SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q
(Mark One)

   X         QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
             THE SECURITIES EXCHANGE ACT OF 1934.

                  For the quarterly period ending June 30, 2001
                                 --------------

                                       OR

   ___       TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
             OF THE SECURITIES EXCHANGE ACT OF 1934.

             For the transition period from __________ to _________
                          Commission file number 1-4719

                             THE DELTONA CORPORATION
             ------------------------------------------------------
             (Exact name of registrant as specified in its charter)


         DELAWARE                                            59-0997584
-------------------------------------------------------------------------------
(State of other jurisdiction of                          (I.R.S. Employer
incorporation or organization)                         Identification Number)

8014 SW 135 STREET ROAD, OCALA, FLORIDA                        34473
-------------------------------------------------------------------------------
(Address of principal executive office)                     (Zip Code)

Registrant's telephone number, including area code        (352)307-8100
                                                   ----------------------------

     Indicate  by check mark  whether the  registrant  (1) has filed all reports
required to be filed by Section 13 or 15(d) of  Securities  Exchange Act of 1934
during the preceding 12 months (or for such shorter  period that the  registrant
was  required  to file such  reports),  and (2) has been  subject to such filing
requirements for the past 90 days. Yes X    No
                                      ---      ---

     Indicate the number of shares outstanding of the issuer's classes of common
stock, as of the latest practicable date:  13,544,277 shares of common stock, $1
par value, excluding treasury stock, as of June 30, 2001.



<PAGE>



                          PART I- FINANCIAL INFORMATION


ITEM 1. FINANCIAL STATEMENTS

                    THE DELTONA CORPORATION AND SUBSIDIARIES
                    ----------------------------------------
                 UNAUDITED CONSOLIDATED CONDENSED BALANCE SHEETS
                 -----------------------------------------------
                       JUNE 30, 2001 AND DECEMBER 31, 2000
                       -----------------------------------
                                 ($000 Omitted)

                                                          June 30,  December 31,
                                                            2001        2000
                                                          --------  ------------
ASSETS

Cash and cash equivalents, including escrow deposits
 and restricted cash of $474 in 2001 and $587 in 2000...  $    786  $     680
                                                          --------  ---------
Contracts receivable for land sales - net...............       978      1,554
                                                          --------  ---------
Mortgages and other receivables - net...................       149        140
                                                          --------  ---------

Inventories (b):
 Land and land improvements.............................     8,226      8,375
 Homes under construction...............................     1,486      1,361
                                                          --------  ---------
               Total inventories........................     9,712      9,736
                                                          --------  ---------

Property, plant, and equipment at cost - net............       473        455
Prepaid expenses and other..............................     1,158      1,403
                                                          --------  ---------
       Total............................................  $ 13,256  $  13,968
                                                          ========  =========


                LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)


Mortgages and similar debt(c):
 Mortgage notes payable.................................  $  4,800  $   5,400
 Other loans ...........................................     6,244      5,572
                                                          --------  ---------
   Total mortgages and similar debt.....................    11,044     10,972

Accounts payable, accrued expenses,
 customers' deposits....................................     6,131      6,490
Deferred revenue........................................     4,852      5,345
                                                          --------  ---------
Total liabilities.......................................    22,027     22,807
                                                          --------  ---------

Commitments and contingencies (d):

Stockholders' equity (deficiency):
  Common stock, $1 par value - authorized
  15,000,000 shares; outstanding: 13,544,277 shares
  (excluding 12,228 shares held in treasury.............    13,544     13,544
 Capital surplus........................................    52,384     52,270
 Accumulated deficit....................................   (74,699)   (74,653)
                                                          --------  ---------
               Total stockholders' (deficiency).........    (8,771)    (8,839)
                                                          --------  ---------
                             Total......................  $ 13,256  $  13,968
                                                          ========  =========



See accompanying notes.

                                        2

<PAGE>


<TABLE>
<CAPTION>


                    THE DELTONA CORPORATION AND SUBSIDIARIES
                    ----------------------------------------
            UNAUDITED CONDENSED STATEMENTS OF CONSOLIDATED OPERATIONS
            ---------------------------------------------------------
                            FOR THE PERIODS INDICATED
                            -------------------------
                     ($000 Omitted Except Per Share Amounts)

                                          Six Months Ended             Three Months Ended
                                     ---------------------------    ---------------------------
                                       June 30,       June 30,        June 30,       June 30,
                                         2001           2000            2001           2000
                                     ------------   ------------    ------------   ------------
<S>                                  <C>            <C>             <C>            <C>
Revenues (a):
 Net land sales ..................   $      4,092   $      2,862    $      2,198   $      1,693
 House and apartment sales .......          1,941          1,130             959            538
 Recognized improvement revenue /
  prior period sales .............             42            140              12             91
 Gain on recovery of bad debt.....            178              0               0              0
 Interest income .................            230            169              56             84
 Other revenues ..................            419            289             270             97
                                     ------------   ------------    ------------   ------------
     Total .......................          6,902          4,590           3,495          2,503
                                     ------------   ------------    ------------   ------------

Costs and expenses (a):
 Cost of sales and improvements ..          2,744          1,779           1,411            897
 Selling, general, administrative
  and other expenses .............          3,512          2,823           1,775          1,470
 Interest expense (c)(e) .........            540            459             265            205
                                     ------------   ------------    ------------   ------------
     Total .......................          6,796          5,061           3,451          2,572
                                     ------------   ------------    ------------   ------------

Net Income (Loss) ................   $        106   $       (471)   $         44   $        (69)
                                     ============   ============    ============   ============

Net Income (Loss) per common share   $        .01   $       (.03)   $        .01   $       (.01)
                                     ============   ============    ============   ============

Number of common and common
 equivalent shares ...............     13,544,277     13,544,277      13,544,277     13,544,277
                                     ============   ============    ============   ============

</TABLE>


See accompanying notes.



                                        3

<PAGE>



                    THE DELTONA CORPORATION AND SUBSIDIARIES
                    ----------------------------------------
            UNAUDITED CONDENSED STATEMENTS OF CONSOLIDATED CASH FLOWS
            ---------------------------------------------------------
                            FOR THE SIX MONTHS ENDED
                            ------------------------
                         JUNE 30, 2001 AND JUNE 30, 2000
                         -------------------------------
                                 ($000 Omitted)


                                                         Six  Months Ended
                                                        -------------------
                                                        June 30,   June 30,
                                                          2001       2000
                                                        --------   --------

Cash flows from operating activities ................   $(3,086)   $(2,758)
                                                        -------    -------

Cash flows from investing activities:
 Payment for acquisition and construction of property,
  plant and equipment ...............................       (47)        (1)
                                                        -------    -------
Net cash provided by (used in) investing activities .       (47)        (1)
                                                        -------    -------

Cash flows from financing activities:
  New borrowings ....................................     3,239      2,808
                                                        -------    -------
Net cash provided by (used in) financing activities .     3,239      2,808
                                                        -------    -------

Net increase (decrease) in cash and cash equivalents
 (including escrow deposits and restricted cash) ....       106         49

Cash and cash equivalents beginning of period .......       680        548
                                                        -------    -------

Cash and cash equivalents end of period .............   $   786    $   597
                                                        =======    =======



See accompanying notes.


                                        4

<PAGE>



                    THE DELTONA CORPORATION AND SUBSIDIARIES
                    ----------------------------------------
            UNAUDITED CONDENSED STATEMENTS OF CONSOLIDATED CASH FLOWS
            ---------------------------------------------------------
                           FOR THE SIX MONTHS ENDED
                           ------------------------
                       JUNE 30, 2001 AND JUNE 30, 2000
                       -------------------------------
                                 ($000 Omitted)

                                                             Six Months Ended
                                                             ----------------
                                                          June 30,      June 30,
                                                            2001          2000
                                                          --------     ---------

Reconciliation of net income (loss) to net cash
 provided by (used in) operating activities:

  Net income (loss).....................................  $    106     $   (471)
                                                          --------     --------

Adjustments to reconcile net loss to net cash
 provided by (used in) operating activities:

  Depreciation and amortization.........................        30           25
  Provision for estimated uncollectible sales-net.......     1,247          499
  Contract valuation discount, net of amortization......       (48)          97
  Imputed Interest on debt with related party...........       113          190
  Net change in assets and liabilities..................    (4,534)      (3,098)
                                                          --------     --------
               Total adjustments........................  $ (3,159)   $  (2,287)
                                                          --------    ---------

  Net cash provided by (used in) operating activities...  $ (3,086)   $  (2,758)
                                                          ========    =========

  Supplemental disclosure of non cash investing
               and financing activities:

  Reduction of debt as a result of the conveyance
               of contracts receivable..................  $  3,167     $  2,356
                                                          ========     ========



See accompanying notes.


                                        5

<PAGE>



                    THE DELTONA CORPORATION AND SUBSIDIARIES
                    ----------------------------------------
         NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
         --------------------------------------------------------------
                                  June 30, 2001
                                  -------------

THE INFORMATION PRESENTED HEREIN AS OF JUNE 30,2001 FOR THE THREE AND SIX MONTHS
ENDED JUNE 30, 2001 AND 2000 IS UNAUDITED.

(a)  BASIS OF PRESENTATION

     The  condensed  unaudited  financial  statements  of the Company  have been
     prepared  pursuant  to the  rules and  regulations  of the  Securities  and
     Exchange  Commission (the  "Commission").  Certain information and footnote
     disclosures   normally  included  in  financial   statements   prepared  in
     accordance  with  generally  accepted   accounting   principles  have  been
     condensed or omitted  pursuant to  Commission  rules and  regulations.  The
     information  furnished  reflects,   in  the  opinion  of  management,   all
     adjustments (consisting only of normal recurring adjustments) necessary for
     a  fair  statement  of the  results  for  the  interim  periods  presented.
     Operating  results for the three and six months ended June 30, 2001 are not
     necessarily  indicative  of the results  that may be expected  for the year
     ending December 31, 2001. These condensed consolidated financial statements
     should be read in conjunction  with the financial  statements and the notes
     thereto included in the Company's latest Annual Report on Form 10-K.

     Certain amounts have been reclassified for comparative purposes.

     The  accompanying  financial  statements  of The  Deltona  Corporation  and
     subsidiaries  ("The  Company") have been prepared on a going concern basis,
     which   contemplates   the  realization  of  assets  and   satisfaction  of
     liabilities  in the normal  course of  business.  The Company has  incurred
     losses from operations  resulting in a stockholders'  deficiency as of June
     30, 2001. The Company has been dependant on its ability to obtain financing
     from  related  companies  to meet its cash  requirements.  There  can be no
     guarantee that the Company will be able to obtain  sufficient  financing in
     the  future or that  related  parties  will  continue  to make loans to the
     Company.   The  consolidated   financial  statements  do  not  include  any
     adjustments  relating to the  recoverability of asset amounts or the amount
     of liabilities should the Company be unable to continue as a going concern.

(b)  INVENTORIES

     Information  with  respect to the  classification  of inventory of land and
     improvements  including  land held for sale or  transfer  is as follows (in
     thousands):

                              Land and Improvements
                              ---------------------
                                                      June 30,     December 31,
                                                        2001          2000
                                                      --------     ------------
        Unimproved land.............................  $    420     $    420
        Land in various stages of development.......     1,770        2,316
        Fully improved land.........................     6,036        5,639
                                                      --------     --------
              Total.................................  $  8,226     $  8,375
                                                      ========     ========
(c)  MORTGAGES AND SIMILAR DEBT

     The  following  table  presents  information  with respect to mortgages and
     similar debt (in thousands):
                                                      June 30,     December 31,
                                                        2001          2000
                                                      --------     ------------
        Mortgage Notes Payable ...................... $  4,800     $   5,400
        Other Loans..................................    6,244         5,572
                                                      --------     ---------
              Total mortgages and similar debt....... $ 11,044     $  10,972
                                                      ========     =========

                                       6

<PAGE>



     Included in Mortgage  Notes Payable is the Yasawa loan  ($4,800,000 at June
     30, 2001); included in Other Loans is the Swan loan ($6,244,000 of June 30,
     2001).

     Indebtedness  under various purchase money mortgages and loan agreements is
     collateralized  by  substantially  all of the Company's  assets,  including
     stock of certain wholly-owned subsidiaries.  The Company's outstanding debt
     to Yasawa is  secured by a first lien on the  Company's  receivables  and a
     mortgage on all of the Company's  property;  and the Company's  outstanding
     debt to Swan is secured by a second lien on the Company's receivables.

     As of December 31,  1999,  the Company had  satisfied  its  principal  debt
     obligation to Scafholding.  The Company's  outstanding debt to Yasawa as of
     June 30, 2001 was  $4,800,000.  The terms of repayment of the  restructured
     Yasawa  loan  provide for monthly  payments of  principal  in the amount of
     $100,000  payable  monthly in cash or with contracts  receivable at 100% of
     face value,  plus interest payable monthly on the declining  balance at the
     rate,  effective January 1, 1999, of 6% per annum in cash or with contracts
     receivable  at 65% of face  value.  The  interest  rate was  again  changed
     effective  January 1, 2001 to the prime rate, to be adjusted  semi-annually
     thereafter,  to equal the prime rate then in effect.  From  January 2001 to
     June 2001, the interest rate on the  outstanding  debt was 9.5%,  which was
     prime. As of July 2001, the interest rate on the outstanding  debt has been
     adjusted to 6.5%,  which  equals the prime rate as of July 1, 2001.  Yasawa
     and Scafholding  did not require the Company to make interest  payments for
     the period  September  1, 1998 to June 30, 2001.  As of June 30, 2001,  the
     total amount of interest accrued is approximately $1,296,000.

     From  October 9, 1998  through  the  present,  Swan  continued  to loan the
     Company  funds to meet its  working  capital  requirements.  The  Company's
     outstanding  debt  to  Swan,  which  is  secured  by a  second  lien on the
     Company's  receivables,  was  $6,244,000  as of June 30, 2001.  The Company
     signed a promissory  note to Swan in March 1999 which  provides  that funds
     advanced  by Swan will be paid back by the  Company  monthly  in  contracts
     receivables at 90% of face value,  with recourse.  There is no interest for
     the first six months after an advance of money is received from Swan by the
     Company;  thereafter  the  interest  was 6% per  annum  on the  outstanding
     balance of the advance.  The interest rate was changed effective January 1,
     2001 to the prime rate, to be adjusted semi-annually  thereafter,  to equal
     the prime rate then in effect. Each time an advance is made, a supplemental
     note is signed.  The amount of each  monthly  payment will vary and will be
     dependent  upon  the  amount  of  contracts  receivable  in  the  Company's
     portfolio,  excluding  contracts  receivable  held as collateral  for prior
     receivable sales. Pursuant to the terms of the promissory note, the Company
     is  required  to transfer  to Swan  monthly as debt  repayment  all current
     contracts  receivable in the Company's portfolio in excess of the aggregate
     sum of  $500,000.  Funds  advanced by Swan were used by the Company to meet
     the Company's working capital requirements. From January 2001 to June 2001,
     the interest rate on the outstanding  debt was 9.5%, which was prime. As of
     July 2001, the interest rate on the  outstanding  debt has been adjusted to
     6.5%,  which equals the prime rate as of July 1, 2001. As of June 30, 2001,
     the total amount of interest accrued is approximately $461,000.

     During the period of time which the  interest  rate was at 6%, the  Company
     recorded  interest  expense on all outstanding  debt balances to Yasawa and
     Swan at 8%, the Company's  incremental borrowing rate. Effective January 1,
     2001, the Company's incremental borrowing rate is adjusted semi-annually to
     equal the prime rate. The  difference  between  interest  calculated at the
     Company's incremental borrowing rate and the amount accrued under the terms
     of the respective  notes was recorded as capital  contribution  increase to
     capital surplus.

(d)  COMMITMENTS AND CONTINGENCIES

     Homesite  sales  contracts  provide  for the return of all  monies  paid in
     (including  paid-in  interest)  should  the  Company  be unable to meet its
     contractual  obligations after the use of reasonable diligence. If a refund
     is made, the Company will recover the related  homesite and any improvement
     thereto.






                                        7

<PAGE>



(e)  CAPITALIZED INTEREST

     The  Company   capitalizes   interest  cost  incurred  during  a  project's
     construction  period.  Of the total  interest cost incurred of $639,000 and
     $506,000  for the six  months  ended  June 30,  2001  and  June  30,  2000,
     respectively, interest in the amount of $99,000 and $47,000 was capitalized
     for the six months ended June 30, 2001 and 2000, respectively.

(f)  EARNINGS OR LOSS PER SHARE

     Basic earnings (loss) per common and common  equivalent share were computed
     by dividing net income (loss) by the weighted  average  number of shares of
     Common Stock and common stock equivalents outstanding during each period.

(g)  RELATED PARTY TRANSACTION

     In January 2000, the Company purchased 16 lots and homes under construction
     from  Scafholding  for  approximately   $862,000.  This  amount  represents
     Scafholding's  lot cost and  payments  to date to the  home  builder.  This
     transaction  was 100%  financed  by Swan under its  existing  note  payable
     arrangement.


                                        8

<PAGE>



ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS

RESULTS OF OPERATIONS
---------------------
For the six months ended June 30, 2001 and June 30, 2000.

Revenues
--------

Total revenues were $6,902,000 for the first six months of 2001 ($3,495,000 for
the quarter ending June 30, 2001) compared to $4,590,000 for the comparable 2000
period ($2,503,000 for the quarter ending June 30,2000).

Gross land sales were $5,453,000 for the first six months of 2001($2,937,000 for
the quarter  ending June 30,  2001)  compared  to  $3,497,000  for the first six
months of 2000 ($1,965,000 for the quarter ending June 30, 2000). Net land sales
(gross land sales less estimated  uncollectible  installment  sales and contract
valuation   discount)   increased  to   $4,092,000   the  first  six  months  of
2001($2,198,000 for the quarter ending June 30, 2001) compared to $2,862,000 for
the first six months of 2000  ($1,693,000 for the quarter ending June 30, 2000).
The  increase  in  sales  reflects  higher  sales by the  Company's  independent
dealers.

Housing  revenues  were  $1,941,000  for the  first six  months  of 2001  versus
$1,130,000 for the  comparable  2000 period.  Revenues are not  recognized  from
housing sales until the completion of construction and passage of title. Housing
revenues  increased  as of result of higher sales by the  Company's  independent
dealer  network.  The backlog of houses under contract was $2,501,000 as of July
17, 2001.  The backlog of houses under contract was $1,989,000 and $5,613,000 as
of June 30, 2001 and June 30, 2000, respectively.

The following table reflects the Company's real estate product mix for the
periods indicated (in thousands):

                              Six Months Ended       Three Months Ended
                            --------------------   ----------------------
                            June 30,   June 30,    June 30,      June 30,
                              2001       2000        2001          2000
                            --------   --------    --------      --------
        Gross Land Sales:
        Retail Sales*       $ 5,453    $ 3,497     $ 2,937       $ 1,965
                            -------    -------     -------       -------
        Housing Sales:        1,941      1,130         959           538
                            -------    -------     -------       -------
        Total Real Estate   $ 7,394    $ 4,627     $ 3,896       $ 2,503
                            =======    =======     =======       =======
------------------
*    New retail land sales contracts  entered into,  including  deposit sales on
     which the Company has  received  less than 20% of the sales  price,  net of
     cancellations,  for the six months  ended June 30,  2001 and June 30,  2000
     were $5,715,000 and $4,470,000,  respectively and $3,320,000 and $2,971,000
     for the  three  months  ended  June 30,  2001 and 2000,  respectively.  The
     Company had a backlog of approximately  $4,233,000 in unrecognized sales as
     of June 30,  2000.  Such  contracts  are not  included in retail land sales
     until the  applicable  rescission  period has  expired  and the Company has
     received payments totaling 20% of the contract sales price.

Improvement  revenues  result from  recognition of revenues  deferred from prior
period sales.  Recognition occurs as development work proceeds on the previously
sold  property  or  customers  are  exchanged  to a developed  lot.  Improvement
revenues  totaled  $41,000  for the first six  months of 2001  ($12,000  for the
second quarter of 2001) versus  $140,000 for the comparable 2000 period ($91,000
for the second quarter of 2000).

Interest income was $230,000 for the first six months of 2001  ($56,000 for the
second quarter of 2001) versus $169,000 for the comparable  2000 period ($84,000
for  the  second quarter of 2000).   The increase  is  the result of a favorable
adjustment to the valuation allowance as a result of the cancellation of a large
contract receivable in the first quarter of 2001.

Other revenues were $419,000 for the first six months of 2001 ($270,000 for the
second quarter of 2001) versus $289,000 for the comparable 2000 period ($97,000
for the second quarter of 2000). Other revenues are principally generated by the
Company's title insurance and real estate brokerage subsidiaries.

                                        9

<PAGE>



Costs and Expenses
------------------

Costs and expenses were $6,796,000 for the first six months of 2001  ($3,451,000
for the second quarter of 2001) versus $5,061,000 for the comparable 2000 period
($2,572,000  for the second quarter of 2000).  Cost of sales were $2,744,000 for
the first six months of 2001  ($1,411,000 for the second quarter of 2001) versus
$1,779,000  for the comparable  2000 period  ($897,000 for the second quarter of
2000).

Commissions,  advertising and other selling expenses totaled  $2,495,000 for the
first six  months of 2001  ($1,283,000  for the second  quarter of 2001)  versus
$1,852,000 for the comparable 2000 period  ($1,005,000 for the second quarter of
2000). Higher retail land sales resulted in increased commission expense.  Other
selling  expenses  increased  to $630,  000 for the  first  six  months  of 2001
($354,000  for the second  quarter of 2001) versus  $574,000 for the  comparable
2000 period  ($315,000 for the second  quarter of 2000) as a result of increased
jobsite expenses. Advertising and promotional expenses decreased to $135,000 for
the first six months of 2001  ($47,000  for the second  quarter of 2001)  versus
$227,000 for the  comparable  2000 period  ($107,000  for the second  quarter of
2000).

General and  administrative  expenses  were $729,000 for the first six months of
2001  ($348,000  for  the  second  quarter  of  2001)  versus  $684,000  for the
comparable  2000 period  ($321,000 for the second quarter of 2000).  General and
administrative expenses increased primarily due to increased overhead expenses.

Real  estate  tax  expenses  were  $288,000  for the  first  six  months of 2001
($144,000  for the second  quarter of 2001) versus  $287,000 for the  comparable
2000 period ($144,000 for the second quarter of 2000).

Interest expense was $540,000 for the first six months of 2001 ($265,000 for the
second  quarter of 2001) versus  $459,000  ($205,000  for the second  quarter of
2000).  The  increase  in interest  expense is a result of higher debt  balances
accruing interest at a higher interest rate.

Net Income (Loss)
-----------------

The Company  reported  net income of  $106,000  for the first six months of 2001
($44,000 for the second quarter of 2001) versus a net loss of ($471,000) for the
comparable 2000 period (a loss of ($69,000) for the second quarter of 2000).


Regulatory Developments which may affect Future Operations
----------------------------------------------------------

In Florida, as in many growth areas, local governments have sought to limit
or control population growth in their communities  through  restrictive  zoning,
density reduction,  the imposition of impact fees and more stringent development
requirements.  Although the Company has taken such factors into consideration in
its master  plans by  agreeing,  for example,  to make  improvements,  construct
public  facilities and dedicate  certain  property for public use, the increased
regulation  has  lengthened  the  development  process and added to  development
costs.

The  implementation  of the Florida  Growth  Management  Act of 1985 (the "Act")
precludes  the issuance of  development  orders or permits if public  facilities
such  as  transportation,  water  and  sewer  services  will  not  be  available
concurrent  with  development.  Development  orders have been  issued  for,  and
development  has  commenced  in,  the  Company's   existing   communities  (with
development  being  completed  in  certain  of  these  communities).  Thus,  the
Company's  communities  are  less  likely  to be  affected  by  the  new  growth
management policies than future communities. Any future communities developed by
the Company will be strongly impacted by new growth management  policies.  Since
the Act and its implications  are consistently  being re- examined by the State,
together  with  local  governments  and  various  state and  local  governmental
agencies,  the Company  cannot  further  predict the timing or the effect of new
growth management policies,  but anticipates that such policies may increase the
Company's permitting and development costs.

The Company's  real estate  business is subject to regulation by various  local,
state  and  federal  agencies.  The  communities  are  increasingly  subject  to
substantial regulation as they are planned, designed and constructed, the nature
of such regulation extending to improvements,  zoning, building,  environmental,
health and related matters. Although the Company has been able

                                       10

<PAGE>



to  operate  within  the  regulatory  environment  in the past,  there can be no
assurance that such  regulations  could not be made more restrictive and thereby
adversely affect the Company's operations.

LIQUIDITY AND CAPITAL RESOURCES

      MORTGAGES AND SIMILAR DEBT

From June 19,  1992  through  March 1999,  the  Company  had  entered  into loan
agreements with Selex International B.V., a Netherlands  corporation  ("Selex"),
Yasawa  Holdings,  N.V., a Netherlands  Antilles  Corporation  ("Yasawa"),  Swan
Development Corporation ("Swan") and related parties, including Scafholding B.V.
("Scafholding").  Since December,  1992, the Company has been dependent on loans
and advances from Selex,  Yasawa, Swan and their affiliates in order to meet its
working capital requirements.

As of December 31, 1999, the Company had satisfied its principal debt obligation
to Scafholding. The Company's outstanding debt to Yasawa as of June 30, 2001 was
$4,800,000.  The terms of repayment of the restructured  Yasawa loan provide for
monthly  payments of principal in the amount of $100,000 payable monthly in cash
or with  contracts  receivable  at 100% of face  value,  plus  interest  payable
monthly on the declining  balance at the rate,  effective January 1, 1999, of 6%
per  annum  in cash or  with  contracts  receivable  at 65% of face  value.  The
interest rate was again changed  effective January 1, 2001 to the prime rate, to
be adjusted  semi-annually  thereafter,  to equal the prime rate then in effect.
From January 2001 to June 2001,  the interest rate on the  outstanding  debt was
9.5%,  which was prime.  As of July 2001,  the interest rate on the  outstanding
debt has been adjusted to 6.5%,  which equals the prime rate as of July 1, 2001.
Yasawa and Scafholding did not require the Company to make interest payments for
the period  September 1, 1998 to June 30, 2001.  As of June 30, 2001,  the total
amount of interest accrued is approximately $1,296,000.

From  October 9, 1998  through  the  present,  Swan  continued  to loan the
Company  funds  to  meet  its  working  capital   requirements.   The  Company's
outstanding  debt to Swan,  which is secured by a second  lien on the  Company's
receivables, was $6,244,000 as of June 30, 2001. The Company signed a promissory
note to Swan in March 1999 which  provides  that funds  advanced by Swan will be
paid back by the Company monthly in contracts  receivables at 90% of face value,
with recourse. There is no interest for the first six months after an advance of
money is received from Swan by the Company;  thereafter  the interest was 6% per
annum on the outstanding  balance of the advance.  The interest rate was changed
effective  January  1,  2001 to the prime  rate,  to be  adjusted  semi-annually
thereafter,  to equal the prime  rate then in  effect.  Each time an  advance is
made, a  supplemental  note is signed.  The amount of each monthly  payment will
vary and will be  dependent  upon the  amount  of  contracts  receivable  in the
Company's portfolio, excluding contracts receivable held as collateral for prior
receivable  sales.  Pursuant to the terms of the promissory note, the Company is
required to transfer to Swan  monthly as debt  repayment  all current  contracts
receivable  in  the  Company's  portfolio  in  excess  of the  aggregate  sum of
$500,000.  Funds advanced by Swan were used by the Company to meet the Company's
working capital requirements.  From January 2001 to June 2001, the interest rate
on the outstanding debt was 9.5%, which was prime. As of July 2001, the interest
rate on the outstanding  debt has been adjusted to 6.5%,  which equals the prime
rate as of July 1,  2001.  As of June 30,  2001,  the total  amount of  interest
accrued is approximately $461,000.

The following table presents information with respect to mortgages and similar
debt (in thousands):
                                                     June 30,     December 31,
                                                        2001          2000
                                                      --------     ------------
        Mortgage Notes Payable ...................... $  4,800     $   5,400
        Other Loans..................................    6,244         5,572
                                                      --------     ---------
              Total mortgages and similar debt....... $ 11,044     $  10,972
                                                      ========     =========

--------------
        Included in Mortgage Notes Payable is the Yasawa loan ($4,800,000
        at June 30, 2001); included in Other Loans is the Swan loan
        ($6,244,000 as of June 30, 2001).


                                       11

<PAGE>




        CONTRACTS AND MORTGAGES RECEIVABLE SALES

In 1990 and 1992,  the  Company  sold  contracts  and  mortgages  receivable  to
unrelated third parties.  These transactions,  among other things,  require that
the Company replace or repurchase any receivable that becomes 90 days delinquent
upon the  request of the  purchaser.  Such  requirement  can be  satisfied  from
contracts  in which  the  purchaser  holds a  security  interest  (approximately
$1,298,000  as of June  30,  2001).  The  Company  has  fully  reserved  for the
estimated  future  cancellations  of  these  contracts  based  on the  Company's
historical  experience for receivables  the Company  services and believes these
reserves to be adequate.  The Company did not replace any delinquent receivables
in 2000 or 2001.  As of June 30, 2001 and  December  31,  2000,  $1,180,000  and
$1,210,000 of these receivables were delinquent, respectively.

Since 1997, the Company sold contracts and mortgages receivable to related third
parties,  Scafholding and Swan. These transactions,  among other things, require
that the Company  replace any receivable  that becomes  eligible to be canceled.
Such requirement is satisfied monthly from contracts in the Company's receivable
portfolio  not otherwise  secured to unrelated  third  parties.  The Company has
fully reserved for the estimated  future  cancellations of these contracts based
on the Company's historical  experience for receivables the Company services and
believes these reserves to be adequate.

The  Company  was  the  guarantor  of  approximately  $17,780,000  of  contracts
receivable  sold  or  transferred  as of June  30,  2001,  for the  transactions
described  above.  There  are  no  funds  on  deposit  with  purchasers  of  the
receivables  as security to assure  collectibility  as of such date. A provision
has been established for the Company's  obligation under the recourse provisions
of which approximately $2,595,000 remains at June 30, 2001. The Company has been
in  compliance  with all  receivable  transactions  since  the  consummation  of
receivable sales.

In the  future,  if the Company  elects to do so,  Yasawa and  Scafholding  have
agreed to purchase contracts receivable at 65% of face value, with recourse. The
Company has an agreement  with Swan whereby Swan will loan the Company  funds to
be repaid with contracts receivable at 90% of face value, with recourse.

       ACQUISITION OF HOMES UNDER CONSTRUCTION

In January 2000, the Company purchased 16 lots and homes under construction from
Scafholding for approximately $862,000. This amount represents Scafholding's lot
cost  and  payments  to date to the  home  builder.  This  transaction  was 100%
financed by Swan under its existing note payable arrangement.

       LIQUIDITY

Retail land sales have  traditionally  produced  negative  cash flow through the
point of sale as a result of a regulatory  requirement  to sell fully  developed
lots and the additional  requirement to pay marketing and selling expenses prior
to or shortly  after the point of sale. In an effort to offset the negative cash
flow  effects of  installment  land sales,  the  Company is  directing a greater
portion  of its  marketing  efforts  to the sale of lots  with  homes and is now
offering lots for sale in compulsory  building  areas where a lot purchaser must
complete  payments for the lot and  construct a home within a limited  period of
time.

The Company has been  dependent on its ability to sell or otherwise  finance its
contracts   receivable   and/or   secure  other   financing  to  meet  its  cash
requirements.  Since 1992,  the Company has been  largely  dependent  on Yasawa,
Scafholding  and Swan and related  parties for the financing of its  operations.
Although  Scafholding has purchased contracts  receivables at the rate of 65% of
face value, with recourse,  and Swan has loaned the Company  additional funds to
be paid back with  contracts  receivable at the rate of 90% of face value,  with
recourse,  there can be no  guarantee  that the Company will be able to generate
sufficient  receivables  to obtain  sufficient  financing  in the future or that
Yasawa, Scafholding,  Swan and other related parties will continue to make loans
to the Company.

                                       12

<PAGE>




                           PART II - OTHER INFORMATION
                           ---------------------------


ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.

        (a)  Exhibits

             None.

        (b)  Reports on Form 8-K

             None.



                                    SIGNATURE
                                    ---------

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.



                                                  THE DELTONA CORPORATION



Date: August 8, 2001                          By: /s/John Battle
      --------------                              -----------------------------
                                                  John  Battle
                                                  Treasurer
                                                  (Principal Financial Officer)


                                       13

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