (the Exchange Act). Our disclosure controls and procedures have been designed to ensure that information we are required to disclose in our reports that we file with the SEC under the Exchange Act is recorded, processed and reported on a timely basis.

      Based upon this evaluation, our chief executive officer and our chief financial officer concluded that, for the reasons set forth below under “Management’s Report on Internal Control Over Financial Reporting,” our disclosure controls and procedures were not effective as of January 30, 2005.

Management’s Report On Internal Control Over Financial Reporting

      Management is responsible for establishing and maintaining adequate internal control over financial reporting for the Company. Internal control over financial reporting is a process designed to provide reasonable

assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles generally accepted in the United States.

      The Company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles generally accepted in the United States, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the financial statements.

      Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies and procedures may deteriorate.

      The Company’s management assessed the effectiveness of the Company’s internal control over financial reporting as of January 30, 2005. In making this assessment the Company’s management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in the Internal Control Integrated Framework.

      On February 7, 2005, the Office of the Chief Accountant of the Securities and Exchange Commission issued a letter to the American Institute of Certified Public Accountants expressing its views regarding certain operating lease-related accounting issues and their application under Generally Accepted Accounting Principles (GAAP). The Company’s management initiated a review of its lease accounting and determined that its then current method of accounting for leasehold improvements funded by landlord incentives or allowances under operating leases and its rent holidays were not in accordance with GAAP. The Company’s Audit Committee of the Board of Directors (the “Audit Committee) held a telephonic meeting with management and determined that the Company’s controls over the selection and monitoring of appropriate assumptions and factors affecting lease accounting were incorrect. These matters and results of the Company’s completed analysis of its lease accounting practices, including the quantification of the impact of the correction of the lease accounting errors on the Company’s financial statements for each of the prior periods affected, were also discussed with the Company’s independent registered public accounting firm. Accordingly, management determined, and the Audit Committee concurred, that the Company should report on Form 8-K (filed on April 1, 2005) that its historical financial statements should no longer be relied upon.

      The Company had historically accounted for tenant improvement allowances as reductions to the related leasehold improvement asset on the consolidated balance sheets and capitalized expenditures in investing activities on the statements of cash flow. Management determined that FASB Technical Bulletin No. 88-1 requires these allowances to be recorded as deferred rent liabilities on the consolidated balance sheets and as a component of operating activities on the consolidated statements of cash flows. Additionally, these adjustments result in a reclassification of the deferred rent amortization from “Depreciation and amortization expenses” to “Other store operating expenses” on the consolidated statements of operations.

      The Company had historically recognized rent holiday periods on a straight-line basis over the lease term commencing with the initial occupancy date, or the opening date for the Company operated stores. The store opening date coincided with the commencement of business operations, which corresponds to the intended use of the property. Management re-evaluated FASB Technical Bulletin No. 85-3, “Accounting for Operating Leases with Scheduled Rent Increases,” and determined that the lease term should commence on the date the Company takes possession of the leased space for construction purposes, which is generally six months prior to a store opening date. Excluding tax impacts the correction of this accounting requires the Company to record additional deferred rent in “Deferred rent liability” and to adjust retained earnings on the consolidated balance sheets as well as to correct amortization in “Other store operating expenses” on the consolidated statements of operations for the prior periods.

      Based on the Public Company Accounting Oversight Board’s:Auditing Standard No. 2, An Audit of Internal Control over Financial Reporting Performed in Conjunction with Audit of Financial Statements”, restatement of financial statements in prior filings with the Securities and Exchange Commission is a strong indicator of the existence of a “material weakness” in the design or operation of internal control over financial reporting. The Company has concluded that, because its historical financial statements required restatement as a result of the lease accounting error described above, a material weakness existed in the effectiveness of the Company’s internal controls to provide reasonable assurance that its accounting for facility leases was in accordance with generally accepted accounting principles as of the date of this report and, to this extent, its internal control over financial reporting was not effective.

      Ernst & Young LLP, Independent Registered Public Accounting Firm, which audited the Company’s financial statements has issued an attestation report on management’s assessment of the Company’s internal control over financial reporting which is included in this annual report.

Remediation of Material Weakness

      As noted under “Management’s Report on Internal Control Over Financial Reporting” above, we identified a material weakness that resulted in an error in our accounting for leases. This error required that previously issued financial statements of the Company be restated. The Company believes that it has implemented procedures which will remediate the material weakness in internal controls relating to the accounting for tenant allowances and rent holidays included in the terms of its facility leases for future periods.

Changes in Internal Control Over Financial Reporting

      Except as described above, there were no changes in our internal control over financial reporting during the quarterly period ended January 30, 2005, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

      Not applicable.

Report of Independent Registered Public Accounting Firm

on Internal Control over Financial Reporting

The Board of Directors and Shareholders of Dave & Buster’s, Inc.

      We have audited management’s assessment, included in “Management’s Report on Internal Control Over Financial Reporting” appearing in this Annual Report on Form 10-K, that Dave & Buster’s, Inc. did not maintain effective internal control over financial reporting as of January 30, 2005, because of the effect of the Company’s insufficient controls to provide reasonable assurance that its accounting for facility leases was in accordance with generally accepted accounting principles, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (the COSO criteria). The management of Dave & Buster’s, Inc. is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting. Our responsibility is to express an opinion on management’s assessment and an opinion on the effectiveness of the company’s internal control over financial reporting based on our audit.

      We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, evaluating management’s assessment, testing and evaluating the design and operating effectiveness of internal control, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

      A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

      Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

      A material weakness is a control deficiency, or combination of control deficiencies, that results in more than a remote likelihood that a material misstatement of the annual or interim financial statements will not be prevented or detected. The following material weakness has been identified and included in management’s assessment: In its assessment as of January 30, 2005, management identified as a material weakness the Company’s insufficient controls to provide reasonable assurance that the Company’s accounting for its facility leases was in accordance with generally accepted accounting principles. The insufficient controls include inadequate controls over the accounting for tenant allowances and rent holidays included in the terms of such leases. As a result of this material weakness in internal control, the Company concluded that its previously reported amounts for leasehold improvements, deferred rent liabilities, depreciation expense, rent expense and cash flows from operating and investing activities were incorrect and that previously issued financial statements would be restated. This material weakness was considered in determining the nature, timing, and extent of audit tests applied in our audit of the financial statements for the year ended January 30, 2005, and this report does not affect our report dated April 13, 2005, on those financial statements.

      In our opinion, management’s assessment that Dave & Buster’s, Inc. did not maintain effective internal control over financial reporting as of January 30, 2005, is fairly stated, in all material respects, based on the COSO control criteria. Also, in our opinion, because of the effect of the material weakness described above on the achievement of the objectives of the control criteria, Dave & Buster’s, Inc. has not maintained effective internal control over financial reporting as of January 30, 2005, based on the COSO control criteria.

Dallas, Texas

April 13, 2005

PART III

      The information set forth under the captions “Director and Nominee Information”, “Committees of the Board of Directors”, “Nomination Process”, “Section 16(a) Beneficial Ownership Reporting Compliance” and “Code of Ethics” appearing in the Company’s Proxy Statement for the 2005 Annual Meeting of Stockholders, is incorporated herein by reference. Certain information with respect to the executive officers of the Company is included under Item 1 of Part I hereof under the caption “Executive Officers”.

      The information set forth under the caption “Compensation of Directors and Executive Officers” appearing in the Company’s Proxy Statement for the 2005 Annual Meeting of Stockholders is incorporated herein by reference.

      The information set forth under the captions “Stock Ownership by Certain Beneficial Owners” and “Equity Compensation Plans” appearing in the Company’s Proxy Statement for the 2005 Annual Meeting of Stockholders is incorporated herein by reference.

      The information set forth under the captions “Compensation Committee Interlocks and Insider Participation” and “Certain Transactions” appearing in the Company’s Proxy Statement for the 2005 Annual Meeting of Stockholders is incorporated herein by reference.

      Information called for by Item 14 will be included under the caption “Proposal 3, Ratification of Selection of Independent Auditors” in our Proxy Statement for the 2005 Annual Meeting of Stockholders, which information is incorporated herein by reference.

PART IV

      (a) (1) Financial Statements

      (a) (2) Financial Statement Schedules

      (b) Exhibits Incorporated by Reference or Filed with this Report

Not applicable.

SIGNATURES

      Pursuant to the requirements of Section 13 or 15(d) 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.

Date: April 14, 2005

POWER OF ATTORNEY

      KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints William C. Hammett, Jr. and James W. Corley, jointly and severally, his attorneys-in-fact, each with full power of substitution, for him in any and all capacities, to sign any amendments to this Annual Report on Form 10-K and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that each of said attorneys-in-fact, or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

      Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities indicated on April 14, 2005.

Report of Independent Registered Public Accounting Firm

The Board of Directors and Shareholders of Dave & Buster’s, Inc.

      We have audited the accompanying consolidated balance sheets of Dave & Buster’s, Inc. as of January 30, 2005 and February 1, 2004, and the related consolidated statements of operations, stockholders’ equity, and cash flows for each of the three fiscal years in the period ended January 30, 2005. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

      We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

      In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Dave & Buster’s, Inc. at January 30, 2005 and February 1, 2004, and the consolidated results of its operations and cash flows for each of the three fiscal years in the period ended January 30, 2005, in conformity with U.S. generally accepted accounting principles.

      As discussed in Note 1 to the consolidated financial statements, effective January 1, 2002, the Company adopted Statement of Financial Accounting Standards No. 142, Goodwill and Other Intangible Assets.

      As discussed in Note 2 to the consolidated financial statements, the accompanying financial statements for the years ended February 1, 2004 and February 2, 2003 have been restated.

      We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the effectiveness of Dave & Buster’s, Inc.’s internal control over financial reporting as of January 30, 2005, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated April 13, 2005, expressed an unqualified opinion on management’s assessment of and an adverse opinion on the effectiveness of internal control over financial reporting.

Dallas, Texas

April 13, 2005

DAVE & BUSTER’S, INC.

CONSOLIDATED BALANCE SHEETS

See accompanying notes to consolidated financial statements.

DAVE & BUSTER’S, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

See accompanying notes to consolidated financial statements.

DAVE & BUSTER’S, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY