SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                    FORM 10-K

(Mark One)
[X]      ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934

For the fiscal year ended      October 28,  2000
                          ---------------------------
                                       OR

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

For the transition period from                         to
                               -----------------------    ---------------------
--------------------------------------------------------------------------------
Commission file number                   0-14900
                       -------------------------------------------


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

             Delaware                                      91-1335798
----------------------------------              --------------------------------
 (State or other jurisdiction of                        (I.R.S. Employer
  incorporation or organization)                       Identification No.)

     P.O. Box 21093, Seattle, WA                          98111-3093
----------------------------------------              ------------------------
(Address of principal executive offices)             (Zip Code)

(Registrant's telephone number, including area code) (206) 901-3790
                                                     --------------

Former  name,  former  address and former  fiscal  year,  if changed  since last
report.

Securities registered pursuant to Section 12(b) of the Act: None.
Securities registered pursuant to Section 12(g) of the Act:
  Common stock - $1.00 par value
  7-1/8% Convertible Debentures due July 15, 2006

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

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]

Aggregate market value of the registrant's voting stock held by nonaffiliates of
the registrant as of December 1, 2000: $90,000.

The  number of shares  of common  stock  outstanding  as of  December  1,  2000:
19,473,728.

Documents incorporated by reference:  None.
-----------------------------------

                                  Page 1 of 25
<PAGE>


                                     PART I

ITEM 1 - BUSINESS
-----------------

PSS, Inc. ("PSS"),  through its wholly owned subsidiary,  PNS Inc. ("PNS"), owns
PSSC Inc. ("PSSC");  together, PSS, PNS and PSSC are referred to collectively as
the "Company".  The Company, through PSSC, owns a pass-through and participation
certificate issued by the Federal Home Loan Mortgage Corporation backed by whole
pool real  estate  mortgages  ("Mortgage  Certificates"),  and as a  result,  is
primarily  engaged in the  business of owning  mortgages  and other liens on and
interests in real estate.  At October 28, 2000, the Company's  principal  assets
consisted  of  approximately  $2.7 million of Mortgage  Certificates  from which
interest  income  is  earned.  The  Mortgage   Certificates  are  financed  with
borrowings,  payable  on  demand,  secured  by the  Mortgage  Certificates  (the
"Mortgage Financing"). The principal obligations of the Company are the Mortgage
Financing  borrowings,  the PNS 12-1/8% Senior  Subordinated  Notes due July 15,
1996 (the "Senior Notes") and the PSS 7-1/8% Convertible Debentures due July 15,
2006 (the "Debentures"), upon which interest expense is incurred.

See the Liquidity and Capital Resources  section of Management's  Discussion and
Analysis of Financial  Condition and Results of Operations  regarding the status
of the Company's  defaults on the Senior Notes and  Debentures  and factors upon
which the Company's future operating  results,  liquidity and capital  resources
are primarily dependent.

ITEM 2 - PROPERTIES
-------------------

None

ITEM 3 - LEGAL PROCEEDINGS
--------------------------

None.


                                       2
<PAGE>


ITEM 4 - SUBMISSON OF MATTERS TO A VOTE OF SECURITY HOLDERS
-----------------------------------------------------------

Not applicable.

                                     PART II

ITEM 5 - MARKET  FOR  THE  REGISTRANT'S  COMMON  STOCK  AND  RELATED
--------------------------------------------------------------------
STOCKHOLDER MATTERS
-------------------

MARKET INFORMATION

The Company's common stock is traded  over-the-counter.  High and low prices are
the high and low bids as reported by National Quotation Bureau,  Inc., which are
those  quoted by dealers to each  other,  exclusive  of  markups,  markdowns  or
commissions,  and do not represent actual transactions.  The high and low prices
for the stock during the two years ended October 28, 2000 were reported as being
less than $0.01 per share.

HOLDERS

As of December 1, 2000, there were 961 holders of record of the Company's common
stock.

DIVIDENDS ON COMMON STOCK

The Company has never paid a dividend and does not anticipate  paying  dividends
for the foreseeable future. The indentures  governing the Company's Senior Notes
and Debentures  contain  covenants  which restrict the ability of the Company to
pay dividends (see Note 5 to the financial statements).



                                       3
<PAGE>


ITEM 6 - SELECTED FINANCIAL DATA
--------------------------------


The following selected financial data should be read in conjunction with the
financial statements and related notes and "Management's Discussion and Analysis
of Financial Condition and Results of Operations" included elsewhere herein. As
explained in Note 2 to the financial statements, information is presented on a
liquidation basis. Presentation of per share information on a liquidation basis
is not considered meaningful and has been omitted.
<TABLE>
<CAPTION>


                                                                                  YEAR ENDED
                                                                                  ----------
                                                       OCTOBER 28,  OCTOBER 30, OCTOBER 31,  NOVEMBER 1,   NOVEMBER 2,
                                                          2000          1999       1998         1997         1996
                                                       ---------------------------------------------------------------
                                                                           (thousands of dollars)
STATEMENT OF CHANGES IN NET LIABILITIES DATA:

<S>                                               <C>               <C>          <C>           <C>           <C>
Increase in Net Liabilities                       $      (2,290)    $ (2,290)    $ (2,265)     $ (2,265)     $ (3,020)


                                                       OCTOBER 28,  OCTOBER 30, OCTOBER 31,  NOVEMBER 1,   NOVEMBER 2,
                                                          2000          1999       1998         1997         1996
                                                       ---------------------------------------------------------------

STATEMENTS OF NET LIABILITIES DATA:


Total Assets                                      $       2,863      $ 3,268      $ 3,984       $ 4,829       $ 5,591

Short-term borrowings                                     2,255        2,641        3,270         4,073         4,922

Long-term debt                                           28,178       28,178       28,178        28,178        28,178

Total Liabilities                                        46,899       45,014       43,440        42,020        40,517

Net Liabilities                                   $    (44,036)     $(41,746)   $ (39,456)    $ (37,191)    $ (34,926)

</TABLE>


                                       4
<PAGE>



ITEM 7 - MANAGEMENT'S  DISCUSSION  AND  ANALYSIS  OF  FINANCIAL  CONDITION  AND
-------------------------------------------------------------------------------
RESULTS OF OPERATIONS
---------------------

Liquidity and Capital Resources
-------------------------------

At October 28, 2000, the Company's  principal  assets consisted of approximately
$2.7 million of Mortgage  Certificates  from which interest income is earned and
its principal  obligations  consisted of Mortgage Financing  borrowings,  Senior
Notes and Debentures upon which interest expense is incurred.

PNS is restricted by terms of its Senior Notes  Indenture from paying  dividends
or making  other  payments to PSS,  except that PNS may pay  dividends to PSS in
amounts  sufficient to enable PSS to meet its obligation on its Debentures  when
due. PNS, like its parent company, has a stockholder's deficit.

At October 28, 2000, the Company had total assets of approximately $2.86 million
and liabilities,  other than the Senior Notes and Debentures  including  accrued
interest and liquidation  costs, of $2.41 million,  thus having a net difference
of approximately  $450,000 available for holders of Senior Notes and Debentures.
At October 28,  2000,  approximately  $5.26  million of Senior  Notes and $22.92
million  of  Debentures  remain  outstanding,  such  outstanding  amounts  being
unchanged since 1995.

The Company  failed to pay the interest due January 15 and July 15, 1995,  1996,
1997,  1998,  1999 and 2000 on its  Debentures and such default  continues.  The
trustee for the Debentures  has indicated to the holders of the Debentures  that
it does not  intend to  accelerate  payment  of the  Debentures  "because  it is
unlikely that the Debenture  holders would receive any payment if the Debentures
were accelerated."

PNS failed to pay interest due July 15, 1995, January 15, 1996 and July 15, 1996
and failed to pay the  outstanding  principal which became due on July 15, 1996.
All such defaults continue.  In 1997, the Company was advised by the trustee for
the Senior Notes that, after concluding that the Company lacks sufficient assets
to pay the Senior  Notes,  the trustee had  petitioned a district  court for the
State of  Minnesota to  authorize  and instruct it to refrain from  pursuing any
default remedy against the Company and to discharge it as trustee,  and that the
Court had granted the trustee's requests.

The  Company's  future  operating  results,  liquidity,  capital  resources  and
requirements  are  primarily  dependent  upon actions  which may be taken by the
trustee for the  Debentures to collect  amounts due  thereunder,  the payment of
amounts due on and  purchases  of Senior Notes and  Debentures  and, to a lesser
extent,  interest  rate  fluctuations  as they  relate  to the  market  value of
Mortgage  Certificates  and to the  spread of  interest  income  therefrom  over
interest expense on related borrowings.  The Company is exclusively  invested in
Mortgage Certificates,  and, accordingly, is presently relying solely on such as
its source of cash funds.  It has not been  determined what course of action the
Company  may  pursue  with  respect  to debt  service  on the  Senior  Notes and
Debentures.


                                       5
<PAGE>


Results of Operations
---------------------

         Investment income
         -----------------

Interest income for the year ended October 28, 2000 increased as compared to the
prior  year as a result of the  decrease  in  Mortgage  Certificates  unrealized
appreciation  of $1,000 during fiscal 2000 being less than the $83,000  decrease
of the prior year, offset by a decrease in interest income due to lower balances
of investments in Mortgage Certificates. Investment income decreased during each
of the years ended  October 30,  1999 and October 31,  1998,  as compared to the
immediate  preceding year primarily as a result of lower balances of investments
in Mortgage  Certificates as well as decreases in unrealized  appreciation.  The
weighted  average  interest  income  rate  earned on the  Mortgage  Certificates
approximated  7.5 %, 7.3% and 7.7%  during the years  ended  October  28,  2000,
October 30, 1999 and October 31, 1998, respectively.

Included in investment  income are unrealized  gains (or losses)  resulting from
increases   (or   decreases)   in   unrealized   appreciation   resulting   from
mark-to-market adjustments on Mortgage Certificates.  As a result of declines in
market  values  as  well  as  principal  repayments  on  Mortgage  Certificates,
unrealized  appreciation  resulting from  mark-to-market  adjustments  decreased
during the years  ended  October  30,  1999 and  October 31, 1998 by $83,000 and
$47,000,  respectively.  Increases  in market  values  offset  decreases  due to
principal  repayments,  resulting in a net decrease in  unrealized  appreciation
during the year ended October 28, 2000 of $1,000.

         Interest expense
         ----------------

Interest expense increased during the year ended October 28, 2000 as compared to
the prior year due to higher interest rates offset by lower average  balances of
Mortgage Certificates  borrowings.  Interest expense for each of the years ended
October 30, 1999 and October  31, 1998  decreased  as compared to the  immediate
preceding  year  primarily due to lower average  balances of Mortgage  Financing
borrowings outstanding during the periods. The weighted average interest expense
rate on Mortgage Certificate related borrowings approximated 6.9%, 5.8% and 6.0%
during the years ended October 28, 2000,  October 30, 1999 and October 31, 1998,
respectively.

ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
--------------------------------------------------------------------

The Company's  investment in mortgage  certificates  is a market risk  sensitive
instrument relative primarily to interest rate risk. The investment represents a
pass-through  and  participation  certificate  issued by the  Federal  Home Loan
Mortgage  Corporation in 1990 with an original  principal of  approximately  $11
million and a 2020 maturity date. The Company's average investment  approximated
$3.0  million,  $3.3  million  and $4.1  million  during the fiscal  years ended
October 28,  2000,  October 30, 1999 and  October 31,  1998,  respectively.  The
investment in mortgage  certificates  has declined over the past three years due
primarily to  principal  repayments  from the  underlying  mortgages  within the
mortgage certificate pool. Specifically,  principal repayments have approximated
12% to 17% of the  mortgage  investment  during  each of the past  three  fiscal
years.

                                       6
<PAGE>

The rate of  interest  to be  earned  on the  mortgage  certificates  is
adjustable  based on  general  interest  rate  trends,  with  certain  maximums,
including  limits of 2% for annual rate  changes and interest  rate  maximums of
approximately 13%. Interest rates on the underlying  mortgages are adjusted,  as
applicable,  throughout the year.  The weighted  average  interest  income rates
earned on the mortgage  certificates  approximated  7.5% and 7.3% during  fiscal
2000  and  1999,  respectively,  and the  interest  rate  at  October  28,  2000
approximated 8.3%.

Mortgage certificates are financed with borrowings from an investment bank, such
borrowings  being  secured by the mortgage  certificates  and payable on demand.
Borrowings  bear  interest  at rates  generally  approximating  the three  month
Federal Funds rate plus 25 to 75 basis points.  The Company's average borrowings
approximated $2.5 million, $2.9 million and $3.7 million during the fiscal years
ended October 28, 2000, October 30, 1999 and October 31, 1998, respectively. The
borrowings  have  declined  over the past three years due  primarily to applying
principal  repayments from the mortgage  certificates to repay  borrowings.  The
weighted average interest expense rates incurred on the borrowings  approximated
6.9% and 5.8% during the years ended  October 28,  2000,  and October 30,  1999,
respectively,  and the  interest  rate at October  28, 2000  approximated  7.5%.
Borrowings at October 28, 2000 approximated $2.3 million.

Generally,  a decline in interest  rates would  result in a decrease in interest
rates  earned on mortgage  certificates  as  underlying  mortgages  would likely
adjust interest rates down,  however such adjustment  would occur throughout the
year. Interest rates paid on borrowings would likely decline on a more immediate
basis.  The  timing of when  interest  income  and  expense  rates are  effected
historically has resulted in a short-term margin  improvement  during periods of
interest  rate  declines.   The  market  price  of  mortgage   certificates  has
historically  increased as interest  rates  decline.  During periods of interest
rate increases, the opposite is the case.

In the  Company's  circumstances,  whereby  its  future  operating  results  and
financial  condition  are  primarily  dependent  upon  actions  to be taken with
respect to the $5.26  million of 12 1/8%  Senior  Notes and $22.92  million of 7
1/8% Debentures,  both of which are in default, and its financial statements are
presented on a liquidation  basis utilizing a liquidation  date in October 2001,
additional quantitative and qualitative disclosures about market risk, including
projections  of future cash flows,  are not  considered  meaningful and have not
been presented.


                                       7
<PAGE>


ITEM 8 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
----------------------------------------------------

INDEX TO FINANCIAL STATEMENTS
-----------------------------

         Financial statements                                         Page
         --------------------                                         ----

         Report of Independent Accountants                               9
         Consolidated Statements of Net Liabilities                     10
         Consolidated Statements of Changes of Net Liabilities          11
         Consolidated Statements of Cash Flows                          12
         Notes to Financial Statements                                  13



SUPPLEMENTARY FINANCIAL INFORMATION
-----------------------------------

         Selected quarterly financial data (unaudited)                  19
         ---------------------------------------------


                                       8
<PAGE>



                        REPORT OF INDEPENDENT ACCOUNTANTS

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

We have audited the  accompanying  consolidated  statements  of net  liabilities
(liquidation basis) of PSS, Inc. and its subsidiaries as of October 28, 2000 and
October  30,  1999 and the  related  consolidated  statements  of changes in net
liabilities  (liquidation  basis) and of cash flows for the years ended  October
28, 2000, October 30, 1999 and October 31, 1998. These financial  statements are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the  United  States of  America.  Those  standards  require  that we plan and
perform the audit to obtain  reasonable  assurance  about  whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence  supporting  the amounts and  disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made by  management,  as well as evaluating  the overall
financial  statement  presentation.   We  believe  that  our  audits  provide  a
reasonable basis for our opinion.

As described in Note 2 of the consolidated  financial statements,  as of October
28, 1995, the Company adopted the liquidation basis of accounting.

In our opinion,  the consolidated  financial statements referred to in the first
paragraph present fairly, in all material  respects,  the financial  position of
PSS, Inc. and its  subsidiaries at October 28, 2000 and October 30, 1999 and the
changes in their net  liabilities  (liquidation  basis) and their cash flows for
the years ended  October 28,  2000,  October 30, 1999 and October 31,  1998,  in
conformity with accounting principles generally accepted in the United States of
America applied on the basis described in the preceding paragraph.

PricewaterhouseCoopers LLP

Seattle, Washington
December 8, 2000


                                       9
<PAGE>



                                    PSS, INC.
                   CONSOLIDATED STATEMENTS OF NET LIABILITIES
                               (LIQUIDATION BASIS)
                             (THOUSANDS OF DOLLARS)
<TABLE>
<CAPTION>

                                                                                  October 28,      October 30,
                                                                                  ----------------------------
                                                                                     2000             1999

<S>                                                                                   <C>             <C>
Cash and short-term investments                                                      $115             $172


Investment in mortage certificates                                                  2,712            3,061


Accrued interest receivable                                                            36               35
                                                                                 --------         --------


             Total Assets                                                           2,863            3,268
                                                                                 --------         --------


Borrowings under mortgage certificate financing agreement                            2,255           2,641
Accounts payable and accrued liabilities                                               161             156
Reserve for estimated costs during period of liquidation                                64              62
PNS 12 1/8% senior notes                                                             5,258           5,258
Accrued interest payable on PNS notes                                                3,696           3,060
Reserve for interest on PNS notes during period of liquidation                         636             636
PSS 7 1/8% debentures                                                               22,920          22,920
Accrued interest payable on PSS debentures                                          10,280           8,652
Reserve for interest on PSS debentures during period of liquidation                  1,629           1,629
                                                                                 ---------        --------

        Total Liabilities                                                           46,899          45,014
                                                                                 ---------        --------

          Net Liabilities                                                          $44,036        ($41,746)
                                                                                 =========        ========
</TABLE>



   The accompanying notes are an integral part of these financial statements.


                                       10
<PAGE>
                                    PSS, INC.
              Consolidated Statements of Changes in Net Liabilities
                               (Liquidation Basis)
                             (thousands of dollars)
<TABLE>
<CAPTION>

                                                                      Year Ended
                                                                      ----------


                                                            October 28,    October 30,   October 31,
                                                               2000           2000          2000

<S>                                                              <C>          <C>           <C>
Investment income                                                $217         $ 156         $ 270


Interest expense                                               (2,436)       (2,432)       (2,490)


General and administrative expense                                (70)          (54)          (94)


Decrease in reserve for estimated costs
     and interest during period of liquidation                  2,289         2,330         2,314


Provision for estimated costs and interest
     during period of liquidation                              (2,290)       (2,290)       (2,265)
                                                             ---------     ---------     ---------


Increase in Net Liabilities                                  $ (2,290)     $ (2,290)     $ (2,265)
                                                             =========     =========     =========
</TABLE>




   The accompanying notes are an integral part of these financial statements.


                                       11
<PAGE>


                                    PSS, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (thousands of dollars)
<TABLE>
<CAPTION>

                                                                                            Year ended
                                                                                            ----------
                                                                                  October 28,   October     October
                                                                                     2000       30, 1999    31, 1998
                                                                                  ---------------------------------

<S>                                                                               <C>          <C>          <C>
Cash flows from operating activities:
     Increase in Net Liabilities                                                  $ (2,290)    $(2,290)     $(2,265)



     Decrease in unrealized appreciation                                                 1          84           47


     Adjustments to reconcile to net cash flows
              from operating activities:


     Increase (decrease) in estimated costs and interest
              during period of liquidation                                               2         (40)         (49)


     Increase in accrued interest payable                                            2,264       2,264        2,264


     Other                                                                               3         (11)          20
                                                                                    ------      ------       ------


Net cash provided (used) by operating activities                                       (20)          7           17
                                                                                    ------      ------       ------


Cash flows from investing activities:
     Principal repayments on mortgage certificates                                     349         555          712
                                                                                    ------      ------       ------


Net cash provided by investing activities                                              349         555          712
                                                                                    ------      ------       ------


Cash flows from financing activities:
     Repayment of mortgage certificate borrrowings                                    (386)       (629)        (803)
                                                                                    ------      ------       ------


Net cash used by financing activities                                                 (386)       (629)        (803)
                                                                                    ------      ------       ------


Net decrease in cash and short-term investments                                        (57)        (67)         (74)


     Cash and short-term investments at beginning of year                              172         239          313
                                                                                    ------      ------       ------

     Cash and short-term investments at end of year                                 $  115       $ 172        $ 239
                                                                                    ======      ======       ======

Supplemental cash flow information
     Cash paid for interest                                                         $  172       $ 168        $ 226
                                                                                    ======      ======       ======
</TABLE>


   The accompanying notes are an integral part of these financial statements.


                                       12
<PAGE>


                                    PSS, INC.
                          NOTES TO FINANCIAL STATEMENTS

NOTE 1 - THE COMPANY
--------------------

The consolidated  financial statements of PSS, Inc. ("PSS"),  include its direct
subsidiary  PNS  Inc.   ("PNS")  and  its  subsidiary   PSSC,   Inc.   ("PSSC"),
collectively,  the "Company".  The Company is principally owned by Seacorp, Inc.
("Seacorp") and Zimmerman  Retailing Group Limited ("Zimco").  Seacorp and Zimco
own approximately 41% and 12%, respectively, of the Company's outstanding common
stock, with the remainder publicly owned.

The Company,  through PSSC, owns a pass-through  and  participation  certificate
issued by the Federal Home Loan Mortgage  Corporation  backed by whole pool real
estate  mortgages  ("Mortgage  Certificates"),  and as a  result,  is  primarily
engaged in the business of owning  mortgages and other liens on and interests in
real  estate.  The  principal  obligations  of the Company  are PSSC  borrowings
secured by Mortgage Certificates, PNS 12-1/8% Senior Subordinated Notes due July
15, 1996 (the "Senior Notes") and PSS 7-1/8% Convertible Debentures due July 15,
2006 (the "Debentures").

The Company  failed to pay the interest due January 15 and July 15, 1995,  1996,
1997,  1998,  1999 and 2000 on its  Debentures and such default  continues.  The
trustee for the Debentures  has indicated to the holders of the Debentures  that
it does not  intend to  accelerate  payment  of the  Debentures  "because  it is
unlikely that the Debenture  holders would receive any payment if the Debentures
were accelerated."

PNS failed to pay interest  due on July 15, 1995,  January 15, 1996 and July 15,
1996 and  failed to pay the  outstanding  principal  on its Senior  Notes  which
became  due on July 15,  1996.  All such  defaults  continue.  In June  1997 the
Company was advised by the trustee for the Senior Notes that,  after  concluding
that the Company lacks  sufficient  assets to pay the Senior Notes,  the trustee
had  petitioned a district  court for the State of  Minnesota  to authorize  and
instruct it to refrain from pursuing any default  remedy against the Company and
to  discharge  it as  trustee,  and that the Court  had  granted  the  trustee's
requests.

At October 28, 2000, the Company had total assets of approximately $2.86 million
and liabilities,  other than the Senior Notes and Debentures  including  accrued
interest and liquidation  costs, of approximately  $2.41 million,  thus having a
net difference of approximately  $450,000  available for holders of Senior Notes
and Debentures. At October 28, 2000, approximately $5.26 million of Senior Notes
and  $22.92  million of  Debentures  remain  outstanding  and,  annual  interest
thereon,  approximates $636,000 and $1.63 million,  respectively.  The Company's
future  operating  results,  liquidity,  capital  resources and requirements are
primarily  dependent  upon  actions  which may be taken by the  trustee  for the
Debentures to collect amounts due thereunder,  the payment of amounts due on and
purchases of Senior Notes and Debentures and, to a lesser extent,  interest rate
fluctuations as they relate to the market value of Mortgage  Certificates and to
the  spread of  interest  income  therefrom  over  interest  expense  on related
borrowings.  The Company is exclusively invested in Mortgage Certificates,  and,
accordingly, is presently relying solely on such as its source


                                       13
<PAGE>

of cash funds.  It has not been determined what course of action the Company may
pursue with respect to debt service on the Senior Notes and Debentures.

NOTE 2 - LIQUIDATION BASIS OF ACCOUNTING
----------------------------------------

Effective  October 28,  1995,  the  Company  adopted  the  liquidation  basis of
accounting for presenting its consolidated  financial statements.  This basis of
accounting is considered appropriate when, among other things,  liquidation of a
company  appears  imminent  and the net  realizable  value  of it's  assets  are
reasonably  determinable.  Under this basis of  accounting,  cash and short term
investments,   investments  in  mortgage   certificates   and  accrued  interest
receivable are stated at their net realizable value, net deferred tax assets are
stated at zero,  liabilities  are stated at contractual  face value with accrued
interest  through  the  liquidation   date,  and  estimated  costs  through  the
liquidation date are provided to the extent reasonably determinable.

The net effect of converting  from the going  concern  basis to the  liquidation
basis of accounting as of October 28, 1995 was an increase in net liabilities of
approximately  $1.7  million,  as a result  of  recording  estimated  costs  and
interest expense to the liquidation date. No adjustment to the reported value of
assets was required.  Under the  liquidation  basis,  the Company accrued future
liabilities  and  estimated  future net revenues  from interest and other income
associated with mortgage certificates to the liquidation date.

A summary of significant  estimates and judgments utilized in preparation of the
consolidated financial statements on a liquidation basis follows:

         o        The  Company's  next fiscal year end, the Saturday  closest to
                  the end of October, November 3, 2001, has been utilized as the
                  liquidation   date  for  the  October   28,   2000   financial
                  statements,  and the  October  28,  2000  fiscal  year end was
                  utilized  as the  liquidation  date for the  October  30, 1999
                  financial statements.

         o        Mortgage Certificates are stated at estimated market value and
                  related interest receivable at face value.

         o        Deferred  tax  assets  relating  to net  operating  loss carry
                  forwards, net of valuation allowance, are stated at zero.

         o        Borrowings secured by Mortgage Certificates are stated at face
                  value, which approximates market value.

         o        The  reserve  for   estimated   costs  during  the  period  of
                  liquidation   represents  estimates  of  future  costs  to  be
                  incurred through the liquidation date.

         o        Net  estimated  interest  income  to  be  earned  on  Mortgage
                  Certificates   in  excess  of  interest   expense  on  related
                  borrowings has been  considered in determining the reserve for
                  estimated costs during the period of liquidation.

                                       14
<PAGE>

NOTE 2 - LIQUIDATION BASIS OF ACCOUNTING (CONTINUED)
----------------------------------------------------

         o        Senior Notes and Debentures and related  interest  accrued are
                  stated at contractual face value.

         o        The  reserve  for  interest  during the period of  liquidation
                  represents  interest on Senior  Notes and  Debentures  for the
                  period  from the date of the  Consolidated  Statements  of Net
                  Liabilities to the estimated liquidation date, as applicable.

All of the above  estimates  and judgments may be subject to change as facts and
circumstances   change.   Similarly,   actual  costs  and  expenses  may  differ
significantly  depending on a number of factors,  particularly the length of the
liquidation period.

During the fiscal years ended October 28, 2000, October 30, 1999 and October 31,
1998,  the Company's  actual net excess of costs  incurred  over net  investment
income reasonably approximated the recorded reserve for such years.

Presentation  of per common  share  information  on a  liquidation  basis is not
considered meaningful and has been omitted.


NOTE 3 - SUMMARY OF ACCOUNTING PRINCIPLES
-----------------------------------------

Cash and Short-Term Investments
-------------------------------

Cash and short-term investments,  having maturities of three months or less when
purchased, are primarily comprised of interest-bearing short-term bank deposits.

Investment in Mortgage Certificates
-----------------------------------

The  investment in Mortgage  Certificates  is recorded at estimated  fair value,
based upon market  prices  obtained from an  investment  bank.  Gains and losses
realized  upon sale of Mortgage  Certificates  and  unrealized  gains and losses
resulting from mark-to-market adjustments are included in investment income.

Accounting Estimates
--------------------

The preparation of financial  statements in conformity  with generally  accepted
accounting principles requires management to make estimates and assumptions that
affect  the  reported  amounts  of assets  and  liabilities  and  disclosure  of
contingent  assets and  liabilities at the date of the financial  statements and
the  reported  amounts of revenues  and expenses  during the  reporting  period.
Actual results could differ from those amounts.


                                       15
<PAGE>


NOTE 4 - INVESTMENT IN MORTGAGE CERTIFICATES
--------------------------------------------

Mortgage  Certificates  are financed with  borrowings  provided by an investment
bank pursuant to a letter  agreement  (the  "Financing  Agreement").  Borrowings
pursuant to the Financing  Agreement (the "Mortgage  Financing")  are secured by
the Mortgage  Certificates.  In the event of a decrease in the aggregate  market
value of the  Mortgage  Certificates  below the  requirements  of the  Financing
Agreement,  additional  collateral is required.  Principal and interest payments
received on Mortgage  Certificates are maintained in an interest earning account
and amounts in excess of required  collateral are released to the Company at its
request.  The  Mortgage  Financing  is  payable on demand  and  generally  bears
interest at rates approximating the three month Federal Funds Rate plus 25 to 75
basis  points.   Mortgage  Financing   borrowings  and  related  interest  rates
approximated $2.3 million and 7.5% at October 28, 2000 and $2.9 million and 5.9%
at October 30,  1999,  respectively.  During the years ended  October 28,  2000,
October 30, 1999, and October 31, 1998, the average balance of mortgage  related
borrowings outstanding approximated $2.5 million, $2.9 million and $3.7 million,
and the weighted annual average interest expense rates  approximated  6.9%, 5.8%
and 6.0%, respectively.

At October 28, 2000, the interest rate to be earned on the Mortgage Certificates
approximated  8.3%.  The  rate  of  interest  on the  Mortgage  Certificates  is
adjustable  based  on  general  interest  rate  trends  with  certain  maximums,
including  limits of 2% for annual  interest  rate  changes  and  interest  rate
maximums of approximately 13%. The weighted average interest income rates earned
on the Mortgage Certificates  approximated 7.5%, 7.3% and 7.7%, during the years
ended October 28, 2000, October 30, 1999 and October 31, 1998, respectively.

NOTE 5 - SUBORDINATED DEBT
--------------------------

Subordinated  debt and related  interest payable through the balance sheet dates
are summarized as follows (thousands of dollars):

                                                    October 28,     October  30,
                                                       2000             1999
                                                       ----             ----

PNS 12-1/8% Senior Notes                             $  5,258         $    5,258
Interest payable on Senior Notes                        3,696              3,060
                                                     --------         ---------
                                                     $  8,954         $   8,318
                                                     ========         =========

PSS 7-1/8% Debentures                                $ 22,920         $  22,920
Interest payable on Debentures                         10,280             8,652
                                                     --------         ---------
                                                     $ 33,200         $  31,572
                                                     ========         =========

                                       16
<PAGE>


NOTE 5 - SUBORDINATED DEBT (CONTINUED)
--------------------------------------

In July 1986,  the Company  completed  three public  securities  offerings  (the
"Public  Offerings").  PNS issued $150 million of Senior Notes and PSS sold 3.25
million  shares of its  common  stock and  issued  $150  million  of  Debentures
convertible  to PSS common  stock at $19.68 per share (the  conversion  price is
subject to adjustment  in the case of  dilution).  PSS invested the net proceeds
from its two offerings in PNS, in the form of a  contribution  to capital and an
intercompany  debenture  between PNS and PSS in the amount of $150  million with
substantially   the  same  interest  rate  and  redemption   provisions  as  the
Debentures.  The indenture  governing the Senior Notes  restricts the ability of
PNS and its  subsidiaries  to pay  dividends or make other  payments to PSS. The
Senior Notes indenture permits PNS to pay dividends to PSS in amounts sufficient
to enable PSS to meet its obligations on the Debentures when due,  provided that
no event of default (as defined in the Senior Notes  indenture) has occurred and
is continuing.  PNS, like its parent company,  has a stockholder's  deficit. The
Senior Notes and  Debentures  provide for semiannual  interest  payments and are
unsecured.

The indentures for the Senior Notes and Debentures  contain certain  restrictive
covenants which, among other things,  limit dividends and similar  distributions
to  stockholders,  essentially  prohibit  redemptions  and  retirements  of  the
Company's equity, limit the Company's ability to incur debt, and restrict action
and  agreements  by the  Company  that  would  prohibit  dividends  and  similar
distributions to the Company from its subsidiaries.

NOTE 6 - INCOME TAXES
---------------------

Due to losses for each of the years ended October 28, 2000, October 30, 1999 and
October 31, 1998, there was no provision for income taxes recorded.

As  of  October  28,  2000,   for  income  tax  purposes,   net  operating  loss
carry-forwards approximate $148 million and begin to expire at the end of fiscal
2001, $65 million expiring on such date. As Company  management cannot determine
that it is more  likely than not that the  Company  will  receive the benefit of
deferred tax assets relating to these loss carry-forwards, a valuation allowance
equal to the deferred  tax asset has been  established.  If certain  substantial
changes  in the  Company's  ownership  should  occur,  there  would be an annual
limitation on the amount of the carry-forwards which could be utilized.

                                       17
<PAGE>


NOTE 7 - STOCKHOLDERS' DEFICIT
------------------------------

The Company's  common stock  consists of 60 million  authorized  shares,  $1 par
value,  19,473,728 shares of which are issued and outstanding.  The Company also
has 10 million authorized shares of preferred stock, $1 par value, none of which
have been issued.  There have been no changes in common stock or additional paid
in capital  since  October 29, 1994.  Effective  October 28, 1995 as a result of
presenting  financial statements on the liquidation basis, changes in components
of stockholders' deficit are not presented.

                                       18
<PAGE>

NOTE 9 - SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)
------------------------------------------------------


Selected quarterly financial data are as follows (thousands of dollars):
<TABLE>
<CAPTION>
                                                                    Fiscal Quarters Ended
                                                                    ---------------------
                                                      October 28,   July 29,     April 29,   January 29,
                                                         2000        2000          2000        2000
                                                      --------------------------------------------------
<S>                                                    <C>          <C>          <C>           <C>
Decrease in reserve for estimated costs and
interest during period of liquidation                  $     599    $     552    $    587      $    551

Provision for estimated costs and interest during
period of liquidation
                                                          (2,290)         ---         ---           ---

Increase in Net Liabilities                               (2,290)         ---         ---           ---


                                                                    Fiscal Quarters Ended
                                                                    ---------------------
                                                      October 30,   July 31,       May 1,    January 30,
                                                         1999        1999          1999        1999
                                                      --------------------------------------------------



Decrease in reserve for estimated costs and
interest during period of liquidation               $        570        $ 604       $ 580         $ 576




Provision for estimated costs and interest
during period of liquidation                              (2,290)         ---         ---           ---


Increase in Net Liabilities                               (2,290)         ---         ---           ---
</TABLE>



ITEM 9 - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
------------------------------------------------------------------------
FINANCIAL DISCLOSURE
--------------------

None.

                                       19

<PAGE>


                                    PART III

ITEM 10 - DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
------------------------------------------------------------

The  following  table  sets forth  certain  information  concerning  each of the
directors and executive officers of the Company.  All directors will serve until
the next Annual Meeting of  Shareholders  and until his respective  successor is
elected or appointed. Each director of the Company is also a director of PNS.
<TABLE>
<CAPTION>
                                                       Present Principal
Name and Position                                      Occupation or Employment
With the Company                Age                    and Five Year Employment History
----------------                ---                    --------------------------------
<S>                             <C>
Mark Todes                      45           President  and Director of the Company since
President and Director                       May 1996.  President  of City  Realty,  Inc.
                                             since  May 1996 and  Vice  President  of 200
                                             West  Holdings,  Ltd. (a real estate holding
                                             company and a subsidiary of City Realty) for
                                             more  than  5  years  prior  thereto.   Vice
                                             President of Seacorp since July 1996.

Gerald P. Nathanson             65           Director of the Company  since October 1986.
Director                                     During  1996,  Mr.   Nathanson,   a  private
                                             investor,  left the  employ  of  L.Luria  (a
                                             retail   company).   He   served   as  Chief
                                             Executive   Officer   of   US   Holographics
                                             (marketing company for holographic products)
                                             from April 1992 to December 1995.

Carite L. Torpey                52           Vice  President,  Secretary and Treasurer of
Vice President, Secretary                    the  Company  since July 1997 and  Assistant
and Treasurer                                Secretary   for  more  than  5  years  prior
                                             thereto. Vice President of TG Services, Inc.
                                             since July 1998 and Assistant Vice President
                                             and  Assistant  Secretary  since  July 1996.
                                             Employed  by  The  Trump  Group  (a  private
                                             investment  company)  for more  than 5 years
                                             prior thereto.
</TABLE>

ITEM 11 - EXECUTIVE COMPENSATION
--------------------------------

Compensation of Directors and Executive Officers

The Company has no employees.  There are currently no  arrangements  under which
any officer or director of the Company will receive  compensation for serving as
such; however, other arrangements may be made in the future.


                                       20
<PAGE>


ITEM 12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
------------------------------------------------------------------------

The following table sets forth, as of December 1, 2000,  information  concerning
the beneficial ownership of the common stock of the Company by (i) persons known
by the Company to own beneficially more than 5% of its outstanding common stock,
(ii) each of the  directors of the Company and (iii) all directors and executive
officers of the Company as a group.  Except as set forth in the footnotes to the
table, the stockholders  have sole voting and investment power over such shares.
Unless otherwise specified,  the address for all directors is the address of the
Company's executive offices.  The address for Messrs.  Julius and Eddie Trump is
the address set forth below for Seacorp.  The address for Mr. Christopher Podoll
is the address set forth below for Zimmerman Retailing Group Limited.
<TABLE>
<CAPTION>

                                                  Amount and Nature
                                                   of Beneficial               Percent
Name                                                 Ownership                 of Class
----                                                 ---------                 --------
<S>                                                  <C>                        <C>
Christopher Podoll (a)                               2,391,079                  12.28%
Zimmerman Retailing Group Limited (a)                2,391,079                  12.28%
 P.O. Box 948
 Route 2, Pleasant Plain Road
 Fairfield, IA 52556
Seacorp, Inc. (b)                                   8,014,705                   41.1%
 P.O. Box 2573
 Seattle, WA 98111
Eddie Trump (b)                                     8,014,705                   41.1%
Julius Trump (b)                                    8,014,705                   41.1%
All Directors and Executive Officers as
 a Group (2 persons)                                   0                           0%
</TABLE>

(a)      According to the Schedule  13D, as amended (the "Zimco  Amended  13D"),
         filed with the Securities and Exchange  Commission (the  "Commission"),
         Zimco is an Iowa limited partnership, the sole general partner of which
         is Soma 2 L.P., a Delaware limited  partnership  ("Soma 2"). Soma 2 has
         as its general partner ZRG Co., Inc., a Delaware  corporation  ("ZRG"),
         for which Mr. Podoll serves as the sole executive officer and director.
         Mr. Podoll is a manager of investments of the William Zimmerman family.
         Amounts  include 8,079 shares  issuable  upon  conversion of Debentures
         beneficially  owned by Zimco.  Amounts do not include the  ownership of
         6,000 shares and 3,810 shares  issuable  upon  conversion of Debentures
         owned by the Surya  Financial Inc.  Retirement  Plan, a retirement plan
         for the  benefit of  various  employees  of Surya  Financial  Inc.,  an
         affiliate of Zimco.

(b)      According to the Schedule 13D, as amended, filed with the Commission by
         Julius Trump, Eddie Trump and Seacorp,  Seacorp is, and Messrs.  Julius
         and  Eddie  Trump  may be  deemed to be,  the  beneficial  owner(s)  of
         8,014,705  shares of common stock.  Such amount  includes

                                       21
<PAGE>

         8,079 shares issuable upon conversion of Debentures  beneficially owned
         by an affiliate of Seacorp.  As set forth in the Schedule 13D,  Seacorp
         is a Delaware  corporation  and does not  presently  have any  business
         other  than the  ownership  of shares of common  stock of the  Company.
         Seacorp is indirectly controlled by Messrs. Julius and Eddie Trump.

ITEM 13 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
--------------------------------------------------------

None

                                       22
<PAGE>


                           PART IV. OTHER INFORMATION

ITEM 14 - EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
-------------------------------------------------------------------------

(a)      See the section  entitled  "Index to  Financial  Statements"  appearing
         under Item 8 of this Annual Report on Form 10-K.

(b)      Not applicable

(c)      Exhibits:
<TABLE>
<CAPTION>
<S>      <C>                                                                                          <C>
         3.1      Restated Certificate of                     Incorporated by referenced from Exhibit 3.1
                  Incorporation of the Registrant             to the Registration Statement on Form S-1
                                                              (File No. 33-5560) of the Company (the
                                                              "Registration Statement").

         3.2      Certificate of Amendment of                 Incorporated by reference from Exhibit 3.2
                  Certificate of Incorporation of             to the Registration Statement.
                  the Registrant

         3.3      Certificate of Amendment of                 Incorporated by reference from Exhibit 3.1
                  Certificate of Incorporation                to Quarterly Report on Form 10-Q for the
                  of the Registrant                           quarter ended July 30, 1988.

         3.4      Certificate of Amendment of                 Incorporated by reference from Exhibit 3.4
                  Certificate of Incorporation                to the Annual Report on Form 10-K for the
                  of the Registrant                           year ended October 31, 1992.

         3.5      By-Laws of the Registrant                   Incorporated by reference from Exhibit 3.3
                                                              to the Registration Statement.

         4.1      Indenture between the Registrant            Incorporated by reference from Exhibit 4.1
                  Inc. and United States Trust                to the Registration Statement.
                  Company of New York, as Trustee,
                  relating to the 7-1/8% Convertible
                  Debentures  due July 15,
                  2006 (including the form of
                  Convertible Debenture).

         4.2      First Supplemental Indenture be-            Incorporated by reference from  Exhibit 4.1
                  tween the  Registrant  and                  to the Quarterly Report on Form 10-Q for
                  United States Trust Company of              quarter ended April 30,  1988.
</TABLE>


                                       23
<PAGE>
<TABLE>
<CAPTION>

<S>      <C>                                                                                          <C>
                  New York as  Trustee,  relating
                  to the 7-1/8% Convertible De-
                  bentures due July 15, 2006.

         4.3      Indenture between PNS Inc. and              Incorporated by reference from Exhibit 4.1
                  Norwest Bank Minneapolis, Nat-              to the Registration Statement on Form S-1
                  ional Association as Trustee,               (File No. 33-5591) of PNS Inc.
                  relating to the 12-1/8% Senior
                  Subordinated  Notes due July 15,
                  1996 (including  the form of
                  Senior Subordinated Note.

         4.4      First  Supplemental  Indenture be-          Incorporated  by reference from  Exhibit  4.2
                  tween PNS Inc.,  and  Norwest  Bank         to the Quarterly   Report  on  Form  10-Q  for
                  Minnesota, National Association             the quarter ended April 30,  1988.
                  as Trustee, relating to the 12-1/8%
                  Senior Subordinated Notes due July 15,
                  1996.

         10.5     Letter Agreement dated                      Incorporated by reference from Exhibit (i)
                  February 9, 1990 by and among               to Quarterly Report on form 10-Q for the
                  PSSC Inc. and Bear Stearns &                quarter ended February 3, 1990.
                  Co., Inc. for the purchase and
                  the financing of adjustable-rate
                  mortgages.

         22.1     Subsidiaries of the Registrant.             Incorporated by reference from Exhibit 22.to
                                                              the Annual Report on Form 10-K for the
                                                              year ended October 31, 1992.
</TABLE>

                                       24
<PAGE>


                                   SIGNATURES
                                   ----------

Pursuant to the  requirements of Section 13 or 15(d) of the Securities  Exchange
Act of 1934,  the  registrant  has duly  caused  this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

                                            PSS, INC.
                                            (Registrant)




Date:  January 15, 2001                     By:/s/ MARK TODES
                                              ---------------------------------
                                              Mark Todes, President and Director


                                       25
<PAGE>



Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following  persons on behalf of the  registrant and
in the capacities and on the dates indicated.

         Date              Title              Signature
         ----              -----              ---------

January 15, 2001           Director            /s/ Gerald Nathanson
                                              ---------------------------------
                                                   Gerald Nathanson

January 15, 2001           Director            /s/ Mark Todes
                                              ---------------------------------

                                                   Mark Todes