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

                                   FORM 10-K/A


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

For the fiscal year ended July 2, 2005

                                       OR

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

For the transition period from ___________ to ____________

Commission File Number 333-37617

                                DELTA MILLS, INC.
          ------------------------------------------------------------
                  (Exact name of registrant as specified in its charter)

        DELAWARE                                 13-2677657
------------------------         --------------------------------------------
  (State of Incorporation)            (I.R.S. Employer Identification No.)

  700 North Woods Drive
  Fountain Inn, South Carolina                              29644
------------------------------------------------      --------------------
(Address of principal executive offices)                  (Zip code)

                                  864-255-4100
          ------------------------------------------------------------
              (Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

                                                 Name of each exchange
                 Title of each class              on which registered
                 -------------------          ------------------------------

                          None                       Not Applicable

Securities registered pursuant to Section 12(g) of the Act:

                               Title of each class

                                      None





<PAGE>


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 _____
                     -------

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K [ ].

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Exchange Act Rule 12b-2).

         Yes                        No __X___
             --------

The aggregate market value of the common equity stock held by non-affiliates of
the registrant as of January 1, 2005 was:

           Common Stock, $.01 par value  - 0

The number of shares outstanding of each of the registrant's classes of Common
Stock, as of September 30, 2005 was:

         Common Stock, par value $.01           100

THE REGISTRANT MEETS THE CONDITIONS SET FORTH IN GENERAL INSTRUCTIONS (I)(1)(a)
AND (b) OF FORM 10-K AND IS THEREFORE FILING THIS FORM WITH THE REDUCED
DISCLOSURE FORMAT.


                                EXPLANATORY NOTE


This amendment is being provided to amend Items 1 and 2 of Part I of the
Company's Annual Report on Form 10-K for the fiscal year ended July 2, 2005. The
changes to these items clarify that the facility at Pamplico, South Carolina
that the Company has announced will be closed includes both the Pamplico and
Cypress plants at that location, which the Company considers to be one
"facility" or "plant"; therefore, after the plant closings, which were announced
on August 11, 2005, are complete, the Company will have two plants remaining in
operation.





                                       2
<PAGE>


PART I.

Item 1.  BUSINESS

General

Delta Mills, Inc. ("Delta Mills" or the "Company") is a Delaware corporation
with its principal executive offices located at 700 North Woods Drive, Fountain
Inn, South Carolina 29644 (telephone number: 864-255-4100). The Company is a
wholly owned subsidiary of Delta Woodside Industries, Inc. ("Delta Woodside"), a
South Carolina corporation, the common stock of which is listed on the NASDAQ
OTC Bulletin Board under the symbol "DLWI". Unless the context otherwise
requires, all references herein to "Delta Mills" or the "Company" refer to Delta
Mills, Inc. and any of its existing and future subsidiaries. The Company was
incorporated in Delaware in 1971 and acquired by a predecessor of Delta Woodside
Industries, Inc. in 1986.


Since 2001, Delta Mills has closed three plants and has recently announced plans
to close two more, which will leave it with two operating plants once recently
announced plans are completed. During fiscal year 2002, the Company announced
the closing of its Furman weaving facility in Fountain Inn, South Carolina and
recently completed the liquidation of the related assets. The Company announced
the closing of its Catawba yarn manufacturing facility in Maiden, North Carolina
in fiscal year 2003 and the closing of its Estes weaving facility in Piedmont,
South Carolina in fiscal year 2005 and completed the liquidation of the related
assets of both of these facilities in fiscal year 2005. In fiscal year 2005, the
Company also eliminated its yarn manufacturing operations at its Beattie Plant
in Fountain Inn, South Carolina and began purchasing all of its yarn from
independent suppliers.

On August 11, 2005, the Company announced implementation of its comprehensive
fiscal year 2006 business plan, which will result in the Company's exit from the
woven synthetics business by the closure of its Pamplico/Cypress spinning and
weaving facility in Pamplico, South Carolina (collectively hereinafter sometimes
referred to as the "Pamplico plant" or the "Pamplico weaving facility") and its
Delta #2 finishing facility located in Wallace, South Carolina. The Company
expects to complete the closing of these facilities in the second quarter of
fiscal year 2006 as production requirements dictate.


When the Company completes the plant closings under its 2006 business plan, its
business will consist of (1) the manufacture and sale of cotton and
cotton/synthetic blend fabrics to apparel manufacturers and resellers, which in
turn sell primarily to department stores and other retailers, and (2) the
manufacture and sale of camouflage print fabrics primarily to apparel
manufacturers that contract with the US Government to fulfill its requirements
for military uniforms.

Products, Raw Materials, and Manufacturing

The Company currently manufactures woven textile fabrics from cotton yarn, wool,
flax or synthetic fibers or from synthetic filament yarns. Cotton yarn,
cotton/synthetic blend yarn, wool, flax, synthetic fibers and synthetic filament
yarns are purchased from a small number of competitive suppliers. The Company
purchases the spun yarns used in its cotton weaving operations from a small
number of domestic spinners and currently spins the major portion of the spun
yarns used in its synthetic weaving operations. Prior to the Company's 2005
Realignment Plan, which incorporated the closing of its Estes Plant and the
closing of its yarn manufacturing operations at its Beattie Plant, the Company
manufactured the majority of its cotton and cotton/synthetic blend yarn. In
manufacturing yarns, the synthetic fibers, either separately or in blends, are
carded (fibers straightened and oriented) and then spun into yarn. In other
fabrics, filament yarns are used. The spun or filament yarn is then woven into
fabric on looms. The unfinished fabric at this stage is referred to as greige
goods. Finished fabric refers to fabric that has been treated by washing,
bleaching, dyeing and applying certain chemical finishes. Finished apparel
fabric is ready to be cut and sewn into garments.

Subsequent to July 2, 2005, the Company's Board of Directors approved the
implementation of a comprehensive fiscal year 2006 Business Plan (the "2006
Plan"). The plan was announced on August 11, 2005 and includes the Company's
exit from the synthetics business. The Company will close the two plants
dedicated to the synthetics product lines: Its Pamplico weaving facility in

                                       3
<PAGE>

Pamplico, SC and its Delta #2 finishing facility located in Wallace, SC. The
Company expects to complete the closing of these facilities in the second
quarter of fiscal year 2006 as production requirements dictate.

The Company's principal raw materials are cotton yarn and cotton/synthetic blend
yarn, although it also spins polyester, wool, linen fiber, acrylic, lyocell and
rayon fibers and weaves textured polyester filament. Polyester is obtained
primarily from two major suppliers, both of whom provide competitive prices.
Polyester prices increased several times during fiscal year 2005, with a price
per pound of $0.62 at the end of fiscal year 2004 compared to $0.74 at the end
of fiscal year 2005. In prior years, as a part of the Company's business of
converting fiber to finished fabric, the Company made raw cotton purchase
commitments and then fixed prices with cotton merchants who buy from producers
and sell to textile manufacturers. As part of the 2005 Realignment Plan, the
Company ceased internal production of cotton yarns and no longer purchases raw
cotton In fiscal year 2005, the Company began to enter into cotton yarn purchase
commitments and then fix prices with the yarn vendors The Company believes that
recent cotton prices have enabled it to contract for cotton yarn at prices that
will permit it to be competitive with other companies in the United States
textile industry when the cotton yarn purchased for future use is put into
production. To the extent that cotton prices decrease before the Company uses
these future yarn purchases, the Company could be materially and adversely
affected, as there can be no assurance that it would be able to pass along its
higher costs to its customers. In addition, to the extent that cotton prices
increase and the Company has not provided for its requirements with fixed price
yarn contracts, the Company may be materially and adversely affected, as there
can be no assurance that it would be able to pass along these increased costs to
its customers. The Company purchases most of its cotton yarn requirements from
one supplier. Approximately 92% of the Company's cotton yarn purchases in fiscal
year 2005 were from this supplier. While alternative sources of cotton yarn
exist, a loss of this supplier as a source of cotton yarn could have a temporary
disruptive effect on the Company.

Most of the Company's raw materials are available from more than one primary
source, but the Company is currently depending primarily on one supplier for
rayon staple. The Company does not currently have an alternate domestic source
for rayon staple. However, in light of the Company's announced exit from the
Synthetics business, the Company believes its remaining rayon requirements will
be met by this supplier.

During fiscal years 2005, 2004 and 2003, approximately 84%, 84% and 77%,
respectively, of the Company's finished fabric sales were of fabrics made from
cotton or cotton/synthetic blends, while approximately 16%, 16%, and 23%,
respectively, of such sales were of fabrics made from spun synthetics and other
natural fibers, including various blends of rayon, polyester, and wool. Fabrics
are generally produced and shipped pursuant to specific purchase orders, which
minimizes the Company's uncommitted inventory levels. The Company's production
of cotton and cotton/synthetic blend and spun synthetic finished woven fabrics
was largely vertically integrated until fiscal year 2005, with the Company
performing most of its own spinning, weaving and finishing. With the closing of
the Estes Plant and the closing of the yarn manufacturing operations at the
Beattie Plant, the Company now purchases from outside suppliers all of its
cotton and cotton/synthetic blend yarns. The Company's finished fabrics plants
are currently operating at less than full capacity.

Sales and Marketing

The Company has focused its marketing efforts in its commercial business on
building close relationships with major apparel companies that have broad
distribution channels and that the Company believes have positioned themselves
for long-term growth. The Company has focused its marketing efforts in its
government business on military uniform awards issued to garment manufacturers
and discussions with the appropriate government procurement agencies and major
garment manufacturers in order to stay abreast of the most current information
and requirements with respect to government funding, uniform fabric requirements
and sourcing needs. The Company sells its fabrics primarily to numerous apparel
manufacturers and apparel resellers and their subcontractors. These
manufacturers and resellers include Levi Strauss or its subcontractors, Haggar
Corp., the Wrangler (R) and Lee(R) divisions of V.F. Corporation, and Liz
Claiborne, Inc. and private label apparel manufacturers for J.C. Penney Company,
Inc., Sears, Roebuck & Co., Wal Mart Stores, Inc. and other retailers. The
Company believes that it is a leading producer of cotton pants-weight woven
fabric used in the manufacture of casual slacks such as Levi Strauss' Dockers(R)
and Haggar Corp.'s Wrinkle-free(R). Other apparel items manufactured with the
Company's fabrics include women's chino pants, and career apparel (uniforms).
The Company also sells camouflage fabric and other fabrics to apparel
manufacturers for their use in manufacturing apparel for the United States

                                       4
<PAGE>

Department of Defense. We refer to this as our "government business" (however,
Delta Mills itself has no direct contracts with the Department of Defense and,
therefore, our government business is not subject to renegotiation of profits).
The Company sells its fabrics through Delta Mills Marketing Inc., a wholly owned
subsidiary with a marketing office based in New York City (which serves the
United States, Canadian and Mexican markets), with sales agents also operating
in Atlanta, Dallas, San Francisco. During fiscal year 2006, the Company plans to
acquire sales representation in the Caribbean basin.

For fiscal year 2005, the Company had one customer, Levi Strauss and its
subcontractors, which exceeded 10% of consolidated net sales. The Company's net
sales to this customer totaled $22 million, or approximately 14%, of net sales
in fiscal year 2005. For fiscal year 2004, the Company had two customers, V.F.
Corporation, and Levi Strauss, which exceeded 10% of consolidated net sales. The
Company's net sales to these customers totaled $45 million, or approximately
26%, of net sales in fiscal year 2004. For fiscal year 2003, the Company had
three customers, Levi Strauss, Haggar Apparel and V.F. Corporation, net sales to
each of which exceeded 10% of consolidated net sales. The Company's net sales to
these customers totaled $71 million, or approximately 40%, of net sales in
fiscal year 2003. There is a trend towards selling directly to subcontractors of
major apparel companies either in addition to or in lieu of sales directly to
the major apparel companies themselves. The foregoing amounts include sales
directly to subcontractors of the named apparel companies. In addition, during
fiscal years 2005, 2004, and 2003, net sales of military fabrics to apparel
customers accounted for approximately 47%, 44%, and 33%, respectively, of the
Company's total net sales. The loss of any of these accounts could have a
material adverse effect on the results of the Company.

Part of the Company's competitive business strategy is to develop and maintain
well-established relationships with its customers. This requires that we respond
quickly to customer needs, particularly to assist customers with their
replenishment programs, but also requires us to bill-and-hold when customers'
schedules are delayed. Goods are ordered by our customers for the express
business purpose of providing finished apparel fabric to the customer's
specification in order to fulfill the customer's requirements associated with
the customer's garment manufacturing operation. From the time of the customer's
order to the time of the completion of our manufacturing of the customer's
goods, the customer may realize a need to change its manufacturing schedule. In
these instances the customer may request a delay in shipment of the goods, and,
at the customer's request, we will bill and hold the goods. As a result, the
Company records a portion of its revenues on a bill and hold basis, invoicing
goods that have been produced, packaged and made ready for shipment. The goods
are effectively segregated from inventory which is available for sale. The risk
of ownership of the goods has passed to the customer, and remittance terms are
consistent with all other sales by the Company. The Company recognized revenue
from such bill-and-hold sales of approximately $38.8 million, $52.5 million and
$71.9 million in fiscal years 2005, 2004 and 2003, respectively. The Company's
sales agreements do not give the buyer a right of return. When returns and
allowances are authorized by the Company, returns and allowances are accounted
for as a reduction to sales, and sales are reported net of returns and
allowances. Allowances are charged against sales at the full dollar amount of
the allowance.

Order Backlog

The Company's order backlog at July 2, 2005 was $56.8 million, an increase of
$15.2 million from the $41.6 million order backlog at July 3, 2004. The increase
in the order backlog was primarily due to a recent increase in the demand for
the Company's commercial cotton products, as well as an increase in the demand
for fabrics in our government business.

Over the last several years many of the Company's commercial customers have
shortened lead times for delivery requirements. Because of shortened lead time
coupled with inconsistent demand at retail, management believes that the order
backlog at any given point in time may not be an indication of future sales. The
Company expects to ship the majority of the orders that make up its order
backlog during the next twelve months.


Competition

The cyclical nature of the textile and apparel industries, characterized by
rapid shifts in fashion, consumer demand and competitive pressures, results in
both price and demand volatility. The demand for any particular product varies
from time to time based largely upon changes in consumer preferences and general
economic conditions affecting the textile and apparel industries, such as

                                       5
<PAGE>

consumer expenditures for non-durable goods. In recent years, the Company has
seen a trend toward shorter lead times for its customers' orders. The textile
and apparel industries are also volatile because the supply of particular
products changes as competitors enter or leave the market.

The Company sells primarily to domestic apparel manufacturers, many of which
operate offshore sewing operations. The Company competes with numerous domestic
and foreign fabric manufacturers, including companies larger in size and having
greater financial resources than the Company. The principal competitive factors
in the woven fabrics markets are price, service, delivery time, quality and
flexibility, with the relative importance of each factor depending upon the
needs of particular customers and the specific product offering. Management
believes that the Company can maintain its ability to compete effectively by
providing its customers with a broad array of high-quality fabrics at
competitive prices on a timely basis.

The Company's competitive position varies by product line. There are several
major domestic competitors in the finished cotton and cotton/polyester blend
woven fabrics business, none of which dominates the market. The Company
believes, however, that it has a strong competitive position in the all cotton
pants-weight fabrics business. In addition, the Company believes that it is one
four finishers that print camouflage for sale to apparel suppliers of the U.S.
Government and the only supplier that is vertically integrated for camouflage
production. We believe additional competitive strengths of the Company include:
knowledge of its customers' business needs; its ability to produce special
fabrics such as textured blends; state of the art weaving and fabric finishing
equipment; vertical integration; and its ability to communicate electronically
with its customers.

Foreign competition is a significant factor in the United States fabric market.
The Company believes that its relatively small manual labor component,
highly-automated manufacturing processes and domestic manufacturing base allow
the Company to compete on a price basis and to respond more quickly than foreign
producers to changing fashion trends and to its domestic customers' delivery
schedules. In addition, the Company benefits from protections afforded to
apparel manufacturers based in certain Latin American and Caribbean countries
that ship finished garments into the United States. The North American Free
Trade Agreement (often referred to as "NAFTA") entered into force on January 1,
1994. NAFTA has effectively eliminated all tariffs and quotas on goods imported
from Mexico if such goods are made from fabric originating in Canada, Mexico, or
the United States. The Caribbean Basin Trade Partnership Act (often referred to
as "CBTPA") became effective on October 1, 2000. CBTPA has effectively
eliminated tariffs and quotas on apparel products imported from participating
Caribbean and Central American nations if such products are made from fabric
woven in the United States of U.S. yarn. Because NAFTA and CBTPA create an
incentive to use fabric manufactured in the United States, they are beneficial
to the Company and other domestic producers of apparel fabrics. In contrast,
apparel not meeting the origin requirements of these trade preference agreements
is subject to tariffs. If NAFTA or CBTPA were repealed or altered in whole or in
part, the Company believes that it could be at a serious competitive
disadvantage relative to textile manufacturers in other parts of the world
seeking to enter the United States market, which would have a material adverse
effect on the Company. Moreover, there can be no assurance that the current
favorable regulatory environment will continue or that other geographic areas
will not be afforded similar regulatory advantages.

The World Trade Organization (often referred to as the "WTO"), a multilateral
trade organization, was formed in January 1995 and is the successor to the
General Agreement on Tariffs and Trade or "GATT". This multilateral trade
organization has set forth mechanisms by which world trade in clothing is being
progressively liberalized by phasing-out quotas and reducing duties. The WTO
phased out textile and apparel quotas as of the end of calendar year 2004 and
imports of textile and apparel products have surged in many categories. The
phase-out has had some negative effect on our commercial synthetics business but
it is too soon to determine what long-term effect it will have on our commercial
cotton business. While we recognize that our Asian competitors will have a cost
advantage as tariffs on textile/apparel products are reduced (but not
eliminated), we believe we have competitive advantages compared to Asian
competitors and we must fully utilize those advantages. Among our advantages are
our well-established relationships with our customers, our ability to respond
quickly to customer needs and the logistical advantage associated with our
manufacturing being located in North America. However, there can be no assurance
that these advantages will allow us to successfully compete with foreign textile
producers.

In August 2005, the Dominican Republic - Central American U.S. Free Trade
Agreement (DR-CAFTA) was signed into law. DR-CAFTA provides that apparel can be
imported into the U. S. duty-free from any DR-CAFTA country if the yarns and

                                       6
<PAGE>

fabric are made in one or more of the participating countries (Guatemala, EL
Salvador, Honduras, Costa Rica, The Dominican Republic, Nicaragua and the United
States). Effective dates for the implementation of this agreement will be
negotiated by the U. S. President and his counterparts in the DR-CAFTA
participants on a country by country basis. For the participating countries,
when effective, DR-CAFTA will replace CBTPA. We do not anticipate any
significant impact on our business in the foreseeable future from DR-CAFTA;
however it is too early to evaluate fully the effects of this new trade
agreement.

Employees

The Company has approximately 1,000 employees. Unions do not represent any of
the Company's employees and the Company is not aware of any efforts to organize
any of its employees. The Company believes that its relations with its employees
are good.

Environmental

The Company is subject to various federal, state and local environmental laws
and regulations concerning, among other things, wastewater discharges, storm
water flows, air emissions, ozone depletion and solid waste disposal. The
Company's plants generate very small quantities of hazardous waste, which are
either recycled or disposed of off-site. Most of its plants are required to
possess one or more discharge permits.

Two of the Company's South Carolina plants, the Delta 2 and Delta 3 finishing
plants, have experienced and are experiencing high nitrate levels in the
groundwater at the two adjacent sludge spray sites for these plants. The South
Carolina Department of Health and Environmental Control ("DHEC") and the Company
have entered into a consent agreement which requires the Company to monitor the
groundwater until drinking water standards are attained.

In addition, the National Pollutant Discharge Elimination System ("NPDES")
permit issued to the Delta 2 and Delta 3 finishing plants on April 1, 2004,
contained a new parameter for zinc in discharges that the Company is supposed to
meet by April 1, 2006. On March 1, 2005, DHEC allowed the Company to convert
groundwater recovery wells with discharges that exceeded the zinc parameter to
monitoring wells, which brought the Company into compliance with the NPDES
permit's zinc discharge limits.

The Company believes that it can satisfy its permit and DHEC's requirements at
the Delta 2 and Delta 3 finishing plants without material additional cost.
Although there is no assurance that the Company will be successful, and it could
face administrative penalties if it is not, no accrual has been made for such
contingency, and the Company does not currently believe that liability has been
incurred. Even if the Company does incur administrative penalties or additional
costs, it does not believe this matter will have a material adverse impact on
the Company's financial position.

On June 30, 2000, the Company sold its Greensboro, North Carolina plant to the
City of Greensboro. The Company had been working with environmental consultants
in assessing groundwater contamination at this site. Because of these studies,
one-half of the proceeds from the sale of the plant, consisting of approximately
$400,000, were placed in an interest bearing escrow account to cover expenses
related to this contamination. As of the date of this filing, approximately
$305,000 remains in this escrow account. The Company recorded the sale net of
estimated costs to remediate the property. The North Carolina Department of
Environment and Natural Resources is requiring the Company to install a
monitoring well on an adjacent property owner's land. The adjacent owner is
requesting that the Company provide it with the sampling results and indemnify
it from any contamination on its property. If contamination is discovered, the
Company would likely face a claim for damages. Management believes that the
escrow is sufficient to cover any likely expenses related to the remediation of
this property, and consequently has not recognized a liability in the
consolidated financial statements.

Delta Woodside's previously owned Nautilus business has been named as a
"potentially responsible party" ("PRP") under the Comprehensive Environmental
Response, Compensation, and Liability Act ("CERCLA") with respect to three
hazardous waste sites in North Carolina, South Carolina and Mississippi. To
Delta Woodside's knowledge, all of the transactions with these sites were

                                       7
<PAGE>

conducted by a corporation (the "Selling Corporation") whose assets were sold in
1990 pursuant to the terms of an order of the United States Bankruptcy Court to
another corporation, the stock of which was subsequently acquired by Delta
Woodside in January 1993.

At the North Carolina site, the Selling Corporation is listed as a "de Minimis"
party, and at the South Carolina site, the Selling Corporation has been listed
as an "insolvent" party and would appear to qualify as a "de Minimis" party.
Delta Woodside's believes that the Selling Corporation's share of the
liabilities at either of these sites will be immaterial.

At the Mississippi ("ERS") site, the PRP group completed the surface removal
action and investigated soil and groundwater contamination, both at the site and
in the surrounding area. Delta Woodside's latest information is that the Selling
Corporation is ranked eleventh out of a total of over 300 PRPs in contributions
of material to the site, and, based on volume, the Selling Corporation
contributed approximately 3% of the site's material. To Delta Woodside's
knowledge, estimates of costs to clean-up the site were $4 million, and could be
higher. Trichloromethane, one of the substances delivered by the Selling
Corporation to the site, was found in the site's groundwater and at nearby
drinking water wells. The EPA referred the site to the Mississippi Department of
Environmental Quality ("MDEQ") in 1996. In August of 2001, MDEQ indicated to a
third party that it was still considering action at the site. On June 16, 2004,
MDEQ conducted a site investigation to determine if any homes around the site
still used private water wells and located three such homes. On October 13,
2004, a contractor wrote to EPA that "residents downgradient of the ERS property
are currently being exposed to unacceptable concentrations of contaminants ....
Therefore, it is recommended that EPA take immediate action to mitigate
exposures to contaminated groundwater by residents at [two addresses].... [I]t
appears that groundwater contamination has expanded beyond the extent of
contamination previously identified in 1993.... Therefore, ... a complete survey
of domestic wells in the vicinity of the ERS property should be conducted....
Finally, if it is determined that additional residents are currently being
exposed to unacceptable concentrations of contaminants, it is recommended that
EPA also take immediate action to mitigate exposure at these residences." On
October 18, 2004, MDEQ notified the homeowners that their drinking water wells
were contaminated.

Although no assurance can be provided, Delta Woodside believes that it is
shielded from liability at these three sites by the order of the United States
Bankruptcy Court pursuant to which the Selling Corporation sold its assets to
the corporation subsequently acquired by Delta Woodside. Delta Woodside has
denied any responsibility at these three sites, has declined to participate as a
member of the respective PRP groups, and has not provided for any reserves for
costs or liabilities attributable to the Selling Corporation. No accrual has
been made for these Nautilus contingencies, as we do not believe it is probable
that a liability has been incurred.

On January 10, 2000, the North Carolina Department of Environment and Natural
Resources requested that the Company accept responsibility for investigating the
discharge of hazardous substances at a hazardous waste site known as the Glen
Raven Mills Site, Kings Mountain, North Carolina (the "Site"). A predecessor by
merger of the Company, Park Yarn Mills Company, Inc. ("Park Yarn"), owned the
Site for approximately six (6) years, from 1977 to 1983. the Company is aware of
no evidence that Park Yarn discharged or deposited any hazardous substance at
the Site or is otherwise a "responsible party" for the Site. Further, Park Yarn
filed bankruptcy and was discharged in 1983. Although no assurance can be
provided, any liability of Park Yarn for the Site may have been discharged by
the bankruptcy order. Accordingly, the Company has denied any responsibility at
the Site, declined to undertake any activities concerning the Site, and has not
provided for any reserves for costs or liabilities attributable to Park Yarn. We
believe that any liability of Park Yarn for the Site may have been discharged by
the bankruptcy order. No accrual has been made for this contingency, as we do
not believe that it is probable that a liability has been incurred.

Generally, the environmental rules applicable to the Company are becoming
increasingly stringent. The Company incurs capital and other expenditures in
each year that are aimed at achieving compliance with current and future
environmental standards.

The Company does not expect that the amount of such expenditures in the future
will have a material adverse effect on its operations or financial condition.
There can be no assurance, however, that future changes in federal, state or
local regulations, interpretations of existing regulations or the discovery of
currently unknown problems or conditions will not require substantial additional
expenditures. Similarly, the extent of the Company's liability, if any, for past
failures to comply with laws, regulations and permits applicable to its
operations cannot be determined.

                                       8
<PAGE>

Item 2  PROPERTIES

    The following table provides a description of Delta Mills' principal
facilities.
<TABLE>
<CAPTION>

                                                                               Approximate
                                                                                 Square
Location                                              Utilization                Footage      Owned/Leased
                                                      -----------                -------      ------------


<S>                                                 <C>                           <C>         <C>
Greenville, SC                                      Vacant                         17,400     Leased (1)
New York, NY                                        Sales Offices                   9,100     Leased (2)
Beattie Plant, Fountain Inn, SC                     Weaving and Corporate         390,000     FILOT
                                                    and Administrative
                                                    Offices
Delta 3 Plant, Wallace, SC                          Dyeing and Finishing          555,000     FILOT
Pamplico/Cypress Plant, Pamplico, SC (3)            Spinning and Weaving          419,000     FILOT
Delta 2 Plant, Wallace, SC (3)                      Dyeing and Finishing          347,000     FILOT

</TABLE>

(1) Lease expires in December 2008.
(2) Lease expires in December 2009.
(3) The Company expects to close these plants in the second quarter of fiscal
    year 2006 as described below in this Item 2.

All of the Company's plants are the subject of a "Fee in Lieu of Tax" or "FILOT"
agreement with three Counties within the State of South Carolina. These
agreements are intended to permit counties to attract business investment by
offering property tax incentives. In accordance with South Carolina law, the
Company entered into a sale-leaseback agreement with these Counties and acquired
an Industrial Development Revenue Bond. The arrangement is structured so that
the Company's lease payments to the Counties equal and offset the Counties' bond
payments to the Company. The Bond is non-recourse to the Counties, the Company's
lease payments are pledged to secure repayment of the Bond, and the lease and
Bond provide for the legal right of offset. Consequently, the FILOT arrangement
is not reflected in the Company's financial statements. The agreements have a
maximum expiration date of 2017. Under the terms of the agreements, the Company
must annually submit information regarding the value of the machinery and
equipment in service in each county. The respective Counties will then accept a
fee in lieu of property tax based upon predetermined millage rates. These costs
are included in cost of sales in the Company's consolidated financial
statements. If the Company had not entered into this transaction, property tax
payments would have been higher. The Company can reacquire such property and
terminate the agreement at a nominal price of $1 and, accordingly, the subject
property is included in property, plant, and equipment in the consolidated
balance sheet. If the Company elects to reacquire the subject property prior to
the expiration of the arrangement, it may also be required to make certain
adjusting property tax payments.

Delta Mills leases offices in Greenville, South Carolina. The lease on the
corporate offices expires on December 31, 2008. In January 2005, the Company
relocated its corporate and administrative offices to the Beattie Plant and is
attempting to sub-lease this space to a new tenant, although there can be no
assurance the Company will be successful in its efforts. Sales offices are
leased in New York City under a lease expiring in December 2009. At the date of
execution of this Form 10-K, the Company's plants are operating at less than
full production capacity. The Company believes that its equipment and facilities
are generally adequate to allow it to remain competitive with its principal
competitors.

During or after fiscal year 2005, the Company completed the disposal of three
manufacturing facilities.

     o    During the year ended June 29, 2002, the Company announced the closing
          of its Furman Plant, a weaving facility located in Fountain Inn, South
          Carolina.  The  equipment  run-out  schedule was  completed in October
          2001.  The Company  completed  the process of  liquidating  the assets
          associated with this facility subsequent to July 2, 2005.

                                       9
<PAGE>

     o    During the year ended June 28, 2003, the Company announced the closing
          of its Catawba Plant, a yarn manufacturing facility located in Maiden,
          North Carolina.  The equipment run-out schedule was completed in April
          2003, and the Company  completed the process of liquidating the assets
          associated with this facility during fiscal year 2005. The Company has
          replaced the  production  from this facility with  purchased yarn from
          outside sources.
     o    During the second quarter of fiscal year 2005,  the Company  announced
          the closing of the Estes weaving facility,  capacity reductions in the
          Company's  commercial  synthetics business and the elimination of yarn
          manufacturing at the Beattie plant. The equipment  run-out schedule at
          the Estes  plant was  completed  in  December  2004,  and the  Company
          completed the process of liquidating  the assets  associated with this
          facility during fiscal year 2005.


On August 11, 2005, the Company announced implementation of a comprehensive
fiscal year 2006 Business Plan (the "2006 Plan"). The plan includes the
Company's exit from the synthetics business, including closure of the two plants
dedicated to the synthetics product lines: the Pamplico/Cypress spinning and
weaving facility in Pamplico, SC and the Delta #2 finishing facility located in
Wallace, SC. The Company expects to complete the closing of these facilities in
the second quarter of fiscal year 2006 as production requirements dictate.


The Company's accounts receivable and inventory, and certain other intangible
property, including the capital stock of Delta Mills Marketing, Inc., secure the
Company's credit facility.










                                       10



<PAGE>

                                   SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.


                                             DELTA MILLS, INC.
                                               (Registrant)


          October 5, 2005                    By:  /s/ William F. Garrett
----------------------------------           ---------------------------------
             Date                             William F. Garrett
                                              President, Chief Executive Officer
                                              and Director








                                       11
<PAGE>


                                  EXHIBIT INDEX

31.1        Certification of CEO Pursuant to Section 302 of the Sarbanes - Oxley
            Act of 2002.

31.2        Certification of CFO Pursuant to Section 302 of the Sarbanes - Oxley
            Act of 2002.

32.1        Certification of CEO Pursuant to Section 906 of the Sarbanes - Oxley
            Act of 2002.

32.2        Certification of CFO Pursuant to Section 906 of the Sarbanes - Oxley
            Act of 2002.














                                       12