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 April 1, 2001,

                                       OR

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

    For the transition period from _______________ to _______________

                           Commission File No. 1-13727



                           FFP MARKETING COMPANY, INC.
             (Exact name of registrant as specified in its charter)




                 Texas                                     75-2735779
(State or other jurisdiction of                            (I.R.S. employer
incorporation or organization)                          identification number)


                2801 Glenda Avenue; Fort Worth, Texas 76117-4391
           (Address of principal executive office, including zip code)

                                  817/838-4700
              (Registrant's telephone number, including area code)



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




                             Common Shares 3,818,747
                (Number of shares outstanding as of May 10, 2001)

<PAGE>

                                      INDEX

                                                                          PAGE
                                                                        -------
Part I

   Item 1. Financial Statements................................             1

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

   Item 3. Quantitative and Qualitative Disclosures
           About Market Risks..................................            10

Part II

   Item 6. Exhibits and Reports on Form 8-K....................            11

Signatures.....................................................            11





<PAGE>


                  FFP MARKETING COMPANY, INC. AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                 (In thousands)
                                   (Unaudited)

                                                       April 1,    December 31,
                                                          2001         2000
                                                       --------    ------------
                                     ASSETS

Current assets -
   Cash and cash equivalents.......................    $ 10,558     $ 14,572
   Investments in marketable securities............       3,459        3,084
   Trade receivables, net..........................      26,570       28,671
   Notes receivable, current portion...............       1,743        1,391
   Receivables from affiliates, current portion....         713          770
   Inventories.....................................      23,183       24,502
   Deferred tax asset..............................       1,030        1,181
   Prepaid expenses and other current assets.......       1,167          676
                                                         ------       ------
      Total current assets.........................      68,423       74,847
Property and equipment, net........................      37,254       38,074
Notes receivable, excluding current portion........       3,812        3,620
Other assets, net..................................       8,320        8,320
                                                        -------      -------
      Total assets.................................    $117,809     $124,861
                                                        =======      =======

                      LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities -
   Current installments of long-term debt..........      $5,490       $1,642
   Current installments of capital
      lease obligations............................         437          437
   Accounts payable................................      22,451       21,190
   Money orders payable............................      18,854       18,237
   Due to affiliate................................       1,671        1,407
   Accrued expenses................................      11,807       14,182
                                                         ------       ------
      Total current liabilities....................      60,710       57,095
Long-term debt, excluding current installments.....      30,346       37,557
Capital lease obligations, excluding
      current installments.........................       3,947        4,042
Deferred income taxes..............................       2,166        3,367
Other liabilities..................................       1,959        2,081
                                                         ------      -------
      Total liabilities............................      99,128      104,142
                                                         ------      -------
Commitments and contingencies......................          -            -
Stockholders' equity -
   Common stock ($0.01 par value)..................      22,235       22,235
   Accumulated deficit.............................      (2,878)        (547)
   Accumulated other comprehensive loss............        (676)        (969)
                                                        -------      -------
      Total stockholders' equity...................      18,681       20,719
                                                        -------      -------
      Total liabilities and stockholders' equity...    $117,809     $124,861
                                                        =======      =======

     See accompanying Notes to Condensed Consolidated Financial Statements.

<PAGE>


                  FFP MARKETING COMPANY, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
               THREE MONTHS ENDED APRIL 1, 2001 AND MARCH 26, 2000
                      (In thousands, except per share data)
                                   (Unaudited)

                                                        April 1,     March 26,
                                                          2001         2000
                                                       --------    -----------
Revenues -
    Motor fuel sales..............................     $130,769    $ 123,432
    Merchandise sales.............................       24,029       28,680
    Miscellaneous.................................        3,495        2,328
                                                        -------      -------
        Total revenues............................      158,293      154,440
                                                        -------      -------

Costs and expenses -
    Cost of motor fuel............................      125,588      116,327
    Cost of merchandise...........................       17,287       20,196
    Direct store expenses.........................       11,901       12,877
    General and administrative expenses...........        4,352        3,760
    Depreciation and amortization.................        1,834        1,724
                                                        -------      -------
        Total costs and expenses..................      160,962      154,884
                                                        -------      -------

Operating loss....................................       (2,669)        (444)
    Interest income...............................          271          351
    Interest expense..............................        1,134        1,170
                                                        -------      -------

Loss before income taxes..........................       (3,532)      (1,263)

Deferred income tax benefit.......................       (1,201)        (379)
                                                        -------      -------

Net loss..........................................      $(2,331)      $ (884)
                                                          =====         ====

Net loss per share -
    Basic.........................................       $(0.61)     $ (0.23)
    Diluted.......................................        (0.61)       (0.23)

Weighted average number of common shares outstanding -
    Basic.........................................        3,819        3,819
    Diluted.......................................        3,819        3,819



     See accompanying Notes to Condensed Consolidated Financial Statements.

<PAGE>


                  FFP MARKETING COMPANY, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
               THREE MONTHS ENDED APRIL 1, 2001 AND MARCH 26, 2000
                                 (In thousands)
                                   (Unaudited)

                                                           April 1,    March 26,
                                                             2001         2000
                                                           --------    ---------

Cash Flows from Operating Activities -
    Net loss...........................................    $(2,331)      $ (884)
    Adjustments to reconcile net loss to cash
    used by operating activities -
       Depreciation and amortization...................      1,834        1,724
       Provision for doubtful accounts.................        120           22
       Deferred income tax benefit.....................     (1,201)        (379)
       Increase in trading securities..................        (33)      (1,653)
       Gain on sale of convenience stores..............       (467)        (210)
       Loss on sale of properties......................        161            0
       Net change in operating assets and liabilities..      1,427          758
                                                            ------       ------
    Net cash used by operating activities..............       (490)        (622)
                                                            ------       ------

Cash Flows from Investing Activities -
    Additions of property and equipment, net...........     (1,023)      (1,193)
    Proceeds of sale of marketable securities..........        476            0
    Proceeds of sale of properties.....................         21            0
    Proceeds of sale of convenience stores.............        127            0
    Payments on note receivable from affiliate.........         57            0
    Receipt of payments on notes receivable............         11            0
                                                             -----       ------
    Net cash used by investing activities..............       (331)      (1,193)
                                                             -----       ------

Cash Flows from Financing Activities -
    Net borrowings (repayments) of long-term
       debt and capital lease obligations..............     (3,457)        (410)
    Advances from (to) affiliate.......................        264           (9)
                                                            ------      -------
    Net cash used by financing activities..............     (3,193)        (419)
                                                            ------      -------

Net decrease in cash and cash equivalents..............     (4,014)      (2,234)

Cash and cash equivalents at beginning of period.......     14,572       20,868
                                                            ------      -------

Cash and cash equivalents at end of period.............    $10,558      $18,634
                                                            ======       ======


Supplemental Disclosure of Cash Flow Information
(in thousands):

Cash paid for interest.................................     $1,134       $1,170


     See accompanying Notes to Condensed Consolidated Financial Statements.

<PAGE>
                  FFP MARKETING COMPANY, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

1.   Basis of Presentation

     The  condensed   consolidated  financial  statements  include  the  assets,
liabilities,  and results of operations of FFP Marketing Company,  Inc., and its
wholly owned subsidiaries, FFP Operating Partners, L.P., Direct Fuels, L.P., FFP
Financial Services,  L.P., Practical Tank Management,  Inc., FFP Transportation,
L.L.C.,  FFP Money Order  Company,  Inc.,  FFP  Operating  LLC, and Direct Fuels
Management  Company,  Inc. These companies are  collectively  referred to as the
"Company."

     The  condensed  consolidated  balance  sheet as of April 1,  2001,  and the
condensed  consolidated  statements of  operations  and cash flows for the three
months ended April 1, 2001,  and March 26, 2000,  have not been audited.  In the
opinion of management,  all  adjustments,  consisting  only of normal  recurring
adjustments,  necessary to fairly present the Company's financial position as of
April 1, 2001,  and the  results of  operations  and cash flows for the  periods
presented  have  been  made.  Interim  operating  results  are  not  necessarily
indicative of results for the entire year.

     The  notes  to the  audited  consolidated  financial  statements  that  are
included in the Company's Annual Report on Form 10-K for the year ended December
31, 2000, include accounting policies and additional information pertinent to an
understanding of these interim  financial  statements.  That information has not
changed other than as a result of normal  transactions in the three months ended
April 1, 2001, and as discussed below.

2.  Loss per Share

     Basic net loss per share is computed by dividing  net loss by the  weighted
average number of common shares  outstanding  for the quarter.  Diluted net loss
per share is computed by dividing  net loss by the  weighted  average  number of
common  shares  outstanding  for the quarter plus  potentially  dilutive  common
shares.  Outstanding  options to acquire  253,667 and 231,667  common  shares at
April 1, 2001,  and March 26, 2000,  respectively,  have been  excluded from the
diluted  computation  because  the  effect  would  have  been  anti-dilutive.  A
reconciliation  of the  denominators  of the  basic and  diluted  loss per share
calculations for the applicable first quarter periods in 2001 and 2000 follows:


                                                               2001       2000
                                                              -----      ------
                                                                (In thousands)

Weighted average number of common shares outstanding......    3,819       3,819
Effect of dilutive options................................        0           0
                                                              -----      ------
Weighted average number of common shares outstanding,
     assuming dilution....................................    3,819       3,819
                                                              =====       =====



3.  Operating Segments

     The Company and its subsidiaries  are principally  engaged in two operating
segments: (i) the retail and wholesale sale of motor fuel, merchandise and other
products and services at  convenience  stores,  truck stops,  and other gasoline
outlets  ("Retail  and  Wholesale"),  and (ii)  the  operation  of a motor  fuel
terminal  and  processing  facility  ("Terminal  Operations").  The  Company has
identified  such  segments  based  on  management  responsibilities.   No  major
distinctions  exist  regarding  geographical  areas  served  by the  Company  or
customer types.  The following table sets forth certain  information  about each
segment's financial information for the first quarters of 2001 and 2000:

                                Retail and   Terminal
                                 Wholesale  Operations Eliminations Consolidated
                                 ---------  ---------- ------------ ------------
                                           (In thousands)

First Quarter 2001
------------------
Revenues from external sources..  $131,033     $27,260      $   0      $158,293
Revenues from other segment.....         0       7,979      7,979             0
Depreciation and amortization...     1,388         446          0         1,834
Loss before income taxes........    (2,924)       (608)         0        (3,532)

First Quarter 2000
------------------
Revenues from external sources.. $ 139,263   $ 15,177      $   0      $ 154,440
Revenues from other segment.....         0      7,541     (7,541)             0
Depreciation and amortization...     1,577        147          0          1,724
Loss before income taxes........    (1,453)       190          0         (1,263)

<PAGE>

4.  Comprehensive Net Loss

     The components of comprehensive net loss for the first quarters of 2001 and
2000 are set forth below:

                                                          2001            2000
                                                       --------         -------
                                                              (In thousands)

Net loss...........................................    $ (2,331)        $ (884)
Unrealized net gains on available-for-sale
   securities, net of tax..........................         293              0
                                                        -------          ------
     Comprehensive loss ...........................    $ (2,038)        $ (884)
                                                         ======           =====

5.   Notes Payable and Long-Term Debt

     In June 1998 the Company closed 44 loans in the original  principal  amount
of $9,420,000 and secured by the Company's assets at 44 of 94 convenience stores
acquired in December 1997.  The loans bear interest at 8.66% per annum,  require
the Company to maintain a minimum fixed charge  coverage ratio of 1.25 to 1, and
will be fully  amortized at various  maturity dates ranging from October 2007 to
July  2013  by  making   principal  and  interest   payments  in  equal  monthly
installments  over their  respective  terms.  At April 1, 2001, and December 31,
2000,  $8,237,000 and $8,359,000,  respectively,  remained  outstanding on these
loans.

     In February 1999 the Company  acquired 23 convenience  stores and two truck
stops.  Eleven of the 25 stores are third party  leasehold  locations  where the
Company purchased the existing leasehold interest, equipment, and inventory. The
Company financed its purchase of those properties with fully-amortizing mortgage
loans in the aggregate  original  principal amount of $1,012,000,  with maturity
dates ranging from 86 to 180 months,  interest payable at a fixed rate of 9.275%
per annum,  a minimum  fixed charge  coverage  ratio of 1.25 to 1, and aggregate
monthly  payments of principal  and interest of $13,000.  At April 1, 2001,  and
December 31, 2000, $892,000 and $908,000, respectively,  remained outstanding on
these loans.

     The land and building at the remaining 14 of those 25 stores were purchased
on the same date by FFP Partners  and  immediately  leased to the Company  under
real  estate  leases with a 15-year  term.  The real  estate  leases  negotiated
between FFP  Partners  and the Company  require a total  monthly rent payment of
$99,000 with a rate of return of  approximately  14%. Under  generally  accepted
accounting  principles,  each real estate lease is treated as two leases: a land
lease and a building lease. Each land lease is classified as an operating lease,
with  monthly  payments  for all such  land  leases  aggregating  $28,000.  Each
building lease is classified as a capital lease,  with monthly  payments for all
such building leases  aggregating  $71,000.  The amount of rent allocated to the
capital lease  obligation for the buildings in the original amount of $3,932,000
results  in an  implicit  rate  of  approximately  20%.  As a  condition  to the
Company's acquisition of store operations at those 14 fee locations, the Company
was required to guarantee the acquisition indebtedness in the original amount of
$9,550,000  incurred by FFP Partners in its purchase of those stores,  including
land,  building,  equipment and  inventory.  At April 1, 2001,  and December 31,
2000, the outstanding amounts on loans of FFP Partners guaranteed by the Company
were  $8,911,000  and  $9,000,000,  respectively.  The Company's  scheduled real
estate lease  payments to FFP Partners equal or exceed the debt service costs of
FFP Partners during the term of the leases.

     In June 1999 the Company refinanced its previous long-term revolving credit
facility  and term loan with the proceeds of fixed rate  financing  from a third
party lender in the original  principal  amount of  $23,800,000.  This long-term
debt is payable in 180 equal, monthly installments with interest at a fixed rate
of 9.9% per  annum,  a minimum  fixed  charge  coverage  ratio of 1.25 to 1, and
aggregate  monthly payments of principal and interest of $256,000.  This loan is
secured by a lien against the Company's leasehold improvements,  equipment,  and
inventory at 49 specific  convenience stores,  truck stops and gas-only outlets.
At  April  1,  2001,  and  December  31,  2000,   $22,566,000  and  $22,773,000,
respectively, remained outstanding on these loans.

     In December 1999 the Company  obtained a revolving  credit  facility with a
third party  lender  providing  for  borrowings  up to  $10,000,000.  The amount
available  at any time  under  the loan is equal to a  borrowing  base of 80% of
certain trade  receivables  plus 60% of the Company's  inventory at its terminal
facility;  provided,  however,  that  any draw  which  would  cause  outstanding
borrowings  under the  facility to exceed  $5,000,000  is limited to 140% of net
value of marketable  securities in the Company's  trading account at a brokerage
firm. At the end of the first quarter of 2001, the Company's  borrowing base was
limited  under  the  agreement  to  $9,800,000.  The  net  value  of  marketable
securities at that  brokerage  firm was  $2,868,000  and  $2,711,000 at April 1,
2001, and December 31, 2000,  respectively.  The revolving credit facility bears
interest at the lender's prime rate plus one percentage point,  payable monthly,
and  matures  in  December  2002.  At April 1,  2001,  and  December  31,  2000,
$3,992,000 and $6,858,000,  respectively,  were outstanding  under the revolving
line of credit. The loan is subject to a Loan Agreement and a Security Agreement
dated in December 1999 between the lender,  the Company and two  subsidiaries of
the Company.  The agreement contains numerous  restrictive  covenants including,
but not  limited to, a financial  covenant  requiring  the Company to maintain a
minimum fixed charge  coverage ratio of 1.25 to 1. Loans under the agreement are
secured by all of the Company's trade accounts receivable and its inventories at
the terminal.  At the end of the first quarter of 2001, the Company did not meet
the required minimum fixed charge coverage ratio.  Because such indebtedness may
be callable by such lender, the Company has classified its obligation payable to
such lender at such date as a short-term liability.

     The Company is currently  pursuing,  but has not obtained a proposal for, a
new revolving  credit facility with another bank to provide for borrowings of up
to  $20,000,000,  with the amount  available  at any time limited to a borrowing
base  equal  to a  percentage  of its  eligible  its  trade  receivables  plus a
percentage of its inventory at the terminal.  The Company currently  anticipates
closing this new facility in the second or third quarter of 2001 and terminating
its  current  revolving  credit  facility,  which  could  require the payment of
prepayment penalties.  The loan being sought would be payable monthly on amounts
borrowed  and  mature in three  years.  Such loan  would be  subject to loan and
security  agreements,  not yet  negotiated,  between  the lender  and  operating
subsidiaries  of the  Company,  and be  guaranteed  by the Company and its other
subsidiaries.  The Company anticipates that the agreement will contain numerous,
but  typical,  restrictive  covenants,  including  financial  covenants  not yet
negotiated,  and be secured by the Company's trade receivables and its inventory
at the terminal and its store locations.


<PAGE>


                  FFP MARKETING COMPANY, INC. AND SUBSIDIARIES

           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                            AND RESULTS OF OPERATIONS

GENERAL
-------

     FFP Marketing Company,  Inc. was formed as a Texas corporation  immediately
prior to the December 1997 restructuring of FFP Partners, L.P. ("FFP Partners").
In that  restructuring,  all of the assets and  businesses  of FFP  Partners was
transferred to the Company,  except that FFP Partners retained the improved real
property  previously used in its retail operations.  Unless the context requires
otherwise, references herein to the "Company" for periods or activities prior to
the December 1997  restructuring  include the activities of FFP Partners and its
then subsidiaries, which are now subsidiaries of FFP Marketing Company, Inc.

     In the December  1997  restructuring  of FFP  Partners,  the holders of its
limited partnership  interests received one share of common stock of the Company
for each  limited  partnership  unit  that  they  owned on  December  28,  1997,
resulting in each such person owning the same  economic  interest in the Company
as they had held in FFP Partners.

     The Company conducts its operations through the following subsidiaries:

  Entity Name and Type            Date Formed          Principal Activity
-----------------------------    --------------  ------------------------------

FFP Operating Partners, L.P.     December 1986   Operation of convenience stores
Delaware limited partnership                     and other retail outlets

Direct Fuels, L.P.               December 1988   Operation of fuel terminal and
Texas limited partnership                        wholesale fuel sales

FFP Financial Services, L.P.     September 1990  Sale of money order services
Delaware limited partnership                     and supplies

Practical Tank Management, Inc.  September 1993  Underground storage tank
Texas corporation                                monitoring

FFP Transportation, L.L.C.       September 1994  Ownership of tank trailers and
Texas limited liability company                  other transportation equipment

FFP Money Order Company, Inc.    December 1996   Sale of money orders through
Nevada corporation                               agents


     The Company and its subsidiaries  are principally  engaged in two operating
segments:  (i) the retail sale of motor fuel, merchandise and other products and
services at 180  Company-operated  convenience  stores,  13 truck stops, and 233
gas-only  stores,  constituting  426 retail  locations in all, and the wholesale
sale of  motor  fuel,  and (ii)  the  operation  of a motor  fuel  terminal  and
processing facility.  (See Note 3 of Notes to Condensed  Consolidated  Financial
Statements.)


RESULTS OF OPERATIONS FOR FIRST QUARTER 2001 COMPARED WITH FIRST QUARTER 2000
-----------------------------------------------------------------------------

FUEL SALES AND MARGINS
----------------------

                                                        First Quarter
                                     -----------------------------------------
                                                                   Change
                                                            ------------------
                                       2001       2000       Amount    Percent
                                    --------    --------    --------   --------
                                       (In thousands, except per gallon data)

Fuel sales.....................     $130,769    $123,432     $ 7,337       5.9%
Fuel margin....................       $5,181      $7,105     $(1,924)    (27.1%)
Gallons sold -
   Retail......................       56,543      59,633      (3,090)     (5.2%)
   Wholesale...................       48,190      37,486      10,704      28.6%
   Total  .....................      104,733      97,119       7,614       7.8%
Margin per gallon (cents) -
   Retail......................          7.6        9.6        (2.0)     (20.8%)
   Wholesale...................          1.9        3.8        (1.9)     (50.0%)


     The Company  sold more motor fuel,  both in dollars and in gallons,  in the
first  quarter of 2001 than in the first quarter of 2000.  Motor fuel sales,  in
dollars, increased to $130,769,000 in the first quarter of 2001, a 5.9% increase
compared  to motor  fuel  sales of  $123,432,000  in the first  quarter of 2000,
primarily as a result of a greater number of gallons sold.

     In all,  the Company  sold  104,733,000  gallons of motor fuel in the first
quarter of 2001,  a 7,614,000  gallon  increase  (7.8%) over the volume of motor
fuel  sold  in  the  comparable   2000  period.   This  increase  was  primarily
attributable to additional  wholesale fuel sales of 10,704,000  gallons (28.6%),
which offset a decrease of 3,090,000  gallons (5.2%) sold at retail.  Motor fuel
retail and  wholesale  fuel margins per gallon  declined  materially  during the
first quarter of 2001,  when  compared to the initial  quarter of 2000, by 20.8%
and 50.0%, respectively.

     The Company's  overall  gross profit on motor fuel sales was  $5,181,000 in
the  first  quarter  of 2001,  a  $1,924,000  (27.1%)  decline  compared  to the
corresponding  quarter in 2000. Fuel margin decreased principally as a result of
competition in the industry.


MERCHANDISE SALES AND MARGINS
-----------------------------

                                                        First Quarter
                                     -----------------------------------------
                                                                   Change
                                                            ------------------
                                       2001       2000       Amount    Percent
                                     -------     -------    --------   --------
                                (In thousands, except average weekly sales data)

Merchandise sales..............      $24,029     $28,680     $(4,651)    (16.2%)
Merchandise margin.............        6,742       8,484      (1,742)    (20.5%)
Margin percentage, convenience
  stores and truck stops.......        26.9%       28.3%       (1.4%)     (4.9%)
Average weekly merchandise
  sales per store -
   Convenience stores..........       10,470      10,585        (115)     (1.1%)
   Truck stops.................       16,154      16,269        (115)     (0.7%)


     Merchandise  sales decreased by $4,651,000  (16.2%) in the first quarter of
2001.   The  primary   factor  for  that  decline  was  the  lesser   number  of
Company-operated  convenience  stores  resulting  from  the  sale/conversion  of
certain  of  its   Company-operated   convenience  stores  to  gas-only  stores.
Accordingly,  the Company operated only 180 convenience stores at the end of the
first quarter of 2001 compared to operating 216 convenience stores at the end of
the first  quarter of 2000.  Merchandise  sales per store  showed  only a slight
decline,  as shown in the above  table.  A decrease in direct  store  expense of
$975,000,   as  described   below,   also   resulted   from  the   reduction  in
Company-operated stores during the comparable periods.


OTHER INCOME AND EXPENSES
-------------------------

     Miscellaneous income increased significantly (50.1%) from $2,328,000 in the
first quarter of 2000 to $3,495,000 in the first quarter of 2001.  Miscellaneous
income  includes  lottery  ticket  sales  income,   money  order  sales  income,
commissions received on alcohol beverage sales, check cashing fees, state excise
tax handling fees, gain on sale/conversion of convenience  stores,  gain or loss
on  exchange  and  hedging  transactions,  and  various  other  types of income.
Material reasons for the increase were a gain on exchange and motor fuel hedging
transactions  in the first  quarter of 2001,  and a gain on  sale/conversion  of
Company-operated  convenience stores to gas-only stores. The Company incurred an
exchange and motor fuel  hedging gain of $328,000 in the first  quarter of 2001,
compared to an exchange and motor fuel hedging loss of  $1,002,000  in the first
quarter  of 2000 as the  Company  sought to  protect  its motor  fuel  inventory
values.  In the  first  quarter  of  2001,  gain on the  sale/conversion  of six
convenience  stores to  gas-only  stores  was  $468,000,  compared  to a gain of
$210,000 in the first quarter of 2000.

     Direct store expenses  declined by $976,000  (7.6%) in the first quarter of
2001,  compared to the direct store expenses in comparable quarter of 2000, as a
result of the lesser number of Company-operated  convenience stores in the first
quarter of 2001. The Company  operated 180 convenience  stores on April 1, 2001,
compared to 216 convenience stores on March 26, 2000.

     General  and  administrative  expenses  increased  by  $592,000  (15.7%) to
$4,352,000  in  the  first  quarter  of  2001,  compared  to  $3,760,000  in the
comparable  period of the prior year. The primary  contributors to this increase
were additional bad debt expenses, wage costs, and utility costs at the terminal
due to rising energy costs.

     Depreciation and  amortization  increased by $110,000 (6.4%) in the current
quarter.  This  increase  resulted in part from  depreciation  of  fixtures  and
equipment  improvements  at  Company-operated  stores  and  gasoline  pumps  and
equipment at gas-only stores.

     Interest  income  declined by $80,000 (22.8%) in the first quarter of 2001,
compared to the first quarter of the prior year, while interest expense remained
relatively constant at $1,134,000 (a 3.1% decrease).


LIQUIDITY AND CAPITAL RESOURCES
-------------------------------

     The  majority  of the  Company's  working  capital is  provided  from three
sources: (i) liquid, short-term investments,  (ii) cash flows generated from its
operating  activities,  and (iii)  borrowings under its revolving line of credit
facility. The Company believes that these investments, operating activities, and
short-term working capital facilities, will provide sufficient liquidity to fund
current commitments for operating and capital expenditure  programs,  as well as
to  service  debt  requirements.  Actual  capital  expenditure  funding  will be
dependent on the level of cash flow generated from operating  activities and the
funds available from financings.

     From time to time, the Company utilizes a revolving line of credit facility
that provides for borrowings of up to $10,000,000,  with the amount available at
any time  limited  to a  borrowing  base  equal to 80% of  certain  of its trade
receivables plus 60% of its inventory at the terminal;  provided,  however, that
any amounts  which  would cause  outstanding  borrowings  under the  facility to
exceed  $5,000,000  are  limited  to 140% of the net  value of debt  and  equity
securities in the Company's  trading  account at a brokerage firm. At the end of
the  first  quarter  of 2001,  the  borrowing  base was  limited  under the loan
agreement to $9,800,000, and the Company's borrowings were $3,992,000 under such
revolving  credit  facility  at  that  time.  The  net  value  of the  Company's
securities at the brokerage firm was approximately $2,626,000 on that date.

     Subject to  obtaining  satisfactory  deal  terms,  the  Company  intends to
continue  to  sell  its  inside   convenience   store   operations   at  certain
Company-operated  convenience stores to independent  operators while retaining a
motor  fuel  concession  at  those   locations.   It  has  identified   numerous
Company-operated  convenience  stores  that  it  would  consider  converting  to
gas-only stores in such a manner. The Company may or may not purchase additional
convenience  stores in 2001 and beyond as the  convenience  store  industry goes
through  as  period  of  greater   competition  and   consolidation.   Any  such
dispositions or  acquisitions  will impact the Company's  financial  results and
liquidity.   In  the  first  quarter  of  2001,   the  Company   closed  on  the
sale/conversion of six stores and several others were under contract for sale.

     The Company is party to commodity  futures  contracts and forward contracts
to buy and sell fuel,  both of which are used  principally  to satisfy  balances
owed on exchange  agreements.  Both of these types of contracts involve the risk
of dealing with others and their  ability to meet the terms of the contracts and
the risk associated with unmatched positions and market  fluctuations.  The open
positions  under  these  contracts  were  insignificant  at the end of the first
quarter of 2001.

     Over the last few years,  the  Company's  money order sales have  increased
significantly.  For example, money order payables at the end of fiscal year 1996
were  $7,809,000,  compared to money order payables of $18,854,000 at the end of
the first quarter of 2001.  Money order payables  represent those sales of money
orders  for which the payee of the money  order has not yet  requested  payment.
Although the Company  collects money order receipts on a daily basis on sales of
money  orders made by its own stores,  the Company  relies on  receiving  timely
payment from its third party money order sales agents.

     The Company had positive  working  capital of $7,713,000  at the end of the
first quarter of 2001. In past years, the Company has operated its business with
minimal or even negative working capital,  principally because most of its sales
are cash sales and it has received  payment  terms from  vendors.  Consequently,
management believes that its current liquidity,  internally generated funds, use
of trade credit,  and available  line of credit will allow its  operations to be
conducted in a customary manner.


FORWARD-LOOKING STATEMENTS
--------------------------

     Certain  of the  statements  made  in  this  report  are  "forward-looking"
statements that involve inherent risks and uncertainties. As defined by the U.S.
Private Securities Litigation Reform Act of 1995,  "forward-looking"  statements
include information about the Company that is based on the beliefs of management
and the assumptions made by, and information currently available to, management.
In making  such  forward-looking  statements,  the  Company is relying  upon the
"statutory  safe harbors"  contained in the  applicable  statutes and the rules,
regulations and releases of the Securities and Exchange  Commission.  Statements
that should generally be considered forward-looking include, but are not limited
to, those that contain the words  "estimate,"  "anticipate,"  "in the opinion of
management,"  "expects," "believes," and similar phrases. Among the factors that
could cause actual results to differ materially from the statements made are the
following:  general  business  conditions  in the  local  markets  served by the
Company's  convenience  stores,  truck stops, and other retail outlets,  and its
wholesale fuel markets;  the weather in the local markets served by the Company;
competitive  factors  such as changes  in the  locations,  merchandise  offered,
pricing, and other aspects of competitors' operations; increases in cost of fuel
and merchandise sold or reductions in the gross profit realized from such sales;
available  product for processing and processing  efficiencies  at the Company's
fuel terminal;  expense pressures relating to operating costs,  including labor,
repair and maintenance, and supplies; unexpected outcome of litigation;  adverse
liquidity  situations;   unanticipated  general  and  administrative   expenses,
including  employee,  taxes,  insurance,  expansion  and  financing  costs;  and
unexpected liabilities.

     Should one or more of these risks or uncertainties  materialize,  or should
any underlying assumptions prove incorrect,  actual results or outcomes may vary
materially from those  described  herein as  anticipated,  believed,  estimated,
expected, or intended.
<PAGE>


           QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS


     The Company is subject to market risks related to variable  interest  rates
and commodity  prices.  The interest rate calculated under the Company's line of
credit  facility  is based on the prime  rate of  interest,  which is subject to
change and exposes the Company to the  possibility of increasing  interest rates
on borrowing under that facility. Approximately 11.1% of the Company's long-term
obligations  at the end of the first  quarter of 2001 was  subject  to  variable
interest  rates.  The  remaining  88.9% of the Company's  long-term  debt is not
subject to interest rate risk because it is fixed rate financing.

     The  Company is also  subject to the market  risk of  increasing  commodity
prices and sometimes attempts to hedge that risk by purchasing commodity futures
and forward contracts.  An attempt to hedge that risk is subject to risk because
the commodities  subject to the hedging contract are not the same commodities as
those owned by the Company in its business.  Open positions  under these futures
and forward  contracts  were  insignificant  at the end of the first  quarter of
2001.


                        EXHIBITS AND REPORTS ON FORM 8-K


EXHIBITS
--------

         None.


REPORTS ON FORM 8-K
-------------------

         None.

                                   SIGNATURES


     Pursuant  to the  requirements  of  Section  13 or 15(d) 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.


                                       FFP MARKETING COMPANY, INC.
                                       Registrant

Date:  May 21, 2001                    By: /s/ John H. Harvison
                                           -----------------------------------
                                           John H. Harvison
                                           Chairman and
                                           Chief Executive Officer

Date:  May 21, 2001                    By: /s/ Craig T. Scott
                                           -----------------------------------
                                           Craig T. Scott
                                           Vice President - Finance and
                                           Chief Financial Officer