(FORTUNE Small Business) – "I'm going to take over the world," boasts Damon Dash. "My company will be worth billions of dollars—maybe worth a quarter of a trillion." The CEO of Roc-a-Fella Records and RocaWear clothing is standing in his 6,500-square-foot home in Manhattan's TriBeCa district. There's a Brunswick fawn-colored pool table, two Cruisin' in Exotica racecar arcade games, a mug shot of Frank Sinatra, and a marble-top chef's kitchen. A closet holds hundreds of pairs of new white athletic shoes. The scene feels as if it were pulled from MTV's Cribs.

Dash's hyperbole mirrors the brash optimism with which he rules his company. The 33-year-old is on an acquisition spree, buying or licensing half-a-dozen companies over the past two years. To fuel that growth, Dash still counts on his two main businesses, hip-hop records and clothing, which industry analysts say bring in close to $200 million in annual sales. While the history of rap is littered with the grand plans of businessmen—including MC Hammer, OutKast, and the Wu-Tang Clan—Dash's ten-year track record lands him in the upper echelon of hip-hop entrepreneurs, alongside Russell Simmons and Sean "P. Diddy" Combs. "Damon isn't just marketing the culture, he's creating the culture," says Jameel Spencer, president of rival P. Diddy's Blue Flame Marketing & Advertising. "He's the new America."

What does Dash's America look like? Actually, a lot like the old one. He's now moving from hip-hop to mainstream, acquiring clothing lines that appeal to mall rats more than to the boyz in the hood. He has shifted from gangsta flicks to independent films—his latest, The Woodsman, an indie starring Kevin Bacon, won awards at Sundance and Cannes this year. He has signed up pop singer Samantha Ronson. He is even pushing a line of vodka called Armandale and has launched a luxury magazine named America.

The expansion takes Dash well outside the areas of expertise in which he has thrived. And he is facing those new challenges without his secret weapon: Jay-Z. Last year the multiplatinum rapper, who helped turn Roc-a-Fella Records into a profitable label, with $65 million in annual revenues, announced that he was retiring from rap. Not only does Dash lose an artist who has sold more than 20 million albums, but he must go forward without the very face of Roc-a-Fella Records, and RocaWear's most influential spokesman. Imagine the Foreman Grill without George Foreman, and you have some idea of the challenge that Dash confronts. "We wouldn't know about RocaWear clothing without Jay-Z," says Morris Reid, head of Westin Rinehart, a Washington, D.C., marketing firm. "If Jay-Z isn't making any more albums, then the whole company loses its platform." How might Dash stay hot without Jay-Z? By tapping into the same qualities that fueled him in the early days: hustle and marketing savvy.

Raised in East Harlem by a single mother who worked as a secretary, Dash has been an entrepreneur since he bounced in and out of private prep schools on scholarships. Multitasking from the start, he hosted parties in Harlem in the early 1990s while starting a music-management business. "If I could rap to sell my s--t, I would," Dash shrugs. "We'd be way ahead, and I wouldn't have to work as hard." Dash knew he didn't have musical talent but sensed he had struck platinum when he signed Brooklyn bad boy Shawn "Jay-Z" Carter, who had been rejected by other record labels. Dash used the money from his party business to fund Jay-Z's first album, which the young manager peddled from his car. The records quickly gained momentum, and in 1995, Dash, Jay-Z, and partner Kareem "Biggs" Burke created Roc-a-Fella records, which teamed with Island Def Jam for manufacturing and distribution.

By the late 1990s Roc-a-Fella was raking in about $50 million in annual revenues, but Dash, frustrated with the music industry's low margins, started up a clothing business. Like most rappers, Jay-Z could boost a new brand or fashion just by wearing it at a concert or during a videotaping, or mentioning it in a song. And RocaWear reaped the benefits. Emboldened by that success—Dash says privately held RocaWear is profitable—he started to tack on complementary companies: Roc-a-Fella Films in 1999, indie production company Dash Films in 2001, Armandale Vodka in 2002, and America magazine in 2004. Ventures in the works include a European cable TV channel, a beer and soda business, and sports and boxing promotions.

A skeptic might look at Dash's sprawling amalgam of businesses and see chaos. But Dash sees one thing: a need to keep diversifying away from the risky music business. Though profitable, Roc-a-Fella, hurt by music piracy and a fiercely competitive hip-hop market, has watched its sales growth slow. "We're doing well, but it's hard for anybody to make money in the music business," he explains.

Dash insists there is a logic to what might seem to be an incoherent acquisition and startup strategy. Each of his decisions is guided by a rule: "We shouldn't let other people make money off us, and we shouldn't give free advertising with our lifestyle," says Dash, using "we" to refer to rappers and their business partners. Dash launched a jewelry business (his Tiret watches run from $17,000 to $130,000) after spending millions at bling king "Jacob the Jeweler" in New York City. "I can sell anything I understand," Dash says.

Dash believes that his tastes—well, maybe not the $130,000 watches—will be shared by millions of customers around the world. Now that success has broadened his world view, he feels emboldened to move into businesses that are farther afield. "I think it's time our company showed the world we can be professional, dress in suits, and change the perception of a hip-hop company," he says. "Tommy Hilfiger isn't urban, but he sells urban clothes. Why can't I do the opposite"—moving from urban to mainstream? In early 2003, Dash licensed the flirty, pricey C. Ronson clothing label. Last year, according to Julee Greenberg, a writer at Women's Wear Daily, the profitable label brought in as much as $2 million, mostly in sales of tank-tops and skirts to the trendy, white twenty-somethings who flock to socialite Charlotte Ronson's designs. Later that year Dash signed Charlotte's twin sister, pop singer Samantha Ronson, to Roc-a-Fella, marking the label's first bid for the teenybopper audience. (A Ronson song is featured three times in the hit teen flick Mean Girls and has been made into a Mean Girls music video.) "Dash knows the money isn't in the ghetto," says Tru Pettigrew, a senior vice president at the AMPdi marketing firm, referring to Dash's diversification. "It's in mainstream America, and he's going to go get it."

That's a philosophy that not only places a lot of faith in Dash's gifts as a tastemaker but also requires a lot of cash. Dash says he doesn't even know exactly how much he has spent on new businesses. He is also vague in explaining his financing, but says he uses a combination of reinvested earnings, his personal funds, and new investors to fuel his burn rate.

To get a return on his investment, Dash is counting on cross-branding, which has played an important role in his business ever since Jay-Z first sang RocaWear's praises. But as any management consultant will tell you, cross-branding is just another name for synergy and is extremely difficult to achieve. It takes cooperation among brand managers who often pursue conflicting goals and agendas. Dash seems to be banking on the sheer force of his personality to make it all happen.

On a warm afternoon 40 of Dash's employees crowd into his 38th-floor Midtown Manhattan office for a weekly cross-marketing meeting. On the floor lie bottles of Armandale, a copy of his thick glossy magazine, and a box of sneakers from PRO-Keds, which Roc-a-Fella recently licensed. As the three-hour meeting wraps up, Dash turns to the topic of an upcoming tour, movie, and merchandising push for the rap group State Property. "Split the tour budget fifty-fifty between the clothing sponsor and the artists, and synchronize the State Property tour in the fall with the movie screenings," the workaholic CEO orders. Dash is also frustrated that his magazine editor isn't stepping forward. "Does America magazine want to be part of anything?" he asks its editor, suggesting synergies for the magazine's next launch party.

Dash believes he has found a new young star who will become the next ambassador for the Roc-a-Fella family of products. Kanye West, 23, is a producer-turned-rapper whose debut CD, The College Dropout, went double platinum and has already sold more in Europe than any of Jay-Z's albums. The College Dropout ends with "Last Call," a 12-minute, 40-second saga of the events that led West to sign with Roc-a-Fella. (The last line of the song ends with the word "Roc-a-Fella.") It's a branding exercise that Dash wants all his acts to emulate.

Still, Dash faces the street fight of his life. Most entrepreneurs find it challenging to run one business they know well, never mind a dozen in new and highly competitive fields. Does Dash have the management skills to coordinate such seemingly incongruous businesses as jewelry, magazine publishing, boxing, and filmmaking? Dash responds, "It hasn't been done, but with my work ethic, I can have a company in every part of fashion and entertainment." One thing Dash doesn't lack is daring.