FORM 10-Q

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

(Mark One)

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

For the quarterly period ended June 30, 2000

                                       OR

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

For the transition period from ________ to ___________

Commission file number: 0-22675

                               800-JR Cigar, Inc.

                       Delaware                                  52-2022117
            (State or other jurisdiction of                   (I.R.S. Employer
            incorporation or organization)                   Identification No.)

               301 Route 10 East, Whippany, New Jersey 07981, USA

                                  (973)884-9555

                                 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 ____

                                    (APPLICABLE ONLY TO CORPORATE REGISTRANTS)

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

            Common Stock, $.01 par value - 11,862,299 share as of August 4, 2000

<PAGE>

                      800-J.R. Cigar, Inc. and Subsidiaries

                               Index to Form 10-Q

Part I - Financial Information

Item 1.  Financial Statements                                             Page
   Consolidated Statements of Income for the Three-Month Periods
     ended June 30, 2000 and 1999 and the Six-Month Periods ended
     June 30, 2000 and 1999  (Unaudited)......................................3
   Consolidated Balance Sheets as of June 30, 2000 (Unaudited) and
     December 31, 1999 (Audited)..............................................4
   Consolidated Statements of Cash Flows for the Six-Month Periods ended
     June 30, 2000 and 1999 (Unaudited).......................................5
   Notes to Consolidated Financial Statements (Unaudited).....................6

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

Part II - Other Information

Item 1.  Legal Proceedings....................................................13

Item 6.  Exhibits and Reports on Form 8-K.....................................13

          Signatures..........................................................14

<PAGE>

                      800-J.R. Cigar, Inc. and Subsidiaries

                        Consolidated Statements of Income

                                   (Unaudited)

                      (In thousands, except share and per share amounts)

                                        Three-month period     Six-month period
                                          ended June 30         ended June 30
                                      ------------------------------------------
                                        2000       1999       2000       1999
                                      ------------------------------------------
Net sales                              $80,245    $78,798    $150,680   $151,619
Cost of goods sold                      66,684     65,519     124,977    125,513
                                      ------------------------------------------
Gross profit                            13,561     13,279      25,703     26,106

Operating expenses:
   Selling                               1,495      1,944       3,165      3,900
   General and administrative expenses   6,655      6,396      12,787     12,612
   Depreciation and amortization           687        536       1,343      1,025
                                    --------------------------------------------
Income from operations                   4,724      4,403       8,408      8,569

Other income (expense):
   Interest expense                       (85)      (207)       (266)      (462)
   Interest income                         253        148         507        392
   Rental income                            39         40          79         80
   Other, net                              27        (68)         80       (139)
                                       -----------------------------------------
Income before income taxes               4,958      4,316       8,808      8,440

Provision for income taxes               1,983      1,707       3,513      3,385
                                       -----------------------------------------
Net income                            $  2,975   $  2,609   $   5,295  $   5,055
                                       =========================================

Per share data
Earnings per share - basic            $    .25   $    .21   $     .44  $     .40
                                       =========================================
Earnings per share - diluted          $    .25   $    .21   $     .44  $     .40
                                       =========================================
Weighted-average shares outstanding
     - basic                            11,872     12,402      11,928     12,501
                                       =========================================
Weighted-average shares outstanding
     - diluted                          11,916     12,402      11,956     12,501
                                       =========================================

See accompanying notes.

<PAGE>

                      800-J.R. Cigar, Inc. and Subsidiaries

                           Consolidated Balance Sheets

                                 (In thousands)

                                                     June          December
                                                   30, 2000        31, 1999
                                               ---------------------------------
Assets                                           (Unaudited)      (Audited)
Current assets:
   Cash and cash equivalents                       $    6,845      $    9,107
   Marketable securities - current                      6,447           6,568
   Accounts receivable, net                             1,444           4,436
   Merchandise inventory                               46,305          40,043
   Prepaid expenses and other current assets            4,030           3,757
   Loans receivable - affiliates and other associated
     entities                                             803             806
   Deferred tax asset                                      51              51
                                               ---------------------------------
Total current assets                                   65,925          64,768

Property, equipment and improvements, at cost, net of
     accumulated
   depreciation and amortization                       35,055          34,241
Other assets                                              383             379
Marketable securities - non-current                       475           2,113
                                               ---------------------------------
                                                     $101,838        $101,501
                                               =================================

Liabilities and stockholders' equity Liabilities:

  Current portion of distribution notes payable to
     stockholders                                  $        -      $    4,967
  Accounts payable                                     13,927          13,919
  Accrued expenses                                      4,279           3,309
                                              ----------------------------------
Total liabilities                                      18,206          22,195

Stockholders' equity:
   Common stock                                           128             128
   Additional paid-in capital                          52,795          52,795
   Retained earnings                                   39,242          33,947
                                               ---------------------------------
                                                       92,165          86,870
   Less treasury stock, at cost                        (8,533)         (7,564)
                                               ---------------------------------
Total stockholders' equity                             83,632          79,306
                                               ---------------------------------
                                                     $101,838        $101,501
                                               =================================

See accompanying notes.

<PAGE>

                      800-J.R. Cigar, Inc. and Subsidiaries

                      Consolidated Statements of Cash Flows

                                   (Unaudited)

                                 (In thousands)

                                                       Six-month period
                                                         ended June 30
                                              ----------------------------------
                                                    2000              1999
                                              ----------------------------------

Cash flows from operating activities
Net income                                       $   5,295        $   5,055
Adjustments to reconcile net income to net cash
   provided by operating activities:
     Depreciation and amortization                   1,343            1,025
     Provision for uncollectible accounts               45               60
     Deferred income taxes                               -              211
     Changes in operating assets and liabilities:
       Accounts receivable                           2,947            (960)
       Merchandise inventory                        (6,262)           4,878
       Prepaid expenses and other current assets      (273)             716
       Other assets                                    (4)              (4)
       Accounts payable and accrued expenses           978          (3,615)
                                                --------------------------------
Net cash provided by operating activities            4,069            7,366

Cash flows from investing activities
Proceeds from sales of marketable securities         1,759            1,800
Purchase of property and equipment                 (2,157)          (2,621)
Loans extended to affiliates and other associated
     entities                                           3             (255)
                                                --------------------------------
Net cash used in investing activities                (395)          (1,076)

Cash flows from financing activities
Purchase of treasury stock                           (969)          (3,036)
Proceeds from issuance of common stock                   -               17
Payments on distribution notes                     (4,967)          (3,967)
                                                --------------------------------
Net cash used in financing activities              (5,936)          (6,986)
                                                --------------------------------

Net decrease in cash and cash equivalents          (2,262)            (696)
Cash and cash equivalents at beginning of period     9,107           12,759
                                                 -------------------------------
Cash and cash equivalents at end of period        $  6,845          $12,063
                                                  ==============================
Supplemental disclosures of cash flow information
Interest paid                                     $    191         $    400
                                                  ==============================
Income taxes paid                                 $  3,511         $  1,886
                                                  ==============================

See accompanying notes.

<PAGE>

                       800-JR Cigar, Inc. and Subsidiaries

                   Notes to Consolidated Financial Statements

                                   (Unaudited)

                     (In thousands, except per share amounts)

                                  June 30, 2000

1.  Unaudited Financial Statements

The accompanying unaudited 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  Rule  10-01 of  Regulation  S-X.
Accordingly, they do not include all of the information and footnote disclosures
normally included in complete financial  statements  prepared in accordance with
generally  accepted  accounting  principles.  For further  information,  such as
significant  accounting policies followed by the Company,  refer to the notes to
the  Company's  audited  consolidated  financial  statements  for the year ended
December 31, 1999.

In the opinion of management,  the unaudited  financial  statements  include all
necessary  adjustments  (consisting  of normal,  recurring  accruals) for a fair
presentation of the financial position, results of operations and cash flows for
the interim  periods  presented.  The results of operations for the  three-month
periods  ended June 30, 2000 and 1999 and the  six-month  periods ended June 30,
2000 and 1999,  are not  necessarily  indicative of the operating  results to be
expected for a full year.

2.  Basis of Presentation

800-JR Cigar,  Inc. ("800-JR Cigar") was incorporated in Delaware in March 1997.
In  connection  with  800-JR  Cigar's  initial  public  offering  of stock  (the
"Offering")  on June 26, 1997, the former  principals of a predecessor  group of
companies  contributed  to  800-JR  Cigar  all of the  outstanding  stock in the
entities  that  comprise the  predecessor  group of  companies,  in exchange for
9,300,000 shares of common stock of 800-JR Cigar.

All significant intercompany balances and transactions have been eliminated.

<PAGE>

                       800-JR Cigar, Inc. and Subsidiaries

                   Notes to Consolidated Financial Statements

                             (Unaudited) (continued)

                     (In thousands, except per share amounts)

3.  Computation of Basic and Diluted Earnings Per Share

The following table sets forth the computation of basic and diluted earnings per
share:

                                  Three-month period            Six-month period
                                    ended June 30                ended June 30
                             ---------------------------------------------------
                                  2000        1999           2000        1999
                             ---------------------------------------------------
Numerator:
 Net income                      $ 2,975     $ 2,609        $ 5,295     $ 5,055
                             ===================================================
Denominator:
 Denominator for basic earnings per
  share - weighted-average shares 11,872      12,402         11,928      12,501

 Effect of dilutive securities -
  stock options                       44           -             28           -
                             ---------------------------------------------------
Denominator for diluted earnings per
 share - adjusted weighted-average
 shares and assumed conversion    11,916      12,402         11,956      12,501
                              ==================================================
Basic earnings per share         $   .25     $   .21        $   .44     $   .40
                              ==================================================
Diluted earnings per share       $   .25     $   .21        $   .44     $   .40
                              ==================================================

Common stock  equivalents are excluded from the calculation of diluted  earnings
per share for the three-month period and six-month period ended June 30, 1999 as
their effect would be anti-dilutive.

4.  Revolving Credit Facility

The Company has a $20 million revolving Credit Facility which expires on May 31,
2001.  Borrowings  under this  facility are  unsecured  and bear interest at the
bank's  prime rate minus  1/2% or, at the option of the  Company,  1.5% over the
London  Interbank  Offered  Rate  (LIBOR).  At  June  30,  2000,  there  was  no
outstanding balance under this facility.

<PAGE>

                       800-JR Cigar, Inc. and Subsidiaries

                   Notes to Consolidated Financial Statements

                             (Unaudited) (continued)

                     (In thousands, except per share amounts)

5.  Stock Repurchase Plan

On August 25, 1998, the Board of Directors  approved the repurchase of up to $10
million  of the  Company's  common  stock  from time to time  subject  to market
conditions.  Purchases can be made in the open market or in privately negotiated
transactions.  At June 30, 2000 and December 31, 1999, the Company had purchased
887,700 shares and 783,000 shares, respectively, at a cost of $8,533 and $7,564,
respectively.

6.  Stock Option Plans

On January 4, 2000,  the Board  approved a change in the exercise price from the
original price to the quoted market price at the close of business on January 4,
2000 ($8.75 per share) for options  outstanding at that date under the Incentive
Plan and the Directors' Plan.

On February 1, 2000, the Company issued options to purchase 79,500 shares of its
common stock under the Incentive Plan at an exercise price of $9.63 per share.

7.  Segment Reporting

The  Company has two  segments  determined  by type of  customer  and made up of
retail and wholesale  operations.  The Company's  retail  division sells cigars,
tobacco  products,  cigarettes,  fragrances and other merchandise to the general
public through direct mail order,  cigar stores, and discount outlet stores. The
Company's   wholesale   division   sells  cigars  and  cigarettes  to  wholesale
distributors through the wholesale mail order and wholesale cigarette operations
located within the Company's  discount outlet stores.  The Company operates only
throughout the United States.

The reportable  segments are each managed separately because the Company markets
these segments of the business  separately.  Although revenues of the retail and
wholesale  divisions are further monitored based upon marketing and distribution
channel, overall profitability is measured only at the retail/wholesale level.

The  Company  evaluates  performance  based on  profit or loss.  The  accounting
policies  of the  reportable  segments  are the same as those  described  in the
summary of  significant  accounting  policies.  The accounting for the assets of
each segment is the same as in consolidation.

<PAGE>

                       800-JR Cigar, Inc. and Subsidiaries

                   Notes to Consolidated Financial Statements

                             (Unaudited) (continued)

                    (In thousands, except per share amounts)

7.  Segment Reporting (continued)

The Company's operations by business segment for the three-months ended June 30,
2000 and 1999 and the six-months ended June 30, 2000 and 1999 are as follows:

                                    Three-month period ended June 30
                                    2000                         1999
                         -------------------------------------------------------
                            Retail      Wholesale        Retail      Wholesale
                         -------------------------------------------------------
Net sales                   $41,779       $38,466        $40,131       $38,667
Segment profit                2,016         3,434            692         4,234

                                      Six-month period ended June 30
                                    2000                         1999
                        --------------------------------------------------------
                            Retail      Wholesale        Retail      Wholesale
                        --------------------------------------------------------
Net sales                   $76,271       $74,409        $76,469       $75,150
Segment profit                3,343         6,129          2,422         7,075

                             Three-month period             Six-month period
                                ended June 30                 ended June 30
                        --------------------------------------------------------
                             2000          1999           2000          1999
                        --------------------------------------------------------
Profit and loss
Total profit for reportable
     segments                $5,450        $4,926       $  9,472      $  9,497
Corporate segment loss         (492)         (610)          (664)       (1,057)
                        --------------------------------------------------------
Consolidated income before
     income taxes            $4,958        $4,316       $  8,808      $  8,440
                        ========================================================

<PAGE>

Item 2.  Management's Discussion and Analysis of Financial Condition and Results
of Operation

This report contains  certain  "forward-looking  statements."  Those  statements
appear in a number of places in this report and include statements regarding the
intent,  belief or current  expectations  of the Company,  its directors and its
officers with respect to, among other things: (i) trends affecting the Company's
financial  condition  or results of  operations;  (ii) the  Company's  financing
plans; (iii) the Company's  business and growth strategies;  (iv) the use of the
proceeds of the Offering by the Company;  (v) the Company's  ability to identify
and address Year 2000 issues; and (vi) the declaration and payment of dividends.
Prospective investors are cautioned that any such forward-looking statements are
not guarantees of future  performance  and involve risks and  uncertainties  and
that  actual  results  may  differ   materially  from  those  projected  in  the
forward-looking statements as a result of various factors.

General

The  Company is one of the largest  distributors  and  retailers  of tobacco and
tobacco related  products in North America.  The Company operates in a large and
highly fragmented industry  characterized by multiple and relatively undeveloped
channels of  distribution.  With its 30-year history in the cigar industry,  the
Company has  established  itself as an important  participant in the movement of
tobacco products from  manufacturers to the customers.  Manufacturers  value the
Company's  ability  to  perform  distribution,   credit,  customer  support  and
marketing  functions,  which  would  otherwise  be  the  responsibility  of  the
manufacturer.  Customers  value  the  Company's  extensive  variety  of  tobacco
products  and rapid order  fulfillment  and benefit  from  advantageous  pricing
derived   through  the  Company's   volume  buying  as  a  direct  importer  and
distributor.

Three-month Period Ended June 30, 2000 Compared to Three-Month Period Ended June
30, 1999

Net sales were $80.2 million and $78.8  million for the second  quarters of 2000
and 1999,  respectively,  an  increase  of $1.4  million or 1.8%.  Retail  sales
increased  4.1% to $41.8  million  for the  second  quarter  of 2000 from  $40.1
million for the second  quarter of 1999. The increase in retail sales was due to
a $2.0 million  increase in our Internet  operations.  Wholesale sales decreased
0.5% to $38.4 million for the second quarter of 2000 from $38.7 million over the
same period in the prior year. The decrease in wholesale sales was due to a $1.4
million,  or 10.0% decrease in direct mail cigar sales,  partially  offset by an
increase of $1.2 million in cigarette sales.

Gross profit was $13.6 million and $13.3 million for the second quarters of 2000
and 1999, respectively,  an increase of $0.3 million or 2.1%. As a percentage of
net sales,  gross profit for the second  quarter of 2000 was 16.9%,  the same as
the percentage for the second quarter of 1999.

Selling,  general and administrative ("S, G & A") expenses were $8.1 million and
$8.3 million for the second quarters of 2000 and 1999, respectively,  a decrease
of $0.2  million  or 2.3%.  As a  percentage  of net  sales,  S, G & A  expenses
decreased  to 10.2% for the  second  quarter  of 2000 from  10.6% for the second

<PAGE>

quarter  of 1999  primarily  due to an  increase  in  sales  and a  decrease  in
professional fees, advertising and freight costs.

Income from operations was $4.7 million and $4.4 million for the second quarters
of 2000 and 1999,  respectively,  an  increase  of $0.3  million  or 7.3%.  As a
percentage of net sales, income from operations increased to 5.9% for the second
quarter of 2000 from 5.6% for the second quarter of 1999.

Interest  expense was $0.1 and $0.2 million for the second  quarters of 2000 and
1999,  respectively,  a  decrease  of  $0.1  million.  Other  income,  primarily
interest,  was $0.3 million and $0.1 million for the second quarters of 2000 and
1999,  respectively.  The  increase  in other  net income  was  primarily  due
to an increase in royalty income.

Income  before  income  taxes was $5.0  million and $4.3  million for the second
quarters of 2000 and 1999, respectively, an increase of $0.7 million or 14.9%.

As a result of the foregoing,  the Company had net income of $3.0 million in the
second  quarter of 2000,  compared to net income of $2.6  million for the second
quarter of 1999, an increase of $0.4 million or 14.0%.

Six-month Period Ended June 30, 2000 Compared to Six-Month Period Ended June 30,
1999

Net sales were $150.7  million and $151.6  million for the first  six-months  of
2000 and 1999,  respectively,  a decrease of $0.9 million or 0.6%.  Retail sales
decreased  0.2% to $76.3  million  for the first  six-months  of 2000 from $76.5
million for the first  six-months of 1999.  The decrease in retail sales for the
first  six-months of 2000 was due primarily to a $2.2 million,  or 7.8% decrease
in direct  mail cigar  sales,  a $1.2  million or 7.8%  decrease  in cigar store
sales,  and a $0.7  million or 2.2%  decrease in discount  outlet  store  sales,
partially  offset by an increase of $3.9  million of internet  sales.  Wholesale
sales  decreased  1.0% to $74.4  million for the first  six-months  of 2000 from
$75.1 million over the same period in the prior year.  The decrease in wholesale
sales was due to a $3.1 million,  or 11.5%  decrease in direct mail cigar sales,
partially offset by an increase of $2.3 million in cigarette sales.

Gross profit was $25.7  million and $26.1  million for the first  six-months  of
2000 and 1999, respectively, a decrease of $0.4 million or 1.5%. As a percentage
of net sales,  gross profit decreased slightly to 17.1% for the first six-months
of 2000 from 17.2% for the first six-months of 1999.

Selling, general and administrative ("S, G & A") expenses were $15.9 million and
$16.5  million  for the  first  six-months  of 2000 and  1999,  respectively,  a
decrease  of $0.6  million  or 3.4%.  As a  percentage  of net  sales,  S, G & A
expenses  decreased to 10.6% for the first six-months of 2000 from 10.9% for the
first  six-months  of 1999  primarily  due to a decrease in  professional  fees,
advertising and freight costs.

<PAGE>

Income  from  operations  was  $8.4  million  and  $8.6  million  for the  first
six-months of 2000 and 1999,  respectively,  a decrease of $0.2 million or 1.9%.
As a percentage of net sales,  income from operations  decreased to 5.6% for the
first six-months of 2000 from 5.7% for the first six-months of 1999.

Interest  expense was $0.3 and $0.5 million for the first six-months of 2000 and
1999,  respectively,  a  decrease  of  $0.2  million.  Other  income,  primarily
interest, was $0.7 million and $0.3 million for the first six-months of 2000 and
1999,  respectively.  The  increase  in other  net income  was  primarily  due
to an increase in display and royalty income.

Income  before  income  taxes was $8.8  million  and $8.4  million for the first
six-months of 2000 and 1999, respectively, an increase of $0.4 million or 4.4%.

As a result of the foregoing,  the Company had net income of $5.3 million in the
first  six-months of 2000,  compared to net income of $5.1 million for the first
six-months of 1999, an increase of $0.2 million or 4.7%.

Liquidity and Capital Resources

As of June 30, 2000, the Company had working  capital of $47.7 million  compared
to $42.6  million at December 31, 1999.  Working  capital as of June 30, 2000 is
comprised  primarily of cash and cash  equivalents  of $6.9 million,  short-term
marketable  securities  of $6.4  million,  accounts  receivable of $1.4 million,
$46.3 million of inventory  and $4.9 million of other  current  assets offset by
$18.2 million of accounts payable and accrued expenses.

The Company has available a short term,  unsecured  line of credit in the amount
of $20.0  million  through May 31, 2001 with  interest at either the bank's base
rate minus 50 basis points or an increment over LIBOR, at the Company's option.

The repurchase of up to $10.0 million of the Company's common stock was approved
by the Board of Directors subject to market conditions. During the quarter ended
June 30, 2000, the Company  repurchased  15,400 shares of its outstanding common
shares at an average  price of $9.99  raising the total  shares  repurchased  to
887,700 at an average cost of $9.61 as of June 30, 2000.

Year 2000

In prior years,  the Company  discussed  the nature and progress of its plans to
become Year 2000 ready.  During 1999, the Company  completed its remediation and
testing of systems.  As a result of those planning and  implementation  efforts,
the  Company   experienced  no  significant   disruptions  in  mission  critical
information technology and non-information technology systems and believes those
systems successfully  responded to the Year 2000 date change. The Company is not
aware of any material problems resulting from Year 2000 issues,  either with its
products,  its internal systems,  or the products and services of third parties.
The Company will continue to monitor its mission critical computer  applications
and those of its suppliers and vendors  throughout  the Year 2000 to ensure that
any latent Year 2000 matters that may arise are addressed promptly.

<PAGE>

Item 3.  Quantitative and Qualitative Disclosures About Market Risk
The Company does not trade in derivative  financial  instruments.  The Company's
revolving  line of credit bears  interest at a variable  rate (prime minus 1/2%)
and,  therefore,  the Company is subject to  market-risk in the form of interest
rate fluctuations.

Part II.  Other Information

Item 1.  Legal Proceedings

The  Company  is not  presently  involved  in any legal  proceedings  which,  if
determined  adversely  to the  Company,  would  have a  material  effect  on the
Company.

Item 6.  Exhibits and Reports on Form 8-K

The Company did not file any report on Form 8-K during the six-months ended June
30, 2000.

<PAGE>

                                   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.

                               800-JR Cigar, Inc.

August 9, 2000                       By: /s/ Lewis I. Rothman___________________
                                         Lewis I. Rothman, President and Chief
                                         Executive Officer

August 9, 2000                       By: /s/ Michael E. Colleton________________
                                         Michael E. Colleton, Chief Financial
                                         Officer