diff --git a/database.py b/database.py
new file mode 100644
index 000000000..650bbe969
--- /dev/null
+++ b/database.py
@@ -0,0 +1,10 @@
+# database.py
+
+from sqlalchemy import create_engine
+from sqlalchemy.ext.declarative import declarative_base
+from sqlalchemy.orm import sessionmaker
+
+# SQLite DB file will live in ./db/development.sqlite
+engine = create_engine("sqlite:///db/development.sqlite")
+Session = sessionmaker(bind=engine)
+Base = declarative_base()
diff --git a/lib/database.py b/lib/database.py
new file mode 100644
index 000000000..f736e1ea0
--- /dev/null
+++ b/lib/database.py
@@ -0,0 +1,10 @@
+
+
+from sqlalchemy import create_engine
+from sqlalchemy.ext.declarative import declarative_base
+from sqlalchemy.orm import sessionmaker
+
+
+engine = create_engine("sqlite:///db/development.sqlite")
+Session = sessionmaker(bind=engine)
+Base = declarative_base()
diff --git a/migrations/003_create_freebies.py b/migrations/003_create_freebies.py
new file mode 100644
index 000000000..392de77c4
--- /dev/null
+++ b/migrations/003_create_freebies.py
@@ -0,0 +1,14 @@
+# migrations/003_create_freebies.py
+
+from sqlalchemy import Column, Integer, String, ForeignKey
+from database import Base
+
+class Freebie(Base):
+    __tablename__ = 'freebies'
+
+    id = Column(Integer, primary_key=True)
+    item_name = Column(String, nullable=False)
+    value = Column(Integer, nullable=False)
+
+    dev_id = Column(Integer, ForeignKey('devs.id'), nullable=False)
+    company_id = Column(Integer, ForeignKey('companies.id'), nullable=False)
diff --git a/models/__init__.py b/models/__init__.py
new file mode 100644
index 000000000..d9144bc4e
--- /dev/null
+++ b/models/__init__.py
@@ -0,0 +1,5 @@
+# models/__init__.py
+
+from models.company import Company
+from models.dev import Dev
+from models.freebie import Freebie
diff --git a/models/company.py b/models/company.py
new file mode 100644
index 000000000..a224e7abf
--- /dev/null
+++ b/models/company.py
@@ -0,0 +1,41 @@
+# models/company.py
+
+from sqlalchemy import Column, Integer, String
+from sqlalchemy.orm import relationship
+from database import Base
+from models.freebie import Freebie
+from models.dev import Dev
+
+class Company(Base):
+    __tablename__ = 'companies'
+
+    id = Column(Integer, primary_key=True)
+    name = Column(String, nullable=False)
+    founding_year = Column(Integer, nullable=False)
+
+    # All Freebie objects this company has given:
+    freebies = relationship("Freebie", back_populates="company", cascade="all, delete-orphan")
+
+    # All Dev objects who have collected freebies from this company:
+    devs = relationship("Dev", secondary="freebies", back_populates="companies", viewonly=True)
+
+    @classmethod
+    def oldest_company(cls, session):
+        """
+        Returns the Company instance with the earliest founding_year.
+        Needs an active SQLAlchemy session passed in.
+        """
+        return session.query(cls).order_by(cls.founding_year.asc()).first()
+
+    def give_freebie(self, session, dev, item_name, value):
+        """
+        Creates and persists a new Freebie belonging to this Company for the given Dev.
+        - session: SQLAlchemy Session
+        - dev: Dev instance
+        - item_name: string
+        - value: int
+        """
+        new_freebie = Freebie(item_name=item_name, value=value, dev=dev, company=self)
+        session.add(new_freebie)
+        session.commit()
+        return new_freebie
diff --git a/models/dev.py b/models/dev.py
new file mode 100644
index 000000000..ff485789b
--- /dev/null
+++ b/models/dev.py
@@ -0,0 +1,39 @@
+# models/dev.py
+
+from sqlalchemy import Column, Integer, String
+from sqlalchemy.orm import relationship
+from database import Base
+from models.freebie import Freebie
+from models.company import Company
+
+class Dev(Base):
+    __tablename__ = 'devs'
+
+    id = Column(Integer, primary_key=True)
+    name = Column(String, nullable=False)
+
+    # All Freebie objects this dev has collected:
+    freebies = relationship("Freebie", back_populates="dev", cascade="all, delete-orphan")
+
+    # All Company objects this dev has collected freebies from:
+    companies = relationship("Company", secondary="freebies", back_populates="devs", viewonly=True)
+
+    def received_one(self, item_name):
+        """
+        Returns True if this Dev has any Freebie whose item_name matches the argument.
+        """
+        return any(f.item_name == item_name for f in self.freebies)
+
+    def give_away(self, session, other_dev, freebie):
+        """
+        Transfers `freebie` from this Dev to other_dev if it currently belongs to this Dev.
+        - session: SQLAlchemy Session
+        - other_dev: Dev instance
+        - freebie: Freebie instance
+        """
+        if freebie.dev_id == self.id:
+            freebie.dev = other_dev
+            session.add(freebie)
+            session.commit()
+            return True
+        return False
diff --git a/models/freebie.py b/models/freebie.py
new file mode 100644
index 000000000..f730aef3f
--- /dev/null
+++ b/models/freebie.py
@@ -0,0 +1,25 @@
+# models/freebie.py
+
+from sqlalchemy import Column, Integer, String, ForeignKey
+from sqlalchemy.orm import relationship
+from database import Base
+
+class Freebie(Base):
+    __tablename__ = 'freebies'
+
+    id = Column(Integer, primary_key=True)
+    item_name = Column(String, nullable=False)
+    value = Column(Integer, nullable=False)
+
+    dev_id = Column(Integer, ForeignKey('devs.id'), nullable=False)
+    company_id = Column(Integer, ForeignKey('companies.id'), nullable=False)
+
+    # RELATIONSHIPS
+    dev = relationship("Dev", back_populates="freebies")
+    company = relationship("Company", back_populates="freebies")
+
+    def print_details(self):
+        """
+        Returns: "<dev name> owns a <item_name> from <company name>"
+        """
+        return f"{self.dev.name} owns a {self.item_name} from {self.company.name}"
diff --git a/seed.py b/seed.py
new file mode 100644
index 000000000..1bd00f4a4
--- /dev/null
+++ b/seed.py
@@ -0,0 +1,44 @@
+# seed.py
+
+import os
+from database import Session, engine, Base
+from models.company import Company
+from models.dev import Dev
+from models.freebie import Freebie
+
+def seed_data():
+    # Ensure the directory for the SQLite file exists
+    os.makedirs(os.path.dirname("db/development.sqlite"), exist_ok=True)
+
+    # Re-create all tables
+    Base.metadata.drop_all(engine)
+    Base.metadata.create_all(engine)
+
+    session = Session()
+
+    # Create Companies
+    apple     = Company(name="Apple", founding_year=1976)
+    google    = Company(name="Google", founding_year=1998)
+    microsoft = Company(name="Microsoft", founding_year=1975)
+
+    # Create Devs
+    alice = Dev(name="Alice")
+    bob   = Dev(name="Bob")
+    carol = Dev(name="Carol")
+
+    session.add_all([apple, google, microsoft, alice, bob, carol])
+    session.commit()
+
+    # Create Freebies
+    f1 = Freebie(item_name="Sticker Pack", value=5, dev=alice,   company=google)
+    f2 = Freebie(item_name="T-shirt",       value=20, dev=bob,    company=apple)
+    f3 = Freebie(item_name="Mug",           value=12, dev=carol,  company=microsoft)
+
+    session.add_all([f1, f2, f3])
+    session.commit()
+    session.close()
+
+    print("Seeding complete.")
+
+if __name__ == '__main__':
+    seed_data()