Exhibit 4.2.7
                                    AMENDMENT
                           DATED AS OF OCTOBER 1, 1997
                                       TO
                          CREDIT AND SECURITY AGREEMENT
                          DATED AS OF NOVEMBER 30, 1992


         Reference is hereby made to that certain Credit and Security  Agreement
("Credit Agreement") dated as of November 30, 1992 among Principal Mututual Life
Insurance Company,  Aetna Life Insurance Company,  The Northwestern  Mutual Life
Insurance  Company,  Chemical  Bank,  Seattle-First  National  Bank  and Bank of
America Oregon,  and WTD Industries,  Inc. and its Affiliates and the Term Notes
issued by the Borrowers in  connection  with the Credit  Agreement.  Capitalized
terms used herein  shall have the same  meaning  ascribed  thereto in the Credit
Agreement.

         The Term Notes  currently  are held by the  following  entities  in the
proportions set forth herein:

         Principal Mututal Life
           Insurance Company                         57.111632%

         The Northwestern Mutual Life
           Insurance Company                         20.450484%

         Foothill Group, Inc.                        13.532675%

         Oppenheimer & Co., Inc.                      6.911127%

         Fixed Plus Partners, beneficial owner
           of Note registered in the name of
           Bear Stearns Securities Corp.              1.994082%

         The Credit Agreement is hereby modified as follows:

         1.  Credit  Agreement  Section  6.01.J  is hereby  restated  to read as
follows:

                  J. Minimum Working Capital.  Maintain minimum working capital,
         at all times during the periods set forth below,  calculated as Current
         Assets  minus  Current  Liabilities;   provided,  for  the  purpose  of
         computing  Current  Assets  under this Section  6.01.J,  the portion of
         Current  Assets  which  consists of Timber and  Timberlands  Current or
         contract rights relating thereto shall be included only up to an amount
         equal to (x) on or before  January 31, 1993,  forty-five  percent (45%)
         and (y)  thereafter,  forty percent (40%),  of the amount of Borrowers'
         overall Current Assets determined in accordance with GAAP:

                  Period                             Millions of Dollars
                  ------                             -------------------

         Effective Date through 12/31/95                      25
         1/1/96 through 6/30/96                               19
         7/1/96 through 6/30/97                               22.5
         7/1/97 through 9/30/97                               25
         10/1/97 through 6/30/98                              21.5
         7/1/98 and beyond                                    25







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<PAGE>
         2. In all other respects,  the Credit  Agreement shall remain unchanged
and in full force and effect.

EFFECTIVE DATE:   October 1, 1997

PRINCIPAL MUTUAL LIFE                       THE NORTHWESTERN MUTUAL LIFE
INSURANCE COMPANY                           INSURANCE COMPANY


By:                                         By:
   ------------------------------              ------------------------------

Its:                                        Its:
   ------------------------------              ------------------------------
                                            (pro rata interest: 20.450484%)
By:
   ------------------------------           FOOTHILL GROUP, INC.
Its:
   ------------------------------
(pro rata interest: 57.111632%)             By:
                                               ------------------------------
                                            Its:
OPPENHEIMER & CO., INC.                        ------------------------------
                                            (pro rata interest: 13.532675%)

By:
   ------------------------------
Its:                                        WTD INDUSTRIES, INC.
   ------------------------------
(pro rata interest:  6.911127%)
                                            By:
                                               ------------------------------
                                            Its:
                                               ------------------------------
FIXED PLUS  PARTNERS,  Beneficial
Owner of Note  Registered in the Name
of Bear Stearns Securities Corp.


By:
   ------------------------------
Its:
   ------------------------------
(pro rata interest: 1.994082%)













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