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

                                    FORM 10-Q

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

     For the Quarterly Period Ended December 31, 2000

                                       OR

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

    For the transition period __________ to __________


                         Commission File Number 1-12902


                       FRONTIER ADJUSTERS OF AMERICA, INC.
             ------------------------------------------------------
             (Exact name of registrant as specified in its charter)


            Arizona                                              86-0477573
-------------------------------                              -------------------
(State or other jurisdiction of                               (I.R.S. Employer
 incorporation or organization)                              Identification No.)


                     45 East Monterey Way, Phoenix, AZ 85012
                    ----------------------------------------
                    (Address of principal executive offices)


                                 (602) 264-1061
              ----------------------------------------------------
              (Registrant's telephone number, including area code)


--------------------------------------------------------------------------------
Former name, former address and former fiscal year, if changed since last report


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

Number of shares of Common Stock outstanding on February 1, 2001       8,957,660
                                                                      ----------

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<PAGE>
                         PART I - FINANCIAL INFORMATION

ITEM 1 - FINANCIAL STATEMENTS

                       FRONTIER ADJUSTERS OF AMERICA, INC.
                                AND SUBSIDIARIES

                      CONDENSED CONSOLIDATED BALANCE SHEET

                                                     December 31,     June 30,
                                                        2000            2000
                                                     -----------    -----------
                                                     (unaudited)        (*)
                                     ASSETS

CURRENT ASSETS
  Cash and cash equivalents                          $ 3,422,942    $ 2,132,297
  Receivables                                          1,036,853      1,344,935
  Prepaid expenses                                       169,727        211,108
  Other                                                  337,069        264,737
                                                     -----------    -----------
       TOTAL CURRENT ASSETS                            4,966,591      3,953,077
                                                     -----------    -----------

PROPERTY AND EQUIPMENT                                 2,662,707      2,656,715
  Less accumulated depreciation and amortization      (1,099,585)    (1,034,326)
                                                     -----------    -----------
                                                       1,563,122      1,622,389
                                                     -----------    -----------

OTHER ASSETS
  Receivables (Long term)                                150,000        200,000
  Investments (Long term)                                622,679        628,661
  Other                                                  285,619        315,966
                                                     -----------    -----------
                                                       1,058,298      1,144,627
                                                     -----------    -----------
       TOTAL ASSETS                                  $ 7,588,011    $ 6,720,093
                                                     ===========    ===========

                                   LIABILITIES

CURRENT LIABILITIES
  Accounts payable                                   $    17,578    $    25,835
  Accrued expenses                                        89,959        138,275
  Franchisee/licensee remittance payable                  87,148        116,287
  Accrued Income Taxes                                        --         33,989
  Service fees due to UFAC                                90,442         15,000
  Other                                                   98,599         90,367
                                                     -----------    -----------
       TOTAL CURRENT LIABILITIES                         383,726        419,753
                                                     -----------    -----------

STOCKHOLDERS' EQUITY
  Common stock                                            90,191         90,191
  Additional paid in capital                           2,104,413      2,104,413
  Treasury stock                                        (184,068)      (184,068)
  Other                                                   26,762         26,704
  Retained earnings                                    5,166,987      4,263,100
                                                     -----------    -----------
                                                       7,204,285      6,300,340
                                                     -----------    -----------
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY             $ 7,588,011    $ 6,720,093
                                                     ===========    ===========
----------
* Condensed from audited financial statements.

   The accompanying notes are an integral part of these condensed statements.

                                        2
<PAGE>
                       FRONTIER ADJUSTERS OF AMERICA, INC.
                                AND SUBSIDIARIES

                   CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                                   (unaudited)

<TABLE>
<CAPTION>
                                                    Six Months Ended                Three Months Ended
                                                       December 31,                    December 31,
                                                 ------------------------        ------------------------
                                                    2000          1999              2000          1999
                                                 ----------    ----------        ----------    ----------
<S>                                            <C>           <C>                 <C>           <C>
REVENUE
  Continuing licensee and franchisee fees        $2,675,114    $2,585,686        $1,284,957    $1,273,079
  Adjusting and Risk Management fees                390,848       657,370           186,340       293,913
                                                 ----------    ----------        ----------    ----------
                                                  3,065,962     3,243,056         1,471,297     1,566,992
                                                 ----------    ----------        ----------    ----------
COST AND EXPENSES
  Compensation and employee benefits                741,101     1,286,001           363,209       699,624
  Office                                            150,195       217,526            77,597       127,026
  Advertising and promotion                          45,561        65,807            20,138        24,373
  Depreciation and amortization                      93,542       114,951            46,417        57,429
  Bad debt expense                                   34,715       135,838            11,010        82,998
  UFAC service fees                                 174,270       150,000            78,995        75,000
  Other                                             477,503       430,141           201,264       210,656
                                                 ----------    ----------        ----------    ----------
                                                  1,716,887     2,400,264           798,630     1,277,106
                                                 ----------    ----------        ----------    ----------
INCOME FROM OPERATIONS                            1,349,075       842,792           672,667       289,886
                                                 ----------    ----------        ----------    ----------
OTHER INCOME (EXPENSE)
  Interest income                                   112,038        56,373            58,186        33,309
  Other (net)                                        19,666        30,021             9,881        22,062
                                                 ----------    ----------        ----------    ----------
  TOTAL OTHER INCOME (EXPENSE)                      131,704        86,394            68,067        55,371
                                                 ----------    ----------        ----------    ----------
  INCOME BEFORE INCOME TAXES                      1,480,779       929,186           740,734       345,257

INCOME TAXES                                        576,892       362,786           313,843       146,189
                                                 ----------    ----------        ----------    ----------
  NET INCOME                                     $  903,887    $  566,400        $  426,891    $  199,068
                                                 ==========    ==========        ==========    ==========
EARNINGS PER SHARE
  Basic                                          $      .10    $      .06        $      .05    $      .02
                                                 ==========    ==========        ==========    ==========
  Diluted                                        $      .10    $      .06        $      .05    $      .02
                                                 ==========    ==========        ==========    ==========
WEIGHTED AVERAGE SHARES OUTSTANDING
  Basic                                           8,957,660     8,957,560         8,957,660     8,957,560
                                                 ==========    ==========        ==========    ==========
  Diluted                                         8,957,660     8,957,560         8,957,660     8,957,560
                                                 ==========    ==========        ==========    ==========
</TABLE>

   The accompanying notes are an integral part of these condensed statements.

                                        3
<PAGE>
                       FRONTIER ADJUSTERS OF AMERICA, INC.
                                AND SUBSIDIARIES

            CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
                                   (unaudited)

<TABLE>
<CAPTION>
                                                 Six Months Ended          Three Months Ended
                                                   December 31,               December 31,
                                              ----------------------      ----------------------
                                                2000         1999           2000         1999
                                              ---------    ---------      ---------    ---------
<S>                                           <C>          <C>            <C>          <C>
NET INCOME                                    $ 903,887    $ 566,400      $ 426,891    $ 199,068
                                              ---------    ---------      ---------    ---------

Other Comprehensive Income, net of tax:
  Foreign currency translation adjustments           58        3,630            707        3,182
  Unrealized gain (loss) on securities               --           --             --       (8,094)
                                              ---------    ---------      ---------    ---------
                                                     58        3,630            707       (4,912)
                                              ---------    ---------      ---------    ---------
COMPREHENSIVE INCOME                          $ 903,945    $ 570,030      $ 427,598    $ 194,156
                                              =========    =========      =========    =========
</TABLE>

    The accompanying notes are an integral part of these condensed statements

                                        4
<PAGE>
                       FRONTIER ADJUSTERS OF AMERICA, INC.
                                AND SUBSIDIARIES

                 CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
                                   (unaudited)

                   SIX MONTHS ENDED DECEMBER 31, 2000 AND 1999
<TABLE>
<CAPTION>
                                                                 2000             1999
                                                             -----------      -----------
<S>                                                          <C>              <C>
NET INCOME                                                   $   903,887      $   566,400
                                                             -----------      -----------
Adjustments to reconcile net income to net cash
 provided by operating activities:
   Depreciation and amortization:                                 93,542          114,951
   Gain on sale of investments                                        --          (12,494)
   (Gain) on sale of license                                      (4,964)              --
   Bad debt expense                                               34,715          135,838
Change in assets and liabilities:
(Increase) decrease in:
   Receivables                                                   122,421           75,298
   Prepaid expenses                                               41,381          156,831
   Other                                                         (70,482)         (57,494)
Increase (decrease) in:
   Accounts payable                                               (8,257)           2,838
   Accrued expenses                                              (48,316)        (232,538)
   Franchisee and licensee remittance payable                    (29,139)        (552,946)
   Service fees due to UFAC                                       75,442           25,000
   Other                                                         (25,828)         244,934
                                                             -----------      -----------
Total adjustments                                                180,515          (99,782)
                                                             -----------      -----------
       NET CASH PROVIDED BY OPERATING ACTIVITIES               1,084,402          466,618
                                                             -----------      -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
   Capital expenditures                                           (5,992)        (117,132)
   Proceeds from held-to-maturity investments                      6,177               --
   Proceeds from sale of available-for-sale investments               --           12,494
   Proceeds on sale of fixed assets                                   --              337
   Proceeds from sales of license                                 11,317           25,000
   Payments on license acquisition                                    --          (13,660)
   Advances to licensees and franchisees                      (1,197,717)      (1,875,385)
   Collections of advances to licensees and franchisees        1,392,310        2,062,267
                                                             -----------      -----------
       NET CASH PROVIDED BY INVESTING ACTIVITIES                 206,095           93,921
                                                             -----------      -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
   Cash dividends                                                     --       (5,918,475)
                                                             -----------      -----------
       NET CASH (USED IN) FINANCING ACTIVITIES                        --       (5,918,475)

EFFECT OF EXCHANGE RATE CHANGES ON CASH                              148            6,226

NET INCREASE (DECREASE) IN CASH                                1,290,645       (5,351,710)
   Cash at beginning of the period                             2,132,297        6,892,851
                                                             -----------      -----------
   Cash at the end of the period                             $ 3,422,942      $ 1,541,141
                                                             ===========      ===========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during the period
   Income taxes                                              $   680,478      $   421,887
   Interest                                                  $        --      $     1,097
</TABLE>

   The accompanying notes are an integral part of these condensed statements.

                                        5
<PAGE>
                       FRONTIER ADJUSTERS OF AMERICA, INC.
                                AND SUBSIDIARIES

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (unaudited)


(1)  BASIS OF PRESENTATION

     The  financial  information  included  herein is unaudited;  however,  such
     information reflects all adjustments (consisting solely of normal recurring
     adjustments) which are, in the opinion of management,  necessary for a fair
     statement of results of operations for the interim periods.

     The  results  of  operations  for the  three and six  month  periods  ended
     December  31,  2000 are not  necessarily  indicative  of the  results to be
     expected for the full year.

(2)  REVENUE RECOGNITION

     In December  1999,  the staff of the  Securities  and  Exchange  Commission
     issued Staff Accounting  Bulletin No. 101 REVENUE  RECOGNITION IN FINANCIAL
     STATEMENTS.  SAB No. 101 summarizes some of the staff's  interpretations of
     the  application  of generally  accepted  accounting  principles to revenue
     recognition.  The  Company  has  adopted  SAB No.  101  this  fiscal  year.
     Management  believes the adoption of SAB No. 101 has not had a  significant
     effect on the Company's financial statements.

ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

The  statements  contained  in this  Report  on Form  10-Q  that are not  purely
historical are forward looking  statements  within the meaning of Section 27A of
the  Securities  Act of 1933,  as amended,  and  Section  21E of the  Securities
Exchange Act of 1934, as amended,  including  statements regarding the Company's
"expectations",    "anticipation",    "hopes",   "intentions",   "beliefs",   or
"strategies" regarding the future. Forward looking statements include statements
regarding revenue,  margins,  expenses, and earnings analysis with regard to the
Company  or with  regard to the  Company's  licensees  and  franchisees  for the
remainder  of fiscal  2001 and  thereafter;  improvement  of,  and growth in the
number of, licensees and  franchisees;  future spending on marketing and product
development  strategy;  statements  regarding  the  outcome of  litigation;  and
liquidity and anticipated availability of cash for operations,  acquisitions, or
payments of dividends.  All forward looking statements included in this document
are based on  information  available  to the Company on the date of this report,
and the  Company  assumes  no  obligation  to update  any such  forward  looking
statement.  It is  important to note that the  Company's  actual  results  could
differ  materially  from those in such  forward  looking  statements.  Among the
factors that could cause  actual  results to differ  materially  are the factors
discussed in this Report and any other  reports on file with the SEC,  including
but not  limited to the extent of nature and  natural  disasters  in  geographic
areas  serviced by the Company or by its licensees and  franchisees;  management
decisions by insurance  companies and  self-insured  to increase or decrease the
degree to which they contract for services offered by the Company, its licensees
or  franchisees;  the  Company's  ability to identify and attract new  qualified
licensees  and  franchisees;  the  success  of  the  Company's  promotional  and
marketing  programs;  the  Company's  ability  to  successfully  manage  offices
reacquired from existing licensees and franchisees;  and uninsured liability for
acts or omissions of the Company's employees, licensees, or franchisees.

In March of 2000,  the  Company  announced  plans  pursuant to which the Company
would exchange 11.2 million shares of its common stock for all of the issued and
outstanding  shares of  United  Financial  Adjusting  Company  ("UFAC")  and its
subsidiaries,  JW Software,  Inc.  ("JW") and DBG  Technologies,  Inc.  ("DBG").
Netrex Holdings,  LLC ("Netrex") currently owns all of the outstanding shares of
stock in UFAC which holds approximately 59% of the Company's  outstanding stock.
The Company  announced  on October 24, 2000 it had agreed with UFAC to terminate
the Merger  Agreement  dated May 2, 2000 entered into between the Company,  UFAC
and Netrex. UFAC maintains its ownership in the Company,  currently representing
approximately 59% of the Company's outstanding shares.

                                        6
<PAGE>
FINANCIAL CONDITION

The Company has  historically  financed its growth and on-going  operations with
cash generated from  operations.  In the six months ended December 31, 2000, the
Company's  operations  generated  $1,084,000 in cash. The most significant items
affecting cash generated by the Company's operations are net income of $904,000,
a decrease of $122,000 in  receivables,  an increase of $75,000 in service  fees
due to UFAC and an increase of $70,000 in other assets.

For the six months ended December 31, 2000, the Company's  investing  activities
generated  $206,000 in cash. The most significant items affecting cash generated
from investing activities are $1,198,000 given as advances or loans to licensees
and  franchisees  and  $1,392,000 in  collections  on advances or loans given to
licensees and franchisees.

For the six months ended  December 31, 2000, the Company did not generate or use
any cash in financing activities.

The Company  anticipates  that during fiscal 2001 its  operations  will generate
sufficient cash to fund its operations and equipment  acquisitions.  Through its
capital investment program,  the Company replaces obsolete or outdated equipment
and invests in new  equipment  and  furnishings  to  maintain  or  increase  the
productivity of the Company and its employees. The Company anticipates investing
between  $100,000  and  $150,000 in fiscal 2001 for  equipment  and  furnishings
pursuant to its capital investment program.

In June 1999,  a  complaint  was filed in the United  States  District  Court in
Nebraska against multiple defendants including the Company. The complaint arises
from the alleged  embezzlement  by a former  licensee in connection  with claims
services provided for the benefit of the plaintiff.  The complaint seeks damages
of at least $1,800,000 from the Company.  The Company has denied  allegations of
liability  contained in the  complaint.  As the lawsuit is still in its earliest
phase, the Company cannot yet assess the merits of the complaint or whether this
suit will have a material adverse effect on the Company. For further discussion,
see "Part II, Item 1 - Legal Proceedings".

The Company's  ratio of current assets to current  liabilities was 12.94 to 1 as
of December 31, 2000 and 9.42 to 1 as of June 30, 2000.

RESULTS OF  OPERATIONS  - SIX MONTHS  ENDED  DECEMBER  31, 2000  COMPARED TO SIX
MONTHS ENDED DECEMBER 31, 1999

REVENUE

The Company's  revenue  decreased 5.5% or $177,000 to $3,066,000  during the six
months ended  December 31, 2000 from  $3,243,000 in the same period of the prior
fiscal year. The decrease  represents a $266,000  decrease in adjusting and risk
management  fees and an $89,000  increase in continuing  licensee and franchisee
fees.

The decrease of $266,000 in adjusting  and risk  management  fees to $391,000 in
the six months ended  December 31, 2000  compared to $657,000 in the same period
of the prior fiscal year  represents a 40.5% decrease.  The Company  experienced
decreases of $147,000 in adjusting fees in its Phoenix,  Arizona office, $77,000
in adjusting fees in its Tucson,  Arizona office (due to sale of this location),
and $40,000 in adjusting fees in its Las  Vegas/Henderson,  Nevada  office.  The
remainder  of the  decrease,  $2,000,  is due to  the  discontinuation  of  risk
management services provided by the Company's home office.

The decrease in the Phoenix  adjusting  office is primarily due to a decrease in
claims  assigned by clients  during the six months  ended  December  31, 2000 as
compared to the prior year.  The  decline in the Las  Vegas/Henderson  adjusting
office is predominately the result of a decrease in storms during the six months
ended  December  31, 2000 as compared to the same period of the prior year.  The
decrease in the Tucson  adjusting  office is the result of the Company's sale of
the Tucson office to a new franchisee on January 1, 2000.  Finally,  the Company
ceased  providing  risk  management  services  within the home office during the
prior fiscal year as it was not economical to continue to provide such services.
Fees generated from risk management services were $2,000 in the six months ended
December 31, 1999. The decision to have  franchisees and licensees  provide risk
management  services  for  clients  continues  to  remain  with  the  individual
franchisees and licensees.

                                        7
<PAGE>
The Company's  revenue from  continuing  licensee and franchisee  fees increased
$89,000 or 3.4% from  $2,586,000  in the six months  ended  December 31, 1999 to
$2,675,000 in the six months ended December 31, 2000. This increase reflects the
benefit to the Company's  licensees and  franchisees  from an increase in claims
assignments from insurance companies and self-insureds.

The Company's revenue is affected by numerous matters including the workloads of
other companies and claims presented by their clients. Therefore, the Company is
unable to project its future revenue.  The Company has historically  seen growth
in the licensee and franchisee  fees paid, with exception to the loss of a major
client in 1997. To further  enhance  revenue  growth,  the Company  continues to
develop and  implement  sales and  marketing  efforts to take  advantage  of its
geographic diversity as well as the unique strengths of its individual licensees
and franchisees.  With the addition of the marketing  resources provided by UFAC
(See "Service Fees"),  the Company hopes to see continued growth in licensee and
franchisee fees paid.

COMPENSATION AND FRINGE BENEFITS

Compensation  and  employee  benefits  represents  approximately  43.2%  of  the
Company's  costs and expenses  and also  represents  the largest  single item of
expense.  These expenses  decreased $545,000 or 42.4% from $1,286,000 in the six
months ended  December 31, 1999 to $741,000 in the current six month  period.  A
portion  of this  decrease  relates  to the  resignation  of an  Executive  Vice
President  on January 31, 2000.  During the six months ended  December 31, 1999,
the Company was still  paying  compensation  and  benefits  associated  with his
employment in addition to a severance package.  Certain services provided by the
former  Executive  Vice President are now provided by UFAC pursuant to a service
agreement between the Company and UFAC. Charges for these services are reflected
in a fixed  monthly  fee paid to UFAC under the service  agreement.  For further
discussion, see "Service Fees".

The decrease  further  reflects the fact that most of the adjusters  employed by
the Company-owned adjusting offices are compensated by commission based on their
adjusting services.  As the adjusting fees in these offices decrease,  the wages
paid to these adjusters also decrease.  During the six months ended December 31,
2000,  wages paid to adjusters  had decreased by $82,000 as compared to the same
period of the prior year. Furthermore, during the prior fiscal year, the Company
replaced its profit sharing plan with a gainsharing and a 401K plan,  decreasing
expenses related to these plans by $56,000 for the six months ended December 31,
2000 as compared to the same period of the prior year. Finally,  the Company has
reduced the amount of  compensation  paid to employees  due to the departure and
non-replacement of certain personnel.

SERVICE FEES

On April 30,  1999,  the  Company  entered  into a service  agreement  with UFAC
whereby the Company pays a $25,000 monthly fee for certain services  provided by
UFAC.  Services  included  under  this  agreement  are  management,   marketing,
technology, human resource support and accounting and reporting support. For the
six months ended  December 31, 2000 and 1999, the Company  incurred  $150,000 in
service fees under this agreement.

The  Company  also  pays UFAC for  services  performed  beyond  the scope of the
service  agreement.  For the six months ended  December  31,  2000,  the Company
incurred an additional $16,000 in computer  consulting fees, $7,000 in telephone
support  for the  Company's  after-hour  hotline  and  $1,000  in  miscellaneous
services,  for an aggregate of $24,000 in services  provided by UFAC outside the
scope of the service agreement and for an aggregate of $174,000 paid to UFAC for
all services.

The  Company  believes  that the  charges for the  services  provided  under the
service agreement are competitive or lower than the charges for similar services
and facilities available from third parties.

EXPENSES OTHER THAN COMPENSATION AND FRINGE BENEFITS AND UFAC SERVICE FEES

The Company's  expenses  other than  compensation  and fringe  benefits and UFAC
service fees  decreased  $163,000 or 16.9% during the six months ended  December
31, 2000 as compared to the same period of the prior fiscal year.  The principal
items  affecting  these  expenses are decreases of $101,000 in bad debt expense,
$68,000  in  office  expenses,  $37,000  in  computer  consulting,   $21,000  in
depreciation  and  amortization,  and $20,000 in advertising and promotion,  and
increases of $67,000 in legal fees and $43,000 in audit and accounting services.

The Company has  traditionally  advanced funds to  franchisees  and licensees to
assist them in the initial  start-up and growth of their  business.  The Company
reserves for such loans based upon historical  experience and current changes in
circumstances.  Loans are reserved for when the Company determines that the loan
is  uncollectible  or  when   collectibility  of  the  entire  loan  balance  is
questionable.  During the six months ended  December  31, 2000,  the Company had
lower  incidents of loans turning into  uncollectible  or  questionable  debt as
compared to the same period of the prior fiscal  year,  thereby  decreasing  bad
debt expense by $101,000.

                                        8
<PAGE>
Office expenses decreased  primarily due to the Company's  purchases of supplies
being greater  during the six months ended  December 31, 1999 in  preparation of
Year 2000.  The Company  wanted to ensure an ample  inventory of supplies in the
event of any  shortages.  Furthermore,  the  Company has nearly  eliminated  all
office expenses associated with the Tucson,  Arizona adjusting office.  Computer
consulting  fees decreased also as the need for such services was greater during
the six months ended December 31, 1999 in preparation for Year 2000.

The decrease in advertising  and promotional  expenses  reflects the purchase of
promotional  items during the six months  ended  December 31, 1999 that were not
made during the current period.  Furthermore,  this reduction is also due to the
non-renewal  of the  Company's  share in a luxury  suite at a sporting  facility
during fiscal 2000.

Legal fees and audit and  accounting  services  increased  during the six months
ended  December 31, 2000 as compared to the same period of the prior year as the
Company's  need for such services  increased in preparation of the once proposed
and now terminated transaction with UFAC.

INCOME TAXES

The Company's income taxes for the six months ended December 31, 2000 were 39.0%
of its income before taxes, or approximately  the same as they were in the prior
fiscal year.  Changes made in the tax laws by various  states and by the federal
government have not had a material  effect on the Company's  current overall tax
rates;  however,  there is no assurance  that such changes will not occur in the
future.

OTHER INCOME

The Company's  other income  increased  $46,000 or 53.5% from $86,000 in the six
months ended  December 31, 1999 to $132,000 in the six months ended December 31,
2000. This increase is primarily due to the $56,000 increase in interest income,
as the  Company has earned more  interest on its  available  cash this period as
compared  to the same  period of the prior  fiscal  year due to an  increase  in
available  cash and the  investment  of a  higher  percentage  of the  Company's
available cash.

NET INCOME

The  Company's net income for the six months ended  December 31, 2000  increased
$338,000 or 59.7% from  $566,000 in the six months  ended  December  31, 1999 to
$904,000 in the current period.  The most significant items affecting net income
were a $177,000  decrease in revenue,  a $545,000  decrease in compensation  and
fringe  benefits,  a $163,000  decrease in expenses other than  compensation and
fringe benefits and UFAC service fees, and a $46,000 increase in other income.

RESULTS OF  OPERATIONS - THREE MONTHS  ENDED  DECEMBER 31, 2000  COMPARED TO THE
THREE MONTHS ENDED DECEMBER 31, 1999

REVENUE

The Company's  revenue  decreased 6.1% or $96,000 to $1,471,000 during the three
months ended  December 31, 2000 from  $1,567,000 in the same period of the prior
fiscal year. The decrease  represents an $108,000 decrease in adjusting and risk
management  fees and a $12,000  increase in continuing  licensee and  franchisee
fees.

The decrease of $108,000 in adjusting  and risk  management  fees to $186,000 in
the three months ended December 31, 2000 compared to $294,000 in the same period
of the prior fiscal year  represents a 36.7% decrease.  The Company  experienced
decreases of $40,000 in adjusting fees in its Phoenix,  Arizona office,  $46,000
in adjusting fees in its Tucson,  Arizona office (due to sale of this location),
and $22,000 in adjusting fees in its Las Vegas/Henderson, Nevada office.

The decrease in the Phoenix  adjusting  office is primarily due to a decrease in
claims  assigned by clients  during the three months ended  December 31, 2000 as
compared to the prior year.  The  decline in the Las  Vegas/Henderson  adjusting
office is  predominately  the  result of a decrease  in storms  during the three
months  ended  December  31, 2000 as  compared to the same  quarter of the prior
year. The decrease in the Tucson adjusting office is the result of the Company's
sale of the Tucson office to a new franchisee on January 1, 2000.

                                        9
<PAGE>
The Company's  revenue from  continuing  licensee and franchisee  fees increased
$12,000 or 1.0% from  $1,273,000 in the three months ended  December 31, 1999 to
$1,285,000 in the current  quarter.  This  increase  reflects the benefit to the
Company's  licensees and franchisees from an increase in claims assignments from
insurance companies and self-insureds.

The Company's revenue is affected by numerous matters including the workloads of
other companies and claims presented by their clients. Therefore, the Company is
unable to project its future revenue.  The Company has historically  seen growth
in the licensee and franchisee  fees paid, with exception to the loss of a major
client in 1997. To further  enhance  revenue  growth,  the Company  continues to
develop and  implement  sales and  marketing  efforts to take  advantage  of its
geographic diversity as well as the unique strengths of its individual licensees
and franchisees.  With the addition of the marketing  resources provided by UFAC
(See "Service Fees"),  the Company hopes to see continued growth in licensee and
franchisee fees paid.

COMPENSATION AND FRINGE BENEFITS

Compensation  and  employee  benefits  represents  approximately  45.5%  of  the
Company's  costs and expenses  and also  represents  the largest  single item of
expense.  These expenses  decreased $337,000 or 48.1% from $700,000 in the three
months ended December 31, 1999 to $363,000 in the current quarter.  The majority
of this decrease  relates to the  resignation  of an Executive Vice President on
January 31, 2000.  During the three months ended  December 31, 1999, the Company
was still paying  compensation  and benefits  associated  with his employment in
addition  to a  severance  package.  Certain  services  provided  by the  former
Executive  Vice  President  are now  provided  by  UFAC  pursuant  to a  service
agreement between the Company and UFAC. Charges for these services are reflected
in a fixed  monthly  fee paid to UFAC under the service  agreement.  For further
discussion, see "Service Fees".

The decrease  further  reflects the fact that most of the adjusters  employed by
the Company-owned adjusting offices are compensated by commission based on their
adjusting services.  As the adjusting fees in these offices decrease,  the wages
paid to these  adjusters also  decrease.  During the three months ended December
31, 2000,  wages paid to adjusters  had  decreased by $41,000 as compared to the
same quarter of the previous year.  Finally,  the Company has reduced the amount
of compensation  paid to employees due to the departure and  non-replacement  of
certain salaried personnel.

SERVICE FEES

On April 30,  1999,  the  Company  entered  into a service  agreement  with UFAC
whereby the Company pays a $25,000 monthly fee for certain services  provided by
UFAC.  Services  included  under  this  agreement  are  management,   marketing,
technology, human resource support and accounting and reporting support. For the
three months ended December 31, 2000 and 1999, the Company  incurred  $75,000 in
service fees under this agreement.

The  Company  also  pays UFAC for  services  performed  beyond  the scope of the
service  agreement.  For the three months ended  December 31, 2000,  the Company
incurred an additional  $4,000 for computer  consulting fees,  telephone support
for the Company's  after-hour hotline and other miscellaneous  services,  for an
aggregate of $79,000 paid to UFAC for all services.

The  Company  believes  that the  charges for the  services  provided  under the
service agreement are competitive or lower than the charges for similar services
and facilities available from third parties.

EXPENSES OTHER THAN COMPENSATION AND FRINGE BENEFITS AND UFAC SERVICE FEES

The Company's  expenses  other than  compensation  and fringe  benefits and UFAC
service fees decreased  $146,000 or 29.1% during the three months ended December
31, 2000 as compared to the same period of the prior fiscal year.  The principal
items  affecting  these  expenses are  decreases of $72,000 in bad debt expense,
$49,000  in office  expenses,  $27,000 in  computer  consulting  and  $11,000 in
depreciation  and  amortization and increases of $34,000 in audit and accounting
services and $32,000 in legal fees.

The Company has  traditionally  advanced funds to  franchisees  and licensees to
assist them in the initial  start-up and growth of their  business.  The Company
reserves for such loans based upon historical  experience and current changes in
circumstances.  Loans are reserved for when the Company determines that the loan
is  uncollectible  or  when   collectibility  of  the  entire  loan  balance  is
questionable.  During the three months ended  December 31, 2000, the Company had
fewer  incidents of loans turning into  uncollectible  or  questionable  debt as
compared to the same quarter of the prior fiscal year,  thereby  decreasing  bad
debt expense by $72,000.

                                       10
<PAGE>
Office expenses decreased  primarily due to the Company's  purchases of supplies
being greater  during the three months ended December 31, 1999 in preparation of
Year 2000.  The Company  wanted to ensure an ample  inventory of supplies in the
event of any  shortages.  Furthermore,  the  Company has nearly  eliminated  all
office expenses associated with the Tucson,  Arizona adjusting office.  Computer
consulting  fees decreased also as the need for such services was greater during
the three months ended December 31, 1999 in preparation for Year 2000.

Legal fees and audit and accounting  services  increased during the three months
ended  December 31, 2000 as compared to the same period of the prior year as the
Company's  need for such services  increased in preparation of the once proposed
and now terminated transaction with UFAC.

INCOME TAXES

The  Company's  income taxes were 42.4% and 42.3% of its income before taxes for
the three months ended December 31, 2000 and 1999, respectively. Changes made in
the tax laws by various  states  and by the  federal  government  have not had a
material effect on the Company's current overall tax rates; however, there is no
assurance that such changes will not occur in the future.

OTHER INCOME

The Company's other income increased  $13,000 or 23.6% from $55,000 in the three
months ended December 31, 1999 to $68,000 in the three months ended December 31,
2000.  This increase  reflects the increase of $25,000 in interest  income and a
decrease of $12,000 in  miscellaneous  income.  Interest income has increased as
the Company's available cash has increased this quarter as compared to the prior
year and has earned more  interest on a higher  percentage of cash invested this
quarter.

NET INCOME

The Company's net income for the three months ended  December 31, 2000 increased
$228,000 or 114.6% from $199,000 in the three months ended  December 31, 1999 to
$427,000 in the current period.  The most significant items affecting net income
were a decrease  in revenue of $96,000,  a decrease of $337,000 in  compensation
and  fringe  benefits,  and a  decrease  of  $146,000  in  expenses  other  than
compensation and fringe benefits and UFAC service fees.

ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market risk is the risk of loss to future earnings,  fair values, or future cash
flows  due to  potential  changes  in the  price of a  financial  instrument.  A
financial  instrument's  value may  change as a result of  changes  in  interest
rates, exchange rates, commodity prices, equity prices and other market changes.
Market risk is inherent in all market risk sensitive financial instruments.

During the six months  ended  December  31,  2000,  the  Company did not own any
marketable  equity  securities  and is therefore  not exposed to any market risk
associated with such investments.

The Company has an investment  in municipal  bonds with a book value of $619,000
as of  December  31,  2000  which  it  carries  as  long  term  held-to-maturity
investments.  An  increase in  interest  rates would  result in a decline in the
market  value of the bonds.  These bonds mature  between  2005 and 2031.  As the
company has the intent and ability to hold these bonds to  maturity,  the market
risk associated with these bonds is  insignificant  and does not have a material
effect on the financial statements.

Although  the Company  wholly owns a Canadian  subsidiary,  the cash held by the
Canadian subsidiary is not material to the Company's operations.  Therefore, any
foreign currency  fluctuations would not have a material effect on the Company's
financial statements.

                                       11
<PAGE>
                           PART II - OTHER INFORMATION

ITEM 1 - LEGAL PROCEEDINGS

In June  1999,  Safeway  Inc.  filed a  complaint  against  multiple  defendants
including  the Company in the United  States  District  Court in  Nebraska.  The
complaint  arises from the alleged  embezzlement  of over $1,800,000 by a former
franchisee of the Company.  The complaint  alleges claims against the Company in
connection  with claims  services  provided  for the  benefit of Safeway,  Inc.,
including breach of fiduciary duty,  negligent  failure to monitor or supervise,
vicarious  liability and breach of contract.  The complaint  seeks an accounting
and a recovery of compensatory  damages of at least $1,800,000.  The Company has
denied the allegations of liability  contained in the complaint.  As the lawsuit
is still in its earliest phase,  the Company cannot yet assess the merits of the
complaint  or  whether  this  suit will have a  material  adverse  effect on the
Company.  The Company has sought  coverage under various  insurance  policies it
holds and has received  denials of coverage  from the  carriers.  The Company is
continuing to attempt to obtain coverage and defense from these carriers.  As of
December 31,  2000,  the Company has not accrued any  liability  with respect to
this lawsuit.

From time to time in the normal course of its business,  the Company is named as
a defendant in lawsuits.  With exception to the complaint  described  above, the
Company does not believe that it is subject to any such  lawsuits or  litigation
or threatened lawsuits or litigation that will have a material adverse effect on
the Company or its business.

ITEM 2 - NOT APPLICABLE

ITEM 3 - NOT APPLICABLE

ITEM 4 - SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS

On December 14, 2000, the Company held its 2000 Annual Shareholders' Meeting.

The Company's  Board of Directors were  reelected  with  8,443,236  shares being
cast.  The  Directors  elected  and the  numbers of votes each  received  are as
follows:

          Charles E. Becker                                  8,333,200
          Eric J. Carlstrom                                  8,334,317
          Peter I. Cavallaro                                 8,339,866
          John M. Davies                                     8,344,217
          Mark A. Freeman                                    8,344,217
          Jeffrey R. Harcourt                                8,344,217
          Jeffrey C. Jordan                                  8,344,217
          Anthony Puglisi                                    8,344,217
          Kenneth A. Sexton                                  8,333,200

The Company's  shareholders ratified the appointment of McGladrey & Pullen, LLP,
Certified Public  Accountants,  as the auditors of the Company for the Company's
fiscal  year  ending  June 30, 2001 with  8,324,324  affirmative  votes,  37,722
against and 81,190 abstaining.

The Company's  shareholders  approved an amendment to the Company's  Articles of
Incorporation  to conform the current  limitations of liability of the Company's
directors  with the revised  Arizona  Business  Corporation  Act with  7,667,407
affirmative votes, 77,722 against and 698,107 abstaining.

The Company's  shareholders  approved an amendment to the Company's  Articles of
Incorporation to conform the current indemnification provisions with the revised
Arizona  Business  Corporation  Act with  7,659,268  affirmative  votes,  73,797
against and 710,171 abstaining.

The Company's  shareholders  approved an amendment to the Company's  Articles of
Incorporation  to conform  the  provisions  regarding  directors'  conflicts  of
interest  provisions  to the  revised  Arizona  Business  Corporation  Act  with
7,662,234 affirmative votes, 69,332 against and 711,680 abstaining.

                                       12
<PAGE>
The Company's  shareholders  approved an amendment to the Company's  Articles of
Incorporation  to update the description of the purpose for which the Company is
organized and the character of business that the Company conducts with 6,246,939
affirmative votes, 58,671 against and 708,121 abstaining.

The Company's  shareholders  approved an amendment to the Company's  Articles of
Incorporation  to update the provisions of Article 4 regarding  serial preferred
stock with 6,156,599 affirmative votes, 57,281 against and 799,851 abstaining.

The Company's  shareholders  approved an amendment to the Company's  Articles of
Incorporation  to  maintain  certain  corporate  records  at the known  place of
business of the Company with  7,671,788  affirmative  votes,  59,797 against and
711,651 abstaining.

The  Company's  shareholders  approved  an  amendment  and  restatement  of  the
Company's  Articles  of  Incorporation  in the  form of the  Amended  and  First
Restated  Articles of  Incorporation  of the  Company to conform  the  Company's
Articles to certain changes under the revised Arizona  Business  Corporation Act
and to reflect certain other technical changes with 6,242,949 affirmative votes,
61,381 against and 709,401 abstaining.

ITEM 5 - NOT APPLICABLE

ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K

(a)  Exhibits

     3(i)(a)  Amended and First Restated Articles of Incorporation
     3(ii)(a) Amended and First Restated Bylaws

(b)  The Company  filed an 8-K on November  21, 2000 and an 8-K/A on December 7,
     2000 to report a change in the Company's  independent  accountants  for the
     fiscal year ending June 30, 2001

                                   SIGNATURES

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


                                        FRONTIER ADJUSTERS OF AMERICA, INC.


Date: 2/2/01                            /s/ John M. Davies
                                        ----------------------------------------
                                        John M. Davies, President, Chief
                                        Executive Officer, Chairman of the
                                        Board and Director


Date: 2/2/01                            /s/ Jeffrey R. Harcourt
                                        ----------------------------------------
                                        Jeffrey R. Harcourt, Chief Financial
                                        Officer, Treasurer and Director

                                       13