SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 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 June 30, 2000
                                                 -------------

                                       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 0-21940

                                 Donnkenny, Inc.
                                ---------------
               (Exact name of registrant as specified in its charter)

                      Delaware                 51-0228891
                      --------                 ----------
               (State or jurisdiction of       (I R.S. Employer
           incorporation or organization)      Identification No.)

                          1411 Broadway, New York, NY 10018
                          ---------------------------------
                 (Address of principal executive offices) (Zip Code)

          Registrant's telephone number, including area code (212) 790-3900
                                                             --------------

                                 NOT APPLICABLE
                                 --------------
              (Former name, former address and former fiscal year,
                         if changed since last report.)

          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 12 months (or for such shorter
  period that the registrant was required to file such reports), Yes X No   and
  (2) has been the subject to such filing requirements for the past 90 days.
  Yes   X No.

           Indicate the number of shares outstanding of each of the issuer's
  classes of Common Stock, as of the latest practicable date.

      Common Stock $0.01 par value                   3,617,417
      ----------------------------     -------------------------------
               (Class)                 (Outstanding at August 9, 2000)


<PAGE>


                           DONNKENNY, INC AND SUBSIDIARIES

                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (FORM 10-Q)

  PART I - FINANCIAL INFORMATION                                           Page
                                                                           ----

  Consolidated financial statements:

          Independent Accountants' Report

          Balance sheets as of June 30, 2000 (unaudited) and
          December 31, 1999 ..........................................      I-1

          Statements of operations for the three and six months ended
          June 30, 2000 and 1999 (unaudited) .........................     II-1

          Statements of cash flows for the three and six months ended
          June 30, 2000 and 1999 (unaudited) .........................    III-1

          Notes to Consolidated Financial Statements (unaudited) .....   IV-1-4

          Management's Discussion and Analysis of Financial Condition
          and Results of Operations ..................................    V-1-4

  PART II - OTHER INFORMATION
          Legal Proceedings and Other Information ....................   VI-1-2
          Exhibits and Reports on Form 8-K ...........................     VI-3
          Signatures .................................................     VI-4


<PAGE>


                           INDEPENDENT ACCOUNTANTS' REPORT

  To the Board of Directors and Stockholders of Donnkenny, Inc.

  We have reviewed the accompanying consolidated balance sheet of Donnkenny,
  Inc. and subsidiaries as of June 30, 2000, and the related consolidated
  statements of operations for the three-month and six-month periods ended June
  30, 2000 and 1999 and cash flows for the six-month periods ended June 30, 2000
  and 1999. These financial statements are the responsibility of the Company's
  management.

  We conducted our review in accordance with standards established by the
  American Institute of Certified Public Accountants. A review of interim
  financial information consists principally of applying analytical procedures
  to financial data and of making inquiries of persons responsible for financial
  and accounting matters. It is substantially less in scope than an audit
  conducted in accordance with auditing standards generally accepted in the
  United States of America, the objective of which is the expression of an
  opinion regarding the financial statements taken as a whole. Accordingly, we
  do not express such an opinion.

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

  We have previously audited, in accordance with auditing standards generally
  accepted in the United States of America, the consolidated balance sheet of
  Donnkenny, Inc. and subsidiaries as of December 31, 1999, and the related
  consolidated statements of operations, stockholders' equity, and cash flows
  for the year then ended (not presented herein); and in our report dated March
  22, 2000 (March 31, 2000 as to note 13 and April 13, 2000 as to note 6), we
  expressed an unqualified opinion on those consolidated financial statements.
  In our opinion, the information set forth in the accompanying consolidated
  balance sheet as of December 31, 1999 is fairly stated, in all material
  respects, in relation to the consolidated balance sheet from which it has been
  derived.

  DELOITTE & TOUCHE LLP
  New York, New York
  August 9, 2000


<PAGE>


                         DONNKENNY, INC AND SUBSIDIARIES
                           Consolidated Balance Sheets
                      (In thousands, except per share data)

  <TABLE>
  <CAPTION>

                                                                        June 30,                December 31,
                                                                          2000                     1999
                                                                    -----------------        -----------------

                                                                       (Unaudited)
  <S>                                                                <C>                     <C>
  CURRENT ASSETS

       Cash ......................................................   $        45             $        180
       Accounts receivable - net of allowances of
       $413 and $382, respectively ...............................        21,871                   30,022
       Recoverable income taxes                                              189                      304
       Inventories ...............................................        21,864                   29,323
       Deferred tax assets .......................................         2,178                    2,865
       Prepaid expenses and other current assets .................         1,099                      636
       Assets held for sale ......................................           358                      456
                                                                     -----------               ----------
       Total current assets ......................................        47,599                   63,786
  PROPERTY, PLANT AND EQUIPMENT, NET .............................         5,518                    5,981
  OTHER ASSETS ...................................................           513                      546
  INTANGIBLE ASSETS ..............................................        30,829                   31,524
                                                                     -----------               ----------

  TOTAL .........................................................    $    84,459               $  101,837
                                                                     ===========               ==========
  LIABILITIES AND STOCKHOLDERS' EQUITY
  CURRENT LIABILITIES:

         Current portion of long-term debt ......................    $     1,175               $    1,168
         Accounts payable .......................................         10,174                   10,351

         Accrued expenses and other current liabilities .........          1,634                    3,965
                                                                     -----------               ----------

            Total current liabilities ...........................         12,983                   15,484
                                                                     -----------               ----------
  LONG-TERM DEBT ................................................          32453                   41,607
  DEFERRED TAX LIABILITIES ......................................          2,178                    2,865

  COMMITMENTS AND CONTINGENCIES

  STOCKHOLDERS' EQUITY:

      Preferred stock $.O1 par value; authorized 500
        shares , issued none ....................................              _                        -
      Common stock, $.O1 par value. Authorized 10,000
        shares, issued and outstanding 3,617 and 3,557 shares
       in 2000 and 1999, respectively                                         36                       36
      Additional paid-in capital ................................         48,582                   47,877
      Issuable shares for litigation settlement .................          1,875                    1,875
      Deficit                                                            (13,648)                  (7,907)
                                                                      ----------               ----------
     Total Stockholders' Equity .................................         36,845                   41,881
                                                                      ----------               ----------
  TOTAL..........................................................    $    84,459              $   101,837
                                                                     ===========               ==========
  </TABLE>

              See accompanying notes to consolidated financial statements


                                       I-1
<PAGE>



                         DONNKENNY, INC AND SUBSIDIARIES
                      Consolidated Statements of Operations

                 (In thousands, except share and per share data)
                                   (Unaudited)

<TABLE>
<CAPTION>

                                                            Three Months Ended                 Six Months Ended
                                                    ---------------------------------  --------------------------------
                                                     June 30, 2000     June 30, 1999    June 30, 2000    June 30, 1999
                                                    ---------------   ---------------  ---------------  ---------------
<S>                                                   <C>                <C>              <C>             <C>
NET SALES .........................................   $   27,733         $   34,708       $   70,127      $   85,759

COST OF SALES .....................................       22,262             27,898           58,073          66,900
                                                      ----------         ----------       -----------     ----------

  Gross profit ....................................        5,471              6,810           12,054          18,859

OPERATING EXPENSES:
  Selling, general and administrative expenses ....        6,224              7,667           14,395          16,940
  Provision for settlement of litigation ..........            -              6,394                -           6,394
  Amortization of goodwill and other related
   acquisition costs ..............................          347                347              695             695
  Restructuring charge ............................                               -              500               -
                                                      ----------         ----------       -----------     ----------

       Operating loss .............................       (1,100)            (7,598)          (3,536)         (5,170)

INTEREST EXPENSE ..................................        1,081              1,298            2,122           2,098
                                                      ----------         ----------       -----------     ----------
       Loss before income taxes ...................       (2,181)            (8,896)          (5,658)         (7,268)

INCOME TAXES (BENEFIT) ............................           58                (83)              83              17
                                                      ----------         ----------       -----------     ----------
       NET LOSS ...................................   $   (2,239)        $   (8,813)      $    (5,741)    $   (7,285)
                                                      ==========         ==========       ===========     ==========
  Basic earnings (loss) per common share ..........   $    (0.62)        $    (2.48)      $     (1.60)    $    (2.05)
                                                      ==========         ==========       ===========     ==========
  Shares used in the calculation of basic (loss)
     per common share .............................    3,616,098          3,550,475        3,586,758       3,546,450
                                                      ==========         ==========       ===========     ==========
  Diluted earnings (loss) per common share            $    (0.62)        $   (2.48)       $    (1.60)     $    (2.05)
                                                      ==========         ==========       ===========     ==========
  Shares used in the calculation of diluted (loss)
     per common share .............................    3,616,098          3,550,475        3,586,758       3,546,450
                                                      ==========         ==========       ===========     ==========
</TABLE>

              See accompanying notes to consolidated financial statements


                                      II-1
<PAGE>



                        DONNKENNY, INC. AND SUBSIDIARIES
                     Consolidated Statements of Cash Flows
                                 (In thousands)
                                  (Unaudited)

<TABLE>
<CAPTION>
                                                                      -------------------------------
                                                                        June 30,            June 30,
                                                                          2000                1999
                                                                      -------------------------------

<S>                                                                     <C>                  <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss .....................................................          $  (5,741)           $ (7,285)
Adjustments to reconcile net cash provided by
  operating activities:

     Provision for shares issuable on settlement of litigation ...              -               2,394
     Depreciation and amortization of fixed assets ...............            399                 405
     Write down of fixed assets ..................................            200                   -
     Net loss on disposal of fixed assets ........................              -                   5
     Amortization of intangibles and other assets ................            695                 695
     Provision for losses on accounts receivable .................             10                  17
Changes in assets and liabilities:
     Decrease in accounts receivable .............................          8,140               5,334
     Decrease in recoverable income taxes ........................            115                 338
     Decrease (increase) in inventories ..........................          7,459                (387)
     (Increase) decrease in prepaid expenses and
     other current assets ........................................           (459)                 84
     Decrease in other non-current assets ........................             33               2,135
     (Decrease) increase in accounts payable .....................           (177)                798
     Decrease in accrued expenses and
     other current liabilities ...................................         (1,626)               (877)
                                                                       ----------           ---------
          Net cash provided by operating activities ..............          9,048               3,656
                                                                       ----------           ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
     Purchase of fixed assets ...............................                (218)               (243)
     Proceeds from sale of fixed assets .....................                 181               1,320
                                                                       ----------           ---------
Net cash (used in) provided by investing activities .........                 (37)              1,077
                                                                       ----------           ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
     Net borrowings (repayment) of long-term debt ...........                (582)              2,924
     Net repayments under revolving credit line .............              (8,564)             (7,803)
                                                                       ----------           ---------
     Net cash used in financing activities ..................              (9,146)             (4,879)
                                                                       ----------           ---------
NET DECREASE IN CASH ........................................                (135)               (146)
CASH, AT BEGINNING OF PERIOD ................................                 180                 503
                                                                       ----------           ---------
CASH, AT END OF PERIOD ......................................           $     45             $    357
                                                                        =========            ========
SUPPLEMENTAL DISCLOSURES
Income taxes paid ...........................................           $     23             $     31
                                                                        =========            ========
Interest paid ...............................................           $  1,953             $  1,666
                                                                        =========            ========

SUPPLEMENTAL SCHEDULE OF NON-CASH FINANCING ACTIVITIES

Issuance of common stock.....................................           $    705             $    176
                                                                        ========             ========
</TABLE>

          See accompanying notes to consolidated financial statements.


                                      III-1

<PAGE>



                          DONNKENNY, INC. AND SUBSIDIARIES
                     Notes to Consolidated Financial Statements
                                   (Unaudited)

  NOTE 1 - BASIS OF PRESENTATION

           The accompanying unaudited consolidated financial statements have
  been prepared by the Company pursuant to the Rules of the Securities and
  Exchange Commission ("SEC") and, in the opinion of management, include all
  adjustments (consisting of normal recurring accruals) necessary for the fair
  presentation of financial position, results of operations and cash flows.
  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 such SEC rules. The
  Company believes the disclosures made are adequate to make such financial
  statements not misleading. The results for the interim periods presented are
  not necessarily indicative of the results to be expected for the full year.
  These financial statements should be read in conjunction with the Company's
  Report on Form 10-K for the year ended December 31, 1999. Balance sheet data
  as of December 31, 1999 have been derived from audited financial statements of
  the Company.

  NOTE 2 - INVENTORIES

  Inventories consist of the following:

  <TABLE>
  <CAPTION>

                                                               June 30,               December 31,
                                                                2000                      1999
                                                                ----                      ----
                                                                        (In thousands)

  <S>                                                          <C>                      <C>

  Raw materials ............................................   $   1,477                $   1,548
  Work-in-process .........................................        1,547                    2,742
  Finished goods ...........................................      18,840                   25,033
                                                                --------                 --------
                                                                $ 21,864                 $ 29,323
  </TABLE>

  NOTE 3 - DEBT

           On June 29, 1999, the Company and its operating subsidiaries signed a
  three year credit agreement (the "Credit Agreement") with CIT Group/Commercial
  Services. The Credit Agreement provides the Company with a $75 million
  facility comprised of a $72 million revolver with sublimits up to $52 million
  for direct borrowings, $35 million for letters of credit, certain overadvances
  and a $3 million term loan.

           Borrowings under the Credit Agreement originally bore interest at the
  prime rate plus one half percent. The Credit Agreement provides for advances
  of (i) up to 90% of eligible accounts receivable plus (ii) up to 60% of
  eligible inventory plus (iii) up to 60% of the undrawn amount of all
  outstanding letters of credit plus (iv) allowable overadvances. The term loan
  requires quarterly payments of $0.25 million plus all accrued and unpaid
  interest beginning September 30, 1999 through June 30, 2002. The Credit
  Agreement expires on June 30, 2002.


                                      IV-1
<PAGE>


           Collateral for the Credit Agreement includes a first priority lien on
  all accounts receivable, machinery, equipment, trademarks, intangibles and
  inventory, a first mortgage on all real property and a pledge of the Company's
  stock interest in the Company's operating subsidiaries.

           The Credit Agreement contains several financial and operational
  covenants, including limitations on additional indebtedness, liens, dividends,
  stock and capital expenditures.

           Subsequent to June 1999, the Company amended the Credit Agreement. On
  February 29, 2000, the Company entered into a Third Amendment and Waiver
  Agreement. The Third Amendment and Waiver waived any existing defaults as of
  December 31, 1999 and for the End of Month Period for January 2000 with
  respect to the Company's noncompliance with covenants related to Minimum
  Interest Coverage, EBITDA and Tangible Net Worth. Pursuant to this amendment,
  the interest rate on borrowings was increased to 1% above the prime rate
  effective February 29, 2000 and the Overadvance Amounts for 2000 were amended
  and restated. Certain covenants were also amended for the respective quarter
  ends in 2000. A fee of $75,000 was paid on February 29, 2000. On April 13,
  2000, the Company entered into a Fourth Amendment and Waiver Agreement to
  support the Company's 2000 business plan for the remainder of the year. The
  Fourth Amendment and Waiver waived any existing defaults as of the End of
  Month Period for March 2000 with respect to the Company's noncompliance with
  covenants related to Minimum Interest Coverage, EBITDA and Tangible Net Worth.
  Pursuant to this amendment, the interest rate on borrowings was increased to
  1.5% above the prime rate effective April 13, 2000 and the Overadvance Amounts
  for 2000 were amended. Certain covenants were also amended for the respective
  quarter ends in 2000. A fee of $75,000 was paid for the Fourth Amendment and
  Waiver.

           The Company also has a factoring agreement with CIT. The factoring
  agreement provides for a factoring commission equal to 0.45% of gross amount
  of sales, plus certain customary charges.

           As of June 30, 2000 and 1999, the borrowings under the Credit
  Agreement amounted to $31.5 million and $23.8 million with an interest rate of
  11.0% and 8.25%, respectively. As of June 30, 2000, the term loan
  amounted to $2.0 million.

           Other debt consists of a secured term loan that was entered into on
  June 30, 1998 in the amount of $0.483 million. As of June 30, 2000 the
  principal balance of this loan amounted to $0.175 million. The interest rate
  is fixed at 8.75% and the loan requires monthly principal and interest
  payments of $0.015 million through June 2001. Software, machinery and
  equipment secure this obligation.

  NOTE 4 - REVERSE STOCK SPLIT

           On February 15, 2000, the Company's Board of Directors adopted a
  resolution to recommend to the Company's shareholders a one for four reverse
  stock split as part of an effort to maintain continued listing of the
  Company's common stock on the NASDAQ National Market.

           The reverse stock split recommendation was approved by the Company's
  shareholders at a special meeting held on April 18, 2000. The reverse split
  became effective on April 20, 2000. As a result of the split, each four shares
  of common stock applicable to shareholders on the effective date of the split
  were converted into one share of stock. One of the requirements for continued
  listing on the NASDAQ National Market is the maintenance of a bid price for
  the Company's shares of $1.00 or higher. During the last quarter of 1999, and
  during fiscal 2000, the Company's bid price had fallen below $1.00.


                                      IV-2
<PAGE>


           Prior to the split, the Company had 14,229,540 shares outstanding. As
  a result of the split, the Company had approximately 3,557,385 shares
  outstanding. Earnings (loss) per share and share amounts have been restated to
  reflect the reverse split for all periods presented.

           By letter dated May 8, 2000, NASDAQ notified the Company that
  although the Company had achieved compliance with the listing requirement of a
  closing bid price of at least $1.00, the Company's market capitalization had
  fallen below $5.0 million which was an additional requirement for listing on
  the NASDAQ National Market. Accordingly, while the Company maintained its
  listing with NASDAQ, the Company's securities were transferred from the NASDAQ
  National Market to the NASDAQ Smallcap Market effective with the open of
  business on May 11, 2000.

           By letter dated July 18, 2000, NASDAQ notified the company that the
  Company's stock had failed to maintain the $1.00 minimum bid price over the
  last 30 consecutive trading days. Accordingly, the Company has been given 90
  days (until October 16, 2000) to regain compliance. If the Company cannot
  demonstrate compliance for a minimum of 10 consecutive days on or before the
  October 16th deadline, the Company's common stock will be delisted on October
  18, 2000.

  NOTE 5 - RESTRUCTURING CHARGE

           On March 15, 2000 the Company announced that it will be closing all
  of its domestic manufacturing plants. These facilities are located in Floyd
  and Independence, Virginia. During the first quarter ended March 31, 2000, the
  Company recorded a restructuring charge of $0.5 million which included the
  following: (i) $0.2 million to write down property, plant and equipment; and
  (ii) $0.3 million related to the cost of providing severance payments to
  approximately 200 employees terminated as a result of the facility closures.
  As of June 30, 2000, the $0.3 million has been paid out to the employees. The
  plant closings were completed by the end of May 2000. The Company has put
  these facilities up for sale as of June 2000.

  NOTE 6 -  COMMITMENTS AND CONTINGENCIES

           a. Commencing November 1996, nine class action complaints were filed
              against the company in the United States District Court for the
              Southern District of New York. Among other things, the complaints
              alleged violation of the federal securities law. By order dated
              August 11, 1998, the court certified the litigation as class
              action on behalf of all persons and entities who purchased
              publicly traded securities or sold put options of the Company
              between February 14, 1995 and November 1996.

              On October 7, 1999, the Company entered into a stipulation of
              settlement (the "Settlement") with the class action plaintiffs. In
              consideration for the discontinuance of the lawsuit with
              prejudice, the Company agreed to pay $10.0 million, of which $5.0
              million is the Company's share and the balance is payable by the
              Company's insurers; issue 3 million shares of the Company's common
              stock (which when issued will be 750,000 shares as a result of the
              reverse split), and to pursue litigation against two of the
              Company's insurers to recover under its excess insurers' policies.
              A Settlement hearing was held by the District Court and an order
              approving the settlement was signed on July 12, 2000. In 1999, the
              Company recorded a charge of $5.9 million, which represented the
              cost of the Settlement. The Company had funded its required cash
              contribution to the settlement as of March 31, 2000; except for
              the cost of the litigation with two of the Company's insurers,
              which is not expected to be material.

                                      IV-3


<PAGE>


           b. On April 27, 1998, an action was commenced against the Company in
              the United States District Court for the Western District of
              Virginia by Wanda King, a former employee of the Company. In her
              complaint, the Plaintiff claimed that she was constructively
              discharged by reason of the fact that she resigned from her
              position rather than follow alleged improper and illegal
              instructions from her supervisors and superiors. The Company has
              denied the allegations contained in the complaint. On July 26,
              1999, the District Court dismissed the complaint on the grounds
              that it failed to plead a legally recognizable case against the
              Company. On August 30, 1999 the Plaintiff filed an amended
              complaint alleging additional actions on the part of the Company
              and former employees and seeking damages against the Company in
              excess of $8.0 million. On February 1, 2000, the District Court
              ruled that the allegations in the amended Complaint, if true,
              state claims against the Company. The Company has interposed an
              answer to the Complaint denying the material allegations.

           c. The Company was a party to legal proceedings arising in the
              ordinary course of its business involving a claim by a former
              supplier of the Company. On July 1, 2000, a settlement of $220,000
              was reached with the Plaintiff in that proceeding. The settlement
              requires two lump sum payments of $62,500 and $27,500 in July and
              August, respectively. Beginning September 1, 2000 the remaining
              balance will be paid in equal monthly installments until September
              1, 2001.

  NOTE 7 - SUBSEQUENT EVENT

              On July 1, 2000 the Company acquired certain assets of Ann Travis
              Inc. ("Ann Travis") for $1.15 million. Assets acquired included
              certain merchandise inventory, the ANN TRAVIS and DECADE DESIGNS
              trademarks and the license rights for sales of womens' apparel
              under the DELTA BURKE trademark. Ann Travis designed, imported,
              and marketed women's sportswear. The purchase was funded by CIT
              under a new $1.3 million term loan which requires principal
              payment in equal installments over three years commencing January
              1, 2001. The new loan bears interest at the prime rate plus one
              and one-half percent (11% at June 30, 2000). The acquisition will
              be accounted for as a purchase.


                                      IV-4
<PAGE>


                        DONNKENNY, INC. AND SUBSIDIARIES
          MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                           AND RESULTS OF OPERATIONS
                           -------------------------

COMPARISON OF SIX MONTHS ENDED JUNE 30, 2000 AND 1999

         Net sales decreased by $15.7 million, or 18.3% from $85.8 million in
the first half of 1999 to $70.1 million in the first half of 2000. The decline
in the Company's net sales was essentially due to decreases in the Donnkenny
Label of $7.6 million (primarily due to the planned exit of the coordinate
business), the Victoria Jones label of $8.1 million, and the Casey & Max label
of $0.8 million. The decreases were partially offset by increases in the Pierre
Cardin label of $0.8 million.

         Gross profit for the first half of 2000 was $12.1 million, or 17.2% of
net sales, compared to $18.9 million, or 22.0% of net sales, during the first
half of 1999. The decrease in gross profit in dollars and as a percentage of net
sales was essentially attributable to the Company's idle domestic plant
capacity, which has now been shut down. Additionally, the decrease in gross
profit came from reduced sales levels and sell off of non-current inventory.

          Selling, general and administrative expenses decreased from $16.9
million in the first half of 1999 to $14.4 million in the first half of 2000.
The decrease in selling, general and administrative expenses was primarily due
to reductions in headcount. These reductions were partially offset by start up
costs of approximately $0.9 million for a new label.

         In the second quarter of 1999, the Company recorded a charge of $6.4
million to reflect the terms of a settlement for the Consolidated Class Action
lawsuit that were agreed to in principle by the attorneys for the plaintiffs
(see note 6 to the financial statements for further description). The terms of
settlement involves a cash payment and the issuance of shares of the Company's
common stock.

         On March 15, 2000, the Company announced that it will be closing all of
its domestic manufacturing plants. These facilities are located in Floyd and
Independence, Virginia. During the first quarter ended March 31, 2000, the
Company recorded a restructuring charge of $0.5 million which included the
following: (i) $0.3 million related to the cost of providing severance payments
to approximately 200 employees terminated as a result of the facility closures.
As of June 30, 2000, the $0.3 million has been paid out to the employees. (ii)
$0.2 million to write down property, plant and equipment. The plant closings
were completed by the end of May 2000. The Company has put these facilities up
for sale as of June 2000.

         Net interest expense was $2.1 million during the first half of 1999 and
2000.


                                      V-1
<PAGE>


  COMPARISON OF QUARTERS ENDED JUNE 30, 2000 AND 1999

           Net sales decreased by $7.0 million, or 20.2% from $34.7 million in
  the second quarter of 1999 to $27.7 million in the second quarter of 2000. The
  decline in the Company's net sales was primarily due to decreases in the
  Donnkenny Label of $3.9 million (primarily due to the planned exit of the
  coordinate business), the Victoria Jones label of $3.1 million, and the Pierre
  Cardin label of $0.9 million. The decreases were partially offset by increases
  in the Casey & Max label of $0.9 million.

           Gross profit for the second quarter of 2000 was $5.5 million, or
  19.7% of net sales, compared to $6.8 million, or 19.6% of net sales, during
  the second quarter of 1999. The decrease in gross profit dollars was primarily
  attributable to the Company's idle domestic plant capacity, which has now been
  shut down. Additionally, the decrease in gross profit came from reduced sales
  levels, and sell off of non-current inventory.

           Selling, general and administrative expenses decreased from $7.7
  million in the second quarter of 1999 to $6.2 million in the second quarter of
  2000. The decrease in selling, general and administrative expenses was
  primarily due to reductions in headcount. These reductions were partially
  offset by start up costs of approximately $0.4 million for a new label.

           In the second quarter of 1999, the Company recorded a charge of $6.4
  million to reflect the terms of a settlement for the Consolidated Class Action
  lawsuit that were agreed to in principle by the attorneys for the plaintiffs
  (see note 6 to the financial statements for further description). The terms of
  settlement involves a cash payment and the issuance of shares of the Company's
  common stock.

           Operating loss was $1.1 million for the second quarter of 2000 as
  compared to $7.6 million (inclusive of the $6.4 million reserve for the
  settlement of the consolidated Class Action) for the second quarter of 1999.

           Net interest expense decreased from $1.3 million during the second
  quarter of 1999 to $1.1 million during the second quarter of 2000. The
  decrease is primarily the result of $0.2 million of financing charges
  amortized in the second quarter of 1999 compared to $0.1 million in the second
  quarter of 2000.

  LIQUIDITY AND CAPITAL RESOURCES

           The Company's liquidity requirements arise from the funding of
  working capital needs, primarily accounts receivable and the interest and
  principal payments related to certain indebtedness. The Company's borrowing
  requirements for working capital fluctuate throughout the year.

                                       V-2


<PAGE>


           On June 29, 1999, the Company and its operating subsidiaries signed a
  three year credit agreement (the "Credit Agreement") with CIT Group/Commercial
  Services. THE CREDIT AGREEMENT PROVIDES the COMPANY with a $75 million
  facility comprised of a $72 million revolver with sublimits up to $52 million
  for direct borrowings, $35 million for letters of credit, certain overadvances
  and a $3 million term loan.

           Borrowings under the Credit Agreement originally bore interest at the
  prime rate plus one half percent. The Credit Agreement provides for advances
  of (i) up to 90% of eligible accounts receivable plus (ii) up to 60$ of
  eligible inventory plus (iii) up to 60% of the undrawn amount of all
  outstanding letters of credit plus (iv) allowable overadvances. The term loan
  requires quarterly payments of $0.25 million plus all accrued and unpaid
  interest beginning September 30, 1999 through June 30, 2002. The Credit
  Agreement expires on June 30, 2002.

           Collateral for the Credit Agreement includes a first priority lien on
  all accounts receivable, machinery, equipment, trademarks, intangibles and
  inventory, a first mortgage on all real property and a pledge of the Company's
  stock interest in the Company's operating subsidiaries, Donnkenny Apparel,
  Inc. and Beldoch Industries Corporation.

           The Credit Agreement contains numerous financial and operational
  covenants, including limitations on additional indebtedness, liens, dividends,
  stock repurchases and capital expenditures.

           Subsequent to June 1999, the Company amended the Credit Agreement. On
  February 29, 2000, the Company entered into a Third Amendment and Waiver
  Agreement. The Third Amendment and Waiver waived any existing defaults as of
  December 31, 1999 and for the End of Month Period for January 2000 with
  respect to the Company's noncompliance with covenants related to Minimum
  Interest Coverage, EBITDA and Tangible Net Worth. Pursuant to this amendment,
  the interest rate on borrowings was increased to 1% above the prime rate
  effective February 29, 2000 and the Overadvance Amounts for 2000 were amended
  and restated. Certain covenants were also amended for the respective quarter
  ends in 2000. A fee of $75,000 was paid on February 29, 2000. On April 13,
  2000, the Company entered into a Fourth Amendment and Waiver Agreement to
  support the Company's 2000 business plan. The Fourth Amendment and Waiver
  waived any existing defaults as of the End of Month Period for March 2000 with
  respect to the Company's noncompliance with covenants related to Minimum
  Interest Coverage, EBITDA and Tangible Net Worth. Pursuant to this amendment,
  the interest rate on borrowings was increased to 1.5% above the prime rate
  effective April 13, 2000 and the Overadvance Amounts for 2000 were amended.
  Certain covenants were also amended for the respective quarter ends in 2000. A
  fee of $75,000 was paid for the Fourth Amendment and Waiver.

           The Company also has a factoring agreement with CIT. The factoring
  agreement provides for a factoring commission equal to 0.45 of gross amount of
  sales, plus certain customary charges.

          As of June 30, 2000 and 1999, borrowings under the Credit Agreement
  amounted to $31.5 million compared to $23.8 million with an interest rate of
  11.0% and 8.25%, respectively. As of June 30, 2000, the term loan amounted to
  $2.0 million.

                                       V-3
<PAGE>


          During the first half of 2000, the Company's operating activities
  provided cash principally as a result of decreases in inventory and accounts
  receivable offset by decreases in accounts payable and accrued expenses.
  During the first half of 1999, the Company's operating activities provided
  cash principally as a result of decreases in accounts receivable and increases
  in accounts payable partially offset by increases in inventory and decreases
  in accrued expenses. Cash used in investing activities in the first half of
  2000 amounted to $0.04 million primarily as the result of capital purchases
  relating to the upgrades of the company's computer systems ($0.22 million)
  partially offset by the sale of machinery from the closed Virginia
  manufacturing facilities ($0.18 million). Cash provided by investing
  activities in the first half of 1999 amounted to $1.1 million primarily as the
  result of the sale of a closed Virginia manufacturing facility ($1.1 million)
  and a manufacturing unit in New York ($0.2 million) partially offset by $0.2
  million for capital purchases relating to the upgrades in the company's
  computer systems.

           The Company believes that cash flows from operations and amounts
  available under the credit agreement will be sufficient for its operating
  needs in the foreseeable future.

  SEASONALITY OF BUSINESS AND FASHION RISK

           The Company's principal products are organized into seasonal lines
  for resale at the retail level during the Spring, Summer, Transition, Fall and
  Holiday Seasons. Typically, the Company's products are designed as much as one
  year in advance and manufactured approximately one season in advance of the
  related retail selling season. Accordingly, the success of the Company's
  products is often dependent on the ability to successfully anticipate the
  needs of retail customers and the tastes of the ultimate consumer up to a year
  prior to the relevant selling season.

  REVERSE STOCK SPLIT

           On February 15, 2000, the Company's Board of Directors adopted a
  resolution to recommend to the Company's shareholders a one for four reverse
  stock split as part of an effort to maintain continued listing of the
  Company's common stock on the NASDAQ National Market. One of the requirements
  for continued listing on the NASDAQ National Market is the maintenance of a
  bid price for the Company's shares of $1.00 or higher. During the last quarter
  of 1999, and during fiscal 2000, the Company's bid price had fallen below
  $1.00.

              The reverse stock spilt recommendation was approved by the
  Company's shareholders at a special shareholders meeting held on April 18,
  2000. The reverse spilt became effective on April 20, 2000. As a result of the
  reverse spilt, each four shares of common stock on April 20, 2000 was
  converted into one share of common stock.

           Prior to the split, the Company had 14,229,540 shares outstanding. As
  a result of the split, the Company had approximately 3,557,385 shares
  outstanding. Earnings (loss) per share and share amounts have been restated to
  reflect the reverse split for all periods presented.

           By letter dated May 8, 2000, NASDAQ notified the Company that
  although the Company had achieved compliance with the listing requirement of a
  closing bid price of at least $1.00, the Company's market capitalization had
  fallen below $5 million which was an additional requirement for listing on the
  National Market. Accordingly, while the Company maintained its listing with
  NASDAQ, the Company's securities were transferred from the NASDAQ National
  Market to the NASDAQ Smallcap Market effective with the open of business on
  May 11, 2000.

                                       V-4
<PAGE>


           By letter dated July 18, 2000, NASDAQ notified the company that the
  Company's stock had failed to maintain the $1.00 minimum bid price over the
  last 30 consecutive trading days. Accordingly, the Company has been given 90
  days (until October 16, 2000) to regain compliance. If the Company cannot
  demonstrate compliance for a minimum of 10 consecutive days on or before the
  October 16th deadline, the Company's common stock will be delisted on October
  18, 2000.

  ANN TRAVIS ACQUISITION

           On July 1, 2000 the Company acquired certain assets of Ann Travis
  Inc. ("Ann Travis") for $1.15 million. Assets acquired included certain
  merchandise inventory, the ANN TRAVIS and DECADE DESIGNS trademarks and the
  license rights for sales of womens' apparel under the DELTA BURKE trademark.
  Ann Travis designed, imported, and marketed women's sportswear. The purchase
  was funded by CIT under a new $1.3 million term loan which requires principal
  payment in equal installments over three years commencing January 1, 2001. The
  new term loan bears interest at the prime rate plus one and one-half percent
  (11% at June 30, 2000). The acquisition will be accounted for as a purchase.

  RECENT ACCOUNTING PRONOUNCEMENTS

           In June 2000, the Financial Accounting Standards Board issued
  Statement of Financial Accounting Standards ("SFAS") No. 138, "Accounting for
  Certain Derivative Instruments and Certain Hedging Activities." This statement
  addresses a limited number of issues causing implementation difficulties for
  entities applying SPAS No. 133. SPAS No. 133 requires that an entity recognize
  all derivative instruments as either assets or liabilities in the balance
  sheet and measure those instruments at fair value. If certain conditions are
  met, a derivative may be specially designated as (i) a hedge of the exposure
  to changes in the fair value of a recognized asset or liability or an
  unrecognized firm commitment, (ii) a hedge of the exposure to variable cash
  flows of a forecasted transaction, or (iii) a hedge of the foreign currency
  exposure of a net investment in a foreign operation, an unrecognized firm
  commitment, an available-for-sale security, or a foreign-currency-denominated
  forecasted transaction. The accounting for changes in the fair value of a
  derivative depends on the intended use of the derivative and the resulting
  designation. This statement is effective for all fiscal quarters of fiscal
  years beginning after June 15, 2000. The Company has determined that this
  statement will not have a significant impact on its financial statements or
  disclosures, as it does not engage in derivative or hedging transactions.

           In December 1999, the securities and Exchange Commission issued Staff
  Accounting Bulletin ("SAB") No. 101, "Revenue Recognition in Financial
  Statements". This bulletin summarizes certain of the SEC Staff's view in
  applying generally accepted accounting principals to revenue recognition in
  financial statements. This bulletin, through its subsequent revised releases
  SAB No. lOlA and No. lO1B, is effective for registrants no later than the
  fourth fiscal quarter of fiscal years beginning after December 15, 1999. The
  Company does not expect the implementation of this bulletin to have a
  significant impact on the results of operations or equity of the Company.


                                       V-5
<PAGE>


                            PART II. OTHER INFORMATION

  ITEM 1. LEGAL PROCEEDINGS

           a. Commencing November 1996, nine class action complaints were filed
           against the Company in the United States District Court for the
           Southern District of New York. Among other things, the complaints
           alleged violation of the federal securities law. By order dated
           August 11, 1998, the court certified the litigation as class action
           on behalf of all persons and entities who purchased publicly traded
           securities or sold put options of the Company between February 14,
           1995 and November 1996.

           On October 7, 1999, the Company entered into a stipulation of
           settlement (the "Settlement") with the class action plaintiffs. In
           consideration for the discontinuance of the lawsuit with prejudice,
           the Company agreed to pay $10.0 million, of which $5.0 million is the
           Company's share and the balance is payable by the Company's insurers;
           issue 3 million shares of the Company's common stock (which when
           issued will be 750,000 shares as a result of the reverse split), and
           to pursue litigation against two of the Company's insurers to recover
           under its excess insurers' policies. A Settlement hearing was held by
           the District Court and an order approving the settlement was signed
           on July 12, 2000. In 1999, the Company recorded a charge of $5.9
           million, which represented the cost of the Settlement. The Company
           had funded its required cash contribution to the settlement as of
           March 31, 2000; except for the cost of the litigation with two of the
           Company's insurers, which is not expected to be material.

           b. On April 27, 1998, an action was commenced against the Company in
           the United States District Court for the Western District of Virginia
           by Wanda King, a former employee of the Company. In her complaint,
           the Plaintiff claimed that she was constructively discharged by
           reason of the fact that she resigned from her position rather than
           follow alleged improper and illegal instructions from her supervisors
           and superiors. The Company has denied the allegations contained in
           the complaint. On July 26, 1999, the District Court dismissed the
           complaint on the grounds that it failed to plead a legally
           recognizable case against the Company. On August 30, 1999, the
           Plaintiff filed an amended complaint alleging additional actions on
           the part of the Company and former employees and seeking damages
           against the Company in excess of $8.0 million. On February 1, 2000,
           the District Court ruled that the allegations in the amended
           Complaint, if true, state claims against the Company. The Company has
           interposed an answer to the Complaint denying the material
           allegations.

                                      VI-1
<PAGE>


  ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
          See Item 4 below

  ITEM 3. NOT APPLICABLE

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

           A Special Meeting of Shareholders of the Company was held on April
           18, 2000. The first item of business before the Meeting was a
           proposal to reverse split the outstanding shares of the Company's
           Common Stock on a one-for-four basis so that the 14,229,540 shares of
           the Company's Common Stock outstanding prior to the reverse split
           would become approximately 3,557,385 shares of the Company's Common
           Stock following the reverse split; all fractional shares being
           rounded up to the next nearest whole share.

           The vote on this proposal was as follows:

             FOR                   AGAINST                         ABSTAIN
             ---                   -------                          ------
           10,930,944              549,542                          20,040

           The second item of business was to amend the Company's Certificate of
           Incorporation to: (i) reduce the number of authorized shares of the
           Company's Common Stock from 20,000,000 to 10,000,000 shares; and (ii)
           affect the reverse split of the outstanding shares of the Company's
           Common Stock outstanding prior to the reverse split to become
           approximately 3,557,385 shares of the Company's Common Stock
           following the reverse split; all fractional shares being rounded up
           to the nearest whole share.

           The vote on this proposal was as follows:

             FOR                    AGAINST                       ABSTAIN
             ---                    -------                       -------

           10,956,864                515,147                      28,515

  ITEM 5. OTHER INFORMATION

           On March 28, 2000, Harry A. Katz was elected to the Board of
           Directors of the Company to fill a vacancy on the Board.


                                      VI-2
<PAGE>


  ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

  (a)      EXHIBITS

           The following documents are filed as part of this report:

           EXHIBIT NO.       DESCRIPTION OF EXHIBIT


           10.55          Asset Purchase Agreement - Ann Travis Inc.
           10.56          5th Amendment to Credit Agreement
           10.57          1st Amendment to Daniel H. Levy Employment Agreement
           10.58          Beverly Eichel Employment Agreement
           27             Financial Data Schedule

  (B)      REPORTS ON FORM B-K

           The Company filed no reports on Form B-K during the quarter ended
           June 30, 2000.


                                      VI-3
<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.

                                                 Donnkenny, Inc.
                                                 Registrant



                                                 /s/ Daniel H. Levy
  Date:    August 14, 2000                       ------------------------------
                                                 Daniel H. Levy
                                                 Chairman of the Board,
                                                 Chief Executive Officer
  Date:    August 14, 2000


                                                 /s/ Beverly Eichel
                                                 ------------------------------
                                                 Beverly Eichel
                                                 Executive Vice President
                                                 and Chief Financial Officer,
                                                 (Principal Financial Officer)


                                      VI-4