| Kansas                                                    | 48-0201080                           |
|----------------------------------------------------------------|--------------------------------------|
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
|                                                           |                                 |
| 401 Cottage StreetAbilene, Kansas                         |   67410-2832               |
| (Address of principal executive offices)                       | (Zip Code)                           |

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| TABLE OF CONTENTS |
|-------------------|
|              |   |   |   |
| PART I            | FINANCIAL INFORMATION |   |
|              | Item 1. | Financial Statements | 3 |
|              | Item 2. | Management's Discussion and Analysis of Financial Condition and Results of Operations | 9 |
|              | Item 3. | Quantitative and Qualitative Disclosure About Market Risk | 16 |
|              | Item 4. | Controls and Procedures | 17 |
|              |   |   |   |
| PART II           | OTHER INFORMATION |   |
|              | Item 1. | Legal Proceedings | 17 |
|              | Item 1A. | Risk Factors | 17 |
|              | Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 18 |
|              | Item 3. | Defaults Upon Senior Securities | 18 |
|              | Item 4. | Reserved | 18 |
|              | Item 5. | Other Information | 18 |
|              | Item 6. | Exhibits | 19 |
|              |   |   |   |
| Signature         |   |   | 21 |

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| Duckwall-ALCO Stores, Inc.                                                                             |   |
|--------------------------------------------------------------------------------------------------------|--------|
| Consolidated Balance Sheets                                                                            |   |
| (dollars in thousands, except share and per share amounts)                                             |   |
| Assets                                                                                                 |   |
|                                                                                                   |   | October 31, 2010 |   |   | January 31, 2010 |   |
|                                                                                                   |   | (Unaudited) |   |   |   |   |
| Current assets:                                                                                        |   |   |   |   |   |   |
|    Cash and cash equivalents                                                            |   | $ | 5,356 |   |   |   | 5,164 |   |
|    Receivables                                                                          |   |   | 5,376 |   |   |   | 7,437 |   |
|    Prepaid income taxes                                                                 |   |   | 3,996 |   |   |   | 594 |   |
|    Inventories                                                                          |   |   | 177,335 |   |   |   | 140,375 |   |
|    Prepaid expenses                                                                     |   |   | 3,727 |   |   |   | 3,517 |   |
|    Deferred income taxes                                                                |   |   | 4,073 |   |   |   | 3,863 |   |
|   Assets held for sale                                                                       |   |   | 935 |   |   |   | 1,631 |   |
|           Total current assets                       |   |   | 200,798 |   |   |   | 162,581 |   |
|                                                                                                   |   |   |   |   |   |   |   |   |
| Property and equipment, at cost:                                                                       |   |   |   |   |   |   |   |   |
|    Land and land improvements                                                           |   |   | 1,454 |   |   |   | 1,455 |   |
|    Buildings and building improvements                                                  |   |   | 11,902 |   |   |   | 11,844 |   |
|    Furniture, fixtures and equipment                                                    |   |   | 70,467 |   |   |   | 67,304 |   |
|    Transportation equipment                                                             |   |   | 1,357 |   |   |   | 1,303 |   |
|    Leasehold improvements                                                               |   |   | 16,073 |   |   |   | 14,855 |   |
|    Construction work in progress                                                        |   |   | 2,632 |   |   |   | 1,744 |   |
|           Total property and equipment               |   |   | 103,885 |   |   |   | 98,505 |   |
|    Less accumulated depreciation                                                        |   |   | 73,916 |   |   |   | 67,959 |   |
|           Net property and equipment                 |   |   | 29,969 |   |   |   | 30,546 |   |
|                                                                                                   |   |   |   |   |   |   |   |   |
| Property under capital leases                                                                          |   |   | 17,815 |   |   |   | 11,015 |   |
|    Less accumulated amortization                                                        |   |   | 10,420 |   |   |   | 9,385 |   |
|           Net property under capital leases          |   |   | 7,395 |   |   |   | 1,630 |   |
|                                                                                                   |   |   |   |   |   |   |   |   |
| Other non-current assets                                                                               |   |   | 1,096 |   |   |   | 51 |   |
|           Total assets                               |   | $ | 239,258 |   |   |   | 194,808 |   |
|                                                                                                   |   |   |   |   |   |   |   |   |
| Liabilities and Stockholders' Equity                                                                   |   |
|                                                                                                   |   |   |   |   |   |   |   |   |
| Current liabilities:                                                                                   |   |   |   |   |   |   |   |   |
|    Current maturities of long-term debt                                                 |   | $ | 1,522 |   |   |   | 1,451 |   |
|    Current maturities of capital lease obligations                                      |   |   | 706 |   |   |   | 1,623 |   |
|    Accounts payable                                                                     |   |   | 46,011 |   |   |   | 23,076 |   |
|    Accrued salaries and commissions                                                     |   |   | 4,942 |   |   |   | 4,122 |   |
|    Accrued taxes other than income                                                      |   |   | 6,414 |   |   |   | 4,913 |   |
|    Self-insurance claim reserves                                                        |   |   | 4,236 |   |   |   | 4,852 |   |
|    Other current liabilities                                                            |   |   | 5,130 |   |   |   | 4,499 |   |
|           Total current liabilities                  |   |   | 68,961 |   |   |   | 44,536 |   |
|                                                                                                   |   |   |   |   |   |   |   |   |
| Long term debt, less current maturities                                                                |   |   | 263 |   |   |   | 1,414 |   |
| Notes payable under revolving loan agreement                                                           |   |   | 54,865 |   |   |   | 35,159 |   |
| Capital lease obligations, less current maturities                                                     |   |   | 7,478 |   |   |   | 1,345 |   |
| Deferred gain on leases                                                                                |   |   | 3,922 |   |   |   | 4,212 |   |
| Deferred income taxes                                                                                  |   |   | 858 |   |   |   | 694 |   |
| Other noncurrent liabilities                                                                           |   |   | 1,791 |   |   |   | 1,715 |   |
|           Total liabilities                          |   |   | 138,138 |   |   |   | 89,075 |   |
|                                                                                                   |   |   |   |   |   |   |   |   |
| Stockholders' equity:                                                                                  |   |   |   |   |   |   |   |   |
| Common stock, $.0001 par value, authorized 20,000,000 shares; issued and outstanding                   |   |
|     3,841,895 shares and 3,797,947 shares, respectively                            |   |   | 1 |   |   |   | 1 |   |
|    Additional paid-in capital                                                           |   |   | 39,955 |   |   |   | 39,313 |   |
|    Retained earnings                                                                    |   |   | 61,164 |   |   |   | 66,419 |   |
|           Total stockholders' equity                 |   |   | 101,120 |   |   |   | 105,733 |   |
|           Total liabilities and stockholders' equity |   | $ | 239,258 |   |   |   | 194,808 |   |
| See accompanying notes to unaudited consolidated financial statements.                                 |   |

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| Duckwall-ALCO Stores, Inc.                                                                 |   |
|--------------------------------------------------------------------------------------------|--------|
| Consolidated Statements of Operations                                                      |   |
| (dollars in thousands, except per share amounts)                                           |   |
| (Unaudited)                                                                                |   |
|                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                       |   | For the Thirteen Week |   |   | For the Thirty-Nine Week |   |
|                                                                                       |   | Periods Ended |   |   | Periods Ended |   |
|                                                                                       |   | October 31, 2010 |   |   | November 1, 2009 |   |   | October 31, 2010 |   |   | November 1, 2009 |   |
|                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |
| Net sales                                                                                  |   | $ | 110,488 |   |   |   | 111,194 |   |   |   | 341,497 |   |   |   | 351,173 |   |
| Cost of sales                                                                              |   |   | 75,530 |   |   |   | 75,635 |   |   |   | 233,850 |   |   |   | 234,921 |   |
| Gross margin                                                                               |   |   | 34,958 |   |   |   | 35,559 |   |   |   | 107,647 |   |   |   | 116,252 |   |
|                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Selling, general and administrative                                                        |   |   | 35,428 |   |   |   | 34,709 |   |   |   | 106,373 |   |   |   | 104,740 |   |
| Depreciation and amortization                                                              |   |   | 2,588 |   |   |   | 2,328 |   |   |   | 7,571 |   |   |   | 6,972 |   |
|            Total operating expenses |   |   | 38,016 |   |   |   | 37,037 |   |   |   | 113,944 |   |   |   | 111,712 |   |
| Operating income (loss) from continuing operations                                         |   |   | (3,058 | ) |   |   | (1,478 | ) |   |   | (6,297 | ) |   |   | 4,540 |   |
|                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest expense, net                                                                      |   |   | 1,015 |   |   |   | 531 |   |   |   | 2,410 |   |   |   | 1,589 |   |
|                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Earnings (loss) from continuing operations before income taxes                             |   |   | (4,073 | ) |   |   | (2,009 | ) |   |   | (8,707 | ) |   |   | 2,951 |   |
|                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income tax expense (benefit)                                                               |   |   | (2,105 | ) |   |   | (606 | ) |   |   | (3,656 | ) |   |   | 1,346 |   |
|                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Earnings (loss) from continuing operations                                                 |   |   | (1,968 | ) |   |   | (1,403 | ) |   |   | (5,051 | ) |   |   | 1,605 |   |
|                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loss from discontinued operations, net of income tax benefit                          |   |   | (59 | ) |   |   | (34 | ) |   |   | (204 | ) |   |   | (61 | ) |
|                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net earnings (loss)                                                                        |   | $ | (2,027 | ) |   |   | (1,437 | ) |   |   | (5,255 | ) |   |   | 1,544 |   |
|                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Earnings (loss) per share                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|      Basic                                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|          Continuing operations                |   | $ | (0.51 | ) |   |   | (0.37 | ) |   |   | (1.32 | ) |   |   | 0.42 |   |
|          Discontinued operations              |   |   | (0.02 | ) |   |   | (0.01 | ) |   |   | (0.05 | ) |   |   | (0.01 | ) |
|                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|          Net earnings (loss) per share        |   | $ | (0.53 | ) |   |   | (0.38 | ) |   |   | (1.37 | ) |   |   | 0.41 |   |
|                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Earnings (loss) per share                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|      Diluted                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|          Continuing operations                |   | $ | (0.51 | ) |   |   | (0.37 | ) |   |   | (1.32 | ) |   |   | 0.41 |   |
|          Discontinued operations              |   |   | (0.02 | ) |   |   | (0.01 | ) |   |   | (0.05 | ) |   |   | (0.01 | ) |
|                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|          Net earnings (loss) per share        |   | $ | (0.53 | ) |   |   | (0.38 | ) |   |   | (1.37 | ) |   |   | 0.40 |   |
|                                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| See accompanying notes to unaudited consolidated financial statements.                     |   |   |   |   |   |   |   |   |   |   |   |   |   |

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| Duckwall-ALCO Stores, Inc.                                                                           |   |
|------------------------------------------------------------------------------------------------------|--------|
| Consolidated Statements of Cash Flows                                                                |   |
| (dollars in thousands)                                                                               |   |
| (Unaudited)                                                                                          |   |
|                                                                                                 |   | For the Thirty-Nine Week |   |
|                                                                                                 |   | Periods Ended |   |
|                                                                                                 |   | October 31, 2010 |   |   | November 1, 2009 |   |
|                                                                                                 |   |   |   |   |   |   |
| Cash flows from operating activities:                                                                |   |   |   |   |   |   |
| Net earnings (loss)                                                                                  |   | $ | (5,255 | ) |   |   | 1,544 |   |
|                                                                                                 |   |   |   |   |   |   |   |   |
| Adjustments to reconcile net earnings (loss) to net cash (used in) provided by operating activities: |   |   |   |   |   |
|                                                                                                 |   |   |   |   |   |   |   |   |
| Depreciation and amortization                                                                        |   |   | 7,571 |   |   |   | 6,929 |   |
| Gain on sale of assets                                                                               |   |   | (6 | ) |   |   | (70 | ) |
| Share-based compensation                                                                             |   |   | 268 |   |   |   | 601 |   |
| Tax benefit of stock options exercised                                                               |   |   | 13 |   |   |   | - |   |
| Deferred income tax expense, net                                                                     |   |   | (46 | ) |   |   | 422 |   |
| Changes in:                                                                                          |   |   |   |   |   |   |   |   |
|    Receivables                                                                        |   |   | 2,061 |   |   |   | (856 | ) |
|    Prepaid income taxes                                                               |   |   | (3,402 | ) |   |   | 4,226 |   |
|    Inventories                                                                        |   |   | (36,960 | ) |   |   | (18,511 | ) |
|    Prepaid expenses                                                                   |   |   | (210 | ) |   |   | 455 |   |
|    Accounts payable                                                                   |   |   | 22,935 |   |   |   | 7,057 |   |
|    Accrued salaries and commissions                                                   |   |   | 820 |   |   |   | (268 | ) |
|    Accrued taxes other than income                                                    |   |   | 1,501 |   |   |   | 469 |   |
|    Self-insurance claim reserves                                                      |   |   | (616 | ) |   |   | (222 | ) |
|    Other assets and liabilities                                                       |   |   | 590 |   |   |   | (565 | ) |
|       Net cash (used in) provided by operating activities              |   |   | (10,736 | ) |   |   | 1,211 |   |
|                                                                                                 |   |   |   |   |   |   |   |   |
| Cash flows from investing activities:                                                                |   |   |   |   |   |   |   |   |
| Proceeds from the sale of assets                                                                     |   |   | 842 |   |   |   | 73 |   |
| Acquisition of property and equipment                                                                |   |   | (6,098 | ) |   |   | (4,664 | ) |
|       Net cash used in investing activities                            |   |   | (5,256 | ) |   |   | (4,591 | ) |
|                                                                                                 |   |   |   |   |   |   |   |   |
| Cash flows from financing activities:                                                                |   |   |   |   |   |   |   |   |
| Net borrowings under revolving loan agreement                                                   |   |   | 19,706 |   |   |   | 6,796 |   |
| Revolving loan agreement financing costs                                                             |   |   | (1,300 | ) |   |   |  - |   |
| Proceeds from exercise of outstanding stock options                                                  |   |   | 442 |   |   |   | - |   |
| Principal payments under term loan                                                                   |   |   | (1,080 | ) |   |   | (1,013 | ) |
| Principal payments under capital lease obligations                                                   |   |   | (1,584 | ) |   |   | (1,444 | ) |
|       Net cash provided by financing activities                        |   |   | 16,184 |   |   |   | 4,339 |   |
|                                                                                                 |   |   |   |   |   |   |   |   |
|       Net increase in cash and cash equivalents                   |   |   | 192 |   |   |   | 959 |   |
| Cash and cash equivalents at beginning of period                                                     |   |   | 5,164 |   |   |   | 4,744 |   |
|                                                                                                 |   |   |   |   |   |   |   |   |
| Cash and cash equivalents at end of period                                                           |   | $ | 5,356 |   |   |   | 5,703 |   |
|                                                                                                 |   |   |   |   |   |   |   |   |
| Supplemental disclosures of cash flow information:                                                   |   |   |   |   |   |   |   |   |
| Cash paid (received) during the period for:                                                          |   |   |   |   |   |   |   |   |
| Interest                                                                                             |   | $ | 2,259 |   |   |   | 1,594 |   |
| Income tax refunds, net of income taxes                                                              |   |   | (267 | ) |   |   | (3,097 | ) |
|                                                                                                 |   |   |   |   |   |   |   |   |
| See accompanying notes to unaudited consolidated financial statements.                               |   |   |   |   |   |

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|                                   |   | Fiscal 2010 Ended |   |   | For the Thirteen Week Periods Ended |   |   | For the Thirty-Nine Week Periods Ended |   |
|----------------------------------------|--------|-------------------|--------|--------|-------------------------------------|--------|--------|----------------------------------------|--------|
|                                   |   | January 31, 2010  |   |   | October 31, 2010                    |   |   | November 1, 2009                       |   |   | October 31, 2010 |   |   | November 1, 2009 |   |
| Stock options granted                  |   |              | 45,000 |   |                                |   | 45,000 |                                   |   |   | 10,000 |   |   |   | 145,000 |   |   |   | 45,000 |   |
| Weighted average exercise price        |   | $                 | 13.95  |   |                                |   | 9.25   |                                   |   |   | 17.89 |   |   |   | 10.34 |   |   |   | 13.95 |   |
| Weighted average grant date fair value |   | $                 | 5.47   |   |                                |   | 5.60   |                                   |   |   | 7.86 |   |   |   | 6.12 |   |   |   | 5.95 |   |

|                                     |   | Fiscal 2010 Ended |   |   | For the Thirteen Week Periods Ended |   |   | For the Thirty-Nine Week Periods Ended |   |
|------------------------------------------|--------|-------------------|--------|--------|-------------------------------------|--------|--------|----------------------------------------|--------|
|                                     |   | January 31, 2010  |   |   | October 31, 2010                    |   |   | November 1, 2009                       |   |   | October 31, 2010 |   |   | November 1, 2009 |   |
| Expected price volatility                |   |              | 48.9   | %      |                                |   | 54.0   | %                                      |   |   | 50.2 | % |   |   | 52.0 | % |   |   | 51.3 | % |
| Risk-free interest rate                  |   |              | 1.5    | %      |                                |   | 0.8    | %                                      |   |   | 1.7 | % |   |   | 1.3 | % |   |   | 1.4 | % |
| Weighted average expected lives in years |   |              | 4.8    |   |                                |   | 4.3    |                                   |   |   | 4.8 |   |   |   | 4.6 |   |   |   | 4.3 |   |
| Dividend yield                           |   |              | 0.00   | %      |                                |   | 0.00   | %                                      |   |   | 0.00 | % |   |   | 0.00 | % |   |   | 0.00 | % |

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| The average number of shares used in computing earnings per share was as follows: |   |   |      |   |    |   |
|-----------------------------------------------------------------------------------|--------|--------|-----------|--------|---------|--------|
|                                                                              |   |   |      |   |    |   |
| Thirteen Weeks Ended                                                              |   | Basic  |      |   | Diluted |   |
|                                                                              |   |   |      |   |    |   |
| October 31, 2010                                                                  |   |   | 3,840,796 |   |    |   | 3,840,796 |   |
| November 1, 2009                                                                  |   |   | 3,797,947 |   |    |   | 3,797,947 |   |
|                                                                              |   |   |      |   |    |   |   |   |
|                                                                              |   |   |      |   |    |   |   |   |
| Thirty-Nine Weeks Ended                                                           |   | Basic  |      |   | Diluted |   |
|                                                                              |   |   |      |   |    |   |   |   |
| October 31, 2010                                                                  |   |   | 3,829,152 |   |    |   | 3,829,152 |   |
| November 1, 2009                                                                  |   |   | 3,797,947 |   |    |   | 3,876,907 |   |

----

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| · | the Company’s ability to hire, train, and retain qualified personnel;                                                                                                 |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| · | the availability of adequate capital resources for us to purchase inventory, equipment, and fixtures and make other capital expenditures necessary for store expansion; and |
| · | the ability of our landlords and developers to find appropriate financing in the current credit market to develop property to be leased by the Company.                     |

| · | The Company closed one Duckwall store during the third quarter of fiscal 2011.  It was located in an underperforming market and was at the end of lease term.                                                                                                                                                                                                                                                                                                                                                                                           |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| · | On August 25, 2010, the Company became a member in Associated Wholesale Grocers, Inc (AWG).  AWG is a retailer-owned cooperative serving over 1,900 retail member stores with a merchandise assortment and extensive distribution network.                                                                                                                                                                                                                                                                                                              |
| · | Terrence M. Babilla was elected to the Company's Board of Directors on September 2, 2010                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| · | The Company entered into a Nonqualified Stock Option Agreement with Mr. Babilla for 20,000 stock options on September 2, 2010                                                                                                                                                                                                                                                                                                                                                                                                                                |
| · | Wayne S. Peterson joined the Company on September 20, 2010 to become Senior Vice President - Chief Financial Officer                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| · | The Company entered into both an Employment Agreement and an Incentive Stock Option Agreement for 25,000 stock options with Mr. Peterson dated September 20, 2010                                                                                                                                                                                                                                                                                                                                                                                            |
| · | The Company announced November 29, 2010 that it would close 43 Duckwall stores.  The liquidation and closing of these stores will conclude during the fourth quarter of fiscal year 2011.  The Company expects to record expenses of approximately $1.8 million during the fourth quarter for closing costs attributable to severance, lease liability, inventory liquidation and other related costs. Upon conclusion of the closing process, the Company expects to redeploy approximately $4.0 million in capital to the ALCO stores. |

| · | Net sales decreased 0.6% to $110.5 million.  Same-store sales decreased 2.3% compared to the prior year third quarter.                                                                                                                                                                                                                                    |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| · | Gross margin percentage decreased to 31.6% of sales, compared to 32.0% in the prior year third quarter.                                                                                                                                                                                                                                                        |
| · | Net loss per share was $0.53 in the third quarter of fiscal 2011 compared to net loss of $0.38 per share in the prior year third quarter.                                                                                                                                                                                                                      |
| · | The Company’s earnings from continuing operations before interest, taxes, depreciation and amortization, share-based compensation, preopening store costs and store transformation project costs (“Adjusted EBITDA”) for the third quarter 2011 was $471 compared to the prior year third quarter of $1.0 million.  |

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|                                                                                                                                                                      |   | For the Thirteen Week Periods Ended |   |   | For the Thirty-Nine Week Periods Ended |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------|--------|--------|----------------------------------------|--------|
| SG&A Expenses Breakout                                                                                                                                                |   | October 31, 2010                    |   |   | November 1, 2009                       |   |   | October 31, 2010 |   |   | November 1, 2009 |   |
| Store support center (1)                                                                                                                                                  |   | $                                   | 5,341  |   |                                   |   | 5,397 |   |   |   | 16,857 |   |   |   | 17,515 |   |
| Distribution center (2)                                                                                                                                                   |   |                                | 2,534  |   |                                   |   | 2,258 |   |   |   | 7,104 |   |   |   | 6,490 |   |
| 401K expense                                                                                                                                                              |   |                                | 100    |   |                                   |   | 101 |   |   |   | 225 |   |   |   | 297 |   |
| Same-store SG&A (3)                                                                                                                                                   |   |                                | 26,938 |   |                                   |   | 26,797 |   |   |   | 80,403 |   |   |   | 79,833 |   |
| Non same-store SG&A (3)(4)                                                                                                                                            |   |                                | 447    |   |                                   |   | 1 |   |   |   | 1,516 |   |   |   | 4 |   |
| Share-based compensation                                                                                                                                                  |   |                                | 68     |   |                                   |   | 155 |   |   |   | 268 |   |   |   | 601 |   |
| SG&A as reported                                                                                                                                                      |   |                                | 35,428 |   |                                   |   | 34,709 |   |   |   | 106,373 |   |   |   | 104,740 |   |
| Less:                                                                                                                                                                     |   |                                |   |   |                                   |   |   |   |   |   |   |   |   |   |   |   |
| Share-based compensation                                                                                                                                                  |   |                                | (68    | )      |                                   |   | (155 | ) |   |   | (268 | ) |   |   | (601 | ) |
| Preopening store costs (4)                                                                                                                                                |   |                                | (110   | )      |                                   |   | (2 | ) |   |   | (492 | ) |   |   | (2 | ) |
| Store re-set costs (3)                                                                                                                                                    |   |                                | (494   | )      |                                   |   | - |   |   |   | (895 | ) |   |   | - |   |
| Private label implementation costs (2)                                                                                                                                    |   |                                | (210   | )      |                                   |   | - |   |   |   | (210 | ) |   |   | - |   |
| Executive and staff severance (1)                                                                                                                                         |   |                                | (59    | )      |                                   |   | - |   |   |   | (540 | ) |   |   | - |   |
| Store transformation project costs (1)                                                                                                                                    |   |                                | -      |   |                                   |   | - |   |   |   | - |   |   |   | (2,096 | ) |
| Adjusted SG&A                                                                                                                                                         |   | $                                   | 34,487 |   |                                   |   | 34,552 |   |   |   | 103,968 |   |   |   | 102,041 |   |
|                                                                                                                                                                      |   |                                |   |   |                                   |   |   |   |   |   |   |   |   |   |   |   |
| Adjusted SG&A as % of sales                                                                                                                                           |   |                                | 31.2   | %      |                                   |   | 31.1 | % |   |   | 30.4 | % |   |   | 29.1 | % |
|                                                                                                                                                                      |   |                                |   |   |                                   |   |   |   |   |   |   |   |   |   |   |   |
| Sales per average selling square foot (5)                                                                                                                                 |   | $                                   | 24.06  |   |                                   |   | 24.41 |   |   | $ | 74.51 |   |   |   | 77.95 |   |
|                                                                                                                                                                      |   |                                |   |   |                                   |   |   |   |   |   |   |   |   |   |   |   |
| Gross Margin dollars per average selling square feet (5)                                                                                                                  |   | $                                   | 7.61   |   |                                   |   | 7.80 |   |   | $ | 23.49 |   |   |   | 25.81 |   |
|                                                                                                                                                                      |   |                                |   |   |                                   |   |   |   |   |   |   |   |   |   |   |   |
| Adjusted SG&A per average selling square foot (5)                                                                                                                     |   | $                                   | 7.51   |   |                                   |   | 7.58 |   |   | $ | 22.69 |   |   |   | 22.65 |   |
|                                                                                                                                                                      |   |                                |   |   |                                   |   |   |   |   |   |   |   |   |   |   |   |
| Adjusted EBITDA per average selling square foot (5)(6)                                                                                                                    |   | $                                   | 0.10   |   |                                   |   | 0.22 |   |   | $ | 0.80 |   |   |   | 3.16 |   |
|                                                                                                                                                                      |   |                                |   |   |                                   |   |   |   |   |   |   |   |   |   |   |   |
| Average inventory per average selling square feet (5)(7)(8)                                                                                                               |   | $                                   | 28.76  |   |                                   |   | 28.52 |   |   | $ | 29.24 |   |   |   | 28.68 |   |
|                                                                                                                                                                      |   |                                |   |   |                                   |   |   |   |   |   |   |   |   |   |   |   |
| Average selling square feet (5)                                                                                                                                           |   |                                | 4,593  |   |                                   |   | 4,556 |   |   |   | 4,583 |   |   |   | 4,505 |   |
|                                                                                                                                                                      |   |                                |   |   |                                   |   |   |   |   |   |   |   |   |   |   |   |
| Total stores operating beginning of period                                                                                                                                |   |                                | 257    |   |                                   |   | 257 |   |   |   | 258 |   |   |   | 258 |   |
| Total stores operating end of period                                                                                                                                      |   |                                | 257    |   |                                   |   | 257 |   |   |   | 257 |   |   |   | 257 |   |
| Total stores less than twelve months old                                                                                                                                  |   |                                |   |   |                                   |   |   |   |   |   | 5 |   |   |   | 0 |   |
| Total non same-stores                                                                                                                                                     |   |                                |   |   |                                   |   |   |   |   |   | 5 |   |   |   | 1 |   |
|                                                                                                                                                                      |   |                                |   |   |                                   |   |   |   |   |   |   |   |   |   |   |   |
| Supplemental Data:                                                                                                                                                        |   |                                |   |   |                                   |   |   |   |   |   |   |   |   |   |   |   |
| Same-store gross margin dollar change                                                                                                                                     |   |                                | (0.3   | )%     |                                   |   | 0.8 | % |   |   | (1.3 | )% |   |   | 1.1 | % |
| Same-store SG&A dollar change                                                                                                                                         |   |                                | 0.5    | %      |                                   |   | (0.6 | )% |   |   | 0.7 | % |   |   | (0.5 | )% |
| Same-store total customer count change                                                                                                                                    |   |                                | (2.8   | )%     |                                   |   | (0.6 | )% |   |   | (3.5 | )% |   |   | 1.4 | % |
| Same-store average sale per ticket change                                                                                                                                 |   |                                | 0.4    | %      |                                   |   | (2.4 | )% |   |   | (0.5 | )% |   |   | (0.6 | )% |
|                                                                                                                                                                      |   |                                |   |   |                                   |   |   |   |   |   |   |   |   |   |   |   |
| (1) Store support center includes executive and staff severance costs for fiscal 2011 and store transformation project costs for first and second quarters of fiscal 2010 |   |
| (2) Warehouse includes implementation costs associated with expanded private label and consolidated shipping programs                                                     |
| (3) Store SG&A includes additional labor and supplies to re-set store fixtures and merchandise layout for new strategy                                                |   |
| (4) Non same-stores are those stores opened in fiscal 2011 and 2010 which have not reached their fourteenth period of operation                                           |   |
| (5) Average selling square feet is calculated as beginning square feet plus ending square feet divided by 2                                                               |   |
| (6) Adjusted EBITDA per selling square foot is calculated as Adjusted EBITDA divided by selling square feet                                                               |   |
| (7) Average store level merchandise inventory for fiscal 2011 and 2010 is calculated as beginning inventory plus ending inventory divided by 2                            |   |
| (8) Excludes inventory for unopened stores                                                                                                                                |

----

|                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |        |   |   | For the Twenty-Six |   |   | Trailing Twelve |   |   | For the Thirteen   |   |   | Trailing Twelve  |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------|--------|--------|--------------------|--------|--------|-----------------|--------|--------|--------------------|--------|--------|------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |        |   |   | Week Periods Ended |   |   | Periods Ended   |   |   | Week Periods Ended |   |   | Periods Ended    |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   | Fiscal 2010 |   |   | August 1, 2010     |   |   | August 2, 2009  |   |   | August 1, 2010     |   |   | October 31, 2010 |   |   | November 1, 2009 |   |   | October 31, 2010 |   |
| Net earnings (loss) from continuing operations (1)                                                                                                                                                                                                                                                                                                                                                                                                            |   | $           | 3,111  |   |               |   | (3,083 | )               |   |   | 3,008              |   |   |             | (2,980 | ) |   |   | (1,968 | ) |   |   | (1,403 | ) |   |   | (3,545 | ) |
| Plus:                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |        |   |   |               |   |   |            |   |   |               |   |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |        | 2,149  |   |               |   | 1,395  |            |   |   | 1,058              |   |   |             | 2,486  |   |   |   | 1,015 |   |   |   | 531 |   |   |   | 2,970 |   |
| Taxes (1)                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |        | 2,181  |   |               |   | (1,551 | )               |   |   | 1,952              |   |   |             | (1,322 | ) |   |   | (2,105 | ) |   |   | (606 | ) |   |   | (2,821 | ) |
| Depreciation and amortization (1)                                                                                                                                                                                                                                                                                                                                                                                                                             |   |        | 9,982  |   |               |   | 4,983  |            |   |   | 4,645              |   |   |             | 10,320 |   |   |   | 2,588 |   |   |   | 2,328 |   |   |   | 10,580 |   |
| Share-based compensation                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |        | 757    |   |               |   | 200    |            |   |   | 447                |   |   |             | 510    |   |   |   | 68 |   |   |   | 155 |   |   |   | 423 |   |
| Preopening store costs (2)                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |        | 128    |   |               |   | 382    |            |   |   | -                  |   |   |             | 510    |   |   |   | 110 |   |   |   | 2 |   |   |   | 618 |   |
| Store re-set costs                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |        | -      |   |               |   | 401    |            |   |   | -                  |   |   |             | 401    |   |   |   | 494 |   |   |   | - |   |   |   | 895 |   |
| Private label implementation costs                                                                                                                                                                                                                                                                                                                                                                                                                            |   |        | -      |   |               |   | -      |            |   |   | -                  |   |   |             | -      |   |   |   | 210 |   |   |   | - |   |   |   | 210 |   |
| Executive and staff severance                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |        | -      |   |               |   | 481    |            |   |   | -                  |   |   |             | 481    |   |   |   | 59 |   |   |   | - |   |   |   | 540 |   |
| Store transformation project costs                                                                                                                                                                                                                                                                                                                                                                                                                            |   |        | 2,096  |   |               |   | -      |            |   |   | 2,096              |   |   |             | -      |   |   |   | - |   |   |   | - |   |   |   | - |   |
| =Adjusted EBITDA (1)(3)(4)(5)                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |        | 20,404 |   |               |   | 3,208  |            |   |   | 13,206             |   |   |             | 10,406 |   |   |   | 471 |   |   |   | 1,007 |   |   |   | 9,870 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |        |   |   |               |   |   |            |   |   |               |   |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |        |   |   |               |   |   |            |   |   |               |   |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |        | 5,164  |   |               |   | 3,690  |            |   |   | 5,446              |   |   |             | 3,690  |   |   |   | 5,356 |   |   |   | 5,703 |   |   |   | 5,356 |   |
| Debt                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |        | 40,992 |   |               |   | 34,018 |            |   |   | 48,802             |   |   |             | 34,018 |   |   |   | 64,834 |   |   |   | 54,180 |   |   |   | 64,834 |   |
| Debt, net of cash                                                                                                                                                                                                                                                                                                                                                                                                                                             |   | $           | 35,828 |   |               |   | 30,328 |            |   |   | 43,356             |   |   |             | 30,328 |   |   |   | 59,478 |   |   |   | 48,477 |   |   |   | 59,478 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |        |   |   |               |   |   |            |   |   |               |   |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| (1) These amounts will not agree with the fiscal year end 2010 or fiscal 2010 second quarter 10-Q filing due to the five stores the Company closed since the second quarter of fiscal 2010. These stores are now shown in discontinued operations.                                                                                                                                                                                                       |   |
| (2) These costs are not consistent quarter to quarter as the Company does not open the same number of stores in each quarter of each fiscal year. These costs are directly associated with the number of stores that have been or will be opened and are incurred prior to the grand opening of each store.                                                                                                                                    |   |
| (3) For the trailing twelve periods ended October 31, 2010 the average open weeks for the Company's five non same-stores was 22 weeks.                                                                                                                                                                                                                                                                                                                   |
| (4) The Company implemented new initiatives for fiscal year 2010. The fiscal 2010 initiatives are designed to better control costs and include, but are not limited to, programs to reduce point-of-sale hardware lease and energy expense, as well as accident reduction programs. These initiatives achieved approximately $2.0 million in SG&A savings for the thirty-nine weeks of fiscal 2010 when compared to the prior year same period. |   |
| (5) The store transformation project completed in fiscal 2010 continues to provide SG&A savings in fiscal 2011. This initiative achieved approximately $458 in SG&A savings for the thirty-nine weeks of fiscal 2011 when compared to the prior year same period.                                                                                                                                                                           |   |

----

|                            |   | For the Thirteen Week Periods Ended |   |   | For the Thirty-Nine Week Periods Ended |   |
|---------------------------------|--------|-------------------------------------|--------|--------|----------------------------------------|--------|
|                            |   | October 31, 2010                    |   |   | November 1, 2009                       |   |   | October 31, 2010 |   |   | November 1, 2009 |   |
| Merchandise Category:           |   |                                |   |   |                                   |   |   |   |   |   |   |   |
| Consumables and commodities     |   |                                | 44     | %      |                                   |   | 43 | % |   |   | 42 | % |   |   | 40 | % |
| Hardlines                       |   |                                | 25     | %      |                                   |   | 24 | % |   |   | 28 | % |   |   | 28 | % |
| Apparel and accessories         |   |                                | 17     | %      |                                   |   | 18 | % |   |   | 16 | % |   |   | 17 | % |
| Home furnishings and décor |   |                                | 14     | %      |                                   |   | 15 | % |   |   | 14 | % |   |   | 15 | % |
|                            |   |                                |   |   |                                   |   |   |   |   |   |   |   |   |   |   |   |
| Total                           |   |                                | 100    | %      |                                   |   | 100 | % |   |   | 100 | % |   |   | 100 | % |

----

----

----

|                                        |   |            |   |   |               |   |   | Total Number          |   |   | Maximum Number        |   |
|---------------------------------------------|--------|-----------------|--------|--------|--------------------|--------|--------|-----------------------|--------|--------|-----------------------|--------|
|                                        |   |            |   |   |               |   |   | of Shares             |   |   | of Shares             |   |
|                                        |   | Total Number Of |   |   |               |   |   | Purchased as Part     |   |   | that May Yet          |   |
|                                        |   | Shares          |   |   | Average Price Paid |   |   | of Publicly Announced |   |   | Be Purchased Under    |   |
| Period                                      |   | Purchased       |   |   | per Share          |   |   | Plans or Programs     |   |   | the Plans or Programs |   |
| As of August 1, 2010                        |   |            | 25,534 |   |               | $      | 15.16  |                  |   |   | 25,534                |   |   |   | 174,466 |   |
|                                        |   |            |   |   |               |   |   |                  |   |   |                  |   |   |   |   |   |
| Third Quarter:                              |   |            |   |   |               |   |   |                  |   |   |                  |   |   |   |   |   |
|     08/02/10 - 08/29/10 |   |            | -      |   |               |   | -      |                  |   |   | -                     |   |   |   | 174,466 |   |
|     08/30/10 - 10/03/10 |   |            | -      |   |               |   | -      |                  |   |   | -                     |   |   |   | 174,466 |   |
|     10/04/10 - 10/31/10 |   |            | -      |   |               |   | -      |                  |   |   | -                     |   |   |   | 174,466 |   |
|                                        |   |            | -      |   |               |   |   |                  |   |   | -                     |   |   |   | 174,466 |   |
|                                        |   |            |   |   |               |   |   |                  |   |   |                  |   |   |   |   |   |
| As of October 31, 2010                      |   |            | 25,534 |   |               | $      | 15.16  |                  |   |   | 25,534                |   |   |   | 174,466 |   |

----

| 3.1    | Articles of Incorporation of Duckwall-ALCO Stores, Inc., amended as of June 13, 1994 and restated solely for filing with the Securities and Exchange Commission (filed as Exhibit 3.1 to Company's Quarterly Report on Form 10-Q for the fiscal quarter ended August 1, 2004 and incorporated herein by reference). |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                |
| 3.2    | Amended and Restated Bylaws of Duckwall-ALCO Stores, Inc. (filed as Exhibit 3.2 to Company's Annual Report on Form 10-K for the fiscal year ended January 31, 2010 and incorporated herein by reference).                                                                                                 |
|   |                                                                                                                                                                                                                                                                                                                |
| 3.3    | Amendment to Bylaws of Duckwall-ALCO Stores, Inc. (filed as Exhibit 99.1 to Form 8-K on April 20, 2010 and incorporated herein by reference).                                                                                                                                                                       |
|   |                                                                                                                                                                                                                                                                                                                |
| 4.1    | Specimen of Duckwall-ALCO Stores, Inc. Common Stock Certificate.  (filed as Exhibit 4.1 to Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended August 3, 2008 and incorporated herein by reference).                                                                               |
|   |                                                                                                                                                                                                                                                                                                                |
| 4.2    | Reference is made to the Amended and Restated Articles of Incorporation described under 3.1 above and Bylaws described under 3.2 above.                                                                                                                                                                             |
|   |                                                                                                                                                                                                                                                                                                                |
| 10.1   | Employment Agreement dated January 5, 2006 between the Company and Tom L. Canfield, Jr. is incorporated by reference as Exhibit 10.1 to the Current Report on Form 10-K of the Company dated April 15, 2010.                                                                                                        |
|   |                                                                                                                                                                                                                                                                                                                |   |
| 10.2   | Employment Agreement dated August 1, 2007 between the Company and Donny R. Johnson is incorporated by reference as Exhibit 10.2 to the Current Report on Form 10-K of the Company dated April 15, 2010.                                                                                                             |
|   |                                                                                                                                                                                                                                                                                                                |   |
| 10.3   | Employment Agreement dated January 5, 2006 between the Company and Jon A. Ramsey is incorporated by reference as Exhibit 10.3 to the Current Report on Form 10-K of the Company dated April 15, 2010.                                                                                                               |
|   |                                                                                                                                                                                                                                                                                                                |   |
| 10.4   | Addendum to Employment Agreement dated December 31, 2008 between the Company and Tom L. Canfield, Jr. is incorporated by reference as Exhibit 10.4 to the Current Report on Form 10-K of the Company dated April 15, 2010.                                                                                          |
|   |                                                                                                                                                                                                                                                                                                                |   |
| 10.5   | Addendum to Employment Agreement dated December 31, 2008 between the Company and Donny R. Johnson is incorporated by reference as Exhibit 10.5 to the Current Report on Form 10-K of the Company dated April 15, 2010.                                                                                              |
|   |                                                                                                                                                                                                                                                                                                                |   |
| 10.6   | Addendum to Employment Agreement dated December 31, 2008 between the Company and Jon A. Ramsey is incorporated by reference as Exhibit 10.6 to the Current Report on Form 10-K of the Company dated April 15, 2010.                                                                                                 |

| 10.7   | Employment Agreement dated December 11, 2009 between the Company and James M. Spencer is incorporated by reference to Exhibit 10.7 to the Current Report on Form 8-K of the Company dated December 17, 2009.                                                                                                                                                                                                  |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                               |
| 10.8   | Separation Agreement and Release, dated as of February 4, 2009, between the Company and Phillip D. Hixon is incorporated by reference to Exhibit 10.8 to the Current Report on Form 8-K of the Company dated February 4, 2009.                                                                                                                                                                                     |
|   |                                                                                                                                                                                                                                                                                                                                                                                                               |
| 10.9   | Addendum to Employment Agreement effective as of May 31, 2009 between the Company and Lawrence J. Zigerelli is incorporated by reference to Exhibit 10.9 to the Current Report on Form 8-K of the Company dated June 3, 2009.                                                                                                                                                                                      |
|   |                                                                                                                                                                                                                                                                                                                                                                                                               |
| 10.10  | Addendum to Employment Agreement effective as of May 31, 2009 between the Company and Jane F. Gilmartin is incorporated by reference to Exhibit 10.10 to the Current Report on Form 8-K of the Company dated June 3, 2009.                                                                                                                                                                                         |
|   |                                                                                                                                                                                                                                                                                                                                                                                                               |
| 10.11  | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements is incorporated by reference to Exhibit 10.11 to the Current Report on Form 8-K of the Company dated January 12, 2010.  On December 31, 2009, Royce Winsten, the Chairman of the Board of Directors of the Company, was awarded a special bonus for the amount of $50,000. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                               |
| 10.12  | Separation Release, dated as of February 1, 2010, between the Company and James M. Spencer, is incorporated by reference to Exhibit 10.12 to the Current Report on Form 8-K of the Company dated February 1, 2010.                                                                                                                                                                                                 |
|   |                                                                                                                                                                                                                                                                                                                                                                                                               |
| 10.13  | Amended and Restated Credit Agreement, dated as of February 10, 2010, between the Company and Bank of America, N.A., and Wells Fargo Retail Finance, LLC is incorporated by reference to the Current Report on Form 10-Q of the Company dated June 10, 2010.                                                                                                                                                  |
|   |                                                                                                                                                                                                                                                                                                                                                                                                               |
| 10.14  | Employment Agreement dated December 11, 2009 between the Company and Richard E. Wilson is incorporated by reference to Exhibit 10.14 to the Current Report on Form 8-K of the Company dated February 25, 2010.                                                                                                                                                                                                |
|   |                                                                                                                                                                                                                                                                                                                                                                                                               |
| 10.15  | Resignation of Director is incorporated by reference to Exhibit 10.15 to the Current Report on Form 8-K of the Company dated March 2, 2010.  On March 2, 2010 James V. Worth resigned from the Board of Directors                                                                                                                                                                                        |
|   |                                                                                                                                                                                                                                                                                                                                                                                                               |
| 10.16  | Separation Agreement and Release, dated as of March 17, 2010, between the Company and Lawrence J. Zigerelli, is incorporated by reference to Exhibit 10.16 to the Current Report on Form 8-K of the Company dated March 16, 2010.                                                                                                                                                                                  |
|   |                                                                                                                                                                                                                                                                                                                                                                                                               |
| 10.17  | Separation Agreement and Release, dated as of May 13, 2010, between the Company and Jane F. Gilmartin, is incorporated by reference to Exhibit 10.17 to the Current Report on Form 8-K of the Company dated May 13, 2010.                                                                                                                                                                                     |

----

| 10.18  | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements is incorporated by reference to Exhibit 10.18 to the Current Report on Form 8-K of the Company dated September 2, 2010.  On September 2, 2010, Terence M. Babilla, was elected to the Board of Directors.                                                       |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                    |
| 10.19  | Employment Agreement dated September 20, 2010 between the Company and Wayne S. Peterson is incorporated by reference to Exhibit 10.19 to the Current Report on Form 8-K of the Company dated September 20, 2010.                                                                                                                                                                    |
|   |                                                                                                                                                                                                                                                                                                                                                                                                    |
| 31.1   | Certification of Chief Executive Officer of Duckwall-ALCO Stores, Inc. dated December 9, 2010, pursuant to Rule 13a-4(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2003.                                                                                                                                                          |
|   |                                                                                                                                                                                                                                                                                                                                                                                                    |
| 31.2   | Certification of Principal Financial Officer of Duckwall-ALCO Stores, Inc. dated December 9, 2010, pursuant to Rule 13a-4(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2003.                                                                                                                                                           |
|   |                                                                                                                                                                                                                                                                                                                                                                                                    |
| 32.1   | Certification of Chief Executive Officer of Duckwall-ALCO Stores, Inc, dated December 9, 2010, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, which is furnished with this Quarterly Report on Form 10-Q for the quarter ended October 31, 2010 and is not treated as filed in reliance upon § 601(b)(32) of Regulations S-K.      |
|   |                                                                                                                                                                                                                                                                                                                                                                                                    |
| 32.2   | Certification of Principal Financial Officer of Duckwall-ALCO Stores, Inc., dated December 9, 2010, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, which is furnished with this Quarterly Report on Form 10-Q for the quarter ended October 31, 2010 and is not treated as filed in reliance upon § 601(b)(32) of Regulations S-K. |

----

| Signature and Title                             | Date             |
|-------------------------------------------------|------------------|
|                                            |             |
| /s/ Richard E. Wilson                           | December 9, 2010 |
| Richard E. Wilson                               |             |
| President and Chief Executive Officer           |             |
| (Principal Executive Officer)                   |             |
|                                            |             |
| /s/ Wayne S. Peterson                           | December 9, 2010 |
| Wayne S. Peterson                               |             |
| Senior Vice President - Chief Financial Officer |             |
| (Principal Financial and Accounting Officer)    |             |
|                                            |             |
| /s/ Terrence M. Babilla                         | December 9, 2010 |
| Terrence M. Babilla                             |             |
| Director                                        |             |
|                                            |             |
| /s/ Raymond A.D. French                         | December 9, 2010 |
| Raymond A.D. French                             |             |
| Director                                        |             |
|                                            |             |
| /s/ Dennis E. Logue                             | December 9, 2010 |
| Dennis E. Logue                                 |             |
| Director                                        |             |
|                                            |             |
| /s/ Lolan C. Mackey                             | December 9, 2010 |
| Lolan C. Mackey                                 |             |
| Director                                        |             |
|                                            |             |
| /s/ Royce L. Winsten                            | December 9, 2010 |
| Royce L. Winsten                                |             |
| Director - Chairman of Board                    |             |
|                                            |             |

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