SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

|X|  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934

     For the quarterly period ended October 31, 2001
                                    ----------------
                                       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 0-12927
                                                -------

                         NATIONAL HOME HEALTH CARE CORP.
                         -------------------------------
             (Exact name of Registrant as Specified in Its Charter)

           Delaware                                      22-2981141
--------------------------------            ----------------------------------
(State or Other Jurisdiction of             (IRS Employer Identification No.)
 Incorporation or Organization)


                700 White Plains Road, Scarsdale, New York 10583
                ------------------------------------------------
             (Address of Principal Executive Offices with Zip Code)


         Registrant's Telephone Number Including Area Code: 914-722-9000
                                                            ------------

--------------------------------------------------------------------------------
                 Former Name, Former Address and Former Fiscal
                       Year, if Changed Since Last Report.

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

APPLICABLE  ONLY TO  ISSUERS  INVOLVED  IN  BANKRUPTCY  PROCEEDINGS  DURING  THE
PRECEDING FIVE YEARS:

Indicate  by check mark  whether  the  Registrant  has filed all  documents  and
reports  required by Section 12, 13 or 15(d) of the  Securities  Exchange Act of
1934 subsequent to the  distribution  of securities  under a plan confirmed by a
court. Yes          No
          ---         ---

APPLICABLE ONLY TO CORPORATE ISSUERS:

The number of shares of common  stock  outstanding  as of December  13, 2001 was
5,267,644.

<PAGE>


                         NATIONAL HOME HEALTH CARE CORP.

                                    FORM 10-Q

                     FOR THE QUARTER ENDED OCTOBER 31, 2001


PART I.   FINANCIAL INFORMATION                                            Page
                                                                           ----

Item 1.   Condensed Consolidated Financial Statements:

              Balance Sheets as of October 31, 2001 and
              July 31, 2001 (unaudited)                                     3-4

              Statements of Operations for the three months
              ended October 31, 2001 and October 31, 2001
              (unaudited)                                                    5

              Statements of Cash Flows for the three months
              ended October 31, 2001 and October 31, 2001
              (unaudited)                                                    6

          Notes to Consolidated Financial Statements                        7-8

Item 2.   Management's Discussion and Analysis of Financial
          Condition and Results of Operations                              10-13


PART II.  OTHER INFORMATION

Item 1.   Legal Proceedings                                                   14

Item 6.   Exhibits and Reports on Form 8-K                                    15

SIGNATURES                                                                    16

<PAGE>

                NATIONAL HOME HEALTH CARE CORP. AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                   (UNAUDITED)

<TABLE>
<CAPTION>

                                                                              October 31, 2001   July 31, 2001
                                                                              ----------------   -------------
<S>                                                                             <C>               <C>
ASSETS

Current assets:
   Cash and cash equivalents                                                    $ 11,444,000      $ 9,082,000
   Investments                                                                        47,000           18,000
   Accounts receivable-less allowance for doubtful
     accounts of $830,000 and $865,000                                            15,620,000       15,983,000
   Prepaid expenses and other assets                                                 835,000        1,199,000
   Deferred taxes                                                                    810,000          810,000
                                                                                 -----------      -----------

     Total current assets                                                         28,756,000       27,092,000

   Furniture, equipment and leasehold
      improvements, net                                                              916,000          939,000
   Excess of cost over fair value of net assets of
      businesses acquired, net                                                     7,166,000        7,166,000
   Other intangible assets, net                                                    1,765,000        1,817,000
   Deposits and other assets                                                         237,000          236,000
                                                                                 -----------      -----------

        TOTAL                                                                   $ 38,840,000      $37,250,000
                                                                                 ===========      ===========
</TABLE>
(continued)

          See accompanying notes to consolidated financial statements.

                                      -3-
<PAGE>


                NATIONAL HOME HEALTH CARE CORP. AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                   (UNAUDITED)

<TABLE>
<CAPTION>

                                                                              October 31, 2001            July 31, 2001
                                                                              ----------------            -------------
<S>                                                                                <C>                    <C>
LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
   Accounts payable and accrued expenses                                           $  3,028,000           $  3,268,000
   Income taxes payable                                                                 654,000                 26,000
   Estimated third-party payor settlements                                              824,000              1,090,000
   Deferred revenue                                                                     199,000                282,000
                                                                                   ------------           ------------

     Total current liabilities                                                        4,705,000              4,666,000
                                                                                   ------------           ------------
Stockholders' equity:
   Common stock, $.001 par value; authorized
     20,000,000 shares, issued 6,520,840 shares                                           6,000                  6,000
   Additional paid-in capital                                                        20,489,000             20,306,000
   Retained earnings                                                                 16,185,000             14,784,000
                                                                                   ------------           ------------
                                                                                     36,680,000             35,096,000

Less: treasury stock (1,314,279 and 1,310,679 shares)
   at cost                                                                           (2,545,000)            (2,512,000)
                                                                                   ------------           ------------

        Total stockholders' equity                                                   34,135,000             32,584,000
                                                                                   ------------           ------------

                   TOTAL                                                           $ 38,840,000           $ 37,250,000
                                                                                   ============           ============

          See accompanying notes to consolidated financial statements.

</TABLE>


                                      -4-
<PAGE>


                NATIONAL HOME HEALTH CARE CORP. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)

<TABLE>
<CAPTION>

                                                    For the three months ended October 31,
                                                    --------------------------------------
                                                           2001                 2000
                                                           ----                 ----

<S>                                                     <C>                  <C>
Net patient revenue                                     $20,274,000          $17,518,000
                                                        -----------          -----------

Operating expenses:
   Cost of revenue                                       12,926,000           11,642,000
   General and administrative                             4,824,000            4,040,000
   Amortization of intangibles                              137,000              222,000
   Bad debt expense                                         115,000              130,000
                                                        -----------          -----------

       Total operating expenses                          18,002,000           16,034,000
                                                        -----------          -----------

Income from operations                                    2,272,000            1,484,000

Other income:
   Interest income                                           78,000               37,000
                                                        -----------          -----------
Income before taxes                                       2,350,000            1,521,000

Provision for income taxes                                  936,000              649,000
                                                        -----------          -----------

Net income                                              $ 1,414,000          $   872,000
                                                        ===========          ===========

Net income per common share:
    Basic                                               $      0.27          $      0.17
                                                        ===========          ===========

    Diluted                                             $      0.26          $      0.16
                                                        ===========          ===========

Weighted average number of shares outstanding:
    Basic                                                 5,194,368            5,193,785
                                                        ===========          ===========

    Diluted                                               5,486,878            5,345,859
                                                        ===========          ===========
</TABLE>


          See accompanying notes to consolidated financial statements.

                                      -5-
<PAGE>


                NATIONAL HOME HEALTH CARE CORP. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)

<TABLE>
<CAPTION>

                                                                                          For the three months ended October 31,
                                                                                          --------------------------------------
                                                                                             2001                   2000
                                                                                             ----                   ----
<S>                                                                                      <C>                   <C>
Cash flows from operating activities:
   Net income                                                                            $ 1,414,000           $    872,000
   Adjustments to reconcile net income to net cash provided by
   operating activities:
       Depreciation and amortization                                                         200,000                274,000
       Provision for doubtful accounts net of write-offs                                     (15,000)               (45,000)
       Loss on sale of assets                                                                     --                 26,000
       Tax benefit realized from the exercise of stock options                                90,000                     --
         by employees
       Changes in operating assets and liabilities:
          (Increase) decrease in assets:
               Accounts receivable                                                           378,000               (927,000)
               Prepaid expenses and other current assets                                     362,000                229,000
           Increase (decrease) in liabilities:
               Accounts payable and accrued expenses                                        (240,000)               459,000
               Deferred revenue                                                              (83,000)                    --
               Income taxes payable                                                          628,000                265,000
               Estimated third-party payor settlements                                      (266,000)                44,000
                                                                                        ------------           ------------
                   Net cash provided by operating activities                               2,468,000              1,197,000
                                                                                        ------------           ------------

Cash flows from investing activities:
   Purchase of investments                                                                   (41,000)                    --
   Purchase of furniture, equipment and leasehold improvements                               (40,000)              (101,000)
   Purchase of assets of business                                                            (85,000)            (1,763,000)
   Proceeds from sale of assets                                                                   --                 22,000
                                                                                        ------------           ------------
               Net cash (used in) investing activities                                      (166,000)            (1,842,000)
                                                                                        ------------           ------------

Cash flows from financing activities:
   Proceeds from exercise of stock options                                                    93,000                     --
   Purchase of treasury shares                                                               (33,000)               (27,000)
                                                                                        ------------           ------------

               Net cash provided by (used in) financing activities                            60,000                (27,000)
                                                                                        ------------           ------------

Net increase (decrease) in cash and cash equivalents                                       2,362,000               (672,000)

Cash and cash equivalents-beginning of period                                              9,082,000              4,856,000
                                                                                        ------------           ------------

Cash and cash equivalents-end of period                                                 $ 11,444,000           $  4,184,000
                                                                                        ============           ============

Supplemental disclosures of cash flow information:
    Cash paid during the period for:
        Taxes                                                                           $    218,000           $    384,000

</TABLE>

          See accompanying notes to consolidated financial statements.

                                      -6-
<PAGE>


                NATIONAL HOME HEALTH CARE CORP. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

NOTE 1 - BASIS OF PRESENTATION

      The accompanying  unaudited  consolidated  financial  statements have been
prepared in accordance with generally accepted accounting principles for interim
financial  information and with the  instructions to Form 10-Q and Article 10 of
Regulation  S-X.  Accordingly,  they do not include all of the  information  and
footnotes  required by generally  accepted  accounting  principles  for complete
financial statements. In the opinion of management,  all adjustments (consisting
of normal recurring accruals)  considered necessary for a fair presentation have
been included.  Operating  results for the three-month  period ended October 31,
2000 are not necessarily  indicative of the results that may be expected for the
year ending July 31, 2002. For further  information,  refer to the  consolidated
financial  statements  and footnotes  thereto  included in the Company's  annual
report on Form 10-K for the year ended July 31, 2001.

NOTE 2 - SUNSTAR HEALTHCARE, INC.

      SunStar   Healthcare,   Inc.   ("SunStar")  has  been  a  publicly  traded
corporation since May 1996. SunStar,  formerly a wholly-owned  subsidiary of the
Company,   had  comprised  the  Company's  Florida   outpatient  medical  center
operations. In May 1996, SunStar completed its initial public offering following
a complete  change in  management  and the  adoption  of a business  plan by new
management for the  establishment  of a health  maintenance  organization.  As a
result,  SunStar was no longer  consolidated  with the  Company  for  accounting
purposes.  The Company had  utilized  the equity  method of  accounting  for its
investment in SunStar.  In February 2000,  SunStar's  sole operating  subsidiary
effectively  discontinued  operations.  As of October 31,  2001,  the  Company's
ownership  percentage  of  SunStar  was  21.6%  and the  Company's  value of its
investment was $0.

NOTE 3 - ACQUISITIONS

      On August 25, 2000,  Accredited  purchased certain assets of Health Forced
Owned,  Ltd. and its affiliates  ("Health  Force").  Health  Force's  operations
included  the  provision  of home health aide and  skilled  nursing  services in
northern and central New Jersey. The purchase price of approximately  $1,822,000
in cash,  including  acquisition  costs of $42,000,  was generated from internal
funds.  The  acquisition  was  accounted  for  as a  purchase.  The  acquisition
complemented the Company's  existing  operations in New Jersey and also expanded
its services to include skilled nursing.


                                      -7-
<PAGE>


NOTE 4 - NET INCOME PER SHARE DATA

A reconciliation  of shares used in calculating basic and diluted net income per
share is as follows:

<TABLE>
<CAPTION>
                                                For the three months ended October 31
                                       -------------------------------------------------------

                                                2001                           2000
                                                ----                           ----

                                           Income         Shares         Income         Shares
                                           ------         ------         ------         ------
<S>                                    <C>             <C>           <C>             <C>
Basic EPS:
       Net income                      $1,313,000      5,194,368     $  872,000      5,193,785
Effective of dilutive securities -
       common stock options                    --        292,510             --        152,074
                                       ----------     ----------     ----------     ----------

Diluted EPS:                           $1,313,000      5,486,878     $  872,000      5,345,859
                                       ==========     ==========     ==========     ==========
</TABLE>


NOTE 5 - GOODWILL AND OTHER INTANGIBLE ASSETS - ADOPTION OF
         STATEMENT NOS. 141 AND 142

In  August  2001,  the  Company  elected  to  adopt  SFAS  No.  141,   "Business
Combinations,"  and No. 142,  "Goodwill  and  Intangible  Assets."  SFAS No. 141
requires the use of the purchase  method of accounting  and prohibits the use of
the   pooling-of-interests   method  of  accounting  for  business  combinations
initiated  after June 30,  2001.  SFAS No. 141 also  requires  that the  Company
recognize  acquired  intangible  assets  apart  from  goodwill  if the  acquired
intangible  assets meet certain  criteria.  SFAS No. 141 applies to all business
combinations   initiated   after  June  30,  2001  and  for  purchase   business
combinations completed on or after July 1, 2001. It also requires, upon adoption
of SFAS No. 142, that the Company reclassify, if necessary, the carrying amounts
of intangible assets and goodwill based on the criteria of SFAS No. 141.

SFAS No. 142 requires,  among other things,  that  companies no longer  amortize
goodwill,  but instead  test  goodwill  for  impairment  at least  annually.  In
addition,  SFAS No. 142 requires that the Company  identify  reporting units for
the purposes of assessing potential future impairments of goodwill, reassess the
useful  lives  of  other  existing  recognized   intangible  assets,  and  cease
amortization of intangible assets with an indefinite useful life.

The  Company's  previous  business  combinations  were  accounted  for using the
purchase method and, as of August 2001, the net carrying amount of goodwill from
prior purchase transactions was approximately $7.2 million.  Annual amortization
of this amount, which ceased effective August 1, 2001, amounted to approximately
$0.4 million.

The effect of adoption of SFAS No. 142 on the  reported net income for the prior
period is as follows:

                                      -8-
<PAGE>

                                For the three months ended October 31
                                -------------------------------------

                                        2000               2001
                                        ----               ----

Reported net income                   $  649,000        $1,414,000
 Add back:  Amortization of
            goodwill                     102,000                --
                                      ----------        ----------

Net income, as adjusted               $  751,000        $1,414,000
                                      ==========        ==========



                                           For the three months ended October 31
                                           -------------------------------------

                                                2000              2001
                                                ----              ----

Basic earnings per share:
   Reported net income                        $   0.17        $   0.27
   Amortization of goodwill                   $   0.02              --
                                              --------        --------

Basic earnings per share, as
   adjusted                                   $   0.19        $   0.27
                                              ========        ========

Diluted earnings per share:
   Reported net income                        $   0.16        $   0.26
   Amortization of goodwill                   $   0.02              --
                                              --------        --------

Diluted earnings per share, as
   adjusted                                   $   0.18        $   0.26
                                              ========        ========


                                      -9-
<PAGE>


ITEM 2 - Management's Discussion and Analysis of Financial Condition and Results
of Operations.

      The  following  discussion  and analysis  provides  information  which the
Company's  management believes is relevant to an assessment and understanding of
the Company's  results of operations and financial  condition.  This  discussion
should  be  read  in  conjunction  with  the  attached  consolidated   financial
statements  and  notes  thereto,   and  with  the  Company's  audited  financial
statements and notes thereto for the fiscal year ended July 31, 2001.

      Except for historical  information  contained herein,  certain matters set
forth in this  report  are  forward-looking  statements  that are  dependent  on
certain risks and  uncertainties,  including such factors,  among others, as the
ability of the Company to identify,  consummate and integrate on favorable terms
acquisitions  or market  penetrations,  as to which  there can be no  assurance,
market  acceptance,  pricing  and demand for the  Company's  services,  changing
regulatory  environment,  changing economic  conditions,  ability to attract and
retain qualified  personnel,  ability to manage the Company's growth,  and other
risks  detailed in the Company's  other filings with the Securities and Exchange
Commission.

      The  Company  is  subject  to  significant  external  factors  that  could
significantly  impact its business,  including  changes in Medicare and Medicaid
reimbursement,  government  fraud and abuse  initiatives  and other such factors
that are beyond the control of the Company.  As a participant in the home health
care  industry,  the Company is subject to  extensive  federal,  state and local
regulations.  There can be no assurance that any of these  regulations  will not
change from existing standards, that additional standards will not be imposed or
that the Company will not experience  adverse  effects as a result of efforts to
comply   with   applicable   standards,   which  are   extensive,   complex  and
often-changing.

      The  Balanced  Budget Act (the "Act") was signed into law in August  1997.
The Act made significant  changes in the reimbursement  system for Medicare home
health  care  services.  The  primary  change  that  affects  the  Company  is a
restructuring  of the  reimbursement  system related to Medicare  certified home
health care agencies.

      Under the Act, Medicare home care reimbursement  changes were scheduled in
two phases.  A temporary or interim  payment system ("IPS") took effect for cost
reports  beginning  on or after  October 1, 1997.  Under IPS,  home  health care
providers were reimbursed the lower of (i) their actual costs,  (ii) cost limits
based on 105% of median costs of  freestanding  home health agencies or (iii) an
agency-specific  per patient cost limit, based on 98% of 1994 costs adjusted for
inflation.   Under  IPS,  most  Medicare  providers  were  reimbursed  under  an
agency-specific  per patient  cost limit.  Prior to the  implementation  of IPS,
Medicare   reimbursed   providers  on  a  reasonable   cost  basis   subject  to
program-imposed cost per visit limitations. Effective October 1, 2000, under the
prospective payment system, the last remaining phase under the Act, Medicare now
reimburses  providers a predetermined base payment.  The payment is adjusted for
the health  condition and care needs of the beneficiary and is also adjusted for
the geographic  differences in wages across the country.  Medicare provides home
health agencies with payments for 60-day  "episodes of care". The 60-day episode
is the basic unit of payment.


                                      -10-
<PAGE>

The 60-day episode coordinates with the 60-day physician re-certification of the
plan of care and with the 60-day  reassessment of the patient using the Outcomes
and  Assessment  Information  Set  ("Oasis").  Oasis is the  outcome  study that
Medicare   utilized   over  a  two-year   period  to  determine  the  amount  of
reimbursement to providers for each 60-day episode.

      As a result of the changes to Medicare  reimbursement  imposed by the Act,
the Company experienced a decline in revenue from its Medicare certified nursing
agency.  In addition,  the  Company's  operations in New York and New Jersey are
dependent upon  referrals,  primarily  from Medicare  certified home health care
agencies,  whose future  reimbursement may be adversely  affected.  Accordingly,
there can be no assurance that the Company's future referrals will not result in
reduced  reimbursement rates or reduced volume in business.  To date, the impact
of the change to the prospective payment system has not had a material effect on
the Company's operations.

RESULTS OF OPERATIONS AND EFFECTS OF INFLATION
----------------------------------------------

      For the three months ended October 31, 2001, net patient revenue increased
$2,756,000, or 15.7%, to $20,274,000 from $17,518,000 for the three months ended
October 31, 2000.  This increase is  attributable  in part to the acquisition of
certain  assets in New Jersey of Health Force in August 2000, in which state the
Company's net patient revenue increased $483,000 over the periods.  In addition,
principally  as a result of the  Company's  ability to  capitalize on additional
market share resulting from the abandonment of Health Force's  operations in New
York,  the  Company's  net patient  revenue  there  increased  $468,000 over the
periods.  Further, net patient revenue in Connecticut  increased $1,805,000 over
the periods,  primarily due to the continued successful penetration of available
market share.

      Gross profit margin  increased to 36.2% for the three months ended October
31, 2001 from 33.6% for the three months ended  October 31, 2000.  This increase
is primarily  attributable to increases in Medicaid  reimbursement rates in both
Connecticut and New Jersey in the current  three-month  period.  The Company did
not experience any such increase in reimbursement rates in New York.

      General and  administrative  expenses  increased  $784,000,  or 19.4%,  to
$4,824,000  for the three months ended October 31, 2001 from  $4,040,000 for the
three months ended October 31, 2000. This increase is primarily  attributable to
additional  administrative  personnel  and occupancy  related costs  incurred in
connection with the expansion into the markets previously served by Health Force
and by continued expansion of operations in Connecticut.  As a percentage of net
patient revenue,  general and administrative expenses increased to 23.8% for the
three  months  ended  October  31,  2001 from 23.1% for the three  months  ended
October 31, 2000.

      Amortization of intangibles  decreased $85,000,  or 38.3%, to $137,000 for
the three  months  ended  October 31, from  $222,000  for the three months ended
October 31, 2000.  This decrease is  attributable  to the Company  adopting SFAS
No.141 and 142 in the current three month period.


                                      -11-
<PAGE>

      The Company recorded a bad debt provision of $115,000 for the three months
ended  October  31, 2001 as compared  to  $130,000  for the three  months  ended
October 31, 2000. The Company has experienced  increases in accounts  receivable
with certain of the Medicare  certified agencies and health care facilities with
which it contracts.

      As a result of the foregoing,  income from operations  increased $788,000,
or 53.1%,  to  $2,272,000  for the three  months  ended  October  31,  2001 from
$1,484,000 for the three months ended October 31, 2000.

      Interest income  increased  $41,000,  or 110.8%,  to $78,000 for the three
months ended  October 31, 2001 from  $37,000 for the three months ended  October
31, 2000.  This  increase is  attributable  to the increase in cash balances and
operating cash flow over the previous three-month period.

      The Company's  effective tax rate  decreased to 39.8% for the three months
ended  October 31, 2001 from 42.7% for the three months ended  October 31, 2000.
This decrease is  attributable to the adoption of SFAS No. 142, a slight decline
in state income taxes and an increase in work opportunity tax credits.

      Net income increased $542,000, or 62.2%, to $1,414,000, or $0.26 per share
in the three months ended October 31, 2001 from $872,000,  or $.16 per share, in
the three months ended  October 31, 2000.  This increase and the increase in net
patient  revenue over the  periods,  as well as over other  recent  periods,  is
attributable  principally to the Company's  expansion of its operations  through
penetrations of markets vacated by competitors and the successful integration of
the Company's  acquisitions over the past two years. Such increases would not be
expected to continue at the same rate,  if at all, in the absence of future such
acquisitions or market penetrations, as to which there can be no assurance.

      The rate of inflation had no material  effect on operations  for the three
months ended October 31, 2001.

FINANCIAL CONDITION AND CAPITAL RESOURCES
-----------------------------------------

      Current assets increased to $28,756,000 and current liabilities  increased
to $4,705,000,  respectively,  at October 31, 2001. This resulted in an increase
of  $1,625,000  in  working  capital  from  $22,426,000  at  July  31,  2001  to
$24,051,000 at October 31, 2001. Cash and cash equivalents increased $2,362,000,
to  $11,444,000  at October  31, 2001 from  $9,082,000  at July 31,  2001.  This
increase in cash and working  capital is primarily  attributable to the net cash
provided by operating activities.

      The Company provided net cash from operating  activities of $2,468,000 for
the three  months  ended  October  31,  2001 as  compared  to cash  provided  by
operating  activities of $1,197,000 for the three months ended October 31, 2000.
The increase in cash provided by operating activities of $1,271,000,  or 106.2%,
is attributable to an increase in operating cash

                                      -12-
<PAGE>

flow of $562,000, net decreases in operating assets of $1,438,000, offset by net
decreases in operating  liabilities of ($729,000) over the comparable period for
the three months ended October 31, 2000.  Net cash used in investing  activities
for the three  months  ended  October  31,  2001  consisted  of the  purchase of
investments,  equipment and assets of businesses. The net cash used in investing
activities for the three months ended October 31, 2000 consisted of the purchase
of assets of Health Force and equipment,  offset by the sale of assets. Net cash
provided by financing  activities  for the three  months ended  October 31, 2001
consisted of the  proceeds  from the  exercise of stock  options,  offset by the
purchase of treasury shares. Net cash used in financing activities for the three
months ended October 31, 2000 consisted of the purchase of treasury shares.

      The nature of the Company's  business  requires  weekly payments to health
care personnel at the time services are rendered. The Company typically receives
payment  for  these  services  on a basis  of 90 to 120  days  with  respect  to
contracted  and  insurance  business  and 15 to 45 days with  respect to certain
governmental payors, such as Medicare and Medicaid programs. Accounts receivable
turnover  was 76 days at October  31, 2001 as compared to 74 days at October 31,
2000.

      On  October  24,  2001,  the  Company  closed  on a  $7,500,000  committed
revolving  line of credit  facility (the "credit  facility")  with its bank. The
credit  facility  provides  for  the  Company  to  borrow  up to the  lesser  of
$7,500,000 or 80% of eligible  accounts  receivable  that are aged less than 120
days at the bank's prime rate or LIBOR plus 2.5%. The credit facility expires on
October 23, 2003 and requires the Company to meet  certain  financial  covenants
and  ratios.  The  Company  is  required  to pay .25%  commitment  fee on unused
amounts, payable quarterly in arrears.

      The Company  intends to meet its short term and long term  liquidity  need
with its  current  cash  balances,  cash flow  from  operations  and its  credit
facility.

      In October 2001, the Board of Directors  extended for one year its program
to repurchase  its Common Stock.  Purchases in the aggregate of up to $1,000,000
in purchase price during the one-year  extension would be made from time to time
in the open market and through  privately  negotiated  transactions,  subject to
general market and other conditions. The buyback program will be financed out of
existing cash or cash equivalents.


                                      -13-
<PAGE>

PART II.   OTHER INFORMATION

Item 1. Legal Proceedings

      The Company,  certain of its officers and directors (who  previously  were
outside directors of SunStar) (the "director defendants") and other parties were
named as defendants in In Re SunStar  Healthcare  Securities  Litigation (United
States  District Court for Middle  District of Florida),  a  consolidated  class
action  brought on behalf of a purported  class of  shareholders  of SunStar who
purchased  stock of SunStar  between June 15, 1998 and  December  14,  1999.  In
February  2001,  the Court  dismissed  the  Consolidated  Amended  Complaint and
granted plaintiffs leave to amend. The plaintiffs' Second  Consolidated  Amended
Complaint (the "Complaint") purported to assert claims under sections 10(b) (and
Rule 10b-5 promulgated  thereunder) and 20(a) of the Securities  Exchange Act of
1934, as amended,  based upon alleged acts or omissions of the  defendants  that
allegedly resulted in  misrepresentations  or omissions of material  information
concerning the financial condition of SunStar (and its subsidiary SunStar Health
Plan,  Inc., a Florida HMO presently in  receivership  ("Plan")).  The Complaint
also alleged that the Company (which  allegedly  held 30.5% of SunStar's  common
stock during  SunStar's fiscal year ended July 31, 1998 and reduced its holdings
to approximately 25% in 1999) and the director defendants exercised control over
SunStar and therefore are liable as "controlling persons" of SunStar. In October
2001,  the Court granted the  defendants'  motion to dismiss the Complaint  with
prejudice.

      In a related action, the director defendants,  along with thirteen others,
are named as  defendants  in  Department of Insurance of the State of Florida v.
Warren D. Stowell et al. (Circuit Court, Seminole County,  Florida) in which the
plaintiff as the receiver of Plan brings  claims  purporting to arise out of the
same facts  forming the basis of the class  action  described  in the  paragraph
above and other alleged matters  relating to the insolvency of Plan. The Company
understands that a related action also has been brought by the plaintiff against
SunStar's and Plan's auditors.  The Company is not a party to these actions.  An
amended  complaint  relating to the action captioned above was filed on November
17,  2000,  and on February 12, 2001 the director  defendants  filed  motions to
dismiss the action.  On May 7, 2001, the Court granted the director  defendants'
motion to dismiss  and granted the  plaintiff  leave to serve a further  amended
complaint.  On July 24, 2001,  the  plaintiff  served an amended  complaint.  On
September 24, 2001 the director defendants filed a motion to dismiss the amended
complaint.  The Company  intends to  indemnify  the director  defendants  to the
fullest extent permitted under its by-laws and applicable law in connection with
all of the actions described herein. At this early stage of the action captioned
above,  it is premature to assess the  likelihood  of the Company  incurring any
loss by virtue of the foregoing.


                                      -14-
<PAGE>


Item 6. Exhibits and reports on Form 8-K

               (a)     Exhibits:

                       Exhibit
                       Number               Document
                       ------               --------

                       10.1                 Credit Agreement dated as of October
                                            24, 2001 by and among the Company,
                                            certain of the Company's
                                            subsidiaries, and HSBC Bank USA with
                                            respect to the Company's $7.5
                                            million revolving credit facility

                       10.2                 Revolving Credit Note dated October
                                            24, 2001 with respect to prime rate
                                            alternative.

                       10.3                 Revolving Credit Note dated October
                                            24, 2001 with respect to LIBOR
                                            alternative.


               (b)     Reports on Form 8-K:

                       None


                                      -15-
<PAGE>


                                   SIGNATURES
                                   ----------

      Pursuant to the  requirements  of the Securities  Exchange Act of 1934, as
amended,  the  Registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.

                                      NATIONAL HOME HEALTH CARE CORP.



Date:  December 14, 2001              By: /s/ Robert P. Heller
                                          ------------------------
                                          Name:  Robert P. Heller
                                          Title: Vice President of Finance and
                                                 Chief Financial Officer


                                      -16-