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, 2000

[ ] 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                              (I.R.S. Employer
      of incorporation)                                   Identification No.)


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 8, 2000: 16,847,159 shares.


<PAGE>

PART I - FINANCIAL INFORMATION

Item I - Financial Statements

                             TRENDWEST RESORTS, INC.
                                AND SUBSIDIARIES

                      Condensed Consolidated Balance Sheets

                             (dollars in thousands)
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                                                    September 30,        December 31,
                                   Assets                                                2000                1999
                                                                                   -----------------    ----------------
<S>                                                                            <C>                      <C>
Assets:
     Cash                                                                      $           123               1,760
     Restricted cash                                                                     6,117               2,987
     Notes Receivable, net of allowance for doubtful accounts, sales returns
         and deferred gross profit                                                      70,978              84,802
     Accrued interest and other receivables                                             12,212               8,506
     Residual interest in Notes Receivable sold                                         42,788              36,265
     Receivable from Parent                                                                 --               3,058
     Inventories                                                                        92,329              45,601
     MountainStar development                                                           49,073                  --
     Property and equipment, net                                                        28,231              24,327
     Deferred income taxes                                                               2,306                  --
     Other assets                                                                        6,670               2,657
                                                                                   -----------------    ----------------
                     Total assets                                              $       310,827             209,963
                                                                                   =================    ================

                    Liabilities and Shareholders' Equity

Liabilities:
     Accounts payable                                                          $         5,951               1,900
     Accrued liabilities                                                                19,702              12,405
     Accrued construction in progress                                                    7,602                 790
     Due to Parent                                                                         481                  --
     Note payable to Parent                                                             17,731                  --
     Borrowing under bank line of credit and other                                      41,599               3,900
     Allowance for recourse liability and deferred gross profit on Notes
         Receivable sold                                                                19,253              17,211
     Deferred income taxes                                                                  --                  42
                                                                                   -----------------    ----------------
                     Total liabilities                                                 112,319              36,248

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 16,886,359 and 17,041,078 shares at September
        30, 2000, and December 31, 1999, respectively.                                  55,956              59,428
     Accumulated other comprehensive loss                                                (607)                  --
     Retained earnings                                                                 143,159             114,287
                                                                                   -----------------    ----------------
                     Total shareholders' equity                                        198,508             173,715

Commitments and contingencies
                                                                                   -----------------    ----------------
                     Total liabilities and shareholders' equity                $       310,827             209,963
                                                                                   =================    ================
</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,
                                                          ----------------------------------- -----------------------------------
                                                               2000               1999             2000               1999
                                                          ----------------  ----------------- ----------------   ----------------
<S>                                                       <C>               <C>               <C>                <C>
Revenues:
     Vacation Credit and Fractional Interest sales, net $        82,908             62,951          217,010            175,393
     Finance income                                               4,725              3,649           13,001             10,938
     Gains on sales of Notes Receivable                           5,040              3,857           13,096             13,000
     Resort management services                                   1,081                573            3,881              2,348
     Other                                                        1,223                964            3,730              3,514
                                                          ----------------  ----------------- ----------------   ----------------

             Total revenues                                      94,977             71,994          250,718            205,193
                                                          ----------------  ----------------- ----------------   ----------------

Costs and operating expenses:
     Vacation Credit and Fractional Interest cost of
        sales                                                    22,253             18,076           53,598             52,179
     Resort management services                                     424                438            1,361              1,256
     Sales and marketing                                         38,529             27,814          102,715             77,976
     General and administrative                                   8,633              6,664           23,687             17,909
     Provision for doubtful accounts and recourse
        liability                                                 6,160              4,414           16,091             12,234
     Interest                                                       128                 16              225                125
                                                          ----------------  ----------------- ----------------   ----------------

             Total costs and operating expenses                  76,127             57,422          197,677            161,679
                                                          ----------------  ----------------- ----------------   ----------------

             Income before income taxes                          18,850             14,572           53,041             43,514

Income tax expense                                                7,300              5,708           20,869             16,996
                                                          ----------------  ----------------- ----------------   ----------------

             Net income                                 $        11,550              8,864           32,172             26,518
                                                          ================  ================= ================   ================


Basic net income per common share                       $           .68                .52             1.90               1.55

Diluted net income per common share                                 .68                .52             1.89               1.54

Weighted average shares of common stock and
dilutive potential common stock outstanding:
Basic                                                        16,916,899         17,128,830       16,942,229         17,142,331

Diluted                                                      16,957,653         17,192,251       16,993,446         17,189,894
</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,
                                                                                 -------------------------------------------
                                                                                        2000                    1999
                                                                                 -------------------     -------------------
<S>                                                                              <C>                     <C>
Cash flows from operating activities:
     Net income                                                              $             32,172                  26,518
     Adjustments to reconcile net income to net cash provided by (used
        in) operating activities:
        Depreciation and amortization                                                       2,005                   1,212
        Gain on sale of property and equipment                                                 --                    (870)
        Amortization of residual interest in Notes Receivable sold                         10,283                   7,919
        Provision for doubtful accounts, sales returns and recourse
           liability                                                                       19,685                  16,166
        Recoveries of Notes Receivable charged off                                            215                     176
        Residual interest in Notes Receivables sold                                       (15,395)                (17,994)
        Unrealized (gain) loss on residual interest in Notes Receivable
           sold                                                                              (573)                    973
        Contract servicing liability arising from sale of Notes Receivable                     --                   2,847
        Amortization of servicer liability                                                   (536)                   (129)
        Change in deferred gross profit                                                       631                      27
        Deferred income tax (benefit) expense                                              (2,348)                  1,569
        Issuance of Notes Receivable                                                     (189,663)               (152,773)
        Proceeds from sale of Notes Receivable                                            152,224                 114,892
        Proceeds from repayment of Notes Receivable                                        44,789                  40,487
        Purchase of Notes Receivable                                                      (13,002)                 (6,267)
        Changes in certain assets and liabilities:
              Restricted cash                                                              (3,130)                 (1,868)
              MountainStar development                                                    (29,773)                     --
              Inventories                                                                 (48,382)                  1,094
              Accounts payable and accrued liabilities                                     14,428                   3,657
              Income taxes payable                                                             --                  (1,100)
              Other                                                                        (7,832)                 (1,905)
                                                                                 -------------------     -------------------

          Net cash (used in) provided by operating activities                             (34,202)                 34,631
                                                                                 -------------------     -------------------

Cash flows from investing activities:
     Purchase of property and equipment                                                    (4,596)                 (4,709)
     Proceeds from sale of property and equipment                                              --                   4,412
                                                                                 -------------------     -------------------

          Net cash used in investing activities                                            (4,596)                   (297)
                                                                                 -------------------     -------------------

Cash flows from financing activities:
     Net borrowing (repayment) under bank line of credit and other                          42,056                (26,391)
     Increase in Receivable from Parent                                                         --                 (1,660)
     Decrease in Due to Parent                                                              (1,330)                (5,688)
     Repurchase of common stock                                                             (3,948)                  (732)
     Issuance of common stock                                                                  476                    163
                                                                                 -------------------     -------------------

          Net cash provided by (used in) financing activities                               37,254                (34,308)
                                                                                 -------------------     -------------------

Effect of foreign currency exchange rates on cash                                              (93)                     --

          Net (decrease) increase in cash                                                   (1,637)                    26

Cash at beginning of period                                                                 1,760                       9
                                                                                 -------------------     -------------------

Cash at end of period                                                        $                123                      35
                                                                                 ===================     ===================
</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,
                                                                                 -------------------------------------------
                                                                                        2000                    1999
                                                                                 -------------------     -------------------
<S>                                                                          <C>                         <C>
Supplemental  disclosures of cash flow information -
     cash paid during the period for:
        Interest (excluding capitalized amounts of $1,485 and $1,047,
          respectively)                                                      $                 --                     212
        Income taxes                                                                       23,787                  16,526

Supplemental schedule of noncash investing and financing activities:
   Issuance of note payable to Parent in connection with the MountainStar
     development acquisition                                                               17,731                      --
   Reduction in retained earnings for the excess of the purchase price of
     the MountainStar development over the Parent's historical cost                         3,300                      --
   Extinguishment of receivable from Parent in connection with the
     MountainStar development acquisition                                                   4,869                      --

</TABLE>

See accompanying notes to the condensed consolidated financial statements.

                                       5

<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.

In October of 1999,  the Company  formed  Trendwest  South  Pacific,  Pty.  Ltd.
(Trendwest South Pacific) as a wholly-owned subsidiary.  Trendwest South Pacific
is an  Australian  corporation  formed  for the  purpose  of  conducting  sales,
marketing  and resort  development  activities in the South  Pacific.  Trendwest
South Pacific  commenced sales operations in Fiji in March 2000 and in Australia
in June of 2000.  The sales terms in the South  Pacific are similar to the terms
in the United States.

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, 2000,  are not  necessarily  indicative of the
results that may be expected for the fiscal year ending December 31, 2000.

These  statements  should  be read in  conjunction  with the  audited  financial
statements and footnotes included in the Company's 1999 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 June 1998,  the  Financial  Accounting  Standards  Board issued  Statement of
Financial  Accounting  Standards No. 133, Accounting for Derivative  Instruments
and Hedging  Activities.  This  Statement,  as amended,  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.

In December 1999, the Securities and Exchange Commission issued Staff Accounting
Bulletin  (SAB) No.  101,  "Revenue  Recognition",  which must be adopted by the
Company no later than the fourth quarter of 2000. Compliance with SAB No. 101 is
not presently expected to result in any material change to the Company's revenue
recognition policies.

In September 2000, the Financial  Accounting Standards Board issued Statement of
Financial  Accounting  Standards No. 140, Accounting for Transfers and Servicing
of Financial Assets and  Extinguishments  of Liabilities--a  replacement of FASB
Statement  No.  125.  This  Statement  applies to  transfers  and  servicing  of
financial  assets and  extinguishments  occurring  after  March 31,  2001,  with
certain disclosure and collateral  recognition  provisions  effective for fiscal
years ending after December 15, 2000. The Company does not presently  expect the
adoption of this  standard  to result in any  material  change to the  Company's
financial position or results of operations.

                                       6

<PAGE>

Note 3 -- Foreign Currency Translation

Assets and liabilities in foreign functional currencies are translated into U.S.
dollars  based  upon the  prevailing  currency  exchange  rates in effect at the
balance  sheet  date.  Translation  gains and  losses  are not  included  in the
determination  of net income but are  accumulated  in a  separate  component  of
shareholders'  equity. These translation gains and losses are the only component
of  accumulated  other  comprehensive  income in the  accompanying  consolidated
balance  sheets.  Transaction  gains and losses are  recorded  in the results of
operations  and were  insignificant  for the three and nine month  periods ended
September 30, 2000.

Note 4 -- Comprehensive Income

The following  illustrates  the  reconciliation  of net income to  comprehensive
income:
<TABLE>
<CAPTION>
                                                                  Three months ended               Nine months ended
                                                                     September 30,                   September 30,
                                                              ----------------------------    ----------------------------
                                                                 2000            1999            2000            1999
                                                              ------------    ------------    ------------    ------------
<S>                                                        <C>                <C>             <C>             <C>
Net income                                                 $       11,550           8,864          32,172          26,518
Other comprehensive loss:
     Change in cumulative effect of foreign currency
     translation                                                    (515)              --           (607)              --
                                                              ----------------------------    ----------------------------
Comprehensive income                                       $       11,035           8,864          31,565          26,518
                                                              ============================    ============================
</TABLE>

Note 5 - 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,
                                             ----------------------------------     ------------------------------------
                                                  2000               1999                2000                 1999
                                             ----------------    --------------     ---------------      ---------------
<S>                                          <C>                 <C>                <C>                  <C>
Basic
Weighted average shares outstanding             16,916,899          17,128,830         16,942,229           17,142,331

Diluted
Effect of dilutive securities                       40,754              63,421             51,217               47,563
                                              ----------------    --------------    ---------------      ---------------

Diluted weighted average shares outstanding     16,957,653          17,192,251         16,993,446           17,189,894
                                             ================    ==============     ===============      ===============
</TABLE>

Net income available to common shareholders for basic and diluted net income per
share was $11,550 and $8,864 for the three months ended  September  30, 2000 and
1999, and $32,172 and $26,518 for the nine months ended  September 30, 2000, and
1999, respectively.

For the three  months  ended  September  30, 2000 and 1999,  there were  options
outstanding   to  purchase   609,500  and  434,100   shares  of  common   stock,
respectively,  which  were  anti-dilutive  and  therefore  not  included  in the
computation  of diluted net income per common  share.  For the nine months ended
September 30, 2000 and 1999, there were options  outstanding to purchase 588,000
and 433,500 shares of common stock,  respectively,  which were anti-dilutive and
therefore  not  included  in the  computation  of diluted  net income per common
share.

                                       7
<PAGE>

Note 6 - Inventories

Inventories consist of Vacation Credits,  Fractional  Interests and construction
in progress as follows:
<TABLE>
<CAPTION>
                                                                          September 30,          December 31,
                                                                               2000                  1999
                                                                         -----------------     ------------------
<S>                                                                 <C>                        <C>
         Vacation Credits                                           $           8,097                13,247
         Construction in progress                                              84,232                32,354
                                                                         -----------------     ------------------

                  Total inventories                                 $          92,329                45,601
                                                                         =================     ==================
</TABLE>

Note 7 - MountainStar Development

In June of 2000,  the Company  acquired the  MountainStar  development  from its
majority  shareholder  JELD-WEN,  inc. (Parent).  The purchase price was $47,600
consisting  of  $25,000  in cash,  a $17,731  note  payable  to  Parent  and the
settlement by the Company of a $4,869  intercompany  receivable from Parent. The
excess of the  purchase  price over  Parent's  historical  cost was treated as a
non-cash reduction to retained earnings due to the accounting requirement to use
historical cost on such a transfer from a controlling  shareholder.  The Company
recorded the asset at Parent's historical cost of $44,300;  the excess $3,300 of
the purchase price over this amount reduced retained earnings.  The cash payment
was funded primarily through the Company's existing credit facilities.

The conceptual  master plan for the MountainStar  development  includes at least
two 18-hole golf courses,  hotel and  conference  facilities,  a spa and fitness
center, vacation homes and vacation condominiums.

Note 8 - Allowance For Doubtful Accounts, Recourse Liability and Sales Returns

The following table  summarizes the Company's total Notes  Receivable  portfolio
at:
<TABLE>
<CAPTION>
                                                                        September 30,        December 31,
                                                                             2000                1999
                                                                       -----------------   ------------------
<S>                                                                    <C>                 <C>
        Total Notes Receivable                                      $       471,732             389,901
        Less Notes Receivable sold                                         (377,743)           (288,950)
                                                                       -----------------   ------------------

        Gross on balance sheet Notes Receivable                              93,989             100,951
                                                                       =================   ==================

        Unencumbered Notes Receivable                                        42,782              64,169
        Retained interest in Notes Receivable sold                           51,207              36,782
                                                                       -----------------   ------------------
       Gross on balance sheet Notes Receivable                               93,989             100,951

        Less: Deferred gross profit                                          (1,113)               (970)
               Allowance for doubtful accounts and sales returns            (21,898)            (15,179)
                                                                       -----------------   ------------------

        Notes Receivable, net                                       $        70,978              84,802
                                                                       =================   ==================
</TABLE>

                                       8
<PAGE>

The activity in the  allowance  for doubtful  accounts,  recourse  liability and
sales returns is as follows for the nine months ended  September  30, 2000,  and
the year ended December 31, 1999:

<TABLE>
<CAPTION>
                                                                               2000                  1999
                                                                         -----------------     ------------------
         <S>                                                        <C>                        <C>
         Balances at beginning of period                            $          29,087                20,935
         Provision for doubtful accounts, sales returns and
             recourse liability                                                19,685                21,407
         Notes Receivable charged-off and sales returns net of
             Vacation Credits recovered                                       (11,627)              (13,515)
         Recoveries                                                               215                   260
                                                                         -----------------     ------------------
         Balances at end of period                                  $          37,360                29,087
                                                                         =================     ==================

         Allowance for doubtful accounts and sales returns          $          21,898                15,179
         Recourse liability on Notes Receivable sold                           15,462                13,908
                                                                         -----------------     ------------------
                                                                    $          37,360                29,087
                                                                         =================     ==================
</TABLE>

Note 9 - Note Payable to Parent

In connection with the acquisition of the MountainStar development,  the Company
issued a promissory  note  payable to Parent in the amount of $17,731.  The note
bears an interest rate of 9.0%, with quarterly interest payments due starting on
September 1, 2000. Eight quarterly principal payments of $2,216 are due starting
on September 1, 2001. The note matures on June 1, 2003.

Maturities of the Note Payable to Parent at September 30, 2000, are as follows:

                   2001                             $4,433
                   2002                              8,865
                   2003                              4,433
                                                 ---------
                   Total                           $17,731
                                                   =======

Note 10 - Commitments and Contingencies

(a) Purchase Commitments
The Company  routinely  enters into purchase  agreements with various parties to
acquire and build  resort  properties.  At September  30, 2000,  the Company had
outstanding  purchase  commitments of $81.1 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.

                                       9

<PAGE>

Note 11 - 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 II, TW
Holdings III,  Trendwest  Funding I, Trendwest  Funding II, or Trendwest Funding
III.

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.

The following tables summarize the segment activity of the Company:

<TABLE>
<CAPTION>
                                                                                                   Segment
Three months ended September 30, 2000:               Sales         Finance          Other           Total
                                                   -----------    -----------     -----------    -------------
<S>                                           <C>                 <C>             <C>            <C>
External revenue                              $        82,908            867          1,081           84,856
Interest revenue - net                                     --          1,039              --           1,039
Interest revenue-intersegment                              --          1,778              --           1,778
Intersegment revenue                                       --            700              --             700
                                                   -----------    -----------     -----------    -------------
Segment revenue                               $        82,908          4,384          1,081           88,373

Segment profit                                $        14,175          2,871            657           17,703

Significant non-cash items:
Provision for doubtful accounts, sales
returns and recourse liability                $         7,619             --             --            7,619

                                                                                                   Segment
Three months ended September 30, 1999:               Sales         Finance          Other           Total
                                                   -----------    -----------     -----------    -------------
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
Nine months ended September 30, 2000:                Sales         Finance          Other           Total
                                                   -----------    -----------     -----------    -------------
External revenue                              $       217,010          2,877          3,881          223,768
Interest revenue - net                                     --          3,590             --            3,590
Interest revenue-intersegment                              --          4,840             --            4,840
Intersegment revenue                                       --          1,505             --            1,505
                                                   -----------    -----------     -----------    -------------
Segment revenue                               $       217,010         12,812          3,881          233,703

Segment profit                                $        39,818          8,531          2,520           50,875

Significant non-cash items:
Provision for doubtful accounts, sales
returns and recourse liability                $        19,685             --              --          19,685
</TABLE>

                                       10


<PAGE>

<TABLE>
<CAPTION>
                                                                                                   Segment
Nine months ended September 30, 1999:                Sales         Finance          Other           Total
                                                   -----------    -----------     -----------    -------------
<S>                                           <C>                 <C>             <C>            <C>
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>

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,
                                                     2000           1999            2000            1999
                                                   -----------    -----------    ------------    -------------
<S>                                             <C>               <C>            <C>             <C>
Segment revenue                                 $     88,373         67,416         233,703          188,953
Interest expense reported net of interest
    income                                               128             16             225              125
Elimination of intersegment revenue                   (2,478)        (1,455)         (6,345)          (4,107)
Finance subsidiaries revenue                           8,954          6,017          23,135           20,222
                                                   -----------    -----------    ------------    -------------
               Consolidated revenue             $     94,977         71,994         250,718          205,193
                                                   ===========    ===========    ============    =============

Segment profit                                  $     17,703         14,358          50,875           38,771
Corporate overhead not included in segment
    reporting                                         (5,178)        (3,683)        (14,223)         (10,672)
Finance subsidiaries profit                            6,325          3,897          16,389           15,415
                                                   -----------    -----------    ------------    -------------
            Consolidated pre-tax income         $     18,850         14,572          53,041           43,514
                                                   ===========    ===========    ============    =============
</TABLE>

The  Company's  revenue from  external  customers  derived from sales within the
United States totaled $81,089 for the three months ended September 30, 2000, and
$214,321 for the nine months ended  September  30, 2000.  Revenue from  external
customers  derived from sales in all foreign countries totaled $1,819 and $2,689
for  the  three  and  nine  months  ended  September  30,  2000,   respectively.
Substantially  all of the  Company's  long-lived  assets are located  within the
United States.

Note 12 - Subsequent Events

In October of 2000, the Kittitas County Commissioners  approved the MountainStar
development's land use application. The development of the master planned resort
is still  subject to the transfer of water rights and plat  approval.  Effective
with the approval vote, the Company began taking refundable reservation deposits
on single-family vacation lots for the first phase of the planned development.

                                       11

<PAGE>

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, 2000,  to the three months
ended September 30, 1999

The  statements  below and  other  statements  herein  contain  forward  looking
information  which  include  future  financing   transactions,   acquisition  of
properties,   and  the  Company's  future  prospects  and  other  forecasts  and
statements of  expectations.  Actual  results may differ  materially  from those
expressed in any  forward-looking  statement made by the Company,  due to, among
other things,  the  Company's  ability to develop or acquire  additional  resort
properties,  find acceptable debt or equity capital to fund such development, as
well as other risk  factors as  outlined  in the "Risk  Factors"  section of the
Company's Form 10-K.

The Company  achieved total revenues of $95.0 million for the three months ended
September  30,  2000,  compared  to $72.0  million  for the three  months  ended
September 30, 1999, an increase of 31.9%. Excluding $4.3 million in revenue from
sales of  Fractional  Interests  in the third  quarter of 1999,  total  revenues
increased  40.3% over 1999.  The principal  reasons for the overall  improvement
were a 41.2%  increase in Vacation  Credit sales to $82.9  million for the three
months ended  September 30, 2000,  from $58.7 million for the three months ended
September  30, 1999.  The increase in Vacation  Credit sales was  primarily  the
result of a 39.6%  increase  in the  number  of  Vacation  Credits  sold to 60.3
million  during the three months  ended  September  30, 2000,  from 43.2 million
during the three months ended  September 30, 1999.  This increase was the result
of the  maturation  of sales  offices  opened in 1999,  strong sales in existing
markets,  and increased  Upgrade  sales.  Revenues from Upgrade sales  increased
57.1% to $12.1 million for the three months ended  September 30, 2000, from $7.7
million for the three  months ended  September  30,  1999,  due  primarily to an
increase of 57.4% in the number of Vacation  Credits sold as Upgrades during the
three  months  ended  September  30,  2000,  compared to the three  months ended
September  30, 1999.  The  increase in Upgrade  sales  results from  WorldMark's
owners continued  satisfaction with its products and service.  The average price
per  Vacation  Credit sold  increased  to $1.37 per credit for the three  months
ended  September  30,  2000,  versus $1.36 per credit for the three months ended
September 30, 1999, reflecting the effect of an increase in the selling price of
Vacation  Credits for new sales of $0.05 per credit  effective July 1, 2000, and
an  increase  in the price of  Upgrade  vacation  credits  of $0.05  per  credit
effective September 1, 2000.

Finance  income  increased  30.6% to $4.7  million  for the three  months  ended
September 30, 2000,  from $3.6 million for the three months ended  September 30,
1999. The increase in finance income is the result of an increase in the average
carrying balances of Notes Receivable for the comparable periods and a favorable
mark-to-market  adjustment on the residual  interest in Notes Receivable sold in
the  third  quarter  of  2000,  resulting  from  lower  interest  rates on Notes
Receivable sold into variable rate structures.  The third quarter of 1999 had no
mark-to-market  adjustment.  The assumptions used in measuring the fair value of
residual  interest in Notes  Receivable  sold are consistent  with those used at
December 31, 1999.  Gains on sales of Notes  Receivable  increased 28.2% to $5.0
million for the three months ended  September 30, 2000 from $3.9 million for the
three months ended September 30, 1999.

Vacation Credit and Fractional Interest cost of sales increased to $22.3 million
for the three months ended  September 30, 2000, from $18.1 million for the three
months ended September 30, 1999, an increase of 23.2%,  primarily reflecting the
increase in sales of Vacation  Credits.  As a percentage of Vacation  Credit and
Fractional  Interests  sales,  cost of sales  decreased  to 26.9%  from 28.7% of
Vacation Credit and Fractional Interest sales for the two periods compared. This
decrease is attributable to the higher cost of sales of the Fractional Interests
sales which are included in 1999  results.  Fractional  Interests  have a higher
product cost than Vacation Credits, which is offset by lower sales and marketing
costs.

Sales and marketing  costs increased 38.5% to $38.5 million for the three months
ended  September  30,  2000,  from  $27.8  million  for the three  months  ended
September 30, 1999. As a percentage of Vacation  Credit and Fractional  Interest
sales,  sales and marketing  costs increased to 46.4% for the three months ended
September  30, 2000,  from 44.1% for the three months ended  September 30, 1999.
This  increase  is a  reflection  of the  sales  generated  from the  Fractional
Interest sales program included in 1999 results,  which had significantly  lower
sales and marketing costs than Vacation Credit sales.

                                       12
<PAGE>

General and  administrative  expenses  increased  28.4% to $8.6  million for the
three months ended  September  30, 2000,  from $6.7 million for the three months
ended  September  30,  1999.  As a  percentage  of total  revenue,  general  and
administrative  costs  remained  comparable  at 9.1% for the three  months ended
September 30, 2000, and 9.3% for the three months ended September 30, 1999.

The provision for doubtful  accounts and recourse  liability  increased 40.9% to
$6.2 million for the three months ended  September  30, 2000,  from $4.4 million
for the three  months ended  September  30,  1999.  As a percentage  of Vacation
Credit and Fractional  Interest sales,  the provision  increased to 7.5% for the
three months  ended  September  30,  2000,  from 7.0% for the three months ended
September  30,  1999.  This  increase was the result of a higher mix of sales in
newer sales  offices  with  expected  default  rates  higher than the  Company's
experience with more mature locations.

Comparison of the nine months ended September 30, 2000, to the nine months ended
September 30, 1999

The Company  achieved total revenues of $250.7 million for the nine months ended
September  30,  2000,  compared  to $205.2  million  for the nine  months  ended
September  30, 1999,  an increase of 22.2%.  Excluding  $11.6 million in revenue
from sales of Fractional  Interests  during the nine months ended  September 30,
1999,  total revenues  increased 29.5% over 1999. The principal  reasons for the
overall  improvement  were a 32.5%  increase in Vacation  Credit sales to $217.0
million for the nine months ended  September 30, 2000,  from $163.8  million for
the nine months ended  September 30, 1999. The increase in Vacation Credit sales
was primarily the result of a 29.1%  increase in the number of Vacation  Credits
sold to 159.1  million  during the nine months ended  September  30, 2000,  from
123.2 million during the nine months ended September 30, 1999, and resulted from
the  continued  maturation  of sales  offices  opened in 1999,  strong  sales in
existing  markets,  and  increased  Upgrade  sales.  Revenues from Upgrade sales
increased  46.1% to $33.3  million for the nine months ended  September 30, 2000
from $22.8 million for the nine months ended  September 30, 1999,  due primarily
to an  increase  of 42.1% in the number of  Vacation  Credits  sold as  Upgrades
during the nine months ended  September  30,  2000,  compared to the nine months
ended September 30, 1999. The increase in Upgrade sales results from WorldMark's
owners continued  satisfaction with its products and service.  The average price
per Vacation Credit sold increased to $1.36 per credit for the nine months ended
September 30, 2000,  versus $1.33 per credit for the nine months ended September
30, 1999,  reflecting  the effect of an increase  the selling  price of Vacation
Credits  for new  sales of $0.05  per  credit  effective  July 1,  2000,  and an
increase in the price of Upgrade  Vacation Credits of $0.05 per credit effective
September 1, 2000.

Finance  income  increased  19.3% to $13.0  million  for the nine  months  ended
September  30,  2000,  compared  to  $10.9  million  for the nine  months  ended
September  30,  1999.  The increase in finance  income  reflects the increase in
average carrying balances of Notes Receivable for the two periods compared and a
favorable mark-to-market adjustment on the residual interest in Notes Receivable
sold in 2000,  resulting from lower interest rates on Notes Receivable sold into
variable rate  structures.  The assumptions  used in measuring the fair value of
residual  interest in Notes  Receivable  sold are consistent  with those used at
December 31, 1999.  Gains on sales of Notes  Receivable  remained  comparable at
$13.1 million for the nine months ended  September  30, 2000,  and $13.0 million
for the nine months ended  September  30,  1999.  In 2000,  increased  principal
balances of Notes  Receivable  were sold at higher  interest rates than in 1999,
reducing the gains.

Vacation  Credit and Fractional  Interest cost of sales  increased 2.7% to $53.6
million for the nine months ended September 30, 2000, from $52.2 million for the
nine months ended  September 30, 1999.  As a percentage  of Vacation  Credit and
Fractional Interests sales, cost of sales decreased to 24.7% for the nine months
ended September 30, 2000,  compared to 29.8% for the nine months ended September
30,  1999.  This  decrease  is a result of the higher  product  cost of the 1999
Fractional  Interest  sales  and  below  average  product  cost for the Fiji and
Vistoso projects completed in 2000.  Fractional  Interests have a higher product
cost than Vacation Credits which is offset by lower sales and marketing costs.

Sales and marketing  costs increased 31.7% to $102.7 million for the nine months
ended September 30, 2000, from $78.0 million for the nine months ended September
30, 1999.  As a percentage of Vacation  Credit and  Fractional  Interest  sales,
sales and marketing costs increased to 47.3% for the nine months ended September
30,  2000,  from  44.5%  for the nine  months  ended  September  30,  1999.  The
difference is primarily  attributable  to the lower sales and marketing  cost of
the Fractional Interest sales program which are included in 1999.

                                       13

<PAGE>

General and  administrative  expenses  increased  32.4% to $23.7 million for the
nine months ended  September  30, 2000,  from $17.9  million for the nine months
ended  September  30,  1999.  As a  percentage  of total  revenue,  general  and
administrative  costs  increased to 9.5% for the nine months ended September 30,
2000,  from 8.7% of total revenue for the nine months ended  September 30, 1999.
The increase  resulted from start-up costs for the new Midwest and South Pacific
regions which were expensed as incurred, and the new sales offices opened during
the first half of 2000.

The provision for doubtful  accounts and recourse  liability  increased 32.0% to
$16.1 million for the nine months ended  September 30, 2000,  from $12.2 million
for the nine months ended September 30, 1999. As a percentage of Vacation Credit
and Fractional Interest sales, the provision increased to 7.4% from 7.0% for the
nine months ended September 30, 2000 and 1999,  respectively.  This increase was
the result of a higher mix of sales in newer sales offices with expected default
rates higher than the Company's experience with more mature locations.

The Company maintains an allowance for doubtful accounts in respect to the Notes
Receivable  owned by the Company and an  allowance  for  recourse  liability  in
respect  to the  Notes  Receivable  that  have  been  sold by the  Company.  The
aggregate  amount of these  allowances at September  30, 2000,  and December 31,
1999,  were  $37.4  million  and  $29.1  million,   respectively,   representing
approximately  7.9% and  7.5%,  respectively,  of the total  portfolio  of Notes
Receivable at those dates,  including the Notes Receivable that had been sold by
the Company.  The growth in the allowance as a percentage of the total portfolio
is attributable to the mix of sales in newer sales offices with expected default
rates  higher  than the  Company's  experience  with more mature  locations.  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 Note  Receivable
origination.  The Company uses this  historical  analysis,  in conjunction  with
other  factors  such  as  local  economic  conditions  and  industry  trends  in
estimating  the  allowance  for doubtful  accounts and recourse  liability.  The
Company  also  utilizes  experience  factors  of  more  mature  sales  sites  in
establishing  the  allowance  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,  2000,  and  December  31,  1999,  1.81%  and 1.91% of the  Company's  total
receivables portfolio of $471.7 million and $389.9 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  payments 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,  2000 and 1999,  cash  (used in)
provided  by  operating  activities  was  ($34.2)  million  and  $34.6  million,
respectively. Cash used in operating activities increased principally due to the
increased  issuance of Notes Receivable,  increased  expenditures for inventory,
and the cash payment to Parent for the MountainStar  development.  For the first
nine months of 2000,  cash used in operating  activities was principally for the
issuance  and  purchase  of Notes  Receivable  of $202.7  million to finance the
purchase  of Vacation  Credits by Owners,  an  increase  in  inventory  of $48.4
million due to  additional  construction  in progress to meet  increasing  sales
demand,  and the  acquisition  and continuing  development  of the  MountainStar
development of $29.8  million.  Cash provided by operating  activities  resulted
primarily  from sales and  repayments of Notes  Receivable of $197.0 million and
net income of $32.2  million.  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.

                                       14
<PAGE>

Net cash used in investing  activities  for the nine months ended  September 30,
2000 and 1999,  was $4.6 million and $0.3  million,  respectively.  Cash used in
investing  activities  for the nine months ended  September  30,  2000,  of $4.6
million was the result of purchases of  furniture  and  equipment to support the
Company's expansion. For the nine months ended September 30, 1999, 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 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.

Net cash  provided by (used in) financing  activities  for the nine months ended
September  30,  2000  and  1999,   was  $37.3   million  and  ($34.3)   million,
respectively.  For the nine months ended  September  30, 2000,  cash provided by
financing  activities was principally the result of increased  borrowings  under
the  Company's  Bank line of credit  and  other of $42.1  million.  Cash used in
financing  activities was the result of a $1.3 million decrease in due to Parent
and $3.9 million repurchase of common stock. 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.

On August 14, 2000, the Company entered into a three-year, $60 million unsecured
revolving credit agreement  (Agreement) with a group of banks agented by KeyBank
National  Association  (KeyBank).  The Agreement  also allows for  borrowings in
Australian  dollars up to a maximum of $15  million  US dollar  equivalent.  The
Agreement  provides for  borrowings  at either a reference  rate as announced by
KeyBank or at LIBOR rates plus the applicable margin for the level of borrowings
outstanding. Available borrowings under the Agreement are subject to a borrowing
base which is a percentage of Notes Receivable and inventory, including property
under  development.  The Credit  Agreement  replaced  the $30 million  revolving
credit agreement  agented by Bank of America.  Borrowings  outstanding under the
new agreement at September 30, 2000, were $41,599 at a weighted average interest
rate of 8.38%.  Borrowings  outstanding at December 31, 1999, under the previous
agreement were $3,900 at a weighted average interest rate of 8.50%.

The Company has a $10  million  open line of credit with the Parent  which bears
interest  at prime plus 1%  (currently  10.5%) per annum.  The line of credit is
payable on demand. As of September 30, 2000, there was $0.5 million indebtedness
to the Parent.  The Company may advance excess funds to the Parent at prime rate
minus 2%  (currently  7.5%) per annum.  At September  30, 2000,  no amounts were
receivable from Parent.

In addition,  the Company has a note payable outstanding to Parent in the amount
of $17.7  million.  This note was issued in connection  with the purchase of the
MountainStar  development.  The note carries a 9% interest rate,  with quarterly
interest  payments due starting  September 1, 2000. The first of eight quarterly
principal  payments of $2.2 million is due September 1, 2001.  The  MountainStar
development  includes the 6,200 acre site for the proposed  MountainStar  Resort
and  land  designated  as an  urban  growth  area  for  the  City  of Cle  Elum,
Washington.  In October of 2000,  Kittitas  County  Commissioners  approved  the
property's  land use  application.  Water rights and plat  approval are still in
process for the first phase of the planned development.

For the remainder of 2000, the Company anticipates spending  approximately $44.1
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  and  borrowings  under  the $60  million
revolving credit agreement. Acquisition of new resort sites and properties is an
ongoing  process and  availability  of certain  properties in desired  locations
could result in increased expenditures for such activities. The Company believes
that, with respect to its current operations, cash generated from operations and
future  borrowings  available under existing  agreements,  will be sufficient to
meet the Company's working capital and capital expenditure needs through the end
of 2000.

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 its
revolving  credit  facility,  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 1999 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.

                                       15
<PAGE>

WorldMark  maintains a replacement  reserve for the  WorldMark  Resorts which is
funded from the annual  assessments  of the Owners.  At September 30, 2000,  the
amount of such reserve was approximately $15.1 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.

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  borrowings  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.  As the
Company expands its operations and resort development activities worldwide,  the
Company will also be exposed to foreign currency exchange risk. 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.  Other than  commencing  operations in the South Pacific,
there have been no  material  changes to the  Company's  exposure to market risk
since December 31, 1999.

                                       16
<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
         --------
         2.1      Restated Articles of Incorporation (1)
         2.2      Restated Bylaws (1)
         10.1     Credit  Agreement  between  Trendwest  Resort, Inc., Trendwest
                  South Pacific Pty. Ltd. and KeyBank National Association.
         11       Statement re:  Computation  of  Earnings per share - See note
                  5 of "Notes to Condensed Consolidated Financial Statements".
         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.


                                       17
<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 10, 2000           /s/ WILLIAM F. PEARE
           ---------------------       -----------------------------------------
                                        William F. Peare
                                        President, Chief Executive Officer and
                                        Director (Principal Executive Officer)


Date:      November 10, 2000           /s/ TIMOTHY P. O'NEIL
           ---------------------       -----------------------------------------
                                        Timothy P. O'Neil
                                        Vice President, Chief Financial Officer
                                        And Treasurer
                                        (Principal Financial Officer)

                                       18