EXHIBIT 10.3
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                               GUARANTY AGREEMENT


                                      from


                           DOLLAR GENERAL CORPORATION

                            Dated as of June 11, 1999

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                                TABLE OF CONTENTS

SECTION 1.        Guaranty...............................................1

SECTION 2.        Bankruptcy.............................................2

SECTION 3.        Right of Set-Off.......................................2

SECTION 4.        Continuing Guaranty....................................2

SECTION 5.        Reinstatement..........................................2

SECTION 6.        Certain Actions........................................3

SECTION 7.        Application............................................3

SECTION 8.        Waiver.................................................3

SECTION 9.        Assignment.............................................3

SECTION 10.       Miscellaneous..........................................3



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                                    GUARANTY
                                    --------


          THIS  GUARANTY  AGREEMENT,  dated  as of June 11,  1999  (as  amended,
supplemented or otherwise modified, this "Guaranty"),  is made by Dollar General
Corporation, a Tennessee corporation ("Dollar" or the "Guarantor").


                              W I T N E S S E T H:
                              - - - - - - - - - -

          WHEREAS, Dollar, as a Lessee and Guarantor,  Atlantic Financial Group,
Ltd.  as Lessor,  certain  Subsidiaries  of Dollar,  as Lessees,  Three  Pillars
Funding  Corporation,  as Lender, the financial  institutions parties thereto as
Liquidity  Banks,  SunTrust  Bank,  Nashville,  N.A.,  as  Agent,  and  SunTrust
Equitable  Securities  Corporation,  as  Administrator  have  entered  into that
certain  Master  Agreement,  dated as of June 11,  1999 (as it may be  modified,
amended or restated  from time to time as and to the extent  permitted  thereby,
the "Master  Agreement";  and, unless otherwise defined herein,  terms which are
defined or defined by reference in the Master  Agreement  (including  Appendix A
thereto)  shall  have the same  meanings  when used  herein as such  terms  have
therein); and

          WHEREAS,   it  is  a  condition   precedent  to  the  Funding  Parties
consummating  the  transactions  to be consummated on each Closing Date that the
Guarantor execute and deliver this Guaranty; and

          WHEREAS,  it is in the  best  interests  of  the  Guarantor  that  the
transactions contemplated by the Master Agreement be consummated on each Closing
Date; and

          WHEREAS,  this Guaranty,  and the execution,  delivery and performance
hereof,  have been duly  authorized  by all  necessary  corporate  action of the
Guarantor; and

          WHEREAS, this Guaranty is offered by the Guarantor as an inducement to
the Funding  Parties to consummate the  transactions  contemplated in the Master
Agreement,  which  transactions,  if  consummated,  will  be of  benefit  to the
Guarantor;

          NOW,  THEREFORE,  in consideration of the foregoing and for other good
and  valuable  consideration,  the receipt and  sufficiency  of which are hereby
acknowledged by the Guarantor, the Guarantor hereby agrees as follows:

          SECTION 1. Guaranty. The Guarantor hereby  unconditionally  guarantees
the full and prompt payment when due, whether by acceleration or otherwise,  and
at all times  thereafter,  and the full and  prompt  performance,  of all of the
Liabilities (as  hereinafter  defined),  including  interest and earnings on any
such  Liabilities  whether accruing before or after any bankruptcy or insolvency
case or proceeding involving  Guarantor,  any Lessee or any other Person and, if
interest  or earnings  on any  portion of such  obligations  ceases to accrue by
operation  of law by reason  of the  commencement  of such  case or  proceeding,
including  such  interest and yield as would have accrued on any such portion of
such  obligations  if such case or  proceeding  had not  commenced,  and further
agrees to pay all reasonable expenses (including  reasonable attorneys' fees and
legal  expenses)  actually  paid or incurred  by each of the Funding  Parties in
endeavoring to collect the  Liabilities,  or any part thereof,  and in enforcing

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this Guaranty.  The term  "Liabilities",  as used herein,  shall mean all of the
following, in each case howsoever created, arising or evidenced,  whether direct
or  indirect,  joint or several,  absolute or  contingent,  or now or  hereafter
existing,  or due or to become due: (i) all amounts payable by the Lessees under
the Lease  (including,  without  limitation,  Basic Rent,  Supplemental Rent and
Recourse Deficiency Amounts),  the Master Agreement (including the facility fee)
or any  other  Operative  Document,  and (ii) all  principal  of the  Notes  and
interest  accrued  thereon,  accrued Yield and all additional  amounts and other
sums at any time due and owing,  and required to be paid, to the Funding Parties
under the terms of the Master Agreement,  the Loan Agreement, the Assignments of
Lease and  Rents,  the  Mortgages,  the Notes or any other  Operative  Document;

<PAGE>

provided,  however,  that,  notwithstanding  anything to the contrary  contained
herein,  (i) the Guarantor will not be obligated under any  circumstances to pay
under this Guaranty,  and the term "Liabilities" shall not include,  any amounts
greater  than the  Lessees  would have had to pay,  under the Lease,  the Master
Agreement,  the Construction Agency Agreement and the other Operative Documents,
assuming that such documents  were enforced in accordance  with their terms (and
without  giving  effect to any  discharge  or  limitation  thereon  resulting or
arising by reason of the  bankruptcy  or  insolvency  of any  Lessee),  plus all
reasonable  costs  actually  incurred in enforcing this Guaranty and (ii) during
the Construction Term for a Construction Land Interest, only the Lessor shall be
a  beneficiary  under  this  Guaranty  with  respect to such  Construction  Land
Interest.  As an  illustration  of the  foregoing  proviso,  if the Lessees have
properly exercised the Remarketing  Option under the Lease,  Guarantor will only
be obligated to pay the amounts due pursuant to Section 14.6 of the Lease,  plus
the reasonable costs actually incurred, if any, in enforcing this Guaranty.

          By  way  of  extension  and  not in  limitation  of  any of its  other
obligations  hereunder,  but subject to the immediately preceding sentence,  the
Guarantor  stipulates and agrees that in the event any  foreclosure  proceedings
are  commenced and result in the entering of a  foreclosure  judgment,  any such
foreclosure judgment, to the extent related to the Liabilities, shall be treated
as part of the  Liabilities,  and the Guarantor  unconditionally  guarantees the
full and prompt payment of such judgment.

          SECTION 2. Bankruptcy.  The Guarantor agrees that, in the event of the
dissolution,  bankruptcy  or insolvency  of the  Guarantor,  or the inability or
failure  of the  Guarantor  generally  to pay debts as they  become  due,  or an
assignment by the Guarantor for the benefit of creditors, or the commencement of
any case or  proceeding  in  respect  of the  Guarantor  under  any  bankruptcy,
insolvency or similar laws,  and if such event shall occur at a time when any of
the Liabilities  may not then be due and payable,  the Guarantor will pay to the
Funding  Parties  forthwith the full amount which would be payable  hereunder by
the Guarantor if all Liabilities were then due and payable.

          SECTION  3.  Right  of  Set-Off.  To  secure  all  obligations  of the
Guarantor hereunder, each Funding Party, each Liquidity Bank and the Agent shall
have a right to set-off,  without  demand or notice of any kind, at any time and
from time to time when any  amount  shall be due and  payable  by the  Guarantor
hereunder against any and all balances, credits, deposits, accounts or moneys of
or in  the  Guarantor's  name  now or  hereafter,  for  any  reason  or  purpose
whatsoever,  in the  possession  or control  of, or in transit  to, any  Funding
Party,  the Agent,  any  Liquidity  Bank or any agent or bailee for any  Funding
Party, and apply any such amounts toward the payment of the Liabilities then due
in such order as in accordance with the Operative Documents.

          SECTION 4. Continuing Guaranty. This Guaranty shall in all respects be
a continuing,  absolute and unconditional guaranty of prompt and, subject to the
limitations  contained herein,  complete payment and performance (and not merely
of  collection),  and shall  remain in full force and  effect  (notwithstanding,
without  limitation,  the dissolution of the Guarantor) until the termination of
the Commitments and the full and final payment of all of the Liabilities.

          SECTION 5. Reinstatement. The Guarantor further agrees that, if at any
time  all  or  any  part  of  any  payment  theretofore  applied  to  any of the
Liabilities  is or must be  rescinded  or  returned  for any  reason  whatsoever
(including, without limitation, the insolvency,  bankruptcy or reorganization of
the Guarantor or any Lessee),  such Liabilities  shall, for the purposes of this

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Guaranty,  to the extent that such  payment is or must be rescinded or returned,
be deemed to have continued in existence,  notwithstanding such application, and
this Guaranty shall  continue to be effective or be reinstated,  as the case may
be, as to such Liabilities, all as though such application had not been made.

          SECTION 6. Certain Actions. The Funding Parties may, from time to time
at their  discretion and,  except as expressly  provided for under the Operative
Documents,  without  notice to the  Guarantor,  take any or all of the following
actions:  (a) retain or obtain (i) a security interest in any Lessee's interests
in the Lease and (ii) a lien or a  security  interest  hereafter  granted by any
Person upon or in any property, in each case to secure any of the Liabilities or
any  obligation  hereunder;  (b)  retain  or obtain  the  primary  or  secondary
obligation  of any  obligor or  obligors,  in addition  to the  Guarantor,  with
respect to any of the  Liabilities;  (c) extend or renew for one or more periods
(regardless  of  whether  longer  than  the  original  period),  or  release  or
compromise  any  obligation of the Guarantor  hereunder or any obligation of any
nature of any other obligor (including,  without limitation,  the Lessor and any
Lessee) with respect to any of the  Liabilities;  (d) release or fail to perfect
its Lien upon or security interest in, or impair,  surrender,  release or permit
any  substitution or exchange for, all or any part of any property  securing any
of the  Liabilities or any obligation  hereunder,  or extend or renew for one or
more periods  (regardless of whether longer than the original period) or release
or compromise  any  obligations of any nature of any obligor with respect to any
such  property;  and (e)  resort  to the  Guarantor  for  payment  of any of the
Liabilities,  regardless  of whether  the Agent or any other  Person  shall have
resorted to any  property  securing  any of the  Liabilities  or any  obligation
hereunder  or shall  have  proceeded  against  any other  obligor  primarily  or
secondarily obligated with respect to any of the Liabilities (all of the actions
referred to in this clause (e) being hereby expressly waived by the Guarantor to
the extent permitted by law).

          SECTION 7. Application. Any amounts received by any Funding Party from
whatever source on account of the Liabilities  shall be applied by it toward the
payment of such of the Liabilities,  and in such order of application, as is set
forth in the Operative Documents.

          SECTION  8.  Waiver.  Subject  in each  event to the  notice,  if any,
otherwise expressly required under the Operative Documents, the Guarantor hereby
expressly waives:  (a) notice of the acceptance of this Guaranty;  (b) notice of
the existence or creation or non-payment of all or any of the  Liabilities;  (c)
presentment,  demand,  notice  of  dishonor,  protest,  and  all  other  notices
whatsoever;  and  (d)  except  as  provided  to the  contrary  in the  Operative
Documents,  all diligence in collection or protection of or realization upon the
Liabilities  or any thereof,  any obligation  hereunder,  or any security for or
guaranty of any of the foregoing.

          SECTION 9. Assignment.  Subject to Section 6 of the Master  Agreement,
each  Funding  Party  may,  from  time to time,  whether  before  or  after  any
discontinuance  of this Guaranty,  at its sole  discretion and without notice to
the Guarantor,  assign or transfer any or all of its portion of the  Liabilities
or any interest therein; and, notwithstanding any such assignment or transfer or
any subsequent  assignment or transfer  thereof,  such Liabilities  shall be and
remain  Liabilities  for the purposes of this Guaranty,  and each and every such
immediate and successive  assignee or transferee of any of the Liabilities or of
any interest  therein shall,  to the extent of such  assignee's or  transferee's
interest in the Liabilities, be entitled to the benefits of this Guaranty to the
same extent as if such assignee or transferee were such Funding Party.

          SECTION 10.  Miscellaneous.  No delay in the  exercise of any right or
remedy shall operate as a waiver thereof,  and no single or partial  exercise of
any right or remedy  shall  preclude  other or further  exercise  thereof or the
exercise of any other right or remedy;  nor shall any  modification or waiver of
any of the  provisions of this Guaranty be binding upon any Funding Party except
as expressly set forth in a writing duly signed and delivered on its behalf.  No
action permitted hereunder shall in any way affect or impair any Funding Party's
rights or the Guarantor's  obligations under this Guaranty.  For the purposes of

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this Guaranty, Liabilities shall include all of the obligations described in the
definition  thereof,  notwithstanding  any  right or power of any  Lessee or the
Lessor or anyone else to assert any claim or defense  (other than final payment)
as to the invalidity or  unenforceability  of any such  obligation,  and no such
claim or  defense  shall  affect  or impair  the  obligations  of the  Guarantor
hereunder. The Guarantor's obligations under this Guaranty shall be absolute and
unconditional irrespective of any circumstance whatsoever which might constitute
a legal or equitable discharge or defense of the Guarantor. The Guarantor hereby
acknowledges  that there are no conditions to the effectiveness of this Guaranty
which have not been satisfied as of the date hereof.

          This  Guaranty  shall  be  binding  upon  the  Guarantor  and upon the
Guarantor's  successors and permitted assigns;  and all references herein to the
Guarantor  shall be deemed to  include  any  successor  or  successors,  whether
immediate  or remote,  to such Person;  provided  that the  Guarantor  shall not
assign,  other than by operation of law, its obligations  hereunder  without the
prior written consent of the Funding Parties.

          Wherever possible each provision of this Guaranty shall be interpreted
in such manner as to be  effective  and valid under  Applicable  Law, but if any
provision of this Guaranty  shall be prohibited by or invalid  thereunder,  such
provision  shall  be  ineffective  only to the  extent  of such  prohibition  or
invalidity,  without  invalidating  the  remainder  of  such  provision  or  the
remaining provisions of this Guaranty.

          The  Guarantor:  (a) submits for itself and its  property in any legal
action  or  proceeding  relating  to  this  Guaranty,  or  for  recognition  and
enforcement of any judgment in respect  thereof,  to the  non-exclusive  general
jurisdiction of the Courts of the State of Tennessee sitting in Davidson County,
Tennessee, the courts of the United States of America for the Middle District of
Tennessee,  and  appellate  courts from any thereof;  (b) consents that any such
action or  proceedings  may be brought to such courts,  and waives any objection
that it may now or hereafter  have to the venue of any such action or proceeding
in any  such  court  or  that  such  action  or  proceeding  was  brought  in an
inconvenient  court and agrees not to plead or claim the same;  (c) agrees  that
service  of  process  in any  such  action  or  proceeding  may be  effected  by
delivering  a copy thereof to it at its address set forth below or at such other
address  of which the other  parties  to the  Master  Agreement  shall have been
notified  pursuant to Section 8.2 of the Master  Agreement;  and (d) agrees that
nothing  herein shall affect the right to effect service of process in any other
manner  permitted by law or shall limit the right of the Funding  Parties to sue
in any other jurisdiction.

          All notices, demands, declarations,  consents, directions,  approvals,
instructions,  requests and other  communications  required or permitted by this
Guaranty  shall be in  writing  and shall be deemed to have been duly given when
addressed to the  appropriate  Person and  delivered in the manner  specified in
Section 8.2 of the Master Agreement.

          THIS GUARANTY  SHALL BE CONSTRUED IN  ACCORDANCE  WITH AND GOVERNED BY
THE  LAWS  OF  THE  STATE  OF  TENNESSEE,  WITHOUT  REGARD  TO  CONFLICT  OF LAW
PRINCIPLES.

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          IN WITNESS  WHEREOF,  the  Guarantor  has caused  this  Guaranty to be
executed and delivered as of the date first above written.



                                          DOLLAR GENERAL CORPORATION



                                          By:_____________________________
                                          Name Printed:
                                          Title:



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