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, 2001
                                        --------------------------

                                       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:
                                        -----------



                               ISG Resources, Inc.
               ------------------------------------------------
             (Exact name of registrant as specified in its charter)


                      Utah                                   87-0619697
         ---------------------------------                ------------------
         (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 30, 2001:




       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

<TABLE>
<CAPTION>
<S>      <C>                                                                                  <C>

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

         Condensed Consolidated Balance Sheets --
         June 30, 2001 and December 31, 2000 .................................................   1

         Unaudited Condensed Consolidated Statements of Operations --
         Three months ended June 30, 2001 and 2000 ...........................................   2

         Unaudited Condensed Consolidated Statements of Operations --
         Six months ended June 30, 2001 and 2000 .............................................   3

         Unaudited Condensed Consolidated Statements of Comprehensive Income  --
         Three months ended June 30, 2001 and 2000 ...........................................   4

         Unaudited Condensed Consolidated Statements of Comprehensive Income  --
         Six months ended June 30, 2001 and 2000 .............................................   5

         Unaudited Condensed Consolidated Statements of Cash Flows --
         Six months ended June 30, 2001 and 2000 .............................................   6

         Notes to Unaudited Condensed Consolidated Financial Statements ......................   7

Item 2.  Management's Discussion and Analysis of
         Financial Condition and Results of Operations .......................................  12

Item 3.  Quantitative and Qualitative Disclosure about Market Risk
          There have been no significant changes since the annual report on Form
          10-K filed for the year ended December 31, 2000.

                           PART II - OTHER INFORMATION


Item 6.  Exhibits and Reports on Form 8-K ...................................................   17
</TABLE>


<PAGE>

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

                                                                   -------------------------------------------------
                                                                           June 30,             December 31,
                                                                       2001 (Unaudited)             2000
                                                                   -------------------------------------------------

<S>                                                                    <C>                       <C>
Assets
Current assets:
   Cash and cash equivalents                                            $    7,542,347               $ 6,986,725

   Accounts receivable:
    Trade, net of allowance for doubtful accounts of   $555,000
    and $501,000, respectively                                              34,172,653                24,321,302
      Retainage                                                                229,713                   146,000
      Other                                                                    608,899                   686,684
   Income tax receivable                                                             -                 2,196,988
   Deferred tax asset                                                          655,335                   851,325
   Inventories                                                               6,800,931                 6,663,633
   Other current assets                                                      1,203,852                 1,057,890
                                                                   -------------------------------------------------
Total current assets                                                        51,213,730                42,910,547

Property, plant and equipment, net of accumulated depreciation of
   $15,516,761 and $12,777,609,
    respectively                                                            40,882,364                37,760,556
Intangible assets, net                                                     161,993,647               167,076,486
Debt issuance costs, net                                                     4,139,490                 4,524,473
Other assets                                                                   111,718                    62,313
                                                                   -------------------------------------------------
Total assets                                                           $   258,340,949           $   252,334,375
                                                                   =================================================

Liabilities and shareholder's equity Current liabilities:
   Accounts payable                                                       $ 19,450,872               $10,704,637
   Accrued liabilities:
      Payroll                                                                2,121,723                 2,406,172
      Interest                                                               2,515,975                 2,849,902
      Other                                                                  2,369,905                 1,826,232
   Other current liabilities                                                 1,772,138                   996,153
    Income taxes payable                                                       201,746                        -
                                                                     -----------------------------------------------
Total current liabilities                                                   28,432,359                18,783,096

Long-term debt                                                             164,917,823               165,000,000
Deferred tax liability                                                      36,376,587                37,702,524
Payable to Industrial Services Group                                         2,244,022                 2,244,022
Other liabilities                                                            2,230,256                 1,482,848

Shareholder's equity:
   Common stock, no par value; 100 shares
    authorized, issued and outstanding                                      34,745,050                34,745,050
   Cumulative foreign currency translation adjustment                           (4,543)                  (29,904)
   Retained deficit                                                        (10,600,605)               (7,593,261)
                                                                     -----------------------------------------------
Total shareholder's equity                                                  24,139,902                27,121,885
                                                                     -----------------------------------------------
Total liabilities and shareholder's equity                                $258,340,949              $252,334,375
                                                                     ===============================================
See accompanying notes.
</TABLE>

                                       1
<PAGE>


                      ISG Resources, Inc. and Subsidiaries
            Unaudited Condensed Consolidated Statements of Operations


                                                    ----------------------------
                                                          Three Months Ended
                                                               June 30,
                                                    ----------------------------
                                                        2001            2000
                                                    ----------------------------
Revenues:
   Product revenues                                  $ 51,442,426  $ 39,030,534
   Service revenues                                     8,674,633     7,662,029
                                                    ----------------------------
                                                       60,117,059    46,692,563

Costs and expenses:
   Cost of product revenues, excluding depreciation    38,357,167    27,494,928
   Cost of service revenues, excluding depreciation     5,599,821     5,486,319
   Depreciation and amortization                        3,873,482     3,579,052
   New product development                                569,600       465,433
   Selling, general and administrative expenses         6,029,539     6,735,458
                                                    ----------------------------
                                                       54,429,609    43,761,190
                                                    ----------------------------
Operating income                                        5,687,450     2,931,373

Interest income                                            94,377        14,049
Interest expense                                       (4,007,377)   (3,862,582)
Other income (expense)                                    (24,103)      164,512
                                                    ----------------------------
Income (loss) before income taxes                       1,750,347      (752,648)
Income tax expense                                     (1,046,774)      (74,649)
                                                    ----------------------------
Net income (loss)                                    $    703,573   $  (827,297)
                                                    ============================


See accompanying notes.

                                       2
<PAGE>

<TABLE>
<CAPTION>

                      ISG Resources, Inc. and Subsidiaries
            Unaudited Condensed Consolidated Statements of Operations


                                                     ------------------------------------------
                                                               Six Months Ended
                                                                   June 30,
                                                     ------------------------------------------
                                                            2001               2000
                                                     ------------------------------------------
<S>                                                  <C>                   <C>
Revenues:
   Product revenues                                      $  85,185,827      $    63,497,790
   Service revenues                                         16,616,619           15,712,977
                                                     ------------------------------------------
                                                           101,802,446           79,210,767

Costs and expenses:
   Cost of product revenues, excluding depreciation         65,371,460           46,616,008
   Cost of service revenues, excluding depreciation         11,006,878           11,102,731
   Depreciation and amortization                             8,018,269            6,866,098
   New product development                                   1,164,818            1,077,122
   Selling, general and administrative expenses             11,881,941           11,536,727
                                                     ------------------------------------------
                                                            97,443,366           77,198,686
                                                     ------------------------------------------
Operating income                                             4,359,080            2,012,081

Interest income                                                242,190               21,574
Interest expense                                            (8,374,291)          (7,401,086)
Other income                                                     9,891              205,602
                                                     ------------------------------------------
Loss before income taxes                                    (3,763,130)          (5,161,829)
Income tax benefit                                             755,786            1,174,116
                                                     ------------------------------------------
Net loss                                             $      (3,007,344)    $     (3,987,713)
                                                     ==========================================
</TABLE>

See accompanying notes.

                                       3
<PAGE>




                      ISG Resources, Inc. and Subsidiaries
            Unaudited Consolidated Statements of Comprehensive Income


                                             -----------------------------------
                                                 Three months ended June 30
                                                    2001         2000
                                             ----------------------------------

Net income (loss)                                 $703,573     $(827,297)
Other comprehensive loss net of tax:
   Foreign currency translation adjustment          13,230        (5,612)
                                             ----------------------------------
Comprehensive income loss                         $716,803     $(832,909)
                                             ==================================

See accompanying notes

                                       4
<PAGE>


                      ISG Resources, Inc. and Subsidiaries
            Unaudited Consolidated Statements of Comprehensive Income


                                            ------------------------------------
                                                  Six months ended June 30
                                                    2001          2000
                                            ------------------------------------

Net loss                                       $(3,007,344)   $(3,987,713)
Other comprehensive loss net of tax:
   Foreign currency translation adjustment          25,361         (5,612)
                                            ------------------------------------
Comprehensive (loss)                           $(2,981,983)   $(3,993,325)
                                            ====================================

See accompanying notes

                                       5
<PAGE>
<TABLE>
<CAPTION>

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

                                                          ------------------------------------
                                                                   Six Months Ended
                                                                       June 30,
                                                          ------------------------------------
                                                                2001             2000
                                                          ------------------------------------
<S>                                                         <C>              <C>
Operating activities
Net loss                                                    $ (3,007,344)    $ (3,987,713)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
     Depreciation and amortization                             8,018,269        6,866,098
     Amortization of debt issuance costs                         474,983          370,867
     Loss on disposal of fixed assets                             29,983            7,090
     Deferred income taxes                                    (1,129,947)      (1,113,757)
     Changes in operating assets and liabilities:
         Receivables                                          (9,857,279)      (5,125,275)
         Inventory                                              (137,298)         156,865
         Other current and non-current assets                   (195,367)        (506,479)
         Accounts payable and accrued expenses                 8,671,532         (309,700)
         Other current and non-current liabilities             2,822,127       (1,763,657)
                                                          ------------------------------------
Net cash provided by (used in) operating activities            5,689,659       (5,405,661)

Investing activities
Purchases of property, plant and equipment                    (5,068,561)      (4,542,960)
Proceeds on sale of property, plant and equipment                 81,340          199,344
Acquisitions of businesses, net of cash acquired                              (23,031,686)
Purchase of intangible assets                                                    (119,442)
                                                          ------------------------------------
Net cash used in investing activities                         (4,987,221)     (27,494,744)

Financing activities
Cash contribution from Parent                                                   9,745,000
Proceeds from long-term debt                                                  120,000,000
Payments on notes payable and long-term debt                     (82,177)     (96,500,000)
Debt issuance costs incurred                                     (90,000)        (338,983)
                                                          ------------------------------------
Net cash (used in) provided by financing activities             (172,177)      32,906,017

Effect of exchange rate changes on cash and
    cash equivalents                                              25,361           (5,612)
                                                          ------------------------------------
Net increase in cash and cash equivalents                        555,622                -
Cash and cash equivalents at beginning of period               6,986,725                -
                                                          ------------------------------------
Cash and cash equivalents at end of period                  $  7,542,347     $          -
                                                          ====================================

Cash paid for interest                                       $ 8,167,467      $ 6,879,256
Cash paid (received) for income taxes                        $(2,028,047)     $ 1,235,409
</TABLE>

See accompanying notes.

                                       6
<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 (the "Merger").  Pneumatic Trucking,  Inc., a wholly owned subsidiary of
Michigan  Ash Sales  Company,  was not merged  into the  Company.  Consequently,
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.

In 2000, ISG Canada Limited,  Inc. ("ISG Canada") was formed and became a wholly
owned foreign  subsidiary of the Company,  with fly ash operations  beginning in
the second half of 2000.

In March  2000,  the  Company  acquired  directly  and  indirectly  through  ISG
Manufactured  Products,  Inc., all of the partnership interest of Don's Building
Supply L.L.P. ("Don's). In May 2000, the Company acquired the stock of Palestine
Concrete Tile Company, Inc. and certain associated real property  (collectively,
"Palestine").  In  September  2000,  the  Company  acquired  certain  fixed  and
intangible assets from Hanson Aggregates West, Inc. ("Hanson").

Each of the above  acquisitions  was accounted for under the purchase  method of
accounting and, accordingly,  the results of operations of each acquired company
have been included in the consolidated financial statements since the respective
date of acquisition.

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 an interim period 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, 2000.

In  1998,  the  Financial  Accounting  Standards  Board  issued  SFAS  No.  133,
"Accounting  for  Derivative  Instruments  and  Hedging  Activities,"  which was
subsequently  amended  by SFAS No.  137  "Accounting  for  Derivative  Financial
Instruments and Hedging  Activities-  Deferral of the Effective Date of SFAS No.
133" and SFAS No. 138 "Accounting for Certain Derivative Instruments and Certain
Hedging Activities." SFAS No. 133 establishes accounting and reporting standards
requiring  that  every  derivative  instrument,   including  certain  derivative
instruments  embedded in other  contracts,  be recorded in the balance  sheet as
either an asset or  liability  measured at its fair value.  The  statement  also
requires that changes in the  derivative's  fair value be recognized in earnings
unless specific hedge  accounting  criteria are met. SFAS No. 133, as amended by
SFAS No. 137 and SFAS No. 138, is effective for all fiscal years beginning after
June 15, 2000. The Company adopted SFAS No. 133 in the first quarter of 2001. As
expected, the adoption did not have a material impact on the Company's financial
condition or results of operations.

The  consolidated  balance  sheet at December  31, 2000 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, 2001 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.  The building materials division
manufactures and distributes masonry  construction  materials to residential and
commercial contractors primarily in Texas, California, Georgia and Florida.

3.       New Product Development Costs

New product development costs consist of scientific research and development and
market development  expenditures.  Expenditures of $510,883 and $357,476 for the
three  months  ended  June  30,  2001  and  June  30,  2000,  respectively,  and
expenditures  of $1,027,518  and $867,612 for the six months ended June 30, 2001
and  June  30,  2000,  respectively,  were  made for  research  and  development
activities  covering  basic  scientific  research and  application of scientific
advances to the development of new and improved products and processes.

Expenditures  of $58,717 and  $107,957  for the three months ended June 30, 2001
and June 30, 2000,  respectively,  and expenditures of $137,300 and $209,510 for
the six months  ended June 30, 2001 and June 30, 2000,  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.


<PAGE>


4.       Inventories

The Company  accounts for inventory  balances  using the lower of cost or market
method on a first-in, first-out basis. Inventories consist of:


                                    --------------------- ---------------------
                                         June 30,             December 31,
                                           2001                   2000
                                    --------------------- ---------------------
                  Raw Materials          $  1,231,885            $1,062,436
                  Finished Goods            5,569,046             5,601,197
                                    --------------------- ---------------------
                                           $6,800,931            $6,663,633
                                    ===================== =====================

5.   Intangible Assets

Intangible assets consist of the following:

                                     --------------------- ---------------------
                                          June 30,             December 31,
                                            2001                   2000
                                     --------------------- ---------------------
    Goodwill                           $ 83,610,925              $83,610,925
    Contracts                            100,227,490             100,227,490
    Patents and licenses                   3,787,431               3,787,431
    Assembled work force                   2,815,233               2,815,233
                                     --------------------- ---------------------
                                         190,441,079             190,441,079
    Less accumulated amortization        (28,447,432)            (23,364,593)
                                     --------------------- ---------------------
                                        $161,993,647            $167,076,486
                                     ===================== =====================

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,
                                                  2001                2000
                                            ----------------- ------------------
     10% Senior Subordinated Notes due 2008     $100,000,000    $   100,000,000
     Secured Credit Facility                      64,917,823         65,000,000
                                            ----------------- ------------------
                                                $164,917,823    $   165,000,000
                                            ================= ==================

At June 30, 2001,  $64.9 million of the Secured Credit Facility was outstanding,
with no amount,  as a result of financing  covenants,  available for  additional
borrowing under the facility.

7.     Other Obligations

In connection with the purchase of land for total  consideration of $1.5 million
during  the second  quarter  of 2001,  the  Company  incurred  a purchase  money
obligation  of $1.1  million.  The  obligation  is to be repaid in payments  due
October 31, 2001 of $300,000, due April 30, 2002 of $400,000 and due October 31,
2002 of $400,000.  The obligation  accrues interest at 8% annually.  The current
portion of $700,000 is classified in other current liabilities and the long term
portion of $400,000 is classified in other  liabilities on the combined  balance
sheet at June 30, 2001.  The $1.1  million is treated as a non-cash  item on the
statement of cash flows.

During the second  quarter of 2001,  an  agreement  was  reached to  terminate a
license  contract.  The  termination  agreement  relieves  the Company of future
obligations  under the license  agreement of $300,000 in 2002,  $400,000 in 2003
and $500,000 in 2004 and each succeeding year until 2012.

8.     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,  Palestine,  and Don's.  The  Company's  two  reportable
segments  are  managed  separately  based on  fundamental  differences  in their
operations.

The Company  evaluates  financial  performance based on earnings from operations
before interest expense, income taxes, depreciation,  and amortization (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 are generally accounted for at cost and
are eliminated in consolidation.

The  building  materials  division  includes  financial  data for the six  legal
entities from their respective  dates of acquisition  through December 31, 2000.
Thus, the building materials division segment  information is not comparable for
the 2001 and 2000 periods.  Don's financial data is included from March 2, 2000,
Palestine from May 31, 2000, and Hanson from September 15, 2000.



<PAGE>



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 months and six months ended June
30, 2001 and June 30, 2000, is as follows:
<TABLE>
<CAPTION>

                                                         Building                       Consolidated
                                        CCP             Materials           Other             Total
                                   ---------------- ---------------- ----------------- -------------------
<S>                                <C>              <C>               <C>               <C>
Three months ended 6/30/01:
Revenue                            $ 46,697,505     $ 13,360,252      $    59,302       $  60,117,059
EBITDA                               10,371,545        1,576,359       (2,316,698)          9,631,206
Total Assets                         62,833,988       48,963,708      146,543,253         258,340,949
Expenditures for PP&E                 1,402,516        1,097,633           66,851           2,567,000

Three months ended 6/30/00:
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

Six months ended 6/30/01:
Revenue                            $ 76,802,042     $ 24,877,799      $   122,605       $ 101,802,446
EBITDA                               15,253,285        2,405,590       (5,029,445)         12,629,430
Total Assets                         62,833,988       48,963,708      146,543,253         258,340,949
Expenditures for PP&E                 3,504,406        1,421,844          142,311           5,068,561

Six months ended 6/30/00:
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
</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., 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").  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. Consequently,  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")   (collectively,   the
"Acquisitions") and sold all of the outstanding stock of Pneumatic.

In 2000, ISG Canada Limited,  Inc. ("ISG Canada") was formed and became a wholly
owned foreign  subsidiary of the Company,  with fly ash operations  beginning in
the second half of 2000.

In March  2000,  the  Company  acquired  directly  and  indirectly  through  ISG
Manufactured  Products,  Inc., all of the partnership interest of Don's Building
Supply L.L.P. ("Don's). In May 2000, the Company acquired the stock of Palestine
Concrete Tile Company, Inc. and certain associated real property  (collectively,
"Palestine").  In  September  2000,  the  Company  acquired  certain  fixed  and
intangible assets from Hanson Aggregates West, Inc. ("Hanson"), collectively the
"2000 Acquisitions."

The 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 are not directly  comparable to
the historical financial condition or results of operations.

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.  The building materials division
manufactures and distributes masonry  construction  materials to residential and
commercial contractors primarily in Texas, California, Georgia and Florida.

The  Company's  revenues  are  subject  to a pattern  of  seasonal  fluctuation,
concurrent with the construction  industry.  Because 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, 2001 compared to Three Months Ended June 30, 2000

Revenues.   Revenues  were  $60.1  million  in  the  second   quarter  of  2001,
representing  an increase of $13.4 million or 28.7%,  as compared to revenues of
$46.7 million in the second quarter of 2000. Product revenues increased to $51.4
million in the second  quarter of 2001 from $39.0 million in the second  quarter
of 2000,  representing an increase of $12.4 million or 31.8%.  Service  revenues
increased  to $ 8.7 million in the second  quarter of 2001 from $7.7  million in
the second  quarter of 2000,  representing  a increase of $1.0 million or 13.2%.
The  increase in product  revenues in the second  quarter of 2001 is both due to
the 2000 Acquisitions of building  materials  entities and to an increase in fly
ash revenues. The increase in service revenues is due primarily to a increase in
disposal  revenue  during the second  quarter of 2001 as  compared to the second
quarter of 2000.

Cost of Product  Revenues,  Excluding  Depreciation.  Cost of product  revenues,
excluding  depreciation,  was  $38.4  million  in the  second  quarter  of 2001,
representing  an  increase  of $ 10.9  million or 39.5%,  as compared to cost of
product revenues, excluding depreciation, of $27.5 million in the second quarter
of 2000.  This  increase is due primarily to the  increasing  price of materials
procured for sale and increases from the 2000  Acquisitions.  As a percentage of
product revenues, cost of product revenues, excluding depreciation, increased to
74.5% in the second  quarter  of 2001 from 70.4% in the second  quarter of 2000.
This decrease in product  margins is primarily  due to lower margins  related to
the building material product revenues derived from the 2000 Acquisitions and to
a higher cost of materials for fly ash.

Cost of Service  Revenues,  Excluding  Depreciation.  Cost of service  revenues,
excluding  depreciation  was  $5.6  million  in  the  second  quarter  of  2001,
representing an increase of $0.1 million or 2.1%, as compared to cost of service
revenues, excluding depreciation, of $5.5 million in the second quarter of 2000.
This increase is due primarily to increased revenue.  As a percentage of service
revenues, cost of service revenues,  excluding depreciation,  decreased to 64.6%
in the second  quarter of 2001 from  71.6% in the second  quarter of 2000.  This
improvement  in margin was  primarily  due to an increase in margins  associated
with disposal  revenues in the second  quarter of 2001 as compared to the second
quarter of 2000.

Depreciation and Amortization. Depreciation and amortization was $3.9 million in
the second quarter of 2001, representing an increase of $0.3 million or 8.2%, as
compared to depreciation  and amortization of $3.6 million in the second quarter
of 2000. This increase resulted  primarily from the depreciation of fixed assets
acquired  by the  Company  in 2000,  and  amortization  of  goodwill  and  other
intangible assets recorded as a result of the 2000 Acquisitions.

Selling,   General   and   Administrative   Expenses.   Selling,   general   and
administrative  expenses  ("SG&A")  were $6.0  million in the second  quarter of
2001,  representing  an decrease of $0.7  million or 10.5%,  as compared to SG&A
expenses of $6.7 million in the second quarter of 2000. This decrease in SG&A is
primarily due to decreased management expenses resulting from the elimination of
a regional management group and tighter expense control in salaries and wages.

New Product  Development.  New product  development  costs consist of scientific
research and development and market development  expenditures.  Expenditures for
scientific research and development in the second quarter of 2001 as compared to
the second  quarter of 2000 increased to $510,883.  Expenditures  for new market
development  in the second  quarter of 2001 as compared to the second quarter of
2000 decreased to $58,716.  The  continuation of 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 $4.0  million in the second
quarter of 2001 from $3.9 million in the second quarter of 2000,  primarily as a
result  of  an  increase  in  outstanding   indebtedness  related  to  the  2000
Acquisitions.

Income Taxes. Income tax expense was $1.0 million in the second quarter of 2001,
representing  an increase  of $0.9  million as compared to income tax expense of
$0.1 million in the second quarter of 2000.  This increase in income tax expense
is a result of higher taxable income as compared to the prior year.

Net Income.  As a result of the  factors  discussed  above,  net income was $0.7
million in the second  quarter of 2001 compared to a net loss of $0.8 million in
the second quarter of 2000.

Six Months Ended June 30, 2001 compared to Six Months Ended June 30, 2000

Revenues.  Revenues  were  $101.8  million  in the  first  six  months  of 2001,
representing  an increase of $ 22.6 million or 28.5%, as compared to revenues of
$79.2  million in the first six months of 2000.  Product  revenues  increased to
$85.2  million in the first six  months of 2001 from $63.5  million in the first
six months of 2000, representing an increase of $21.7 million or 34.2 %. Service
revenues  increased to $16.6  million in the first six months of 2001 from $15.7
million in the first six months of 2000, representing a increase of $0.9 million
or 5.8%. The increase in product revenues in the first six months of 2001 is due
primarily to the addition of product  revenue  related to the 2000  Acquisitions
and increasing  revenue in fly ash operations.  The increase in service revenues
reflects an increase in disposal revenues.

Cost of Product  Revenues,  Excluding  Depreciation.  Cost of product  revenues,
excluding  depreciation,  was $65.4  million  in the  first six  months of 2001,
representing  an  increase  of $18.8  million or 40.2%,  as  compared to cost of
product  revenues,  excluding  depreciation,  of $46.6  million in the first six
months of 2000. This increase is due primarily to two factors:  1) the inclusion
of cost of product revenues of 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 76.7% in the first six months of 2001 from 73.4% in
the first six months of 2000.  This  increase was primarily due to lower margins
on product revenues derived from the 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,  remained  relatively  constant at $11.0 million in the
first six  months of 2001 as  compared  to cost of service  revenues,  excluding
depreciation,  of $11.1 million in the first six months of 2000. As a percentage
of service revenues, cost of service revenues, excluding depreciation, decreased
to 66.2% in the first six months of 2001 as  compared  to 70.7% in the first six
months of 2000.  This  decrease was due to  continued  process  efficiencies  in
disposal techniques.

Depreciation and Amortization. Depreciation and amortization was $8.0 million in
the first six months of 2001, representing an increase of $1.2 million or 16.8%,
as compared to  depreciation  and  amortization of $6.9 million in the first six
months of 2000. This increase resulted primarily from increased  depreciation of
fixed assets and amortization of goodwill and other  intangible  assets recorded
as a result of the 2000 Acquisitions.

Selling,   General   and   Administrative   Expenses.   Selling,   general   and
administrative  expenses  ("SG&A") were $11.9 million in the first six months of
2001,  representing  an  increase of $0.4  million or 3.0%,  as compared to SG&A
expenses of $11.5 million in the first six months of 2000. This increase in SG&A
expenses  reflects  incremental  SG&A costs  resulting from the operation of the
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
$1,027,518 were made for scientific  research and  development  during the first
six  months of 2001 as  compared  to  $867,612  during  the first  half of 2000.
Expenditures of $137,300 were made for market  development  during the first six
months of 2001, as compared to $209,510 during the first six months of 2000. 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 $8.4 million in the first six
months of 2001 from $7.4 million in the first six months of 2000, primarily as a
result of an increase in outstanding indebtedness due to the 2000 acquisitions

Income  Taxes.  Income tax benefit was $0.8  million for the first six months of
2001,  as compared  to the income tax  benefit of $1.2  million in the first six
months of 2000.  This change reflects an increase in taxable income in the first
half  of  2001.   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 $3.0
million  in the  first  six  months  of 2001 as  compared  to a net loss of $4.0
million in the first six months of 2000.

Liquidity and Capital Resources

The Company  financed  the 1998 and 1999  Acquisitions  through the  issuance of
$100.0  million,  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 $15.0  increase in the
Secured  Credit  Facility on May 26, 2000  (discussed  below) and  receiving  an
equity  contribution of  approximately  $9.7 million from ISG on April 19, 2000.
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. 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.

On August 8, 2000, the amended and restated  secured credit  agreement dated May
26, 2000 was amended in order to modify certain debt covenants  contained in the
credit agreement.  Primarily,  a minimum  consolidated  Earnings Before Interest
Expense,  Income Tax Expense,  Depreciation  Expense,  and Amortization  Expense
(EBITDA)  debt  covenant was added.  The minimum  consolidated  EBITDA  covenant
requires the Company to maintain a minimum  EBITDA  amount as of the last day of
every fiscal quarter through June 30, 2003 at levels set forth in the agreement.

On March 30, 2001, the amended and restated  secured credit  agreement dated May
26,  2000 and  subsequently  amended on August 8, 2000,  was amended in order to
modify  certain  debt  covenants  contained  in the  agreement.  The amended and
restated secured credit facility  continues to require the Company to not exceed
a maximum leverage ratio, to not drop below a minimum  interest  coverage ratio,
to not drop  below a minimum  consolidated  EBITDA  level,  and to  comply  with
certain other financial and non-financial covenants.

At June 30, 2001, the Company had $7.5 million in cash and cash  equivalents and
$64.9 million of the Secured  Credit  Facility was  outstanding,  with no amount
available for additional  borrowing under the facility.  The Company had working
capital of approximately $23.1 million, a decrease of $1.0 million from December
31,  2000,  due to an  increase  in trade  accounts  payable  and other  current
liabilities,  offset  in part by  increases  in  inventory  and  trade  accounts
receivable.

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,
2001, capital  expenditures  amounted to approximately $5.1 million. The Company
expects that capital  expenditures  made in the ordinary course of business will
be funded by cash flow from operations.

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 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.

Other Events

On February 24, 1999,  the Company  entered into an option  agreement to acquire
the stock of Tatum  Industries,  Inc.  (Tatum).  As part of that agreement,  the
Company  agreed to loan  Tatum  approximately  $50,000  per month for  operating
expenses and loan  servicing.  In November 2000, the note payable to the Company
was approximately $1.1 million. In December 2000, Tatum advised the Company that
they would not be able to repay the note and the  Company's  attempt to purchase
the  outstanding  stock of Tatum  was  unsuccessful.  As a result,  the  Company
expensed the $1.1 million note payable in the fourth quarter of 2000.

In addition to the option agreement, the Company continued to lease the building
and  equipment   under  a   month-to-month   lease  and  made   expenditures  of
approximately  $1.1 million in leasehold  improvements and equipment  purchases.
The  Company is  currently  in the process of  negotiating  the sale of its $1.1
million investment in leasehold improvements and equipment to a third party. The
Company  believes that they will be successful  in  negotiating  the sale of the
leasehold improvements and equipment with no significant resulting gain or loss;
however,  there is a risk that  management will be unable to sell the assets for
an amount greater than or equal to the net book value of the assets.


<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.

          (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

          (99)      Additional Exhibits: Not Applicable


(b)      Reports on Form 8-K

                  None


<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 3, 2001                     ISG RESOURCES, INC.


                                          /s/ J.I. Everest
                                          -------------------------------------
                                          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)