|Duckwall-ALCO Stores, Inc.                                                    
|------------------------------------------------------------------------------
|And Subsidiaries                                                              
|Consolidated Balance Sheets                                                   
|(Dollars in Thousands)                                                        
|                                                                              
|                                                                              
|Assets                                                                        
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|Current
        assets:                                                       
|Cash and cash equivalents                                                     
|Receivables                                                                   
|Inventories                                                                   
|Prepaid expenses and other current assets                                     
|                                                                              
|Total current assets                                                          
|                                                                              
|Property and equipment                                                        
|Less accumulated depreciation                                                 
|                                                                              
|Net property and equipment                                                    
|                                                                              
|Property under capital leases                                                 
|Less accumulated amortization                                                 
|                                                                              
|Net property under capital leases                                             
|                                                                              
|Other non-current assets                                                      
|                                                                              
|Total assets                                                                  
|                                                                              
|                                                                              
|See accompanying notes to unaudited consolidated
        financial statements.
|                                                                              
|                                                                              
|PAGE2 OF 13 (FORM 10-Q)                                                       

|Duckwall-ALCO Stores, Inc.                                                
|--------------------------------------------------------------------------
|And Subsidiaries                                                          
|Consolidated Balance Sheets                                               
|(Dollars in Thousands)                                                    
|                                                                          
|Liabilities and Stockholders' Equity                                      
|                                                                          
|                                                                          
|Current liabilities:                                                      
|Current maturities of:                                                    
|Long term debt                                                            
|Capital lease obligations                                                 
|Accounts payable                                                          
|Income taxes payable                                                      
|Accrued salaries and commissions                                          
|Accrued taxes other than income                                           
|Other current liabilities                                                 
|Deferred income taxes                                                     
|                                                                          
|Total current liabilities                                                 
|                                                                          
|Notes payable under revolving loan                                        
|Long term debt - less current maturities                                  
|Capital lease obligations - less current maturities                       
|Other noncurrent liabilities                                              
|Deferred revenue                                                          
|Deferred income taxes                                                     
|                                                                          
|Total liabilities                                                         
|                                                                          
|Stockholders' equity:                                                     
|Common stock, $.0001 par value, authorized                                
|20,000,000 shares; issued and outstanding                                 
|4,419,599 shares and 4,772,299 shares
    respectively                    
|Additional paid-in capital                                                
|Retained earnings since June 2, 1991                                      
|                                                                          
|Total stockholders' equity                                                
|                                                                          
|Total liabilities and stockholders' equity                                
|                                                                          
|See accompanying notes to unaudited consolidated financial
    statements.
|                                                                          
|                                                                          
|PAGE3 OF 13 (FORM 10-Q)                                                   

|Duckwall-ALCO Stores, Inc.                                                
|--------------------------------------------------------------------------
|And Subsidiaries                                                          
|Consolidated Statements of Operations                                     
|(Dollars in Thousands Except Per Share Amounts)                           
|(Unaudited)                                                               
|                                                                          
|                                                                          
|                                                                          
|                                                                          
|Net sales                                                                 
|Cost of sales                                                             
|Gross margin                                                              
|                                                                          
|Selling, general and administrative                                       
|Depreciation and amortization                                             
|Total operating expenses                                                  
|                                                                          
|Income from operations                                                    
|Interest expense                                                          
|                                                                          
|Earnings before income taxes                                              
|                                                                          
|Income tax expense                                                        
|                                                                          
|Net earnings                                                              
|                                                                          
|Earnings per share:                                                       
|Basic                                                                     
|                                                                          
|Diluted                                                                   
|                                                                          
|See accompanying notes to unaudited consolidated financial
    statements.
|                                                                          
|PAGE4 OF 13 (FORM 10-Q)                                                   
|                                                                          

|Duckwall-ALCO Stores Inc,                                                
|-------------------------------------------------------------------------
|And Subsidiaries                                                         
|Consolidated Statements of Cash Flow                                     
|Dollars in Thousands                                                     
|(Unaudited)                                                              
|                                                                         
|                                                                         
|                                                                         
|Cash Flows From Operating Activities:                                    
|Net earnings                                                             
|Adjustments to reconcile net earnings to net cash                        
|used in operating activities                                             
|                                                                         
|Loss on disposal and impairment of assets                                
|Amortization of debt financing costs                                     
|Depreciation and amortization                                            
|LIFO expense                                                             
|Increase in inventories                                                  
|Increase in accounts payable                                             
|Increase in receivables                                                  
|Increase in prepaid expenses and other
    current assets                
|Increase in accrued taxes other than
    income                          
|Decrease in accrued salaries and
    commissions                         
|Decrease in income taxes payable                                         
|Decrease in other liabilities                                            
|Net cash provided by (used in) operating activities                      
|                                                                         
|Cash Flow From Investing Activities:                                     
|Capital expenditures                                                     
|Increase in other assets                                                 
|Net cash used in investing activities                                    
|                                                                         
|Cash Flow From Financing Activities:                                     
|Proceeds from exercise of outstanding
    stock options                  
|Repurchase of common stock                                               
|Increase in revolving loan                                               
|Principal payments on long term notes                                    
|Principal payments on capital leases                                     
|Debt issue costs                                                         
|Net cash provided by financing activities                                
|                                                                         
|Net decrease in cash and cash equivalents                                
|Cash and cash equivalents at beginning of period                         
|Cash and cash equivalents at end of period                               
|                                                                         
|See accompanying notes to unaudited consolidated financial
    statements
|                                                                         
|                                                                         
|PAGE5 OF 13 (FORM 10-Q)                                                  





|                               | For The Thirteen Week |  | For The Thirty-Nine Week
|------------------------------ | --------------------- |  | ------------------------
|                               | Periods Ended         |  | Periods Ended           
|                               | October 29,           |  | October 31,             
|                               | 2000                  |  | 1999                    
|Segment Information            |                       |  |                         
|Net Sales:                     |                       |  |                         
|ALCO Discount Stores           | $82,063               |  | $79,785                 
|All Other                      |                       |  |                         
|External                       | 7,935                 |  | 7,839                   
|Intercompany                   | 59,122                |  | 57,119                  
|                               | $149,120              |  | $144,743                
|                               |                       |  |                         
|Depreciation and Amortization  |                       |  |                         
|ALCO Discount Stores           | $1,037                |  | $1,010                  
|All Other                      | 513                   |  | 587                     
|                               | $1,550                |  | $1,597                  
|                               |                       |  |                         
|Income (loss) from Operations: |                       |  |                         
|ALCO Discount Stores           | $5,824                |  | $6,049                  
|All Other                      | (4,486)               |  | (3,485)                 
|                               | $1,338                |  | $2,564                  
|Capital Expenditures:          |                       |  |                         
|ALCO Discount Stores           | $1,554                |  | $2,107                  
|All Other                      | 351                   |  | 228                     
|                               | $1,905                |  | $2,335                  
|Identifiable Assets:           |                       |  |                         
|ALCO Discount Stores           | $143,959              |  | $142,518                
|All Other                      | 41,409                |  | 46,286                  
|                               | $185,368              |  | $188,804                
|                               |                       |  |                         
|PAGE9OF 13(FORM 10-Q)         



|                                        | Periods Ended | Periods Ended
|--------------------------------------- | ------------- | -------------
|                                        |               |              
|                                        | October 29,   |              
|                                        | 2000          |              
|                                        |               |              
|Net sales per above segment information | $149,120      |              
|Intercompany elimination                | (59,122)      |              
|Net sales per consolidated statements   | $89,998       |              
|of operations                           |               |              
|                                        |               |              
|Income from operations per above        | $1,338        |              
|segment information                     |               |              
|Inventory method                        | 0             |              
|Leases                                  | 2             |              
|Income from operations per consolidated | $1,340        |              
|statements of operations               
|                                       
|PAGE10OF 13
        (FORM 10-Q)