United States
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                    FORM 10-Q


[X]    Quarterly report pursuant to Section 13 or 15(d) of the
       Securities Exchange Act of 1934

       For the quarterly period ended September 30, 1999

[  ]   Transition report pursuant to Section 13 or 15(d) of the
       Securities Exchange Act of 1934 for the transition period from
       ____________ to ______________


Commission file number 000-22979

                             Trendwest Resorts, inc.
             (Exact name of registrant as specified in its charter)


               Oregon                                   93-1004403
  (State or other jurisdiction of        (I.R.S. Employer Identification No.)
           incorporation)

                               9805 Willows Road
                           Redmond, Washington 98052
              (Address of principal executive offices) (Zip Code)


(Registrant's telephone number, including area code)    (425) 498-2500


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding  twelve months (or for such shorter period that the registrant was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days. Yes X No

The number of shares of the registrant's  no-par voting common stock outstanding
as of November 12, 1999: 17,128,721 shares.


<PAGE>
PART I - FINANCIAL INFORMATION

Item I - Financial Statements

                             TRENDWEST RESORTS, INC.
                                AND SUBSIDIARIES

                      Condensed Consolidated Balance Sheets

                             (dollars in thousands)

<TABLE>
<CAPTION>
                                                                                    September 30,        December 31,
                                   Assets                                                1999                1998
                                                                                   -----------------    ----------------
                                                                                     (Unaudited)
<S>                                                                            <C>                       <C>
Assets:
     Cash                                                                      $            35                   9
     Restricted cash                                                                     4,219               2,351
     Notes Receivable, net of allowance for doubtful accounts, sales
        returns and deferred gross profit                                               79,624              93,361
     Accrued interest and other receivables                                             10,955              11,399
     Residual interest in Notes Receivable sold                                         36,339              23,683
     Receivable from Parent                                                              1,660                 --
     Inventories                                                                        41,215              42,309
     Property and equipment, net                                                        20,396              20,343
     Deferred income taxes                                                                 --                  702
     Other assets                                                                        6,592               4,341
                                                                                   -----------------    ----------------
                     Total assets                                              $       201,035             198,498
                                                                                   =================    ================
                    Liabilities and Shareholders' Equity

Liabilities:
     Accounts payable                                                          $         2,802               1,436
     Accrued liabilities                                                                13,490               6,645
     Accrued construction in progress                                                      837               1,064
     Borrowing under bank line of credit                                                 2,000              30,000
     Due to Parent                                                                         --                5,688
     Allowance for recourse liability and deferred gross profit on Notes
        Receivable sold                                                                 13,775              11,250
     Deferred income taxes                                                                 867                  --
     Income taxes payable                                                                   53               1,153
                                                                                   -----------------    ----------------
                     Total liabilities                                                  33,824              57,236

Shareholders' equity:
     Preferred stock, no par value.  Authorized 10,000,000 shares;
        no shares issued or outstanding                                                     --                   --
     Common stock, no par value.  Authorized 90,000,000 shares;
        issued and outstanding 17,128,721 and 17,158,766 shares at September
        30, 1999, and December 31, 1998, respectively.                                  61,279              61,848
     Retained earnings                                                                 105,932              79,414
                                                                                   -----------------    ----------------
                     Total shareholders' equity                                        167,211             141,262

Commitments and contingencies

                                                                                   -----------------    ----------------
                     Total liabilities and shareholders' equity                $       201,035             198,498
                                                                                   =================    ================
</TABLE>

See accompanying notes to the condensed consolidated financial statements.

                                       2
<PAGE>

                             TRENDWEST RESORTS, INC.
                                AND SUBSIDIARIES

                   Condensed Consolidated Statements of Income

                  (dollars in thousands, except per share data)
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                  Three months ended                  Nine months ended
                                                                    September 30,                       September 30,
                                                          ----------------------------------- -----------------------------------
                                                               1999               1998             1999               1998
                                                          ----------------  ----------------- ----------------   ----------------

<S>                                                     <C>                    <C>             <C>                   <C>
Revenues:
     Vacation Credit and Fractional Interest sales, net $        62,951             46,530          175,393            123,403
     Finance income                                               3,649              3,368           10,938              9,628
     Gains on sales of Notes Receivable                           3,857              1,828           13,000              7,003
     Resort management services                                     573                521            2,348              1,517
     Other                                                          964                946            3,514              2,459
                                                          ----------------  ----------------- ----------------   ----------------

             Total revenues                                      71,994             53,193          205,193            144,010
                                                          ----------------  ----------------- ----------------   ----------------

Costs and operating expenses:
     Vacation Credit and Fractional Interest cost of
        sales                                                    18,076             13,438           52,179             34,119
     Resort management services                                     438                347            1,256                946
     Sales and marketing                                         27,814             22,346           77,976             61,003
     General and administrative                                   6,664              4,246           17,909             12,312
     Provision for doubtful accounts and recourse
        liability                                                 4,414              3,220           12,234              8,535
     Interest                                                        16                204              125                242
                                                          ----------------  ----------------- ----------------   ----------------

             Total costs and operating expenses                  57,422             43,801          161,679            117,157
                                                          ----------------  ----------------- ----------------   ----------------

             Income before income taxes                          14,572              9,392           43,514             26,853

Income tax expense                                                5,708              3,508           16,996              9,941
                                                          ----------------  ----------------- ----------------   ----------------

             Net income                                 $         8,864              5,884           26,518             16,912
                                                          ================  ================= ================   ================

Basic net income per common share                       $           .52                .34             1.55                .97

Diluted net income per common share                                 .52                .34             1.54                .97

Weighted average shares of common stock and dilutive
potential common stock outstanding:
Basic                                                        17,128,830         17,308,564       17,142,331         17,498,086

Diluted                                                      17,192,251         17,308,564       17,189,894         17,498,086

</TABLE>

See accompanying notes to the condensed consolidated financial statements.

                                       3

<PAGE>
                             TRENDWEST RESORTS, INC.
                                AND SUBSIDIARIES

                 Condensed Consolidated Statements of Cash Flows

                             (dollars in thousands)
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                                                      Nine months ended September 30,
                                                                                 -------------------------------------------
                                                                                        1999                    1998
                                                                                 -------------------     -------------------
<S>                                                                           <C>                             <C>
Cash flows from operating activities:
     Net income                                                              $             26,518                  16,912
     Adjustments to reconcile net income to net cash provided by (used
        in) operating activities:
        Depreciation and amortization                                                       1,212                     769
        Gain on sale of property and equipment                                               (870)                     --
        Amortization of residual interest in Notes Receivable sold                          7,919                   4,882
        Provision for doubtful accounts, sales returns and recourse
           liability                                                                       16,166                  11,114
        Recoveries of Notes Receivable charged off                                            176                     159
        Residual interest in Notes Receivables sold                                       (17,994)                 (7,993)
        Unrealized loss (gain) on residual interest in Notes Receivable
           sold                                                                               973                    (534)
        Contract servicing liability arising from sale of Notes Receivable                  2,847                      --
        Amortization of contract servicing liability                                         (129)                     --
        Change in deferred gross profit                                                        27                    (884)
        Deferred income tax expense (benefit)                                               1,569                    (236)
        Issuance of Notes Receivable                                                     (152,773)               (107,651)
        Proceeds from sale of Notes Receivable                                            114,892                  72,152
        Proceeds from repayment of Notes Receivable                                        40,487                  23,302
        Purchase of Notes Receivable                                                       (6,267)                (18,402)
        Changes in certain assets and liabilities:
              Restricted cash                                                              (1,868)                 (1,286)
              Inventories                                                                   1,094                   4,474
              Accounts payable and accrued liabilities                                      3,657                  (5,245)
              Income taxes payable to Parent                                                   --                  (2,755)
              Income taxes payable                                                         (1,100)                   (280)
              Other                                                                        (1,905)                 (2,538)
                                                                                 -------------------     -------------------

          Net cash provided by (used in) operating activities                              34,631                 (14,040)
                                                                                 -------------------     -------------------

Cash flows from investing activities:
     Purchase of property and equipment                                                    (4,709)                 (6,193)
     Proceeds from sale of property and equipment                                           4,412                       --
                                                                                 -------------------     -------------------

          Net cash used in investing activities                                              (297)                 (6,193)
                                                                                 -------------------     -------------------

Cash flows from financing activities:
     Net (repayment) borrowings under bank line of credit and other                       (26,391)                 30,000
     Increase in Receivable from Parent                                                    (1,660)                 (2,022)
     Decrease in Due to Parent                                                             (5,688)                 (1,947)
     Repurchase of common stock                                                              (732)                 (4,894)
     Issuance of common stock                                                                 163                      --
                                                                                 -------------------     -------------------

          Net cash (used in) provided by financing activities                             (34,308)                 21,137
                                                                                 -------------------     -------------------

          Net increase in cash                                                                 26                     904

Cash at beginning of period                                                                     9                      70
                                                                                 -------------------     -------------------

Cash at end of period                                                        $                 35                     974
                                                                                 ===================     ===================
</TABLE>

See accompanying notes to the condensed consolidated financial statements.

                                       4
<PAGE>
                             TRENDWEST RESORTS, INC.
                                AND SUBSIDIARIES

                 Condensed Consolidated Statements of Cash Flows
                                   (continued)
                             (dollars in thousands)
                                   (unaudited)
<TABLE>
<CAPTION>
                                                                                      Nine months ended September 30,
                                                                                 -------------------------------------------
                                                                                        1999                    1998
                                                                                 -------------------     -------------------
<S>
Supplemental  disclosures of cash flow  information  cash paid
   during the period for:                                                    <C>                                 <C>
        Interest (excluding capitalized amounts of $1,047 and $312,
          respectively)                                                      $                212                     110
        Income taxes                                                                       16,526                  13,212


</TABLE>







                                       5




See accompanying notes to the condensed consolidated financial statements.



<PAGE>
                             TRENDWEST RESORTS, INC.
                                AND SUBSIDIARIES
                       Notes to the Condensed Consolidated
                              Financial Statements
                 (dollars in thousands except per share amounts)
                                   (Unaudited)

Note 1 - Background

Trendwest  Resorts,  Inc.  (Company)  markets,   sells  and  finances  timeshare
ownership  interests  in the  form  of  perpetual  timeshare  credits  (Vacation
Credits) in WorldMark, the Club (WorldMark) and Fractional Interests in vacation
properties.  Vacation  Credits are created  through the transfer to WorldMark of
resort units acquired or developed by the Company.  The Company derives revenues
primarily from Vacation  Credit and  Fractional  Interest sales and, to a lesser
extent,  from the financing of Vacation Credit and Fractional Interest sales and
from its management agreement with WorldMark.

These  condensed  consolidated  financial  statements  do  not  include  certain
information and footnotes required by generally accepted  accounting  principles
for complete financial  statements.  However, in the opinion of management,  all
adjustments  considered necessary for a fair presentation have been included and
are of a normal  recurring  nature.  Operating  results for the three months and
nine months ended  September  30, 1999,  are not  necessarily  indicative of the
results that may be expected for the fiscal year ending December 31, 1999.

These  statements  should  be read in  conjunction  with the  audited  financial
statements and footnotes included in the Company's 1998 Form 10-K filed with the
Securities  and Exchange  Commission  (SEC).  The  accounting  policies  used in
preparing  these  financial  statements are the same as those  described in such
Form 10-K.

Note 2 - New Accounting Pronouncements

In April,  1998, the Accounting  Standards  Executive  Committee of the American
Institute of Certified Public  Accountants  (AICPA) issued Statement of Position
(SOP)  98-5,  Reporting  on the  Costs  of  Start-Up  Activities.  This  SOP was
effective  on January 1, 1999,  and has not  impacted  the  Company's  financial
position or results of operations.

In June,  1998, the Financial  Accounting  Standards  Board issued  Statement of
Financial  Accounting  Standards No. 133, Accounting for Derivative  Instruments
and Hedging  Activities.  This Statement is effective as of the beginning of the
first quarter of the fiscal year beginning after June 15, 2000. The Company does
not  anticipate  a  material  impact on its  financial  position  or  results of
operations from the future adoption of this standard.

Note 3 - Sale and Securitization of Notes Receivable

On April 15, 1999, the Company created a  wholly-owned,  special purpose finance
company,  TW Holdings  II, Inc (TW Holdings  II). At the same time,  the Company
entered into a $75 million,  364-day  Receivables  Warehouse facility (Facility)
with Prudential Securities Credit Corporation.  The Facility has an advance rate
of 90% and has a required yield of LIBOR plus 100 basis points.

On June 17, 1999,  the Company chose not to renew the  revolving  portion of the
$98 million  Receivable  Transfer  Agreement from the Bank Group. In conjunction
with the private  placement of Notes  Receivable in August 1999, the Company was
able to transfer  the TW  Holdings,  Inc. (TW  Holdings),  receivables  to a new
special-purpose  entity TRI Funding III, Inc. (TRI Funding III),  and retire the
credit facility.

In August 1999,  the Company sold certain  Notes  Receivable to TRI Funding III,
for cash,  a  subordinated  note  payable  from TRI  Funding  III and a residual
interest in the excess cash flows of TRI Funding III. TRI Funding III issued six
classes  of senior  notes to  institutional  investors.  The  subordinated  note
payable from TRI Funding III represents the Company's retained interest in Notes
Receivable  which provides  collateral to the holders of the notes issued by the
entity and is classified as Notes Receivable on the accompanying balance sheets.
The  residual  interest  in the excess  cash  flows is  classified  as  residual
interest in Notes Receivable sold and is measured at fair value.

                                       6
<PAGE>
Note 4 - Basic and Diluted Net Income Per Common Share

The following illustrates the reconciliation of weighted average shares used for
basic and diluted net income per share:

<TABLE>
<CAPTION>
                                                    Three months ended                       Nine months ended
                                                       September 30,                           September 30,
                                             ----------------------------------     ------------------------------------
                                                  1999               1998                1999                 1998
                                             ----------------    --------------     ---------------      ---------------
<S>                                          <C>                  <C>                <C>                  <C>
Basic
Weighted average shares outstanding             17,128,830         17,308,564          17,142,331           17,498,086

Diluted
Effect of dilutive securities                       63,421                 --              47,563                   --
                                             ----------------    --------------     ---------------      ---------------
Diluted weighted average shares outstanding     17,192,251         17,308,564          17,189,894           17,498,086
                                             ================    ==============     ===============      ===============
</TABLE>

Net income available to common shareholders for basic and diluted net income per
share was $8,864 and $5,884 for the three months ended  September 30, 1999,  and
1998, and $26,518 and $16,912 for the nine months ended  September 30, 1999, and
1998, respectively.

At September  30, 1999,  and 1998,  there were  outstanding  options to purchase
433,500  and  487,000   shares  of  common  stock,   respectively,   which  were
anti-dilutive  and  therefore  not  included in the  computation  of diluted net
income per common share.

Note 5 - Inventories

Inventories consist of Vacation Credits,  Fractional  Interests and construction
in progress as follows:

<TABLE>
<CAPTION>
                                                                          September 30,          December 31,
                                                                               1999                  1998
                                                                         -----------------     ------------------
        <S>                                                         <C>                        <C>
         Vacation Credits                                           $           7,553                11,342
         Fractional Interests                                                     757                    --
         Construction in progress                                              32,905                30,967
                                                                         -----------------     ------------------

                  Total inventories                                 $          41,215                42,309
                                                                         =================     ==================

</TABLE>




                                       7
<PAGE>
Note 6 - Allowance For Doubtful Accounts, Recourse Liability and Sales Returns

The activity in the  allowance  for doubtful  accounts,  recourse  liability and
sales returns is as follows for the nine months ended  September  30, 1999,  and
the year ended December 31, 1998:

<TABLE>
<CAPTION>
                                                                               1999                  1998
                                                                         -----------------     ------------------
<S>                                                                 <C>                        <C>
         Balances at beginning of period                            $          20,935                15,240

         Provision for doubtful accounts, sales returns and
             recourse liability                                                16,166                15,435
         Notes Receivable charged-off and sales returns net of
             Vacation Credits recovered                                        (9,991)               (9,919)
         Recoveries                                                               176                   179
                                                                         -----------------     ------------------

         Balances at end of period                                  $          27,286                20,935
                                                                         =================     ==================


         Allowance for doubtful accounts and sales returns          $          16,126                12,363
         Recourse liability on Notes Receivable sold                           11,160                 8,572
                                                                         -----------------     ------------------
                                                                    $          27,286                20,935
                                                                         =================     ==================

</TABLE>

Total Notes Receivable outstanding, including Notes Receivable sold, amounted to
$370,028  and  $307,740  at   September   30,  1999,   and  December  31,  1998,
respectively.

Note 7 - Commitments and Contingencies

(a) Purchase Commitments
The Company routinely enters into purchase agreements with various developers to
acquire and build  resort  properties.  At September  30, 1999,  the Company had
outstanding  purchase  commitments of $44.2 million related to properties  under
development.

(b) Litigation
The Company is involved in various claims and lawsuits arising from the ordinary
course of business.  Management  believes that outcome of these matters will not
have a material adverse effect on the Company's financial  position,  results of
operations, or liquidity.

Note 8 - Segment Reporting

The Company has two reportable segments:  sales and financing. The sales segment
markets and sells timeshare  memberships and Fractional  Interests.  The finance
segment is primarily  responsible for servicing and collecting  Notes Receivable
originated in  conjunction  with the financing of sales of Vacation  Credits and
Fractional  Interests.  The finance  segment  does not include TW  Holdings,  TW
Holdings  II,  Trendwest  Funding I,  Inc.,  Trendwest  Funding  II,  Inc.,  and
Trendwest  Funding III.  Management  evaluates  the business  based on sales and
marketing activities as these are the primary drivers of the business.

The accounting  policies of the segments are the same as those  described in the
summary of significant  accounting policies.  The Company evaluates  performance
based on profits  or losses  from sales and  marketing  activities  on a pre-tax
basis. Intersegment revenues are recorded at market rates as if the transactions
occurred with third parties. Assets are not reported by segment.

                                       8
<PAGE>

The following tables summarize the segment activity of the Company:

<TABLE>
<CAPTION>
                                                                                                   Segment
Three months ended September 30, 1999:               Sales         Finance          Other           Total
                                                   -----------    -----------     -----------    -------------
<S>                                           <C>                 <C>             <C>            <C>
External revenue                              $        62,951            923            573           64,447
Interest revenue - net                                     --          1,514             --            1,514
Interest revenue-intersegment                              --          1,039             --            1,039
Intersegment revenue                                       --            416             --              416
                                                   -----------    -----------     -----------    -------------
Segment revenue                               $        62,951          3,892            573           67,416

Segment profit                                $        11,500          2,723            135           14,358

Significant non-cash items:
Provision for doubtful accounts, sales
returns and recourse liability                $         5,422             --             --            5,422

                                                                                                   Segment
Three months ended September 30, 1998:               Sales         Finance          Other           Total
                                                   -----------    -----------     -----------    -------------
External revenue                              $        46,530            926            521           47,977
Interest revenue - net                                     --            927             --              927
Interest revenue-intersegment                              --            811             --              811
Intersegment revenue                                       --            157             --              157
                                                   -----------    -----------     -----------    -------------
         Segment revenue                      $        46,530          2,821            521           49,872

Segment profit                                $         6,852          1,993            174            9,019

Significant non-cash items:
Provision for doubtful accounts, sales
  returns and recourse liability              $         4,053             --             --            4,053

                                                                                                   Segment
Nine months ended September 30, 1999:                Sales         Finance          Other           Total
                                                   -----------    -----------     -----------    -------------
External revenue                              $       175,393          3,399          2,348          181,140
Interest revenue - net                                     --          3,706             --            3,706
Interest revenue-intersegment                              --          2,626             --            2,626
Intersegment revenue                                       --          1,481             --            1,481
                                                   -----------    -----------     -----------    -------------
Segment revenue                               $       175,393         11,212          2,348          188,953

Segment profit                                $        29,776          7,903          1,092           38,771

Significant non-cash items:
Provision for doubtful accounts, sales
returns and recourse liability                $        16,166             --             --           16,166
Gain on sale of property and equipment        $            --            870             --              870

</TABLE>

                                       9
<PAGE>

<TABLE>
<CAPTION>
                                                                                                   Segment
Nine months ended September 30, 1998:                Sales         Finance          Other           Total
                                                   -----------    -----------     -----------    -------------
<S>                                           <C>                 <C>             <C>            <C>
External revenue                              $       123,403          2,404          1,517          127,324
Interest revenue - net                                     --          2,730             --            2,730
Interest revenue-intersegment                              --          2,109             --            2,109
Intersegment revenue                                       --            696             --              696
                                                   -----------    -----------     -----------    -------------
         Segment revenue                      $       123,403          7,939          1,517          132,859

Segment profit                                $        18,055          5,507            571           24,133

Significant non-cash items:
Provision for doubtful accounts, sales
  returns and recourse liability              $        11,114             --             --           11,114
</TABLE>

The following table provides a reconciliation of segment revenues and profits to
the consolidated amounts:

<TABLE>
<CAPTION>
                                                         Three Months                    Nine Months
                                                     Ended September 30,             Ended September 30,
                                                     1999           1998            1999            1998
                                                   -----------    -----------    ------------    -------------
<S>                                           <C>                 <C>             <C>            <C>
Segment revenue                                 $     67,416         49,872         188,953          132,859
Interest expense reported net of interest
    income                                                16            204             125              242
Elimination of intersegment revenue                   (1,455)          (968)         (4,107)          (2,805)
Finance subsidiaries revenue                           6,017          4,085          20,222           13,714
                                                   -----------    -----------    ------------    -------------
               Consolidated revenue             $     71,994         53,193         205,193          144,010
                                                   ===========    ===========    ============    =============

Segment profit                                  $     14,358          9,019          38,771           24,133
Corporate overhead not included in segment
    reporting                                         (3,683)        (2,733)        (10,672)          (8,150)
Finance subsidiaries profit                            3,897          3,106          15,415           10,870
                                                   -----------    -----------    ------------    -------------
            Consolidated pre-tax income         $     14,572          9,392          43,514           26,853
                                                   ===========    ===========    ============    =============
</TABLE>

     All of the Company's revenue from external  customers is derived from sales
within the United States.

Note 9 - Subsequent Event

On October 21, 1999,  the Company  entered into a forward  exchange  contract to
deliver $6.6 million CDN at a rate of 1.4752 CND/USD on February 15, 2000.

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

                              RESULTS OF OPERATIONS

Comparison  of the three  months  ended  September  30, 1999 to the three months
ended September 30, 1998

The Company  achieved total revenues of $72.0 million for the three months ended
September  30,  1999,  compared  to $53.2  million  for the three  months  ended
September 30, 1998, an increase of 35.3%. The principal  reasons for the overall
improvement  were a 26.2% increase in Vacation Credit sales to $58.7 million for
the three months ended  September  30,  1999,  from $46.5  million for the three
months ended September 30, 1998,  sales of Fractional  Interests of $4.3 million
and gains on sales of Notes Receivable from the August, 1999, private placement.
The  Fractional  Interest  sales  program  commenced  pre-selling  of fractional
interests  at the Depoe Bay resort on the  Oregon  Coast in  October  1998.  The

                                       10
<PAGE>
Company  exercised  its purchase  option in April of 1999 and began  recognizing
revenue from the pre-sales at that time.  The increase in Vacation  Credit sales
was primarily the result of a 21.0%  increase in the number of Vacation  Credits
sold to 43.2 million during the three months ended September 30, 1999, from 35.7
million during the three months ended  September 30, 1998. This increase was the
result of the continued maturation of sales offices opened in 1998 and increased
Upgrade sales.  Revenues from Upgrade sales  increased 22.2% to $7.7 million for
the three  months  ended  September  30,  1999,  from $6.3 million for the three
months ended  September  30, 1998,  due primarily to an increase of 22.7% in the
number of  Vacation  Credits  sold as  Upgrades  during the three  months  ended
September 30, 1999,  compared to the three months ended  September 30, 1998. The
average  price per  Vacation  Credit sold  increased to $1.36 per credit for the
three months  ended  September  30, 1999,  versus $1.29 per credit for the three
months ended September 30, 1998, and reflected an approximate 4% increase in the
selling price of Vacation Credits, effective June 28, 1999.

Finance  income  increased  5.9% to $3.6  million  for the  three  months  ended
September 30, 1999,  from $3.4 million for the three months ended  September 30,
1998. The increase in finance income primarily reflects the increase in carrying
balances of Notes  Receivable  for the two periods  compared.  Gains on sales of
Notes  Receivable  increased  117.0% to $3.9  million for the three months ended
September  30, 1999 from $1.8 million for the three months ended  September  30,
1998, due primarily to an increase in the principal balances of Notes Receivable
sold and the August,  1999,  asset backed  securitization  of $160.0  million of
Notes Receivable through Prudential Securities. The Notes were issued by a newly
formed special purpose entity, TRI Funding III, Inc., and will be secured by the
cash flow on $169.7 million of receivables, and a reserve account.

Vacation Credit and Fractional Interest cost of sales increased to $18.1 million
for the three months ended  September 30, 1999, from $13.4 million for the three
months ended September 30, 1998, an increase of 35.1%,  primarily reflecting the
increase  in  sales  of  Vacation  Credits  and  Fractional   Interests.   Sales
recognition  of Fractional  Interests  began in the second  quarter of 1999, and
have a higher  relative  product cost,  as a percentage  of Vacation  Credit and
Fractional  Interest sales,  than Vacation  Credits which is offset by the lower
sales and marketing  costs.  As a percentage of Vacation  Credit and  Fractional
Interests  sales,  cost of  sales  remained  comparable  at 28.7%  and  28.8% of
Vacation  Credit and  Fractional  Interest  sales for the two periods  compared.
Lower cost of sales for Vacation  Credits  sold,  for the two periods  compared,
were offset by the higher cost of sales of Fractional Interests sold for the two
periods compared.

Sales and marketing  costs increased 24.7% to $27.8 million for the three months
ended  September  30,  1999,  from  $22.3  million  for the three  months  ended
September 30, 1998. As a percentage of Vacation  Credit and Fractional  Interest
sales,  sales and marketing  costs decreased to 44.1% for the three months ended
September  30, 1999,  from 48.0% for the three months ended  September 30, 1998.
This decrease  reflects the sales  generated  from the new  Fractional  Interest
sales  program  which has  significantly  lower sales and  marketing  costs than
Vacation  Credit sales.  In addition,  the new sales offices  opened during 1998
have improved closing  percentages over last year's start-up phase which further
reduces sales and marketing  costs. The improvement in sales and marketing costs
is also  attributable  to the price  increase  effective  June 29, 1999, and the
changes to the commissions program effective June 30, 1998.

General and  administrative  expenses  increased  59.5% to $6.7  million for the
three  months  ended  September  30, 1999 from $4.2 million for the three months
ended  September  30,  1998.  As a  percentage  of total  revenue,  general  and
administrative  costs increased to 9.3% for the three months ended September 30,
1999 from 7.9% for the three months ended  September  30, 1998.  The increase is
the result of additions to the infrastructure to support the Company's continued
growth.

Provision for doubtful accounts and recourse  liability  increased 37.5% to $4.4
million for the three months ended  September 30, 1999 from $3.2 million for the
three months ended  September 30, 1998.  As a percentage of Vacation  Credit and
Fractional  Interest sales,  the provision  remained  comparable at 7.0% for the
three  months  ended  September  30,  1999 and 6.9% for the three  months  ended
September 30, 1998.
                                       11
<PAGE>
Comparison of the nine months ended  September 30, 1999 to the nine months ended
September 30, 1998

The Company  achieved total revenues of $205.2 million for the nine months ended
September  30,  1999,  compared  to $144.0  million  for the nine  months  ended
September 30, 1998, an increase of 42.5%. The principal  reasons for the overall
improvement were a 32.7% increase in Vacation Credit sales to $163.8 million for
the nine months  ended  September  30,  1999,  from $123.4  million for the nine
months ended  September  30, 1998,  and sales of  Fractional  Interests of $11.6
million.  The  Fractional  Interest  sales  program  commenced   pre-selling  of
Fractional  Interests  at the Depoe Bay  resort on the  Oregon  Coast in October
1998.  The  Company  exercised  its  purchase  option in April of 1999 and began
recognizing  revenue from the  pre-sales at that time.  The increase in Vacation
Credit  sales was  primarily  the  result of a 29.1%  increase  in the number of
Vacation  Credits sold to 123.2 million  during the nine months ended  September
30, 1999,  from 95.4 million during the nine months ended September 30, 1998 and
resulted  from the  continued  maturation  of sales  offices  opened in 1998 and
increased  Upgrade sales.  Revenues from Upgrade sales  increased 20.6% to $22.8
million for the nine months ended  September 30, 1999 from $18.9 million for the
nine months ended  September 30, 1998,  due primarily to an increase of 20.3% in
the number of Vacation  Credits  sold as Upgrades  during the nine months  ended
September 30, 1999,  compared to the nine months ended  September 30, 1998.  The
average  price per  Vacation  Credit sold  increased to $1.33 per credit for the
nine months  ended  September  30,  1999,  versus  $1.27 per credit for the nine
months ended  September 30, 1998, and reflected the  approximate 4% increases in
the selling  price of  Vacation  Credits,  effective  June 29, 1998 and June 28,
1999, respectively.

Finance  income  increased  13.5% to $10.9  million  for the nine  months  ended
September 30, 1999, compared to $9.6 million for the nine months ended September
30,  1998.  The  increase in finance  income  reflects  the increase in carrying
balances of Notes  Receivable  for the two periods  compared.  Gains on sales of
Notes  Receivable  increased  85.7% to $13.0  million for the nine months  ended
September  30, 1999,  from $7.0 million for the nine months ended  September 30,
1998 due primarily to an increase in the principal  balances of Notes Receivable
sold and the August 1999, asset backed securitization of $160.0 million of Notes
Receivable through Prudential Securities.

Other  income  increased  $1.0 million to $3.5 million for the nine months ended
September 30, 1999, compared to $2.5 million for the nine months ended September
30, 1998, due primarily to a gain recorded on the sale of the Bellevue Corporate
building of $.9 million in March of 1999.

Vacation Credit and Fractional Interest cost of sales increased to $52.2 million
for the nine months ended  September  30, 1999,  from $34.1 million for the nine
months ended September 30, 1998, an increase of 53.1%,  primarily reflecting the
increase  in  sales  of  Vacation  Credits  and  Fractional   Interests.   Sales
recognition  of Fractional  Interests  began in the second  quarter of 1999, and
have a higher  relative  product cost,  as a percentage  of Vacation  Credit and
Fractional  Interest sales,  than Vacation  Credits which is offset by the lower
sales and marketing  costs.  As a percentage of Vacation  Credit and  Fractional
Interests  sales,  cost of sales  increased  to 29.8% for the nine months  ended
September  30, 1999  compared to 27.6% for the nine months ended  September  30,
1998.

Sales and marketing  costs  increased 27.9% to $78.0 million for the nine months
ended September 30, 1999, from $61.0 million for the nine months ended September
30, 1998.  As a percentage of Vacation  Credit and  Fractional  Interest  sales,
sales and marketing costs decreased to 44.5% for the nine months ended September
30, 1999, from 49.4% for the nine months ended September 30, 1998. This decrease
reflects the sales  generated  from the new  Fractional  Interest  sales program
which has  significantly  lower sales and marketing  costs than Vacation  Credit
sales.  In addition,  the new sales  offices  opened  during 1998 have  improved
closing  percentages over last year's start-up phase which further reduces sales
and  marketing  costs.  The  improvement  in sales and  marketing  costs is also
attributable  to the price  increases  effective in late June 1998 and late June
1999,  respectively,  and the changes to the commissions  program effective June
30, 1998.

General and  administrative  expenses  increased  45.5% to $17.9 million for the
nine months  ended  September  30,  1999 from $12.3  million for the nine months
ended  September  30,  1998.  As a  percentage  of total  revenue,  general  and
administrative  costs were  comparable at 8.7% and 8.5% of total revenue for the
two periods compared.

Provision for doubtful accounts and recourse liability  increased 43.5% to $12.2
million for the nine months ended  September  30, 1999 from $8.5 million for the

                                       12
<PAGE>

nine months ended  September 30, 1998.  As a percentage  of Vacation  Credit and
Fractional  Interest sales, the provision  remained  comparable at 7.0% and 6.9%
for the nine months ended September 30, 1999, and 1998, respectively.

The Company maintains an allowance for doubtful accounts in respect of the Notes
Receivable  owned by the Company and an  allowance  for  recourse  liability  in
respect  of the  Notes  Receivable  that  have  been  sold by the  Company.  The
aggregate  amount of these  allowances at September  30, 1999,  and December 31,
1998,  were  $27.3  million,  and  $20.9  million,  respectively,   representing
approximately  7.4% and  6.8%,  respectively,  of the total  portfolio  of Notes
Receivable at those dates,  including the Notes Receivable that had been sold by
the Company.  No assurance can be given that these  allowances will be adequate,
and if the  amount of the  Notes  Receivable  that are  ultimately  written  off
materially exceed the related  allowances,  the Company's  business,  results of
operations and financial condition could be materially adversely affected.

The Company estimates its allowance for doubtful accounts and recourse liability
by analysis of bad debts by each sales site by year of origination.  The Company
uses this historical  analysis,  in conjunction with other factors such as local
economic  conditions and industry trends.  The Company also utilizes  experience
factors of more mature sales sites in establishing  the reserve for bad debts at
new sales offices.  The Company  generally charges off all receivables when they
become  180  days  past  due  and  returns  the  credits  associated  with  such
charge-offs to inventory.  At September 30, 1999,  and December 31, 1998,  1.80%
and 1.97% of the Company's  total  receivables  portfolio of $370.0  million and
$307.7 million, respectively, were more than 60 days past due.

                         LIQUIDITY AND CAPITAL RESOURCES

The  Company  generates  cash from  operations  from down  payments  on sales of
Vacation  Credits and  Fractional  Interests  which are financed,  cash sales of
Vacation  Credits and  Fractional  Interests,  principal  and  interest on Notes
Receivable,  and  proceeds  from sales and  borrowings  collateralized  by Notes
Receivable. The Company also generates cash on the interest differential between
the interest  charged on the Notes  Receivable  and the  interest  paid on loans
collateralized by Notes Receivable.

During the nine months ended September 30, 1999 and 1998, cash provided by (used
in) operating  activities was $34.6 million and ($14.0)  million,  respectively.
Cash  generated  from  operating  activities  increased  principally  due to the
increased  sales of Notes  Receivable.  For the first nine months of 1999,  cash
used in operating  activities was  principally  for the issuance and purchase of
Notes  Receivable of $159.1 million to finance the purchase of Vacation  Credits
by Owners.  Cash provided by operating  activities resulted primarily from sales
and  repayments of Notes  Receivable  of $155.4  million and net income of $26.5
million.  For the nine months ended  September 30, 1998,  cash used in operating
activities was principally for the issuance and purchase of Notes  Receivable of
$126.1  million to finance  the  purchase of  Vacation  Credits by Owners.  Cash
provided by operating  activities resulted primarily from the sale and repayment
of Notes Receivable of $95.5 million and net income of $16.9 million.

Net cash used in investing  activities  for the nine months ended  September 30,
1999 and 1998, was $.3 million and $6.2 million, respectively.  Cash provided by
investing activities was the result of $4.4 million in proceeds from the sale of
the Bellevue corporate building.  Cash used in investing activities for the nine
months  ended  September  30,  1999,  of $4.7  million  was the  result of final
retention payments on the new corporate headquarters and furniture and equipment
related  to the new  building.  Cash  used for the same  period  in 1998 of $6.1
million  was for  progress  payments  on the  new  corporate  headquarters,  the
acquisition of furniture and fixtures and data processing  equipment required to
meet the growth of the Company.

Net cash (used in)  provided by financing  activities  for the nine months ended
September  30,  1999  and  1998,   was  ($34.3)   million  and  $21.1   million,
respectively.  For the nine  months  ended  September  30,  1999,  cash  used in
financing activities was the result of $26.4 million reduction in net borrowings
under bank line of credit and other, a $5.7 million decrease in due to Parent, a
$1.7 million  increase in receivable  from parent and $.7 million  repurchase of
common  stock.  For the nine  months  ended  September  30,  1998,  cash used in
financing  activities was principally the result of repurchasing $4.9 million or
434,600  shares of common  stock.  Cash provided was  principally  the result of
borrowings  of $30.0 million on the Company's  $30.0  million  revolving  credit
facility.
                                       13
<PAGE>

Financing of Notes  Receivable had been  accomplished  by use of a $98.0 million
Receivable  Transfer Agreement from the Bank Group through TW Holdings and a new
$75.0 million Receivables  Warehouse facility with Prudential  Securities Credit
Corporation  through TW Holdings II. On June 17, 1999,  the Company chose not to
renew the revolving  portion of the $98 million  Receivable  Transfer  Agreement
from the Bank  Group.  The TW Holdings  receivables  were  transferred  to a new
special-purpose  entity TRI Funding III in conjunction with a private  placement
of Notes  Receivable in August of 1999 and the credit  facility was retired.  At
September 30, 1999, $10 million of receivables  were outstanding and transferred
under the $75 million TW Holdings II Receivables Warehouse facility.

In August 1999,  the Company sold certain  Notes  Receivable to TRI Funding III,
for cash,  a  subordinated  note  payable  from TRI  Funding  III and a residual
interest in the excess cash flows of TRI Funding III.

The Company has a $10  million  open line of credit with the Parent  which bears
interest  at prime plus 1%  (currently  9.25%) per annum.  The line of credit is
payable  on  demand.  As  of  September  30,  1999,  there  was  no  outstanding
indebtedness  to the Parent.  The Company may advance excess funds to the Parent
at prime rate minus 2% (currently  6.25%) per annum. At September 30, 1999 there
was a $1.7 million  Receivable from Parent. The Company also has a $30.0 million
unsecured revolving line of credit. Outstanding borrowings on the line of credit
were $2.0 million at September 30, 1999.

Through the end of 2000, the Company anticipates  spending  approximately $121.4
million  for  acquisitions  and  development  of new resort  properties  and for
expansion  and  development   activities.   The  Company  plans  to  fund  these
expenditures  with cash generated from operations,  including  further sales and
securitizations of Notes Receivable.  The Company believes that, with respect to
its current  operations,  cash generated from operations and future  borrowings,
will be sufficient to meet the Company's working capital and capital expenditure
needs through the end of 2000.

WorldMark  maintains a replacement  reserve for the  WorldMark  Resorts which is
funded from the annual  assessments  of the Owners.  At September 30, 1999,  the
amount of such reserve was approximately $11.2 million.  The replacement reserve
is  utilized to  refurbish  and replace the  interiors  and  furnishings  of the
condominium  units and to maintain the  exteriors  and common areas in WorldMark
Resorts in which all units are owned by WorldMark. The Company may advance funds
to WorldMark from time to time.

Since completed units at various resort  properties are acquired or developed in
advance and a significant  portion of the purchase price of Vacation  Credits is
financed  by the  Company,  the Company  continually  needs funds to acquire and
develop  property,  to carry Notes  Receivable  contracts and to provide working
capital.  The Company has  historically  secured  additional funds through loans
from  the  Parent  and  the  sale  of  Notes  Receivable   through  the  Finance
Subsidiaries.  See "Risk  Factors - Dependence  on  Acquisitions  of  Additional
Resort Units for Growth; Need for Additional Capital" of the Company's 1998 Form
10-K.

In the future, the Company may negotiate additional credit facilities,  or issue
corporate debt or equity securities.  Any debt incurred or issued by the Company
may be secured or unsecured,  at a fixed or variable  interest  rate, and may be
subject to such additional terms as management deems appropriate.

                                YEAR 2000 STATUS

The Year 2000 issue relates to a flaw in many electronic data processing systems
which prevents them from processing  year-date data  accurately  beyond the year
1999. This is the result of using a two-digit  representation  for the year, for
example "99" for "1999".  This approach assumed that the first two digits of the
abbreviated  date are  "19".  However,  when the  computer  reaches  2000 it may
interpret "00" as the year 1900 possibly  causing  inaccurate data processing or
processing to stop altogether.

As of September 30, 1999,  mission-critical  applications  such as Reservations,
Contract Processing, Collections and Marketing have been analyzed and tested and
the Company has determined that all these  applications are Year 2000 compliant.
Each  of  these  critical  applications  is  currently  operating  in  the  live
environment.  In many cases, the applications are performing  transactions  with
Year 2000 dates and the Company has not experienced any Year 2000 issues.

                                       14
<PAGE>

The Company  expended  considerable  effort in the third  quarter to monitor the
Year 2000 compliance  program of Sage Systems,  Inc. (Sage), the servicer of the
Company's  Notes  Receivable  portfolio.  Sage and the  Company  worked  closely
together  to analyze  all of the  date-sensitive  code,  which Sage  utilizes to
service the Company's receivables.  Every line of this code was reviewed and the
necessary remediation was performed. The Company and Sage performed tests on the
remediated code to verify it was Year 2000 compliant.

The Company has incurred  approximately $.8 million to date to modify or replace
software in order to remediate the Year 2000 issue and has $.2 million  budgeted
for any potential future expenditures.

Based on its current  assessments  and remediation  plans,  the Company does not
expect that it will suffer any material  disruption  of its business as a result
of the Year 2000 issue.  Nevertheless,  the Company will be  performing  further
testing and developing  Year 2000  contingency  plans between now and the end of
the calendar year.

Item 3 - Quantitative and Qualitative Disclosures About Market Risk

The Company is exposed to interest  rate  changes  primarily  as a result of its
financing  of  timeshare  purchases,   the  sale  and  securitization  of  notes
receivable and borrowing under revolving lines of credit. The Company's interest
rate risk  management  objective is to limit the impact of interest rate changes
on earnings and cash flows and to reduce overall borrowing costs. To achieve its
objectives,  the Company borrows funds,  sells or securitizes  Notes  Receivable
primarily  at fixed rates and may enter into  derivative  financial  instruments
such as interest  rate swaps,  caps and treasury  locks in order to mitigate its
interest  rate risk on a related  financial  instrument.  The  Company  does not
maintain a trading  account for any class of financial  instrument,  it does not
purchase  high risk  derivative  instruments  and it is not directly  subject to
commodity  price  risk.  There have been no  material  changes to the  Company's
exposure to market risk since December 31, 1998.

                                       15

<PAGE>

PART II - OTHER INFORMATION

Item 1 - Legal Proceedings
                  Incorporated by reference.  See Note 7 of "Notes to Condensed
                  Consolidated Financial Statements."

Item 2 - Changes in Securities and Use of Proceeds
                  None

Item 3 - Defaults Upon Senior Securities
                  None

Item 4 - Submission of Matter to a Vote of Security Holders
                  None

Item 5 - Other Information
                  None

Item 6 - Exhibits and Reports on Form 8-K
(a)      Exhibits
         3.1      Restated Articles of Incorporation (1)
         3.2      Restated Bylaws (1)
         11       Statement re: Computation of Earnings per share. Incorporated
                  by reference. See Note 4 of "Notes to Condensed
                  Consolidated Financial Statements."
         10.44    Receivables  Purchase Agreement among Registrant,  TRI Funding
                  II, Inc.,  TRI Funding  Company I, LLC, TW Holdings,  Inc., TW
                  Holdings II,  Inc.,  and TRI Funding  III,  Inc.,  dated as of
                  August 1, 1999.
         10.45    Indenture among  Registrant,  TRI Funding III, Inc. and
                  Norwest Bank  Minnesota,  National  Association  Dated as
                  of August 1, 1999.
         10.46    Servicing  Agreement among  Registrant,  TRI Funding III, Inc.
                  and Norwest Bank Minnesota,  National  Association  Dated as
                  of August 1, 1999.
         10.47    Purchase Agreement Between TRI Funding III, Inc., and
                  Prudential Securities Incorporated Dated August 18, 1999.
         27       Financial Data Schedule

         (1) Incorporated by reference to the Company's Registration Statement
             on Form S-1 (File No. 333-26861).

(b)               Reports on Form 8-K
                  None

                                       16

<PAGE>



                                   SIGNATURES


Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned, thereunto duly authorized.


                                         TRENDWEST RESORTS, INC.




Date:      November 12, 1999            /s/ WILLIAM F. PEARE
           -------------------          --------------------------------------
                                         William F. Peare
                                         President, Chief Executive Officer and
                                         Director (Principal Executive Officer)


Date:      November 12, 1999            /s/ GARY A. FLORENCE
           -------------------          --------------------------------------
                                         Gary A. Florence
                                         Vice President, Chief Financial Officer
                                         and Treasurer
                                         (Principal Financial Officer)