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

                                    FORM 10-K


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

For the fiscal year ended July 1, 2000

                                       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.)


100  Augusta  Street
Greenville, South Carolina                                       29601
----------------------------                                    -----------
(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



                                        1
<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  [   ].

The  aggregate market value of the common equity stock held by non-affiliates of
the  registrant  as  of  September  25,  2000  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  25,  2000  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.


                                        2
<PAGE>
<TABLE>
<CAPTION>
                                      DELTA MILLS, INC.
                            FOR THE FISCAL YEAR ENDED JULY 1, 2000
                                  FORM 10-K ANNUAL REPORT



                                      TABLE OF CONTENTS
                                                                                         PAGE
PART  I
<S>             <C>                                                                      <C>
Item 1.         Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  4
Item 2.         Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  9
Item 3.         Legal Proceedings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Item 4.         Submission of Matters to a Vote of Security Holders. . . . . . . . . . . . 10

PART II

Item 5.         Market for Registrant's Common equity and Related Stockholder Matters. . . 10
Item 6.         Selected Financial Data. . . . . . . . . . . . . . . . . . . . . . . . . . 11
Item 7.         Management's discussion and Analysis of Financial Condition and
                Results of Operations. . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Item 7A         Quantitative and Qualitative Disclosures about Market Risk . . . . . . . . 16
Item 8.         Financial Statements and Supplementary Data. . . . . . . . . . . . . . . . 17
Item 9.         Changes in and Disagreements with Accountants on Accounting and
                Financial Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . 33

PART III

Item 10.        Directors and Executive Officers of the Registrant . . . . . . . . . . . . 34
Item 11.        Executive Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Item 12.        Security Ownership of Certain Beneficial Owners and Management . . . . . . 34
Item 13.        Certain Relationships and Related Transactions . . . . . . . . . . . . . . 34

PART IV

Item 14.        Exhibits, Financial Statement Schedules and Reports on Form 8-K. . . . . . 35
</TABLE>


                                        3
<PAGE>
ITEM  1  BUSINESS
-----------------

     The  following  discussion  contains  various "forward-looking statements".
All  statements,  other  than  statements  of  historical  fact,  that  address
activities,  events or developments that the Company expects or anticipates will
or  may  occur  in  the  future  are  forward-looking  statements.  Examples are
statements  that  concern  future  revenues,  future  costs,  future  capital
expenditures,  business strategy, competitive strengths, competitive weaknesses,
goals,  plans,  references  to  future success or difficulties and other similar
information.  The  words  "estimate",  "project",  "forecast",  "anticipate",
"expect",  "intend",  "believe"  and  similar  expressions,  and  discussions of
strategy  or  intentions,  are  intended to identify forward-looking statements.

     The  forward-looking statements in this document are based on the Company's
expectations  and are necessarily dependent upon assumptions, estimates and data
that  the  Company  believes  are  reasonable and accurate but may be incorrect,
incomplete  or  imprecise.  Forward-looking  statements  are  also  subject to a
number  of  business  risks  and  uncertainties, any of which could cause actual
results  to  differ  materially  from  those  set  forth  in  or  implied by the
forward-looking  statements.  Accordingly, any forward-looking statements do not
purport  to  be  predictions  of  future  events or circumstances and may not be
realized.

     The  Company  does  not  undertake  publicly  to  update  or  revise  the
forward-looking  statements  even if it becomes clear that any projected results
will  not  be  realized.

GENERAL

     Delta  Mills,  Inc.  ("Delta  Mills"  or  the  "Company")  is  a  Delaware
corporation  with its principal executive offices located at 100 Augusta Street,
Greenville,  South Carolina 29601 (telephone number: 864-255-4100).  The Company
is  a  wholly  owned  subsidiary  of  Delta  Woodside  Industries, Inc., a South
Carolina  corporation, the common stock of which is listed on the New York Stock
Exchange.  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 has one segment in continuing operations: Delta Mills Marketing
Company.  The  Company  is a leading manufacturer and marketer of woven finished
cotton,  synthetic  and  blended  fabrics,  which  are  sold  for  the  ultimate
production  of  apparel.  The  Company  sells  a broad range of finished apparel
fabrics  primarily to branded apparel manufacturers and resellers, including The
Gap,  Levi  Strauss,  Haggar  Corp.,  the  Wrangler   and Lee  divisions of V.F.
Corporation,  Farah  Incorporated,  Kellwood Company 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  and Haggar Corp.'s
Wrinkle-free  .  Other  apparel  items  manufactured  with  the  Company's woven
fabrics include women's chinos pants, women's blazers, career apparel (uniforms)
and  battle  dress  camouflage  military  uniforms.  During fiscal year 2000 the
Company  also  produced  a variety of unfinished light-weight woven fabrics that
were  sold  to  converters  of  finished  products.  Due to import pressure, the
unfinished  fabrics  business was discontinued and replaced with more profitable
product  lines.  This  move  away  from  the  unfinished  fabric  production was
completed  in  the  first  half  of  fiscal  2000.

          During  fiscal  1998,  the  Company made the decision to exit the knit
textile  market  by  closing  its Stevcoknit Fabrics Company operating division.
Stevcoknit  Fabrics  Company  has been reclassified and reported as discontinued
operations.  Most of the liquidation of Stevcoknit Fabrics Company was completed
in  fiscal  1998.

      The  Company  was  incorporated  in  Delaware  in  1971  and acquired by a
predecessor  of  Delta  Woodside  Industries,  Inc.  in  1986.


                                        4
<PAGE>
PRODUCTS,  MARKETING  AND  MANUFACTURING

     The  Company  produces  woven  textile  fabrics.

     Woven  textile  fabrics  produced  for sale by the Company are manufactured
from  cotton, wool or synthetic fibers or from synthetic filament yarns.  Cotton
and  wool are purchased from numerous suppliers.  Synthetic fibers and synthetic
filament  yarns  are  purchased  from a smaller number of competitive suppliers.
The  Company  spins  the  major  portion  of  the spun yarns used in its weaving
operations.  In  manufacturing  these  yarns,  the  cotton and synthetic fibers,
either  separately  or  in blends, are carded (fibers straightened and oriented)
and  then spun into yarn.  The Company combs (removing short fibers) some cotton
fiber  to  make  high quality yarns.  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.

     The  Company  produces  finished  woven  fabrics  used in the production of
apparel.  Finished  apparel  fabric  is  ready to be cut and sewn into garments.

     The  Company  has  focused  its  marketing  efforts  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 sells its woven fabrics primarily to numerous apparel manufacturers
and  apparel  resellers.  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,  Chicago,  Dallas, Los Angeles, San
Francisco  and  Mexico.

     For fiscal year 2000, the Company had three customers, Levi Strauss, Haggar
Corp.,  and  V.F. Corporation, that each exceeded 10% of consolidated net sales.
The Company's sales to these customers were $109 million, $150 million, and $136
million  for fiscal 2000, 1999, and 1998, respectively. The loss of any of these
accounts  could  have  a  material adverse effect on the results of the Company.

     During  fiscal  years  2000, 1999 and 1998, approximately 83%, 78% and 70%,
respectively,  of the Company's finished woven fabric sales were of fabrics made
from  cotton  or cotton/synthetic blends, while approximately 17%, 22%, and 30%,
respectively,  of such sales were of fabrics made from spun synthetics and other
natural  fibers,  including  various blends of rayon, polyester, and wool. Woven
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 is largely vertically integrated, with the Company performing most
of  its  own  spinning,  weaving  and  finishing.  In the production of military
fabrics,  the Company purchases a portion of its greige goods needs and finishes
this  fabric to specifications.  The Company's woven finished fabrics plants are
currently  operating  at  less  than  full  capacity.


RAW  MATERIALS

     The  Company's  principal  raw  material  is cotton, although it also spins
polyester,  wool,  linen  fiber,  acrylic,  lyocell,  nylon and rayon fibers and
weaves  textured polyester filament.  Polyester is obtained primarily from three
major  suppliers,  all  of  whom  provide  competitive  prices.  For fiscal 2000
polyester  prices  reached  the  lowest prices the Company has paid since fiscal
year  1993, but prices increased before the year ended.  Management expects that
trend  to  continue  in  fiscal  2001.  The Company's average price per pound of
cotton purchased and consumed (including freight, carrying cost and cost for the
relatively  high  amount of premium cotton the Company uses) was $.661 in fiscal
year  2000  as  compared  to $.770 in fiscal year 1999, and $.817 in fiscal year
1998.  As  of July 1, 2000, the Company had contracted to purchase about 85% and
had  fixed  the  price for approximately 67% of its expected cotton requirements
for  fiscal year 2001.  The percentage of the Company's cotton requirements that
the  Company  fixes  each  year  varies depending upon the Company's forecast of
future  cotton  prices.  The  Company  believes  that  recent cotton prices have
enabled  it  to  contract  for  cotton  at  prices  that  will  permit  it to be
competitive



                                        5
<PAGE>
RAW  MATERIALS  -  CONTINUED

with  other  companies  in  the  United  States textile industry when the cotton
purchased  for  future  use  is  put into production.  To the extent that cotton
prices  decrease  before  the  Company  uses these future 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  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.

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
consumer expenditures for non-durable goods.  The textile and apparel industries
are  also  cyclical  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 maintains 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
of  only  two  finishers  successful  in printing camouflage for sale to apparel
suppliers  of  the  U.S.  Government  and  the  only supplier that is vertically
integrated  for  camouflage production.  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 spinning,
weaving  and  fabric  finishing equipment at most of its facilities; substantial
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.  NAFTA has effectively
eliminated  or  substantially  reduced  tariffs on goods imported from Mexico if
such  goods  are  made  from fabric originating in Canada, Mexico, or the United
States.  Section  807  provides  for  the  duty  free treatment of United States
origin components used in the assembly of imported articles.  The result is that
duty is assessed only on the value of any foreign components that may be present
and  the  labor  cost  incurred offshore in the assembly of apparel using United
States  origin  fabric  components.  Because Section 807 creates an incentive to
use  fabric  manufactured  in the United States, it is beneficial to the Company
and  other  domestic  producers  of  apparel  fabrics.  In addition, pursuant to
Section  807A,  apparel  articles assembled in a Caribbean country, in which all
fabric  components  have  been  wholly  formed and cut in the United States, are
subject to preferential quotas with respect to access into the United States for
such  qualifying  apparel,  in  addition  to  the  significant  tariff reduction
pursuant  to  Section  807.  A similar program, enacted as a result of NAFTA and
referred  to  as  the  Special  Regime  Program,  provides even greater benefits
(complete  duty free, quota free treatment) for apparel assembled in Mexico from
fabric  components  formed  and  cut


                                        6
<PAGE>
COMPETITION  -  CONTINUED

in  the United States.  In contrast, apparel not meeting the criteria of Section
807,  Section  807A,  or the Special Regime Program, is subject to quotas and/or
relatively  higher tariffs, except as may result under the Trade and Development
Act of 2000, as noted below.  If Section 807, Section 807A or the Special Regime
Program  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  Trade  and  Development  Act  of 2000 (often referred to as the "CBI Parity
Bill")  will become effective on October 1, 2000.  The Company believes that the
provisions  of the CBI Parity Bill will have the following effects most relevant
to  its  business:

          -Apparel  assembled  in  most Caribbean nations from fabric formed and
           cut  in  the  United States  of  U.S.  yarn  can  enter  the  United
           States  duty-free;

          -Apparel  cut and sewn in most Caribbean nations from fabric formed in
           the  United States of U.S. yarn can enter the United States duty-free
           so long as it  is  sewn  with  U.S.  manufactured  thread;  and

          -Certain  limits  of  apparel  made  from  fabric  formed  in  certain
           Caribbean  nations of U.S. yarn and cut and sewn in those nations can
           enter the United  States  duty-free.

Apparel  entering the United States under any of these three provisions will not
be  subject  to  any  quotas that may exist for that specific category of goods.
The  Company  believes  that  the  CBI  Parity  Bill  will give it a competitive
advantage  relative  to  fabric  manufacturers  outside  of  the  United States.
Subsequent  repeal  or  adverse  alteration of the CBI Parity Bill could put the
Company  at  a  serious competitive disadvantage relative to such manufacturers.

The World Trade Organization (which this document refers to as the "WTO"), a new
multilateral trade organization, was formed in January 1995 and is the successor
to  the  General  Agreement  on  Tariffs and Trade.  This new multilateral trade
organization  has set forth mechanisms by which world trade in clothing is being
progressively  liberalized  by  phasing-out  quotas  and  reducing duties over a
period  of  time  that  began  in  January  of  1995.  As  it implements the WTO
mechanisms,  the  U.S. government is negotiating bilateral trade agreements with
developing  countries  (which  are  generally  exporters  of textile and apparel
products)  that  are  members  of the WTO to get them to reduce their tariffs on
imports  of textiles and apparel in exchange for reductions by the United States
in  tariffs  on  imports of textiles and apparel.  The elimination of quotas and
the  reduction  of  tariffs  under  the  WTO  may result in increased imports of
certain  textile  and  apparel products into North America.  These factors could
make  the  Company's  products  less  competitive  against low cost imports from
developing  countries.


EMPLOYEES

     The Company has approximately 2,200 employees.  The Company's employees are
not  represented  by  unions.  The  Company believes that its relations with its
employees  are  good.


                                        7
<PAGE>
ENVIRONMENTAL  AND  REGULATORY  MATTERS

     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.

     The  information  contained  under  the  subheading "Environmental Matters"
under  the  heading "Management's Discussion and Analysis of Financial Condition
and Results of Operations " included in Item 7 of this Form 10-K is incorporated
herein  by  reference.

     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.

DISCONTINUED  OPERATIONS

     Information  concerning  discontinued  operations  in  Note  F,  "Notes  To
Consolidated  Financial  Statements"  included  in  Item  8 of this Form 10-K is
incorporated  herein  by  reference.

OTHER

     Information  concerning  order  backlogs  in  "Management's  Discussion and
Analysis  of  Financial  Condition  and  Results  of  Operations,  Results  of
Operations, Fiscal 2000 Versus Fiscal 1999" included in Item 7 of this Form 10-K
is  incorporated  herein  by  reference.


                                        8
<PAGE>
ITEM  2  PROPERTIES
-------  ----------

     The following table provides a description of Delta Mills, Inc.'s principal
production  and  warehouse  facilities.


<TABLE>
<CAPTION>
                                                             Approximate
                                                               Square
          Location                          Utilization        Footage       Owned/Leased
-----------------------------------------  -------------  -----------------  -------------
<S>                                        <C>            <C>                          <C>
Greenville, SC                             Admin Offices             17,400   Leased    (1)
Beattie Plant, Fountain Inn, SC            spin/weave               390,000             (2)
Furman Plant, Fountain Inn, SC             weave                    155,000             (2)
Estes Plant, Piedmont, SC                  spin/weave               332,000             (2)
Delta 3 Plant, Wallace, SC                 dye/finish               555,000             (2)
Pamplico and Cypress Plants, Pamplico, SC  spin/weave               419,000             (2)
Delta 2 Plant, Wallace, SC                 dye/finish               347,000             (2)
Catawba Plant, Maiden, NC                  spin                     115,000           Owned

<FN>
(1)     Lease  expires in December 2003 with the right to renew for one additional five-year period.
(2)     Title to these facilities and substantially all of the equipment located in these facilities
        is  held  by  three  South  Carolina  counties  under  a  fee-in-lieu-of-taxes  arrangement,
        which  has  the  effect  of  substantially reducing the Company's property  taxes  in  South
        Carolina.  Although the Company can reacquire such property at a  nominal price, this  would
        currently cause a significant increase in the amount of property taxes paid  by the Company.
</TABLE>


     Except as noted above all of the above facilities are owned by Delta Mills,
Inc.,  subject  in  certain  cases  to  various  outstanding  security interests

     Delta  Mills  Marketing,  Inc.  leases  sales offices in New York, NY.  The
lease on the sales offices expires in December 2004.  A small sales office lease
in  Dallas,  Texas  expires  in  September  2002.

     At  the  date of execution of this Form 10-K, the Company believes that its
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.

     The  Company's  accounts  receivable  and  inventory,  and  certain  other
intangible  property,  secure  the  Company's  credit  facility.


                                        9
<PAGE>
ITEM  3.  LEGAL  PROCEEDINGS
--------  ------------------

     On  January  10,  2000,  the  North  Carolina Department of Environment and
Natural  Resources  requested  that  Delta Mills, Inc. accept responsibility for
investigating  the  discharge  of  hazardous substances at an inactive hazardous
waste  site  known  as the Glen Raven Mills Site, Kings Mountain, North Carolina
(the  "Site").  A  predecessor  by  merger of Delta Mills, Inc., Park Yarn Mills
Company,  Inc.  ("Park  Yarn"),  owned the Site for approximately six (6) years,
from  approximately  1977  to 1983 (prior to the time Delta Mills, Inc. became a
subsidiary of Delta Woodside Industries, Inc.)  Delta Mills, Inc. 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,  Delta  Mills,  Inc.  has  denied  any
responsibility  at the Site, has declined to undertake any activities concerning
the  Site,  and  had  not  provided  for  any  reserves for costs or liabilities
attributable  to  Park  Yarn.

     On  January  13,  2000, Marion Mills, LLC, a supplier to Delta Mills, Inc.,
brought  an action against Delta Mills, Inc. in North Carolina Superior Court in
McDowell  County, North Carolina.  Delta Mills, Inc. removed the case to federal
court in the Western District of North Carolina, Asheville Division, where it is
currently pending.  Plaintiff seeks actual damages in excess of $1.8 million and
consequential  and  incidental  damages  in  excess of $7.4 million.  The actual
damages  claim  is  based  on  an alleged failure by Delta Mills, Inc. to pay in
excess  of  $1.8  million  of invoice amounts.  The consequential and incidental
damages  claim  is  based on the allegation that Delta Mills, Inc.'s. failure to
pay  caused Marion Mills, LLC to shut down its business.  The Company's position
is that Delta Mills, Inc. paid some of the invoices claimed to be unpaid and did
not  pay  the  other  invoices  because  of defects in the goods supplied by the
plaintiff  (which were returned per the plaintiff's authorization).  The Company
therefore  denies  and  is  vigorously  contesting  the  claims.

     All  other  litigation  to which the Company is a party is ordinary routine
product  liability  litigation  or  contract  breach  litigation incident to its
business that does not depart from the normal kind of such actions.  The Company
believes that none of these actions, if adversely decided, would have a material
adverse  effect  on  its results of operations or financial condition taken as a
whole.


ITEM  4.  SUBMISSION  OF  MATTERS  TO  A  VOTE  OF  SECURITY-HOLDERS
-------- -----------------------------------------------------------

     Not  applicable.

ITEM  5.  MARKET  FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
--------  ----------------------------------------------------------------------

     The Company is a wholly-owned subsidiary of Delta Woodside Industries, Inc.
Accordingly,  there  is  no  established public trading market for the Company's
common  stock.

     The  Company  declared no dividends in fiscal year 2000 and $7.5 million of
dividends  in  fiscal year 1999.  The information concerning limitations on cash
distributions  contained under the subheading "Liquidity and Sources of Capital"
under  Item  7  is  incorporated  herein  by  reference.


                                       10
<PAGE>
<TABLE>
<CAPTION>
ITEM  6.  SELECTED  FINANCIAL  DATA
-------   -------------------------
In  Thousands,  Except  Ratios
                                                                      Fiscal Year (1)
                                                ------------------------------------------------------
STATEMENTS  OF  OPERATIONS  DATA:(1)
                                                    2000       1999       1998       1997        1996
                                                ---------  ---------  ---------  ---------  ----------
<S>                                             <C>        <C>        <C>        <C>        <C>
Net Sales                                       $276,511   $348,955   $364,395   $358,204   $ 317,446
Cost of Goods Sold                               243,254    292,914    300,556    293,145     283,776
                                                ---------  ---------  ---------  ---------  ----------
Gross Profit                                      33,257     56,041     63,839     65,059      33,670

Selling, general and administrative expenses      15,345     16,937     17,585     16,323      13,624
Restructuring charges                                                                   0       1,596
Other income(expense)                                446         96        146      1,553        (908)
                                                ---------  ---------  ---------  ---------  ----------
Operating Profit                                  18,358     39,200     46,400     50,289      17,542
Interest expense                                  16,095     17,414     19,324     14,212      14,026
Interest (income)                                   (958)      (185)      (152)         0         (19)
                                                ---------  ---------  ---------  ---------  ----------
Income from Continuing Operations
  Before Income Tax and Extraordinary Item         3,221     21,971     27,228     36,077       3,535
Income taxes                                       1,280      8,590     10,743     14,187       1,361
                                                ---------  ---------  ---------  ---------  ----------
Income from Continuing Operations
   Before Extraordinary Item                       1,941     13,381     16,485     21,890       2,174
Extraordinary gain (net of taxes)                  4,659
Profit(Loss) from Discontinued Operations           (174)     3,802    (25,909)    (5,337)    (26,973)
                                                ---------  ---------  ---------  ---------  ----------
Net Income(Loss)                                $  6,426   $ 17,183    ($9,424)  $ 16,553    ($24,799)
                                                =========  =========  =========  =========  ==========
OTHER DATA:(1)
Depreciation and amortization                   $ 14,015   $ 14,815   $ 14,127   $ 13,840   $  12,238

Capital expenditures                               4,340      9,075      4,065     14,122      43,378

EBITDA  (2)                                       31,415     53,830     60,375     64,129      29,761

Ratio of EBITDA to interest expense (2)              2.0        3.1        3.1        4.5         2.1

BALANCE SHEET DATA: (1)
Working Capital (deficit)                       $ 95,158   $101,613   $107,423    ($7,525)  $  16,010

Total assets                                     229,612    260,951    290,290    345,010     333,577

Total debt and other long-term obligations (3)   115,078    150,000    176,635    268,658     289,587

Shareholder's equity (deficit)                    56,187     49,761     40,078      7,844      (8,709)
<FN>
NOTES  TO  SELECTED  FINANCIAL  DATA
(1)  The  amounts presented for years prior to fiscal 1998 have been restated to conform to the fiscal
1998,  fiscal  1999  and  fiscal 2000 presentation of discontinued operations.  The Stevcoknit knitted
fabrics  business  is  presented  as  part  of  discontinued  operations.

(2)   "EBITDA"  is  defined herein as operating profit, plus depreciation and amortization expense and
interest  income,  plus  impairment  and  restructuring charges (credits).  While EBITDA should not be
construed  as  an alternative to operating earnings (loss) or net income (loss), or as an indicator of
operating  performance or liquidity, the Company believes that the ratio of EBITDA to interest expense
is  a  measure  that  is  commonly  used  to  evaluate  a  company's  ability  to  service  debt.

(3)  Total debt and other long-term obligations, for fiscal years prior to fiscal 1998, consist of the
long-term  debt  due  to  affiliate, the current loan payable to affiliate and the noninterest-bearing
payable  to  affiliates.  See  Notes  C  and  E  to  the  Consolidated  Financial  Statements.
</TABLE>


                                       11
<PAGE>
ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
-------  -----------------------------------------------------------------------
OF  OPERATIONS
--------------

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

     The  following  discussion  contains  various "forward-looking statements".
All  statements,  other  than  statements  of  historical  fact,  that  address
activities,  events or developments that the Company expects or anticipates will
or  may  occur  in  the  future  are  forward-looking  statements.  Examples are
statements  that  concern  future  revenues,  future  costs,  future  capital
expenditures,  business strategy, competitive strengths, competitive weaknesses,
goals,  plans,  references  to  future success or difficulties and other similar
information.  The  words  "estimate",  "project",  "forecast",  "anticipate",
"expect",  "intend",  "believe"  and  similar  expressions,  and  discussions of
strategy  or  intentions,  are  intended to identify forward-looking statements.

     The  forward-looking statements in this document are based on the Company's
expectations  and are necessarily dependent upon assumptions, estimates and data
that  the  Company  believes  are  reasonable and accurate but may be incorrect,
incomplete  or  imprecise.  Forward-looking  statements  are  also  subject to a
number  of  business  risks  and  uncertainties, any of which could cause actual
results  to  differ  materially  from  those  set  forth  in  or  implied by the
forward-looking  statements.  Accordingly, any forward-looking statements do not
purport  to  be  predictions  of  future  events or circumstances and may not be
realized.

     The  Company  does  not  undertake  publicly  to  update  or  revise  the
forward-looking  statements  even if it becomes clear that any projected results
will  not  be  realized

RESULTS  OF  OPERATIONS  FISCAL  2000  VERSUS  FISCAL  1999

     Net  Sales.  Consolidated net sales for the year ended July 1, 2000 totaled
$276.5 million, as compared to $349.0 million for the year ended July 3, 1999, a
decrease  of  20.8%  resulting  from a decrease in unit sales and in prices. The
sales  of  finished  synthetic  products  decreased  28%  caused  mainly  by the
Company's  decision  to  down  size  the finished synthetic business in order to
concentrate  on  a  more fashion driven product line.  The sale of cotton fabric
decreased 16% due to inventory adjustments by the Company's customers.  Sales of
greige  fabric  decreased 84.0% as the Company exited the greige goods business.
Sales  of yarn from the Rainsford plant to the Delta Apparel affiliate decreased
by 20% from the prior year. The Rainsford plant was sold to Delta Apparel in May
2000.

     Gross  Profit.  Consolidated  gross profit margin as a percent of sales for
the  year ended July 1, 2000 was 12.0 %, as compared to 16.1% for the year ended
July 3, 1999. The decline in gross profit percent for the year was the result of
reduced  volume  and price along with a change in product mix.  In addition to a
general  market  decline,  these  reductions  were  caused  by  cotton  garment
manufacturers expanding their supplier base to gain a more competitive price and
by  increased  import  pressure  on  synthetic  products.  Manufacturing  cost
increases caused by reduced operating schedules in the first and second quarters
of  fiscal  2000  also  contributed  to  the decline in gross profit.  The gross
profit  margin  improved in the third and fourth quarters as sales and operating
schedules  improved.

     Selling,  General  and Administrative Expenses.  During the year ended July
1,  2000,  selling,  general  and administrative expenses were $15.3 million, as
compared  to  $16.9  million  during  the year ended July 3, 1999, a decrease of
$1.6  million  or  9.5%.  The decrease was due primarily to a reduction of fixed
administrative  service  costs.  Expenses in this category were 5.5% of sales in
fiscal  2000  as  compared  to  4.9%  in  fiscal  1999.

     Operating Earnings. Operating earnings for the year ended July 1, 2000 were
$18.4  million,  as  compared  to $39.2 million for the year ended July 3, 1999.
The  decline  in  operating  earnings  was  due  to the factors described above.

     Net  Interest  Expense.  For  the  year  ended  July  1, 2000, net interest
expense  was $15.1 million, as compared to $17.2 million for the year ended July
3,  1999.   The decrease in interest expense resulted from the extinguishment of
$34.9  million  of debt due to the purchase of a portion of the Company's 9.625%
unsecured  senior  notes.

     Taxes.  The  effective tax rate of 39.7% for the year ended July 1, 2000 is
approximately  the  same  as  the  effective tax rate for the year ended July 3,
1999.


                                       12
<PAGE>
MANAGEMENT'S  DISCUSSION  AND  ANALYSIS  OF  FINANCIAL  CONDITION AND RESULTS OF
OPERATIONS  -  CONTINUED

      Income  from  Continuing Operations. Income from Continuing Operations for
the  year  ended July 1, 2000 was $1.9 million, as compared to $13.4 million for
the  year  ended  July  3,  1999.  The decrease was due to the factors described
above.

     Extraordinary  gain,  net  of  taxes.  During  fiscal  2000,  the  Company
purchased  $34.9  million  of  face  amount of its 9 5/8% Senior Notes for $26.6
million.  The  Company  recognized an extraordinary gain of $4.7 million after a
tax  cost  of  $2.8  million.

     Order  Backlog.  The  Company's  order  backlog  at  July 1, 2000 was $78.8
million,  a 24.5% increase from the $63.3 million order backlog at July 3, 1999.
The Company believes that backlog orders can give a general indication of future
sales.

     Adoption  of  Accounting  Standards.  In  June  of  1998,  the  Financial
Accounting  Standards  Board  (FASB)  issued  Statement  of Financial Accounting
Standards  (SFAS)  No.  133,  "Accounting for Derivative Instruments and Hedging
Activities".  This  standard,  as subsequently amended by SFAS Nos. 137 and 138,
requires  the  recognition of all derivatives as either assets or liabilities in
the  statement of financial position and the measurement of those instruments at
fair  value.

     Historically, the Company has not entered into any derivative contracts, as
defined  by SFAS No.133 and its subsequent amendments.  Accordingly, adoption of
the  new  standard  on  July  2, 2000 will not have an effect upon the Company's
consolidated financial statements, unless the Company enters into any derivative
contracts  in  the  future.

RESULTS  OF  OPERATIONS  FISCAL  1999  VERSUS  FISCAL  1998

     Net  Sales.  Consolidated net sales for the year ended July 3, 1999 totaled
$349.0  million, as compared to $364.4 million for the year ended June 27, 1998,
a  decrease  of 4.2% resulting from a decrease in unit sales.  The decrease came
from the sales of finished synthetic fabric and greige sales to converters.  The
principal decline in sales was from the sale of finished synthetic fabric, which
declined  30%  from  the prior year.  These decreases were somewhat offset by an
increase  in  finished  cotton  fabric  sales.

     Gross  Profit.  Consolidated gross profit margin for the year ended July 3,
1999  was  16.1  %,  as compared to 17.5% for the year ended June 27, 1998.  The
decline  in  gross  profit percent was due principally to the sale of knit yarn.
The  decline  in the finished fabric sales accounted for approximately one third
of  the decline in gross profit percent. As a result of the declining market for
synthetic  and greige sales, the synthetic business has been downsized to better
match  capacity  with  market  demand  and  the greige business assets have been
converted  to  the  more  profitable finished cotton fabrics product lines.  The
movement away from the greige business was substantially completed during fiscal
1999.

     Selling,  General  and Administrative Expenses.  During the year ended July
3,  1999,  selling,  general  and administrative expenses were $16.9 million, as
compared  to  $17.6  million  during the year ended June 27, 1998, a decrease of
$.7  million  or 4%.  Expenses in this category were approximately the same as a
percent  of  sales in both years.  The decrease was due primarily to a reduction
of  fixed  administrative services cost and the cost associated with information
technology  system studies expensed in fiscal year 1998.  Management believes it
has  effectively  controlled  its  selling, general and administrative expenses.

     Operating Earnings. Operating earnings for the year ended July 3, 1999 were
$39.2  million,  as  compared to $46.4 million for the year ended June 27, 1998.
The  decline  in  operating  earnings  was  due  to the factors described above.

     Net  Interest  Expense.  For  the  year  ended  July  3, 1999, net interest
expense  was $17.2 million, as compared to $19.2 million for the year ended June
27,  1998.   The  decrease  in  interest  expense resulted from repayment of the
amounts  outstanding  under  the  revolving  line  of  credit  facility.


                                       13
<PAGE>
MANAGEMENT'S  DISCUSSION  AND  ANALYSIS  OF  FINANCIAL  CONDITION AND RESULTS OF
OPERATIONS  -  CONTINUED

     Taxes.  The  effective tax rate of 39.1% for the year ended July 3, 1999 is
approximately  the  same  as  the effective tax rate for the year ended June 27,
1998.

      Income  from  Continuing Operations. Income from Continuing Operations for
the  year ended July 3, 1999 was $13.4 million, as compared to $16.5 million for
the  year  ended  June  27, 1998.  The decrease was due to the factors described
above.

     Order  Backlog.  The  Company's  order  backlog  at  July 3, 1999 was $63.3
million,  a  40.6%  decrease  from  the $106.6 million order backlog at June 27,
1998.  The  majority  of this decrease was in finished woven fabrics due in part
to  a  decline  in  blanket  contracts  (contracts  without  specific  color
requirements).  The decline in blanket contracts accounted for approximately 45%
of  the  overall decline in the order backlog.  Many customers have discontinued
the  practice  of issuing blanket contracts when specific color requirements are
unknown.  Management believes this is an industry trend that will continue.  The
balance  of  the  decline  is a result of market conditions, particularly in the
synthetics  business.

LIQUIDITY  AND  SOURCES  OF  CAPITAL

     During fiscal 2000, the Company financed its capital expenditures primarily
through  cash  generated  from  operations.

     The  Company  generated  operating  cash  flows  of $26.3, $51.4, and $32.1
million  for the 2000, 1999 and 1998 fiscal years, respectively.  Cash generated
in  fiscal  year  2000 from both continuing and discontinued operations was used
primarily to finance capital expenditures, including equipment purchases, and to
reduce  indebtedness.  The  Company  generated cash from investing activities of
$8.7  million in fiscal 2000 and $6.6 million in fiscal year 1998, but used $7.6
million  in  fiscal  year 1999. Cash generated in fiscal year 2000 was primarily
from  the  sale  of  the  Rainsford Plant and associated operating assets to the
Delta Apparel affiliate for $13.6 million in May 2000.  Cash generated in fiscal
year  1998  from  investing  activities  was  primarily  from  the  disposal  of
discontinued  assets.

     On  August  25,  1997 the Company issued $150 million of unsecured ten-year
senior  notes  at  an  interest rate of 9.625%, and obtained a secured five-year
$100 million revolving line of credit subject to borrowing base limitations. The
$100  million  revolving line of credit was replaced by a new credit facility on
March  31, 2000.  Borrowings under the new credit facility are based on eligible
accounts  receivable  and  inventory  of  the  Company, subject to a maximum $50
million availability limit. The facility has a three-year term and is secured by
the  accounts  receivable,  inventory  and  capital  stock  of the Company.  The
interest rate on the credit facility is based on a spread over either LIBOR or a
base  rate.  On  July  1,  2000,  there were no borrowings and approximately $50
million  was  available  for  borrowing  under  this  credit  facility.

     The credit facility contains restrictive covenants which require that Delta
Mills'  maximum  leverage ratio not exceed specified ratios.  The agreement also
restricts additional indebtedness, dividends, and capital expenditures.  The new
credit  facility does not contain certain restrictions which were present in the
credit  facility  which  it  replaced.  The payment of dividends with respect to
Delta  Mills  stock  is permitted by the credit facility if there is no event of
default  and  there  is  at least $1 of undrawn availability under the facility.

     Loan  covenants  in  the  senior  notes  and the Company's revolving credit
facility,  among  other  matters,  limit  the  Company's  ability  to  make cash
distributions  to Delta Woodside. At July 1, 2000, under the most restrictive of
these  covenants  $1.8  million was available for distribution by the Company to
Delta  Woodside.

     During  the  year  the  Company acquired for $26,615,179 a portion of its 9
5/8%  Senior  Notes.  The aggregate principal face amount of the acquired Senior
Notes  was  $34,922,000.  In  July,  August and  through September 18, 2000, the
Company  acquired for the sum of $14,270,481 an additional portion of its 9 5/8%
Senior  Notes, the aggregate principal face amount of which was $15,653,000. The
future  annual  reduction  in  the  Company's  interest expense because of these
Senior  Note  repurchases  will  be  $  4,867,844.


                                       14
<PAGE>
LIQUIDITY  AND  SOURCES  OF  CAPITAL  -  CONTINUED

     During  fiscal  2000, the Company had capital expenditures of approximately
$4.3  million  primarily  for  capital improvements, new equipment, and computer
system  upgrades.  During  fiscal 2001, the Company plans to spend approximately
$10  million  for  capital  improvements,  new  equipment,  and  computer system
upgrades.  The  Company believes that its equipment and facilities are generally
adequate  to  allow  it  to  remain  competitive with its principal competitors.

     The  Company has entered into agreements, and has fixed prices, to purchase
cotton  for  use  in  its  manufacturing  operations.  At  July  1, 2000 minimum
payments  under  these  contracts  with  non-cancelable  contract terms were $25
million.

     The  Company  believes  that  the cash flow generated by its operations and
funds  available under its credit line should be sufficient to service its debt,
to  satisfy its day-to-day working capital needs and to fund its planned capital
expenditures.


ENVIRONMENTAL  MATTERS

     Prior  to fiscal year 2001, two of the Company's South Carolina plants, the
Delta  2  &  3 finishing plants, had been unable to comply with certain toxicity
and  other  permit-related  limits  contained  in a National Pollutant Discharge
Elimination  System  ("NPDES")  permit  held by the Company.  Additionally, high
nitrate  levels  had  been  observed  at  the  spray field for those plants.  To
achieve  compliance  with  the  non-toxicity  NPDES  permit  limits, the Company
completed  certain  upgrades  in  October  1998  at a cost of approximately $2.3
million.  Since  then,  the  Company  has had two non-toxicity permit violations
resulting  in  the  payment of a de minimis penalty. On June 30,2000 the Company
was  issued  a discharge permit without toxicity limits. The Company is required
to  monitor  the  toxicity  level and report the results annually. The effective
date  of  this  permit  is August 1,2000, and is in effect until March 31, 2004.

     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. Because of these studies,
one  half  of  the  proceeds  from the sale of the plant was placed in an escrow
account  to  cover  expenses  related  to  this  contamination.  The Company has
recorded  the  sale  net  of  estimated  costs  to  remediate  the  property.


                                       15
<PAGE>
ITEM  7A.  QUANTITATIVE  AND  QUALITATIVE  DISCLOSURES  ABOUT  MARKET  RISK
---------------------------------------------------------------------------

COMMODITY  RISK  SENSITIVITY

     As a part of the Company's business of converting fiber to finished fabric,
the  Company  makes  raw  cotton purchase commitments and then fixes prices with
cotton  merchants who buy from producers and sell to textile manufacturers.  The
Company  may  seek  to fix prices up to 18 months in advance of delivery.  Daily
price  fluctuations  are  minimal,  yet  long-term  trends in price movement can
result  in unfavorable pricing of cotton for the Company.  Before fixing prices,
the  Company  looks  at  supply and demand fundamentals, recent price trends and
other  factors  that affect cotton prices.  The Company also reviews the backlog
of  orders from customers as well as the level of fixed price cotton commitments
in  the industry in general.  At July 1, 2000, a 10% decline in the market price
of  the  cotton  covered  by  the  Company's  fixed price contracts would have a
negative impact of approximately $2.5 million on the value of the contracts.  At
the end of fiscal 1999, a 10% decline in the market price of the Company's fixed
price  contracts  would have had a negative impact of approximately $4.2 million
on  the  value  of  the contracts.  The decline in the potential negative impact
from  1999  to  2000  is  due principally to current cotton commitments being at
significantly  lower  average  prices  than  in  fiscal  1999.


INTEREST  RATE  SENSITIVITY

The $50 million secured three-year revolving credit facility expiring in 2003 is
sensitive  to  changes  in  interest  rates.  Interest is based on a spread over
LIBOR or a base rate.  An interest rate increase would have a negative impact to
the  extent  the  Company  borrows  against  the revolving credit facility.  The
impact  would  be  dependent on the level of borrowings incurred. In fiscal year
2001, as of this date, the Company has not borrowed against the revolving credit
facility.  An  interest  rate  change would not have an impact on the fixed rate
ten  year  senior  notes.


                                       16
<PAGE>

ITEM  8.  FINANCIAL  STATEMENTS  AND  SUPPLEMENTARY  DATA
--------  -----------------------------------------------

<TABLE>
<CAPTION>
INDEX  TO  CONSOLIDATED  FINANCIAL  STATEMENTS
<S>                                                                             <C>
                                                                                Page
                                                                                -----
Report of KPMG  LLP   . . . . . . . . . . . . . . . . .  . . . . . . . . . . .     F2

Consolidated Balance Sheets as of July 1, 2000 and July 3, 1999    . . . . . .     F3

Consolidated Statements of Operations for the fiscal years ended July 1, 2000,
July 3, 1999, and June 27, 1998     . . . . . . . . . . . . . . . . .  . . . .     F4

Consolidated Statements of Shareholder's Equity  for the fiscal years
ended July 1, 2000, July 3, 1999, and June 27, 1998.   . . . . . . . . . . . .     F5

Consolidated Statements of Cash Flows for the fiscal years ended July 1,
2000, July 3, 1999 and June 27, 1998.      . . . . . . . . . . . . . . . . . .     F6

Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . . .     F7
</TABLE>


                                       17
<PAGE>
INDEPENDENT  AUDITORS'  REPORT

THE  BOARD  OF  DIRECTORS
DELTA  MILLS,  INC.

We  have  audited  the  accompanying consolidated balance sheets of Delta Mills,
Inc. as of July 1, 2000 and July 3, 1999 and the related consolidated statements
of operations, shareholder's equity, and cash flows for each of the years in the
three-year  period  ended July 1, 2000.  These consolidated financial statements
are  the  responsibility  of the Company's management.  Our responsibility is to
express  an  opinion  on  these  consolidated  financial statements based on our
audit.

We conducted our audits in accordance with auditing standards generally accepted
in  the  United  States  of  America.  Those  standards require that we plan and
perform  the  audits  to obtain reasonable assurance about whether the financial
statements  are free of material misstatement. An audit includes examining, on a
test  basis,  evidence  supporting  the amounts and disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made  by  management,  as well as evaluating the overall
financial  statement  presentation.  We  believe  that  our  audit  provides  a
reasonable  basis  for  our  opinion.

In  our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Delta Mills, Inc. as
of July 1, 2000 and July 3, 1999, and the results of its operations and its cash
flows  for  each  of  the  years  in the three-year period ended July 1, 2000 in
conformity with accounting principles generally accepted in the United States of
America.


                                                  \s\KPMG  LLP
                                                  ------------
                                                     KPMG  LLP

Greenville,  South  Carolina
August  4,  2000,  except  as  to  Note K (b), which is as of September 18, 2000


                                       18
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED  BALANCE  SHEETS
Delta  Mills,  Inc.
(In  Thousands)

                                                         July 1, 2000   July 3, 1999
                                                        -------------  -------------
<S>                                                     <C>            <C>
ASSETS
CURRENT ASSETS
  Cash and cash equivalents                             $      18,287  $       9,903
  Accounts receivable:
     Factor and other                                          71,670         69,881
     Affiliates                                                     0         12,994
                                                        -------------  -------------
                                                               71,670         82,875
     Less allowances for doubtful accounts and returns            173            291
                                                        -------------  -------------
                                                               71,497         82,584
  Inventories
     Finished goods                                             4,916          9,122
     Work in process                                           31,324         29,201
     Raw materials and supplies                                 7,679          7,144
                                                        -------------  -------------
                                                               43,919         45,467

  Current assets of discontinued operations                         0            780
  Deferred income taxes                                         1,208          2,032
  Other assets                                                    467            450
                                                         -------------  -------------
                               TOTAL CURRENT ASSETS          135,378        141,216

PROPERTY, PLANT AND EQUIPMENT, at cost
     Land and land improvements                                 2,068          2,988
     Buildings                                                 36,634         45,293
     Machinery and equipment                                  119,996        145,467
     Furniture and fixtures                                     1,952          1,993
     Lease improvements                                           619            619
     Construction in progress                                     401          4,363
                                                        -------------  -------------
                                                              161,670        200,723
     Less accumulated depreciation                             70,322         85,743
                                                        -------------  -------------
                                                               91,348        114,980

DEFERRED LOAN COSTS
             less accumulated amortization of $3,207
             and $1,288 in 2000 and 1999 respectively           2,886          4,755
                                                        -------------  -------------
                                                        $     229,612  $     260,951
                                                        =============  =============
</TABLE>


                                       19
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED  BALANCE  SHEETS
Delta  Mills,  Inc.
(In  Thousands)

LIABILITIES  AND  SHAREHOLDER'S  EQUITY


                                                         July 1, 2000    July 3, 1999
                                                         -------------  --------------
<S>                                                      <C>            <C>
LIABILITIES AND SHAREHOLDER'S EQUITY
CURRENT LIABILITIES
  Trade accounts payable                                 $      14,514  $      15,887
  Payable to Affiliates                                          1,318            571
  Accrued employee compensation                                  2,858          4,014
  Accrued and sundry liabilities                                21,530         18,381
  Restructuring accruals                                             0            750
                                                         -------------  --------------
                    TOTAL CURRENT LIABILITIES                   40,220         39,603
LONG-TERM DEBT                                                 115,078        150,000
DEFERRED INCOME TAXES                                           12,314         15,547
DEFERRED COMPENSATION                                            5,813          6,040
SHAREHOLDER'S EQUITY
  Common Stock -- par value $.01 a share -- authorized
    3000 shares, issued and outstanding 100 shares
  Additional paid-in capital                                    51,792         51,792
  Retained earnings(deficit)                                     4,395         (2,031)
                                                         -------------  --------------
                                                                56,187         49,761
COMMITMENTS AND CONTINGENCIES
                                                         $     229,612  $     260,951
                                                         =============  ==============
</TABLE>

See  notes  to  consolidated  financial  statements.


                                       20
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED  STATEMENTS  OF  OPERATIONS
Delta  Mills,  Inc.
(In  Thousands)
                                                              Year Ended      Year Ended      Year Ended
                                                             July 1, 2000    July 3, 1999    June 27, 1998
                                                            --------------  --------------  ---------------
<S>                                                         <C>             <C>             <C>
Net sales to non-affiliates                                       249,918         318,733          342,732
Net sales to affiliated parties                                    26,593          30,222           21,663
                                                            --------------  --------------  ---------------
  Net sales                                                 $     276,511   $     348,955   $      364,395
Cost of goods sold                                                243,254         292,914          300,556
                                                            --------------  --------------  ---------------
Gross profit                                                       33,257          56,041           63,839
Selling, general and administrative expenses                       15,345          16,937           17,585
Other income                                                          446              96              146
                                                            --------------  --------------  ---------------
  OPERATING PROFIT                                                 18,358          39,200           46,400
Other (expense) income:
  Interest expense                                                (16,095)        (17,415)         (17,160)
  Interest income                                                     958             186              152
  Affiliate interest expense                                                                        (2,164)
                                                            --------------  --------------  ---------------
                                                                  (15,137)        (17,229)         (19,172)
 INCOME FROM CONTINUING
  OPERATIONS BEFORE INCOME TAXES                                    3,221          21,971           27,228
                                                            --------------  --------------  ---------------
Income tax expense                                                  1,280           8,590           10,743
                                                            --------------  --------------  ---------------
 INCOME FROM CONTINUING
  OPERATIONS                                                        1,941          13,381           16,485

  Extraordinary gain (net of taxes)                                 4,659

 Discontinued operations:
 Income (Loss) on disposal of discontinued operations net
   of applicable income taxes                                                       3,802          (21,079)

 (Loss) from operations of discontinued businesses net of
   applicable income taxes                                           (174)                          (4,830)
                                                            --------------  -------------  ----------------
 Total discontinued operations                                       (174)          3,802          (25,909)
                                                            --------------  -------------  ---------------
NET INCOME (LOSS)                                           $       6,426   $      17,183          ($9,424)
                                                            =============  ==============  ===============

</TABLE>

See  notes  to  consolidated  financial  statements.


                                       21
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED  STATEMENTS  OF  SHAREHOLDER'S  EQUITY
Delta  Mills,  Inc.
(In  Thousands)


                                                     Additional     Retained       Total
                                  Common Stock         Paid-In      Earnings    Shareholder's
                              Shares        Amount     Capital      (Deficit)     Equity
                           -------------  ----------  ---------  ---------------  -------
<S>                        <C>            <C>         <C>        <C>              <C>
Balance at June 28, 1997            100           0       2,134           5,710     7,844
  Net (loss)                                                             (9,424)   (9,424)
  Cash dividends paid                                                    (8,000)   (8,000)
  Capital Contribution                                   49,658                    49,658
                           -------------  ----------  ---------  ---------------  -------
Balance at June 27, 1998            100           0      51,792         (11,714)   40,078
  Net Income                                                             17,183    17,183
  Cash dividends paid                                                    (7,500)   (7,500)
                           -------------  ----------  ---------  ---------------  -------
Balance at July 3, 1999             100           0      51,792          (2,031)   49,761
                           -------------  ----------  ---------  ---------------  -------
  Net Income                                                              6,426     6,426
                           -------------  ----------  ---------  ---------------  -------
Balance at July 1, 2000             100   $       0   $  51,792  $        4,395   $56,187
                           =============  ==========  =========  ===============  =======
</TABLE>

See  notes  to  consolidated  financial  statements.


                                       22
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED  STATEMENTS  OF  CASH  FLOWS
Delta  Mills,  Inc.
(In  Thousands)

                                                              Year Ended      Year Ended      Year Ended
                                                            --------------  --------------  ---------------
                                                             July 1, 2000    July 3, 1999    June 27, 1998
OPERATING ACTIVITIES
<S>                                                         <C>             <C>             <C>
  Net income (loss)                                         $       6,426   $      17,183          ($9,424)
  Adjustments to reconcile net income to net
     cash provided by operating activities:
     Depreciation                                                  13,408          14,109           14,095
     Amortization                                                     607             706               32
     Write off of loan origination costs - line of credit             419
     Gain on early retirement of debt                              (7,414)
     Discontinued operations                                        1,359          22,087           29,751
     Provision for losses on accounts receivable                     (118)             45              468
     Provision for deferred income taxes                           (3,339)            605            3,068
     Losses (gains) on disposition of property
        and equipment                                                 138              73               (6)
     Deferred compensation                                           (227)            317              638
     Changes in operating assets and liabilities:
        Accounts receivable                                        11,182          12,573            1,895
        Inventories                                                 1,548          10,372             (236)
        Other current assets                                            0             (85)              41
        Accounts payable and accrued expenses                       2,308         (26,596)          (8,244)
                                                            --------------  --------------  ---------------
           NET CASH PROVIDED BY OPERATING ACTIVITIES               26,297          51,389           32,078

INVESTING ACTIVITIES
  Property, plant and equipment:
     Purchases                                                     (4,340)         (9,075)          (4,065)
     Proceeds of dispositions                                      12,750           1,086               13
     Other investing activities                                         0             140
  Investing activities of discontinued operations                     333             206           10,686
                                                            --------------  --------------  ---------------
           NET CASH PROVIDED(USED) BY
                         INVESTING ACTIVITIES                       8,743          (7,643)           6,634

FINANCING ACTIVITIES
  Proceeds from revolving lines of credit                          15,000         104,365          137,000
  Repayments on revolving lines of credit                         (15,000)       (131,000)        (110,365)
  Repurchase and retirement of long term debt                     (26,615)
  Scheduled principal payments of long-term debt
  Net proceeds/(repayments) of loan from parent company                                           (202,093)
  Proceeds from issuance of long-term debt                                                         145,688
  Dividends paid                                                        0          (7,500)          (8,000)
  Other                                                               (41)           (252)          (1,493)
                                                            --------------  --------------  ---------------
          NET CASH (USED)  BY FINANCING ACTIVITIES                (26,656)        (34,387)         (39,263)

(DECREASE) INCREASE IN CASH AND
         CASH EQUIVALENTS                                           8,384           9,359             (551)

Cash and cash equivalents at beginning of year                      9,903             544            1,095
                                                            --------------  --------------  ---------------
         CASH AND CASH EQUIVALENTS AT END OF YEAR           $      18,287   $       9,903   $          544
                                                            ==============  ==============  ===============
</TABLE>

See  notes  to  consolidated  financial  statements.


                                       23
<PAGE>
NOTES  TO  CONSOLIDATED  FINANCIAL  STATEMENTS

NOTE  A-DESCRIPTION  OF  BUSINESS  AND  SIGNIFICANT  ACCOUNTING  POLICIES
DESCRIPTION  OF  BUSINESS:    The  Company  manufactures woven fabrics which are
sold  through a separate sales subsidiary.  The Company's operations, all within
the  textile  industry,  are  considered  a  single  business  segment.

BASIS  OF  PRESENTATION:     The  consolidated  financial statements include the
accounts of Delta Mills, Inc. and Delta Mills Marketing, Inc. (collectively, the
"Company").  All  significant  intercompany  balances and transactions have been
eliminated.  Delta Mills, Inc. and Delta Mills Marketing , Inc. are wholly-owned
subsidiaries  of  Delta  Woodside Industries, Inc. ("DWI").  The Company has one
segment  that  is  presented  as  a  discontinued  operation, Stevcoknit Fabrics
Company,  which  manufactured  and  sold  knitted  fabrics.

CASH  EQUIVALENTS:   The  Company considers all highly liquid investments having
initial  maturities  of  three  months  or  less  when  purchased  to  be  cash
equivalents.

INVENTORIES:   Inventories  are  stated  at  the  lower  of  the  cost or market
determined  using  the  first-in  ,  first-out  (FIFO)  method.

PROPERTY,  PLANT AND EQUIPMENT:   Property, plant and equipment is stated on the
basis  of  cost.  Depreciation  is  computed  by  the  straight-line  method for
financial  reporting  based  on  estimated  useful  lives of three to thirty-two
years,  but  predominantly  over  seven  to  fourteen  years, and by accelerated
methods  for  income  tax  reporting.

IMPAIRMENT  OF  LONG-LIVED ASSETS:   When required by circumstances, the Company
evaluates  the  recoverability  of  its long-lived assets by comparing estimated
future  undiscounted cash flows with the asset's carrying amount to determine if
a  write-down  to  market  value  is  required

REVENUE  RECOGNITION:   Sales  are  recorded  upon  shipment  or  designation of
specific  goods  for  later  shipment at customers' request with related risk of
ownership  passing  to  such  customers.

DEFERRED  LOAN  COSTS:  Deferred  loan costs are being amortized over periods of
five  and  ten  years  based  on  maturity  of  related  debt.

INCOME TAXES:   Deferred income taxes are recognized for the tax consequences of
"temporary  differences"  by  applying enacted statutory tax rates applicable to
future years to differences between the financial statement carrying amounts and
the  tax bases of existing assets and liabilities.  The effect on deferred taxes
of a change in tax rates is recognized in income in the period that includes the
enactment  date.

ENVIRONMENTAL  COSTS:   Environmental  compliance  cost,  including  ongoing
maintenance,  monitoring  and  similar  costs,  are  expensed  as  incurred.
Environmental  remediation  costs are accrued, except to the extent costs can be
capitalized,  when remedial efforts are probable, and the cost can be reasonably
estimated.

COTTON  PROCUREMENT:   The  Company contracts to buy cotton with future delivery
dates  at  fixed  prices  in  order to reduce the effects of fluctuations in the
prices  of  cotton used in the manufacture of its products.  These contracts are
settled  by delivery and are not used for trading purposes.  The Company commits
to fixed prices on a percentage of its cotton requirements up to eighteen months
in  the future.   If market prices for cotton fall below the Company's committed
fixed  costs  and  it is estimated that the cost of cotton is not recoverable in
future  sales  of  finished goods, the differential is charged to income at that
time.

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

FISCAL  YEAR:  The  Company's operations are based on a fifty-two or fifty-three
week  fiscal  year  ending on the Saturday closest to June 30.  Fiscal year 2000
and  fiscal  year  1998  consisted of 52 weeks and fiscal year 1999 consisted of
53weeks.


                                       24
<PAGE>
NOTES  TO  CONSOLIDATED  FINANCIAL  STATEMENTS  -  CONTINUED

NOTE  B-ACCOUNTS  RECEIVABLE

The  Company assigns a substantial portion of its trade accounts receivable to a
bank under a factor agreement.  The assignment of these receivables is primarily
without  recourse,  provided that customer orders are approved by the bank prior
to  shipment  of  goods,  up  to  a  maximum  for  each  individual  account.

The  Company  operates  within  the  textile  industry,  and  its operations are
affected  by  the  relative  strength  or  weakness of the textile markets.  The
Company  has three major customers that together accounted for 39%, 43%, and 37%
of  total  net  sales  of continuing operations for fiscal years 2000, 1999, and
1998,  respectively.

The  Company's  accounts  receivable  are  due  from many companies that produce
apparel  products  located  throughout  the  United  States.  The many companies
represented  in  the Company's accounts receivable limit to a certain extent the
concentration of credit risk.  The Company generally does not require collateral
for  its  accounts  receivable.


NOTE  C-LONG-TERM  DEBT  AND  LEASES

On  August 25, 1997 the Company issued $150 million of unsecured ten-year senior
notes  at  an  interest  rate  of  9.625%, and obtained a secured five-year $100
million revolving line of credit subject to borrowing base limitations. The $100
million  revolving line of credit was replaced by a new credit facility on March
31,  2000.  Borrowings  under  the  new  credit  facility  are based on eligible
accounts  receivable  and  inventory  of  the  Company, subject to a maximum $50
million availability limit. The facility has a three-year term and is secured by
the  accounts  receivable,  inventory  and  capital  stock  of the Company.  The
interest rate on the credit facility is based on a spread over either LIBOR or a
base  rate.  On  July  1,  2000,  there were no borrowings and approximately $50
million  was  available  for  borrowing  under  this  credit  facility.

The  credit  facility  contains  restrictive  covenants which require that Delta
Mills'  maximum  leverage ratio not exceed specified ratios.  The agreement also
restricts additional indebtedness, dividends, and capital expenditures.  The new
credit  facility does not contain certain restrictions which were present in the
credit  facility  which  it  replaced.  The payment of dividends with respect to
Delta  Mills  stock  is permitted by the credit facility if there is no event of
default  and  there  is  at least $1 of undrawn availability under the facility.

The carrying value of the Company's revolving credit agreement approximates fair
value  since the rates are tied to floating rates.  At July 1, 2000 the carrying
value  of  the senior notes was $115,078,000 and the fair value, based on quoted
market  prices  was  $96,666,000.

Total  interest expense incurred by the Company was $16,095,000, $17,415,000 and
$17,160,000  for  fiscal  years  2000,  1999,  and  1998, respectively, of which
$106,000  was  capitalized  during fiscal year 1999.  Total interest paid during
fiscal  years 2000, 1999, and 1998 was $16,343,000, $16,760,000 and $13,563,000,
respectively.

     Rent  expense  relating  to  operating leases was approximately $3,507,000,
$3,407,000  and  $  3,821,000 for fiscal years 2000, 1999 and 1998 respectively.


                                       25
<PAGE>
NOTE  C-CONTINUED

Aggregate  principal maturities of all long-term debt and minimum payments under
operating  leases  are  as  follows:


                                   Long-term     Operating
                     Fiscal Year      Debt        Leases
                     -----------  ------------  ----------
                         2001                   $3,280,000
                         2002                    1,628,000
                         2003                      446,000
                         2004                      461,000
                  Later Years      115,078,000     528,000
                                  ------------  ----------
                                  $115,078,000  $6,343,000
                                  ============  ==========


NOTE  D-EMPLOYEE  BENEFIT  PLANS

The  Company has participated in the Delta Woodside Industries, Inc.  Retirement
and  40l(k) Plans.  On September 27, 1997 the Delta Woodside Industries Employee
Retirement  Plan  ("Retirement  Plan")  merged  into the Delta Woodside Employee
Savings  and  Investment  Plan  ("401(k)  Plan").  Following  the  merger,
contributions  to  the  401(k)  Plan in lieu of a contribution to the Retirement
Plan  are made in cash and not in stock.  In the 401(k) Plan employees may elect
to convert DWI stock to other funds, but may not increase the amount of stock in
their  account.  Each  participant has the right to direct the trustee as to the
manner  in  which shares held are to be voted.  The Retirement Plan qualified as
an  Employee  Stock Ownership Plan ("ESOP") under the Internal Revenue Code as a
defined  contribution  plan.  A  contribution  of  $236,000  was  allocated  to
participants  in  fiscal  1998.  During  fiscal 2000, 1999 and 1998, the Company
contributed  $453,000,  $497,000, and $455,000, respectively, to the 401(k) plan
to match employee contributions.  In addition to the matching contributions, the
Company also made a discretionary contribution of $280,000 to the 401(k) plan in
fiscal  1999.

The  Company also participates in a 501(c)(9) trust, the Delta Woodside Employee
Benefit Plan and Trust ("Trust").  The Trust collects both employer and employee
contributions  from  the  Company  and makes disbursements for health claims and
other  qualified  benefits.

The  Company participates in a Deferred Compensation Plan, managed by DWI, which
permits  certain  management employees to defer a portion of their compensation.
Deferred  compensation  accounts are credited with interest  and are distributed
after  retirement, disability or employment termination.  As of July 1, 2000 and
July  3,  1999,  the  Company's  liability  was  $5,813,000  and  $6,040,000
respectively.

The  Company  also participates in the Delta Woodside Industries, Inc. Incentive
Stock  Award  Plan  and Stock Option Plan.  Including associated tax assistance,
under  the  Incentive  Stock  Award  Plan  the  Company  recognized  expense  of
$176,000,  $321,000,  and  $404,000  for  fiscal  years  2000,  1999  and  1998,
respectively.  Under  the  Stock  Option Plan, the Company recognized expense of
$190,000,  $152,000  and  $104,000  for  fiscal  years  2000,  1999  and  1998,
respectively.

NOTE  E-AFFILIATED  PARTY  TRANSACTIONS

The  Company  participated  in  a  cash  management  system  maintained by Delta
Woodside  Industries, Inc. until August 25, 1997.  Under this system excess cash
was  forwarded  to DWI each day, reducing the current loan payable to affiliate.
Likewise, cash requirements were funded daily by DWI, increasing loan payable to
affiliate.  Interest  was charged on loan payable to affiliate balances based on
the  weighted  average  cost  of  DWI's  borrowings.


                                       26
<PAGE>
NOTE  E-CONTINUED

Accounts  receivable  due from affiliates include $13.0 million at July 3, 1999,
resulting  from sales to Delta Apparel (then a division of another subsidiary of
DWI).

Current payable to affiliates bears no interest and includes  amounts payable to
DWI  for  current  activity  as  described  in  the  following  paragraphs.

Affiliated  party  transactions  included in the statements of operations result
from  a  variety  of  services  provided  and  goods transferred as shown in the
following  table:

<TABLE>
<CAPTION>
                                 2000         1999         1998
                              -----------  -----------  -----------
<S>                           <C>          <C>          <C>
Textile and yarn  sales       $26,593,000  $30,221,000  $19,385,000
Corporate services expense      2,264,000    2,816,000    2,838,000
Income tax payments               154,000       74,000       88,000
Payroll taxes, insurance and
   Employee related expenses   20,673,000   39,889,000   45,223,000
Printing services expense               0            0      220,000
Interest expense                        0            0    2,193,000
Rental income                           0       81,000       95,000

</TABLE>

From March 29, 1997 until mid-May 2000, the Company sold textiles and yarn to an
affiliate  at  prices  which  approximate  market.  Prior to March 29, 1997, the
Company sold textiles and yarn to an affiliate at prices which approximate cost.
This  arrangement  was  terminated  in  the  fiscal 2000 fourth quarter when the
Company  sold  its  Rainsford  facility  and  associated operating assets to the
affiliate  for  $13.6  million  which  approximates  net  book  value.

Corporate  services  included  management,  treasury,  computer,  purchasing,
benefits,  payroll, auditing, accounting  and tax services.  For these services,
DWI  charged actual cost based on relative usage and other factors.  Actual cost
was  charged  for  payroll taxes, insurance and employee related expenses, which
were  managed  by DWI as a corporate service.  Printing services were charged at
market  prices.  Interest  was  charged based on fixed rates for long-term debt.
Interest  on  loan  payable  to  affiliates was charged based on DWI 's weighted
average  interest  rate.  These  services  are  now  performed  by  the Company.

NOTE  F-DISCONTINUED  OPERATIONS  AND  RESTRUCTURING  CHARGES

The  Company  has  one  segment  in continuing operations, Delta Mills Marketing
Company,  which  manufactures  and  sells  woven  fabrics  for  apparel and home
furnishings.   Operating  profit  does  not include interest expense or interest
income.  The  Company  also has one segment which is presented as a discontinued
operation:  Stevcoknit  Fabrics  Company  which  manufactured  and  sold knitted
fabrics.

On  March  3,  1998,  the Company made the decision to close Stevcoknit Fabrics.
Accordingly,  operating  results  for  this  segment  have been reclassified and
reported  as  discontinued  operations.

In  connection  with  the decision to discontinue this business, the Company, in
fiscal 1998, recognized an estimated loss on disposal of discontinued operations
of  $21 million including an income tax benefit of $14 million.  In fiscal 1999,
the  Company  decreased  the estimate of the after-tax cost to discontinue these
businesses  and recognized after-tax credits of $3.8 million.  Proceeds from the
liquidation  of this division have been used to make capital expenditures and to
reduce  indebtedness.


                                       27
<PAGE>
NOTE  F-CONTINUED

The  assets  of  discontinued operations at July 1, 2000 and July 3, 1999 are as
follows:

(in thousands)             July 1, 2000   July 3, 1999
                           -------------  -------------

Accounts Receivable                    0  $         763
Inventory                              0              0
Other current assets                   0             17
                           -------------  -------------
    Total current assets   $           0  $         780
                           =============  =============

Summarized results of operations for the discontinued business are as follows:


     (in thousands)               July 1, 2000    July 3, 1999    June 27, 1998
                                 --------------  --------------  ---------------

     Net Sales                   $           0   $       2,080   $       91,153
     Cost and expense                      276           2,080          112,899
     (Loss) before income tax             (276)              0          (21,746)
     Income tax (benefit)                  102               0          (16,916)
                                 --------------  --------------  ---------------

     (Loss) from operations of
     discontinued operations     $        (174)  $           0   $      (4,830)
                                 ==============  ==============  ==============



NOTE  G-INCOME TAXES

The  Company  reports  federal  income  taxes  in the consolidated return of its
parent  Delta  Woodside  Industries,  Inc.  (DWI)  and had taxable income of $18
million  which  will  be reported in the fiscal 2000 consolidated Federal income
tax return with its parent, DWI.  The consolidated tax group had regular taxable
income  of  $13  million  and  alternative  minimum  taxable  income (AMT) of $7
million,  both  of  which were offset by available tax loss carry-forwards.  The
Federal  income  tax  obligation  or  refund that is allocated to the Company is
determined  as  if the company were filing a separate Federal income tax return.
The  Company's Federal tax liability or receivable is paid to or is a receivable
from  the  parent  company.

Deferred  income  taxes  reflect  the  net  tax effects of temporary differences
between  the  financial  statement  amounts  and amounts reported for income tax
purposes.  The  company  anticipates  that  the  reversal  of  existing  taxable
temporary  differences  will  provide  sufficient  taxable income to realize the
remaining  deferred  tax  assets.  Accordingly,  no valuation allowance has been
provided  for  in  2000.  The  valuation allowance was reduced to $ 0 for fiscal
year  2000  from  the  $  37,000  balance  in  fiscal  year  1999.


                                       28
<PAGE>
NOTE  G-CONTINUED

Significant  components of the Company's deferred tax assets and liabilities are
as  follows:

<TABLE>
<CAPTION>
                                         2000             1999
                                    --------------  ----------------
Assets
<S>                                 <C>             <C>
Deferred compensation               $   2,222,000   $     2,325,000
Accrued and sundry liabilities          2,071,000         1,436,000
Net operating loss carryforwards        1,129,000         1,373,000
Restructuring reserves                     82,000           303,000
Other                                      67,000           714,000
                                    --------------  ----------------
Subtotal                                5,571,000         6,151,000
Valuation allowance                             0           (37,000)
                                    --------------  ----------------
Deferred tax assets                     5,571,000         6,114,000


Liabilities:
Depreciation                           15,747,000        18,638,000
Inventory                                 269,000                 0
Other                                     661,000           991,000
                                    --------------  ----------------
Deferred tax liabilities               16,677,000        19,629,000
                                    --------------  ----------------
      Net deferred tax liabilities   ($11,106,000)     ($13,515,000)
                                    ==============  ================
</TABLE>

Significant components  of the  provision for income taxes  are as follows:

<TABLE>
<CAPTION>
                                                       2000          1999          1998
Current:
<S>                                            <C>            <C>          <C>
     Federal income taxes                      $  4,190,000   $ 6,980,000  $  7,270,000
     State income taxes                             429,000     1,005,000       405,000
                                               -------------  -----------  -------------
           Total current                       $  4,619,000   $ 7,985,000  $  7,675,000
Deferred:
      Federal income taxes (benefits)           ($2,871,000)  $   520,000  $  2,640,000
      State income taxes (benefits)                (468,000)       85,000       428,000
                                               -------------  -----------  -------------
           Total Deferred                       ($3,339,000)  $   605,000  $  3,068,000
                                               -------------  -----------  -------------
Total provision for Continuing Operations      $  1,280,000   $ 8,590,000  $ 10,743,000

Total provision for income taxes related to:
Extraordinary Items                               2,755,000             0             0
Discontinued Operations                            (103,000)    2,335,000   (16,916,000)
                                               -------------  -----------  -------------
Total provision for income taxes               $  3,932,000   $10,925,000   ($6,173,000)
                                               =============  ===========  =============
</TABLE>


                                       29
<PAGE>
NOTE  G-CONTINUED

The  reconciliation  of  income  tax  expense  (benefit) computed at the Federal
statutory  tax  rate:
<TABLE>
<CAPTION>
                                                     2000         1999           1998
                                                 -----------  -----------  ---------------
<S>                                              <C>          <C>          <C>
Income tax expense (benefit) at statutory rates  $3,627,000   $ 9,835,000     ($5,459,000)
State taxes (benefits) net of federal benefit       364,000       991,000        (733,000)
Other                                               (59,000)       99,000          19,000
                                                 -----------  -----------  ---------------
                                                 $3,932,000   $10,925,000     ($6,173,000)
                                                 ===========  ===========  ===============
</TABLE>

The  Company  made tax payments of $ 154,000, $81,000 and $110,000 during fiscal
years  2000,  1999  and  1998,  respectively.

NOTE  H-SUMMARIZED  FINANCIAL  INFORMATION  OF  SUBSIDIARY

Delta  Mills  Marketing,  Inc.  (the  "Guarantor")  does not comprise a material
portion  of the Company's assets or operations.  The Guarantor is a wholly-owned
subsidiary  of  the  Company  and  has fully and unconditionally guaranteed (the
"Guarantee")  the  Company's payment of principal, premium, interest and certain
liquidated  damages,  if  any, on the Company's senior notes (the "Notes").  The
Guarantor's liability under the Guarantee is limited to such amount, the payment
of  which would not have left the guarantor insolvent or with unreasonably small
capital  at  the  time its Guarantee is entered into, after giving effect to the
incurrence  of  existing  indebtedness  immediately  prior  to  such  time.

The Guarantor is the sole subsidiary of the Company.  All future subsidiaries of
the  Company  will  provide  guarantees  identical  to  the one described in the
preceding paragraph unless such future subsidiaries are Receivables Subsidiaries
(as defined in the indenture relating to the Notes).  Such additional guarantees
will  be  joint  and  several  with  the  Guarantee  of  the  Guarantor.

The Company has not presented separate financial statements or other disclosures
concerning  the  Guarantor  because  Company management has determined that such
information  is  not  material  to  investors.

Summarized financial information for the Guarantor is as follows (in thousands):

<TABLE>
<CAPTION>
                                JULY 1, 2000   JULY 3, 1999
                                -------------  -------------
<S>                             <C>            <C>
Current assets                           234            194
Noncurrent assets                        117             71
Current Liabilities                    1,479            560
Noncurrent liabilities                   785            980
Stockholders' equity (deficit)        (1,913)        (1,275)
</TABLE>

Summarized results of operations for the Guarantor are as follows
(in thousands):

<TABLE>
<CAPTION>
                                                                     Twelve Months Ended
                                                      -----------------------------------------------
                                                       July 1, 2000    July 3, 1999    June 27, 1998
                                                      --------------  --------------  ---------------
<S>                                                   <C>             <C>             <C>
Net sales -intercompany commissions                   $       4,106   $       5,207   $        6,177
Cost and expenses                                             4,744           4,948            5,346
Income from continuing operations                              (638)            167              468
(Loss) from discontinued operations                                            (519)          (1,450)
Net (loss)                                                     (638)           (352)            (982)
</TABLE>


                                       30
<PAGE>
NOTE  I-COMMITMENTS  AND  CONTINGENCIES

     The  Company has entered into agreements, and has fixed prices, to purchase
cotton  for  use  in  its  manufacturing  operations.  At  July  1, 2000 minimum
payments  under  these  contracts  with  non-cancelable  contract  terms  were
approximately  $25  million.

     During  fiscal  year  2001,  the  Company plans to spend approximately $ 10
million  for  capital  improvements  and  to  maintain  existing  facilities.

     Prior  to fiscal year 2001, two of the Company's South Carolina plants, the
Delta  2  &  3 finishing plants, had been unable to comply with certain toxicity
and  other  permit-related  limits  contained  in a National Pollutant Discharge
Elimination  System  ("NPDES")  permit  held by the Company.  Additionally, high
nitrate  levels  had  been  observed  at  the  spray field for those plants.  To
achieve  compliance  with  the  non-toxicity  NPDES  permit  limits, the Company
completed  certain  upgrades  in  October  1998  at a cost of approximately $2.3
million.  Since  then,  the  Company  has had two non-toxicity permit violations
resulting  in  the  payment of a de minimis penalty. On June 30,2000 the Company
was  issued  a discharge permit without toxicity limits. The Company is required
to  monitor  the  toxicity  level and report the results annually. The effective
date  of  this  permit  is August 1,2000, and is in effect until March 31, 2004.

     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.  The Company has recorded
the  sale  net  of  estimated  costs  to  remediate  the  property.

     On  January  10,  2000,  the  North  Carolina Department of Environment and
Natural  Resources  requested  that  Delta Mills, Inc. accept responsibility for
investigating  the  discharge  of  hazardous substances at an inactive hazardous
waste  site  known  as the Glen Raven Mills Site, Kings Mountain, North Carolina
(the  "Site").  A  predecessor  by  merger of Delta Mills, Inc., Park Yarn Mills
Company,  Inc.  ("Park  Yarn"),  owned the Site for approximately six (6) years,
from  approximately  1977  to 1983 (prior to the time Delta Mills, Inc. became a
subsidiary of Delta Woodside Industries, Inc.)  Delta Mills, Inc. 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,  Delta  Mills,  Inc.  has  denied  any
responsibility  at the Site, has declined to undertake any activities concerning
the  Site,  and  has  not  provided  for  any  reserves for costs or liabilities
attributable  to  Park  Yarn.

     On  January 13, 2000, Marion Mills, LLC, a supplier to the Company, brought
an action against Delta Mills, Inc. in North Carolina Superior Court in McDowell
County,  North Carolina.  Delta Mills, Inc. removed the case to federal court in
the  Western  District  of  North  Carolina,  Asheville  Division,  where  it is
currently pending.  Plaintiff seeks actual damages in excess of $1.8 million and
consequential  and  incidental  damages  in  excess of $7.4 million.  The actual
damages  claim  is  based  on  an alleged failure by Delta Mills, Inc. to pay in
excess  of  $1.8  million  of invoice amounts.  The consequential and incidental
damages  claim  is  based on the allegation that Delta Mills, Inc.'s. failure to
pay  caused Marion Mills, LLC to shut down its business.  The Company's position
is that Delta Mills, Inc. paid some of the invoices claimed to be unpaid and did
not  pay  the  other  invoices  because  of defects in the goods supplied by the
plaintiff  (which were returned per the plaintiff's authorization).  The Company
therefore  denies  and  is  vigorously  contesting  the  claims.

     From  time  to  time  the  Company  is  a  defendant in other legal actions
involving  claims  arising  in  the normal course of business, including product
liability  claims.  The  Company  believes  that, as a result of legal defenses,
insurance  arrangements  and indemnification provisions with parties believed to
be  financially  capable, none of these actions should have a material effect on
its  operations  or  financial  condition.


                                       31
<PAGE>
NOTE  J-QUARTERLY  RESULTS  OF  OPERATIONS  (UNAUDITED)

The  following is a summary of the unaudited quarterly results of operations for
the  years  ended  July  1,  2000  and  July  3,  1999

<TABLE>
<CAPTION>
                                                     Quarter Ended
                                    ----------------------------------------------
                                      October 2     January 1   April 1    July 1
                                    -------------  -----------  --------  --------
<S>                                 <C>            <C>          <C>       <C>
(In thousands)
2000
Net sales                           $     65,318   $   66,441   $ 70,624  $74,128
Gross profit                               5,817        6,208      9,566   11,666
Income from continuing operations
    before extraordinary items            (1,050)        (753)       918    2,826
Extraordinary gain net of taxes                0            0      3,502    1,157
Discontinued operations                        0            0          0     (174)
Net income (loss)                         (1,050)        (753)     4,420    3,809


                                     September 26  December 26  March 27   July 3
                                    -------------  -----------  --------  --------
(In thousands)
1999
Net sales                           $     92,417   $   86,938   $ 81,049  $88,551
Gross profit                              17,188       15,782     11,685   11,386
Income from continuing operations          5,397        4,186      2,260    1,538
Discontinued operations                    2,632            0      1,141       29
Net income (loss)                          8,029        4,186      3,401    1,567
</TABLE>

During  the  third  quarter  of  fiscal  year  1998,  the  Company  recognized
restructuring  and  impairment  charges  of  $21  million  in  connection  with
discontinued  operations  described  in  Note  F.  In  fiscal  1999, the Company
decreased the estimate of the after-tax cost to discontinue these businesses and
recognized  after-tax  credits of $2.6 million and $1.2 million during the first
and  third  quarters  of  fiscal  year  1999,  respectively.


NOTE  K-EXTRAORDINARY  ITEMS  AND  SUBSEQUENT  EVENTS

a) During the fiscal year 2000, the Company purchased $34,922,000 of face amount
of  its  9  5/8%  Senior  Notes  for  $26,615,000.  The  Company  recognized  an
extraordinary  gain  of  $4,659,000  after  a  tax  benefit  of  $2,755,000.

b)  Subsequent  to  the  end of fiscal 2000, and through September 18, 2000, the
Company  purchased  $15,653,000  face  amount  of  its  9  5/8% senior notes for
$14,270,481,  resulting  in  a  pre-tax  extraordinary  gain  of  $989,927.


                                       32
<PAGE>
ITEM  9.  CHANGES  IN  AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON
--------  ------------------------------------------------------
          ACCOUNTING  AND  FINANCIAL  DISCLOSURE
          --------------------------------------

      Not  applicable.


                                       33
<PAGE>
                                    PART III

ITEM  10.  DIRECTORS  AND  EXECUTIVE  OFFICERS  OF  THE  REGISTRANT
---------  --------------------------------------------------------

     Not  applicable.


ITEM  11.  EXECUTIVE  COMPENSATION

     Not  applicable.


ITEM  12.  SECURITY  OWNERSHIP  OF  CERTAIN  BENEFICIAL  OWNERS  AND  MANAGEMENT
---------  ---------------------------------------------------------------------

     Not  applicable.


ITEM  13.  CERTAIN  RELATIONSHIPS  AND  RELATED  PARTY  TRANSACTIONS
---------  ---------------------------------------------------------

      Not  applicable.


                                       34
<PAGE>
                                     PART IV


<TABLE>
<CAPTION>

ITEM  14.  EXHIBITS,  FINANCIAL  STATEMENT  SCHEDULES  AND  REPORTS  ON
------------------------------------------------------------------------
FORM  8-K
----------

     (a) (1) and  (2)  Financial  Statements  and  Financial  Statement  Schedules
                       -----------------------------------------------------------

                       The response to this  portion  of  Item  14  is  set  forth on page
           F-2 included  herein, which  response  is  incorporated  herein  by  reference.

           (3)  Listing  of  Exhibits:
                ---------------------


<S>        <C>
3.1        Restated and Amended Certificate of Incorporation of Delta Mills, Inc.:
           Incorporated by reference to Exhibit 3.1 to the Registration Statement on Form S-4
           of the Company and Delta Mills Marketing, Inc., File No. 333-37617 (the "S-4").
3.2        Bylaws of Delta Mills, Inc.: Incorporated by reference to Exhibit 3.2 to the S-4.
4.1        See Exhibits 3.1 and 3.2.
4.2        Indenture, dated as of August 25, 1997, by and among the Company, Delta Mills
           Marketing, Inc. and The Bank of New York, as Trustee, with respect to the
           Company's Series A and Series B 9-5/8% Senior Notes due 2007, $150,000,000 in
           aggregate principal amount, together with forms of certain related instruments,
           agreements and documents:  Incorporated by reference to Exhibit 4.2.6 to the
           Current Report on Form 8-K/A of Delta Woodside Industries, Inc. with the date of
           September 25, 1997(the "DWI 8-K/A").*
4.3.1      Revolving Credit and Security Agreement, dated as of March 31, 2000, between
           GMAC Commercial Credit LLC as agent and lender, and Delta Mills, Inc. as
           borrower:  Incorporated by reference to Exhibit 99.1 to the Company's Current
           Report on Form 8-K dated March 31, 2000 and filed with the Securities and
           Exchange Commission on April 13, 2000
4.3.1.1    Letter, dated July 28, 2000, amending Revolving Credit and Security Agreement:
           Incorporated by reference to Exhibit 4.3.1.1 to Form 10-K of Delta Woodside
           Industries, Inc. for the fiscal year ended July 1, 2000 (the "DWI 2000 10-K").*
4.3.2      Guarantee, dated as of March 31, 2000, of Delta Mills Marketing, Inc. in favor of
           GMAC Commercial Credit LLC as agent:  Incorporated by reference to Exhibit
           99.2 to the Company's Current Report on Form 8-K dated March 31, 2000 and
           filed with the Securities and Exchange Commission on April 13, 2000.
4.3.3      General Security Agreement, dated as of March 31, 2000, between Delta Mills
           Marketing, Inc. and GMAC Commercial Credit LLC as agent:  Incorporated by
           reference to Exhibit 99.3 to the Company's Current Report on Form 8-K dated
           March 31, 2000 and filed with the Securities and Exchange Commission on April
           13, 2000.
4.3.4      Stock Pledge and Security Agreement, dated as of March 31, 2000, by Alchem
           Capital Corporation in favor of GMAC Commercial Credit LLC as agent:
           Incorporated by reference to Exhibit 99.4 to the Company's Current Report on
           Form 8-K dated March 31, 2000 and filed with the Securities and Exchange
           Commission on April 13, 2000.
4.3.5      Stock Pledge and Security Agreement, dated as of March 31, 2000, by Delta Mills,
           Inc. in favor of GMAC commercial Credit LLC as agent:  Incorporated by
           reference to Exhibit 99.5 to the Company's Current Report on Form 8-K dated
           March 31, 2000 and filed with the Securities and Exchange Commission on
           April 13, 2000
4.3.6      Stock Pledge and Security Agreement, dated as of May 11, 2000, by Delta
           Woodside Industries, Inc. in favor of GMAC Commercial Credit LLC as agent:
           Incorporated by reference to Exhibit  4.3.6 to the DWI 2000 10-K.*
4.4        The Company hereby agrees to furnish to the Commission upon request of the
           Commission a copy of any instrument with respect to long-term debt not being
           registered in a principal amount less than 10% of the total assets of the Company
           and its subsidiaries on a consolidated basis.


                                       35
<PAGE>
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON
---------------------------------------------------------------
FORM 8-K - CONTINUED
--------------------

10.1       Lease dated September 1, 1998, by and between Hammond Square, Ltd. and
           Delta WoodsideIndustries, Inc.: Incorporated by reference to Exhibit 10.1 to Form
           10-K of Delta Woodside Industries, Inc. for the fiscal year ended July 3, 1999 (the
           "DWI 1999 10-K").*
10.1.1     Letter terminating lease between 233 N. Main, Inc. (formerly named Hammond
           Square, Ltd.) and theCompany:  Incorporated by reference to Exhibit 10.1.1 to the
           DWI 2000 10-K.*
10.2**     Delta Woodside Industries, Inc. Deferred Compensation Plan for Key
           Managers, Amended and Restated effective June 30, 2000, as amended.
10.3.1**   Delta Woodside Industries, Inc. Incentive Stock Award Plan effective July
           1, 1990: Incorporated by reference to Exhibit 10.1 to the Form 10-Q of Delta
           Woodside Industries, Inc. for the fiscal quarter ended March 31, 1990.*
10.3.2**   1995 Amendment to the Incentive Stock Award Plan effective as of
           November 9, 1995:  Incorporated by reference to Exhibit 10.3.1 to the Form 10-Q
           of Delta Woodside Industries, Inc. for the quarterly period ended December 30,
           1995 (the "DWI 12/95 10-Q").*
10.3.3**   1997 Amendment to the Incentive Stock Award Plan effective as of
           November 6, 1997: Incorporated by reference to Exhibit 99.1 to the Registration
           Statement on Form S-8 of Delta Woodside Industries, Inc. (File No. 333-45771).
10.4.1**   Delta Woodside Industries, Inc. Stock Option Plan effective as of July 1,
           1990: Incorporated by reference to Exhibit 10.11 to the Form 10-K of Delta Woodside
           Industries,  Inc. for the fiscal year ended June 30, 1999.*
10.4.2**   Amendment No. 1 to Stock Option Plan: Incorporated by reference to
           Exhibit 10.1 to the Form 10-Q of Delta Woodside Industries, Inc. for the quarterly
           period ended  December 29, 1990 (the "DWI 12/90 10-Q").*
10.4.3**   Amendment to Stock Option Plan: Incorporated by reference to Exhibit 10.9.2
           to the Form 10-K of Delta Woodside Industries, Inc. for the fiscal year ended June
           29, 1991 (the  "DWI 1991 10-K").*
10.4.4**   1995 Amendment to Stock Option Plan effective as of November 9, 1995:
           Incorporated by reference to Exhibit 10.4.4 to the DWI 12/95 10-Q.*
10.4.5**   1997 Amendment to Stock Option Plan effective as of November 6, 1997: Incorporated
           by reference to Exhibit 99.1 to the Registration Statement on Form S-8 of Delta
           Woodside Industries, Inc. (File No. 333-45767).
10.4.6**   Amendment to Stock Option Plan adopted April 25, 2000: Incorporated by
           reference to Exhibit 10.4.6 to Form 10-Q of Delta Woodside Industries, Inc. for the
           fiscal quarter ended April 1, 2000.*
10.4.7**   Amendments to Stock Option Plan:  Incorporated by reference to Exhibit 10.4.7
           to the DWI 2000 10-K.*
10.5       Stock Transfer Restrictions and Right of First Refusal Agreement between
           Delta Woodside Industries, Inc. and E. Erwin Maddrey, II: Incorporated by
           reference to Exhibit 10.2 to the DWI 12/90 10-Q.*
10.5.1     Termination of Stock Transfer Restrictions and Right of First Refusal
           Agreement with E. Erwin Maddrey, II, dated June 22, 2000:  Incorporated by
           reference to Exhibit 10.5.1  to the DWI 2000 10-K.*
10.6       Stock Transfer Restrictions and Right of First Refusal Agreement between
           Delta Woodside Industries, Inc. and Bettis C. Rainsford: Incorporated by reference
           to Exhibit 10.3 to the DWI 12/90 10-Q.*
10.6.1     Termination of Stock Transfer Restrictions and Right of First Refusal Agreement with
           Bettis C.Rainsford, dated June 14, 2000:  Incorporated by reference to Exhibit 10.6.1
           to the DWI 2000 10-K.*
10.7**     Form of Amendment of Certain Rights and Benefits Relating to Stock Options
           and Deferred Compensation by and between the Company and certain pre-spin-off
           plan participants: Incorporated by reference to Exhibit 10.7 to the DWI 2000 10-K.*
10.7.1     List of directors and officers of the Company who signed the document
           described in Exhibit 10.7:  Incorporated by reference to Exhibit 10.7.1 to DWI
           2000 10-K.*
10.7.2**   Form of Amendment of Stock Options by and between Delta Woodside Industries, Inc.
           and certain pre-spin-off plan participants.  Incorporated by reference to Exhibit 10.7.2
           to DWI 2000 10-K*


                                       36
<PAGE>
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON
---------------------------------------------------------------
FORM 8-K - CONTINUED
--------------------


10.8.1**   Directors Stock Acquisition Plan: Incorporated by reference to Exhibit 10.14
           to the DWI 1991 10-K.*
10.8.2**   Amendment to Directors Stock Acquisition Plan, dated April 30, 1992:
           Incorporated by reference to Exhibit 10.12.2 to the DWI 1992 10-K.*
10.9**     Delta Woodside Industries, Inc. Long Term Incentive Plan: Incorporated by
           reference to Exhibit 10.2 to the Registration Statement on Form S-4 of the
           Company (File No. 333-37617).
10.9.1**   Amendments of Delta Woodside Industries, Inc. Long Term Incentive Plan:
           Incorporated by reference to Exhibit 10.9.1 to the DWI 2000 10-K.*
10.9.2**   Form of Agreement Respecting Delta Woodside Industries, Inc. Long Term
           Incentive Plan, dated in June 2000:  Incorporated by reference to Exhibit 10.9.2 to
           the DWI 2000 10-K.*
10.10**    2000 Stock Option Plan of Delta Woodside Industries, Inc.:  Incorporated by
           reference to Exhibit 10.10 to the DWI 2000 10-K.*
10.11**    2000 Incentive Stock Award Plan of Delta Woodside Industries, Inc.:
           Incorporated by reference to Exhibit 10.11 to the DWI 2000 10-K.*
10.12**    Letter dated December 14, 1998 to Robert W. Humphreys: Incorporated by
           reference to Exhibit 10.10 to the Form 10-Q/A of Delta Woodside Industries, Inc.
           for the quarterly period ended December 26, 1998 (the "DWI 12/98 10-Q").*
10.12.1**  Letter dated April 22, 1999 to Robert W. Humphreys: Incorporated by
           reference to Exhibit 10.12.1 to the DWI 1999 10-K.*
10.13**    Letter dated December 14,1998 to Jane H. Greer: Incorporated by reference to
           Exhibit 10.11 to the DWI 12/98 10-Q.*
10.14**    Letter dated June 28, 2000 to William F. Garrett:  Incorporated by reference to
           Exhibit 10.l4 to the DWI 2000 10-K.*
10.15**    Election and Release Form for the Severance Plan for Salaried Employees of
           Delta Woodside Industries, Inc., and its Adopting Subsidiaries with Bettis C.
           Rainsford:  Incorporated by reference to Exhibit 10.15 to the DWI
           2000 10-K.*
10.16      Letter terminating lease with Bettis C. Rainsford:  Incorporated by reference to
           Exhibit 10.16 to the DWI 2000 10-K.*
10.17      See Exhibits 4.2, 4.3.1, 4.3.2, 4.3.3, 4.3.4, 4.3.5 and 4.3.6.
23         Report on Schedule by Independent Auditors.

<FN>
*          All reports previously filed with the Commission by Delta Woodside Industries, Inc. pursuant
           to the Exchange Act and rules and regulations promulgated thereunder, exhibits of which are
           incorporated by reference into this Report, were filed under Commission File No. 1-10095.

**         This is a management contract or compensatory plan or arrangement.
</TABLE>


The  registrant  agrees to furnish supplementally to the Securities and Exchange
Commission  a  copy of any omitted schedule or exhibit to any of the above filed
exhibits  upon  request  of  the  Commission.

     (b)  Reports  on  Form  8-K
          ----------------------
          The  Company  filed  a  Form  8-K  with date of March 31, 2000.  Items
          reported  were:
               Item  5.  Other  Events
               Item  7.  Financial  statements  and  exhibits

     (c)  Exhibits
          --------
          The  response  to  this  portion of Item 14 is submitted as a separate
          section  of  this  report.

     (d)  Financial  Statement  Schedules
          -------------------------------
          Not  applicable


                                       37
<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)



       9/28/2000               By:  /s/  William  F.  Garrett
     --------------               ------------------------------
         Date                     William  F.  Garrett
                                  President,  Chief  Executive  Officer
                                  and  Director

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has  been  signed below by the following persons on behalf of the registrant and
in  the  capacities  and  on  the  dates  indicated.

/s/  E. Erwin  Maddrey, II   9/28/2000     /s/  William  F.  Garrett  9/28/2000
--------------------------------------     ------------------------------------
E.  Erwin  Maddrey,  II          Date      William  F.  Garrett         Date
Director                                   President,  Chief  Executive Officer
                                           and  Director

/s/  Buck  A.  Mickel        9/28/2000     /s/ William H. Hardman, Jr 9/25/2000
--------------------------------------     ------------------------------------
Buck A. Mickel                   Date      William H. Hardman, Jr.     Date
Director                                   Vice President, Treasurer and Chief
                                           Financial  Officer

                                           /s/  Donald  C.  Walker 9/25/2000
                                           ---------------------------------
                                           Donald  C.  Walker          Date
                                           Controller


                                       38
<PAGE>
                                  EXHIBIT INDEX

                      ITEM 14 (a) (1) and (2), (c) and (d)

         LIST OF FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES

                                CERTAIN EXHIBITS

                          FINANCIAL STATEMENT SCHEDULES

                             YEAR ENDED JULY 1, 2000

                                DELTA MILLS, INC.

                           GREENVILLE, SOUTH CAROLINA


                                       F-1


<PAGE>
FORM  10-K--ITEM  14(A)(1)  AND  (2)
------------------------------------

DELTA  MILLS,  INC.

LIST  OF  FINANCIAL  STATEMENTS  AND  FINANCIAL  STATEMENT  SCHEDULES


The following consolidated financial statements of Delta Mills, Inc. and for the
Year  ended  July  1,  2000  are  incorporated  by  reference  in  Item  8:

     Consolidated  balance  sheets-July  1,  2000  and  July  3,  1999.

     Consolidated statements of operations--Years ended July 1, 2000 and July 3,
     1999,  and  June  27,1998.

     Consolidated  statements of shareholder's equity-- Years ended July 1, 2000
     and  July  3,  1999,  and  June  27,1998.

     Consolidated  statements  of  cash flows-- Years ended July 1, 2000
     and  July  3,  1999,  and  June  27,1998.

     Notes  to  consolidated  financial  statements.

The  following consolidated financial statement schedule of Delta Mills, Inc. is
included  in  Item  14(d):

     Schedule  II  --  Valuation  and  qualifying  accounts

All  other  schedules  for  which provision is made in the applicable accounting
regulation  of the Securities and Exchange Commission are not required under the
related  instructions  or  are  inapplicable,  and  therefore have been omitted.
Columns  omitted  from schedules filed have been omitted because the information
is  not  applicable.


<PAGE>
<TABLE>
<CAPTION>
                                           SCHEDULE II--VALUATION AND QUALIFYING ACCOUNTS
                                                            DELTA MILLS, INC.

-------------------------------------------------------------------------------------------------------------------------------
           COL. A                                   COL. B          COL. C                       COL. D             COL. E
-------------------------------------------------------------------------------------------------------------------------------
                                                                   ADDITIONS
                                                                  ----------------------------
                                                  Balance at
        DESCRIPTION                               Beginning         (1)              (2)       Deductions        Balance at End
                                                  of Period     Charged to       Charged to     Describe           of Period
                                                                   Costs            Other
                                                               and Expenses  Accounts-Describe
-------------------------------------------------------------------------------------------------------------------------------
Deducted from asset accounts
Allowance for Doubtful Accounts and Returns:
<S>                                           <C>                 <C>        <C>               <C>              <C>
Year ended July 1, 2000                       $          291,000                               $  118,000  (2)  $       173,000
                                              ==================                               ==========       ===============
Year ended July 3, 1999                       $          246,000                  $   45,000               (1)  $       291,000
                                              ==================                  ==========                    ===============
Year ended June 27, 1998                      $          128,000                  $  118,000               (1)  $       246,000
                                              ==================                  ==========                    ===============
Inventory reserves:

Year ended July 1, 2000                       $        1,347,000                               $    9,000  (2)  $     1,338,000
                                              ==================                               ==========       ===============
Year ended July 3, 1999                       $        3,452,000                               $2,105,000  (2)  $     1,347,000
                                              ==================                               ==========       ===============
Year ended June 27, 1999                      $        2,638,000  $  814,000                                    $     3,452,000
                                              ==================  ==========                                    ===============

NOTES:
<FN>
(1)  Net  change  in  sales  allowances  charged  to  income  as  a  reduction  of  sales.
(2)  Deducted  from  costs  and  expenses.
</TABLE>


<PAGE>