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

                                   FORM 10-QSB

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

          For the quarterly period ended   June 30, 2003
                                         -----------------


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

             For the transition period from__________ to __________

             Commission file number:   0 - 50235
                                     ---------------


                      PERFORMANCE CAPITAL MANAGEMENT, LLC
                      -----------------------------------
        (Exact name of small business issuer as specified in its charter)

            California                              03-0375751
   ------------------------------        ---------------------------------
   State or other jurisdiction of        (IRS Employer Identification No.)
   incorporation or organization


          222 South Harbor Blvd., Suite 400, Anaheim, California 92805
    ------------------------------------------------------------------------
                    (Address of principal executive offices)


                                 (714) 502-3780
                          ---------------------------
                          (Issuer's telephone number)


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

Check  whether  the issuer (1) filed all reports required to be filed by Section
13  or  15(d) of the Exchange Act during the past 12 months (or for such shorter
period  that  the  issuer  was  required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.  Yes [X]  No [ ]


State the number of shares outstanding of each of the issuer's classes of common
equity,  as  of the latest practicable date: As of June 30, 2003, the issuer had
571,550  LLC  Units  issued  and  outstanding.


Transitional Small Business Disclosure Format (Check one):  Yes [ ]  No [X]


<PAGE>
                      PERFORMANCE CAPITAL MANAGEMENT, LLC

                                    INDEX TO
                         QUARTERLY REPORT ON FORM 10-QSB
                       FOR THE QUARTER ENDED JUNE 30, 2003



PART I - FINANCIAL INFORMATION                                           PAGE

Item 1     Financial Statements

           Independent Accountants' Review Report . . . . . . . . . . .     1

           Balance Sheets as of June 30, 2003 (unaudited) and
           December 31, 2002 (audited). . . . . . . . . . . . . . . . .     2

           Statements of Operations for the three months ended
           June 30, 2003 and 2002, the six months ended
           June 30, 2003, and the period from February 4, 2002
           (Inception) to June 30, 2002 (unaudited) . . . . . . . . . .     3

           Statements of Members' Equity for the six months ended
           June 30, 2003 (unaudited) and  the year ended
           December 31, 2002 (audited). . . . . . . . . . . . . . . . .     4

           Statements of Cash Flows for the six months ended
           June 30, 2003, and the period from
           February 4, 2002 (Inception) to June 30, 2002 (unaudited). .     5

           Condensed Notes to the Financial Statements (unaudited). . .     6

Item 2     Management's Discussion and Analysis of Financial Condition
           and Results of Operations. . . . . . . . . . . . . . . . . .    13

Item 3     Controls and Procedures. . . . . . . . . . . . . . . . . . .    19

PART II - OTHER INFORMATION

Item 1     Legal Proceedings. . . . . . . . . . . . . . . . . . . . . .    20

Item 4     Submission of Matters to a Vote of Security Holders. . . . .    20

Item 5     Other Information. . . . . . . . . . . . . . . . . . . . . .    20

Item 6     Exhibits and Reports on Form 8-K . . . . . . . . . . . . . .    21

SIGNATURES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    21

CERTIFICATIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . .    22


<PAGE>
                         PART I - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL  STATEMENTS



[MOORE STEPHENS WURTH FRAZER AND TORBET, LLP LETTERHEAD]


                     Independent Accountants' Review Report


To the Board of Directors
Performance Capital Management, LLC
Anaheim, California

We  have  reviewed  the  accompanying  balance  sheet  of  Performance  Capital
Management,  LLC,  as of June 30, 2003, and the related statements of operations
for  the  three  and six months ended June 30, 2003, the three months ended June
30, 2002, and the period from inception (February 4, 2002) through June 30, 2002
and  the related statements of members' equity and cash flows for the six months
ended  June  30,  2003  and the period from inception (February 4, 2002) through
June  30,  2002,  in  accordance with Statements on Standards for Accounting and
Review  Services  issued  by  the  American  Institute  of  Certified  Public
Accountants.  All  information  included  in  these  financial statements is the
representation  of  the  management  of  Performance  Capital  Management,  LLC.

A  review  of  interim  financial  information  consists principally of applying
analytical  procedures and making inquiries of persons responsible for financial
and  accounting  matters.  It  is  substantially  less in scope than an audit in
accordance with generally accepted auditing standards, the objective of which is
the  expression  of  an  opinion  regarding  the financial statements taken as a
whole.  Accordingly,  we  do  not  express  such  an  opinion.

Based on our reviews, we are not aware of any material modifications that should
be  made  to the accompanying financial statements referred to above for them to
be  in  conformity  with  accounting principles generally accepted in the United
States  of  America.

We  have  previously  audited,  in  accordance with auditing standards generally
accepted  in  the  United  States  of  America, the balance sheet of Performance
Capital  Management,  LLC as of December 31, 2002, and the related statements of
operations,  members'  equity  and  cash  flows  for  the  period from inception
(February  4, 2002) through December 31, 2002 (not presented herein); and in our
report  dated  March  20,  2003,  we  expressed  an unqualified opinion on those
financial  statements.  In  our  opinion,  the  information  set  forth  in  the
accompanying  balance  sheet  as  of December 31, 2002, is fairly stated, in all
material  respects,  in  relation  to  the  balance sheet from which it has been
derived.


/s/ Moore Stephens Wurth Frazer And Torbet, LLP


August 5, 2003
City of Industry, California


                                        1
<PAGE>
<TABLE>
<CAPTION>
                       PERFORMANCE CAPITAL MANAGEMENT, LLC

                                 BALANCE SHEETS
                    AS OF JUNE 30, 2003 AND DECEMBER 31, 2002
                  (See Independent Accountants' Review Report)
                  --------------------------------------------


                                                               December 31,
                                              June 30, 2003        2002
                                               (unaudited)      (audited)
                                             ---------------  --------------
<S>                                          <C>              <C>
                                     ASSETS
                                     ------

  Cash and cash equivalents                  $     1,733,739  $      850,139
  Restricted cash                                     21,408          21,395
  Other receivables                                   33,881          47,615
  Note receivable                                     51,524               -
  Purchased loan portfolios, net                   2,240,621       4,044,194
  Property and equipment, net                        479,459         578,963
  Deposits                                            56,588          56,588
  Prepaid expenses and other assets                   85,872          69,187
                                             ---------------  --------------

      Total assets                           $     4,703,092  $    5,668,081
                                             ===============  ==============



                        LIABILITIES AND MEMBERS' EQUITY
                        -------------------------------

LIABILITIES:
  Accounts payable                           $        89,634  $      130,421
  Pre-petition claims                                120,000         139,737
  Accrued liabilities                                341,185         502,279
  Income taxes payable                                 5,895          16,590
                                             ---------------  --------------
    Total liabilities                                556,714         789,027

COMMITMENTS AND CONTINGENCIES                              -               -

MEMBERS' EQUITY                                    4,146,378       4,879,054
                                             ---------------  --------------

      Total liabilities and members' equity  $     4,703,092  $    5,668,081
                                             ===============  ==============

         The accompanying notes are an integral part of this statement.
</TABLE>


                                        2
<PAGE>
<TABLE>
<CAPTION>
                                         PERFORMANCE CAPITAL MANAGEMENT, LLC

                                              STATEMENTS OF OPERATIONS
                       FOR THE THREE MONTHS ENDED JUNE 30, 2003 AND 2002, THE SIX MONTHS ENDED
                  JUNE 30, 2003, AND THE PERIOD FROM FEBRUARY 4, 2002 (INCEPTION) TO JUNE 30, 2002
                                    (See Independent Accountants' Review Report)
                                    --------------------------------------------

                                          For the three    For the three        For the six        From February 4,
                                          months ended      months ended       months ended      2002 (inception) to
                                          June 30, 2003    June 30, 2002       June 30, 2003        June 30, 2002
                                           (unaudited)      (unaudited)         (unaudited)           (unaudited)
                                         ---------------  ---------------  ---------------------  ------------------
<S>                                      <C>              <C>              <C>                    <C>
REVENUES:
  Portfolio collections                  $    2,367,483   $    1,871,287   $          5,007,101   $       3,081,406
  Portfolio sales                               159,763          864,769                505,724             925,612
                                         ---------------  ---------------  ---------------------  ------------------
    Total revenues                            2,527,246        2,736,056              5,512,825           4,007,018
  Less portfolio basis recovery               1,124,448        1,377,856              2,703,414           2,277,443
                                         ---------------  ---------------  ---------------------  ------------------

NET REVENUES                                  1,402,798        1,358,200              2,809,411           1,729,575
                                         ---------------  ---------------  ---------------------  ------------------

OPERATING COSTS AND EXPENSES:
  Salaries and benefits                       1,060,572        1,039,355              2,180,680           1,837,332
  General and administrative                    530,238          467,866              1,075,931             851,878
  Depreciation                                   51,677           52,902                103,178              87,289
                                         ---------------  ---------------  ---------------------  ------------------
    Total operating costs and expenses        1,642,487        1,560,123              3,359,789           2,776,499
                                         ---------------  ---------------  ---------------------  ------------------

LOSS FROM OPERATIONS                           (239,689)        (201,923)              (550,378)         (1,046,924)
                                         ---------------  ---------------  ---------------------  ------------------

OTHER INCOME (EXPENSE):
  Reorganization costs                          (24,497)         (30,863)               (48,020)            (84,461)
  Interest income                                 3,914            9,038                  5,850              34,295
  Other income (expense)                         (9,304)           8,266                  1,280              21,168
                                         ---------------  ---------------  ---------------------  ------------------
    Total other expense, net                    (29,887)         (13,559)               (40,890)            (28,998)
                                         ---------------  ---------------  ---------------------  ------------------

LOSS BEFORE INCOME TAX PROVISION               (269,576)        (215,482)              (591,268)         (1,075,922)

INCOME TAX PROVISION                              4,547              752                  7,496               3,700
                                         ---------------  ---------------  ---------------------  ------------------

NET LOSS                                 $     (274,123)  $     (216,234)  $           (598,764)  $      (1,079,622)
                                         ===============  ===============  =====================  ==================

                  The accompanying notes are an integral part of this statement.
</TABLE>


                                        3
<PAGE>
<TABLE>
<CAPTION>
                       PERFORMANCE CAPITAL MANAGEMENT, LLC

                          STATEMENTS OF MEMBERS' EQUITY
                   (See Independent Accountants' Review Report)
                   --------------------------------------------


                                                                       Total
                                       Unreturned     Accumulated     Members'
                                         Capital        Deficit        Equity
                                      -------------  -------------  -------------
                                       (unaudited)    (unaudited)    (unaudited)
<S>                                   <C>            <C>            <C>
Balance, February 4, 2002 (audited)   $ 38,116,880   $(18,239,185)  $ 19,877,695

Distribution to investors              (12,000,000)             -    (12,000,000)

Net loss                                         -     (1,079,622)    (1,079,622)
                                      -------------  -------------  -------------

Balance, June 30, 2002                  26,116,880    (19,318,807)     6,798,073

Net loss                                         -     (1,919,019)    (1,919,019)
                                      -------------  -------------  -------------

Balance, December 31, 2002 (audited)    26,116,880    (21,237,826)     4,879,054

Distribution to investors                 (133,912)                     (133,912)

Net loss                                         -       (598,764)      (598,764)
                                      -------------  -------------  -------------

Balance, June 30, 2003                $ 25,982,968   $(21,836,590)  $  4,146,378
                                      =============  =============  =============

         The accompanying notes are an integral part of this statement.
</TABLE>


                                        4
<PAGE>
<TABLE>
<CAPTION>
                         PERFORMANCE CAPITAL MANAGEMENT, LLC

                            STATEMENTS OF CASH FLOWS
                   FOR THE SIX MONTHS ENDED JUNE 30, 2003 AND
          THE PERIOD FROM FEBRUARY 4, 2002 (INCEPTION) TO JUNE 30, 2002
                  (See Independent Accountants' Review Report)
                  --------------------------------------------

                                                       For the six    From February 4,
                                                       months ended  2002 (inception) to
                                                      June 30, 2003     June 30, 2002
                                                       (unaudited)       (unaudited)
                                                     ---------------  ---------------
<S>                                                  <C>              <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net loss                                           $     (598,764)  $   (1,079,622)
  Adjustments to reconcile net loss to net cash
    provided by operating activities:
      Depreciation                                          103,178           87,289
      Decrease in other receivables                          13,734           91,059
      Increase in note receivable                           (51,524)               -
      Increase in prepaid expenses and other assets         (16,685)         (29,868)
      Decrease in loan portfolios                         1,803,573        1,085,268
      Decrease in deposits                                        -           22,167
      Increase (decrease) in accounts payable               (40,787)          (3,175)
      Decrease in pre-petition claims                       (19,737)        (264,056)
      (Decrease) increase in accrued liabilities           (161,094)         136,379
      (Decrease) increase in income taxes payable           (10,695)           5,895
                                                     ---------------  ---------------
        Net cash provided by operating activities         1,021,199           51,336

CASH FLOWS FROM INVESTING ACTIVITIES:
  Additions to property and equipment                        (3,674)          (8,458)

CASH FLOWS FROM FINANCING ACTIVITIES:
  Distribution to investors                                (133,912)     (12,000,000)
                                                     ---------------  ---------------

NET CHANGE IN CASH AND CASH EQUIVALENTS                     883,613      (11,957,122)

CASH AND CASH EQUIVALENTS, beginning of period              871,534       15,529,574
                                                     ---------------  ---------------

CASH AND CASH EQUIVALENTS, end of period             $    1,755,147   $    3,572,452
                                                     ===============  ===============

SUPPLEMENTAL DISCLOSURE FOR CASH FLOW INFORMATION:

  Income taxes paid                                  $            -   $       11,720
                                                     ===============  ===============

  Interest paid                                      $            -   $            -
                                                     ===============  ===============

          The accompanying notes are an integral part of this statement.
</TABLE>


                                        5
<PAGE>
                       PERFORMANCE CAPITAL MANAGEMENT, LLC

                  CONDENSED NOTES TO THE FINANCIAL STATEMENTS
                  (See Independent Accountants' Review Report)
                  --------------------------------------------

NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS

Performance  Capital  Management, LLC ("PCM LLC" or "the Company") is engaged in
the business of acquiring assets originated by federal and state banks and other
sources,  for  the  purpose  of  generating  income and cash flow from managing,
collecting,  or  selling  those  assets.  These  assets  consist  primarily  of
non-performing  credit  card  loan  portfolios  and  are  purchased  and sold as
portfolios  ("portfolios").  Additionally,  some  of  the  loan  portfolios  are
assigned  to  third  party  agencies  for  collection.

Reorganization Under Bankruptcy
-------------------------------

PCM  LLC  was  formed  under  a  Chapter  11  Bankruptcy Reorganization Plan and
operating  agreement.  The  plan called for the consolidation of five California
limited  partnerships  and  a  California  Corporation  into  the new California
Limited Liability Company.  The five California limited partnerships were formed
for  the  purpose  of  acquiring  investments  in  or  direct  ownership  of
non-performing credit card loan portfolios from financial institutions and other
sources.  The  assets  of  the  five limited partnerships consisted primarily of
non-performing  credit  card  loans,  as  well  as  cash.  PCM LLC was formed on
January  14,  2002  and  commenced  operations  upon  the  confirmation  of  its
Bankruptcy Reorganization Plan ("Reorganization Plan") on February 4, 2002.  The
entities  that  were  consolidated under the Reorganization Plan are as follows:

Performance  Asset  Management  Fund  ,  Ltd.,-  (PAM),  a  California  Limited
Partnership,  formed  in  1991.  Units  in  PAM were sold in a private placement
offering.  PAM  raised  $5,205,000  in  gross  proceeds  from  the  sale  of its
partnership  units.  PAM  was  not  subject to the reporting requirements of the
Securities  and  Exchange  Commission.

Performance  Asset  Management  Fund  II  , Ltd.,- (PAMII), a California Limited
Partnership,  formed  in  1992.  Units in PAMII were sold in a private placement
offering.  PAMII  raised  $7,670,000  in  gross  proceeds  from  the sale of its
partnership  units.  PAMII  was not subject to the reporting requirements of the
Securities  and  Exchange  Commission.

Performance  Asset  Management  Fund  III, Ltd.,- (PAMIII), a California Limited
Partnership,  formed  in  1992. Units in PAMIII were sold in a private placement
offering  pursuant  to  Regulation  D promulgated by the Securities and Exchange
Commission on a "best efforts" basis. PAMIII raised $9,990,000 in gross proceeds
from  the sale of its partnership units. PAMIII was a public limited partnership
that  was  subject  to the reporting requirements of the Securities and Exchange
Commission.

Performance  Asset  Management  Fund  IV,  Ltd., - (PAMIV), a California Limited
Partnership,  formed in 1992. Units in PAMIV were sold in an intrastate offering
to  residents  of  California, pursuant to the provisions of Section 3(A)(11) of
the  Securities Act of 1933. PAMIV raised $28,595,000 in gross proceeds from the
sale  of  its partnership units. PAMIV was a public limited partnership that was
subject to the reporting requirements of the Securities and Exchange Commission.

Performance  Asset  Management  Fund  V,  Ltd.,  -  (PAMV), a California Limited
Partnership,  formed  in  1994.  Units  in PAMV were sold in a private placement
offering.  PAMV  raised  $5,965,000  in  gross  proceeds  from  the  sale of its
partnership  units.  PAMV  was  not subject to the reporting requirements of the
Securities  and  Exchange  Commission.

Performance  Capital  Management,  Inc.  (PCM  INC),  a  California  corporation
incorporated  in  January  1993.  PCM  INC  identified  potential  portfolio
acquisitions,  performed  due  diligence in conjunction with potential portfolio
acquisitions,  acquired  portfolios, and through joint ventures with the limited
partnerships  (PAM,  PAMII, PAMIII, PAMIV, and PAMV) collected and sold acquired
portfolios.  The  limited  partnerships  (PAM,  PAMII,  PAMIII, PAMIV, and PAMV)
collectively  obtained  98.5% of the outstanding shares of PCM INC. The minority
interest of 1.5% was effectively eliminated in the bankruptcy plan.


                                        6
<PAGE>
                       PERFORMANCE CAPITAL MANAGEMENT, LLC

                  CONDENSED NOTES TO THE FINANCIAL STATEMENTS
                  (See Independent Accountants' Review Report)
                  --------------------------------------------

NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS (CONTINUED)

Pre-Petition  Operations
------------------------

A  total of approximately $57,450,000 was raised over the period 1991 to 1994 by
selling  limited  partnership  interests in PAM, PAMII, PAMIII, PAMIV, and PAMV.
Approximately  $8.7  million  was  deducted  for  brokerage  and  organizational
expenses.  Approximately  $49 million was used to purchase non-performing credit
card  loan portfolios.  These portfolios were typically purchased by the limited
partnerships  from  PCM  INC.  PCM INC also collected the portfolios under joint
venture agreements between itself and the limited partnerships.

In  the  normal  course  of  business,  loan  portfolios  would  be  purchased,
collections  would  be made and in some cases the portfolios were sold.  PCM INC
was in the business of managing these loan portfolios.

PCM INC generally charged a "mark-up" to the limited partnerships for portfolios
purchased  for  the  limited  partnerships.  This  markup averaged 35% above the
price  PCM  INC  paid  for  the portfolios on the open market.  PCM INC was also
contractually entitled to receive 45% of all monies collected on the portfolios.

The  following  is  a  summary  of the ownership interest of Performance Capital
Management, LLC pursuant to the terms of the Reorganization Plan:

<TABLE>
<CAPTION>
Member's  Number of    Number of        Percentage
  Name    Investors  PCM LLC Units  Interest in PCM LLC
--------  ---------  -------------  -------------------
<S>       <C>        <C>            <C>
PAM             370         52,050                    9
PAMII           459         76,700                   14
PAMIII          595         99,900                   17
PAMIV          1153        285,950                   50
PAMV            327         56,950                   10
                     -------------  -------------------
  Totals                   571,550                  100
                     =============  ===================
</TABLE>


                                        7
<PAGE>
                       PERFORMANCE CAPITAL MANAGEMENT, LLC

                  CONDENSED NOTES TO THE FINANCIAL STATEMENTS
                  (See Independent Accountants' Review Report)
                  --------------------------------------------

NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS (CONTINUED)

The  Reorganization  Plan  calls  for  distributions to be made first to the LLC
Members  to  the  extent  of  and  in  proportion  to  their  unreturned Capital
Contributions;  and  thereafter  to  the  LLC  Members  in  proportion  to their
respective  percentage  ownership  interest.

The  combination  of  the  Partnerships and PCM INC is summarized as follows (in
thousands):

<TABLE>
<CAPTION>
                                            PAM      PAMII     PAMIII    PAMIV      PAMV     PCM INC    Total
                                          --------  --------  --------  --------  --------  ---------  --------
<S>                                       <C>       <C>       <C>       <C>       <C>       <C>        <C>
Sale of Limited
    Partnership Units                     $ 5,205   $ 7,670   $ 9,990   $28,595   $ 5,965   $     -   $ 57,425

Distributions
    to Investors                           (3,704)   (4,137)   (3,719)   (6,920)     (829)        -    (19,309)
                                          --------  --------  --------  --------  --------  --------  ---------

Unreturned Capital                          1,501     3,533     6,271    21,675     5,136          -    38,116

Accumulated Deficit                          (288)   (1,333)   (2,424)   (9,330)   (2,561)    (2,302)  (18,238)
                                          --------  --------  --------  --------  --------  ---------  --------

Cash and Net Assets
    Transferred to PCM LLC                $ 1,213   $ 2,200   $ 3,847   $12,345   $ 2,575   $(2,302)    19,878
                                          ========  ========  ========  ========  ========  ========

2002 Distribution to Investors                                                                         (12,000)

Net Loss For The Year Ended
    December 31, 2002                                                                                   (2,999)
                                                                                                      ---------

Members' Equity PCM, LLC
    at December 31, 2002                                                                                 4,879

2003 Distribution to Investors                                                                            (134)

Net Loss For The Six Months
    Ended June 30, 2003                                                                                   (599)
                                                                                                      ---------

Members' Equity PCM, LLC
    at June 30, 2003                                                                                  $  4,146
                                                                                                      =========
</TABLE>

Performance  Asset  Management  Fund  III, Ltd. and Performance Asset Management
Fund  IV,  Ltd.,  were  reporting  entities under the Securities Exchange Act of
1934.  PAM,  PAMII,  PAMV,  and PCM INC were not reporting entities. It has been
determined  that  Performance  Capital  Management, LLC is a "successor company"
under  rule  12g-3  under  the Securities Exchange Act of 1934, and therefore is
subject  to  the  reporting requirements of the Securities Exchange Act of 1934.
PCM  LLC's LLC units are not publicly traded securities. The Reorganization Plan
placed  certain  restrictions  on  the  transfer  of  members'  interests.


                                        8
<PAGE>
                       PERFORMANCE CAPITAL MANAGEMENT, LLC

                  CONDENSED NOTES TO THE FINANCIAL STATEMENTS
                  (See Independent Accountants' Review Report)
                  --------------------------------------------

NOTE 2 - BASIS OF PRESENTATION

Interim Condensed Financial Statements
--------------------------------------

These  interim condensed financial statements have been prepared using generally
accepted  accounting  principles  in  the  United  States. The interim financial
statements  include  all  adjustments,  consisting  solely  of  normal recurring
adjustments,  which  in management's opinion are necessary for fair presentation
of the financial results for interim periods. The financial statements have been
prepared  consistent  with  the  accounting  policies described in the Company's
annual  audited  financial  statements.  Reference  should  be  made  to  those
statements included with the Company's annual report filed on Form 10-KSB.

Reporting Entity
----------------

The Company is a successor entity of six companies emerging from bankruptcy (see
Note  1).  The  accompanying  balance sheets, statements of operations, members'
equity,  and  cash  flows  include balances and transactions since the emergence
from  bankruptcy.

Transfer  of  Assets  to  Successor  Company
--------------------------------------------

Assets  were  transferred  at  historical  carrying  values  and  postpetition
liabilities were assumed as required by the bankruptcy confirmation plan.


NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Use  of  Estimates
------------------

In  preparing  financial  statements  in  conformity  with accounting principles
generally  accepted  in  the United States of America, management is required to
make  estimates  and  assumptions that affect the reported amounts of assets and
liabilities,  the 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.

Significant  estimates  have  been made by management with respect to the timing
and  amount  of  collection of future cash flows from non-performing credit card
loan  portfolios.  Among  other  things,  the estimated future cash flows of the
portfolios  are  used  to recognize impairment in the purchased loan portfolios.
Management  reviews  the  estimate  of  future collections, and it is reasonably
possible  that  these  estimates  may  change  based on actual results and other
factors.  A  change  could  be  material  to  the  financial  statements.

Purchased  Loan  Portfolios
---------------------------

Purchased  loan  portfolios  consisted  primarily  of non-performing credit card
accounts.  For  substantially all the Company's acquired portfolios, future cash
flows  cannot  be  reasonably  estimated  in order to record an accretable yield
consistently.  Therefore,  the  Company  utilizes  the  cost  recovery method as
required  by AICPA Practice Bulletin 6.  Application of the cost recovery method
requires  that any amounts received be applied first against the recorded amount
of  the  portfolios;  when  that amount has been reduced to zero, any additional
amounts  received  are  recognized  as  net  revenue.  Acquired  portfolios  are
initially  recorded  at  their  respective  costs,  and  no  accretable yield is
recorded  on  the  accompanying  balance  sheet.

The Company provides a valuation allowance for acquired loan portfolios when the
present value of expected future cash flows do not exceed the carrying values of
the  portfolios.


                                        9
<PAGE>
                       PERFORMANCE CAPITAL MANAGEMENT, LLC

                  CONDENSED NOTES TO THE FINANCIAL STATEMENTS
                  (See Independent Accountants' Review Report)
                  --------------------------------------------

NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Over the life of the portfolio, the Company's management continues to review the
carrying  values  of  each loan for impairment. If the present value of expected
future  cash  flows falls below the carrying value of the related portfolio, the
valuation  allowance  is  adjusted  accordingly.  Adjustments  to  the valuation
allowance  are recorded in the statement of operations as a provision for losses
on  loan  portfolios.

Revenue  Recognition
--------------------

Revenue  is  accounted  for  using  the  cost  recovery  method of accounting in
accordance  with  Practice Bulletin No. 6, "Amortization of Discounts on Certain
Acquired Loans". Under the cost recovery method of accounting, all cash receipts
relating  to individual loan portfolios are applied first to recover the cost of
the portfolios, prior to recognizing any net revenue. Cash receipts in excess of
cost  of  purchased  loan  portfolios  are  then  recognized  as  net  revenue.

Loan portfolio sales occur after the initial portfolio analysis is performed and
the loan portfolio is acquired.  Portfolios sold typically do not meet PCM LLC's
targeted collection characteristics or are located in geographic areas where PCM
LLC is not licensed to collect.  Loan portfolios sold are valued at the lower of
cost  or  market.

Proceeds from strategic sales of portions of purchased loan portfolios in excess
of their cost basis are recorded as net revenue when received.


NOTE 4 - FAIR VALUE OF FINANCIAL INSTRUMENTS

The  estimated  fair  value and the methods and assumptions used to estimate the
fair  values of the financial instruments of the Company as of June 30, 2003 and
2002  are  as  follows.  The  carrying  amount  of  cash  and  cash equivalents,
restricted  cash  and liabilities approximate the fair value.  The fair value of
purchased  loan  portfolios  was  determined  based  on  both market pricing and
discounted  expected  cash  flows.  The  discount rate is based on an acceptable
rate  of  return  adjusted  for  the  risk inherent in the loan portfolios.  The
discount  rate  utilized  at  June  30, 2003 and December 31, 2002 was 20%.  The
estimated  fair value of loan portfolios was $15,900,000 and $15,000,000 at June
30,  2003  and  December  31,  2002,  respectively.


NOTE 5 - PURCHASED LOAN PORTFOLIOS

The Company acquires portfolios of non-performing credit card loans from federal
and  state  banks  and other sources.  These loans are acquired at a substantial
discount  from  the  actual  outstanding  balance.  The  aggregate  outstanding
contractual  loan  balances  at  June  30,  2003  and  December 31, 2002 totaled
approximately  $1.1  billion.

The  Company  initially  records acquired loans at cost.  To the extent that the
cost  of  a  particular  loan  portfolio  exceeds  the estimated amount of money
expected  to  be collected, a valuation allowance is recognized in the amount of
such  impairment.


                                       10
<PAGE>
                       PERFORMANCE CAPITAL MANAGEMENT, LLC

                  CONDENSED NOTES TO THE FINANCIAL STATEMENTS
                  (See Independent Accountants' Review Report)
                  --------------------------------------------

NOTE 5 - PURCHASED LOAN PORTFOLIOS (CONTINUED)

The  carrying amount of loans included in the accompanying balance sheets are as
follows:

<TABLE>
<CAPTION>
                                       As of               As of
                                   June 30, 2003     December 31, 2002
                                  ----------------  -------------------
<S>                               <C>               <C>
Unrecovered cost balance,
  beginning of period             $     9,517,146   $       10,236,158
Valuation allowance,
  beginning of period                  (5,472,952)          (5,472,952)
                                  ----------------  -------------------
Net balance, beginning of period        4,044,194            4,763,206
Net portfolio activity                 (1,803,573)            (719,012)
                                  ----------------  -------------------
Net balance, end of period        $     2,240,621   $        4,044,194
                                  ================  ===================
</TABLE>


The  activity in the loan portfolios in the accompanying financial statements is
as  follows:

<TABLE>
<CAPTION>
                                    Three months    Three months        Six months       From February 4,
                                       ended            ended              ended        2002 (Inception) to
                                    June 30, 2003   June 30, 2002      June 30, 2003       June 30, 2002
                                   --------------  --------------  --------------------  ------------------
<S>                                <C>             <C>             <C>                   <C>
Purchased loan portfolios                549,890         492,125               899,841          1,192,175
Collections on loan portfolios        (2,367,483)     (1,871,287)           (5,007,101)        (3,081,406)
Sales of loan portfolios                (159,763)       (864,769)             (505,724)          (925,612)
Revenue recognized on collections      1,392,762         524,431             2,744,271            873,782
Revenue recognized on sales               10,036         833,769                65,140            855,793
                                   --------------  --------------  --------------------  -----------------
Net portfolio activity                  (574,558)       (885,731)           (1,803,573)        (1,085,268)
                                   ==============  ==============  ====================  =================
</TABLE>

The  valuation  allowance  related  to  the  loan  portfolios  had  a balance of
$5,472,952 at June 30, 2003 and December 31, 2002.


NOTE  6  -  PRE-PETITION  CLAIMS

Under  the  Reorganization  Plan  PCM  LLC  was  required to pay certain allowed
pre-petition  claims  and professional fees totaling to approximately $1,400,000
of which $884,274 remained outstanding at inception (February 4, 2002).  At June
30,  2003  all of these claims had been paid or settled except for approximately
$120,000  which  was related primarily to operating expenses.  At June 30, 2003,
the  Company has approximately $120,000 accrued to cover the pre-petition claims
and  related  expenses.


                                       11
<PAGE>
                       PERFORMANCE CAPITAL MANAGEMENT, LLC

                  CONDENSED NOTES TO THE FINANCIAL STATEMENTS
                  (See Independent Accountants' Review Report)
                  --------------------------------------------

NOTE  7  -  COMMITMENTS  AND  CONTINGENCIES

Lease  Commitments
------------------

The  Company  currently  leases  office  space  in  Anaheim,  California under a
non-cancelable  five  year  operating lease.  Under the lease agreement, PCM LLC
must  pay  a basic monthly rental charge plus a portion of the building's common
area  expenses.

Future minimum lease commitments as of June 30, 2003 are as follows:

      Year  ending
        June  30,
        ---------
          2004                           $301,000
          2005                           $311,000
          2006                           $318,000
          2007                           $134,000
        Thereafter                           -

Rental  expense  for  the  three months ended June 30, 2003 and 2002 amounted to
$77,450 and $102,881 respectively.  Rental expense for the six months ended June
30,  2003  and  the  period  from  February 4, 2002 (Inception) to June 30, 2002
amounted  to  $155,029  and  $197,950  respectively.


Consent Decree - Fair Credit Reporting Act
------------------------------------------

In  February  2001, a Consent Decree was entered in United States District Court
in  an  action  United States of America v. Performance Capital Management, Inc.
(One  of  the entities that formed Performance Capital Management, LLC, see Note
1). Under the terms of the Consent Decree, PCM, INC had a civil penalty pursuant
to  Section  621  (a)  of  the  Fair Credit Reporting Act, 15 U.S.C. 1681s(a) of
$2,000,000  waived.  The Consent Decree basically had PCM INC and its successors
agree  to  follow  the  provisions of the Fair Credit Reporting Act. The Consent
Decree  ordered,  among  other  specifics,  that  PCM  INC  and  its successors,
officers,  employees,  et  al,  are: 1.) enjoined from failing to report correct
delinquency  dates  to consumer reporting agencies; 2.) enjoined from failing to
properly  investigate  consumer  disputes  and  verify,  correct  or  delete the
reporting of such information to consumer reporting agencies within the time set
forth  in  the  Fair  Credit  Reporting Act; 3.) enjoined from failing to report
accounts  as  "disputed"  to  consumer reporting agencies when consumers dispute
accounts  either  in  writing,  orally, or by electronic means; and 4.) enjoined
from  failing to comply in any other respect with the Fair Credit Reporting Act.

The  Consent  Decree  provides  for access to the business for a period of three
years,  including  all  computerized  databases,  right  to inspect and copy all
relevant documents and the right to interview officers and employees.

Claims
------

PCM  LLC is involved in various legal actions primarily arising from PCM INC and
the  partnerships' Chapter 11 filing.  As of June 30, 2003, most of these issues
have  been  resolved  by settlement agreements.  PCM LLC management has actively
resolved  these  actions.  The  Company has accrued approximately $120,000 as of
June  30,  2003 to cover the remaining pre-petition claims and related expenses.


                                       12
<PAGE>
ITEM  2.  MANAGEMENT'S  DISCUSSION  AND  ANALYSIS  OF  FINANCIAL  CONDITION  AND
RESULTS OF OPERATIONS

Except  for  the  historical information presented in this document, the matters
discussed  in this Form 10-QSB, and specifically in "Management's Discussion and
Analysis  of  Financial  Condition  and  Results  of  Operations,"  or otherwise
incorporated  by  reference  into  this  document  contain  "forward-looking
statements" (as such term is defined in the Private Securities Litigation Reform
Act  of  1995). These statements can be identified by the use of forward-looking
terminology  such  as  "believes," "plans," "expects," "may," "will," "intends,"
"should,"  "plan,"  or "anticipates" or the negative thereof or other variations
thereon  or  comparable  terminology, or by discussions of strategy that involve
risks  and  uncertainties.  The  safe  harbor  provisions  of Section 21E of the
Securities  Exchange  Act of 1934, as amended, and Section 27A of the Securities
Act of 1933, as amended, apply to forward-looking statements made by Performance
Capital  Management, LLC. You should not place undue reliance on forward-looking
statements.  Forward-looking  statements  involve  risks  and uncertainties. The
actual  results  that  we achieve may differ materially from any forward-looking
statements due to such risks and uncertainties. These forward-looking statements
are  based  on  current expectations, and we assume no obligation to update this
information.  Readers  are  urged  to  carefully review and consider the various
disclosures  made  by  us in this report on Form 10-QSB and in our other reports
filed  with  the  Securities  and  Exchange  Commission  that  attempt to advise
interested  parties  of  the  risks  and  factors  that may affect our business.

The  following discussion and analysis of our financial condition and results of
operations should be read in conjunction with the unaudited financial statements
and  accompanying  notes and the other financial information appearing elsewhere
in  this  report and with the financial information contained in our Form 10-KSB
filed with the Securities and Exchange Commission on April 28, 2003.

OVERVIEW

We  acquire  assets  originated  by  federal  and  state  banking  and  savings
institutions,  loan  agencies,  and other sources, for the purpose of generating
income  and  cash flow from collecting or selling those assets. Typically, these
assets  consist of charged-off credit card contracts, but we have also purchased
other  forms  of  indebtedness,  including automobile deficiencies and defaulted
judgments. These assets are typically purchased and sold as portfolios.

Before  purchasing  a portfolio, we conduct due diligence to assess the value of
the  portfolio.  We  try to purchase portfolios at a substantial discount to the
actual amount of money that they will ultimately produce, so that we can recover
the  cost  we  pay for the portfolio, pay our collection and operating costs and
still  have  a  profit.  We  record our portfolios at cost based on the purchase
price.  We  reduce  the cost bases of our portfolios on a portfolio-by-portfolio
basis based on collections, sales of some or all of the portfolio and impairment
of  net  realizable  value.

We  frequently sell certain portions of portfolios we purchase, such as accounts
from  particular states where we do not collect, and then collect the balance of
the  portfolio.  We do not generally purchase loan portfolios solely with a view
to  their resale, and for this reason we generally do not show portfolios on our
balance  sheet  as  "held for investment". From time to time we sell some of our
portfolios  either to capitalize on market conditions, to dispose of a portfolio
that  is not performing or to dispose of a portfolio whose collection life, from
our  perspective, has run its course. When we engage in these sales, we continue
collecting the portfolio right up until the closing of the sale.

We  refer  to the discounted present value of the actual amount of money that we
believe  a  portfolio  will  ultimately  produce  as  the  "fair  value"  of the
portfolio.  If we conduct our business successfully, the aggregate fair value of
our  portfolios should be substantially greater than the aggregate cost basis of
our  portfolios  presented  on  our  balance  sheet. We must make assumptions to
determine fair value, the most significant of which are the magnitude and timing
of  future  collections  and  the discount rate used to determine present value.
Because  of  the  inherent uncertainty associated with predicting future events,
our  determinations  of  fair  value  at  any  particular point in time are only
estimates,  and  actual  fair value could ultimately vary significantly from our
estimate.

We  earn revenues from collecting our portfolios and from selling our portfolios
or  portions  of  our  portfolios. We recognize gross revenue when we collect an
account and when we sell a portfolio or a portion of it. On our income statement
we  reduce  our  gross  revenues by the cost basis recovery of our portfolios to
arrive  at  net  revenue.  For  collections,  we  reduce  the  cost basis of the
portfolio dollar-for-dollar until we have completely recovered the cost basis of
the  portfolio.  When  we  sell a portfolio or a portion of it, to the extent of


                                       13
<PAGE>
remaining  cost  basis  for  the  portfolio,  we  reduce  the  cost basis of the
portfolio  by  a  percentage  of  the  original  portfolio  cost.

Our  net  revenues  from  portfolio collections may vary from quarter to quarter
because  the  number  and  magnitude of portfolios where we are still recovering
costs  may  vary, and because the return rates of portfolios whose costs we have
already  recovered  in full may vary. Similarly, our net revenues from portfolio
sales  may vary from quarter to quarter depending on the number and magnitude of
portfolios  (or  portions)  we  decide to sell and the market values of the sold
portfolios  (or  portions)  relative  to  their  cost  bases.

Our  operating  costs  and expenses consist principally of salaries and benefits
and  general  and  administrative  expenses.  Fluctuations  in  our salaries and
benefits  correspond  roughly  to fluctuations in our headcount. Our general and
administrative  expenses  include non-salaried collection costs, telephone, rent
and  professional  expenses.  Fluctuations  in  telephone  and  collection costs
generally  correspond  to  the  volume of accounts we are attempting to collect.
Professional  expenses  tend  to  vary based on specific issues we must resolve.

BASIS  OF  PRESENTATION

We present our financial statements based on our emergence from bankruptcy being
treated  as  the inception of our business. In our emergence from bankruptcy, we
succeeded to the assets and liabilities of six entities that were in bankruptcy.
The  equity  owners of these entities approved a reorganization plan under which
the  owners  of  these  six  entities  agreed  to receive ownership interests in
Performance  Capital  Management, LLC, in exchange for their ownership interests
in  the  predecessor  entities.  As  discussed  in  more detail in Note 2 to our
audited  financial  statements  contained  in our annual report for 2002 on Form
10-KSB,  we do not present comparative financial information for the predecessor
entities  in  bankruptcy because we believe it would be prohibitively expensive,
if  not impossible, to reconstruct accurate accrual-based consolidated financial
information  for  the  six  entities  that were in bankruptcy, and any financial
statements  developed  for  prior  bankrupt periods would not provide meaningful
information  sufficient  to  justify  the  cost.

CRITICAL  ACCOUNTING  ESTIMATES

We  present investments in portfolios on our balance sheet at the lower of cost,
market,  or  estimated  net  realizable value. As discussed above, we reduce the
cost basis of a portfolio on a proportionate basis when we sell a portion of the
portfolio,  and  we treat amounts collected on a portfolio as a reduction to the
carrying  basis  of  the  portfolio  on  an  individual portfolio basis. When we
present financial statements we assess the estimated net realizable value of our
portfolios  on  a  portfolio-by-portfolio  basis, and we reduce the value of any
portfolio  that  has  suffered  impairment  because  its  cost basis exceeds its
estimated  net  realizable  value.  Estimated  net  realizable  value represents
management's  estimates,  based  upon  present  plans  and  intentions,  of  the
discounted  present  value  of  future  collections. We must make assumptions to
determine  estimated net realizable value, the most significant of which are the
magnitude  and  timing  of  future  collections  and  the  discount rate used to
determine  present  value.  Once we write down a particular portfolio, we do not
increase it in subsequent periods if our plans and intentions or our assumptions
change.

We  present  the fair value of our portfolios only in the notes to our financial
statements,  not  in  the  basic  financial  statements  themselves. In order to
understand  our  financial  statements  the  reader must understand the concepts
involved  in estimation of the fair value of our portfolios, as discussed in the
section  above  entitled  "Overview".  Because  of  the  inherent  uncertainty
associated  with  predicting  future events, our determinations of fair value at
any  particular  point  in  time are only estimates, and actual fair value could
ultimately  vary  significantly  from  our  estimate.

When  we  collect  an  account  in  a portfolio, we reduce the cost basis of the
portfolio dollar-for-dollar until we have completely recovered the cost basis of
the  portfolio. We believe this method of accounting for the amortization of the
purchase  price  of  our  portfolios is conservative and minimizes the effect of
estimation  on  our  results  of  operations.  This  policy  has  the  effect of
"front-loading"  expenses,  however,  and  may  result  in a portfolio initially
showing  no  net  revenue for a period of time and then showing only net revenue
once  we  have  recovered its entire cost basis. Although this accounting policy
may  be  criticized  for  not  matching  portfolio  cost  basis  to revenue on a
proportionate basis over the life of the portfolio, we believe a policy grounded
in  conservatism  is  preferable  to  a  policy  of  attempting  to estimate the
appropriate  matching percentages, due to the distressed nature of the portfolio
assets and the lack of assurance that projected collections will actually occur.


                                       14
<PAGE>
When  we  sell  a  portfolio or a portion of it, to the extent of remaining cost
basis  for  the  portfolio,  we  reduce  the  cost  basis  of the portfolio by a
percentage of the original portfolio cost. Our policy does not take into account
whether the portion of the portfolio we are selling may be more or less valuable
than  the remaining accounts that comprise the portfolio. We believe our policy,
which  is  grounded  in  this  objective  measure  for  cost  basis recovery, is
preferable  to  a  policy  that would attempt to estimate whether a portion of a
portfolio  being  sold is more or less valuable than the remaining accounts that
comprise the portfolio, because our policy minimizes the effect of estimation on
our  results  of  operations.

OPERATING RESULTS

COMPARISON OF RESULTS FOR THE QUARTERS ENDED JUNE 30, 2003, AND 2002

The  following  discussion  compares  our results for the quarter ended June 30,
2003,  to  the  quarter  ended  June  30,  2002.  Our  net  loss  increased  to
approximately  $274,000  for the quarter ended June 30, 2003, from approximately
$216,000  for  the  quarter  ended  June  30,  2002.

Revenue
-------

Our  net revenues were approximately $1.4 million for each of the quarters ended
June  30,  2003  and  2002.  The  following  table  presents a comparison of the
components  of  our revenues for the quarter ended June 30, 2003, to the quarter
ended  June  30,  2002, as well as presenting net revenue as a percentage of the
corresponding total revenue (approximate amounts due to rounding):

<TABLE>
<CAPTION>
                                   Total              Collections             Sales
                           --------------------  --------------------  --------------------
                            6/30/03    6/30/02    6/30/03    6/30/02    6/30/03    6/30/02
                           ---------  ---------  ---------  ---------  ---------  ---------
                             ($in millions)        ($in millions)          ($in millions)
<S>                        <C>        <C>        <C>        <C>        <C>        <C>

  Total revenues           $    2.5   $    2.7   $    2.4   $    1.9   $    0.2   $    0.8
  Less basis recovery          (1.1)      (1.4)      (1.0)      (1.4)      (0.2)         -
                           ---------  ---------  ---------  ---------  ---------  ---------
  Net revenues             $    1.4   $    1.4   $    1.4   $    0.5   $      -   $    0.8
                           =========  =========  =========  =========  =========  =========

  Net revenue percentage       55.5%      49.6%      58.8%      28.0%       6.3%      96.4%
</TABLE>

Portfolio  collections continue to provide most of our total revenues. We showed
substantial  improvements in both total revenues and net revenues from portfolio
collections. Our total revenues from portfolio collections increased principally
due  to  collections from recently purchased portfolios and increased efficiency
in  collection  procedures for both recently purchased and older portfolios. Our
net revenues from portfolio collections (as well as the corresponding percentage
of  net  revenues  to  total  revenues) increased principally due to maintaining
collection trends on our older portfolios with low or fully-amortized cost bases
while simultaneously exploiting our recently purchased portfolios.

Our  total  and net revenues from portfolio sales declined dramatically.  During
the quarter ended June 30, 2002, we sold a substantial number of old portfolios,
some  of whose collection lives, from our perspective, had run their course, and
some  to  capitalize  on market conditions.  These old portfolio sales generated
substantial  net  revenues  because  almost  all  of these portfolios had low or
fully-amortized  cost  bases  due  to  prior  collection  activities.  These old
portfolio  sales  resulted  in  unusually  high net revenues for portfolio sales
during  the quarter ended June 30, 2002.  Net revenues from portfolio sales were
not  as  large in the quarter ended June 30, 2003, because these sales consisted
principally  of portions of newly acquired portfolios, which generally have high
cost  bases  that  must  be  recovered  against  sale  proceeds.  We  anticipate
continuing  to sell portions of newly acquired portfolios from time to time, but
we do not expect to generate substantial net revenues from these sales.


                                       15
<PAGE>
Operating  Expenses
-------------------

Our  total operating costs and expenses increased slightly for the quarter ended
June  30,  2003,  although total operating costs and expenses were approximately
$1.6  million  for  each  of  the  quarters  ended  June  30, 2003 and 2002. The
approximately  $80,000  increase  was  due  principally  to  the increase in our
general  and  administrative expenses. Our ratio of operating costs and expenses
to  total  revenues increased to 65.0% for the quarter ended June 30, 2003, from
approximately  57.0%  for  the  quarter  ended June 30, 2002.  The ratio for the
quarter  ended June 30, 2002, is somewhat skewed by the significant net revenues
from  sales  of old portfolios, which we do not expect to recur at those levels.
Otherwise,  our  ratio would have improved in 2003 from 2002, due principally to
improved  collection  performance.  Our  general  and  administration  expenses
increased  to  approximately  $530,000 for the quarter ended June 30, 2003, from
approximately  $468,000  for  the  quarter ended June 30, 2002.  Our general and
administrative  expenses  for  the  quarter  ended June 30, 2003, include annual
meeting  costs  that  were  not present in the quarter ended June 30, 2002.  Our
salaries  and  benefits expenses increased to approximately $1.1 million for the
quarter  ended  June  30,  2003, from approximately $1.0 million for the quarter
ended  June  30, 2002. Although our headcount has decreased, expenses associated
with  bonuses  due to increased productivity and with employee turnover resulted
in  a  slight  increase  in  our  salaries  and  benefits expense. Our operating
expenses  may increase somewhat in 2003, but at this time we do not expect these
increases  to  be  substantial.

COMPARISON OF RESULTS FOR THE SIX MONTHS ENDED JUNE 30, 2003, TO THE PERIOD FROM
FEBRUARY 4, 2002, TO JUNE 30, 2002

The following discussion compares our results from the six months ended June 30,
2003,  to the period from February 4, 2002, to June 30, 2002. We generally refer
to  the  approximately  five-month  period  from February to June of 2002 as the
comparable  period  for the prior year. The comparable period from 2002 is not a
full  six  months  because  we  present  our  financial  statements based on our
February  4,  2002,  emergence from bankruptcy being treated as the inception of
our business. As you read the following discussion, please keep in mind that the
comparable  period  for  the  prior year covers a time period of just under five
months, about one month less than the six-month period ended June 30, 2003.

Our  net  loss decreased to approximately $599,000 for the six months ended June
30,  2003,  from  approximately  $1.1  million for the comparable period for the
prior year. Our operating activities provided cash of approximately $1.0 million
for  the  six  months  ended  June  30,  2003,  as compared to providing cash of
approximately $51,000 for the comparable period for the prior year.

Revenue
-------

Our  net  revenues  increased  to  approximately $2.8 million for the six months
ended  June  30, 2003, from approximately $1.7 million for the comparable period
for the prior year.  The following table presents a comparison of the components
of our revenues for the six months ended June 30, 2003, to the comparable period
for  the  prior  year,  as well as presenting net revenue as a percentage of the
corresponding  total  revenue  (approximate  amounts  due  to  rounding):

<TABLE>
<CAPTION>
                                   Total              Collections             Sales
                           --------------------  --------------------  --------------------
                            6/30/03    6/30/02    6/30/03    6/30/02    6/30/03    6/30/02
                           ---------  ---------  ---------  ---------  ---------  ---------
                             ($in millions)        ($in millions)          ($in millions)
<S>                        <C>        <C>        <C>        <C>        <C>        <C>

  Total revenues           $    5.5   $    4.0   $    5.0   $    3.1   $    0.5   $    0.9
  Less basis recovery          (2.7)      (2.3)      (2.3)      (2.2)      (0.4)      (0.1)
                           ---------  ---------  ---------  ---------  ---------  ---------
  Net revenues             $    2.8   $    1.7   $    2.7   $    0.9   $    0.1   $    0.8
                           =========  =========  =========  =========  =========  =========

  Net revenue percentage       51.0%      43.2%      54.8%      28.4%      12.9%      92.4%
</TABLE>

Portfolio collections continue to provide most of our total revenues.  We showed
substantial  improvements in both total revenues and net revenues from portfolio
collections.  Our  total  revenues  from  portfolio  collections  increased
principally  due to collections from recently purchased portfolios and increased
efficiency  in  collection  procedures  for  both  recently  purchased and older
portfolios.  Our  net  revenues  from  portfolio  collections  (as  well  as the
corresponding percentage of net revenues to total revenues) increased


                                       16
<PAGE>
principally  due  to  maintaining collection trends on our older portfolios with
low  or  fully-amortized cost bases while simultaneously exploiting our recently
purchased  portfolios.

Although  our  total  revenues  from  portfolio sales declined somewhat, our net
revenues  from  portfolio sales declined dramatically.  During the quarter ended
June  30,  2002,  we  sold a substantial number of old portfolios, some of whose
collection  lives,  from  our  perspective,  had  run  their course, and some to
capitalize  on  market  conditions.  These  old  portfolio  sales  generated
substantial  net  revenues  because  almost  all  of these portfolios had low or
fully-amortized  cost  bases  due  to  prior  collection  activities.  These old
portfolio  sales  resulted  in  unusually high net revenues for portfolio sales,
principally during the quarter ended June 30, 2002.  Net revenues from portfolio
sales  were  not  as  large in the six months ended June 30, 2003, because these
sales  consisted  principally  of  portions  of newly acquired portfolios, which
generally have high cost bases that must be recovered against sale proceeds.  We
anticipate continuing to sell portions of newly acquired portfolios from time to
time,  but  we  do  not  expect  to generate substantial net revenues from these
sales.

Operating  Expenses
-------------------

Our  total  operating costs and expenses increased to approximately $3.4 million
for  the six months ended June 30, 2003, from approximately $2.8 million for the
comparable  period  for  the  prior  year.  Taking into account the shorter time
period  in  the  comparable period for the prior year, our total operating costs
and  expenses  remained  roughly  the  same.  Our  ratio  of operating costs and
expenses  to total revenues decreased to 60.9% for the six months ended June 30,
2003,  from  approximately  69.3%  for the comparable period for the prior year.
The ratio for the comparable period for the prior year is somewhat skewed by the
significant net revenues from sales of old portfolios, which we do not expect to
recur  at  those  levels.  Otherwise,  the improvement in 2003 from 2002 was due
principally  to improved collection performance.  Our general and administration
expenses  increased  to approximately $1.1 million for the six months ended June
30,  2003,  from  approximately $852,000 for the comparable period for the prior
year.  Our general and administrative expenses for the six months ended June 30,
2003,  include  annual  meeting  costs  that  were not present in the comparable
period  for  the  prior  year.  Our  salaries and benefits expenses increased to
approximately  $2.2  million  for  the  six  months  ended  June  30, 2003, from
approximately  $1.8  million  for  the  comparable  period  for  the prior year.
Although  our  headcount  has decreased, expenses associated with bonuses due to
increased  productivity and with employee turnover resulted in a slight increase
in  our  salaries  and  benefits  expense.  Our  operating expenses may increase
somewhat  in  2003,  but  at  this  time  we do not expect these increases to be
substantial.

LIQUIDITY  AND  CAPITAL  RESOURCES

Our  cash  and  cash equivalents increased approximately $884,000 during the six
months  ended  June 30, 2003, to a balance of approximately $1.8 million at June
30,  2003.  During the six months ended June 30, 2003, our portfolio collections
and  sales  generated  approximately  $5.5  million  of  cash,  and  we  used
approximately  $3.6  million  for  operating and other activities, approximately
$900,000 to purchase new portfolios and approximately $135,000 for distributions
to  unit  holders.

During  the  six-month  period ended June 30, 2003, we continued making progress
toward,  but  did  not  achieve  results  consistent with, our business plan: to
recover  the  cost  we  pay for our portfolios, pay our collecting and operating
costs  and  still  have a profit.  Our cost basis recovery of approximately $2.7
million  plus  our  operating  and  other expenses of approximately $3.4 million
exceeded  our  total  revenues  from collections and sales of approximately $5.5
million by approximately $550,000. On a cash basis, our collections and sales of
approximately $5.5 million exceeded the sum of our new portfolio acquisitions of
approximately  $900,000 plus our cash operating and other costs of approximately
$3.6 million plus distributions of $135,000. This cash increase of approximately
$884,000  was  principally due to our decision to build cash at this time rather
than  aggressively  acquire  new portfolios. We acquired a substantial amount of
new  portfolios  during  the second half of 2002, and in the first six months of
2003  we focused on improving our liquidity following those acquisitions so that
we  can sustain distributions to our unit holders while simultaneously acquiring
portfolios  that  we believe are available on good economic terms. Our portfolio
acquisition  strategy  for the balance of 2003 will depend principally on market
conditions.

During  the  six  months ended June 30, 2003, we believe we continued to improve
the balance between our new and old portfolios. In addition, we believe that our
procedures to ensure that our collectors continue to focus collection efforts on
older  portfolios that still have returns to yield, rather than focusing just on


                                       17
<PAGE>
the  most  recently  acquired  portfolios,  have begun to show results. We had a
successful first six months from a cash flow standpoint, and we made substantial
progress toward achieving results consistent with our business plan.

Our  portfolios  provide our principal source of liquidity. Over time, we expect
to  convert  our portfolios to cash in an amount that equals or exceeds the cost
basis  of  our portfolios. In addition, some portfolios whose cost bases we have
completely  recovered will continue to return collections to us. Our estimate of
the  fair  value of our portfolios at June 30, 2003, increased $900,000 to $15.9
million  from  $15.0  million  at  December 31, 2002. At the same time, the cost
basis  of  our  portfolios  decreased  to approximately $2.2 million at June 30,
2003, from approximately $4.0 million at December 31, 2002. Our estimate of fair
value  increased  despite this decline in cost basis because we believe recently
purchased  portfolios  will  provide  better  collection ratios than some of the
older  portfolios  we inherited from our PAM Fund predecessors and because newly
acquired  portfolios  generally  provide an increase in fair value substantially
greater  than  the  increase  in  cost  basis recorded on our balance sheet.  We
believe  portfolio  cost basis will continue to decline in the near term because
we  do  not expect the magnitude of new portfolio acquisitions to be as large in
2003 as it was in 2002. Due to factors such as the fair value of a new portfolio
being  greater  than  its  purchase  price,  the availability of new portfolios,
market  pricing conditions for new portfolios and the timing of distributions to
our  members, we believe it is difficult to assess whether the fair value of our
portfolios  will  also  decrease.

We used a discount rate of 20% to determine the fair values of our portfolios at
June 30, 2003, and December 31, 2002. The following table sets forth alternative
estimates  of  fair  value  if  we  assessed  collection risk as higher (using a
discount rate of 25%) or lower (using a discount rate of 15%).

<TABLE>
<CAPTION>
                                                   June 30, 2003   December 31, 2002
                                                  ---------------  ------------------
<S>                                               <C>              <C>
     Higher collection risk (25% discount rate)   $  14.8 million  $     14.2 million
     Assumed collection risk (20% discount rate)  $  15.9 million  $     15.0 million
     Lower collection risk (15% discount rate)    $  17.1 million  $     15.9 million
</TABLE>

Our  estimates of fair values also would change if we revised our projections of
the  magnitude  and  timing  of  future  collections.  Because  of  the inherent
uncertainty associated with predicting future events, our determinations of fair
value  at any particular point in time are only estimates, and actual fair value
could  ultimately  vary  significantly  from  our  estimate.

We plan to realize the difference between fair value and cost basis over time as
we  collect  our portfolios. We generally collect our portfolios over periods of
time  ranging  from  three  to seven years, with the bulk of a portfolio's yield
coming  in  the first three years we collect it. If we succeed in collecting our
portfolios  and  realize the difference between fair value and cost basis of our
portfolios,  we  will  recover the cost we paid for them, pay our collection and
operating  costs,  and  still  have  excess  cash.

In  the near term, we plan to reinvest some of our cash collections representing
cost  basis  recovery  to  acquire additional portfolios to continue growing the
fair  value  of our portfolios on a quarter to quarter basis. Ultimately we plan
to  reinvest all of the cash representing cost basis recovery, plus a portion of
excess  cash,  to  acquire  additional  portfolios.

Our Board of Directors has described this strategy as having two parts:

     -    Provide an annuity without impairing the value of the business; and

     -    Grow the business to increase the annuity.

Due  to  factors  such  as  the  availability  of new portfolios, market pricing
conditions for new portfolios and the timing of distributions to our members, we
may  not  achieve  increases  in fair value each quarter.  The fair value of our
portfolios declined during the second quarter to $15.9 million at June 30, 2003,
from  $16.6  million at March 31, 2003, due principally to collections outpacing
new  portfolio  acquisitions.

In  general,  we  expect  increases  in  portfolio  fair  value  to  result in a
corresponding  increase  in  the  cost  basis of our portfolios presented on our
balance  sheet.  The  magnitude  and  timing of our collections could cause cost
basis  to  decline in some quarters when fair value actually increases, however,
because  we  "front-load"  our cost basis recovery instead of matching portfolio


                                       18
<PAGE>
cost  basis  recovery  to  revenue on a proportionate basis over the life of the
portfolio.  Our  purchasing patterns could reinforce this divergence. A decrease
in the magnitude of new portfolio acquisitions (i.e., failing to reinvest all of
cash  collections  representing  cost basis recovery) may still result in a fair
value  increase  because new portfolios generally have a fair value that exceeds
their  purchase  price.

In  the  near term we plan to use some of our cash collections representing cost
basis  recovery  to  make  distributions  to  our  members and interest holders.
Ultimately  we  plan  to generate cash in excess of our collection and operating
costs  and  our  cost  basis recovery and to use some of the excess cash to make
distributions  to  our  members and interest holders. We have made the following
distributions  (not  counting  the initial $12 million distribution made shortly
after  emergence  from  bankruptcy)  based  on  results  through  the  specified
quarters:

<TABLE>
<CAPTION>
                     For the     Approximate Timing    Gross Amount of
                  Quarter Ended      of Payment       Distribution Paid
                  -------------  -------------------  -----------------
<S>               <C>            <C>                  <C>

                   June 30, 2003     July 2003        $         165,000
                   March 31, 2003    April 2003       $         135,000
</TABLE>

We  do  not  have any lines of credit or other debt financing available to us at
this  time.  We do not have any plans to raise equity capital. Based on our cash
position  and  current  financial  resources, and assuming our operating results
continue  to  increase  at projected levels, we believe we have adequate capital
resources  to  continue  our business as presently conducted for the foreseeable
future.  To  maximize  the return on our infrastructure, we are also considering
whether  there might be ways to increase the volume of accounts we service other
than  through  new  portfolio  acquisitions.

We  do not have any contractual commitments to make capital expenditures, and we
have not budgeted any capital expenditures for the coming year. We may from time
to  time  acquire  capital  assets  on  an as needed basis. Our most significant
capital  assets  are  our  dialer  and  our  telephone  switch,  which we do not
anticipate  having  to  replace  within  the  next  year.

ITEM 3.  CONTROLS AND PROCEDURES

(a) Evaluation of disclosure controls and procedures.

Our  principal executive officer and principal financial officer, based on their
evaluation of our disclosure controls and procedures (as defined in Exchange Act
Rules  13a  -14  (c))  as  of  a date within 90 days prior to the filing of this
Quarterly Report on Form 10-QSB, have concluded that our disclosure controls and
procedures  are  adequate  and  effective  for  the  purposes  set  forth in the
definition  in  Exchange  Act  rules.

(b) Changes in internal controls.

There  were  no significant changes in our internal controls or in other factors
that  could significantly affect our internal controls subsequent to the date of
their  evaluation.


                                       19
<PAGE>
                           PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

In  March  2003,  Michael  Cushing  filed  a Motion for Allowance and Payment of
Chapter  11  Claim  with  the  United  States  Bankruptcy  Court for the Central
District  of California, Santa Ana Division (the "Bankruptcy Court"). The claims
pertaining  to  Performance  Capital  Management,  LLC  amounted  to $170,000 in
aggregate.  On  March  17,  2003,  we  filed  a motion with the Bankruptcy Court
opposing  the  claims.  A  hearing  was  held  on  March 27, 2003. Following the
hearing,  the  Bankruptcy  Court  issued  its order providing that the period to
object  to  claims is reopened for a period of 30 days, or until April 27, 2003.
On  July 3, 2003, the Bankruptcy Court issued a final order awarding Mr. Cushing
a  total  of  $170,000  in  settlement  of his claims. The remaining outstanding
balance to be paid on this claim as of June 30, 2003, was $100,000.

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

On  June  9, 2003, we held our annual meeting of members in Anaheim, California.
At  the  meeting, our members were asked to vote on the election of directors to
the  Board  of  Directors. All of the directors nominated for election served as
directors  immediately prior to the annual meeting. The following directors were
elected  by  our  members  as  a  result  of  the  following  votes:

<TABLE>
<CAPTION>
DIRECTORS              VOTES "FOR" ELECTION  VOTES "WITHHELD"
---------------------  --------------------  ----------------
<S>                    <C>                   <C>
Class I
     Larisa Gadd                    215,831             4,756
     Rodney Woodworth               216,327             4,260
     Robert R. Price                215,980             4,607
Class II
     Lester T. Bishop               216,129             4,458
     Larry C. Smith                 216,228             4,359
     David Barnhizer                215,184             5,403
     Sanford Lakoff                 216,327             4,260
</TABLE>

In  addition to the election of directors, the following matters were voted upon
at  the  annual  meeting:

     -    To  approve the Second Amendment to the Operating Agreement to provide
          for  classes  and  staggered terms for Performance Capital Management,
          LLC directors. The votes were cast as follows: 214,691 in favor of the
          amendment;  1,765  against  the  amendment;  and  4,131  abstaining.

     -    To  ratify  the board of directors' selection and appointment of Moore
          Stephens  Wurth  Frazer  and  Torbet, LLP, as independent auditors for
          Performance  Capital  Management,  LLC  for  the  fiscal  year  ending
          December 31, 2003. The votes were cast as follows: 216,902 in favor of
          ratification;  449  against  ratification;  and  3,236  abstaining.

No other matters were submitted to our members at the annual meeting.

ITEM 5.  OTHER INFORMATION

Effective July 14, 2003, Mr. Robert Price resigned as a director of Performance
Capital Management, LLC. We intend to find someone to succeed Mr. Price as our
audit committee financial expert.


                                       20
<PAGE>
ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a)  EXHIBITS

EXHIBIT
NUMBER         DESCRIPTION
-------------  -----------------------------------------------------------------
99.1           Certification  of  Principal  Executive  Officer  Pursuant  to 18
               U.S.C.  Section  1350,  as Adopted Pursuant to Section 906 of the
               Sarbanes-Oxley  Act  of  2002

99.2           Certification  of  Principal  Financial  Officer  Pursuant  to 18
               U.S.C.  Section  1350,  as Adopted Pursuant to Section 906 of the
               Sarbanes-Oxley  Act  of  2002

(b)  REPORTS ON FORM 8-K

A  report  on Form 8-K dated February 4, 2002 was filed with the SEC on April 2,
2003. The report contained Item 1 disclosure regarding a change in control, Item
2  disclosure  regarding  acquisition  of  assets,  Item  3 disclosure regarding
bankruptcy  proceedings,  Item  4  disclosure  regarding  changes in independent
accountants  and  Item 7 disclosure regarding financial statements and exhibits.
The  following  financial  statements  were  filed  with the report: Independent
Auditors'  Report  dated  March  14,  2003; Balance Sheet as of February 4, 2002
(audited);  and  Notes  to  Financial  Statement.

No other reports on Form 8-K were filed during the three months ended June 30,
2003.


                                   SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                                           PERFORMANCE CAPITAL MANAGEMENT, LLC


   August 12, 2003                    By:  /s/ David J. Caldwell
---------------------                    ---------------------------------------
        (Date)                             Name: David J. Caldwell
                                             Its: Chief Operations Officer


                                       21
<PAGE>
                                 CERTIFICATIONS


                  CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER
                         PURSUANT TO SECTION 302 OF THE
                           SARBANES-OXLEY ACT OF 2002


I, David J. Caldwell, certify that:

1.  I  have reviewed this quarterly report on Form 10-QSB of Performance Capital
Management,  LLC;

2.  Based  on  my  knowledge,  this quarterly report does not contain any untrue
statement  of a material fact or omit to state a material fact necessary to make
the  statements  made, in light of the circumstances under which such statements
were  made,  not misleading with respect to the period covered by this quarterly
report;

3.  Based  on  my  knowledge,  the  financial  statements,  and  other financial
information  included  in  this quarterly report, fairly present in all material
respects  the  financial  condition, results of operations and cash flows of the
registrant  as  of,  and  for,  the  periods presented in this quarterly report;

4.  The  registrant's  other  certifying  officers  and  I  are  responsible for
establishing  and  maintaining disclosure controls and procedures (as defined in
Exchange  Act  Rules  13a-14  and  15d-14)  for  the  registrant  and  have:

     a) designed such disclosure controls and procedures to ensure that material
     information  relating  to  the  registrant,  including  its  consolidated
     subsidiaries,  is  made  known  to  us  by  others  within  those entities,
     particularly  during  the  period  in  which this quarterly report is being
     prepared;

     b)  evaluated the effectiveness of the registrant's disclosure controls and
     procedures  as  of  a  date within 90 days prior to the filing date of this
     quarterly  report  (the  "Evaluation  Date");  and

     c)  presented  in  this  quarterly  report  our  conclusions  about  the
     effectiveness  of  the  disclosure  controls  and  procedures  based on our
     evaluation  as  of  the  Evaluation  Date;

5. The registrant's other certifying officers and I have disclosed, based on our
most  recent evaluation, to the registrant's auditors and the audit committee of
registrant's  board  of  directors  (or  persons  performing  the  equivalent
functions):

     a)  all  significant  deficiencies  in  the design or operation of internal
     controls  which  could adversely affect the registrant's ability to record,
     process,  summarize  and  report financial data and have identified for the
     registrant's  auditors  any  material  weaknesses in internal controls; and

     b)  any  fraud,  whether or not material, that involves management or other
     employees  who  have  a  significant  role  in  the  registrant's  internal
     controls;  and

6.  The  registrant's  other  certifying  officers  and I have indicated in this
quarterly  report whether there were significant changes in internal controls or
in other factors that could significantly affect internal controls subsequent to
the  date  of  our most recent evaluation, including any corrective actions with
regard  to  significant  deficiencies  and  material  weaknesses.



Date:  August 12, 2003                        /s/  David J. Caldwell
      ------------------                    ------------------------------------
                                            David J. Caldwell
                                            Chief Operations Officer


                                       22
<PAGE>
                  CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER
                         PURSUANT TO SECTION 302 OF THE
                           SARBANES-OXLEY ACT OF 2002


I, Edward M. Rucker, certify that:

1.  I  have reviewed this quarterly report on Form 10-QSB of Performance Capital
Management,  LLC;

2.  Based  on  my  knowledge,  this quarterly report does not contain any untrue
statement  of a material fact or omit to state a material fact necessary to make
the  statements  made, in light of the circumstances under which such statements
were  made,  not misleading with respect to the period covered by this quarterly
report;

3.  Based  on  my  knowledge,  the  financial  statements,  and  other financial
information  included  in  this quarterly report, fairly present in all material
respects  the  financial  condition, results of operations and cash flows of the
registrant  as  of,  and  for,  the  periods presented in this quarterly report;

4.  The  registrant's  other  certifying  officers  and  I  are  responsible for
establishing  and  maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

     a) designed such disclosure controls and procedures to ensure that material
     information  relating  to  the  registrant,  including  its  consolidated
     subsidiaries,  is  made  known  to  us  by  others  within  those entities,
     particularly  during  the  period  in  which this quarterly report is being
     prepared;

     b)  evaluated the effectiveness of the registrant's disclosure controls and
     procedures  as  of  a  date within 90 days prior to the filing date of this
     quarterly  report  (the  "Evaluation  Date");  and

     c)  presented  in  this  quarterly  report  our  conclusions  about  the
     effectiveness  of  the  disclosure  controls  and  procedures  based on our
     evaluation  as  of  the  Evaluation  Date;

5. The registrant's other certifying officers and I have disclosed, based on our
most  recent evaluation, to the registrant's auditors and the audit committee of
registrant's  board  of  directors  (or  persons  performing  the  equivalent
functions):

     a)  all  significant  deficiencies  in  the design or operation of internal
     controls  which  could adversely affect the registrant's ability to record,
     process,  summarize  and  report financial data and have identified for the
     registrant's  auditors  any  material  weaknesses in internal controls; and

     b)  any  fraud,  whether or not material, that involves management or other
     employees  who  have  a  significant  role  in  the  registrant's  internal
     controls;  and

6.  The  registrant's  other  certifying  officers  and I have indicated in this
quarterly  report whether there were significant changes in internal controls or
in other factors that could significantly affect internal controls subsequent to
the  date  of  our most recent evaluation, including any corrective actions with
regard  to  significant  deficiencies  and  material  weaknesses.



Date:  August 12, 2003                        /s/  Edward M. Rucker
      ------------------                    ------------------------------------
                                            Edward M. Rucker
                                            Accounting Manager


                                       23
<PAGE>
                                  EXHIBIT INDEX


EXHIBIT
NUMBER         DESCRIPTION
-------------  -----------------------------------------------------------------
99.1           Certification  of  Principal  Executive  Officer  Pursuant  to 18
               U.S.C.  Section  1350,  as Adopted Pursuant to Section 906 of the
               Sarbanes-Oxley  Act  of  2002

99.2           Certification  of  Principal  Financial  Officer  Pursuant  to 18
               U.S.C.  Section  1350,  as Adopted Pursuant to Section 906 of the
               Sarbanes-Oxley  Act  of  2002


<PAGE>