We present the theoretical description of the image formation with the in-line germanium Bragg Magnifier Microscope (BMM) and the first successful phase retrieval of X-ray holograms recorded with this imaging system. The conditions under which the BMM acts as a linear shift invariant system are theoretically explained and supported by the experiment. Such an approach simplifies the mathematical treatment of the image formation and reconstruction as complicated propagation of the wavefront onto inclined planes can be avoided. Quantitative phase retrieval is demonstrated using a test sample and a proof of concept phase imaging of a spider leg is also presented.