SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                    FORM 10-Q

                  --------------------------------------------

              [X] QUARTERLY REPORT PURSUANT TO SECTION 10 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                For the quarterly period ended February 28, 1998

                                       OR

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

                         Commission file number 0-14830

                         CONTINENTAL HOMES HOLDING CORP.

             (Exact name of registrant as specified in its charter)

                Delaware                                          86-0554624
     (State or other jurisdiction                               (IRS Employer
   of incorporation or organization)                         Identification No.)

  7001 N. Scottsdale Road, Suite 2050                               85253
          Scottsdale, Arizona                                    (Zip Code)
(Address of principal executive offices)

                                 (602) 483-0006
              (Registrant's telephone number, including area code)

                                 Not Applicable
              (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
                      -------                         -------

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock, as of the latest practicable date.

                                                        Outstanding at
          Class of Common Stock                          April 1, 1998
          ---------------------                          -------------
             $.01 par value                                6,868,900

--------------------------------------------------------------------------------
<PAGE>
                         CONTINENTAL HOMES HOLDING CORP.


                                    FORM 10-Q
                              FOR THE QUARTER ENDED
                                FEBRUARY 28, 1998


                                TABLE OF CONTENTS


<TABLE>
<S>      <C>                                                                                      <C>
PART I.      FINANCIAL INFORMATION                                                                Page
                                                                                               
  Item 1.  Financial Statements:                                                               
         Consolidated Balance Sheets as of February 28, 1998 and                               
           May 31, 1997.........................................................................    3
                                                                                               
         Consolidated Statements of Income for the three and nine months ended                 
           February 28, 1998 and 1997...........................................................    4
                                                                                               
         Consolidated Statements of Cash Flows for the nine months ended                       
           February 28, 1998 and 1997...........................................................    5
                                                                                               
         Notes to unaudited Consolidated Financial Statements...................................    6
                                                                                               
  Item 2.  Management's Discussion and Analysis of Financial Condition and                     
         Results of Operations..................................................................    8
                                                                                               
PART II.     OTHER INFORMATION                                                                 
                                                                                               
  Item 4.  Submission of matters to a vote of Security Holders..................................   13
                                                                                               
  Item 6.  Exhibits and Reports on Form 8-K.....................................................   13
</TABLE>
                                       2
<PAGE>
                CONTINENTAL HOMES HOLDING CORP. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                                            February 28,      May 31,
                                                                                1998           1997
                                                                                ----           ----
<S>                                                                          <C>            <C>      
ASSETS                                                                            (In thousands)
Homebuilding:
      Cash and cash equivalents                                              $  27,099      $  23,759
      Receivables                                                               16,586         27,894
      Homes, lots and improvements in production                               450,487        392,540
      Property and equipment, net                                                4,031          3,656
      Prepaid expenses and other assets                                         21,176         20,868
      Excess of cost over related net assets acquired                            8,575          9,565
      Deferred income tax asset                                                  4,961          2,471
                                                                             ---------      ---------
                                                                               532,915        480,753
                                                                             ---------      ---------
Mortgage banking:
      Mortgage loans held for sale                                              35,174         27,229
      Other assets                                                                 498            274
                                                                             ---------      ---------
                                                                                35,672         27,503
                                                                             ---------      ---------
        Total assets                                                         $ 568,587      $ 508,256
                                                                             =========      =========

LIABILITIES AND STOCKHOLDERS' EQUITY
Homebuilding:
      Accounts payable and other liabilities                                 $  61,106      $  62,163
      Notes payable, senior and convertible subordinated debt                  310,192        270,763
                                                                             ---------      ---------
                                                                               371,298        332,926
                                                                             ---------      ---------
Mortgage banking:
      Notes payable                                                             16,522         15,662
      Other                                                                        389            560
                                                                             ---------      ---------
                                                                                16,911         16,222
                                                                             ---------      ---------
        Total liabilities                                                      388,209        349,148
                                                                             ---------      ---------

Minority interest                                                                3,597          4,209
                                                                             ---------      ---------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
      Preferred stock, $.01 par value:
        Authorized - 2,000,000 shares, Issued none                                --             --
      Common stock, $.01 par value:
        Authorized - 20,000,000 shares, Issued - 7,085,109 shares                   71             71
      Treasury stock, at cost - 217,345 and 228,320 shares                      (2,887)        (2,973)
      Capital in excess of par value                                            61,048         60,878
      Retained earnings                                                        118,549         96,923
                                                                             ---------      ---------
        Total stockholders' equity                                             176,781        154,899
                                                                             ---------      ---------
        Total liabilities and stockholders' equity                           $ 568,587      $ 508,256
                                                                             =========      =========
</TABLE>

The accompanying notes to consolidated financial statements are an integral part
of these unaudited consolidated balance sheets.
                                        3
<PAGE>
                CONTINENTAL HOMES HOLDING CORP. AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF INCOME
                                   (Unaudited)
                      (In thousands, except per share data)

<TABLE>
<CAPTION>
                                                  Three months ended            Nine months ended
                                                     February 28,                  February 28,
                                                     ------------                  ------------
                                                  1998           1997           1998           1997
                                                  ----           ----           ----           ----
<S>                                           <C>            <C>            <C>            <C>        
REVENUES
     Home sales                               $   169,467    $   169,986    $   540,101    $   516,533
     Land sales                                       311            424          2,577         15,548
     Mortgage banking and title operations          3,331          2,396         10,129          8,226
     Other income, net                               (139)          (129)          (974)          (112)
                                              -----------    -----------    -----------    -----------
       Total revenues                             172,970        172,677        551,833        540,195
                                              -----------    -----------    -----------    -----------

COSTS AND EXPENSES
     Homebuilding:
       Cost of home sales                         139,468        140,783        445,594        423,433
       Cost of land sales                             190            102          2,506         14,594
       Selling, general and administrative
         expenses                                  18,231         17,942         56,754         53,587
       Interest, net                                  855            847          2,311          3,593
       Minority interest                             (158)          (255)          (612)          (557)
     Mortgage banking and title operations:
       Selling, general and administrative
         expenses                                   2,056          1,879          7,043          6,017
       Interest, net                                 (206)          (178)          (580)          (577)
                                              -----------    -----------    -----------    -----------
       Total costs and expenses                   160,436        161,120        513,016        500,090
                                              -----------    -----------    -----------    -----------

INCOME BEFORE INCOME TAXES AND
     EXTRAORDINARY LOSS                            12,534         11,557         38,817         40,105
     Income taxes                                   5,134          4,799         15,840         16,319
                                              -----------    -----------    -----------    -----------

INCOME FROM OPERATIONS                              7,400          6,758         22,977         23,786
     Extraordinary loss:
     Loss on extinguishment of
       debt, net of income taxes of $233             --             --             (322)          --
                                              -----------    -----------    -----------    -----------
NET INCOME                                    $     7,400    $     6,758    $    22,655    $    23,786
                                              ===========    ===========    ===========    ===========

BASIC EARNINGS PER COMMON SHARE
     Income from operations                   $      1.08    $       .98    $      3.35    $      3.42
     Net income                                      1.08            .98           3.30           3.42
DILUTED EARNINGS PER COMMON SHARE
     Income from operations                   $       .78    $       .72    $      2.41    $      2.48
     Net income                                       .78            .72           2.38           2.48
CASH DIVIDENDS PER SHARE                      $       .05    $       .05    $       .15    $       .15
WEIGHTED AVERAGE NUMBER OF SHARES
       OUTSTANDING                              6,865,905      6,897,402      6,860,308      6,960,023
                                              ===========    ===========    ===========    ===========
</TABLE>

The accompanying notes to consolidated financial statements are an integral part
of these unaudited consolidated statements.
                                        4
<PAGE>
                CONTINENTAL HOMES HOLDING CORP. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)

                                                            Nine months ended
                                                               February 28,
                                                               ------------
                                                             1998        1997
                                                             ----        ----
Cash flows from operating activities:                         (In thousands)
     Net income                                            $ 22,655    $ 23,786
         Adjustments to reconcile net income to net
         cash used by operating activities:
              Depreciation and amortization                   2,644       2,424
              Minority interest                                (612)       (557)
              Deferred income taxes                          (2,490)      1,292
     Decrease (increase) in assets:
         Homes, lots and improvements in production         (57,947)    (40,281)
         Receivables                                          3,363      (7,845)
         Prepaid expenses and other assets                   (1,195)     (4,544)
     Increase (decrease) in liabilities:
         Accounts payable and other liabilities              (1,228)      9,664
                                                           --------    --------
     Net cash used by operating activities                  (34,810)    (16,061)
                                                           --------    --------

Cash flows from investing activities:
     Additions of property and equipment                     (1,237)     (2,094)
     Cash paid for acquisitions, net of cash acquired          --        (1,205)
     Adjustment to purchase price                              --         1,700
                                                           --------    --------
     Net cash used by investing activities                   (1,237)     (1,599)
                                                           --------    --------

Cash flows from financing activities:
     Increase in notes payable to financial
         institutions                                        51,817      12,173
     Retirement of bonds payable                               --          (168)
     Retirement of 12% Senior Notes                         (11,557)       --
     Issuance of Senior Notes                                  --        20,175
     Repurchase of stock                                       --        (1,922)
     Stock options exercised                                    156         236
     Dividends paid                                          (1,029)     (1,043)
                                                           --------    --------
     Net cash provided by financing activities               39,387      29,451
                                                           --------    --------

     Net increase in cash                                     3,340      11,791
     Cash at beginning of period                             23,759      25,236
                                                           --------    --------
     Cash at end of period                                 $ 27,099    $ 37,027
                                                           ========    ========

Supplemental disclosures of cash flow information:
     Cash paid during the period for:
         Interest, net of amounts capitalized              $  4,553    $  4,680
         Income taxes                                      $ 14,560    $ 12,987

The accompanying notes to consolidated financial statements are an integral part
of these unaudited consolidated statements.
                                       5
<PAGE>
                CONTINENTAL HOMES HOLDING CORP. AND SUBSIDIARIES
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


Note 1.  Basis of Presentation

         The  consolidated   financial   statements   include  the  accounts  of
         Continental  Homes Holding Corp. and its subsidiaries  (the "Company").
         In the opinion of the Company, the accompanying  unaudited consolidated
         financial statements contain all adjustments (consisting of only normal
         recurring  adjustments)  necessary  to  present  fairly  the  Company's
         financial  position,  results  of  operations  and cash  flows  for the
         periods presented.

         These consolidated  financial  statements should be read in conjunction
         with the consolidated  financial statements and the related disclosures
         contained  in the  Company's  annual  report  on Form 10-K for the year
         ended May 31, 1997, filed with the Securities and Exchange Commission.

         The results of operations  for the three and nine months ended February
         28, 1998 are not  necessarily  indicative of the results to be expected
         for the full year.

Note 2.  Interest Capitalization

         The Company follows the practice of capitalizing  for its  homebuilding
         operations  certain  interest costs incurred on land under  development
         and homes under construction.  Such capitalized interest is included in
         cost  of  home  sales  when  the  units  are  delivered.   The  Company
         capitalized  such interest in the amount of $16,815,000 and $14,755,000
         and  expensed  as a  component  of cost of home sales  $13,222,000  and
         $13,352,000  in the nine  months  ended  February  28,  1998 and  1997,
         respectively.

Note 3.  Notes payable, Senior and Convertible Subordinated Debt

         Notes   payable,   senior  and   convertible   subordinated   debt  for
homebuilding consist of:

<TABLE>
<CAPTION>
                                                                          February 28,         May 31,
                                                                              1998              1997
                                                                              ----              ----
                                                                                  (In thousands)        
<S>                                                                         <C>               <C>     
10% senior notes, due 2006, net of discount of $1,462 and $1,599            $148,538          $148,401
12% Senior notes, due 1999, net of premium of $65                                -0-            11,565
6-7/8% convertible subordinated notes, due 2002                               86,150            86,250
Notes payable                                                                 75,504            24,547
                                                                            --------          --------
                                                                                           
                                                                            $310,192          $270,763
                                                                            ========          ========
</TABLE>
                                        6
<PAGE>
                CONTINENTAL HOMES HOLDING CORP. AND SUBSIDIARIES
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                                   (CONTINUED)

Note 4.  Interest, net

         The summary of the components of interest, net is as follows:

                                     Three months ended      Nine months ended
                                        February 28,            February 28,
                                        ------------            ------------
                                      1998        1997        1998        1997
                                      ----        ----        ----        ----
Homebuilding:                                      (In thousands)
       Interest expense             $ 1,272     $ 1,300     $ 3,657     $ 4,285
       Interest income                 (417)       (453)     (1,346)       (692)
                                    -------     -------     -------     -------
                                    $   855     $   847     $ 2,311     $ 3,593
                                    =======     =======     =======     =======
Mortgage Banking:
       Interest expense             $   311     $   135     $   896     $   395
       Interest income                 (517)       (313)     (1,476)       (972)
                                    -------     -------     -------     -------
                                    $  (206)    $  (178)    $  (580)    $  (577)
                                    =======     =======     =======     =======

Note 5.  Subsequent Event

         In December 1997, the Company  entered into a definitive  agreement and
plan of merger with D.R. Horton,  Inc.  ("Horton") pursuant to which the Company
would be merged into Horton.  Stockholders of record as of February 23, 1998 are
entitled to vote on the merger at stockholders' meetings for each corporation to
be held on Monday,  April 20, 1998.  If approved,  the Company  expects that the
merger will be effective that day.
                                       7
<PAGE>
                CONTINENTAL HOMES HOLDING CORP. AND SUBSIDIARIES
                                     ITEM 2.
                                     -------
         MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
                              RESULTS OF OPERATIONS

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

         The  following  table  sets  forth,  for the  periods  indicated,  unit
activity, average sales price and revenue from home sales for the Company:

<TABLE>
<CAPTION>
                                              Quarters ended           Nine months ended
                                               February 28,               February 28,
                                               ------------               ------------
                                            1998          1997         1998          1997
                                            -----         ----         ----          ----
<S>                                     <C>           <C>          <C>           <C>     
Units delivered                            1,264         1,208        4,027         3,721
Average sales price                     $134,072      $140,717     $134,120      $138,816
Revenue from home sales (000's)         $169,467      $169,986     $540,101      $516,533
Percentage increase (decrease) from
  prior year                                 (.3)%        23.9%         4.6%         27.4%
Change due to volume                         4.6%         16.0%         8.2%         20.1%
Change due to average sales price           (4.9)%         7.9%        (3.6)%         7.3%
</TABLE>

         The volume  increase in the quarter and nine months ended  February 28,
1998  compared to the same periods  during  fiscal 1997  resulted  from improved
deliveries in Phoenix, Southern California, San Antonio and Dallas. The decrease
in average  sales price in the quarter and nine months  ended  February 28, 1998
compared to the same  periods  during  fiscal  1997  resulted  primarily  from a
decrease in average sales price in Phoenix, Denver, Southern California,  Dallas
and South  Florida due to product  mix and a decrease in average  sales price in
Austin due to competitive pricing pressures.

         The following  table  summarizes  information  related to the Company's
backlog at the dates indicated:

                                                 February 28,
                                                 ------------
                                            (Dollars in thousands)
                                        1998                     1997
                                        ----                     ----
                                   Units     Dollars        Units     Dollars
                                   -----     -------        -----     -------
Phoenix                              802    $104,261          713    $ 95,417
Texas                                808      91,845          499      54,804
South Florida                        413      56,425          163      19,903
Denver                               359      65,991          211      41,685
Southern California                  164      43,866           50      15,867
                                   -----    --------        -----    --------
         Total backlog             2,546    $362,388        1,636    $227,676
                                   =====    ========        =====    ========
                               
Average price per unit                          $142                     $139
                                                ====                     ====
                               
         The increase in backlog at February 28, 1998  resulted from an increase
in sales in all markets during the prior six months  compared to the same period
last year. The aggregate  sales value of new contracts  signed  increased 45% in
the nine months ended February 28, 1998 to $627,072,000
                                       8
<PAGE>
representing 4,558 homes as compared with $432,426,000  representing 3,208 homes
for the nine months ended February 28, 1997.

         The  following  table  summarizes  information  related to cost of home
sales, selling,  general and administrative  ("SG&A") expenses and interest, net
for homebuilding (dollars in thousands):

<TABLE>
<CAPTION>
                                        Quarters ended February 28,                Nine months ended February 28,
                                        ---------------------------                ------------------------------
                                         1998                  1997                  1998                  1997
                                         ----                  ----                  ----                  ----
                                   Dollars       %       Dollars       %       Dollars       %       Dollars       %
                                   -------       -       -------       -       -------       -       -------       -
<S>                               <C>        <C>        <C>        <C>        <C>        <C>        <C>        <C>   
Revenue from                                                      
  home sales                      $169,467   100.0%     $169,986   100.0%     $540,101   100.0%     $516,533   100.0%
Cost of home sales                 139,468    82.3       140,783    82.8       445,594    82.5       423,433    82.0
                                  --------   -----      --------   ------     --------   -----      --------   -----
Gross profit                        29,999    17.7        29,203    17.2        94,507    17.5        93,100    18.0
SG&A expenses                       18,231    10.8        17,942    10.6        56,754    10.5        53,587    10.4
                                  --------   -----      --------   -----      --------   -----      --------   -----
Operating income from                                             
  homebuilding                      11,768     6.9        11,261     6.6        37,753     7.0        39,513     7.6
Interest, net                          855      .5           847      .5         2,311      .4         3,593      .7
                                  --------   -----      --------   -----      --------   -----      --------   -----
Pre-tax profit from                                               
  homebuilding                    $ 10.913     6.4%     $ 10,414     6.1%     $ 35,442     6.6%     $ 35,920     6.9%
                                  ========   =====      ========   =====      ========   =====      ========   =====
</TABLE>
                                                                 
         The  increase  in gross  profit  margin from home sales for the quarter
ended February 28, 1998 as compared to the prior quarter was primarily due to an
increase  in  margins in  Phoenix,  Southern  California  and San  Antonio.  The
decrease  in gross  margins  for the nine  months  ended  February  28,  1998 as
compared to the same period a year ago was primarily due to a decline in margins
in all markets except Phoenix and San Antonio.

         The  increase  in total SG&A  expense  for the  quarter and nine months
ended  February 28, 1998 compared to the quarter and nine months ended  February
28, 1997 was  principally due to the increased  volume which increased  variable
marketing   costs   (sales   commissions,   advertising   and  model   furniture
amortization)  and an increase in plans and blueprint  expenses and professional
fees.  SG&A  expenses  for each home  delivered  were $14,423 and $14,853 in the
third quarter of fiscal 1998 and 1997,  respectively  and $14,093 and $14,401 in
the first  nine  months  of fiscal  1998 and  1997,  respectively.  The  Company
capitalizes  certain SG&A  expenses for  homebuilding.  Accordingly,  total SG&A
costs incurred for  homebuilding  were $21,711,000 and $66,553,000 for the three
and nine months ended February 28, 1998 compared to $20,941,000  and $62,262,000
for the corresponding fiscal 1997 periods.

         The Company  capitalizes  certain  interest costs for its  homebuilding
operations and includes such capitalized interest in cost of home sales when the
related units are delivered. Accordingly, total interest incurred by the Company
was $6,949,000 and  $20,472,000 for the three and nine months ended February 28,
1998, respectively compared to $6,832,000 and $19,040,000 for the three and nine
months ended February 28, 1997, respectively.  The increase in interest incurred
during the quarter and nine months ended  February 28, 1998 compared to the same
periods a year ago was  primarily  due to an increase in debt as a result of the
15% increase in inventory  from February 28, 1997 to February 28, 1998.  For the
nine month period ended February 28, 1998,  interest,  net for  homebuilding was
$2,311,000 compared with $3,593,000 for the nine months ended February 28, 1997.
The decrease in interest,  net was due to the  capitalization of interest on the
Company's Carlsbad,  California project which began development in October 1996,
as well as additional interest income.
                                       9
<PAGE>
         The  Company's  pre-tax  profit from  homebuilding  for the nine months
ended  February  28,  1998  was  $35,442,000  compared  to  $35,920,000  for the
corresponding period ended February 28, 1997.

Mortgage Banking and Title Operations
-------------------------------------

         The Company's  mortgage  banking  operations are conducted  through its
wholly-owned  subsidiary CH Mortgage Company ("CHMC"). The Company also conducts
title operations in Austin,  Texas through its wholly-owned  subsidiary,  Travis
County Title Company. The following table summarizes  operating  information for
the Company's mortgage banking and title operations:

<TABLE>
<CAPTION>
                                                                  Quarters ended      Nine months ended
                                                                   February 28,          February 28,
                                                                   ------------          ------------
                                                                 1998       1997       1998       1997
                                                                 ----       ----       ----       ----
                                                                         (Dollars in thousands)
<S>                                                           <C>        <C>        <C>        <C>    
Number of loans originated                                        948        677      2,869      2,234

Loan origination fees                                         $   922    $   677    $ 2,882    $ 2,157
Sale of servicing and marketing gains                           1,571      1,010      4,589      3,705
Title policy premiums, net                                        402        352      1,350      1,233
Other revenue                                                     436        357      1,308      1,131
                                                              -------    -------    -------    -------
         Total revenues                                         3,331      2,396     10,129      8,226
General and administrative expenses                             2,056      1,879      7,043      6,017
                                                              -------    -------    -------    -------
Operating income from mortgage banking and title                1,275        517      3,086      2,209
Interest, net                                                     206        178        580        577
                                                              -------    -------    -------    -------
Pre-tax profit from mortgage banking and title                $ 1,481    $   695    $ 3,666    $ 2,786
                                                              =======    =======    =======    =======
</TABLE>

Revenues and general and administrative expenses from mortgage banking increased
in the quarter and nine months ended  February 28, 1998 primarily as a result of
a 40% and 28% increase in originations, respectively.

Consolidated operations
-----------------------

         Net income was  $22,655,000  ($3.30  basic  earnings  per share,  $2.38
diluted earnings per share) for the nine months ended February 28, 1998 compared
to  $23,786,000  ($3.42 basic  earnings per share,  $2.48  diluted  earnings per
share) for the period ended February 28, 1997.

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

         The Company's financing needs depend primarily upon sales volume, asset
turnover, land acquisition and inventory balances. The Company has financed, and
expects to  continue  to  finance,  its  working  capital  needs  through  funds
generated by operations and borrowings.  Funds for future land  acquisitions and
construction  costs are  expected  to be provided  primarily  by cash flows from
operations  and  future   borrowings  as  permitted  under  the  Company's  loan
agreements.  On June 27,  1996,  the  Company  entered  into a credit  agreement
("Credit  Agreement")  with a group of banks which  provides  for a $140 million
unsecured  revolving line of credit.  Borrowings under the Credit Agreement bear
interest at LIBOR plus 1.35% or prime plus .10% at the  Company's  election  and
subject to the rating on its senior debt.  Available borrowings under the Credit
Agreement  are limited to certain  percentages  of housing unit costs,  finished
lots, land under development and receivables
                                       10
<PAGE>
as defined in the Credit Agreement.  As a result of this formula,  the borrowing
base at February 28, 1998 was $140,000,000 of which $58,500,000 was outstanding.
The Company believes that amounts  generated from operations and such additional
borrowings  will provide  funds  adequate to finance its  existing  homebuilding
activities and meet its debt service requirements.

         In order to provide funds for the origination of mortgage  loans,  CHMC
has a  warehouse  line of credit  for  $25,000,000  which is  guaranteed  by the
Company.  Pursuant to the warehouse line of credit, the Company issues drafts to
fund its  mortgage  loans.  The  amount  represented  by a draft is drawn on the
warehouse  line of credit when the draft is presented  for payment.  At February
28, 1998,  the amount  outstanding  under the  warehouse  line of credit and the
amount  of  funding   drafts  that  had  not  been  presented  for  payment  was
$16,522,000.  The Company believes that this line is sufficient for its mortgage
banking operations.

         On November 10, 1995,  the Company  completed  the sale of  $75,000,000
principal amount of its 6-7/8% Convertible Subordinated Notes due November 2002.
On December 5, 1995,  the Company sold an additional  $11,250,000 of such notes.
The  net  proceeds  were  used  to  redeem  the  Company's  6-7/8%   Convertible
Subordinated Notes due March 2002 and to reduce temporarily  outstanding amounts
under  certain  of the  Company's  revolving  lines  of  credit  (including  the
warehouse line of credit).  The Convertible  Notes are  immediately  convertible
into shares of the  Company's  common stock at a rate of 42.105  shares for each
$1,000 principal amount of Convertible Notes.

         On  April  18,  1996 the  Company  completed  the sale of  $130,000,000
principal  amount of its 10%  Senior  Notes due April  2006.  The  Company  used
approximately  $107,542,000  of  the  net  proceeds  to  repurchase  $98,500,000
aggregate  principal  amount of its 12%  Senior  Notes due 1999.  The  remaining
proceeds were used to reduce  temporarily  outstanding  amounts under certain of
the Company's revolving lines of credit. On January 30, 1997, the Company issued
an  additional  $20,000,000  principal  amount of its 10% Senior Notes due April
2006. The net proceeds were used to reduce temporarily outstanding amounts under
the Company's  revolving line of credit. On August 1, 1997, the Company redeemed
the remaining  $11,500,000  principal amount outstanding of its 12% Senior Notes
due 1999, at a redemption price of 104%.

         Pursuant to a stock  repurchase plan approved by the Board of Directors
on December 22, 1994, the Company repurchased 162,000 shares of its common stock
during fiscal 1997 at an average price of $16.22.

         In December 1997, the Company  entered into a definitive  agreement and
plan of merger with D.R. Horton,  Inc.  ("Horton") pursuant to which the Company
would be merged into Horton.  Stockholders of record as of February 23, 1998 are
entitled to vote on the merger at stockholders' meetings for each corporation to
be held on Monday,  April 20, 1998.  If approved,  the Company  expects that the
merger will be  effective  that day.  This merger  would  constitute a change in
control  under the Company's 10% Senior Notes due April 2006 whereby the holders
would have the right to require the Company to  repurchase  the Notes at a price
equal to 101% of the principal amount.

Cautionary disclosure regarding forward-looking statements
----------------------------------------------------------

         The Company  desires to take advantage of the "safe harbor"  provisions
of the Private  Securities  Litigation  Reform Act of 1995 and is including this
disclosure in order to do so. Certain
                                       11
<PAGE>
statements  in  this  report  that  are  not  historical  facts  are,  or may be
considered to be, forward-looking statements. Given the risks, uncertainties and
contingencies  of  the  Company's  business,   the  actual  results  may  differ
materially from those expressed or implied by such  forward-looking  statements.
Further, certain forward-looking  statements are based on assumptions concerning
future events which may not prove to be accurate.

         Forward-looking   statements  by  the  Company   regarding  results  of
operations and, ultimately,  financial condition,  are subject to numerous risks
and  assumptions,  including  but not  limited to,  changes in general  economic
conditions, fluctuations in interest rates or labor and material costs, consumer
confidence,   competition,   government  regulations,   financing  availability,
geographic concentration and risks associated with new and future communities.
                                       12
<PAGE>
                CONTINENTAL HOMES HOLDING CORP. AND SUBSIDIARIES

                                     PART II
                                OTHER INFORMATION

Item 4.       Submission of matters to a vote of Security Holders
              ---------------------------------------------------

              None.

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

         (a)    11    Statement of Computation of Earnings Per Share.

                27    Financial Data Schedule.

         (b)    Reports on Form 8-K: The Company filed reports on Form 8-K dated
October 2, 1997 and December 18, 1997.
                                       13
<PAGE>
                CONTINENTAL HOMES HOLDING CORP. AND SUBSIDIARIES

                                   SIGNATURES
                                   ----------


Pursuant  to the  requirements  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.

                                                 CONTINENTAL HOMES HOLDING CORP.


Date:  April 9, 1998                        By:  /s/Julie E. Collins
                                                 -------------------------------
                                                 JULIE E. COLLINS
                                                 Chief Financial Officer


Date:  April 9, 1998                        By:  /s/ W. Thomas Hickcox
                                                 -------------------------------
                                                 W. Thomas Hickcox
                                                 Chief Executive Officer
                                       14