UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

[ X ]  QUARTERLY  REPORT  PURSUANT  TO  SECTION  13 OR 15(d)  OF THE  SECURITIES
EXCHANGE ACT OF 1934

For the quarterly period ended             June 30, 2000
                                        -----------------

                                       or

[ ]  TRANSACTION  REPORT  PURSUANT  TO  SECTION  13 OR 15(d)  OF THE  SECURITIES
EXCHANGE ACT OF 1934

For the transition period from          ____________ to _________

Commission File Number:                 333-56217.



                               ISG Resources, Inc.

             (Exact name of registrant as specified in its charter)


                      Utah                               87-0327982
         ---------------------------------            -------------
         (State or other jurisdiction of              (I.R.S. Employer
         incorporation or organization)               Identification No.)


          136 East South Temple, Suite 1300, Salt Lake City, Utah 84111
          -------------------------------------------------------------
               (Address of principal executive offices) (Zip Code)

                                 (801) 236-9700
                          --------------------------
              (Registrant's telephone number, including area code)


         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) [ X ] Yes [ ] No, and (2) has been
subject to such filing requirements for the past 90 days [ X ] Yes [ ] No.

         Indicate  the  number of  shares  outstanding  of each of the  issuer's
classes of common stock, as of the latest practicable date. As of July 31, 2000:



        Classes of Common Stock                  Number of shares outstanding
   ------------------------------------       --------------------------------
         Common Stock, no par value                               100


<PAGE>





                               ISG Resources, Inc.

                                  ------------

                               INDEX TO FORM 10-Q

                         PART I -- FINANCIAL INFORMATION

Item 1.  Financial Statements                                              Page
         --------------------                                              ----

         Unaudited  Condensed  Consolidated  Balance Sheets --
         June 30, 2000 and December 31, 1999 ................................ 1

         Unaudited   Condensed   Consolidated   Statements  of  Operations
         and Comprehensive  Income -- Three  months ended June 30, 2000
         and 1999 and Six months ended June 30, 2000 and 1999................ 2

         Unaudited Condensed Consolidated Statements of Cash Flows --
         Six months ended June 30, 2000 and 1999 ............................ 4

         Notes to Unaudited Condensed Consolidated Financial Statements ..... 5

Item 2.  Management's Discussion and Analysis of
         Financial Condition and Results of Operations ..................... 10

Item 3.  Quantitative and Qualitative Disclosure about Market Risk

          There have been no  significant  changes  since the annual report Form
          10-K filed for the year ended December 31, 1999.

                           PART II - OTHER INFORMATION

Item 6.  Exhibits and Reports on Form 8-K  ................................. 15


<PAGE>

<TABLE>

                      ISG Resources, Inc. and Subsidiaries
                 Unaudited Condensed Consolidated Balance Sheets
<CAPTION>

                                                                           June 30,             December 31,
Assets                                                                       2000                   1999
Current assets:
<S>                                                                      <C>                      <C>
   Cash and cash equivalents                                             $          -             $           -
   Accounts receivable:
       Trade, net of allowance for doubtful accounts of
          $454,000 and $329,000, respectively                               29,729,133                21,167,616
       Retainage                                                               172,590                   176,000
       Other                                                                   668,021                   502,058
   Deferred tax asset                                                          358,081                   316,161
   Inventories                                                               5,774,552                 4,055,425
   Other current assets                                                        830,832                   829,661
Total current assets                                                        37,533,209                27,046,921

Property, plant and equipment, net of accumulated depreciation of
   $10,322,357 and $7,893,374, respectively                                 37,386,845                33,584,188
Intangible assets, net                                                     169,070,945               153,952,547
Debt issuance costs, net                                                     4,794,126                 4,826,010
Other assets                                                                 1,627,924                 1,052,845
Total assets                                                              $250,413,049              $220,462,511

                                                                   =================================================

Liabilities and shareholders' equity

Current liabilities:
   Accounts payable                                                       $ 13,139,735               $10,409,583
   Accrued liabilities:
      Payroll                                                                1,238,015                 1,288,732
      Interest                                                               2,260,612                 2,190,471
      Other                                                                  1,709,348                 1,828,537
   Income taxes payable                                                      1,293,968                 1,705,678
   Other current liabilities                                                   545,450                   652,119
Total current liabilities                                                   20,187,128                18,075,120

Long-term debt                                                             157,000,000               133,500,000
Deferred tax liability                                                      37,993,252                39,158,249
Payable to Industrial Services Group                                           643,983                   643,983
Other liabilities                                                            1,675,207                 1,923,355

Shareholders' equity:
   Common stock, no par value; 100 shares authorized, issued and
     outstanding                                                            34,745,050                25,000,050
   Cumulative foreign currency translation adjustment                           (5,612)                       -
   Retained earnings (deficit)                                              (1,825,959)                2,161,754
Total shareholders' equity                                                  32,913,479                27,161,804
Total liabilities and shareholders' equity                                $250,413,049              $220,462,511
---------------------------------------------------------------------===============================================
</TABLE>

See accompanying notes


<PAGE>


<TABLE>

                      ISG Resources, Inc. and Subsidiaries
          Unaudited Condensed Consolidated Statements of Operations and
                              Comprehensive Income
<CAPTION>

                                                                          Three Months
                                                                          Ended June 30,
                                                              ------------------------------------------
                                                                      2000              1999
                                                              ------------------------------------------
Revenues:
<S>                                                                <C>                  <C>
   Product revenues                                                $  39,030,534        $ 31,087,379
   Service revenues                                                    7,662,029           9,044,679
                                                              ------------------------------------------
                                                                      46,692,563          40,132,058
Costs and expenses:
   Cost of product revenues, excluding depreciation                   27,494,928          21,051,260
   Cost of service revenues, excluding depreciation                    5,486,319           6,329,610
   Depreciation and amortization                                       3,579,052           3,026,875
   Selling, general and administrative expenses                        6,735,458           4,987,001
   New product development                                               465,433             509,988
                                                              ------------------------------------------
                                                                      43,761,190          35,904,734
                                                              ------------------------------------------
Operating income                                                       2,931,373           4,227,324

Interest income                                                           14,049              11,547
Interest expense                                                      (3,862,582)         (3,333,461)
Other income and expense                                                 164,512             (18,545)
                                                              ------------------------------------------
Income (loss) before income taxes                                       (752,648)            886,865
Income tax expense                                                       (74,649)           (567,936)
                                                              ------------------------------------------
Net income (loss)                                                       (827,297)            318,929
Other comprehensive loss, net of tax:
    Foreign currency translation adjustment                               (5,612)
                                                              ------------------------------------------
Comprehensive income (loss)                                          $  (832,909)         $  318,929
                                                              ==========================================
</TABLE>


See accompanying notes.


<PAGE>



<TABLE>

                      ISG Resources, Inc. and Subsidiaries
          Unaudited Condensed Consolidated Statements of Operations and
                              Comprehensive Income
<CAPTION>

                                                                           Six Months
                                                                          Ended June 30,
                                                              ------------------------------------------
                                                                      2000              1999
                                                              ------------------------------------------
Revenues:
<S>                                                                <C>                 <C>
   Product revenues                                                $  63,497,790       $  52,470,939
   Service revenues                                                   15,712,977          17,097,611
                                                              ------------------------------------------
                                                                      79,210,767          69,568,550

Costs and expenses:
   Cost of product revenues, excluding depreciation                   46,616,008          36,112,752
   Cost of service revenues, excluding depreciation                   11,102,731          12,219,151
   Depreciation and amortization                                       6,866,098           6,095,111
   Selling, general and administrative expenses                       11,536,727           9,782,872
   New product development                                             1,077,122             842,899
                                                              ------------------------------------------
                                                                      77,198,686          65,052,785
                                                              ------------------------------------------
Operating income                                                       2,012,081           4,515,765

Interest income                                                           21,574              21,178
Interest expense                                                      (7,401,086)         (6,521,372)
Other income and expense                                                 205,602              (5,099)
                                                              ------------------------------------------
Loss before income taxes                                              (5,161,829)         (1,989,528)
Income tax benefit                                                     1,174,116             464,834
                                                              ------------------------------------------
Net loss                                                              (3,987,713)         (1,524,694)
Other comprehensive loss, net of tax:
    Foreign currency translation adjustment                               (5,612)                 -
                                                              ------------------------------------------
Comprehensive loss                                                 $  (3,993,325)       $ (1,524,694)
                                                              ==========================================

</TABLE>


See accompanying notes.


<PAGE>


<TABLE>

                      ISG Resources, Inc. and Subsidiaries
            Unaudited Condensed Consolidated Statements of Cash Flows
<CAPTION>

                                                                                     Six Months
                                                                                   Ended June 30,
                                                                               2000             1999

Operating activities
<S>                                                                        <C>             <C>
Net loss                                                                   $ (3,987,713)   $  (1,524,694)
Adjustments to  reconcile  net loss to net cash (used in)
   provided by operating activities:
     Depreciation and amortization                                            6,866,098        6,095,111
     Amortization of debt issuance costs                                        370,867          343,298
     Loss on sale of fixed assets                                                 7,090           32,522
     Deferred income taxes                                                   (1,113,757)        (721,239)
     Changes in operating assets and liabilities:
         Receivables                                                         (5,125,275)      (8,766,192)
         Inventories                                                            156,865       (1,037,935)
         Other current and non-current assets                                  (506,479)        (276,873)
         Accounts payable                                                     1,927,795        5,734,197
         Accrued expenses                                                    (2,237,495)       2,040,439
         Other current and non-current liabilities                           (1,763,657)       1,118,673
Net cash provided by (used in) operating activities                          (5,405,661)       3,037,307

Investing activities
Purchases of property, plant and equipment                                   (4,542,960)      (4,996,113)
Proceeds on sale of property, plant and equipment                               199,344           29,076
Acquisitions of businesses, net of cash acquired                            (23,031,686)     (22,750,012)
Purchase of intangible assets                                                  (119,442)        (985,109)
Net cash used in investing activities                                       (27,494,744)     (28,702,158)

Financing activities
Cash contribution from parent                                                 9,745,000                -
Proceeds from long-term debt                                                120,000,000       58,000,000
Payments on notes payable and long-term debt                                (96,500,000)     (32,000,000)
Debt issuance costs incurred                                                   (338,983)        (335,149)
Net cash provided by financing activities                                    32,906,017       25,664,851

Effect of exchange rate changes on cash                                          (5,612)               -

Net change in cash and cash equivalents                                               -                -
Cash and cash equivalents at beginning of period                                      -                -
Cash and cash equivalents at end of period                                  $         -     $          -
                                                                         ====================================

Cash paid for interest                                                      $ 6,879,256     $  6,068,934
Cash paid (received) for income taxes                                       $ 1,235,409     $ (1,000,000)
------------------------------------------------------------------------=====================================
</TABLE>

See accompanying notes.


<PAGE>



                               ISG RESOURCES, INC.

         NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1.   Basis of Presentation

ISG  Resources,  Inc., a Utah  corporation  (the  "Company"),  is a wholly owned
subsidiary  of  Industrial  Services  Group,  Inc.  ("ISG").  ISG was  formed in
September 1997 and acquired the stock of JTM Industries, Inc. ("JTM") on October
14,  1997.  In 1998,  JTM  acquired  the  stock of  Pozzolanic  Resources,  Inc.
("Pozzolanic"), Power Plant Aggregates of Iowa, Inc. ("PPA"), Michigan Ash Sales
Company d.b.a. U.S. Ash Company,  together with two affiliated  companies,  U.S.
Stabilization,  Inc. and Flo Fil Company, Inc.  (collectively,  "U.S. Ash"), and
Fly  Ash  Products,   Inc.  ("Fly  Ash  Products")   (collectively,   the  "1998
Acquisitions").  Effective January 1, 1999, JTM, Pozzolanic,  PPA, U.S. Ash, Fly
Ash  Products  and their  wholly  owned  subsidiaries  merged  with and into the
Company.  Pneumatic Trucking, Inc.  ("Pneumatic"),  a wholly owned subsidiary of
Michigan Ash Sales Company,  was not merged into ISG Resources,  Inc. Therefore,
Pneumatic became a wholly owned subsidiary of the Company.

In 1999, the Company  acquired the stock of Best Masonry & Tool Supply ("Best"),
Mineral  Specialties,  Inc.  ("Specialties"),  Irvine Fly Ash, Inc.  ("Irvine"),
Lewis  W.  Osborne,   Inc.   ("Osborne"),   United  Terrazzo  Supply  Co.,  Inc.
("Terrazzo"),  and  Magna  Wall,  Inc.  ("Magna  Wall")  and  sold  all  of  the
outstanding stock of Pneumatic.

On March 2, 2000,  the Company  acquired  directly  and  indirectly  through ISG
Manufactured  Products,  Inc., a newly  formed  wholly-owned  subsidiary  of the
Company,  all of the  partnership  interest  of  Don's  Building  Supply  L.L.P.
("Don's") for approximately $5.9 million in cash. Don's is engaged in the retail
and  wholesale   distribution  of  construction  materials  to  residential  and
commercial contractors primarily in the State of Texas.

The purchase  price of Don's was  allocated  based on  estimated  fair values of
assets and liabilities at the date of acquisition.  Goodwill  resulting from the
difference  between the purchase price plus acquisition costs and the net assets
acquired  totaled  approximately  $4.3  million  and  is  being  amortized  on a
straight-line basis over 20 years.

On May 31, 2000, the Company  completed the acquisition of all outstanding stock
of Palestine  Concrete Tile Company,  Inc. and certain  associated real property
(collectively,  "Palestine") for approximately $17.9 million in cash, subject to
future purchase price  adjustments as specified  within the purchase  agreement.
Additionally,   the  Company  paid  off   outstanding   debt  of  Palestine  for
approximately $1.0 million.  Palestine is a Texas corporation  primarily engaged
in the manufacture and  distribution of concrete block. The Company financed the
acquisition  of  Palestine by  obtaining a  $15,000,000  increase in the Secured
Credit  Facility  on May 26,  2000  and  receiving  an  equity  contribution  of
$9,745,000 from ISG on April 19, 2000.

The purchase price of Palestine was allocated  based on estimated fair values of
assets and liabilities at the date of acquisition.  Goodwill  resulting from the
difference  between the purchase price plus acquisition costs and the net assets
acquired  totaled  approximately  $14.9  million,  and is being  amortized  on a
straight-line basis over 20 years.

The following pro forma combined financial information reflects operations as if
the  acquisition of Don's and Palestine and the related  financing  transactions
had occurred as of January 1, 1999. The pro forma combined financial information
is presented for  illustrative  purposes only, does not purport to be indicative
of the  Company's  results  of  operations  as of  the  date  hereof  and is not
necessarily  indicative of what the Company's actual results of operations would
have been had the acquisition and the financing transactions been consummated on
such date.


<PAGE>


                                        Three Months Ended June 30

                                           2000             1999
                                  ------------------ --------------------
          Revenues                $      50,037        $ 46,728
          Net income (loss)       $      (  982)       $    612



                                         Six Months Ended June 30

                                           2000             1999
                                  ------------------ --------------------
          Revenues                $   88,325           $ 82,322
          Net loss                $   (3,932)          $   (917)


These  financial  statements  reflect the  consolidated  financial  position and
results of  operations  of the Company and its wholly  owned  subsidiaries.  All
significant  intercompany  accounts and  transactions  have been  eliminated  in
consolidation.

In the opinion of management,  the accompanying unaudited condensed consolidated
financial  statements  reflect all  adjustments,  consisting of normal recurring
adjustments,  necessary to present  fairly the  financial  position,  results of
operations and cash flows of the Company,  for the respective periods presented.
The results of  operations  for the three and  six-month  periods ended June 30,
2000 are not necessarily indicative of the results which may be expected for any
other interim period or for the year as a whole.

The preparation of financial  statements,  in conformity with generally accepted
accounting  principles,  requires  management to make estimates and  assumptions
that affect the reported  amounts of assets and  liabilities  and  disclosure of
contingent  assets and  liabilities at the date of the financial  statements and
the  reported  amounts of revenues  and expenses  during the  reporting  period.
Actual results could differ from those estimates.

Certain  information  and footnote  disclosures  normally  included in financial
statements presented in accordance with generally accepted accounting principles
have been condensed or omitted.  The accompanying  unaudited  interim  condensed
consolidated  financial  statements  should  be read  in  conjunction  with  the
consolidated  financial  statements and notes in the Company's Form 10-K for the
fiscal year ended December 31, 1999.

In December 1999, the Securities and Exchange Commission issued Staff Accounting
Bulleting (SAB) 101, Revenue Recognition in Financial Statements.  The effective
date of SAB 101 is the fourth quarter of fiscal years  beginning  after December
15, 1999. This SAB clarifies proper methods of revenue recognition given certain
circumstances surrounding sales transactions.  The Company continues to evaluate
the impact of SAB 101, but believes it is in compliance  with the  provisions of
the SAB and  accordingly,  does not expect SAB 101 to have a material  effect on
its financial statements.

The  consolidated  balance  sheet at December  31, 1999 was derived from audited
consolidated financial statements, but does not include all disclosures required
under  generally  accepted  accounting  principles.  Certain  amounts  have been
reclassified to conform to the June 30, 2000 presentation.

2.       Description of Business

The Company operates two principal  business  segments:  coal combustion product
(CCP) management and building materials manufacturing and distribution.  The CCP
division  purchases,  removes  and sells fly ash and other  by-products  of coal
combustion  to producers and  consumers of building  materials and  construction
related products  throughout the United States and parts of Canada. The building
materials division  manufactures and distributes masonry construction  materials
to  residential  and  commercial  contractors  primarily  in Texas,  California,
Georgia and Florida.

<PAGE>
3.       New Product Development Costs

New product development costs consist of scientific research and development and
market development expenditures. Expenditures of $1,077,122 and $465,433 for the
six months and quarter ended June 30, 2000, respectively, were made for research
and  development   activities   covering  basic  scientific   research  and  the
application  of  scientific  advances  to the  development  of new and  improved
products and processes. Expenditures of $842,899 and $509,988 for the six months
and quarter ended June 30, 1999, respectively,  were made for market development
activities  related  to  promising  new  and  improved  products  and  processes
identified during research and development activities.  The Company expenses all
new product development costs as they are incurred.

4.       Inventories

Inventories  are valued at lower of cost  (computed  on the  average,  first-in,
first-out method), or net realizable value. Inventories consist of:


                                       June 30,             December 31,
                                         2000                   1999
                                  --------------------- ---------------------
     Raw Materials                      $   457,474          $    234,073
     Finished Goods                       5,317,078             3,821,352
                                  --------------------- ---------------------
                                         $5,774,552          $  4,055,425
                                  ===================== =====================

5.   Intangible Assets

Intangible assets consist of the following:

                                            June 30,             December 31,
                                              2000                   1999
                                       --------------------- -------------------
      Goodwill                            $ 83,566,208            $ 64,313,512
      Contracts                             98,641,588              98,522,146
      Patents and licenses                   2,787,431               2,787,431
      Assembled work force                   2,700,233               2,700,233
                                       --------------------- -------------------
                                           187,695,460             168,323,322
      Less accumulated amortization        (18,624,515)            (14,370,775)
                                       --------------------- -------------------
                                         $ 169,070,945            $153,952,547
                                       ===================== ===================

Amortization  is  provided  over the  estimated  period  of  benefit,  using the
straight-line method, ranging from 8 to 25 years.

6.     Long-term Debt

Long-term debt consists of the following:

                                            June 30,             December 31,
                                              2000                   1999
                                          ------------------ -------------------
   10% Senior Subordinated Notes due 2008   $100,000,000       $   100,000,000
   Secured Credit Facility                    57,000,000            33,500,000
                                          ------------------ -------------------
                                            $157,000,000       $   133,500,000
                                          ================== ===================

The Company  financed  the 1998 and 1999  Acquisitions  through the  issuance of
$100.0 million of 10% Senior  Subordinated  Notes due 2008 and borrowings on its
Secured Credit  Facility (as  subsequently  amended and  restated).  The Company
financed the acquisition of Palestine by obtaining a $15,000,000 increase in the
Secured Credit Facility on May 26, 2000 (discussed below). Operating and capital
expenditures have been financed  primarily through cash flow from operations and
borrowings under the Secured Credit Facility.

<PAGE>

On May 26, 2000, the Secured Credit  Facility was amended and restated to, among
other  things,  increase  the  borrowings  available  to the Company  from $50.0
million to $65.0 million.

This increase in the funds available to the Company was accomplished through the
addition of a Tranche B feature,  pursuant to which two of the existing lenders,
Bank of America,  N.A. and Zions First  National  Bank (the "Tranche B Lenders")
agreed  to  provide  the  additional  $15.0  million  in  funding.  No amount is
available pursuant to the Tranche B revolving loans unless all amounts under the
Tranche  A  (existing)  revolving  loans  have  been  borrowed  in full  and are
outstanding.  Under the amended and restated  Secured  Credit  Facility,  at the
option of the  Company,  both the  Tranche A  Revolving  Loans and the Tranche B
Revolving Loans may be maintained as Eurodollar Loans or Base Rate Loans.

Eurodollar  loans will bear  interest  at a per annum rate equal to the rate per
annum  (rounded  upwards,  if  necessary,  to the  nearest  1/100 of 1  percent)
determined by the  Administrative  Agent to be equal to the quotient by dividing
(a) Interbank  Offered Rate for such Eurodollar Loan for such Interest Period by
(b) 1 minus the Reserve  Requirement  for such Eurodollar Loan for such Interest
Period,  and by then adding  thereto the  applicable  LIBOR  margin  (which is a
percentage ranging from 1.75% to 2.50%,  depending  primarily upon the Company's
Leverage  Ratio).  All  capitalized  terms are  defined  in the  Secured  Credit
Facility.

Base Rate Loans will bear  interest  at a per annum rate equal to the rate which
is the higher of (a) the  Federal  Funds rate for such day plus  one-half of one
percent  (0.5%) and (b) the Prime rate for such day and by then  adding  thereto
the  applicable  ABR Margin  (which is a percentage  ranging from 0.50% to 1.25%
depending  primarily upon the Company's  Leverage Ratio). Any change in the Base
Rate due to a change in the  Federal  Funds  Rate or to the Prime  Rate shall be
effective on the effective  date of such change.  All  capitalized  terms are as
defined in the Secured Credit Facility.

The Company will also pay certain fees with respect to any unused portion of the
amended and restated Secured Credit Facility.

The amended and  restated  Secured  Credit  Facility  maintains  the term of the
original  Secured  Credit  Facility  obtained on March 4, 1998, is guaranteed by
ISG, existing, and future subsidiaries of the Company (the "Guarantors"), and is
secured by a first priority security interest in all of the capital stock of the
Company  and all of the  capital  stock  of each of the  Guarantors,  as well as
certain present and future assets and properties of the Company and any domestic
subsidiaries.

The  amended and  restated  Secured  Credit  Facility  continues  to require the
Company to maintain a maximum leverage ratio, a minimum interest coverage ratio,
a minimum  consolidated net worth and to comply with certain other financial and
non-financial  covenants,  as  defined  in the  agreement.  The  Company  was in
compliance with all such covenants as of June 30, 2000.

At June 30, 2000, $8.0 million was unused and available under the Secured Credit
Facility.

7.       Reportable Segments

As discussed in note 2, the Company operates in two reportable segments: the CCP
division  and  the  building  materials  division.  The  CCP  division  consists
primarily of three operating units that manage and market CCPs in North America.
The building materials division consists of six legal entities,  Best,  Osborne,
Terrazzo,  Magna Wall,  Don's,  and  Palestine.  The  Company's  two  reportable
segments  are  managed  separately  based on  fundamental  differences  in their
operations.

The Company evaluates performance based on profit or loss from operations before
depreciation,  amortization,  income taxes and interest  expense  (EBITDA).  The
Company  derives  a  majority  of its  revenues  from CCP  sales  and the  chief
operating  decision  makers  rely on  EBITDA to assess  the  performance  of the
segments and make  decisions  about  resources to be allocated to the  segments.
Accordingly,  EBITDA is  included in the  information  reported  below.  Certain
expenses are  maintained at the  Company's  corporate  headquarters  and are not
allocated to the segments.  Such expenses  primarily  include interest  expense,
corporate overhead costs, certain  non-recurring gains and losses and intangible
asset  amortization.  Inter-segment  sales,  which  historically  have  not been
material,   are  generally   accounted  for  at  cost  and  are   eliminated  in
consolidation.

<PAGE>

The building  materials  division includes  financial data for Best only for the
three and six months  ended June 30,  1999,  as Osborne,  Terrazzo,  Magna Wall,
Don's and Palestine were acquired  subsequent to the second quarter of 1999. The
building  materials division includes financial data for Don's and Palestine for
the three and six months ended June 30, 2000 from their  respective  acquisition
dates. Amounts included in the "Other" column include financial  information for
the Company's corporate, R&D and other administrative business units.

Information about reportable segments, and reconciliation of such information to
the  consolidated  totals as of and for the three and six months  ended June 30,
2000 and June 30, 1999, is as follows:

<TABLE>
<CAPTION>
                                                         Building
                                        CCP             Materials           Other       Consolidated
                                                                                              Total
                                   ---------------- ---------------- ----------------- -------------------
Three months ended 6/30/00:
<S>                                 <C>             <C>               <C>               <C>
Revenue                             $ 36,106,233    $ 10,501,268       $     85,062     $  46,692,563
EBITDA                                 8,624,602       1,472,074         (3,407,690)        6,688,986
Total Assets                          53,930,444      47,190,860        149,291,745       250,413,049
Expenditures for PP&E                  1,433,176         794,112             79,765         2,307,053

Three months ended 6/30/99:
Revenue                             $ 34,434,193     $ 5,333,023          $ 364,842      $ 40,132,058
EBITDA                                 8,795,247         864,157         (2,412,203)        7,247,201
Total Assets                          53,563,412      18,050,824        154,701,311       226,315,547
Expenditures for PP&E                  1,846,958         105,194            117,460         2,069,612
</TABLE>


<TABLE>
<CAPTION>
                                                         Building
                                        CCP             Materials           Other       Consolidated
                                                                                              Total
                                   ---------------- ---------------- ----------------- -------------------
Six months ended 6/30/00:
<S>                                <C>              <C>                 <C>              <C>
Revenue                            $  61,052,222    $ 17,963,171        $   195,374      $ 79,210,767
EBITDA                                12,778,754       2,294,243         (5,967,642)        9,105,355
Total Assets                          53,930,444      47,190,860        149,291,745       250,413,049

Expenditures for PP&E                  3,393,602         882,822            266,536         4,542,960

Six months ended 6/30/99:
Revenue                              $58,834,917    $ 10,101,906         $  631,727      $ 69,568,550
EBITDA                                13,235,758       1,701,475         (4,310,278)       10,626,955
Total Assets                          53,563,412      18,050,824        154,701,311       226,315,547
Expenditures for PP&E                  4,542,921         113,951            339,241         4,996,113

</TABLE>

<PAGE>


                MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                       CONDITION AND RESULTS OF OPERATIONS

The  following  discussion  and analysis of financial  condition  and results of
operations   should  be  read  in  conjunction  with  the  Unaudited   Condensed
Consolidated Financial Statements and Notes thereto included elsewhere herein.

General

ISG Resources,  Inc. (the "Company") is the leading manager and marketer of coal
combustion  products  ("CCPs")  throughout North America.  The Company generates
revenues  from  marketing  products to its  customers  and  providing  materials
management,  engineering and construction services to its clients. The Company's
strategic   objectives  include  the  maintenance  and  expansion  of  long-term
contractual  relationships,  the  increase  in  product  sales and  applications
through  cross-marketing and further  technological  advances and the pursuit of
strategic acquisitions.

In 1999, the Company  acquired the stock of Best Masonry & Tool Supply ("Best"),
Mineral  Specialties,  Inc.  ("Specialties"),  Irvine Fly Ash, Inc.  ("Irvine"),
Lewis  W.  Osborne,   Inc.   ("Osborne"),   United  Terrazzo  Supply  Co.,  Inc.
("Terrazzo"),  and  Magna  Wall,  Inc.  ("Magna  Wall")  and  sold  all  of  the
outstanding stock of Pneumatic.

On March 2, 2000,  the Company  acquired  directly  and  indirectly  through ISG
Manufactured  Products,  Inc., a newly  formed  wholly-owned  subsidiary  of the
Company, all of the partnership interest of Don's Building Supply L.L.P. (Don's)
for approximately $5.9 million in cash.

On May 31, 2000, the Company  completed the acquisition of all outstanding stock
of Palestine  Concrete Tile Company,  Inc. and certain  associated real property
(collectively,  "Palestine") for approximately $17.9 million in cash, subject to
future purchase price  adjustments as specified  within the purchase  agreement.
Additionally,   the  Company   paid  off   outstanding   debt  of  Palestine  of
approximately $1.0 million.  Palestine is a Texas corporation  primarily engaged
in the manufacture and  distribution of concrete block. The Company financed the
acquisition  of  Palestine by  obtaining a  $15,000,000  increase in the Secured
Credit  Facility  on May 26,  2000  and  receiving  an  equity  contribution  of
$9,745,000 from its parent, Industrial Services Group, Inc. ("ISG") on April 19,
2000.

The Palestine and Don's acquisitions (the "2000  Acquisitions"),  as well as the
acquisitions of Best, Mineral Specialties,  Irvine, Osborne, Terrazzo, and Magna
Wall (the "1999 Acquisitions"),  were accounted for under the purchase method of
accounting  and,  accordingly,  the  results  of  operations  of the  respective
companies have been included in the consolidated  financial statements since the
respective acquisition dates.  Accordingly,  the financial condition and results
of operations of the Company after the  Acquisitions is not directly  comparable
to the historical financial condition or results of operations.

The  Company's  revenues  are  subject  to a pattern  of  seasonal  fluctuation,
concurrent  with the  construction  industry.  Because  certain of the Company's
products  are used as raw  materials  in other  products,  the amount of revenue
generated during the year generally depends upon a number of factors,  including
the level of road and other  construction  using  concrete,  weather  conditions
affecting the level of  construction,  general  economic  conditions,  and other
factors beyond the Company's control.

Results of Operations

Three Months Ended June 30, 2000 compared to Three Months Ended June 30, 1999

Revenues.   Revenues  were  $46.7  million  in  the  second   quarter  of  2000,
representing  an increase of $6.6  million or 16.3%,  as compared to revenues of
$40.1 million in the second quarter of 1999. Product revenues increased to $39.0
million in the second  quarter of 2000 from $31.1 million in the second  quarter
of 1999,  representing  an increase of $7.9 million or 25.6%.  Service  revenues
decreased to $7.7 million in the second quarter of 2000 from $9.0 million in the
second quarter of 1999,  representing  a decrease of $1.3 million or 15.3%.  The
increase in product  revenues in the second  quarter of 2000 is due primarily to
the 1999 and 2000  Acquisitions.  The decrease in service revenues in the second
quarter  of 2000 is due  primarily  to a decrease  in  revenues  generated  from
construction projects due to the conclusion of several of these projects in 1999
or early 2000.

<PAGE>

Cost of Product  Revenues,  Excluding  Depreciation.  Cost of product  revenues,
excluding  depreciation,  was  $27.5  million  in the  second  quarter  of 2000,
representing  an  increase  of $6.4  million or 30.6% , as  compared  to cost of
product revenues, excluding depreciation, of $21.1 million in the second quarter
of 1999. This increase is due primarily to two factors: 1) the inclusion of cost
of product  revenues of the 1999 and 2000  Acquisitions  since their  respective
dates of acquisition; and 2) the increased cost of material in the CCP division.
As a  percentage  of  product  revenues,  cost of  product  revenues,  excluding
depreciation, increased to 70.4% in the second quarter of 2000 from 67.7% in the
second  quarter of 1999.  This  increase was  primarily  due to lower margins on
product revenues  derived from the 1999 and 2000  Acquisitions and lower margins
in the CCP division due to the increase in the cost of materials.

Cost of Service  Revenues,  Excluding  Depreciation.  Cost of service  revenues,
excluding  depreciation,  was  $5.5  million  in the  second  quarter  of  2000,
representing a decrease of $0.8 million or 13.3%, as compared to cost of service
revenues, excluding depreciation, of $6.3 million in the second quarter of 1999.
This  decrease  reflects the decrease in total  service  revenues  earned in the
second quarter of 2000 as compared to the total service  revenues  earned in the
second  quarter of 1999.  As a percentage of service  revenues,  cost of service
revenues,  excluding  depreciation,  remained  fairly  constant  at 71.6% in the
second quarter of 2000 as compared to 70.0% in the second quarter of 1999.

Depreciation and Amortization. Depreciation and amortization was $3.6 million in
the second quarter of 2000,  representing  an increase of $0.6 million or 18.2%,
as compared  to  depreciation  and  amortization  of $3.0  million in the second
quarter of 1999. This increase resulted primarily from increased depreciation of
fixed assets and amortization of goodwill and other  intangible  assets recorded
as a result of the 1999 and 2000 Acquisitions.

Selling,   General   and   Administrative   Expenses.   Selling,   general   and
administrative  expenses  ("SG&A")  were $6.7  million in the second  quarter of
2000,  representing  an increase of $1.7  million or 35.1%,  as compared to SG&A
expenses of $5.0 million in the second  quarter of 1999.  This  increase in SG&A
expenses  reflects  incremental  SG&A costs  resulting from the operation of the
1999  and 2000  Acquisitions  as well as an  increase  in  sales  and  marketing
efforts.

New Product  Development.  New product  development  costs consist of scientific
research and development and market development  expenditures.  Expenditures for
scientific  research and development during the second quarter of 2000 decreased
slightly to $357,000 as compared to $406,000  during the second quarter of 1999.
Expenditures  of  $108,000  were made for market  development  during the second
quarter of 2000 as  compared  to  $104,000  during  the second  quarter of 1999.
Continuing  expenditures  for new product  development  costs  demonstrates  the
Company's  commitment to  developing  and  marketing  value added  products that
utilize CCPs and related materials.

Interest  Expense.  Interest  expense  increased  to $3.9  million in the second
quarter of 2000 from $3.3 million in the second quarter of 1999,  primarily as a
result of an increase in  outstanding  indebtedness  and an increase in interest
rates.

Income Taxes. Income tax expense was $0.1 million in the second quarter of 2000,
representing  a decrease  of $0.5  million or 86.9%,  as  compared to income tax
expense of $0.6 million in the second  quarter of 1999.  This decrease  reflects
the decrease in taxable income in the second quarter of 2000.  Taxable income is
calculated  considering  non-deductible  amortization expense related to most of
the Company's acquisitions.

Net  Income.  As a result of the  factors  discussed  above,  a net loss of $0.8
million for the second  quarter of 2000 was reported as compared to $0.3 million
of net income reported in the second quarter of 1999.


<PAGE>


Six Months Ended June 30, 2000 compared to Six Months Ended June 30, 1999

Revenues.  Revenues  were  $79.2  million  in the  first  six  months  of  2000,
representing  an increase of $9.6  million or 13.9%,  as compared to revenues of
$69.6  million in the first six months of 1999.  Product  revenues  increased to
$63.5  million in the first six  months of 2000 from $52.5  million in the first
six months of 1999,  representing an increase of $11.0 million or 21.0%. Service
revenues  decreased to $15.7  million in the first six months of 2000 from $17.1
million in the first six months of 1999, representing a decrease of $1.4 million
or 8.1%. The increase in product revenues in the first six months of 2000 is due
primarily  to the  addition  of  product  revenue  related  to the 1999 and 2000
Acquisitions.  The decrease in service revenues  reflects a decrease in revenues
generated from  construction  projects due to the conclusion of several of these
projects in 1999 and early 2000.

Cost of Product  Revenues,  Excluding  Depreciation.  Cost of product  revenues,
excluding  depreciation,  was $46.6  million  in the  first six  months of 2000,
representing  an  increase  of $10.5  million or 29.1%,  as  compared to cost of
product  revenues,  excluding  depreciation,  of $36.1  million in the first six
months of 1999. This increase is due primarily to two factors:  1) the inclusion
of cost of  product  revenues  of the  1999 and 2000  Acquisitions  since  their
respective  dates of  acquisition;  and 2) the increased cost of material in the
CCP division.  As a percentage of product  revenues,  cost of product  revenues,
excluding depreciation,  increased to 73.4% in the first six months of 2000 from
68.8% in the first six months of 1999.  This increase was primarily due to lower
margins on product  revenues  derived  from the 1999 and 2000  Acquisitions  and
lower margins in the CCP division due to the increase in the cost of materials.

Cost of Service  Revenues,  Excluding  Depreciation.  Cost of service  revenues,
excluding  depreciation,  was $11.1  million  in the  first six  months of 2000,
representing  a decrease of $1.1 million or 9.1%, as compared to cost of service
revenues,  excluding  depreciation,  of $12.2 million in the first six months of
1999.  This decrease  reflects the decrease in total service  revenues earned in
the second quarter of 2000 as compared to the total service  revenues  earned in
the second quarter of 1999. As a percentage of service revenues, cost of service
revenues, excluding depreciation, remained fairly constant at 70.7% in the first
six months of 2000 as compared to 71.5% in the first six months of 1999.

Depreciation and Amortization. Depreciation and amortization was $6.9 million in
the first six months of 2000, representing an increase of $0.8 million or 12.6%,
as compared to  depreciation  and  amortization of $6.1 million in the first six
months of 1999. This increase resulted primarily from increased  depreciation of
fixed assets and amortization of goodwill and other  intangible  assets recorded
as a result of the 1999 and 2000 Acquisitions.

Selling,   General   and   Administrative   Expenses.   Selling,   general   and
administrative  expenses  ("SG&A") were $11.5 million in the first six months of
2000,  representing  an increase of $1.7  million or 17.9%,  as compared to SG&A
expenses  of $9.8  million  in the first  half of 1999.  This  increase  in SG&A
expenses  reflects  incremental  SG&A costs  resulting from the operation of the
1999  and 2000  Acquisitions  as well as an  increase  in  sales  and  marketing
efforts.

New Product  Development.  New product  development  costs consist of scientific
research and development and market  development  expenditures.  Expenditures of
$868,000 were made for scientific  research and development during the first six
months  of  2000 as  compared  to  $661,000  during  the  first  half  of  1999.
Expenditures of $209,000 were made for market  development  during the first six
months of 2000, as compared to $182,000 during the first six months of 1999. The
increase in new product development costs demonstrates the Company's  commitment
to developing  and marketing  value added products that utilize CCPs and related
materials.

Interest  Expense.  Interest expense  increased to $7.4 million in the first six
months of 2000 from $6.5 million in the first six months of 1999, primarily as a
result of an increase in  outstanding  indebtedness  and an increase in interest
rates.

<PAGE>

Income  Taxes.  Income tax benefit was $1.2  million for the first six months of
2000,  as compared  to the income tax  benefit of $0.5  million in the first six
months of 1999. This change reflects the decrease in taxable income in the first
half of 2000,  primarily  resulting from increased  interest  expense as well as
decreasing   product   margins.   Taxable   income  is  calculated   considering
non-deductible   amortization   expense   related  to  most  of  the   Company's
acquisitions.

Net Income.  As a result of the factors  discussed  above, the net loss was $4.0
million  in the  first  six  months  of 2000 as  compared  to a net loss of $1.5
million in the first six months of 1999.

Liquidity and Capital Resources

The Company  financed  the 1998 and 1999  Acquisitions  through the  issuance of
$100.0 million of 10% Senior  Subordinated  Notes due 2008 and borrowings on its
Secured Credit  Facility (as  subsequently  amended and  restated).  The Company
financed the acquisition of Palestine by obtaining a $15,000,000 increase in the
Secured Credit Facility on May 26, 2000 (discussed below). Operating and capital
expenditures have been financed  primarily through cash flow from operations and
borrowings under the Secured Credit Facility.

The Secured Credit  Facility has been amended a number of times.  Most recently,
on May 26, 2000, the Secured Credit  Facility was amended and restated to, among
other  things,  increase  the  borrowings  available  to the Company  from $50.0
million to $65.0 million.

This increase in the funds available to the Company was accomplished through the
addition of a Tranche B feature,  pursuant to which two of the existing lenders,
Bank of America,  N.A. and Zions First  National  Bank (the "Tranche B Lenders")
agreed  to  provide  the  additional  $15.0  million  in  funding.  No amount is
available pursuant to the Tranche B revolving loans unless all amounts under the
Tranche  A  (existing)  revolving  loans  have  been  borrowed  in full  and are
outstanding.  Under the amended and restated  Secured  Credit  Facility,  at the
option of the  Company,  both the  Tranche A  Revolving  Loans and the Tranche B
Revolving Loans may be maintained as Eurodollar Loans or Base Rate Loans.

Eurodollar  loans will bear  interest  at a per annum rate equal to the rate per
annum  (rounded  upwards,  if  necessary,  to the  nearest  1/100 of 1  percent)
determined by the  Administrative  Agent to be equal to the quotient by dividing
(a) Interbank  Offered Rate for such Eurodollar Loan for such Interest Period by
(b) 1 minus the Reserve  Requirement  for such Eurodollar Loan for such Interest
Period,  and by then adding  thereto the  applicable  LIBOR  margin  (which is a
percentage ranging from 1.75% to 2.50%,  depending  primarily upon the Company's
Leverage  Ratio).  All  capitalized  terms are  defined  in the  Secured  Credit
Facility.

Base Rate Loans will bear  interest  at a per annum rate equal to the rate which
is the higher of (a) the  Federal  Funds rate for such day plus  one-half of one
percent  (0.5%) and (b) the Prime rate for such day and by then  adding  thereto
the  applicable  ABR Margin  (which is a percentage  ranging from 0.50% to 1.25%
depending  primarily upon the Company's  Leverage Ratio). Any change in the Base
Rate due to a change in the  Federal  Funds  Rate or to the Prime  Rate shall be
effective on the effective  date of such change.  All  capitalized  terms are as
defined in the Secured Credit Facility.

The Company will also pay certain fees with respect to any unused portion of the
amended and restated Secured Credit Facility.

The amended and  restated  Secured  Credit  Facility  maintains  the term of the
original Secured Credit Facility obtained on March 4, 1998, and is guaranteed by
ISG and existing future subsidiaries of the Company (the  "Guarantors"),  and is
secured by a first priority security interest in all of the capital stock of the
Company  and all of the  capital  stock  of each of the  Guarantors,  as well as
certain present and future assets and properties of the Company and any domestic
subsidiaries.

The  amended and  restated  Secured  Credit  Facility  continues  to require the
Company to maintain a maximum leverage ratio, a minimum interest coverage ratio,
a minimum  consolidated net worth and to comply with certain other financial and
non-financial  covenants,  as  defined  in the  agreement.  The  Company  was in
compliance with all such covenants as of June 30, 2000.

<PAGE>

At June 30, 2000, the Company had no cash and cash  equivalents and $8.0 million
in availability under the Secured Credit Facility. In addition,  the Company had
working capital of approximately $17.4 million, an increase of $8.4 million from
December 31, 1999.  The Company  intends to make capital  expenditures  over the
next several years  principally  to construct  storage,  loading and  processing
facilities for CCPs and to replace  existing capital  equipment.  During the six
months ended June 30, 2000, capital expenditures  amounted to approximately $4.5
million.  Capital  expenditures  made in the ordinary course of business will be
funded by cash flow from  operations  and  borrowings  under the Secured  Credit
Facility.

The  Company  anticipates  that its  principal  use of cash will be for  working
capital requirements, debt service requirements and capital expenditures.  Based
upon current and anticipated levels of operations, the Company believes that its
cash flow from  operations,  together with amounts  available  under the Secured
Credit  Facility,  will be adequate  to meet its  anticipated  requirements  for
working capital, capital expenditures and interest payments for the next several
years. There can be no assurance,  however,  that cash flow from operations will
be sufficient  to service the Company's  debt and the Company may be required to
refinance  all or a  portion  of  its  existing  debt  or to  obtain  additional
financing.  These increased  borrowings may result in higher interest  payments.
There can be no assurance  that any such  refinancing  would be possible or that
any additional  financing could be obtained.  The inability to obtain additional
financing could have a material adverse effect on the Company.


<PAGE>



ISG Resources, Inc.

                                  -------------


                           PART II - OTHER INFORMATION

Item 1.  Legal Proceedings

                  None

Item 2.  Changes in Securities and Use of Proceeds

                  None

Item 3.  Defaults upon Senior Securities

                  None

Item 4.  Submission of Matters to a Vote of Security Holders

                  None

Item 5.  Other Information

                  None

Item 6.  Exhibits and Reports on Form 8-K

  (a)  Exhibits

     Item                                                           Exhibit
      No.                       Item Title                            No.
      ---      -----------------------------------------              ---

     (2)      Plan of acquisition, reorganization,
              arrangement, liquidation or succession:
              Not Applicable

     (3)      Articles of Incorporation and By-Laws:
              Not Applicable

     (4)      Instruments defining the rights of
              security holders, including indentures:
              Not Applicable

    (10)      Material Contracts:  Not Applicable

    (11)      Statement  regarding  computation  of per share earnings is
              not  required  because  the  relevant  computations  can be
              clearly  determined  from  the  material  contained  in the
              Financial Statements included herein.
<PAGE>

     (15)     Letter re unaudited interim financial
              information:  Not Applicable

     (18)     Letter re change in accounting
              principles:  Not Applicable

     (19)     Report furnished to security holders:
              Not Applicable

     (22)     Published report regarding matters
              submitted to vote of security holders:
              Not Applicable

     (23)     Consents of expert and counsel:
              Not Applicable

     (24)     Power of attorney:  Not Applicable

     (27)     Financial Data Schedule                               27.1

     (99)     Additional Exhibits:  Amended and
              Restated Secured Credit Facility and
              Exhibits

(b)      Reports on Form 8-K

                  Two  reports on Form 8-K were filed by  Registrant  during the
         three months ended June 30, 2000.  The first is Form 8-K/A filed on May
         16, 2000 in connection with the  acquisition of Don's Building  Supply,
         L.L.P. on March 2, 2000. The second Form 8-K relates to the acquisition
         of Palestine Concrete Tile Company and was filed on June 15, 2000.


<PAGE>



                                   SIGNATURES

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

Date:  August 14, 2000              ISG RESOURCES, INC.


                                        /s/ J. I. Everest, II
                                    -------------------------------------
                                    J. I. Everest,  II
                                    Chief  Financial  Officer and  Treasurer
                                    (As both a duly  authorized  officer  of the
                                    Company and as principal  financial  officer
                                    of the Company)