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 June 30, 2001

                                       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  [  X  ].

The  aggregate market value of the common equity stock held by non-affiliates of
the  registrant  as  of  September  25,  2001  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,  2001  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 JUNE 30, 2001
                             FORM 10-K ANNUAL REPORT

                                TABLE OF CONTENTS

                                                                                 PAGE
PART I
<S>       <C>                                                                    <C>
Item 1.   Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   4
Item 2.   Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   8
Item 3.   Legal Proceedings. . . . . . . . . . . . . . . . . . . . . . . . . . .   9
Item 4.   Submission of Matters to a Vote of Security Holders. . . . . . . . . .   9

PART II

Item 5.   Market for Registrant's Common equity and Related Stockholder Matters.   9
Item 6.   Selected Financial Data. . . . . . . . . . . . . . . . . . . . . . . .  10
Item 7.   Management's Discussion and Analysis of Financial Condition and
          Results of Operations. . . . . . . . . . . . . . . . . . . . . . . . .  11
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 . . . . . . . . . . . . . . . . . . . . . . . . .  31

PART III

Item 10.  Directors and Executive Officers of the Registrant . . . . . . . . . .  32
Item 11.  Executive Compensation . . . . . . . . . . . . . . . . . . . . . . . .  32
Item 12.  Security Ownership of Certain Beneficial Owners and Management . . . .  32
Item 13.  Certain Relationships and Related Transactions . . . . . . . . . . . .  32

PART IV

Item 14.  Exhibits, Financial Statement Schedules and Reports on Form 8-K. . . .  33
</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  under  the  symbol  "DLW".  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  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 Levi
Strauss,  Haggar  Corp.,  the  Wrangler  (R)  and  Lee(R)  divisions  of  V.F.
Corporation, The Gap, 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(R)  and  Haggar  Corp.'s
Wrinkle-free(R).  Other  apparel  items  manufactured  with  the Company's woven
fabrics  include women's chino 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.

      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 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 2001, 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 $90 million, $109 million, and $150
million  for fiscal 2001, 2000, and 1999, respectively. The loss of any of these
accounts  could  have  a  material adverse effect on the results of the Company.

     During  fiscal  years  2001, 2000 and 1999, approximately 82%, 83% and 78%,
respectively,  of the Company's finished woven fabric sales were of fabrics made
from  cotton  or cotton/synthetic blends, while approximately 18%, 17%, and 22%,
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.  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 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
$.659  DCWDon  WalkerIncludes Rainsford  for 10 months in FY 2000.in fiscal year
2001  as  compared  to  $.661  DCWDon  WalkerIncludes  Rainsford in 1999 & 1998.
in  fiscal  year  2000,  and $.770 in fiscal year 1999. As of June 30, 2001, the
Company  had  contracted  to  purchase  100%  and  had  fixed  the  price  for
approximately 83% of DCWDon WalkerPer Alan Barber on 9/11/00.its expected cotton
requirements  for  fiscal  year  2002.  The  percentage  of  the


                                        5
<PAGE>
RAW  MATERIALS  -  CONTINUED

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 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. The North American Free
Trade  Agreement (often referred to as "NAFTA") entered into force on January 1,
1994.  NAFTA has effectively eliminated all tariffs and quotas on goods imported
from Mexico if such goods are made from fabric originating in Canada, Mexico, or
the  United States. The Caribbean Basin Trade Partnership Act (often referred to
as  "CBTPA")  became  effective  on  October  1,  2000.  CBTPA  has  effectively
eliminated  tariffs  and  quotas on apparel products imported from participating
Caribbean  and  Central  American  nations if such products are made from fabric
woven  in  the  United  States  of  U.S. yarn. Because NAFTA and CBTPA create an
incentive  to  use fabric manufactured in the United States, they are beneficial
to  the  Company  and  other domestic producers of apparel fabrics. In contrast,
apparel  not  meeting the criteria of NAFTA or CBTPA is subject to quotas and/or
relatively  higher  tariffs. If NAFTA or CBTPA were repealed or altered in whole
or  in  part,  the  Company  believes  that it could be at a serious competitive


                                        6
<PAGE>
COMPETITION  -  CONTINUED

disadvantage  relative  to  textile  manufacturers  in  other parts of the world
seeking  to  enter the United States market, which would have a material adverse
effect  on  the  Company.  Moreover,  there can be no assurance that the current
favorable  regulatory  environment  will continue or that other geographic areas
will  not  be  afforded  similar  regulatory  advantages.

The  World  Trade  Organization  (which this document refers to as the "WTO"), a
multilateral trade organization, was formed in January 1995 and is the successor
to  the  General  Agreement  on  Tariffs  and  Trade.  This  multilateral  trade
organization  has set forth mechanisms by which world trade in clothing is being
progressively  liberalized  by  phasing-out  quotas  and  reducing duties 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 1,900 employees.  The Company's employees are
not  represented  by  unions.  The  Company believes that its relations with its
employees  are  good.



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.


                                        7
<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.

     At the date of execution of this Form 10-K, the Company has announced plans
to  close  and  dispose  of  its  Furman  facility  in  Fountain  Inn,  SC.

     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.


                                        8
<PAGE>
ITEM 3.  LEGAL  PROCEEDINGS
-------  ------------------

     All  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.

     During  2001,  the  Company  declared dividends of $2,900,000.  The Company
declared  no  dividends  for  fiscal  year  2000.  The  information  concerning
limitations  on cash distributions contained under the subheading "Liquidity and
Sources  of  Capital"  under  Item  7  is  incorporated  herein  by  reference.


                                        9
<PAGE>
<TABLE>
<CAPTION>
ITEM  6.  SELECTED  FINANCIAL  DATA
-------   -------------------------
In  Thousands,  Except  Ratios
                                                                   Fiscal Year (1)
                                                -----------------------------------------------------
STATEMENTS OF OPERATIONS DATA:(1)
                                                    2001       2000       1999       1998       1997
                                                ---------  ---------  ---------  ---------  ---------
<S>                                             <C>        <C>        <C>        <C>        <C>
Net Sales                                       $212,960   $276,511   $348,955   $364,395   $358,204
Cost of Goods Sold                               196,692    243,254    292,914    300,556    293,145
                                                ---------  ---------  ---------  ---------  ---------
Gross Profit                                      16,268     33,257     56,041     63,839     65,059

Selling, general and administrative expenses      14,609     15,345     16,937     17,585     16,323
Other income                                         302        446         96        146      1,553
                                                ---------  ---------  ---------  ---------  ---------
Operating Profit                                   1,961     18,358     39,200     46,400     50,289
Interest expense                                  11,064     16,095     17,414     19,324     14,212
Interest (income)                                   (547)      (958)      (185)      (152)         0
Income (Loss) from Continuing Operations
  Before Taxes and Extraordinary Items            (8,556)     3,221     21,971     27,228     36,077
Income Tax Expense (Benefit)                      (3,065)     1,280      8,590     10,743     14,187
                                                ---------  ---------  ---------  ---------  ---------
Income (Loss) from Continuing Operations
  Before Extraordinary Items                      (5,491)     1,941     13,381     16,485     21,890
Extraordinary gain (net of taxes)                  1,585      4,659
Profit (Loss) from Discontinued Operations                     (174)     3,802    (25,909)    (5,337)
                                                ---------  ---------  ---------  ---------  ---------
Net Income (Loss)                               $ (3,906)  $  6,426   $ 17,183    ($9,424)  $ 16,553
                                                =========  =========  =========  =========  =========
OTHER DATA:(1)
Depreciation and amortization                   $ 11,310   $ 14,015   $ 14,815   $ 14,127   $ 13,840

Capital expenditures                               5,151      4,340      9,075      4,065     14,122

EBITDA  (2)                                       13,271     32,373     54,015     60,527     64,129

Ratio of EBITDA to interest expense (2)              1.2        2.0        3.1        3.1        4.5

BALANCE SHEET DATA: (1)
Working Capital (deficit)                       $ 64,270   $ 95,158   $101,613   $107,423    ($7,525)

Total assets                                     181,747    229,612    260,951    290,290    345,010

Total debt and other long-term obligations (3)    83,815    115,078    150,000    176,635    268,658

Shareholder's equity (deficit)                    49,381     56,187     49,761     40,078      7,844
</TABLE>


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.  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.


                                       10
<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  2001  VERSUS  FISCAL  2000

     Net Sales.  Consolidated net sales for the year ended June 30, 2001 totaled
$213.0 million, as compared to $276.5 million for the year ended July 1, 2000, a
decrease  of 23.0%. The decline in sales was due to declines in volume and price
as  retail  market  demand  weakened  over the past fiscal year. The weak demand
continues to create inventory adjustments at retail, that have resulted in price
pressure  and  order  deferments  from  major  customers. Sales of yarn from the
Rainsford  plant  to  the  Delta  Apparel affiliate were $0 as compared to $26.6
million  in 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 June 30, 2001 was 7.6 %, as compared to 12.0% for the year ended
July 1, 2000. The decline in gross profit percentage 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 also contributed to the decline
in  gross  profit.

     Selling,  General  and Administrative Expenses.  During the year ended June
30,  2001,  selling,  general and administrative expenses were $14.6 million, as
compared  to  $15.3  million  during  the year ended July 1, 2000, a decrease of
$0.7  million  or  4.6%.  Expenses in this category were 6.9% of sales in fiscal
2001  as  compared  to  5.5% in fiscal 2000. The decrease was due primarily to a
reduction  of  fixed  administrative  service  costs.

     Operating  Earnings.  Operating  earnings  for the year ended June 30, 2001
were $2.0 million, as compared to $18.4 million for the year ended July 1, 2000.
The  decline  in  operating  earnings  was  due  to the factors described above.

     Net  Interest  Expense.  For  the  year  ended  June 30, 2001, net interest
expense  was $10.5 million, as compared to $15.1 million for the year ended July
1,  2000.   The decrease in interest expense resulted from the extinguishment of
$66.2  million  of debt due to the purchase of a portion of the Company's 9.625%
Senior  Notes  in  fiscal  2001  and  in  fiscal  2000.


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

     Taxes.  The  effective  tax  rate of 35.8% on continuing operations for the
year  ended  June  30,  2001  is  lower  than  the  39.7%  effective tax rate on
continuing  operations  for the year ended July 1, 2000 primarily because of the
effect  of  nondeductible  permanent differences on pretax income in fiscal year
2000  compared  to  pretax  losses  in  fiscal  year  2001.

      Income(Loss)  from Continuing Operations.  Loss from Continuing Operations
for the year ended June 30, 2001 was $5.5 million, as compared to income of $1.9
million  for  the  year ended July 1, 2000.  The decrease was due to the factors
described  above.

     Extraordinary  gain,  net  of  taxes.  During  fiscal  2001,  the  Company
purchased  $31.3  million  of  face  amount of its 9.625% Senior Notes for $28.0
million.  The Company recognized an extraordinary gain of $1.6 million after tax
expense  of  $0.9  million and the write off of deferred loan cost $0.8 million.
During  fiscal  2000,  the Company purchased $34.9 million of face amount of its
9.625%  Senior Notes for $26.6 million.  The Company recognized an extraordinary
gain  of  $4.7  million  after  tax expense of $2.8 million and the write off of
deferred  loan  costs  of  $0.8  million.

     Order  Backlog.  The  Company's  order  backlog  at June 30, 2001 was $47.2
million,  a 40.2% decrease from the $78.8 million order backlog at July 1, 2000.
Many  of  The  Company's  customers  have  shortened  lead  times  for  delivery
requirements.  This  coupled  with  an  overall  softening of the apparel market
accounted  for  the  decline  in the order backlog. Management believes that the
order  backlog  at  any  given  point in time may not be an indication of future
sales.

     Adoption  of  Accounting  Standards. In June 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.
On July 2, 2000, the Company adopted the new standard.  The Company's management
has  determined that its cotton buying contracts meet the criteria for exclusion
under  the  normal  purchases  and normal sales exemption and are not considered
derivatives;  therefore,  the Company had no financial statement impact from the
adoption  of  the  standard.

     In  July  of 2001, the FASB issued SFAS 141, "Business Combinations".  SFAS
141  requires  all  business  combinations  to  be accounted for by the purchase
method and eliminates use of the pooling-of -interests method.  It also requires
upon  adoption  of SFAS 141, that the Company reclassify the carrying amounts of
intangible assets and goodwill based on the criteria in SFAS 141.  Additionally,
the  statement requires recognition of intangible assets apart from goodwill and
provides  for  additional  disclosure  of  information  related  to  a  business
combination.  This  SFAS  is  effective  for all business combinations initiated
after  June  30,  2001.  The  adoption  of  this  standard  is  not  expected to
materially  impact  the  Company.

     In  July  2001,  the  FASB  issued SFAS 142, "Goodwill and Other Intangible
Assets".  SFAS  142  eliminates  goodwill  amortization,  provides  guidance and
requirements  for impairment testing of goodwill, and discusses the treatment of
other  intangible assets.  Adoption of the standard is required for fiscal years
beginning after December 15, 2001. The adoption of this standard is not expected
to  materially  impact  the  Company.

     In  August  of  2001,  the  FASB  issued  SFAS  143,  "Accounting for Asset
Retirement  Obligations".  SFAS  143  requires  an enterprise to record the fair
value of an asset retirement obligation as a liability in the period in which it
incurs  a  legal  obligation  associated  with  the  retirement of tangible long
lived-assets,  which  assets  result  from  the  acquisition,  construction,
development and or normal use of the assets.  The enterprise also is to record a
corresponding  increase  to  the carrying amount of the related long-lived asset
(i.e.  the  associated  asset retirement costs) and to depreciate that cost over
the  life  of  the asset.  The liability is changed at the end of each period to
reflect  the  passage  of  time  (i.e.  accretion  expense)  and  changes in the
estimated  future  cash flows underlying the initial fair value measurement. The
adoption  of  this  standard  is  not expected to materially impact the Company.


                                       12
<PAGE>
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.

      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 9.625% Senior Notes for $26.6
million.  The  Company  recognized an extraordinary gain of $4.7 million after a
tax  cost  of  $2.8  million  and  the  write off of deferred loan costs of $0.8
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.


                                       13
<PAGE>
LIQUIDITY  AND  SOURCES  OF  CAPITAL

     During fiscal 2001, the Company financed its capital expenditures primarily
through  cash  generated  from  operations.

     The  Company  generated  operating  cash  flows  of $29.1, $26.3, and $51.4
million  for the 2001, 2000 and 1999 fiscal years, respectively.  Cash generated
in  fiscal  year  2001  from  operations  was  used primarily to finance capital
expenditures,  including  equipment  purchases,  and to reduce indebtedness.  In
fiscal  2001,  the  Company used cash from investing activities of $4.7 million,
generated  cash  of $8.7 million in fiscal 2000, and 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.

     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  June  30,  2001, there were no borrowings and approximately $50
million  was  available  for  borrowing  under  this  credit  facility.

     The  credit facility contains restrictive covenants that require that Delta
Mills'  maximum  leverage  ratio not exceed specified ratios. The agreement also
restricts  additional  indebtedness,  dividends,  and  capital expenditures. The
payment  of  dividends with respect to Delta Mills stock is permitted by the new
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 June 30, 2001, under the most restrictive of
these  covenants, no dividends were available for distribution by the Company to
Delta  Woodside.

     During  the  year  the  Company  acquired  for $28,021,356 a portion of its
9.625%  Senior Notes. The aggregate principal face amount of the acquired Senior
Notes  was  $31,263,000.  The  current outstanding aggregate principal amount of
these  Senior Notes is $83,815,000. The future annual reduction in the Company's
interest  expense  because of these Senior Note repurchases will be $ 3,009,064.

     The  Company has entered into agreements, and has fixed prices, to purchase
cotton  for  use  in  its  manufacturing  operations.  At  June 30, 2001 minimum
payments  under  these  contracts  with  non-cancelable  contract terms were $21
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.


                                       14
<PAGE>
ENVIRONMENTAL  MATTERS

     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.  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  will  have  a  material  adverse  impact  on  the  Company.

     On  June  11,  2001,  DHEC  issued  a Notice of Violation ("NOV") for three
alleged  violations  of  an  air  permit for the Company's Delta #2 and Delta #3
Plants.  On June 26, 2001, the Company participated in an enforcement conference
with  DHEC,  during  which  DHEC  agreed to inspect the plants again on July 24,
2001.  On September 12, 2001, the Company received a proposed Consent Order from
DHEC  which  requires that; (1) The Company submit to DHEC a construction permit
application  for  a machine that was installed;  (2) The Company comply with all
DHEC  regulations regarding permitting: (3) The Company comply with all emission
and  fuel  content requirements of its operating permit; and (4) The Company pay
to  DHEC  the  amount  of $3,000.00. The Company intends to abide by the Consent
Order  and believes that it will be able fulfill the requirements of the consent
order.

     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, consisting of approximately
$400,000,  was  placed  in  an interest bearing escrow account to cover expenses
related  to  this  contamination.  As  of the date of this filing, approximately
$393,000 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  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.



                                       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.
Under  these  contracts,  nonperformance  by  either the buyer or the seller may
result in net cash settlement of the difference between the current market price
of  cotton  and  the  contract  price.  The  Company  has  not  utilized the net
settlement  provision  in  the  past,  and  does  not anticipate using it in the
future.  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 June 30, 2001, 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  $2.1  million  on the value of the
contracts.  At  the end of fiscal 2000, a 10% decline in the market price of the
Company's  fixed  price  contracts  would  have  had  a  negative  impact  of
approximately  $2.5  million  on the value of the contracts.  The decline in the
potential negative impact from 2000 to 2001 is due principally to current cotton
commitments  being  at  significantly  lower average prices than in fiscal 2000.


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
2002, 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>
<TABLE>
<CAPTION>
ITEM  8.  FINANCIAL  STATEMENTS  AND  SUPPLEMENTARY  DATA
--------  -----------------------------------------------

                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS


                                                                                            Page
                                                                                           ------
<S>                                                                                        <C>
Report of KPMG  LLP                                                                          F2
Consolidated Balance Sheets as of June 30, 2001 and July 1, 2000                             F3
Consolidated Statements of Operations for the fiscal years ended June 30, 2001,
             July 1, 2000 and July 3, 1999                                                   F4
Consolidated Statements of Shareholder's Equity for the fiscal years ended June 30, 2001,
             July 1, 2000 and July 3, 1999                                                   F5
Consolidated Statements of Cash Flows for the fiscal years ended June 30, 2001,
             July 1, 2000 and July 3, 1999                                                   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  June  30,  2001  and  July  1,  2000  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  30,  2001.  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. as
of  June  30,  2001  and July 1, 2000, and the results of its operations and its
cash flows for each of the years in the three-year period ended June 30, 2001 in
conformity with accounting principles generally accepted in the United States of
America.


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

Greenville, South Carolina
July  27,  2001


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


                                                        June 30, 2001   July 1, 2000
                                                        --------------  -------------
<S>                                                     <C>             <C>
ASSETS
CURRENT ASSETS
  Cash and cash equivalents                             $       11,715  $      18,287
  Accounts receivable:
     Factor and other                                           37,621         71,670
     Due from Affiliates                                            34
                                                        --------------  -------------
                                                                37,655         71,670
     Less allowances for doubtful accounts and returns              51            173
                                                        --------------  -------------
                                                                37,604         71,497
  Inventories
     Finished goods                                             13,241          4,916
     Work in process                                            23,195         31,324
     Raw materials and supplies                                  6,766          7,679
                                                        --------------  -------------
                                                                43,202         43,919


  Deferred income taxes                                          1,968          1,208
  Other assets                                                     547            467
                                                        --------------  -------------
                         TOTAL CURRENT ASSETS                   95,036        135,378

PROPERTY, PLANT AND EQUIPMENT, at cost
     Land and land improvements                                  1,937          2,068
     Buildings                                                  36,634         36,634
     Machinery and equipment                                   118,386        119,996
     Furniture and fixtures                                      6,263          1,952
     Lease improvements                                          1,030            619
     Construction in progress                                    1,976            401
                                                        --------------  -------------
                                                               166,226        161,670
     Less accumulated depreciation                              81,195         70,322
                                                        --------------  -------------
                                                                85,031         91,348

DEFERRED LOAN COSTS
          less accumulated amortization of $4,413
          and $3,207 in 2001 and 2000 respectively               1,680          2,886

                                                        --------------  -------------
                                                        $      181,747  $     229,612
                                                        ==============  =============
</TABLE>


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


                                                        June 30, 2001   July 1, 2000
                                                       ---------------  -------------
<S>                                                    <C>              <C>
LIABILITIES AND SHAREHOLDER'S EQUITY
CURRENT LIABILITIES
  Trade accounts payable                               $        8,571   $      14,514
  Payable to Affiliates                                                         1,318
  Accrued employee compensation                                 2,339           2,858
  Accrued and sundry liabilities                               19,856          21,530

                    TOTAL CURRENT LIABILITIES                  30,766          40,220
                                                       ---------------  -------------

LONG-TERM DEBT                                                 83,815         115,078
DEFERRED INCOME TAXES                                          11,186          12,314
DEFERRED COMPENSATION                                           6,599           5,813
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)                                   (2,411)          4,395
                                                       ---------------  -------------
                                                               49,381          56,187
COMMITMENTS AND CONTINGENCIES
                                                       ---------------  -------------
                                                       $      181,747   $     229,612
                                                       ===============  =============
</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
                                                             June 30, 2001    July 1, 2000    July 3, 1999
                                                            ---------------  --------------  --------------
<S>                                                         <C>              <C>             <C>
Net sales to non-affiliates                                 $      212,960   $     249,918   $     318,733
Net sales to affiliated parties                                                     26,593          30,222
                                                            ---------------  --------------  --------------
  Net sales                                                        212,960         276,511         348,955
Cost of goods sold                                                 196,692         243,254         292,914
                                                            ---------------  --------------  --------------
Gross profit                                                        16,268          33,257          56,041
Selling, general and administrative expenses                        14,609          15,345          16,937
Other income                                                           302             446              96
                                                            ---------------  --------------  --------------
  OPERATING PROFIT                                                   1,961          18,358          39,200
Other (expense) income:
  Interest expense                                                 (11,064)        (16,095)        (17,414)
  Interest income                                                      547             958             185

                                                            ---------------  --------------  --------------
                                                                   (10,517)        (15,137)        (17,229)
                                                            ---------------  --------------  --------------
INCOME (LOSS) FROM CONTINUING
  OPERATIONS BEFORE INCOME TAXES
    AND EXTRAORDINARY ITEMS                                         (8,556)          3,221          21,971
Income tax expense (benefit)                                        (3,065)          1,280           8,590
                                                            ---------------  --------------  --------------
INCOME (LOSS) FROM CONTINUING
  OPERATIONS BEFORE EXTRAORDINARY ITEMS                             (5,491)          1,941          13,381

  Extraordinary gain (net of taxes)                                  1,585           4,659

Discontinued operations:
Income on disposal of discontinued operations net
   of applicable income taxes                                                                        3,802

(Loss) from operations of discontinued businesses net of
   applicable income taxes                                                            (174)
                                                            ---------------  --------------  --------------

 Total discontinued operations                                                        (174)          3,802
                                                            ---------------  --------------  --------------

NET INCOME (LOSS)                                           $       (3,906)  $       6,426   $      17,183
                                                            ===============  ==============  ==============
</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 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
  Net Income (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
                           ======  =======  ===========  ==========  ===============
</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
                                                        June 30, 2001    July 1, 2000    July 3, 1999
                                                       ---------------  --------------  --------------
<S>                                                    <C>              <C>             <C>
OPERATING ACTIVITIES
  Net income (loss)                                    $       (3,906)  $       6,426   $      17,183
  Adjustments to reconcile net income to net
     cash provided by operating activities:
     Depreciation                                              10,886          13,408          14,109
     Amortization                                                 424             607             706
     Decrease in deferred loan costs                              784           1,312
     Gain on early retirement of debt                          (3,242)         (8,307)
     Discontinued operations                                                    1,359          22,087
     Provision for losses on accounts receivable                 (122)           (118)             45
     Provision for deferred income taxes                       (2,297)         (3,339)            605
     Losses (gains) on disposition of property
        and equipment                                            (342)            138              73
     Changes in operating assets and liabilities:
        Accounts receivable                                    33,701          11,182          12,573
        Inventories                                               717           1,548          10,372
        Other current assets                                      (80)                            (85)
        Deferred compensation                                     786            (227)            317
        Accounts payable and accrued expenses                  (8,259)          2,308         (26,596)
                                                       ---------------  --------------  --------------
           NET CASH PROVIDED BY OPERATING ACTIVITIES           29,050          26,297          51,389

INVESTING ACTIVITIES
  Property, plant and equipment:
     Purchases                                                 (5,151)         (4,340)         (9,075)
     Proceeds of dispositions                                     450          12,750           1,086
 Other investing activities                                                                       140
  Investing activities of discontinued operations                                 333             206
                                                       ---------------  --------------  --------------
           NET CASH PROVIDED(USED) BY
                         INVESTING ACTIVITIES                  (4,701)          8,743          (7,643)

FINANCING ACTIVITIES
  Proceeds from revolving lines of credit                       3,003          15,000         104,365
  Repayments on revolving lines of credit                      (3,003)        (15,000)       (131,000)
  Repurchase and retirement of long term debt                 (28,021)        (26,615)
  Dividends paid                                               (2,900)                         (7,500)
  Other                                                                           (41)           (252)
                                                       ---------------  --------------  --------------
          NET CASH (USED)  BY FINANCING ACTIVITIES            (30,921)        (26,656)        (34,387)
                                                       ---------------  --------------  --------------

(DECREASE) INCREASE IN CASH AND
         CASH EQUIVALENTS                                      (6,572)          8,384           9,359

Cash and cash equivalents at beginning of year                 18,287           9,903             544
                                                       ---------------  --------------  --------------
         CASH AND CASH EQUIVALENTS AT END OF YEAR      $       11,715   $      18,287   $       9,903
                                                       ===============  ==============  ==============
</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's
knitted  fabrics  business,  Stevcoknit  Fabrics, is presented as a discontinued
operation  through  its  final  liquidation  in  fiscal  2000.

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 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.  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.

RECENT  ACCOUNTING  PRONOUNCEMENTS:  In  June  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.
On July 2, 2000, the Company adopted the new standard.  The Company's management
has  determined that its cotton buying contracts meet the criteria for exclusion
under  the  normal  purchases  and normal sales exemption and are not considered
derivatives;  therefore,  the Company had no financial statement impact from the
adoption  of  the  standard.


                                       24
<PAGE>
NOTES  TO  CONSOLIDATED  FINANCIAL  STATEMENTS  -  CONTINUED

ESTIMATES:   The  preparation  of  financial  statements  in  conformity  with
accounting  principles generally accepted in the United Sates of America require
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 2001
and  fiscal year 2000 consisted of 52 weeks and fiscal year 1999 consisted of 53
weeks.

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.

For  fiscal  year  2001,  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 $90 million, $109 million, and $150
million  for fiscal 2001, 2000, and 1999, respectively. 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.  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  June  30,  2001, there were no borrowings and approximately $50
million  was  available  for  borrowing  under  this  credit  facility.

The  credit  facility  contains  restrictive  covenants  that require that Delta
Mills'  maximum  leverage ratio not exceed specified ratios.  The agreement also
restricts  additional  indebtedness,  dividends,  and capital expenditures.  The
payment  of dividends with respect to Delta Mills' stock is permitted by the new
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 June 30, 2001 the carrying
value  of  the  Senior Notes was $83,815,000 and the fair value, based on quoted
market  prices  was  $46,098,250.

Total  interest expense incurred by the Company was $11,064,000, $16,095,000 and
$17,415,000  for  fiscal  years  2001,  2000,  and  1999, respectively, of which
$106,000  was  capitalized  during fiscal year 1999.  Total interest paid during
fiscal  years 2001, 2000, and 1999 was $12,099,000, $16,343,000 and $16,760,000,
respectively.

Rent  expense  relating  to  operating  leases  was  approximately  $3,165,000,
$3,507,000  and  $  3,407,000 for fiscal years 2001, 2000 and 1999 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
              -----------  -----------  ----------

                     2002               $1,341,000
                     2003                  417,000
                     2004                  241,000
                     2005                   64,000
              Later Years   83,815,000     464,000
                           -----------  ----------
                           $83,815,000  $2,527,000
                           ===========  ==========


NOTE  D-EMPLOYEE  BENEFIT  PLANS

The  Company  participates  in  the Delta Woodside Industries, Inc. 40l(k) Plan.
During  fiscal  2001, 2000 and 1999, the Company contributed $411,000, $453,000,
and  $497,000, 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 participated in a 501(c)(9) trust, the Delta Woodside Employee
Benefit  Plan  and  Trust  ("Trust").  The  Trust  collected  both  employer and
employee contributions from the Company and made disbursements for health claims
and other qualified benefits.  The Company made no contributions to the trust in
either fiscal 2001, fiscal 2000, or in fiscal 1999.  On June 13, 2001, the trust
was  terminated.

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 30, 2001 and
July  1,  2000,  the  Company's  liability  was  $6,599,000  and  $5,813,000
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  $0,
$176,000,  and  $321,000  for  fiscal  years  2001, 2000 and 1999, respectively.
Under  the Stock Option Plan, the Company recognized expense of $0, $190,000 and
$152,000  for  fiscal  years  2001,  2000  and  1999,  respectively.

NOTE  E-AFFILIATED  PARTY  TRANSACTIONS

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:

                              2001      2000         1999
                              -----  -----------  -----------

Textile and yarn  sales       $   0  $26,593,000  $30,221,000
Corporate services expense        0    2,264,000    2,816,000
Income tax payments               0      154,000       74,000
Payroll taxes, insurance and
   Employee related expenses      0   20,673,000   39,889,000
Rental income                     0            0       81,000


                                       26
<PAGE>
NOTE  E-CONTINUED

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

Corporate  services  before fiscal 2001 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.

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-DISCONTINUED  OPERATIONS

On  March  3,  1998,  the  Company made the decision to close its knitted fabric
operation,  Stevcoknit  Fabrics.  Accordingly operating results for this segment
were  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  were  used  to make capital expenditures and to
reduce  indebtedness.

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

(in thousands)              June 30, 2001    July 1, 2000   July 3, 1999
                            --------------  --------------  -------------

Net Sales                   $            0  $           0   $       2,080
Cost and expense                         0            276           2,080
(Loss) before income tax                 0           (276)              0
Income tax expense                       0            102               0
                            --------------  --------------  -------------

(Loss) from operations of
discontinued operations     $            0  $        (174)  $           0
                            ==============  ==============  =============


                                       27
<PAGE>
NOTE  G-INCOME  TAXES

The  Company  reports  federal  income  taxes  in the consolidated return of its
parent  Delta Woodside Industries, Inc. (DWI) and had a tax loss of $3.3 million
which will be reported in the fiscal 2001 consolidated Federal income tax return
with its parent, DWI.  The consolidated tax group had a regular tax loss of $5.2
million  and  an  alternative  minimum  taxable loss (AMT) of $6.0 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  2001  or  2000.

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

                                       2001         2000
                                  ------------  -------------
Assets:
Deferred compensation             $ 2,542,000   $  2,222,000
Accrued and sundry liabilities      1,688,000      2,153,000
Net operating loss carryforwards    2,077,000      1,129,000
Inventory                             589,000
Other                                  20,000         67,000
                                  ============  =============
Subtotal                            6,916,000      5,571,000
Valuation allowance
                                  ------------  -------------
Deferred tax assets                 6,916,000      5,571,000



Liabilities:
Depreciation                       15,805,000     15,747,000
Inventory                                            269,000
Other                                 329,000        661,000
                                  ------------  -------------
Deferred tax liabilities           16,134,000     16,677,000
                                  ------------  -------------
    Net deferred tax liabilities  ($9,218,000)  ($11,106,000)
                                  ============  =============

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

<TABLE>
<CAPTION>
                                                   2001           2000          1999
<S>                                            <C>            <C>            <C>
Current:
     Federal income taxes                      $          0   $  4,190,000   $ 6,980,000
     State income taxes                              78,000        429,000     1,005,000
                                               -------------  -------------  -----------
           Total current                       $     78,000   $  4,619,000   $ 7,985,000
Deferred:
      Federal income taxes (benefits)           ($2,783,000)   ($2,871,000)  $   520,000
      State income taxes (benefits)                (360,000)      (468,000)       85,000
                                               -------------  -------------  -----------
           Total Deferred                       ($3,143,000)   ($3,339,000)  $   605,000
                                               -------------  -------------  -----------
Total provision for Continuing Operations       ($3,065,000)  $  1,280,000   $ 8,590,000

Total provision for income taxes related to:
Extraordinary Items                                 873,000      2,755,000
Discontinued Operations                                           (103,000)    2,335,000
                                               -------------  -------------  -----------
Total provision for income taxes                ($2,192,000)  $  3,932,000   $10,925,000
                                               =============  =============  ===========
</TABLE>


                                       28
<PAGE>
NOTE  G-CONTINUED

The reconciliation of total income tax expense (benefit) computed at the Federal
statutory  tax  rates  is  as  follows:

<TABLE>
<CAPTION>
                                                     2001         2000         1999
                                                 ------------  -----------  -----------
<S>                                              <C>           <C>          <C>
Income tax expense (benefit) at statutory rates  $(2,135,000)  $3,627,000   $ 9,835,000
State taxes (benefits) net of federal benefit       (143,000)     364,000       991,000
Other                                                 86,000      (59,000)       99,000
                                                 ------------  -----------  -----------
                                                 $(2,192,000)  $3,932,000   $10,925,000
                                                 ============  ===========  ===========
</TABLE>


The  Company  made  tax  payments of $48,000, $154,000 and $81,000 during fiscal
years  2001,  2000  and  1999,  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>
                                JUNE 30, 2001   JULY 1, 2000
                                --------------  -------------
<S>                             <C>             <C>
Current assets                            142            234
Noncurrent assets                          88            117
Current Liabilities                     2,036          1,479
Noncurrent liabilities                    660            785
Stockholders' equity (deficit)         (2,466)        (1,913)
</TABLE>

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

<TABLE>
<CAPTION>
                                                         Twelve Months Ended
                                           -----------------------------------------------
                                            June 30, 2001    July 1, 2000    July 3, 1999
                                           ---------------  --------------  --------------
<S>                                        <C>              <C>             <C>

Net sales -intercompany commissions        $        3,602   $       4,106   $       5,207
Cost and expenses                                   4,155           4,744           4,948
Income (loss) from continuing operations             (553)           (638)            167
(Loss) from discontinued operations                                                  (519)
Net (loss)                                           (553)           (638)           (352)
</TABLE>


                                       29
<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  June 30, 2001 minimum
payments  under  these  contracts  with  non-cancelable  contract  terms  were
approximately  $21  million.

     During  fiscal  year  2002,  the  Company  plans to spend approximately $ 7
million  for  capital  improvements  and  to  maintain  existing  facilities.

     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, consisting of approximately
$400,000,  was  placed  in  an interest bearing escrow account to cover expenses
related  to  this  contamination.  As  of the date of this filing, approximately
$393,000 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  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.

     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.


                                       30
<PAGE>
NOTE  J-QUARTERLY  RESULTS  OF  OPERATIONS  (UNAUDITED)

The  following is a summary of the unaudited quarterly results of operations for
the  years  ended  June  30,  2001  and  July  1,  2000

<TABLE>
<CAPTION>
2001 Quarter Ended
(In thousands)                                      September 30    December 30    March 31    June 30
                                                   --------------  -------------  ----------  ---------
<S>                                                <C>             <C>            <C>         <C>
Net Sales                                          $      63,199   $     59,697   $  52,991   $ 37,073
Gross profit                                               9,274          5,917       2,196     (1,119)
Income (loss) from continuing operations
              Before extraordinary items                   2,334           (149)     (2,297)    (5,379)
Extraordinary gain net of taxes                              639            946           0          0
Net income (loss)                                          2,973            797      (2,297)    (5,379)


2000 Quarter Ended
(In thousands)                                     October 2       January 1      April 1     July 1
                                                   --------------  -------------  ----------  ---------

Net Sales                                          $      65,318   $     66,441   $  70,624   $ 74,128
Gross profit                                               5,817          6,208       9,566     11,666
Income (loss) from continuing operations
              Before extraordinary items                  (1,050)          (753)        918      2,826
Extraordinary gain net of taxes                                                       3,502      1,157
Discontinued operations                                                                           (174)
Net income (loss)                                         (1,050)          (753)      4,420      3,809
</TABLE>


NOTE K-EXTRAORDINARY ITEMS AND SUBSEQUENT EVENTS

a)   During  the  fiscal  year  2001,  the Company purchased $31,263,000 of face
     amount  of  its 9.625% Senior Notes for $28,021,000. The Company recognized
     an  extraordinary  gain of $1,585,000 after taxes of $873,000 and the write
     off  of  deferred  loan costs of $784,000. During the fiscal year 2000, the
     Company purchased $34,922,000 of face amount of its 9.625% Senior Notes for
     $26,615,000.  The  Company  recognized  an extraordinary gain of $4,659,000
     after  a  tax expense of $2,755,000 and write off of deferred loan costs of
     $893,000.

b)   On  August 22, 2001, the Company announced the closing of its Furman Plant,
     a  weaving  only  facility  located  in  Fountain  Inn S. C. The closing is
     directly  related  to  the  continued  weakness  of the textile and apparel
     industries  that  has forced the Company to adjust its production capacity.
     With  this  strategic  move,  the  Company should be able to better balance
     production  with demand while still allowing for growth beyond recent sales
     trends.  While  the  Company  projects that it will incur fiscal 2002 first
     quarter  costs  in the range of $8 to $10 million for asset impairments and
     closing  costs,  the Company anticipates this move should enhance cash flow
     and  improve  operating  results  in  the  current  fiscal  year.


ITEM  9.  CHANGES  IN  AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON
--------  ------------------------------------------------------
          ACCOUNTING  AND  FINANCIAL  DISCLOSURE
          --------------------------------------

Not  applicable.


                                       31
<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.


                                       32
<PAGE>
                                     PART IV

ITEM  14.  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  30,  2001

     Consolidated  balance  sheets-June  30,  2001  and  July  1,  2000.

     Consolidated  statements  of operations--Years ended June 30, 2001, July 1,
     2000,  and  July  3,1999.

     Consolidated  statements  of  shareholder's  equity--  Years ended June 30,
     2001,  July  1,  2000,  and  July  3,1999.

     Consolidated  statements of cash flows-- Years ended June 30, 2001, July 1,
     2000,  and  July  3,1999.

     Notes  to  consolidated  financial  statements.

               (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 Woodside Industries, Inc. for the fiscal
               year  ended  June  30,  2001  (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


                                       33
<PAGE>
ITEM  14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON
---------  ------------------------------------------------------
FORM  8-K - CONTINUED
---------------------

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           Lease  dated  September 1, 1998, by  and  between Hammond Square,
               Ltd.  and  Delta  Woodside  Industries,  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  the Company: Incorporated by
               reference  to  Exhibit  10.1.1  to  the  DWI  2000  10-K.*
10.2**         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.  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,  1990.*
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.*


                                       34
<PAGE>
ITEM  14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON
---------  ------------------------------------------------------
FORM  8-K - CONTINUED
---------------------

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.*
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.*
10.10.1        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.
10.11**        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.


*              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.

     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
               ----------------------

               None

     (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


                                       35
<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)


September 25, 2001               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>
<CAPTION>
<S>                   <C>        <C>                                                     <C>
/s/ E. Erwin Maddrey  9/25/2001  /s/ William F. Garrett                                  9/25/2001
--------------------  ---------  ------------------------------------------------------  ---------
E. Erwin Maddrey, II  Date       William F. Garrett                                      Date
Director                         President, Chief Executive Officer and Director

/s/ Buck A. Mickel    9/25/2001  /s/ William H. Hardman, Jr.                             9/25/2001
--------------------  ---------  ------------------------------------------------------  ---------
Buck A. Mickel        Date       William H. Hardman, Jr.                                 Date
Director                         Vice President, Treasurer, and Chief Financial Officer

                                 /s/ Donald C. Walker                                    9/25/2001
                                 ------------------------------------------------------  ---------
                                 Donald C. Walker                                        Date
                                 Vice President, Assistant Secretary, and Controller
</TABLE>


                                       36
<PAGE>
                                  EXHIBIT INDEX


SCHEDULE  II  -  VALUATION  AND  QUALIFYING  ACCOUNTS





                                      F-1
<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 Costs  Charged to Other         Describe      of Period
                                                               and Expenses    Accounts-Describe
-----------------------------------------------------------------------------------------------------------------------------------
<S>                                             <C>          <C>               <C>                <C>  <C>           <C>
Deducted from asset accounts
  Allowance for Doubtful Accounts and Returns:

Year ended June 30, 2001                        $   173,000                    $       2,998,000  (1)  ($3,222,000)  (2)  $ 51,000
                                                 ==========                    =================       ============       ========
Year ended July 1, 2000                         $   291,000                    $       4,472,000  (1)  ($4,590,000)  (2)  $173,000
                                                 ==========                    =================       ============       ========
Year ended July 3, 1999                         $   246,000                    $       7,788,000  (1)  ($7,743,000)  (2)  $291,000
                                                 ==========                    =================       ============       ========
</TABLE>



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



                                      F-2
<PAGE>