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  September  30,  2000  Commission  File
         Number 0-27050
                -------

         Transition  report  pursuant  to Section 13 or 15(d) of the  Securities
-------- Exchange Act of 1934

         For the transition period from________ to ________


                                 PHAR-MOR, INC.
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

         PENNSYLVANIA                                          25-1466309
------------------------------------------------           ---------------------
         (State or other jurisdiction of                   (I.R.S. Employer
         incorporation or organization)                    Identification No.)


         20 Federal Plaza West, Youngstown, Ohio            44501-0400
------------------------------------------------           ---------------------
         (Address of principal executive offices)          (Zip code)


Registrant's telephone number, including area code:        (330) 746-6641
                                                           --------------

         Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days.

                                            YES      X        No
                                                   -----           -----

         Indicate by check mark whether the  registrant  has filed all documents
and reports  required to be filed by Sections 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      X        No
                                                   -----           -----

On October 16, 2000,  there were 12,240,865  shares of the  registrant's  common
stock  outstanding  before  deducting   1,261,643  shares  which  represent  the
Company's  25.2% equity interest in common stock of the Company owned by Avatex,
Inc.



<PAGE>2


                           PHAR-MOR, INC. AND SUBSIDIARIES

                                    FORM 10-Q

                       FOR THE QUARTER ENDED SEPTEMBER 30, 2000


                                    I N D E X

                                                                           Page
--------------------------------------------------------------------------------

Part I:  Financial Information

         Item 1.  Financial Statements

              Condensed Consolidated Balance Sheets as of September 30,
              2000 and July 1, 2000                                           3

              Condensed Consolidated Statements of Operations for the
              Thirteen Weeks Ended September 30, 2000 and October 2, 1999     4

              Condensed Consolidated Statements of Cash Flows for the
              Thirteen Weeks Ended September 30, 2000 and October 2, 1999     5

              Notes to Condensed Consolidated Financial Statements            6

         Item 2.  Management's Discussion and Analysis of Financial
         Condition and Results of Operations                                  7

Part II: Other Information

         Item 1.  Legal Proceedings                                           9
         Item 2.  Changes in Securities                                       9
         Item 3.  Defaults Upon Senior Securities                             9
         Item 4.  Submission of Matters to a Vote of Security Holders         9
         Item 5.  Other Information                                           9
         Item 6.  Exhibits and Reports on Form 8-K                            9
         Signatures                                                          10
         Exhibit Index                                                       11


<PAGE>3


                                             PHAR-MOR, INC. AND SUBSIDIARIES
                                          CONDENSED CONSOLIDATED BALANCE SHEETS
                                                        (In thousands)
<TABLE>
<CAPTION>

ASSETS                                                   (Unaudited)
                                                        September 30,    July 1,
                                                             2000          2000
                                                             ----          ----
<S>                                                        <C>          <C>
Current assets:
  Cash and cash equivalents                                $  14,797    $  16,752
  Marketable securities                                        2,516        3,019
  Accounts receivable - net                                   30,055       25,017
  Merchandise inventories                                    224,733      207,228
  Prepaid expenses and other current assets                    6,852        6,538
                                                             -------      -------

          Total current assets                               278,953      258,554

Property and equipment - net                                  88,505       91,801
Goodwill                                                      15,648       15,809
Deferred tax asset                                             9,126        9,126
Investments                                                   13,443       13,682
Investment in Avatex                                           3,948        3,691
Other assets                                                   5,288        5,241
                                                             -------      -------

          Total assets                                     $ 414,911    $ 397,904
                                                           =========    =========

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
  Accounts payable                                         $ 103,647    $  97,461
  Accrued expenses and other current liabilities              35,148       40,621
  Current portion of long-term debt and capital lease
    obligations                                                6,356        6,499
                                                             -------      -------
          Total current liabilities                          145,151      144,581

Long-term debt and capital lease obligations                 193,288      167,856
Long-term self insurance reserves                              7,184        7,335
Deferred rent and unfavorable lease liability - net           10,296       10,639
                                                             -------      -------
          Total liabilities                                  355,919      330,411
                                                             -------      -------

Commitments and contingencies                                   --           --
Minority interests                                               535          535

Stockholders' equity:
  Preferred stock                                               --           --
  Common stock                                                   122          122
  Additional paid-in capital                                  90,007       90,007
  Stock options outstanding                                    2,200        2,200
  Retained deficit                                           (27,513)     (19,012)
                                                             -------      -------
                                                              64,816       73,317
  Less: equity, through investment in Avatex, in cost of
   common stock of the Company held by Avatex, Inc.           (6,359)      (6,359)
                                                             -------      -------
        Total stockholders' equity                            58,457       66,958
                                                             -------      -------

        Total liabilities and stockholders' equity         $ 414,911    $ 397,904
                                                           =========    =========
</TABLE>


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


<PAGE>4


                          PHAR-MOR, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                 (Dollars in thousands, except per share amounts)
                                   (Unaudited)

<TABLE>
<CAPTION>

                                                             Thirteen             Thirteen
                                                           Weeks Ended          Weeks Ended
                                                       September 30, 2000     October 2, 1999
                                                       ------------------     ---------------

<S>                                                          <C>             <C>
Sales                                                        $    308,187    $    317,835

Less:
  Cost of goods sold, including occupancy and
      distribution costs                                          255,278         256,783
  Selling, general and administrative expenses                     50,422          53,455
  Depreciation and amortization                                     5,374           7,175
                                                                  -------         -------

(Loss) income from operations before interest expense,
 investment loss and equity in (loss) income of affiliates         (2,887)            422

Interest expense                                                   (5,022)         (4,545)
Investment loss                                                      (503)           (658)
                                                                  -------         -------
Loss before equity in (loss) income of affiliates                  (8,412)         (4,781)

Equity in (loss) income of affiliates                                 (90)            590
                                                                  -------         -------
Net loss                                                     $     (8,502)   $     (4,191)
                                                             ============    ============


Loss per basic and diluted common share                      $       (.77)   $       (.36)
                                                             ============    ============


Weighted average number of basic and diluted common shares
outstanding                                                    11,019,871      11,516,185
</TABLE>


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


<PAGE>5



                          PHAR-MOR, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (In thousands)
                                   (Unaudited)
<TABLE>
<CAPTION>

                                                           Thirteen           Thirteen
                                                          Weeks Ended        Weeks Ended
                                                      September 30, 2000   October 2, 1999
                                                      ------------------   ---------------
<S>                                                           <C>           <C>
OPERATING ACTIVITIES
  Net loss                                                    $ (8,502)     $ (4,191)
  Adjustments to reconcile net loss to net
    cash used for operating activities:
    Items not requiring the outlay of cash:
      Depreciation                                               4,546         4,641
      Amortization of video rental tapes                           519         2,241
      Stock option expense                                        --              95
      Amortization of deferred financing costs and goodwill        377           361
      Deferred rent and unfavorable lease liability               (343)          121
      Equity in loss (income) of affiliates                         90          (590)
    Changes in assets and liabilities:
      Accounts receivable                                       (5,038)       (3,482)
      Marketable securities                                        503         1,713
      Merchandise inventories                                  (17,687)      (14,821)
      Prepaid expenses                                            (314)        1,008
      Other assets                                                (264)          (51)
      Accounts payable                                           5,258       (22,088)
      Accrued expenses and other current liabilities            (5,622)          699
                                                               -------       -------
  Net cash used for operating activities                       (26,477)      (34,344)
                                                               -------       -------

INVESTING ACTIVITIES
  Additions to rental videotapes                                  (337)         (454)
  Additions to property and equipment                           (1,251)       (4,448)
  Investment in equity securities                                 (107)       (4,600)
                                                               -------       -------
  Net cash used for investing activities                        (1,695)       (9,502)
                                                               -------       -------

FINANCING ACTIVITIES
  Borrowings under revolving credit facility                    26,890        30,969
  Bank overdrafts                                                  928        13,495
  Principal payments on long-term debt                            (502)         (446)
  Principal payments on capital lease obligations               (1,099)       (1,651)
                                                               -------       -------
  Net cash provided by financing activities                     26,217        42,367
                                                               -------       -------

  Decrease in cash and cash equivalents                         (1,955)       (1,479)
  Cash and cash equivalents, beginning of period                16,752        17,346
                                                               -------       -------
  Cash and cash equivalents, end of period                    $ 14,797      $ 15,867
                                                              ========      ========
</TABLE>

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


<PAGE>6


PHAR-MOR, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share
amounts)
--------------------------------------------------------------------------------
1.       BASIS OF PRESENTATION
         The accompanying  unaudited  interim condensed  consolidated  financial
         statements  have been prepared in accordance  with  generally  accepted
         accounting  principles for interim financial  information.  They do not
         include  all  information  and  footnotes  which  would be  required by
         generally  accepted   accounting   principles  for  complete  financial
         statements.  In the  opinion  of  management  of  Phar-Mor,  Inc.  (the
         "Company") and its  subsidiaries,  these interim  financial  statements
         contain all adjustments considered necessary for a fair presentation of
         financial  position,  results  of  operations  and cash  flows  for the
         periods  presented.  Reference  should be made to the Company's  Annual
         Report  on Form  10-K  for the  fiscal  year  ended  July 1,  2000  for
         additional disclosures, including a summary of the Company's accounting
         policies,  which  have  not  changed  except  for  the  new  accounting
         pronouncement  discussed in note 2. Operating  results for the thirteen
         weeks ended  September 30, 2000 are not  necessarily  indicative of the
         results  that may be expected for the  fifty-two  weeks ending June 30,
         2001.

2.       NEW ACCOUNTING PRONOUNCEMENTS
         In June 1998, the Financial  Accounting Standards Board ("FASB") issued
         Statement of Accounting  Standards  ("SFAS") No. 133,  "Accounting  for
         Derivative  Instruments  and  Hedging  Activities,"  which  establishes
         accounting and reporting  standards for derivative  instruments and for
         hedging   activities.   It  requires  that  an  entity   recognize  all
         derivatives  as  either  assets  or  liabilities  in the  statement  of
         financial  position and measure those  instruments at fair value,  with
         the potential  effect on operations  dependent upon certain  conditions
         being  met.  SFAS No.  133 (as  amended  by SFAS  Nos.  137 and 138) is
         effective for all fiscal  quarters of fiscal years beginning after June
         15, 2000. The Company  adopted SFAS 133 effective July 2, 2000, and the
         adoption of this  standard  did not have an impact on its  consolidated
         financial position, results of operations or cash flows.

3.       LITIGATION
         The Company and its  subsidiaries  are  involved in legal  proceedings,
         claims and litigation  arising in the ordinary  course of business.  In
         the  opinion  of   management,   the  outcome  of  such  current  legal
         proceedings,  claims and litigation  will not have a material impact of
         the Company's consolidated financial position, results of operations or
         cash flows.

4.       INVESTMENT IN AVATEX
         On  December  6, 1999,  the  Company  invested  $5,724 to  purchase  an
         additional  2,862,400  shares of Avatex  common stock,  increasing  its
         investment  from  15.1%  to  approximately   25.2%  of  Avatex's  total
         outstanding common stock.  Accordingly,  the Company changed its method
         of accounting for the investment  from cost to equity basis as required
         by  generally  accepted  accounting   principles  and  treats  Avatex's
         investment  in the Company's  common stock  similar to treasury  stock,
         with a reduction in the number of shares  outstanding  for  calculating
         earnings per share of  1,220,994.  The  financial  statements  of prior
         years have been  restated to reflect the adoption of the equity  method
         in  a  manner  consistent  with  the  accounting  of  a  step  by  step
         acquisition of Avatex.  The effect of the  restatement  was to increase
         net income for fiscal 1999 by $2,188,  eliminate  comprehensive  income
         (loss)  for all  prior  periods  and  reclassify  all of the  Company's
         investment in Avatex common stock prior to fiscal 2000 from  Investment
         in Avatex to Equity  in cost of  common  stock of the  Company  held by
         Avatex, Inc. on the Condensed Consolidated Balance Sheets.

         The Company's  investment in Avatex includes the unamortized  excess of
         the Company's  investment  over its equity in Avatex's net assets.  The
         original excess was $3,628 at January 1, 2000 and is being amortized on
         a straight-line basis over 20 years.




<PAGE>7


PHAR-MOR, INC. AND SUBSIDIARIES
ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

RESULTS OF OPERATIONS (all dollar amounts in thousands)

Thirteen Weeks Ended September 30, 2000 versus
    Thirteen Weeks Ended October 2, 1999

Sales for the first quarter of fiscal year 2001 ("Fiscal  2001")  decreased 3.0%
compared to the first  quarter of fiscal year 2000 ("Fiscal  2000").  Comparable
store sales  decreased 2.9% from $314,949 for Fiscal 2000 to $305,866 for Fiscal
2001.  Comparable  store pharmacy sales  increased 5.6% while  comparable  store
front-end  sales  decreased  6.5%.  Front-end sales were afected by unseasonably
cool and wet  summer  weather  which  negatively  impacted  the  sale of  summer
seasonal merchandise.

Cost of sales as a  percentage  of sales was 82.8% in Fiscal  2001  compared  to
80.8% in Fiscal 2000,  an increase of 2.0% of sales.  The increase was primarily
due to the  inclusion  of  vendor  allowances  for  the  remerchandising  of the
Pharmhouse  stores in Fiscal 2000 and a reduction in video rental tape sales and
gross margin due to the elimination of underperforming video rental departments.

Selling, general and administrative expenses as a percentage of sales were 16.4%
in Fiscal  2001  compared to 16.8% in Fiscal  2000,  a decrease of .4% of sales.
This decrease was primarily due to lower store wages, lower corporate  incentive
compensation accruals and lower credit card fees. The decrease in store wages is
due to an increase in productivity as a result of improved labor scheduling. The
decrease  in credit  card fees is the  result of  increased  efforts  to convert
customers to the use of debit cards.

Depreciation  and  amortization  expense was $5,374 in Fiscal  2001  compared to
$7,175 in Fiscal 2000, a decrease of $1,801. The decrease was primarily due to a
$1,722 decrease in video tape  amortization  due to the closure of approximately
one half of the Company's poorer  performing video rental  departments since the
beginning  of Fiscal 2000  combined  with lower video  rental tape  purchases in
continuing video rental departments.

Interest  expense  was $5,022 in Fiscal 2001  compared  to  interest  expense of
$4,545 in Fiscal 2000, a $477 increase. The increase in interest expense was due
to increased boirrowings under the revolving credit facility partially offset by
lower  interest  expense on the senior notes due to the repurchase of $10,149 in
senior notes in Fiscal 2000.

Equity in loss (income) of affiliates declined from a $590 income in Fiscal 2000
to a $90 loss in Fiscal  2001,  primarily  due to lower  income  realized  by an
investment partnership for which the Company has an investment.


FINANCIAL CONDITION AND LIQUIDITY (all dollar amounts in thousands)

The Company's cash position as of September 30, 2000 was $14,797.  The Company's
cash  position may fluctuate as a result of seasonal  merchandise  purchases and
timing of payments.

The Company entered into an Amended and Restated  Revolving Credit Facility (the
"Amended Facility")  effective September 10, 1998 with BABC, as agent, and other
financial  institutions that establishes a credit facility in the maximum amount
of $100,000.

Borrowings  under the Amended Facility may be used for working capital needs and
general  corporate  purposes.  Up to $50,000 of the Amended Facility at any time
may be used for standby and documentary  letters of credit. The Amended Facility
includes  restrictions  on, among other things,  additional  debt,  investments,
dividends  and other  distributions,  mergers and  acquisitions  and contains no
financial covenants.

Credit  availability under the Amended Facility at any time is the lesser of the
aggregate  availability  (as defined in the Amended  Facility) or $100,000.  The
Amended Facility  establishes a first priority lien and security interest in the
current  assets of the Company,  including,  among other items,  cash,  accounts
receivable and inventory.

Advances  made under the  Amended  Facility  bear  interest  at the  BankAmerica
reference rate plus 1/2% or LIBOR plus 2.00% from January 1 to June 30 each year
and the BankAmerica  reference rate plus 3/4% or LIBOR plus 2.25% from July 1 to
December 31 each year. Under the terms of the Amended  Facility,  the Company is
required  to pay a  commitment  fee of between  0.25% and 0.35% per annum on the
unused portion of the facility, letter of credit fees and certain other fees.

Unused  availability under the Amended Facility,  after subtracting amounts used
for outstanding letters of credit, was $10,776 at September 30, 2000.

The Amended Facility expires on March 14, 2002.

On October 6, 2000 the Company  received a commitment from Fleet Retail Finance,
Inc. to provide a senior secured  revolving  credit  facility for up to $150,000
that would replace the Amended  Facility.  The closing date for this facility is
expected to occur on or before November 30, 2000.

Thirteen weeks ended September 30, 2000

During the thirteen weeks ended  September 30, 2000, the Company's cash position
decreased by $1,955.  Net cash used for operating  activities  was $26,477.  The
major  uses of cash  from  operating  activities  were  net loss of  $8,502,  an
increase in inventories of $17,687, an increase in accounts receivable of $5,038
and a decrease in accrued  expenses  and other  current  liabilities  of $5,622.
These were  partially  offset by an  increase  in acounts  payable of $5,258 and
depreciation expense of $4,546.

Capital  expenditures of $1,251,  additions to video rental tapes of $337 and an
investment in equity  securities of $107 were paid for with borrowings under the
Company's revolving credit facility.

Net cash  provided by financing  activities  of $26,217  consisted of borrowings
under the revolving  credit facility and decreases in bank overdrafts  partially
offset by principal  payments on lease  obligations  and  principal  payments on
long-term debt.

The  Company  is  exposed to certain  market  risks from  transactions  that are
entered into during the normal course of business. The Company's policies do not
permit active trading of, or speculation in, derivative  financial  instruments.
The Company's  primary  market risk exposure  relates to interest rate risk. The
Company manages its interest rate risk in order to balance its exposure  between
fixed and variable rates while attempting to minimize its interest costs.

Trends,  Demands,  Commitments,  Events or Uncertainties  (all dollar amounts in
thousands)

In June  1998,  the  FASB  issued  SFAS  No.  133,  "Accounting  for  Derivative
Instruments and Hedging Activities," which establishes  accounting and reporting
standards for derivative  instruments  and for hedging  activities.  It requires
that an entity  recognize all derivatives as either assets or liabilities in the
statement of financial  position and measure  those  instruments  at fair value,
with the potential effect on operations  dependent upon certain conditions being
met.  SFAS No. 133 (as amended by SFAS Nos.  137 and 138) is  effective  for all
fiscal  quarters of fiscal  years  beginning  after June 15,  2000.  The Company
adopted SFAS 133 effective  July 2, 2000,  and the adoption of this standard did
not have an impact on its consolidated financial position, results of operations
or cash flows.


<PAGE>9


PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

                  None.

ITEM 2.  CHANGES IN SECURITIES

                  None.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

                  None.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

                  None.

ITEM 5.  OTHER INFORMATION

                  None.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

         (a)      Exhibits

                  See Exhibit Index on page 11.

         (b)      Reports on Form 8-K

                  The  following  reports  on  Form  8-K  were  filed  with  the
                  Securities  and Exchange  Commission  during the quarter ended
                  September 30, 2000

                  None.




<PAGE>10



                                   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.




                                              PHAR-MOR, INC.


Date:  November 9, 2000                 By:   /s/ Martin S. Seekely
                                              ---------------------
                                                  Martin S. Seekely
                                                  Vice President and Chief
                                                    Financial Officer



Date:  November 9, 2000                By:   /s/ John R. Ficarro
                                              ------------------
                                                 John R. Ficarro
                                                 Senior Vice President and Chief
                                                   Administrative Officer


<PAGE>11




                                 PHAR-MOR, INC.

                                INDEX TO EXHIBITS


Exhibit No.

*3.1              Amended and Restated Articles of Incorporation

**3.2             Amended and Restated By-laws

*4.1              Indenture dated September 11, 1995  between Phar-Mor, Inc. and
                  IBJ Schroder Bank & Trust Company

*4.2              Warrant  Agreement dated  September 11, 1995 between Phar-Mor,
                  Inc. and Society National Bank

***10.1           Loan and Security  Agreement,  dated as of September 10, 1998,
                  by  and  among  the  financial   institutions  listed  on  the
                  signature pages therein, BankAmerica Business Credit, Inc., as
                  agent, and Phar-Mor,  Inc.,  Phar-Mor,  Inc., LLC, Phar-Mor of
                  Delaware,  Inc., Phar-Mor of Florida,  Inc., Phar-Mor of Ohio,
                  Inc.,  Phar-Mor of Virginia,  Inc., and Phar-Mor of Wisconsin,
                  Inc.

27                Financial Data Schedule
--------------------------------------------------------------------------------
*        Previously filed in connection with the filing of  Phar-Mor's  Form 10,
         on October 23, 1995

**       Previously filed in connection with the filing of  Phar-Mor's quarterly
         report on Form 10-Q, on May 1, 1998

***      Previously filed in connection with the filing of  Phar-Mor's quarterly
         report on Form 10-Q, on November 2, 1998