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   September 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 September 30, 2003, the issuer
had  570,916  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 SEPTEMBER 30, 2003


PART I - FINANCIAL INFORMATION                                              PAGE

Item 1   Financial  Statements

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

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

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

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

         Statements of Cash Flows for the nine months ended September
         30, 2003, and the period from February 4, 2002 (Inception)
         to September 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. . . . . . . . . . . . . . . . . . . . . 14

Item 3   Controls  and  Procedures . . . . . . . . . . . . . . . . . . . . . 20

PART II - OTHER INFORMATION

Item 5   Other  Information. . . . . . . . . . . . . . . . . . . . . . . . . 21

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

SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23


<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  September  30,  2003,  and  the related statements of
operations  for  the  three  and nine months ended September 30, 2003, the three
months ended September 30, 2002 and the period from inception (February 4, 2002)
through  September  30,  2002  and the related statements of members' equity and
cash  flows  for  the  nine  months ended September 30, 2003 and the period from
inception  (February  4,  2002)  through  September 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


November 5, 2003
City of Industry, California


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

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


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

    Cash and cash equivalents                         $     1,728,372  $     850,139
    Restricted cash                                            21,408         21,395
    Other receivables                                           9,460         47,615
    Purchased loan portfolios, net                          1,860,823      4,044,194
    Property and equipment, net                               430,254        578,963
    Deposits                                                   56,588         56,588
    Prepaid expenses and other assets                         102,056         69,187
                                                      ---------------  -------------

          Total assets                                $     4,208,961  $   5,668,081
                                                      ===============  =============


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

LIABILITIES:
    Accounts payable                                  $        39,593  $     130,421
    Pre-petition claims                                        20,000        139,737
    Accrued liabilities                                       317,933        502,279
    Income taxes payable                                        8,843         16,590
                                                      ---------------  -------------
          Total liabilities                                   386,369        789,027

COMMITMENTS AND CONTINGENCIES                                                      -

MEMBERS' EQUITY                                             3,822,592      4,879,054
                                                      ---------------  -------------

          Total liabilities and members' equity       $     4,208,961  $   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
                                      (See Independent Accountants' Review Report)
                                      --------------------------------------------


                                              For the three    For the three       For the nine    From February 4,
                                              months ended     months ended        months ended  2002 (inception) to
                                              September 30,    September 30,       September 30,    September 30,
                                                  2003             2002                2003              2002
                                               (unaudited)      (unaudited)         (unaudited)      (unaudited)
                                             ---------------  ---------------  -----------------  ------------------
<S>                                          <C>              <C>              <C>                <C>
REVENUES:
    Portfolio collections                    $    2,351,314   $    2,153,598   $      7,358,415   $       5,234,995
    Portfolio sales                                       -           43,857            505,724             969,469
                                             ---------------  ---------------  -----------------  ------------------
        Total revenues                            2,351,314        2,197,446          7,864,139           6,204,464
    Less portfolio basis recovery                   894,837        1,534,613          3,598,251           3,812,056
                                             ---------------  ---------------  -----------------  ------------------

NET REVENUES                                      1,456,477          662,833          4,265,888           2,392,408
                                             ---------------  ---------------  -----------------  ------------------

OPERATING COSTS AND EXPENSES:
    Salaries and benefits                         1,050,518        1,022,365          3,231,198           2,859,697
    General and administrative                      497,399          486,932          1,573,330           1,338,810
    Depreciation                                     50,930           52,979            154,108             140,268
                                             ---------------  ---------------  -----------------  ------------------
        Total operating costs and expenses        1,598,847        1,562,276          4,958,636           4,338,775
                                             ---------------  ---------------  -----------------  ------------------

LOSS FROM OPERATIONS                               (142,370)        (899,443)          (692,748)         (1,946,367)
                                             ---------------  ---------------  -----------------  ------------------

OTHER INCOME (EXPENSE):
    Reorganization costs                            (17,364)         (22,026)           (65,384)           (106,487)
    Interest income                                   3,205            7,801              9,056              42,096
    Other income (expense)                            8,634           18,315              9,914              39,483
                                             ---------------  ---------------  -----------------  ------------------
        Total other expense, net                     (5,525)           4,090            (46,414)            (24,908)
                                             ---------------  ---------------  -----------------  ------------------

LOSS BEFORE INCOME TAX PROVISION                   (147,895)        (895,353)          (739,162)         (1,971,275)

INCOME TAX PROVISION                                  2,355            5,990              9,852               9,690
                                             ---------------  ---------------  -----------------  ------------------

NET LOSS                                     $     (150,250)  $     (901,343)  $       (749,014)  $      (1,980,965)
                                             ===============  ===============  =================  ==================

NET LOSS PER MEMBER
    UNIT - BASIC AND DILUTED                 $        (0.26)  $        (1.58)  $          (1.31)  $           (3.47)
                                             ===============  ===============  =================  ==================



                             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'
                                       Member      Capital        Deficit        Equity
                                       Units     (unaudited)    (unaudited)    (unaudited)
                                      --------  -------------  -------------  -------------
<S>                                   <C>       <C>            <C>            <C>

Balance, February 4, 2002 (audited)   571,550   $ 38,116,880   $(18,239,185)  $ 19,877,695

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

Net loss                                                   -     (1,980,965)    (1,980,965)
                                      --------  -------------  -------------  -------------

Balance, September 30, 2002           571,550     26,116,880    (20,220,150)     5,896,730

Net loss                                                   -     (1,017,676)    (1,017,676)
                                      --------  -------------  -------------  -------------

Balance, December 31, 2002 (audited)  571,550     26,116,880    (21,237,826)     4,879,054

Distribution to investors                           (307,448)             -       (307,448)

Member units returned by investors       (634)

Net loss                                                   -       (749,014)      (749,014)
                                      --------  -------------  -------------  -------------

Balance, September 30, 2003           570,916   $ 25,809,432   $(21,986,840)  $  3,822,592
                                      ========  =============  =============  =============



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


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

                                          STATEMENTS OF CASH FLOWS
                                (See Independent Accountants' Review Report)
                                --------------------------------------------


                                                                         For the nine      From February 4,
                                                                         months ended      2002 (inception)
                                                                         September 30,     to September 30,
                                                                             2003                2002
                                                                         (unaudited)         (unaudited)
                                                                      ------------------  ------------------
<S>                                                                   <C>                 <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
    Net loss                                                          $        (749,014)  $      (1,980,965)
    Adjustments to reconcile net loss to net cash
        provided by (used in) operating activities:
            Depreciation                                                        154,108             140,268
            Decrease in other receivables                                        38,155              56,507
            Increase in prepaid expenses and other assets                       (32,869)            (59,237)
            Decrease in loan portfolios                                       2,183,371             871,528
            Decrease in deposits                                                      -              22,167
            Decrease in accounts payable                                        (90,828)           (144,324)
            Decrease in pre-petition claims                                    (119,737)           (672,022)
            (Decrease) increase in accrued liabilities                         (184,346)             95,871
            (Decrease) increase in income taxes payable                          (7,747)              8,843
                                                                      ------------------  ------------------
                Net cash provided by (used in) operating activities           1,191,093          (1,661,364)

CASH FLOWS FROM INVESTING ACTIVITIES:
    Additions to property and equipment                                          (5,399)            (12,135)

CASH FLOWS FROM FINANCING ACTIVITIES:
    Distributions to investors                                                 (307,448)        (12,000,000)
                                                                      ------------------  ------------------

NET CHANGE IN CASH AND CASH EQUIVALENTS                                         878,246         (13,673,499)

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

CASH AND CASH EQUIVALENTS, end of period                              $       1,749,780   $       1,856,075
                                                                      ==================  ==================

SUPPLEMENTAL DISCLOSURE FOR CASH FLOW INFORMATION:

    Income taxes paid                                                 $          18,190   $          12,000
                                                                      ==================  ==================

    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.  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. 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 Distributions to Investors                                                                   (307)

Net Loss For The Nine Months
  Ended September 30, 2003                                                                        (749)
                                                                                              ---------

Members' Equity PCM, LLC
  at September 30, 2003                                                                       $  3,823
                                                                                              =========
</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 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)

Purchased  Loan  Portfolios  (continued)
----------------------------------------

Over the life of the portfolio, the Company's management continues to review the
carrying  values  of each loan for impairment.  If net 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.

Cash  and  Cash  Equivalents
----------------------------

PCM  LLC  defines  cash  equivalents  as  cash,  money  market  investments, and
overnight  deposits  with  original  maturities of less than three months.  Cash
equivalents  are  valued  at  cost,  which  approximates  market.  The  Company
maintains cash balances which exceeded federally insured limits by approximately
$1,895,000 as of September 30, 2003.  The Company has not experienced any losses
in  such  accounts.  Management  believes  it  is not exposed to any significant
risks  on  cash  in  bank  accounts.

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 September 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 September 30, 2003 and December 31, 2002 was 20%.  The
estimated  fair  value  of  loan  portfolios  was $15,900,000 and $15,000,000 at
September  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 September 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
                                   September 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                     (2,183,371)            (719,012)
                                  --------------------  -------------------
Net balance, end of period        $         1,860,823   $        4,044,194
                                  ====================  ===================
</TABLE>


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

<TABLE>
<CAPTION>
                                    Three months     Three months        Nine months       From February 4,
                                       ended            ended               ended        2002 (Inception) to
                                   Sept. 30, 2003   Sept. 30, 2002     Sept. 30, 2003       Sept. 30, 2002
                                   ---------------  ---------------  --------------------  -----------------
<S>                                <C>              <C>              <C>                   <C>
Purchased loan portfolios          $      515,039   $    1,748,354   $         1,414,880   $      2,940,528
Collections on loan portfolios         (2,351,314)      (2,153,589)           (7,358,415)        (5,234,995)
Sales of loan portfolios                        -          (43,857)             (505,724)          (969,469)
Revenue recognized on collections       1,456,477          648,747             4,200,748          1,522,529
Revenue recognized on sales                     -           14,086                65,140            869,879
                                   ---------------  ---------------  --------------------  -----------------
Net portfolio activity             $     (379,798)  $      213,741   $        (2,183,371)  $       (871,528)
                                   ===============  ===============  ====================  =================
</TABLE>


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

NOTE  6  -  OTHER  RECEIVABLES

Other receivables consist of collections on portfolios received by a third party
collection  agency.

NOTE  7  -  PROPERTY  AND  EQUIPMENT

Property  and  equipment  is  as  follows:

<TABLE>
<CAPTION>
                                      As of                 As of
                                September 30, 2003    December 31, 2002
                                -------------------  -------------------
<S>                             <C>                  <C>

Office furniture and equipment  $           273,835  $           269,685
Computer equipment                          467,242              465,994
Leasehold improvements                       36,982               36,981
                                -------------------  -------------------
  Totals                                    778,059              772,660
Less accumulated depreciation               347,805              193,697
                                -------------------  -------------------
  Property and equipment, net   $           430,254  $           578,963
                                ===================  ===================
</TABLE>

Depreciation  expense  for  the  three  months ended September 30, 2003 and 2002
amounted  to $50,930 and $52,979 respectively. Depreciation expense for the nine
months ended September 30, 2003 and the period from February 4, 2002 (Inception)
to September 30, 2002 amounted to $154,108 and $140,268 respectively.


                                       11
<PAGE>
                       PERFORMANCE CAPITAL MANAGEMENT, LLC

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


NOTE  8  -  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
September  30,  2003  all  of  these  claims had been paid or settled except for
approximately  $20,000  which  was  related primarily to operating expenses.  At
September  30,  2003, the Company has approximately $20,000 accrued to cover the
pre-petition  claims  and  related  expenses.

NOTE  9  -  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 September 30, 2003 are as follows:

     Year ending
    September 30,
    -------------
         2004                            $ 303,000
         2005                              313,000
         2006                              320,000
         2007                               54,000
      Thereafter                                 -

Rental  expense  for the three months ended September 30, 2003 and 2002 amounted
to  $77,460  and $76,154 respectively.  Rental expense for the nine months ended
September 30, 2003 and the period from February 4, 2002 (Inception) to September
30,  2002  amounted  to  $232,490  and  $274,104  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 September 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 $20,000
as  of September 30, 2003 to cover the remaining pre-petition claims and related
expenses.


                                       12
<PAGE>
                       PERFORMANCE CAPITAL MANAGEMENT, LLC

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


NOTE 10  -  EARNINGS  PER  MEMBER  UNIT

Basic  and diluted earnings per member unit are calculated based on the weighted
average  number  of  member  units  issued and outstanding (571,550 for the nine
months ended September 30, 2003 and the period from February 4, 2002 (Inception)
to  September  30,  2002.


                                       13
<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


                                       14
<PAGE>
of  the portfolio. 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  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.


                                       15
<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 SEPTEMBER 30, 2003, AND 2002

The  following  discussion  compares our results for the quarter ended September
30,  2003,  to  the  quarter ended September 30, 2002. Our net loss decreased to
approximately  $150,000  for  the  quarter  ended  September  30,  2003,  from
approximately  $901,000  for  the  quarter  ended  September  30,  2002.

Revenue
-------

Our  net  revenues increased to approximately $1.5 million for the quarter ended
September  30, 2003, from approximately $663,000 for the quarter ended September
30,  2002.  The  following  table presents a comparison of the components of our
revenues  for  the  quarter  ended  September  30,  2003,  to  the quarter ended
September  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
                                    -----               -----------             -----
                              9/30/03    9/30/02    9/30/03    9/30/02    9/30/03    9/30/02
                             ---------  ---------  ---------  ---------  ---------  ---------
                               ($ in millions)        ($ in millions)       ($ in millions)
<S>                          <C>        <C>        <C>        <C>        <C>        <C>

     Total revenues          $    2.4   $    2.2   $    2.4   $    2.2   $      --  $      --
     Less basis recovery         (0.9)      (1.5)      (0.9)      (1.5)         --         --
                             ---------  ---------  ---------  ---------  ---------  ---------
     Net revenues            $    1.5   $    0.7   $    1.5   $    0.7   $      --  $      --
                             =========  =========  =========  =========  =========  =========

     Net revenue percentage      61.9%      30.2%      61.9%      30.1%       0.0%      32.1%
</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 portfolios purchased during the second half of
2002.  We  have  almost completely recovered the cost basis of a number of these
recently  purchased  portfolios,  and  we  expect  them  to begin generating net
revenues  over  the  next  three  to  nine  months.

We  had  no  revenues  from  portfolio sales for the quarter ended September 30,
2003,  and our total and net revenues from portfolio sales for the quarter ended
September  30, 2002, were not particularly significant. 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 slightly for the quarter ended
September  30,  2003,  although  total  operating  costs  and  expenses  were
approximately $1.6 million for each of the quarters ended September 30, 2003 and
2002.  The  increase  was  due  principally  to the increase in our salaries and
benefits  expenses.  Our ratio of operating costs and expenses to total revenues
decreased  to 67.9% for the quarter ended September 30, 2003, from approximately


                                       16
<PAGE>
71.1%  for  the  quarter  ended  September  30,  2002.  Our  ratio  improved due
principally  to  improved  collection  performance.  Our  salaries  and benefits
expenses increased to approximately $1.1 million for the quarter ended September
30,  2003, an increase of approximately $28,000 from the quarter ended September
30, 2002. Although our headcount has decreased, expenses associated with bonuses
due  to increased productivity and an increase in medical benefits resulted in a
slight increase in our salaries and benefits expense. Our operating expenses may
increase  somewhat  in  the coming year, but at this time we do not expect these
increases  to  be  substantial.

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

The  following  discussion  compares  our  results  from  the  nine months ended
September  30, 2003, to the period from February 4, 2002, to September 30, 2002.
We  generally  refer  to  the  approximately eight-month period from February to
September  of  2002  as the comparable period for the prior year. The comparable
period  from  2002  is  not  a full nine 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  eight  months, about one month less than the nine-month
period  ended  September  30,  2003.

Our  net  loss  decreased  to  approximately  $749,000 for the nine months ended
September  30,  2003,  from approximately $2.0 million for the comparable period
for the prior year. Our operating activities provided cash of approximately $1.2
million  for the nine months ended September 30, 2003, as compared to using cash
of  approximately  $1.7  million  for  the comparable period for the prior year.

Revenue
-------

Our  net  revenues  increased  to approximately $4.3 million for the nine months
ended  September  30,  2003,  from approximately $2.4 million for the comparable
period  for  the  prior  year.  The following table presents a comparison of the
components  of our revenues for the nine months ended September 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
                                -----             -----------              -----
                         9/30/03    9/30/02    9/30/03    9/30/02    9/30/03    9/30/02
                        ---------  ---------  ---------  ---------  ---------  ---------
                           ($ in millions)       ($ in millions)       ($ in millions)
<S>                     <C>        <C>        <C>        <C>        <C>        <C>

Total revenues          $    7.9   $    6.2   $    7.4   $    5.2   $    0.5   $    1.0
Less basis recovery         (3.6)      (3.8)      (3.2)      (3.7)      (0.4)      (0.1)
                        ---------  ---------  ---------  ---------  ---------  ---------
Net revenues            $    4.3   $    2.4   $    4.2   $    1.5   $    0.1   $    0.9
                        =========  =========  =========  =========  =========  =========

Net revenue percentage      54.2%      38.6%      57.1%      29.1%      12.9%      89.7%
</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 portfolios purchased during the second half of
2002.  We  have  almost completely recovered the cost basis of a number of these
recently  purchased  portfolios,  and  we  expect  them  to begin generating net
revenues  over  the  next  three  to  nine  months.

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


                                       17
<PAGE>
sales,  principally  during  the  quarter ended June 30, 2002. Net revenues from
portfolio  sales  were not as large in the nine months ended September 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 $5.0 million
for  the  nine  months ended September 30, 2003, from approximately $4.3 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  63.0%  for  the  nine months ended
September  30,  2003, from approximately 69.9% 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 $1.6 million for the nine
months  ended  September  30,  2003,  from  approximately  $1.3  million for the
comparable  period  for  the prior year. Our general and administrative expenses
for  the nine months ended September 30, 2003, include annual meeting costs that
were not present in the comparable period for the prior year, and we experienced
increased  costs sending privacy notices required by the Gramm-Leach-Bliley Act.
Our  salaries  and benefits expenses increased to approximately $3.2 million for
the  nine  months  ended September 30, 2003, from approximately $2.9 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 the coming year, but at this time we
do  not  expect  these  increases  to  be  substantial.

LIQUIDITY  AND  CAPITAL  RESOURCES

Our  cash  and cash equivalents increased approximately $878,000 during the nine
months  ended  September 30, 2003, to a balance of approximately $1.7 million at
September  30,  2003.  During  the  nine  months  ended  September 30, 2003, our
portfolio  collections  and  sales generated approximately $7.9 million of cash,
and  we  used  approximately  $5.3  million  for operating and other activities,
approximately  $1.4  to  purchase  new portfolios and approximately $300,000 for
distributions  to  unit  holders.

During  the  nine-month  period  ended  September  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 $3.6
million  plus  our  operating  and  other expenses of approximately $5.0 million
exceeded  our  total  revenues  from collections and sales of approximately $7.9
million by approximately $749,000. On a cash basis, our collections and sales of
approximately $7.9 million exceeded the sum of our new portfolio acquisitions of
approximately  $1.4  million  plus  our  cash  operating  and  other  costs  of
approximately $5.3 million plus distributions of $300,000. This cash increase of
approximately $878,000 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 nine
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 coming year will
depend  principally  on  market  conditions.

During  the  nine  months  ended  September 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  the  most  recently  acquired portfolios, have begun to show
results.  We had a successful first nine months from a cash flow standpoint, and
we  made  substantial  progress  toward  achieving  results  consistent with our
business  plan.

Our  portfolios  provide our principal long-term 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 September 30, 2003, increased
$900,000  to  $15.9 million from $15.0 million at December 31, 2002. At the same


                                       18
<PAGE>
time,  the  cost basis of our portfolios decreased to approximately $1.9 million
at September 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,
because  newly  acquired  portfolios generally provide an increase in fair value
substantially  greater  than  the increase in cost basis recorded on our balance
sheet  and  because  improved collection procedures have extended the collection
lives  of  some  of  our  older portfolios. 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
September  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>
                                                    September 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  from $16.6  million at March 31, 2003, to $15.9 million at
June  30, 2003, and September 30, 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
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


                                       19
<PAGE>
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:

               For the        Approximate Timing   Gross Amount of
            Quarter Ended         of Payment      Distribution Paid
          ------------------  ------------------  ------------------

          September 30, 2003  October 2003        $          165,000
          June 30, 2003       July 2003           $          165,000
          March 31, 2003      April 2003          $          135,000


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

The  company's  management,  with  the  participation  of  the  company's  Chief
Operations  Officer  and  Accounting Manager, has evaluated the effectiveness of
the company's disclosure controls and procedures as of September 30, 2003. Based
on  this  evaluation,  the  company's  Chief  Operations  Officer and Accounting
Manager  concluded  that  the  company's  disclosure controls and procedures are
effective for gathering, analyzing and disclosing the information the company is
required  to  disclose in the reports it files under the Securities Exchange Act
of  1934,  within  the time periods specified in the SEC's rules and forms. Such
evaluation  did  not  identify any change in the company's internal control over
financial  reporting  that  occurred during the quarter ended September 30, 2003
that  has materially affected, or is reasonably likely to materially affect, the
company's  internal  control  over  financial  reporting.


                                       20
<PAGE>
                           PART II - OTHER INFORMATION

ITEM  5.  OTHER  INFORMATION

Our  Board  of Directors recently became aware of a letter from Sierra Liquidity
Fund, LLC, dated September 23, 2003, offering to purchase units from Performance
Capital  Management, LLC, Unit Holders for $2.00 per unit (the "Offer").  We are
not  aware  that the Offer was published in any medium, and we did not receive a
copy of it from Sierra. The terms of the Offer are ambiguous concerning how many
units  Sierra  seeks  to purchase, and we do not know how widely Sierra may have
disseminated  its  Offer.  We  believe that Sierra's Offer may be a "mini-tender
offer"  subject  to  SEC  regulation  and, if the size is large enough, Sierra's
Offer  could be a tender offer requiring Sierra to make filings with the SEC. As
a  result, we have not been able to determine definitively that we should file a
Solicitation/Recommendation  Statement  on  Schedule  14D-9.  Instead,  we  have
prepared  a  Solicitation/Recommendation Statement based on the content required
by  Schedule  14D-9, and filed it with the SEC on October 22, 2003 as an exhibit
to a current report on Form 8-K dated October 21, 2003. On November 11, 2003, we
provided  Sierra  with  a  copy of an SEC release setting forth the Commission's
guidance  on  the  disclosure  that  should  accompany  a  "mini-tender  offer."


ITEM  6.  EXHIBITS  AND  REPORTS  ON  FORM  8-K

<TABLE>
<CAPTION>
(a)  EXHIBITS

EXHIBIT |
NUMBER  | DESCRIPTION
--------|--------------------------------------------------------------------------------------------------
<S>       <C>
  2.1   | Joint Chapter 11 Plan of Reorganization Proposed by Chapter 11 Trustee and the Official
        | Committee of Equity Security Holders effective February 4, 2002 *
        |
  2.2   | First Amended Disclosure Statement Describing Joint Chapter 11 Plan Proposed by Chapter 11
        | Trustee and the Official Committee of Equity Security Holders approved on October 12, 2001 *
        |
  3.1   | Performance Capital Management, LLC Articles of Organization *
        |
  3.2   | Operating Agreement for Performance Capital Management, LLC *
        |
  3.3   | First Amendment to Operating Agreement for Performance Capital Management, LLC *
        |
  3.4   | Second Amendment to Operating Agreement for Performance Capital Management, LLC
        |
  4.1   | Specimen Performance Capital Management, LLC Unit Certificate *
        |
  4.2   | Specimen Performance Capital Management, LLC Economic Interest Unit Certificate *
        |
  4.3   | Provisions in the Operating Agreement for Performance Capital Management, LLC pertaining to
        | the rights of LLC Unit holders (see Exhibit 3.2 and 3.3) *
        |
  20.1  | Form of letter to Unit Holders communicating the recommendation of the Board **
        |
  20.2  | Solicitation/Recommendation Statement dated October 21, 2003 **
        |
  31.1  | Certification of Chief Executive Officer Pursuant to Rule 13a-14(a)
        |
  31.2  | Certification of Principal Financial Officer Pursuant to Rule 13a-14(a)
        |
  32.1  | Certification of Principal Executive Officer and Principal Financial Officer Pursuant to 18 U.S.C.
        | Sec. 1350 ***


                                       21
<PAGE>
<FN>

*  Filed on April 2, 2003, as an exhibit to Performance Capital Management, LLC's report on Form 8-K dated
February 4, 2002, and incorporated herein by reference.

** Filed on October 22, 2003, as an exhibit to Performance Capital Management, LLC's report on Form 8-K
dated October 21, 2003, and incorporated herein by reference.

*** The certifications filed under Exhibit 32.1 are not deemed "filed" for purposes of Section 18 of the
Securities Exchange Act of 1934 and are not to be incorporated by reference into any filing of Performance
Capital Management, LLC under the Securities Exchange Act of 1933, as amended, or the Securities Exchange
Act of 1934, as amended, whether made before or after the date hereof irrespective of any general
incorporation by reference language contained in any such filing, except to the extent that Performance
Capital Management, LLC specifically incorporates it by reference.
</TABLE>

(b)  REPORTS  ON  FORM  8-K

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


                                       22
<PAGE>
                                   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


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


                                       23
<PAGE>
<TABLE>
<CAPTION>
                                              EXHIBIT INDEX

EXHIBIT |
NUMBER  | DESCRIPTION
--------|---------------------------------------------------------------------------------------------------
<S>       <C>
  2.1   | Joint Chapter 11 Plan of Reorganization Proposed by Chapter 11 Trustee and the Official
        | Committee of Equity Security Holders effective February 4, 2002 *
        |
  2.2   | First Amended Disclosure Statement Describing Joint Chapter 11 Plan Proposed by Chapter 11
        | Trustee and the Official Committee of Equity Security Holders approved on October 12, 2001 *
        |
  3.1   | Performance Capital Management, LLC Articles of Organization *
        |
  3.2   | Operating Agreement for Performance Capital Management, LLC *
        |
  3.3   | First Amendment to Operating Agreement for Performance Capital Management, LLC *
        |
  3.4   | Second Amendment to Operating Agreement for Performance Capital Management, LLC
        |
  4.1   | Specimen Performance Capital Management, LLC Unit Certificate *
        |
  4.2   | Specimen Performance Capital Management, LLC Economic Interest Unit Certificate *
        |
  4.3   | Provisions in the Operating Agreement for Performance Capital Management, LLC pertaining to
        | the rights of LLC Unit holders (see Exhibit 3.2 and 3.3) *
        |
  20.1  | Form of letter to Unit Holders communicating the recommendation of the Board **
        |
  20.2  | Solicitation/Recommendation Statement dated October 21, 2003 **
        |
  31.1  | Certification of Chief Executive Officer Pursuant to Rule 13a-14(a)
        |
  31.2  | Certification of Principal Financial Officer Pursuant to Rule 13a-14(a)
        |
  32.1  | Certification of Principal Executive Officer and Principal Financial Officer Pursuant to 18 U.S.C.
        | Sec. 1350 ***
<FN>

*  Filed on April 2, 2003, as an exhibit to Performance Capital Management, LLC's report on Form 8-K dated
February 4, 2002, and incorporated herein by reference.

** Filed on October 22, 2003, as an exhibit to Performance Capital Management, LLC's report on Form 8-K
dated October 21, 2003, and incorporated herein by reference.

*** The certifications filed under Exhibit 32.1 are not deemed "filed" for purposes of Section 18 of the
Securities Exchange Act of 1934 and are not to be incorporated by reference into any filing of Performance
Capital Management, LLC under the Securities Exchange Act of 1933, as amended, or the Securities Exchange
Act of 1934, as amended, whether made before or after the date hereof irrespective of any general
incorporation by reference language contained in any such filing, except to the extent that Performance
Capital Management, LLC specifically incorporates it by reference.
</TABLE>


<PAGE>