UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                    FORM 10-Q

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

              For the thirteen week period ended September 2, 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 333-44969-01

                            DESA HOLDINGS CORPORATION
             (Exact name of registrant as specified in its charter)


          Delaware                                   61-1251518
 (State or other jurisdiction of         (IRS Employer Identification No.)
 incorporation or organization)

                 2701 Industrial Drive, Bowling Green, KY 42101
               (Address of principal executive offices) (Zip Code)

                                 (270) 781-9600
              (Registrant's telephone number, including area code)

Indicate by check 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 [ ]

As of October  6, 2000,  there were  16,372,566  shares of  Registrant's  Common
Stock, $.01 par value per share, and 90,604 shares of the Registrant's Nonvoting
Common Stock, $.01 par value per share, outstanding.
<PAGE>
<TABLE>
<CAPTION>

                            DESA HOLDINGS CORPORATION
                                    FORM 10-Q
                                September 2, 2000

                                      INDEX

                                                                                     PAGE
<S>     <C>                                                                         <C>

PART I   Financial Information

Item 1.  Consolidated Financial Statements (Unaudited)
         Consolidated Balance Sheets - September 2, 2000 and February 26, 2000         2
         Consolidated Statements of Operations - Thirteen and Twenty-seven Weeks       3
                  ended September 2, 2000 and Thirteen and Twenty-six Weeks
                  ended August 28, 1999
         Consolidated Statements of Stockholders' Equity (Deficit)-Twenty-seven        4
                  Weeks ended September 2, 2000
         Consolidated Statements of Cash Flows - Twenty-seven Weeks                    5
                  ended September 2, 2000 and Twenty-six Weeks
                     ended August 28, 1999
         Notes to Consolidated Financial Statements                                    6

Item 2.  Management's Discussion and Analysis of Financial Condition and              12
                     Results of Operations

Item 3.  Quantitative and Qualitative Disclosures About Market Risk                   15

PART II  Other Information

Item 2.  Changes in Securities and Use of Proceeds                                    17

Item 6.  Exhibits and Reports on Form 8-K                                             17

         Signatures                                                                   18
</TABLE>

                                       1
<PAGE>
<TABLE>
<CAPTION>
                                             DESA HOLDINGS CORPORATION

                                            CONSOLIDATED BALANCE SHEETS

                                                                                 September 2,          February 26,
                                                                                     2000                  2000
                                                                                --------------        --------------
                                                                                (in thousands)        (in thousands)
                                                                                 (Unaudited)
<S>                                                                               <C>                 <C>
ASSETS
Current assets:
      Cash and cash equivalents                                                    $     955           $     173
      Accounts receivable, net                                                        80,526              32,921
      Inventories:
          Raw materials                                                                  692                 209
          Work-in-process                                                             15,719               9,756
          Finished goods                                                              68,169              50,192
                                                                                   ---------           ---------
                                                                                      84,580              60,157
      Deferred tax assets                                                              1,743               1,743
      Other current assets                                                             3,300               2,003
                                                                                   ---------           ---------
Total current assets                                                                 171,104              96,997

Property, plant and equipment:
      Land                                                                               526                 525
      Buildings and improvements                                                       6,399               6,294
      Machinery and equipment                                                         41,292              39,361
      Furniture and fixtures                                                           1,117               1,090
                                                                                   ---------           ---------
                                                                                      49,334              47,270
      Less accumulated depreciation                                                   32,926              30,574
                                                                                   ---------           ---------
                                                                                      16,408              16,696
Goodwill, net                                                                         96,214              93,818
Other assets                                                                          20,408              22,266
                                                                                   ---------           ---------
Total assets                                                                       $ 304,134           $ 229,777
                                                                                   =========           =========

Liabilities and stockholders' equity (deficit)
Current liabilities:
      Accounts payable                                                             $  64,898           $  37,040
      Accrued interest                                                                 3,889               5,233
      Other accrued liabilities                                                       15,119              13,225
      Current portion of long-term debt                                               68,124              23,500
                                                                                   ---------           ---------
Total current liabilities                                                            152,030              78,998

Long-term debt                                                                       265,250             265,846
Other liabilities                                                                     15,715              15,629
                                                                                   ---------           ---------
Total liabilities                                                                    432,995             360,473

Commitments and contingencies

SeriesC redeemable preferred stock, $.01 par value;  authorized--
      40,000 shares; issued and outstanding-- 23,805 shares at September 2,
      2000 and at February 26, 2000 (liquidation preference - $24,306,000a
      at September 2, 2000 and $22,882,000 at February 26, 2000)                      21,410              19,937

Stockholders' equity (deficit):
      Common stock, $.01 par value; authorized-- 50,000,000 shares; issued and
      outstanding-- 16,372,566 shares at September 2, 2000 and 15,562,656 shares         164                 155
      at February 26, 2000

      Nonvoting common stock,  $.01 par value;  authorized-- 3,000,000
      shares; issued and outstanding-- 90,604 shares at September 2, 2000
      and February 26, 2000                                                                1                   1

      Capital in excess of par value                                                 103,330              98,075
      Carryover predecessor basis adjustment                                         (32,309)            (32,309)
      Accumulated deficit                                                           (218,880)           (214,518)
      Accumulated other comprehensive loss                                            (2,577)             (2,037)
                                                                                   ---------           ---------
Total stockholders' equity (deficit)                                                (150,271)           (150,633)
                                                                                   ---------           ---------
Total liabilities and stockholders' equity (deficit)                               $ 304,134           $ 229,777
                                                                                   =========           =========
</TABLE>
See accompanying notes
                                                         2
<PAGE>
<TABLE>
<CAPTION>


                                                     DESA HOLDINGS CORPORATION

                                               CONSOLIDATED STATEMENTS OF OPERATIONS
                                                           (in thousands)

                                                            (Unaudited)




                                                   Thirteen Weeks      Thirteen Weeks      Twenty-seven Weeks     Twenty-six Weeks
                                                        Ended               Ended                 Ended                Ended
                                                  September 2, 2000    August 28, 1999      September 2, 2000     August 28, 1999
                                                  -----------------    ----------------    ------------------     -----------------

<S>                                                  <C>                 <C>                 <C>                    <C>
Net sales                                             $ 110,622           $  97,924           $ 181,241              $ 160,717
Cost of sales                                            72,347              65,349             121,974                109,800
                                                      ---------           ---------           ---------              ---------
Gross profit                                             38,275              32,575              59,267                 50,917

Operating costs and expenses:
     Selling                                             20,261              16,559              35,403                 29,194
     General and administrative                           4,621               3,446               9,037                  7,048
     Other                                                1,727               1,540               3,461                  3,064
                                                      ---------           ---------           ---------              ---------
                                                         26,609              21,545              47,901                 39,306
                                                      ---------           ---------           ---------              ---------

Operating profit                                         11,666              11,030              11,366                 11,611

Interest expense                                          8,420               7,334              16,612                 13,962
                                                      ---------           ---------           ---------              ---------
Income (loss) before provision
    (benefit) for income taxes                            3,246               3,696              (5,246)                (2,351)

Provision (benefit) for income taxes                      1,552               1,720              (2,438)                  (939)
                                                      ---------           ---------           ---------              ---------

Net income (loss)                                         1,694               1,976              (2,808)                (1,412)

Less dividends and accretion on preferred stock             764                 685               1,553                  1,348
                                                      ---------           ---------           ---------              ---------
Income (loss) applicable to common stockholders       $     930           $   1,291           $  (4,361)             $  (2,760)
                                                      =========           =========           =========              =========

</TABLE>


See accompanying notes

                                                                 3
<PAGE>
<TABLE>
<CAPTION>


                                                      DESA HOLDINGS CORPORATION
                                      CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
                                                           (in thousands)

                                                            (Unaudited)

                                                                        Carryover                    Accumulated
                                              Nonvoting   Capital in   Predecessor                      Other              Total
                                   Common      Common      Excess of      Basis      Accumulated    Comprehensive      Stockholders'
                                   Stock        Stock      Par Value   Adjustment      Deficit           Loss             Deficit
                                   -------------------------------------------------------------------------------------------------
<S>                                <C>         <C>         <C>         <C>           <C>              <C>               <C>

Balance at
February 26, 2000                   $155        $1          $98,075     ($32,309)     ($214,518)       ($2,037)          ($150,633)

Comprehensive loss:

  Net Loss                                                                               (2,808)                            (2,808)

  Net change in
     foreign currency
     translation adjustment                                                                               (540)               (540)
                                                                                                                          --------

Comprehensive loss                                                                                                          (3,348)
                                                                                                                          --------


Accretion of preferred stock                                                               (130)                              (130)

Dividends on preferred stock                                                             (1,424)                            (1,424)

Issuance of common stock               9                      5,255                                                          5,264


                                   ---------------------------------------------------------------------------            --------
Balance at
September 2, 2000                   $164        $1         $103,330     ($32,309)     ($218,880)       ($2,577)          ($150,271)
                                   ===========================================================================            ========
</TABLE>

See accompanying notes

                                                                 4
<PAGE>
<TABLE>
<CAPTION>

                                                  DESA HOLDINGS CORPORATION
                                            CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                       (in thousands)

                                                         (Unaudited)



                                                                             Twenty-seven Weeks          Twenty-six Weeks
                                                                                    Ended                      Ended
                                                                              September 2, 2000           August 28, 1999
                                                                            ---------------------       ------------------
<S>                                                                               <C>                        <C>
Cash flows from operating activities
Net loss                                                                           $ (2,808)                  $ (1,412)
Adjustments to reconcile net loss to net cash used in operating activities:
       Depreciation                                                                   2,352                      2,305
       Amortization                                                                   3,214                      2,980
       Equity in undistributed earnings of joint venture                               (102)                      (119)
       Change in operating assets and liabilities, net of
                 effects of acquisition:
            Accounts receivable, net                                                (43,419)                   (33,881)
            Inventories                                                             (19,062)                   (27,542)
            Other current assets                                                     (1,164)                      (811)
            Accounts payable                                                         25,613                     21,337
            Accrued interest                                                         (1,308)                       568
            Other accrued liabilities                                                 3,390                      4,592
            Income taxes payable                                                     (2,722)                      (910)
            Other liabilities                                                             3                        176
                                                                                   --------                   --------
Net cash used in operating activities                                               (36,013)                   (32,717)
                                                                                   --------                   --------


Investing activities
Capital expenditures                                                                 (1,064)                    (2,918)

Dividends received from joint venture                                                    65                        106
Net cash paid for acquisition of businesses                                         (11,448)                         0
Other                                                                                    15                       (390)
                                                                                   --------                   --------
Net cash used in investing activities                                               (12,432)                    (3,202)
                                                                                   --------                   --------


Financing activities

Increase in working capital loan                                                     38,544                     38,930
Increase in Guaranteed Line of Credit                                                 9,900                          0
Decrease in note payable                                                             (1,878)                       (64)
Principal payments of term loans                                                     (4,200)                    (1,875)
Principal payments of acquisition loans                                              (4,375)                         0
Proceeds from acquisition loans                                                       6,000                          0
Issuance of common stock                                                              5,264                         25
Payment of debt financing costs                                                         (23)                      (703)
                                                                                   --------                   --------
Net cash provided by financing activities                                            49,232                     36,313

Effect of exchange rate changes on cash                                                  (5)                        (5)
                                                                                   --------                   --------
Increase in cash and cash equivalents for the period                                    782                        389

Cash and cash equivalents at beginning of period                                        173                        888
                                                                                   --------                   --------
Cash and cash equivalents at end of period                                         $    955                   $  1,277
                                                                                   ========                   ========

</TABLE>

See accompanying notes

                                                             5

<PAGE>
                            DESA HOLDINGS CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (unaudited)


1. Basis of Presentation

The interim  consolidated  financial statements for the periods presented herein
have not been audited by independent  auditors.  In the opinion of management of
DESA Holdings  Corporation  (with its  consolidated  subsidiaries,  "Company" or
"Holdings"),  all adjustments  (consisting  only of normal  recurring  accruals)
considered necessary to present fairly the results of operations for the periods
have been included.  Interim results are not  necessarily  indicative of results
for a full year.

Sales of the  Company's  zone heating  products  follow  seasonal  patterns that
affect the  Company's  results of  operations.  Demand  for the  Company's  zone
heating  products  has  been  historically  highest  in the  third  quarter,  as
consumers  prepare for winter.  Consequently,  the  Company's  net sales and the
Company's fiscal operating profit have also been historically highest during the
Company's fiscal third quarter.  Management  believes that the Company's results
of operations  will continue to follow this pattern;  there can be no assurance,
however,  that third quarter  results will always surpass those of the first and
second quarters, or that any improvement shown will be as great as that shown in
previous  years.  In  particular,  unusually warm weather in the fall may reduce
demand for zone heating products.

The  unaudited  consolidated  financial  statements  have been  prepared  by the
Company in accordance with generally accepted accounting  principles for interim
financial  information and with the  instructions to Form 10-Q and Article 10 of
Regulation S-X. Certain information and footnote  disclosures  normally included
in  financial   statements   prepared  in  accordance  with  generally  accepted
accounting  principles have been condensed or omitted pursuant to such rules and
regulations.

The  consolidated  balance  sheet  presented as of February  26, 2000,  has been
derived from the consolidated financial statements that have been audited by the
Company's independent auditors.  The consolidated financial statements and notes
thereto  included  herein should be read in  conjunction  with the  consolidated
financial  statements and notes thereto  included in the Company's Annual Report
on Form 10-K.

2. Summary of Significant Accounting Policies

Consolidation

The accompanying  consolidated  financial statements include the accounts of the
Company and its wholly-owned subsidiary,  DESA International,  Inc. ("DESA") and
all of its wholly-owned subsidiaries, including DESA Industries of Canada, Inc.,
DESA Europe BV, DESA Industries of V.I., Inc., Heath Company Limited and Desico,
S.A. De C.V. All significant  intercompany  accounts and transactions  have been
eliminated.  DESA's 50% interest in a joint  venture is accounted  for using the
equity method.

Use of Estimates

The preparation of financial  statements in conformity  with generally  accepted
accounting principles requires management to make estimates and assumptions that
affect  the  reported  amounts  of assets  and  liabilities  and  disclosure  of
contingent assets and liabilities at the date of the financial  statements;  and
the reported amounts of revenues and expenses during the reported period. Actual
results can differ from those estimates.


                                       6
<PAGE>
                            DESA HOLDINGS CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (unaudited)


Summarized Financial Information of DESA International, Inc.

DESA is the issuer of the 9 7/8% Senior  Subordinated Notes. The Company has not
presented  separate financial  statements and other disclosures  concerning DESA
because  management  has  determined  that such  information  is not material to
holders of the Senior Subordinated Notes.

The following summarized  consolidated  financial  information is being provided
for DESA as of September 2, 2000 and February 26, 2000, and for the thirteen and
twenty-seven  weeks ended  September 2, 2000 and thirteen and  twenty-six  weeks
ended August 28, 1999.

Summarized consolidated balance sheet information (in thousands):

                                         September 2,         February 26,
                                             2000                 2000
                                        ----------------------------------
Assets:
Current assets                           $ 275,987             $ 205,265
Net fixed assets                            16,408                16,696
Goodwill, net                               95,125                92,713
Other assets                                20,408                22,266
                                         -------------------------------
                                         $ 407,928             $ 336,940
                                         ===============================

Liabilities and stockholders' deficit:
Current liabilities                      $ 151,529             $  78,554
Long-term debt                             135,250               134,004
9 7/8% Senior Subordinated Notes           130,000               130,000
Other liabilities                           15,715                15,629
Stockholders' deficit                      (24,566)              (21,247)
                                         -------------------------------
                                         $ 407,928             $ 336,940
                                         ===============================

Summarized consolidated statements of operations information (in thousands):

<TABLE>
<CAPTION>

                                  September 2,        August 28,           September 2,        August 28,
                                      2000               1999                  2000               1999
                                   (Thirteen          (Thirteen           (Twenty-seven        (Twenty-six
                                     Weeks)             Weeks)                Weeks)             Weeks)
                               ------------------------------------    -------------------------------------
<S>                              <C>                 <C>                   <C>                <C>
Net Sales                         $ 110,622           $  97,924             $ 181,241          $ 160,717
Income (loss) before
   income taxes                   $   3,254           $   3,745             $  (5,216)         $  (2,254)
Income (loss) applicable
   to common stockholders         $   1,702           $   2,025             $  (2,778)         $  (1,315)
</TABLE>

                                       7


<PAGE>
                            DESA HOLDINGS CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (unaudited)


3. Financing Arrangements

Outstanding borrowings consist of the following (in thousands):
<TABLE>
<CAPTION>
                                                                     September 2,         February 26,
                                                                         2000               2000
                                                                ---------------------------------------
<S>                                                                 <C>                 <C>

9 7/8% Senior Subordinated Notes due 2007 (A)                        $130,000            $130,000
Bank of America and various banks Term A Loan (B)                      34,000              37,500
Bank of America and various banks Term B Loan (C)                      47,250              47,750
Bank of America and various banks Term C Loan (D)                       5,800                  --
Bank of America and various banks Working Capital Loan
      Commitment (E)                                                   63,924              25,379
Bank of America and various banks Acquisition Loan (F)                 17,000              18,750
Bank of America and various banks Acquisition B Loan (G)               25,500              28,125
Note payable related to acquisition of Heath (H)                           --               1,842
Guaranteed Line of Credit (I)                                           9,900                  --
                                                                     --------            --------
Total outstanding borrowings                                          333,374             289,346
Less current portion of long-term debt                                 68,124              23,500
                                                                     --------            --------
Total long-term debt                                                 $265,250            $265,846
                                                                     ========            ========

<FN>
(A)  The Senior Subordinated Notes are payable on December 15, 2007 and accrue interest at
     a rate of 9.875% per annum. Interest is payable semi-annually on June 15 and December
     15. The Senior  Subordinated Notes can be redeemed prior to the mandatory  redemption
     date based upon the occurrence of certain events,  as defined.  DESA is the issuer of
     the Senior  Subordinated  Notes,  which are fully and  unconditionally  guaranteed by
     Holdings.

(B)  The Term A Loan is payable in quarterly  installments  through November 26, 2003, and
     accrues  interest  at the prime  rate plus 2.00% or LIBOR plus 3.00% at the option of
     DESA.  Interest is payable on a quarterly basis under the prime rate option or at the
     end of each LIBOR  period.  The weighted  average  interest rate was 9.47% in year to
     date fiscal 2001 and 8.03% in fiscal year 2000. Once repaid,  the Term A Loan may not
     be reborrowed.

(C)  The Term B Loan is payable in quarterly  installments  through November 26, 2004, and
     accrues  interest  at the prime  rate plus 2.25% or LIBOR plus 3.25% at the option of
     DESA.  Interest is payable on a quarterly basis under the prime rate option or at the
     end of each LIBOR  period.  The weighted  average  interest rate was 9.72% in year to
     date fiscal 2001 and 8.52% in fiscal year 2000. Once repaid,  the Term B Loan may not
     be reborrowed.

(D)  The Term C Loan is payable in quarterly  installments  and  commenced in May 2000 and
     extends through  November 26, 2003, and accrues interest at the prime rate plus 2.25%
     or LIBOR plus 3.25% at the option of DESA.  Interest is payable on a quarterly  basis
     under the prime rate option or at the end of each LIBOR period.  The weighted average
     interest rate was 9.68% in year to date fiscal 2001. Once repaid, the Term C Loan may
     not be reborrowed.

                                            8
<PAGE>
                            DESA HOLDINGS CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (unaudited)


(E)  The Working  Capital Loan Commitment is payable at any time at the option of Holdings
     prior to November  26,  2003,  and  accrues  interest at the prime rate plus 2.00% or
     LIBOR plus 3.00%, at the option of DESA. The weighted average interest rate was 9.41%
     in year to date fiscal  2001 and 8.60% in fiscal year 2000.  Interest is payable on a
     quarterly basis under the prime rate option or at the end of each LIBOR period.  DESA
     can utilize  letters of credit under the Working  Capital Loan  Commitment  up to $10
     million.  As of September  2, 2000 and  February 26, 2000,  letters of credit of $8.7
     million and $1.5 million were outstanding  under the Working Capital Loan Commitment.
     Borrowings  are  generally   limited  to  specific   percentages  of  eligible  trade
     receivables  and inventory.  Holdings pays  commitment fees of 1/2 of 1% per annum on
     the daily unutilized Working Capital Loan Commitment.

(F)  The Acquisition Loan is payable in quarterly installments which commenced in February
     2000 and extend  through  November 26, 2003, and accrues  interest,  which is payable
     quarterly,  at the prime  rate plus  2.25% or LIBOR plus 3.25% at the option of DESA.
     The weighted average interest rate was 9.69% in year to date fiscal 2001 and 8.22% in
     fiscal year 2000. Once repaid, the Acquisition Loan may not be reborrowed.

(G)  The  Acquisition  B Loan is payable in  quarterly  installments  which  commenced  in
     February 2000 and extend  through  November 26, 2003 and accrues  interest,  which is
     payable quarterly,  at the prime rate plus 2.25% or LIBOR plus 3.25% at the option of
     DESA. The weighted  average interest rate was 9.74% in year to date 2001 and 8.05% in
     fiscal year 2000. Once repaid, the Acquisition B Loan may not be reborrowed.

(H)  The note payable is due on December 31, 2008 and accrues  interest,  which is payable
     semi-annually at a rate of 7.5% per annum.  DESA may elect,  upon written notice,  to
     defer any interest payments,  in which event such interest payments shall effectively
     convert to principal and accrue  interest at a rate of 7.5% per annum. In March 2000,
     the loan was fully  satisfied  through  reductions of principal for certain  payments
     made under the terms of the note.

(I)  The Guaranteed Line of Credit loan is payable at any time at the option of DESA prior
     to March 5,  2001,  and  accrues  interest  at the prime rate plus .25% or LIBOR plus
     1.75%,  at the option of DESA.  Interest  is payable on a  quarterly  basis under the
     prime rate option or at the end of each LIBOR period.  The weighted  average interest
     rate was 8.64% in year to date fiscal 2001.
</FN>
</TABLE>

In accordance with the terms of the Credit Facility,  the ability of the Company
to incur additional  indebtedness is limited,  as defined. At September 2, 2000,
the Company can incur additional indebtedness of $2.4 million.

                                       9
<PAGE>
                            DESA HOLDINGS CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (unaudited)


4. Comprehensive Income (Loss)

Comprehensive income (loss) consisted of the following (in thousands):
<TABLE>
<CAPTION>

                                  September 2,          August 28,           September 2,           August 28,
                                      2000                 1999                  2000                  1999
                                    (Thirteen            (Thirteen           (Twenty-seven          (Twenty-six
                                     Weeks)               Weeks)                Weeks)                Weeks)
                                  ------------------------------------------------------------------------------
<S>                                <C>                  <C>                    <C>                  <C>
Net income (loss)                   $ 1,694              $ 1,976                $(2,808)             $(1,412)
Net change in foreign
   currency translation
   adjustment                          (386)                 (84)                  (540)                (302)
                                  --------------------------------------------------------------------------
Comprehensive
   income (loss)                    $ 1,308              $ 1,892                $(3,348)             $(1,714)
                                  --------------------------------------------------------------------------
</TABLE>

As of September 2, 2000 and August 28, 1999 the accumulated other  comprehensive
loss consisted solely of the Company's foreign currency translation adjustment.

5. Segment Information

In March 2000, the Company  reorganized into three  divisions.  Each division is
comprised of dedicated  operational resources required to support their specific
product and  geographic  categories,  and shared  administrative  resources  for
certain corporate functions. The divisions are: (a) zone heating division, which
includes  indoor room heaters,  hearth  products and outdoor heaters sold in the
United States, (b) specialty  products division,  which includes specialty tools
and home  security  products  sold in the United States and all products sold in
Canada and (c) international division, which includes zone heating and specialty
products sold in all  geographic  areas other than the United States and Canada.
Zone heating division and specialty products division are reportable segments.

Identifiable assets are those assets of the Company that are identified with the
operations in each segment.  Prior amounts have been  reclassified to conform to
the current year's presentation.  Operating results and other financial data for
the  business  segments for the periods  ended  September 2, 2000 and August 28,
1999 are presented below (in thousands):
<TABLE>
<CAPTION>


                                                               Specialty
                                            Zone Heating        Products
                                              Division          Division           Other           Total
                                             --------------------------------------------------------------
<S>                                          <C>              <C>              <C>               <C>

Thirteen weeks ended September 2, 2000:
Net sales                                     $ 63,726         $ 44,715         $  2,181          $110,622
Operating profit (loss)                          8,782            3,506             (622)           11,666
Depreciation and amortization                    2,112              822               56             2,990
Identifiable assets                            166,226          129,575            8,333           304,134
Capital expenditures                               391               97              138               626

Thirteen weeks ended August 28, 1999:
Net sales                                     $ 48,764         $ 46,549         $  2,611          $ 97,924
Operating profit (loss)                          5,699            5,634             (303)           11,030
Depreciation and amortization                    2,142              652               51             2,845
Identifiable assets                            141,938          113,063            9,415           264,416
Capital expenditures                             1,059              255                0             1,314



                                       10
<PAGE>
<CAPTION>
                            DESA HOLDINGS CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (unaudited)




                                                               Specialty
                                            Zone Heating        Products
                                              Division          Division           Other           Total
                                             --------------------------------------------------------------
<S>                                          <C>              <C>              <C>               <C>


Twenty-seven weeks ended September 2, 2000:
Net sales                                     $ 87,595         $ 90,749         $  2,897          $181,241
Operating profit (loss)                          5,030            7,818           (1,482)           11,366
Depreciation and amortization                    3,862            1,592              112             5,566
Identifiable assets                            166,226          129,575            8,333           304,134
Capital expenditures                               755              171              138             1,064

Twenty-six weeks ended August 28, 1999:
Net sales                                     $ 69,170         $ 88,129         $  3,418          $160,717
Operating profit (loss)                          1,538           11,088           (1,015)           11,611
Depreciation and amortization                    3,906            1,276              103             5,285
Identifiable assets                            141,938          113,063            9,415           264,416
Capital expenditures                             2,196              722                0             2,918

</TABLE>

6. Acquisition

On April 3, 2000, DESA acquired the assets of Trine Products  Company  ("Trine")
located in Bronx, New York for consideration of approximately $11.0 million. The
Company  financed the  acquisition  through  borrowings  of $6.0 million and the
issuance  of common  stock for $5.0  million.  The  Company  accounted  for such
acquisition  using the  purchase  method  and has  preliminarily  allocated  the
purchase price to the net assets  acquired  based on estimated fair values.  The
results of operations have been included in Holdings' results of operations from
the acquisition date.



                                       11
<PAGE>

                            DESA HOLDINGS CORPORATION
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS



This quarterly report on Form 10-Q of DESA Holdings Corporation (the "Company"),
which  includes  its  consolidated  subsidiaries  unless the  context  indicates
otherwise, contains statements that constitute forward looking statements within
the meaning of Section 21E of the  Securities  Exchange Act of 1934, as amended.
Those  statements  appear  in a number  of places  in this  report  and  include
statements  regarding the strategies,  plans, beliefs or current expectations of
the Company and its  management  and other  statements  that are not  historical
facts.  Readers 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 set forth in such  forward
looking statements as a result of various factors. Such factors include, but are
not limited to, the  Company's  vulnerability  to adverse  general  economic and
industry  conditions  because of its leverage,  the Company's  ability to obtain
future  financing  on  acceptable  terms,  the  Company's  ability to  integrate
acquired  companies and to complete  acquisitions  on  satisfactory  terms,  the
demand and price for the Company's products relative to production costs and the
seasonality of the Company's  business.  The Company undertakes no obligation to
release  publicly  the  results  of  any  revisions  to  these  forward  looking
statements that may be made to reflect errors or circumstances  that occur after
the date hereof.

The following  discussion of the Company's  results of operations  and financial
condition for the thirteen and twenty-seven  week period ended September 2, 2000
and the thirteen  and  twenty-six  week period ended August 28, 1999,  should be
read in conjunction  with the consolidated  financial  statements of the Company
and the notes  thereto  contained  herein,  as well as for the fiscal year ended
February 26, 2000, included in the Company's Annual Report on Form 10-K.

Overview

In March 2000, the Company  reorganized into three  divisions.  Each division is
comprised of dedicated  operational resources required to support their specific
product and  geographic  categories,  and shared  administrative  resources  for
certain corporate functions. The divisions are: (a) zone heating division, which
includes  indoor room heaters,  hearth  products and outdoor heaters sold in the
United States, (b) specialty  products division,  which includes specialty tools
and home  security  products  sold in the United States and all products sold in
Canada and (c) international division, which includes zone heating and specialty
products sold in all  geographic  areas other than the United States and Canada.
The Company records sales upon shipment of products to its customers.  Net sales
constitute  gross sales net of an accrual for  returns and  allowances  and cash
discounts.

Sales of the  Company's  zone heating  products  follow  seasonal  patterns that
affect the  Company's  results of  operations.  Demand  for the  Company's  zone
heating products has been historically  highest in the fiscal third quarter,  as
consumers  prepare for winter.  Consequently,  the  Company's  net sales and the
Company's fiscal operating profit have also been historically highest during the
Company's fiscal third quarter.  Management  believes that the Company's results
of operations  will continue to follow this pattern;  there can be no assurance,
however,  that third quarter  results will always surpass those of the first and
second quarters, or that any improvement shown will be as great as that shown in
previous  years.  In  particular,  unusually warm weather in the fall may reduce
demand for zone heating products.

Sales of the Company's  specialty products do not follow a significant  seasonal
pattern and are not affected by weather patterns. Historically, these sales have
followed a relatively level quarterly pattern.

On April 3, 2000, DESA acquired the assets of Trine Products  Company  ("Trine")
located in Bronx, New York for consideration of approximately $11.0 million. The
Company  financed the  acquisition  through  borrowings  of $6.0 million and the
issuance of common stock for $5.0 million.  Trine's  annual sales for their most
recent year-end (June 30, 1999) were approximately $25 million. Trine produces a
complete line of door chimes,  and  accessories  for  residential and commercial
applications.  Trine  products are sold through mass  merchants,  home  centers,
retail chains and hardware cooperatives.

                                       12
<PAGE>

Results of Operations

Thirteen  Week Period  Ended  September 2, 2000,  Compared to the Thirteen  Week
Period Ended August 28, 1999

Net sales.  Net sales in the thirteen  weeks ended  September  2, 2000  ("second
quarter  2001") were  $110.6  million,  an  increase  of 13.0% or $12.7  million
compared to the thirteen  weeks ended August 28, 1999 ("second  quarter  2000").
Zone heating  division had net sales of $63.7 million in second quarter 2001, an
increase of 30.7% or $15.0 million from the second  quarter 2000.  This increase
is primarily due to increased  indoor  heating and hearth product sales volumes.
Specialty products division had net sales of $44.7 million in the second quarter
2001,  a decrease of 3.9% or $1.8 million from second  quarter  2000,  due to an
increase in home security product sales and the acquisition of Trine offset by a
reduction in generator  sales from the prior year's sales that had been inflated
by consumer year 2000 concerns.

Cost of Sales.  Cost of sales for  second  quarter  2001 was $72.3  million,  an
increase of $7.0  million or 10.7% from second  quarter  2000.  The increase was
attributable to the higher unit sales for the period. Cost of sales was 65.4% of
net sales in second quarter 2001 compared to 66.7% for second quarter 2000.

Selling,  General and Administrative Expenses. For second quarter 2001, selling,
general and  administrative  expenses  were $26.6  million,  an increase of $5.1
million  or 23.5%  from  second  quarter  2000.  The  proportional  increase  is
primarily  attributable  to direct selling costs  associated  with the net sales
increase.  As a percentage  of net sales,  selling,  general and  administrative
expenses were 24.1% for second  quarter 2001 compared to 22.0% in second quarter
2000.  The  increase  as a percent of net sales is  primarily  the result of the
timing of sales  related  costs and a change in the  product  and  customer  mix
related to sales program costs compared to second quarter 2000.

Operating  Profit.  Operating  profit was $11.7 million for second  quarter 2001
compared to $11.0  million for second  quarter 2000, an increase of $.7 million.
Operating  profit  attributable  to zone  heating  products was $8.8 million for
second  quarter 2001,  an increase of $3.1 million or 54.1% from second  quarter
2000.  The increase is primarily  the result of  increased  sales and  favorable
changes in sales mix.  Specialty  products operating profit was $3.5 million for
the second quarter 2001, a decrease of $2.1 million or 37.8% from second quarter
2000.  This  decrease  is  primarily  attributable  to the decline in net sales,
redundant costs related to the planned  integration of Trine and increased sales
program costs  resulting from a change in the customer and product mix in second
quarter 2001.

EBITDA. EBITDA for the second quarter 2001 was $14.7 million, an increase of $.8
million or 5.6% from second  quarter  2000.  EBITDA is defined as income  (loss)
before  income  taxes  plus  interest   expense  and  depreciation  as  well  as
amortization expense associated with intangibles and deferred charges. EBITDA is
presented  because it is a widely  accepted  financial  indicator of a leveraged
company's  ability to service and/or incur  indebtedness and because  management
believes that EBITDA is a relevant measure of the Company's  ability to generate
cash without regard to the Company's capital structure or working capital needs.
However,  EBITDA should not be considered as an  alternative  to net income as a
measure  of a  company's  operating  results  or to cash  flows  from  operating
activities as a measure of liquidity as defined by generally accepted accounting
principles.

Interest Expense.  Interest expense for second quarter 2001 was $8.4 million, an
increase of $1.1 million  from second  quarter  2000.  The increase is primarily
attributable  to market  interest  rate  increases  and higher levels of working
capital borrowing in support of increased sales.

Income Taxes.  The effective  income tax rate was 47.8% for second quarter 2001,
an  increase  of 1.3%  compared to the second  quarter  2000 rate of 46.5%.  The
increase is primarily due to a change in the mix of foreign and domestic  income
and an increase in non-deductible goodwill during fiscal year 2001.

Net Income.  Net income was $1.7 million for second quarter 2001 compared to net
income of $2.0 million for second  quarter 2000, a decrease of $.3 million.  The
decrease is primarily attributable to higher selling, general and administrative
expenses and interest, offset by increased sales volumes and related margins.

                                       13
<PAGE>

Twenty-seven  Week Period Ended  September 2, 2000,  Compared to the  Twenty-six
Week Period Ended August 28, 1999

Net sales. Net sales in the twenty-seven weeks ended September 2, 2000 ("year to
date 2001") were $181.2 million,  an increase of 12.8% or $20.5 million compared
to the  twenty-six  weeks  ended  August 28, 1999  ("year to date  2000").  Zone
heating  division  had net  sales  of $87.6  million  in year to date  2001,  an
increase of 26.6% or $18.4 million from the year to date 2000.  This increase is
primarily due to increased  indoor  heating and hearth  product  sales  volumes.
Specialty  products  division had net sales of $90.7 million in the year to date
2001,  an increase  of 3.0% or $2.6  million  from year to date 2000,  due to an
increase in home security product sales and the acquisition of Trine offset by a
reduction in generator  sales from the prior year's sales that had been inflated
by consumer year 2000 concerns.

Cost of  Sales.  Cost of sales  for year to date  2001 was  $122.0  million,  an
increase  of $12.2  million or 11.1% from year to date 2000.  The  increase  was
attributable to the higher unit sales for the period. Cost of sales was 67.3% of
net sales in year to date 2001 compared to 68.3% for year to date 2000.

Selling,  General and Administrative  Expenses.  For year to date 2001, selling,
general and  administrative  expenses  were $47.9  million,  an increase of $8.6
million or 21.9% from year to date 2000. The proportional  increase is primarily
attributable to direct selling costs associated with the net sales increase.  As
a percentage of net sales,  selling,  general and  administrative  expenses were
26.4% for year to date 2001 compared to 24.5% in year to date 2000. The increase
as a percent of net sales is primarily the result of the timing of sales related
costs and a change in the product  and  customer  mix  related to sales  program
costs compared to year to date 2000.

Operating  Profit.  The operating profit was $11.4 million for year to date 2001
compared  to $11.6  million for year to date 2000,  a decrease  of $.2  million.
Operating profit attributable to zone heating products was $5.0 million for year
to date 2001, an increase of $3.5 million or 227.0% from year to date 2000.  The
increase is primarily  the result of increased  sales and  favorable  changes in
sales mix. Specialty products operating profit was $7.8 million for year to date
2001, a decrease of $3.3 million or 29.5% from year to date 2000.  This decrease
is primarily  attributable to the decline in net sales,  redundant costs related
to the planned  integration of Trine and increased sales program costs resulting
from a change in the customer and product mix.

EBITDA.  EBITDA for the year to date 2001 was $16.9 million,  approximately  the
same as year to date  2000.  EBITDA is defined as income  (loss)  before  income
taxes plus interest  expense and  depreciation as well as  amortization  expense
associated with intangibles and deferred charges. EBITDA is presented because it
is a widely accepted  financial  indicator of a leveraged  company's  ability to
service and/or incur indebtedness and because management believes that EBITDA is
a relevant  measure of the Company's  ability to generate cash without regard to
the Company's capital structure or working capital needs. However, EBITDA should
not be  considered as an  alternative  to net income as a measure of a company's
operating  results or to cash flows from  operating  activities  as a measure of
liquidity as defined by generally accepted accounting principles.

Interest Expense.  Interest expense for year to date 2001 was $16.6 million,  an
increase of $2.7  million  from year to date 2000.  The  increase  is  primarily
attributable  to market  interest  rate  increases  and higher levels of working
capital borrowing in support of increased sales.

Income Taxes.  The effective income tax rate was 46.5% for year to date 2001, an
increase of 6.5%  compared to the year to date 2000 rate of 40.0%.  The increase
is primarily  due to a change in the mix of foreign and  domestic  income and an
increase in non-deductible goodwill during fiscal year 2001.

Net Loss. Net loss was $2.8 million for year to date 2001 compared to a net loss
of $1.4 million for year to date 2000, an increase of $1.4 million. The increase
is primarily attributable to higher selling, general and administrative expenses
and interest, offset by increased sales volumes and related margins.

Liquidity and Capital Resources

The  Company's  primary  cash  needs  have  been for  working  capital,  capital
expenditures and debt service  requirements.  The Company's sources of liquidity
have been cash flows from  operations,  borrowings  under its  revolving  credit
facilities and the Guaranteed Line of Credit.  The Company's business is subject
to a pattern of seasonal  fluctuation.  The Company's  needs for working capital
and the  corresponding  debt levels tend to peak in the second and third  fiscal
quarters.  The amount of sales  generated  during  the  second and third  fiscal
quarters

                                       14
<PAGE>

generally depends upon a number of factors,  including the level of retail sales
for heating  products during the prior winter,  current fall weather  conditions
affecting the level of sales of heating products,  general economic  conditions,
and other factors beyond the Company's control.

Net cash used in operating  activities  for year to date 2001 was $36.0  million
compared to net cash used of $32.7 million for year to date 2000. This increased
use of cash in  year  to  date  2001  was  primarily  due to  higher  sales  and
production in year to date 2001 that resulted in increased  accounts  receivable
and inventory, offset by higher accounts payable.

Net cash used in investing  activities  was $12.4 million for year to date 2001,
compared  to $3.2  million  in year to date 2000.  The use of cash in  investing
activities  in year to date 2001  reflects  the  acquisition  of Trine for $11.4
million.  Net cash  provided by  financing  activities  in year to date 2001 was
$49.2 million, compared to $36.3 million for year to date 2000. Cash provided by
financing  activities  in year to date 2001 reflects the proceeds of a term loan
and sale of common stock related to the Trine  acquisition  and increases in the
working capital loan and the Guaranteed  Line of Credit  associated with the net
increase in working capital.

The Credit  Facility  provides for  commitments in an aggregate  amount of up to
$204.6  million.  Borrowings  outstanding  under the Credit Facility were $193.5
million on September 2, 2000. Outstanding letters of credit and foreign currency
contracts established to facilitate  merchandise purchases were $8.7 million and
$4.9 million, respectively, at September 2, 2000. The Company had the ability to
incur  additional  indebtedness  of $2.4  million at September 2, 2000 under the
Credit  Facility.  The Company is in compliance  with all of its covenants under
the Credit Facility.

The Company  entered into an agreement  for a $15.0 million  Guaranteed  Line of
Credit on May 25,  1999.  On July 28,  2000 the  Guaranteed  Line of Credit  was
amended to mature on March 5, 2001 and to replace J. W. Childs Equity  Partners,
L.P. with UBS Capital LLC, shareholder of the Company, as guarantor.  Borrowings
under the Line of Credit bear interest at an annual rate equal to either (at the
Company's  option)  a  margin  over a base  rate or a  margin  over  LIBOR.  The
Guaranteed Line of Credit contains customary covenants and events of default.

The  Company  expects  that  capital  expenditures  during  fiscal  2001 will be
approximately $4.0 million.  Capital expenditures are expected to be funded from
internally generated cash flows and from borrowings under the Credit Facility.

Management  believes  that  cash flow from  operations,  availability  under the
Credit  Facility and the Guaranteed  Line of Credit will provide  adequate funds
for  the  Company's   foreseeable   working   capital  needs,   planned  capital
expenditures  and debt service  obligations.  Additionally,  the Company reviews
potential  acquisitions and relationships  from time to time and may be required
to seek additional debt to fund any acquisition.  The Credit Facility requires a
Clean-Up Period,  as defined,  under the Working Capital Loan Commitment,  for a
period of 30  consecutive  days occurring  between  January 1 and May 30 in each
calendar year commencing January 1, 1998. During the Clean-Up Period, the sum of
Working Capital advances, Letter of Credit advances and Swing Line loan advances
outstanding  shall  not  exceed  $30,000,000  for  any  Clean-Up  Period.  As of
September 2, 2000,  approximately  $33.9 million of working  capital  borrowings
have been  classified as current as a result of the Clean-Up  requirement.  Such
amount  may be  reborrowed  after  compliance  with  the  Clean-Up  Period.  The
Company's  ability to fund its operations,  make planned  capital  expenditures,
make scheduled debt payments, make desired acquisitions,  refinance indebtedness
and remain in  compliance  with all of the  financial  covenants  under its debt
agreements  depends on its future operating  performance and cash flow, which in
turn, are subject to prevailing economic  conditions and to financial,  business
and other factors, some of which are beyond its control.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Market risks relating to the Company's  operations result primarily from changes
in interest rates. The Company also has limited foreign currency risk associated
with its  Canadian,  European,  and  Hong  Kong  operations.  A  portion  of the
Company's  operations  consists of  purchasing  and sales  activities in foreign
jurisdictions.  The Company  manufactures  its products in the United States and
Hong Kong, purchases products in Europe, China, and Japan and sells the products
primarily in the United States,  Canada,  and Europe. As a result, the Company's
financial  results  could be  affected  by  factors  such as  changes in foreign
currency  exchange rates or weak economic  conditions in the foreign  markets in
which the  Company  operates.  The  Company  employs  established  policies  and
procedures  to manage its  exposure to  fluctuations  in interest  rates and the
value of the foreign currencies. Interest rate and foreign currency transactions
are  used  only  to the  extent  considered  necessary  to  meet  the  Company's
objectives.  The Company does not utilize derivative  financial  instruments for
trading or other  speculative  purposes.  There have been no material changes in
the market risk to which the Company is exposed  since the end of the  Company's
preceding fiscal year.

                                       15
<PAGE>

Interest Rate Risk

The Company's interest rate risk management  objective is to limit the impact of
interest  rate  changes on its  earnings  and cash flow and to lower its overall
borrowing cost. To achieve its objectives,  the Company regularly  evaluates the
amount of its variable  rate debt as a percentage  of its  aggregate  debt.  The
Company manages its exposure to interest rate  fluctuations in its variable rate
debt through  periodic  review of the cost of interest rate swap  agreements and
interest rate cap  agreements  relative to the perceived  interest rate risk. At
September  2, 2000,  the Company did not have an interest  rate swap or interest
rate cap agreement in place.

The following  table  summarizes the carrying  amounts and estimated fair values
the Company's remaining financial  instruments at September 2, 2000 and February
26, 2000 (bracketed amount represents an asset):
<TABLE>
<CAPTION>
                                        September 2, 2000                     February 26, 2000
                                Carrying Amount     Fair Value      Carrying Amount        Fair Value
                               ------------------------------------------------------------------------
                                                             (in thousands)

<S>                                 <C>              <C>               <C>                 <C>
Bank debt                           $193,474         $193,474          $157,504            $157,504
Senior subordinated notes            130,000           98,475           130,000              96,850
Guaranteed Line of
Credit loan                            9,900            9,900                --                  --
Note payable                              --               --             1,842               1,842
Foreign exchange contracts                --              633                --                 473
</TABLE>

Based on the average  outstanding  amount of variable rate  indebtedness  of the
Company in FY 2000 a one  percentage  point change in the interest rates for the
Company's  variable  rate debt would have  impacted  the  Company's  fiscal 2000
interest expense by an aggregate of approximately $1.9 million.

Foreign Currency Exchange Rate Risk

The Company does not conduct a significant portion of its manufacturing or sales
activity in foreign markets.  The Company's  reported financial results could be
affected, however, by factors such as changes in foreign currency exchange rates
in the markets where it operates.  When the U.S. dollar strengthens against such
foreign  currencies,  the reported U.S. dollar value of local currency operating
profits generally  decreases;  when the U.S. dollar weakens against such foreign
currencies,  the reported U.S. dollar value of local currency  operating profits
generally increases.  The Company utilizes foreign exchange forward contracts to
mitigate the  short-term  effect of movements in currency  exchange rates on the
Company's  foreign  currency based inventory  purchases.  The Company  regularly
hedges by entering into foreign exchange forward contracts, approximately 85% to
95% of its budgeted (future) net foreign currency  purchase  transactions over a
period of four  quarters.  Gains and  losses  related  to  qualifying  hedges of
foreign  currency  risk  exposures  are recorded  when the related  inventory is
purchased. Because the Company does not have significant foreign operations, the
Company  does not  believe it is  necessary  to enter into any other  derivative
financial  instruments to reduce its exposure to foreign currency  exchange rate
risk.

                                       16



<PAGE>
PART II  Other Information


Item 2.  Changes in Securities and Use of Proceeds

During July and August 2000,  options  representing  1,034 shares were issued to
employees at an aggregate  exercise price of $6,700.  On August 4, 2000,  38,462
shares  were sold to a  non-employee  director  at an  aggregate  sale  price of
$250,000.  These shares are exempt from  registration  under Section 4(2) of the
Securities Act.



Item 6.  Exhibits and Reports on Form 8-K

         (a)      Exhibits

                  10.1     Amendment  No.  5 to the Loan  Documents  dated as of
                           April 7,  2000 to the  Credit  Agreement  dated as of
                           November  26,  1997 by and  among the  Company,  DESA
                           International,   Inc.,   the  Lender   Parties  party
                           thereto,   UBS   Securities   LLC,  Banc  of  America
                           Securities  LLC  (formerly   NationsBanc   Montgomery
                           Securities LLC) and Bank of America,  N.A.  (formerly
                           NationsBank, N.A.).

                  10.2     Amendment No. 1 to the Credit  Agreement  dated as of
                           July 28, 2000 to the Credit Agreement dated as of May
                           26, 1999 between DESA International, Inc. and Bank of
                           America, N.A. (formerly NationsBank, N.A.).

                  27       Financial Data Schedule

         (b)      Reports on Form 8-K

The Company filed no reports on Form 8-K during the period for which this report
is made.


                                       17
<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.


                           DESA HOLDINGS CORPORATION

                           By:

Dated:  October 11, 2000   /s/ Stephen L. Clanton
                           Stephen L. Clanton
                           Chief Financial Officer
                           (Principal Financial Officer and
                              Chief Accounting Officer)



                                     18