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

                                   FORM 10-K/A
                                Amendment No. 1


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

For the fiscal year ended June 28, 2003

                                       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.)

PO Box 6126
100 Augusta Street
Greenville, South Carolina                                29606
--------------------------------------------       --------------------
(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 [ X ].

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

         Yes                        No    X
             --------                  --------

The aggregate market value of the common equity stock held by  non-affiliates of
the registrant as of December 28, 2002 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, 2003 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.




This  Amendment  No. 1 is being  filed in order to include  Exhibit 23 which was
inadvertently omitted from the initial filing.




                                       2
<PAGE>

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS


<TABLE>
<CAPTION>
                                                                                                 Page
                                                                                                -------
<S>                                                                                               <C>
Report of KPMG  LLP                                                                               22
Consolidated Balance Sheets as of June 28, 2003 and June 29, 2002                                 23
Consolidated Statements of Operations for the fiscal years ended June 28, 2003,
                      June 29, 2002 and June 30, 2001                                             25
Consolidated Statements of Shareholder's Equity  for the fiscal years ended June 28, 2003,
                      June 29, 2002 and June 30, 2001                                             26
Consolidated Statements of Cash Flows for the fiscal years ended June 28, 2003,
                      June 29, 2002 and June 30, 2001                                             27
Notes to Consolidated Financial Statements                                                        28

</TABLE>

















                                       3
<PAGE>


         INDEPENDENT AUDITORS' REPORT

         THE BOARD OF DIRECTORS
         DELTA MILLS, INC.

         We have audited the accompanying  consolidated  balance sheets of Delta
         Mills,  Inc. and subsidiaries as of June 28, 2003 and June 29, 2002 and
         the  related  consolidated  statements  of  operations,   shareholder's
         equity,  and cash flows for each of the years in the three-year  period
         ended June 28, 2003. 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 audits.

         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 audits provide 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. and  subsidiaries  as of June 28, 2003 and June 29,
         2002, and the results of their operations and their cash flows for each
         of the years in the three-year period ended June 28, 2003 in conformity
         with accounting  principles  generally accepted in the United States of
         America.

         As discussed in Note A to the  consolidated  financial  statements,  on
         June 30, 2002, the Company  adopted  Statement of Financial  Accounting
         Standards  No.  145,  "Rescission  of FASB  Statements  Nos.  4 and 64,
         Amendment of FASB Statement No. 13, and Technical Corrections."


                                              /s/KPMG LLP
                                              KPMG LLP

         Greenville, South Carolina
         July 25, 2003



                                       4
<PAGE>
<TABLE>
<CAPTION>

CONSOLIDATED BALANCE SHEETS Delta Mills, Inc.
(In Thousands, except share amounts)

                                                              June 28, 2003             June 29, 2002
                                                       ---------------------    ----------------------
<S>                                                                 <C>                        <C>
ASSETS
CURRENT ASSETS
  Cash and cash equivalents                                            $520                       $52
  Accounts receivable:
     Factor and other                                                44,628                    49,887
    Less allowances for returns                                         180                        32
                                                       ---------------------    ----------------------
                                                                     44,448                    49,855
  Inventories
     Finished goods                                                   7,711                     7,085
     Work in process                                                 25,765                    19,878
     Raw materials and supplies                                      10,659                     5,784
                                                       ---------------------    ----------------------
                                                                     44,135                    32,747

  Deferred income taxes                                               1,517                     1,347
  Other assets                                                          520                        25
                                                       ---------------------    ----------------------
                      TOTAL CURRENT ASSETS                           91,140                    84,026
                                                       ---------------------    ----------------------

ASSETS HELD FOR SALE                                                  3,948                     3,141

PROPERTY, PLANT AND EQUIPMENT, at cost
     Land and land improvements                                       1,587                     1,702
     Buildings                                                       30,943                    32,171
     Machinery and equipment                                        109,623                   114,070
     Furniture, fixtures and office equipment                         9,789                     9,599
     Lease improvements                                               1,030                     1,030
     Construction in progress                                         4,427                     1,025
                                                       ---------------------    ----------------------
                                                                    157,399                   159,597
     Less accumulated depreciation and amortization                  90,618                    89,096
                                                       ---------------------    ----------------------
                                                                     66,781                    70,501

DEFERRED LOAN COSTS
             less accumulated amortization of $ 5,634
             and $5,324 in 2003 and 2002 respectively                   459                       769

                                                       ---------------------    ----------------------
                                                                   $162,328                  $158,437
                                                       =====================    ======================
</TABLE>











                                       5
<PAGE>

<TABLE>
<CAPTION>
CONSOLIDATED BALANCE SHEETS Delta Mills, Inc.
(In Thousands, except share amounts)


                                                              June 28, 2003           June 29, 2002
                                                          ------------------      ------------------

<S>                                                                 <C>                     <C>
LIABILITIES AND SHAREHOLDER'S EQUITY
CURRENT LIABILITIES
  Trade accounts payable                                            $14,217                 $11,689
  Revolving credit facility                                          24,856                  11,365
  Payable to Affiliates                                               3,517                   3,321
  Accrued employee compensation                                       1,414                   1,696
  Accrued and sundry liabilities                                     20,479                  18,617

                                                          ------------------      ------------------
                    TOTAL CURRENT LIABILITIES                        64,483                  46,688

LONG-TERM DEBT                                                       31,941                  47,819
DEFERRED INCOME TAXES                                                 8,421                   9,340
DEFERRED COMPENSATION                                                 7,573                   7,271
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 (accumulated deficit)                            (1,882)                 (4,473)
                                                          ------------------      ------------------
                                                                     49,910                  47,319
COMMITMENTS AND CONTINGENCIES
                                                          ------------------      ------------------
                                                                   $162,328                $158,437
                                                          ==================      ==================

</TABLE>




See notes to consolidated financial statements.

                                       6
<PAGE>

<TABLE>
<CAPTION>

CONSOLIDATED STATEMENTS OF OPERATIONS
Delta Mills, Inc.
(In Thousands)

                                                                     Year Ended        Year Ended       Year Ended
                                                                   June 28, 2003     June 29, 2002     June 30, 2001
                                                                 ----------------  ---------------- -----------------

<S>                                                                     <C>               <C>               <C>
Net sales                                                               $177,193          $174,673          $212,960
Cost of goods sold                                                       160,243           165,266           196,692
                                                                 ----------------  ---------------- -----------------
Gross profit                                                              16,950             9,407            16,268
Selling, general and administrative expenses                              11,370            11,634            14,609
Impairment and restructuring expenses                                        398             8,683
Other income                                                                 582               476               302
                                                                 ----------------  ---------------- -----------------
  OPERATING PROFIT (LOSS)                                                  5,764           (10,434)            1,961
Other (expense) income:
  Interest expense                                                        (5,275)           (9,090)          (11,064)
  Interest income                                                                              192               547
  Gain on extinguishment of debt                                           3,643            16,072             2,458
                                                                 ----------------  ---------------- -----------------
                                                                          (1,632)            7,174            (8,059)
                                                                 ----------------  ---------------- -----------------
INCOME (LOSS) BEFORE INCOME TAXES                                          4,132            (3,260)           (6,098)
Income tax expense (benefit)                                               1,541            (1,198)           (2,192)
                                                                 ----------------  ---------------- -----------------

NET INCOME (LOSS)                                                         $2,591           $(2,062)          $(3,906)
                                                                 ================  ================ =================





See notes to consolidated financial statements.

</TABLE>







                                       7
<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       (Accumulated Deficit)         Equity
                             --------------  -------------  ---------------  -----------------------  -----------------
<S>                                    <C>             <C>         <C>                       <C>               <C>
Balance at July 1, 2000                100             $0          $51,792                   $4,395            $56,187
  Net Loss                                                                                   (3,906)            (3,906)
  Cash dividends paid                                                                        (2,900)            (2,900)
                             --------------  -------------  ---------------  -----------------------  -----------------
Balance at June 30, 2001               100              0           51,792                   (2,411)            49,381
  Net Loss                                                                                   (2,062)            (2,062)
                             --------------  -------------  ---------------  -----------------------  -----------------
Balance at June 29, 2002               100              0           51,792                   (4,473)            47,319
  Net Income                                                                                  2,591              2,591
                             --------------  -------------  ---------------  -----------------------  -----------------
Balance at June 28, 2003               100             $0          $51,792                  $(1,882)           $49,910
                             ==============  =============  ===============  =======================  =================



</TABLE>







See notes to consolidated financial statements.







                                       8
<PAGE>

<TABLE>
<CAPTION>

CONSOLIDATED STATEMENTS OF CASH FLOWS
Delta Mills, Inc.
(In Thousands)
                                                                      Year Ended           Year Ended            Year Ended
                                                                     June 28, 2003        June 29, 2002         June 30, 2001
                                                                   ------------------   ------------------    ------------------
OPERATING ACTIVITIES
<S>                                                                           <C>                <C>                   <C>
  Net income (loss)                                                           $2,591             $(2,062)              $(3,906)
  Adjustments to reconcile net income (loss) to net
     cash provided by operating activities:
     Depreciation                                                              8,979                9,174                10,886
     Amortization                                                                135                  370                   424
     Decrease in deferred loan costs                                             175                  541                   784
     Discount to face value on repurchase of bonds                            (3,818)             (16,613)               (3,242)
     Impairment and restructuring expenses                                       398                8,683
     Change in deferred income taxes                                          (1,089)              (1,225)               (1,888)
     Gains on disposition of property
        and equipment                                                           (433)                (356)                 (342)
     Changes in operating assets and liabilities:
        Accounts receivable                                                    5,407              (12,251)               33,579
        Inventories                                                          (11,388)              10,455                   717
        Other current assets                                                    (495)                 522                   (80)
        Deferred compensation                                                    306                  672                   786
        Accounts payable and accrued expenses                                  3,732                4,512                (8,668)
                                                                   ------------------   ------------------    ------------------
          NET CASH PROVIDED BY OPERATING ACTIVITIES                            4,500                2,422                29,050
                                                                   ------------------   ------------------    ------------------

INVESTING ACTIVITIES Property, plant and equipment:
     Purchases                                                                (6,442)              (6,496)               (5,151)
     Proceeds of dispositions                                                    807                  429                   450
                                                                   ------------------   ------------------    ------------------
           NET CASH USED IN INVESTING ACTIVITIES                              (5,635)              (6,067)               (4,701)
                                                                   ------------------   ------------------    ------------------

FINANCING ACTIVITIES
  Proceeds from revolving lines of credit                                    195,461               44,979                 3,003
  Repayments on revolving lines of credit                                   (181,970)             (33,614)               (3,003)
  Repurchase and retirement of long-term debt                                (11,888)             (19,383)              (28,021)
  Dividends paid                                                                                                         (2,900)
                                                                   ------------------   ------------------    ------------------
          NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES                  1,603               (8,018)              (30,921)
                                                                   ------------------   ------------------    ------------------

INCREASE (DECREASE) IN CASH AND
         CASH EQUIVALENTS                                                        468              (11,663)               (6,572)

Cash and cash equivalents at beginning of year                                    52               11,715                18,287
                                                                   ------------------   ------------------    ------------------
         CASH AND CASH EQUIVALENTS AT END OF YEAR                               $520                  $52               $11,715
                                                                   ==================   ==================    ==================
See notes to consolidated financial statements.
</TABLE>

                                       9
<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 in consolidation.  Delta Mills, Inc. and Delta Mills Marketing , Inc.
are wholly-owned subsidiaries of Delta Woodside Industries, Inc. ("DWI").

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

INVENTORIES:  Inventories  are stated at the lower of 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:  In  accordance  with  Statement of Financial
Accounting  Standards (SFAS) No. 144, "Accounting for the Impairment or Disposal
of Long-Lived Assets," long-lived assets such as property,  plant and equipment,
are reviewed for impairment whenever events or changes in circumstances indicate
that the carrying amount of an asset may not be recoverable.  Recoverability  of
assets to be held and used is measured by a comparison of the carrying amount of
an asset to estimated undiscounted future cash flows expected to be generated by
the asset. If the carrying amount of an asset exceeds its estimated  future cash
flows,  an  impairment  charge is recognized by the amount by which the carrying
amount of the asset  exceeds the fair value of the asset.  Assets to be disposed
of are  separately  presented in the balance  sheet and reported at the lower of
the  carrying  amount  or fair  value  less  costs  to sell,  and are no  longer
depreciated.

Prior to June 30, 2002, the impairment of long-lived assets was accounted for in
accordance  with SFAS No. 121,  "Accounting for the Impairment of Long-Lived and
Long-Lived Assets to be Disposed Of."

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 the life of
the related debt which is primarily ten years.

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  and net operating  losses and
tax credit carryforwards.  The effect on deferred taxes of a change in tax rates
is recognized in income in the period that includes the enactment date. Accruals
for tax  exposures are recorded  when they are probable and  estimable,  and tax
valuation  allowances are established  when management  cannot conclude that the
realization of deferred tax assets are more likely than not.

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.

                                      10
<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

NOTE A--DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES - CONTINUED

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. The Company's  management has determined that its cotton buying  contracts
meet the  criteria for  exclusion  under the normal  purchases  and normal sales
exemption of SFAS 133 and its related amendments.

STOCK OPTIONS:  The Company  participates in the Delta Woodside  Industries Inc.
Stock Option  Plan.  The Company  applies the  intrinsic  value-based  method of
accounting  for these  stock  options,  in  accordance  with the  provisions  of
Accounting  Principles Board (APB) Opinion No. 25,  "Accounting for Stock Issued
to  Employees",  and related  interpretations.  Under this method,  compensation
expense is recorded on the date of the grant only if the current market price of
the underlying  stock exceeded the exercise price. If the Company had determined
compensation  expense at fair  value,  as under SFAS No.  123,  "Accounting  for
Stock-Based  Compensation,"  the  Company's net income (loss) would have been as
follows:
<TABLE>
<CAPTION>

(In thousands)                                              Year Ended               Year Ended              Year Ended
                                                            June 28, 2003            June 29, 2002           June 30, 2001
                                                            -----------------        ------------------      -----------------

<S>                                                           <C>                      <C>                      <C>
Net income (loss), as reported                                $        2,591           $        (2,062)         $      (3,906)

Add stock based employee compensation expense
included in reported net income (loss), net of tax                       174                       136

Less total stock based compensation expense
   determined under fair value based method, net
   of related tax effects                                               (496)                     (491)                 (331)
                                                            -----------------        ------------------      -----------------

Pro forma net income (loss)                                   $        2,269          $         (2,417)         $     (4,237)
                                                            -----------------        ------------------      -----------------


</TABLE>

RECENT ACCOUNTING  PRONOUNCEMENTS:  In April 2002, the FASB issued Statement No.
145,  "Rescission of FASB Statements Nos. 4 and 64,  Amendment of FASB Statement
No. 13, and  Technical  Corrections."  Among other  things,  Statement  No. 145,
through the rescission of Statement No. 4, no longer requires extraordinary item
treatment for gains and losses from the  extinguishment of debt, unless the debt
extinguishment  meets  the  unusual  in nature  and  infrequency  of  occurrence
criteria  established  in APB 30. The  Statement  was effective for fiscal years
beginning after May 15, 2002 and requires the  reclassification  of prior period
items that do not meet the extraordinary item classification criteria in APB 30.
Upon adoption,  the Company  reclassified all extraordinary gains recognized for
the early  extinguishment  of debt as a component of income (loss) before income
taxes for all financial statement periods presented.

ESTIMATES: The preparation of financial statements in conformity with accounting
principles   generally  accepted  in  the  United  States  of  America  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.

                                       11
<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

NOTE A--DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES - CONTINUED

FAIR  VALUE OF  FINANCIAL  INSTRUMENTS:  The  carrying  values of the  Company's
financial  instruments,  except for those disclosed in Note C, approximate their
estimated  fair  values  due  to  either  the  short-term   maturities  of  such
instruments or minor interest rate differentials.

RECLASSIFICATIONS:  Certain prior year amounts in the accompanying  consolidated
financial  statements  have been  reclassified  to conform  to the  fiscal  2003
presentation.  These  reclassifications  did not  effect  net  income  (loss) or
shareholders' equity.

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 years 2003,
2002 and 2001 each consisted of 52 weeks.


NOTE B--ACCOUNTS RECEIVABLE

The Company  assigns a substantial  portion of its trade accounts  receivable to
GMAC Commercial Credit LLC (the Factor) under a factor agreement. The assignment
of these  receivables  is primarily  without  recourse,  provided  that customer
orders are  approved by the Factor  prior to shipment of goods,  up to a maximum
for each individual account. The assigned trade accounts receivable are recorded
on the Company's  books at full value and  represent  amounts due to the Company
from the Factor.  There are no  advances  from the Factor  against the  assigned
receivables.  All factoring fees are recorded on the Company's books as incurred
as a part of selling, general and administrative expense.

For fiscal year 2003,  the  Company  had three  customers,  Levi  Strauss,  V.F.
Corporation,  and Haggar  Apparel  that each  exceeded 10% of  consolidated  net
sales.  The  Company's  sales to these  customers  totaled $71 million in fiscal
2003. For fiscal year 2002, only two of these  customers,  Levi Strauss and V.F.
Corporation, each exceeded 10% of consolidated net sales. The Company's sales to
these  customers  totaled $63 million in fiscal 2002.  For fiscal year 2001, the
Company  again  had  three  customers,  Levi  Strauss,  Haggar  Corp.,  and V.F.
Corporation,  which each exceeded 10% of consolidated  net sales.  The Company's
aggregate  sales to these  customers  were  $90  million  for  fiscal  2001.  In
addition, during fiscal years 2003, 2002, and 2001, sales of military fabrics to
apparel customers  accounted for approximately 33%, 31%, and 22%,  respectively,
of the Company's  total sales.  The loss of any of these  accounts  could have a
material adverse effect on the results of the Company.

The  Company's  accounts  receivable  are due from many  companies  that produce
apparel  products  located  throughout  the United  States.  Credit risk for the
receivables  generally  remains with the Factor under the terms of the factoring
agreement.

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%.  These notes will mature in August 2007. At
June 28, 2003, the outstanding balance of the notes was $31,941,000,  a decrease
of $15,878,000 from the balance of $47,819,000 at June 29, 2002.

At June 28, 2003, the carrying value of the Senior Notes was $31,941,000 and the
fair value, based on quoted market prices was $25,233,000. The fair value of the
revolving  credit facility  approximates  its carrying value as of June 28, 2003
due to the variable interest rate provision of the facility.

                                       12
<PAGE>

NOTE C--LONG-TERM DEBT AND LEASES - CONTINUED

On March 20, 2003,  the  Company's  $50 million  credit  facility  with GMAC was
amended. The facility remains a $50 million committed revolving credit facility.
Among other things, the amendment removed a minimum availability  requirement of
$12.5  million,  added  financial  covenants for a maximum  leverage ratio and a
minimum fixed charge  coverage ratio and extended the term of the facility until
March of 2007. The amended credit  facility also includes  GMAC's consent to the
sale of the Company's Catawba Plant, the closing of which was announced March 5,
2003,  and allows the  Company to exclude  from the  calculation  of EBITDA (for
purposes of financial covenant ratios) the restructuring  charge associated with
the closing of the Catawba  Plant.  Borrowings  under this credit  facility  are
based on eligible accounts receivable and inventory of the Company. The facility
is  secured by the  accounts  receivable,  inventory  and  capital  stock of the
Company.  The interest  rate on the credit  facility was 2.932% at June 28, 2003
and is based on a spread over either LIBOR or a base rate. Borrowings under this
facility  were $24.9  million and $11.4 million as of June 28, 2003 and June 29,
2002,  respectively.  As  of  June  28,  2003,  the  revolver  availability  was
approximately  $24 million and the Company was in compliance with all covenants.
There is a  substantial  likelihood  that Delta Mills will not be in  compliance
with the  financial  covenants  of the credit  agreement at the end of the first
quarter of fiscal 2004. As a precaution,  the Delta Mills has already obtained a
waiver of  compliance  with these  covenants  from GMAC for the first quarter of
fiscal 2004.  Management  believes the  availability  under Delta Mills'  credit
facility is adequate for the foreseeable future.

The Company's  credit  facility  contains  restrictive  covenants  that restrict
additional  indebtedness,  dividends,  and capital expenditures.  The payment of
dividends  with respect to Delta Mills,  Inc.  stock is permitted if there is no
event of default and there is at least $1 of availability under the facility. At
June 28, 2003, under the most restrictive of these covenants,  no dividends were
available for distribution by Delta Mills to Delta Woodside Industries, Inc. The
indenture  pertaining to the Company's 9.625% Senior Notes contains  restrictive
covenants that restrict additional  indebtedness,  dividends, and investments by
the Company and its subsidiaries. The payment of dividends with respect to Delta
Mills,  Inc.  stock is  permitted  if there is no  event of  default  under  the
indenture and after payment of the dividend, the Company could incur at least $1
of additional  indebtedness  under a fixed  coverage  ratio.  Dividends are also
capped  based on  cumulative  net  income  and  proceeds  from the  issuance  of
securities and liquidation of certain investments. Delta Mills may loan funds to
Delta  Woodside  Industries,  Inc.  if there is no event of default  and a fixed
charge  coverage  ratio test is satisfied.  Certain prior year amounts have been
reclassified  to conform to the  fiscal  2003  presentation  that  reflects  the
Company's adoption of SFAS 145 pertaining to the treatment of gain on retirement
of debt.  During the year ended June 28, 2003 and the year ended June 29,  2002,
Delta  Mills  did not pay any  dividends  to  Delta  Woodside  Industries,  Inc.
Industries,  Inc.  During the year ended June 30,  2001,  Delta  Mills paid $2.9
million of dividends to Delta Woodside Industries, Inc.

Total interest  expense  incurred by the Company was $5,275,000,  $9,090,000 and
$11,064,000 for fiscal years 2003, 2002, and 2001, respectively, net of $386,000
of capitalized  interest in fiscal 2003. Total interest paid during fiscal years
2003, 2002, and 2001 was $5,778,000, $10,252,000 and $12,099,000, respectively.

Rent expense relating to operating leases was approximately $435,000, $1,733,000
and $ 3,165,000 for fiscal years 2003, 2002 and 2001 respectively.

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

                                  Long-term         Operating
                 Fiscal Year          Debt             Leases

                          2004                            433,000
                          2005                            203,000
                          2006                              8,000
                          2007                              4,000
                          2008       $31,941,000            2,000
                              ------------------------------------
                                     $31,941,000         $650,000
                              ====================================

                                       13
<PAGE>

NOTE D--EMPLOYEE BENEFIT PLANS

The Company  participates  in the Delta Woodside  Industries,  Inc. 40l(k) Plan.
During fiscal 2003, 2002 and 2001, the Company contributed  $617,000,  $574,000,
and $411,000, respectively, to the 401(k) plan to match employee contributions.

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 June 28, 2003 and
June  29,  2002,   the  Company's   liability  was   $7,573,000  and  $7,271,000
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 $280,000,
$198,000, and $0 for fiscal years 2003, 2002 and 2001, respectively. The Company
has adopted the disclosure only provisions of Statement of Financial  Accounting
Standards No. 123, "Accounting for Stock-Based  Compensation." SFAS 123 requires
pro  forma  disclosures  for  option  grants  when  accounting  for  stock-based
compensation  plans  in  accordance  with  APB 25.  The pro  forma  effects  are
determined as if  compensation  costs were  recognized  using a fair value based
accounting method.  The fair value of each option granted,  as disclosed in Note
A, is  estimated  on the date of grant  using the  Black-Scholes  option-pricing
model with the following weighted-average assumptions:

                                                 2003      2002       2001
                                                 ----      ----       ----
Risk free interest rate                           N/A       N/A       5.0%
Expected lives for options                        N/A       N/A   10 Years
Expected volatility                               N/A       N/A        62%
Dividend yield                                    N/A       N/A        N/A
Fair value per option at grant date               N/A       N/A      $4.00


NOTE E--AFFILIATED PARTY TRANSACTIONS

The Company is the only  operating  division of DWI.  Actual  corporate  service
costs for management,  treasury, auditing, and shareholder relations are charged
to the  Company  as  incurred.  Receivable  or payable  to  affiliates  bears no
interest  and includes  amounts  payable to or  receivable  from DWI for current
activity as described.


NOTE F--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
approximately   $6.6  million   which  will  be  reported  in  the  fiscal  2003
consolidated  Federal income tax return with its parent,  DWI. The  consolidated
tax  group  had  regular  taxable  income  of  approximately  $5.8  million  and
alternative  minimum  taxable income (AMT) of  approximately  $3.4 million.  The
Federal  income tax  obligation  or refund that is  allocated  to the Company is
determined  as if the Company was 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 2003 or 2002.

                                       14
<PAGE>

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

---------------------------------------------------------------------------------------
                                                           2003               2002
<S>                                                     <C>                <C>
Assets:
Deferred compensation                                   $  3,026,000       $  2,799,000
Accrued and sundry liabilities                             1,389,000          1,696,000
Net operating loss carryforwards                             284,000            749,000
Inventories                                                   62,000
Other                                                         68,000             14,000
                                                        ------------       ------------
Gross deferred tax assets                                  4,829,000          5,258,000
Valuation allowance                                     ------------       ------------
Deferred tax assets                                        4,829,000          5,258,000

Liabilities:
Depreciation                                              11,733,000         12,888,000
 Inventories                                                                    363,000
                                                       -------------      -------------
Deferred tax liabilities                                  11,733,000         13,251,000
                                                       -------------      -------------
      Net deferred tax liabilities                       $(6,904,000)      $ (7,993,000)
                                                       ==============     =============
</TABLE>

Significant  components of the provision for income tax expense (benefit) are as
follows:
<TABLE>
<CAPTION>

                                                             2003               2002                2001
                                               ----------------------------------------------------------
<S>                                                    <C>                 <C>                 <C>
Current:
     Federal income taxes                              $2,230,000
     State income taxes                                   400,000            $15,000            $105,000
                                               ----------------------------------------------------------
           Total current                                2,630,000             15,000             105,000
Deferred:
      Federal income taxes                               (804,000)        (1,009,000)         (2,056,000)
      State income taxes                                 (285,000)          (204,000)           (241,000)
                                               ----------------------------------------------------------
           Total deferred                              (1,089,000)        (1,213,000)         (2,297,000)

                                               ----------------------------------------------------------
Total income tax expense (benefit)                     $1,541,000        $(1,198,000)        $(2,192,000)
                                               ==========================================================
</TABLE>

The  reconciliation  of income tax  expense  (benefit)  computed  at the Federal
statutory tax rates is as follows:
<TABLE>
<CAPTION>

                                                             2003                 2002                   2001
                                                      ------------------   ------------------      -------------

<S>                                                   <C>                  <C>                    <C>
Income tax expense (benefit) at statutory rates       $     1,446,000      $    (1,141,000)       $  (2,134,000)
State tax expense (benefit), net of federal benefit            75,000             (123,000)             (88,000)
Other                                                          20,000               66,000               30,000
                                                      ---------------      ----------------       --------------
                                                      $     1,541,000      $    (1,198,000)       $  (2,192,000)
                                                      ===============      ================       ==============
</TABLE>


The Company  made tax  payments of $0, $0 and $1,000  during  fiscal years 2003,
2002 and 2001, respectively.


                                       15
<PAGE>

NOTE G--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  was 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):

                                     JUNE 28, 2003          JUNE 29, 2002
                                     -------------          -------------

Current assets                            $ 88                  $  33
Noncurrent assets                           38                     61
Current Liabilities                      1,912                  1,902
Noncurrent liabilities                   1,047                    978
Stockholders' deficit                   (2,833)                (2,786)

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


<TABLE>
<CAPTION>
                                                                    Year Ended
                                             --------------------------------------------------
                                             June 28, 2003      June 29, 2002     June 30, 2001
                                             -------------      -------------     -------------


<S>                                              <C>                <C>               <C>
Net sales -intercompany commissions              $3,986             $3,930            $3,602
Cost and expenses                                 4,033              4,250             4,155
Net loss                                           (47)               (320)             (553)

</TABLE>


NOTE H--COMMITMENTS AND CONTINGENCIES

The Company has  entered  into  agreements,  and has fixed  prices,  to purchase
cotton  for use in its  manufacturing  operations.  At June  28,  2003,  minimum
payments  under  these  contracts  with   non-cancelable   contract  terms  were
approximately $8.1 million.

Two of the Company's  South Carolina  plants,  the Delta 2 and Delta 3 Finishing
Plants,  have  experienced  high  nitrate  levels at the  spray  field for these
plants. The Company is working with the South Carolina  Department of Health and
Environmental  Control  ("DHEC") to address this issue. In addressing this issue
in the method and within the time frame required by DHEC, a report was submitted
in June 2001 to DHEC  detailing  four options for dealing with this  groundwater
situation.  At the date of this  filing,  DHEC has  still not  responded  to the
Company's  proposal.  Although  there is no  assurance  that the Company will be
successful, and it could face administrative penalties if it is not, the Company
does not currently believe that this matter would have a material adverse impact
on the Company's financial position or results of operations.

                                       16
<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

NOTE H--COMMITMENTS AND CONTINGENCIES - CONTINUED

On June 30, 2000, the Company sold its  Greensboro,  North Carolina plant to the
City of Greensboro.  The Company had been working with environmental consultants
in assessing  groundwater  contamination at this site. Because of these studies,
one-half of the proceeds from the sale of the plant, consisting of approximately
$400,000,  were placed in an interest  bearing  escrow account to cover expenses
related  to this  contamination.  As of the date of this  filing,  approximately
$308,000 remains in this escrow account.  The Company believes that this balance
is adequate to cover any remaining  expenses related to this matter. The Company
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 the Company accept responsibility for investigating the
discharge of hazardous  substances  at a hazardous  waste site known as the Glen
Raven Mills Site, Kings Mountain,  North Carolina (the "Site"). A predecessor by
merger of the Company,  Park Yarn Mills Company,  Inc. ("Park Yarn"),  owned the
Site for approximately six (6) years, from  approximately 1977 to 1983 (prior to
the time the Company became a subsidiary of Delta Woodside Industries, Inc.) The
Company is aware of no  evidence  that Park Yarn  discharged  or  deposited  any
hazardous  substance at the Site or is otherwise a  "responsible  party" for the
Site.  Further,  Park Yarn filed bankruptcy and was discharged in 1983. Although
no assurance  can be provided,  any liability of Park Yarn for the Site may have
been discharged by the bankruptcy order. Accordingly, the Company has denied any
responsibility at the Site, declined to undertake any activities  concerning the
Site,   and  has  not  provided  for  any  reserves  for  costs  or  liabilities
attributable to Park Yarn.

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
results of operations or financial condition.



NOTE I--QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)

The following is a summary of the unaudited  quarterly results of operations for
the years ended June 28, 2003 and June 29, 2002:

<TABLE>
<CAPTION>
2003 Quarter Ended
(In thousands)                             September 28        December 28      March 30          June 28
                                           ------------        -----------      --------          -------

<S>                                         <C>                 <C>              <C>               <C>
Net sales                                   $46,179             $35,853          $46,489           $48,672

Gross profit                                  5,545               3,695            2,840             4,870

Net income (loss)                             1,432                 293          (1,100)             1,966


2002 Quarter Ended
(In thousands)                             September 29        December 29      March 30          June 29
                                           ------------        -----------      --------          -------

Net sales                                   $36,977             $44,140          $41,190           $52,366

Gross profit                                  1,074               1,708            1,062             5,558

Net income (loss)                           (8,153)             (2,402)          (2,447)            10,940

</TABLE>


                                       17
<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

NOTE J--GAIN ON EXTINGUISHMENT OF DEBT

During fiscal 2003, the Company purchased  $15,878,000 face amount of its 9.625%
Senior Notes for $12,060,000 including expenses of approximately  $172,000.  The
Company  recognized a gain of  $3,643,000  after the  write-off of deferred loan
costs of $175,000.  During fiscal 2002, the Company  purchased  $35,996,000 face
amount  of its  9.625%  Senior  Notes  for  $19,383,000  including  expenses  of
approximately  $500,000.  The Company recognized a gain of $16,072,000 after the
write-off of deferred loan costs of $541,000.  During  fiscal 2001,  the Company
purchased  $31,263,000  face amount of its 9.625% Senior Notes for  $28,021,000.
The Company recognized a gain of $2,458,000 after the write-off of deferred loan
costs of $784,000.


NOTE L-- RESTRUCTURING AND IMPAIRMENT CHARGES

During the year ended June 28, 2003, the Company recorded a restructuring charge
of $0.4 million on a pre-tax  basis  associated  with the closing of its Catawba
facility  as  announced  on  March  5,  2003.  The  charge  reflected   employee
termination costs of approximately $354,000.  Production at the Catawba facility
ceased in April of 2003 and the  Company is in the  process of  liquidating  the
assets associated with this facility.

During the year ended June 29,  2002,  the Company  recorded an  impairment  and
restructuring  charge of $8.7 million,  on a pretax basis,  associated  with the
closing  of the  Furman  Plant as  announced  on August 22,  2001.  The  Company
recorded an $8.2 million  non-cash asset  write-down to reflect the property and
equipment at the Furman Plant at its estimated  fair value,  less selling costs.
The carrying amount of these assets was reduced to approximately $3,923,000. The
balance of the charge was  approximately  $0.5  million of accrued  expenses for
involuntary  termination costs associated with the 122 employees terminated as a
result of the plant closing. Production at the Furman facility ceased in October
of 2001 and the Company is in the process of liquidating  the assets  associated
with this facility.

During  fiscal 2003 and fiscal  2002,  the Company paid  $196,000 and  $345,000,
respectively,  in restructuring  costs and has a remaining liability of $342,000
and $140,000 as of June 28, 2003 and June 29, 2002, respectively.

As of June 28,  2003 and June 29,  2002 the  Company  had $3.9  million and $3.1
million,  respectively,  in assets  held for sale  related to the closing of the
Catawba facility and the Furman plant.







                                       18
<PAGE>

                                     PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON
FORM 8-K

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

The following  consolidated  financial statements of Delta Mills, Inc. as of the
Year ended June 28, 2003 are included in Item 8.

         Consolidated balance sheets--June 28, 2003 and June 29, 2002.

         Consolidated  statements of operations--Years ended June 28, 2003, June
29, 2002, and June 30,2001.

         Consolidated  statements of shareholder's equity-- Years ended June 28,
2003, June 29, 2002, and June 30,2001.

         Consolidated statements of cash flows-- Years ended June 28, 2003, June
29, 2002, and June 30,2001.

         Notes to consolidated financial statements.

The following  consolidated  financial  statement schedules of Delta Mills, Inc.
are included in Item 15a (2):

         Schedule II -- Valuation and qualifying accounts

All other  schedules for which  provision is made in the  applicable  accounting
regulations 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.

                  (3) Listing of Exhibits:


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 Mills,  Inc. for the fiscal year
                  ended June 30, 2001 (the "DMI 2000 10-K").*
4.3.1.2           Consent and Amendment to Credit Agreement and Other Documents,
                  dated as of October  5, 2001:  Incorporated  by  reference  to
                  Exhibit 4.3.1.2 to the Company's Quarterly Report on Form 10-Q
                  for the fiscal quarter ended September 29, 2001 and filed with
                  the Securities and Exchange Commission on November 9, 2001.

                                       19
<PAGE>


ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON
FORM 8-K - CONTINUED

4.3.1.3           Consent and Amendment to Credit Agreement and Other Documents,
                  dated  as of  March  31,2002:  Incorporated  by  reference  to
                  Exhibit 4.3.1.3 to the Company's Quarterly Report on Form 10-Q
                  for the fiscal quarter ended March 30, 2002 and filed with the
                  Securities and Exchange Commission on May 14, 2002.
4.3.1.4           Consent and Amendment to Credit Agreement and Other Documents,
                  dated  as of  March  20,2003:  Incorporated  by  reference  to
                  Exhibit 4.3.1.4 to the Company's Quarterly Report on Form 10-Q
                  for the fiscal quarter ended March 29, 2003 and filed with the
                  Securities and Exchange Commission on May 13, 2003.
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.
10.1**            Delta Woodside  Deferred  Compensation  Plan for Key Managers,
                  Amended and Restated Effective  June 30, 2000: Incorporated by
                  reference  to  Exhibit  10.2 to the Delta Woodside Industries,
                  Inc. Report on Form 10-K dated July 1, 2000 and filed with the
                  Securities and Exchange Commission on  September 29, 2000. *
10.3.1**          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, 1990.*
10.3.2**          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").*
10.3.3**          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").*
10.3.4**          1995 Amendment to  Stock Option Plan  effective as of November
                  9, 1995:  Incorporated by reference to Exhibit 10.4.4  to  the
                  Form 10-Q of Delta Woodside Industries, Inc. for the quarterly
                  period   ended  December   30,  1995   (the  "Delta   Woodside
                  Industries, Inc. 12/95 10-Q".)*
10.3.5**          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).

                                       20
<PAGE>

ITEM 15.  EXHIBITS,  FINANCIAL  STATEMENT  SCHEDULES  AND  REPORTS ON FORM 8-K -
CONTINUED

10.3.6**          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.*
10.3.7**          Amendments to Stock Option Plan:  Incorporated by reference to
                  Exhibit 10.4.7 to the DWI 2000 10-K.*
10.4**            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.*
10.4.1            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.*
10.4.2**          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.*
10.5.1**          Directors Stock Acquisition Plan: Incorporated by reference to
                  Exhibit 10.14 to the DWI 1991 10-K.*
10.5.2**          Amendment to Directors Stock Acquisition Plan, dated April 30,
                  1992:  Incorporated by reference to Exhibit 10.12.2 to the DWI
                  1992 10-K.*
10.6**            2000 Stock Option  Plan  of  Delta  Woodside Industries, Inc.:
                  Incorporated by reference to Exhibit 10.10  to  the  DWI  2000
                  10-K.*
10.6.1            Amendment  of  2000  stock  option  plan  of  Delta   Woodside
                  Industries, Inc: Incorporated by reference to Item 6(a) of the
                  Delta Woodside  Industries,  Inc.  report on Form 10-Q for the
                  quarter ended September 30, 2000 and filed with the Securities
                  and Exchange Commission on November 14, 2000.
10.7**            2000 Incentive Stock Award Plan of Delta  Woodside Industries,
                  Inc.:  Incorporated by reference to Exhibit 10.11  to  the DWI
                  2000 10-K.*
10.8              Tax Sharing  Agreement, dated as of June 30, 2000 by and among
                  Delta  Woodside  Industries,  Inc.  Duck Head Apparel Company,
                  Inc. and Delta  Apparel,  Inc.:  Incorporated  by reference to
                  Exhibit 2.2 to the Report on Form 8-K of the Company  with the
                  date of June 30, 2000.
10.8.1            Amendment to tax sharing agreement dated as of August 6, 2001:
                  Incorporated  by  reference  to   Exhibit   10.17.2   to   the
                  Company's  Report on Form 10-K for the fiscal  year ended June
                  30, 2001 and filed with the Securities and Exchange Commission
                  on September 24, 2001, the "2001 10-K."
10.9**            Letter dated June 28, 2000 to William F. Garrett: Incorporated
                  by reference to Exhibit 10.l4 to the DWI 2000 10-K.*
10.10             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.
31.1              Certification of CEO Pursuant  to Section 302 of the Sarbanes-
                  Oxley Act of 2002.
31.2              Certification of CFO Pursuant  to Section 302 of the Sarbanes-
                  Oxley Act of 2002.
32.1              Certification of CEO Pursuant  to Section 906 of the Sarbanes-
                  Oxley Act of 2002.
32.2              Certification of CFO Pursuant  to Section 906 of the Sarbanes-
                  Oxley Act of 2002.


*                 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.

                                       21
<PAGE>

         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

                  On April 4, 2003,  the Company filed a Current  Report on Form
                  8-K dated April 3, 2003 reporting information under Item 5 and
                  Item 7.

         (c)      Exhibits
                  The  response to this  portion of Item 15 is  incorporated  by
                  reference from Item 15(a)(3) above.

         (d)      Financial Statement Schedules
                  Not applicable






                                       22
<PAGE>

SIGNATURES

Pursuant to the  requirements of Section 13 or 15(d) of the Securities  Exchange
Act of 1934,  the  registrant  has duly  caused  this report to be signed on its
behalf by the undersigned, thereunto duly authorized.


                                         DELTA MILLS, INC.
                                         (Registrant)


     October 2, 2003                     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.

<TABLE>

<S>                                   <C>              <C>                                                      <C>
/s/ E. Erwin Maddrey, II              10/1/2003        /s/ William F. Garrett                                   10/2/2003
------------------------------------- ------------     -------------------------------------------------------- ------------
E. Erwin  Maddrey,  II                Date             William F. Garrett                                       Date
Director                                               President,  Chief Executive Officer and Director

/s/ Buck A. Mickel                    10/2/2003        /s/ William H. Hardman, Jr.                              10/2/2003
------------------------------------- ------------     -------------------------------------------------------- ------------
Buck A. Mickel                        Date             William H. Hardman, Jr.                                  Date
Director                                               Vice President, Treasurer, and Chief Financial Officer

                                                       /s/ Donald C. Walker                                     10/2/2003
                                                       -------------------------------------------------------- ------------
                                                       Donald C. Walker                                         Date
                                                       Vice President, Assistant Secretary, and Controller




</TABLE>







                                       23

<PAGE>


                                  EXHIBIT INDEX


23                Report on Schedule by Independent Auditors.





























                                       24
<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                                                       (2)
               DESCRIPTION         Beginning              (1)                (2)                Deductions          Balance at End
                                   of Period        Charged to Costs  Charged to Other           Describe              of Period
                                                      and Expenses    Accounts-Describe
-----------------------------------------------------------------------------------------------------------------------------------
Deducted from asset accounts
  Allowance for Returns:

<S>                                      <C>                                   <C>                <C>                       <C>
Year ended June 28 2003                  $ 32,000                              $1,751,000 (1)    ($1,603,000) (2)         $180,000
                                 =================                    ====================    =================    ================

Year ended June 29, 2002                 $ 51,000                              $1,795,000 (1)    ($1,814,000) (2)          $32,000
                                 =================                    ====================    =================    ================

Year ended June 30, 2001                 $173,000                              $2,998,000 (1)    ($3,222,000) (2)          $51,000
                                 =================                    ====================    =================    ================

</TABLE>





NOTES:
1) The change in the reserve for returns and  allowances is charged to income as
a  reduction  of  net  sales.  2)  Deductions  represent  customer  returns  and
allowances during the period.







                                       25