UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-K

                Annual Report Pursuant to Section 13 or 15(d) of
                       the Securities Exchange Act of 1934
                  For the fiscal year ended November 30, 1995
                          Commission File Number 0-6116

                         INTERNATIONAL DAIRY QUEEN, INC.
                         -------------------------------
             (Exact name of Registrant as specified in its charter)

          Delaware                                         41-0852869
   State of Incorporation                            I.R.S. Employer I.D. No.

7505 Metro Boulevard, Minneapolis, Minnesota                  55439
  (Address of principal executive offices)                 (Zip Code)

       Registrant's telephone number, including area code: (612) 830-0200
        Securities registered pursuant to Section 12(b) of the Act: None
           Securities registered pursuant to Section 12(g) of the Act:
                 Class A Common Stock, par value $.01 per share
                 Class B Common Stock, par value $.01 per share

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 and (2) has been subject to such filing requirements for
the past 90 days.    Yes [X]  No

   Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K  [X]

               Number of shares of Common Stock outstanding as of
                                February 2, 1996:

                        Class A Common Stock - 14,383,815
                        Class B Common Stock -  8,414,448

               Approximate aggregate market value of voting stock
                 held by non-affiliates as of February 2, 1996:

                        Class A Common Stock - $256,019,750
                        Class B Common Stock - $ 84,371,741
                                               ------------
                                        Total  $340,391,491
                                               ============

Documents incorporated by reference:

1. Portions of the Annual Report to Stockholders for the year ended November 30,
1995 are incorporated by reference into Parts I and II.

2. Portions of the definitive proxy statement for the annual meeting of
stockholders to be held on March 19, 1996 are incorporated by reference into
Part III.

PART I

ITEM 1.BUSINESS
GENERAL
The Company develops and services a system of more than 5,600 Dairy Queen stores
in the United States, Canada and other foreign countries featuring hamburgers,
hot dogs, various dairy desserts and beverages; more than 430 Orange Julius
stores in the United States, Canada and other foreign countries featuring
blended drinks made from orange juice, fruits and fruit flavors, along with
various snack items; and more than 60 Karmelkorn stores featuring popcorn and
other treat items. The Company also owns 60% of Firstaff, Inc., specialists in
the placement and training of permanent and temporary office support personnel.

   To support and promote the businesses of its franchisees, the Company
undertakes product development and market testing, creates and coordinates
advertising programs, provides training and advisory services for store
operators and enforces quality control standards.

   A major portion of the Company's operating income is derived from franchise
fees paid by franchised stores and stores licensed by territorial operators.
The Company does not itself operate stores.

   The Company also sells equipment to stores and sells other products used in
store operations to a system of independently-owned warehouses, which also
purchase approved products from other suppliers. These warehouses in turn sell
products to retail stores in their geographical areas.

   Except for providing financing for the sale of specialized equipment to its
franchisees, offering limited financing services for the remodeling of existing
franchised stores and for providing certain leasing services for stores located
in shopping malls, the Company has not generally provided financial assistance
or guarantees for the construction or operation of franchised stores.

FRANCHISING SYSTEM

DAIRY QUEEN. Stores are located in all states, except Rhode Island, as well as
Canada, Japan and several other countries. Most stores are located in smaller
towns and suburbs of larger cities. Some franchised stores offer only soft serve
dairy products, while others also offer some or all of the food items in the
Brazier line. The Company endeavors to have its Dairy Queen franchisees offer a
more complete line of authorized products.

   The first Dairy Queen store was opened in Illinois in 1940. In 1945, two
predecessor companies began to develop the Dairy Queen system on a national
basis by granting territorial franchise rights for specific geographical areas.
In 1962, certain territorial operators formed International Dairy Queen, Inc.,
by contributing their territorial franchise rights and acquiring ownership of
the Dairy Queen trademarks and other franchise rights.

   Dairy Queen/Brazier stores offer a menu of fast food items, including
hamburgers, various dairy desserts (including soft serve and frozen yogurt) and
beverages which are marketed under the Dairy Queen and Brazier trademarks.
Retail prices are determined by the store operators.

   The Dairy Queen dairy dessert product line includes cones of various sizes,
Blizzard Flavor Treats, as well as shakes, malts and sundaes, hardpacked
products for home consumption and specialty frozen confections. These products
are prepared in the store from the Company's specially formulated mixes by means
of distinctive freezing and dispensing units.

   The Brazier product line, adopted nationally in 1968, consists of a food menu
featuring hamburgers, hot dogs, chicken strips, barbecue and chicken sandwiches,
french fried potatoes and onion rings.

   The Company franchises Dairy Queen stores either directly through agreements
with individual retail store operators or indirectly through agreements with
territorial operators who are authorized to grant franchise rights to store
operators within a specified territory.

   The terms of direct store franchise agreements used by the Company have been
modified from time to time as experience and changing circumstances have
required. The present Dairy Queen/Brazier franchise agreement provides that the
store franchisee shall pay to the Company an initial service and set-up fee of
$30,000 ($15,000 for a Limited Brazier), and a continuing franchise service fee
of 4% of gross retail sales. The Company may permit certain qualified existing
franchisees to open additional stores by paying a reduced service and set-up
fee. Other forms of store agreements currently in force, most of which were
entered into prior to 1968, provide for varying levels of service fees computed
on different bases, such as the amount of total Dairy Queen mix or products
dispensed. All direct franchisees pay some fees to the Company, and at November
30, 1995, 2,744 of the 3,875 stores franchised by the Company in the United
States and Canada were paying a continuing franchise service fee of 4% or more.

   At November 30, 1995, there were 140 Dairy Queen territorial operators in the
United States who are licensed by the Company to grant franchise rights in
specific geographical areas. Most of the existing territorial operator
agreements were granted prior to 1950 during the early stages of development of
the predecessor companies. Since 1973, the Company has acquired the rights of a
number of territorial operators and has sought to convert subfranchisees to a
direct franchise basis. The Company expects to continue to acquire the rights of
territorial operators when it has the opportunity to do so on terms acceptable
to the Company.

   While the business terms of individual territorial operator agreements may
differ in certain respects, they generally provide for substantial uniformity in
terms of operation and product quality. The territory covered by territorial
operator agreements vary, although most are for limited geographical areas as is
evidenced by the fact that most have five or fewer stores. Many of the Company's
territorial franchises provide for continuing payments to the Company generally
computed on the basis of a percentage of the franchise service fees collected by
the territorial operator. However, at November 30, 1995, 138 stores were
subfranchised or operated by territorial operators who do not have any
obligation to pay the Company any franchise service fees. As to most of these
stores, the Company's right to control and supervise quality standards and
methods of operation is limited to that activity normally required of the holder
of a trademark or service mark under the laws related to trademark protection to
control the nature and quality of goods sold under its trademark or service
mark.

   TREAT CENTER. With the acquisition of Karmelkorn in 1986 and Orange Julius in
1987, the Treat Center concept has emerged. This franchising concept combines
Dairy Queen treat items together with either or both Orange Julius and
Karmelkorn menu items under one storefront within a shopping mall. By combining
the products of these franchising systems, the Company seeks to substantially
increase store sales volumes in order to support the signing of leases that
would be too expensive for a one product-line store. The present Treat Center
franchise agreement provides that the store franchisee shall pay to the Company
an initial service and set-up fee of $15,000, and a continuing franchise service
fee of 6% of gross retail sales. The Company permits certain existing
franchisees to open additional stores without paying an initial service and
set-up fee. At November 30, 1995, there were 145 Treat Center units, of which
124 were in the United States and 21 in Canada, all of which were franchised by
the Company.

   ORANGE JULIUS. In August 1987, the Company acquired Orange Julius of America
and Orange Julius Canada Limited, franchisors of retail stores which feature
blended drinks made from orange juice, fruits and fruit flavors. Most of the
stores are located in shopping malls. At November 30, 1995, there were 433
Orange Julius stores, of which 305 were in the United States, 103 were in
Canada, and 25 in other foreign countries, all of which were franchised by the
Company.

   The present Orange Julius franchise agreement provides that the store
franchisee shall pay to the Company an initial service and set-up fee of $15,000
($5,000 for certain existing franchises), and a continuing franchise service
fee of 6% of gross retail sales.

   KARMELKORN. In March 1986, the Company acquired Karmelkorn Shoppes, Inc., a
franchisor of retail stores which sells popcorn, candy and other treat items.
Most of the stores are located in shopping malls. At November 30, 1995, there
were 69 Karmelkorn stores, of which 64 were in the United States and 5 were in
foreign countries, all of which were franchised by the Company.

   GOLDEN SKILLET. In December 1981, the Company acquired the United States and
international (exclusive of Canada) franchise rights and other selected assets
of the Golden Skillet system. Golden Skillet stores feature fried chicken and
side dishes. In October 1992, the Company assigned the franchises, trademarks
and related assets for Golden Skillet in the contiguous 48 United States and the
District of Columbia to a non-affiliated company. The Company continues to hold
the Golden Skillet franchises and rights for the rest of the world. At November
30, 1995, there were 21 Golden Skillet stores in foreign countries, all of which
were franchised by the Company.

NEW STORES

The Company is continuously seeking to open new stores. The ability of the
Company to open new stores is most dependent upon recruiting qualified operators
with suitable sites. New stores franchised by the Company are constructed in
accordance with the Company's specifications and standards. Substantially all
stores have a standardized appearance as well as uniform product lines and
operating methods.

   The Company also has a program whereby existing franchisees in good standing
with the Company may be awarded an additional store franchise at reduced cost.

FOREIGN OPERATIONS

Foreign operations, excluding Canada, did not have a significant effect on
consolidated operations for the year ended November 30, 1995. The Company's
operations in Canada are substantially similar to its U.S. operations. Of the
763 foreign stores, at November 30, 1995, 571 were located in Canada, 84 in
Japan and 108 in 23 other foreign countries.

COMPANY SERVICES

PRODUCT DEVELOPMENT AND TEST MARKETING. The Company continually attempts to
develop new products. New product concepts are obtained from vendors,
franchisees and Company personnel who work with the Company's Research and
Development personnel to develop a product concept into a finished product
suitable for the system.

   ADVERTISING AND SALES PROMOTION. The Company develops and conducts national
and area sales promotion and advertising programs principally through
television, radio and newspapers. For each of the four food systems, the Company
is assisted by an advisory council, the majority of whose members are elected by
members of the system. Substantially all amounts expended for advertising and
promotion are provided by franchisees who contribute to advertising funds.

   The present franchise agreements provide that franchisees shall pay an amount
equal to 3% to 6% of gross sales to the advertising and sales promotion funds
administered by the Company. Funds administered by the Company for advertising
and sales promotion during 1995, 1994 and 1993 aggregated approximately
$57,100,000, $51,000,000 and $47,800,000, respectively.

   In addition to the funds administered by the Company, many stores expend
funds for local and regional advertising. Unexpended advertising funds were
$844,714 and $2,498,816 at November 30, 1995 and 1994, respectively.

   MANUFACTURING AND DISTRIBUTION. The Company is one of over 80 approved
manufacturers of Dairy Queen mix. In addition to Dairy Queen mix and
concentrates, the Company sells equipment which is manufactured by independent
manufacturers. The Company also purchases approved perishable and nonperishable
supplies and resells them to independently-owned authorized warehouses described
below. Substantially all of the Company's sales of products consist of products
purchased for resale from manufacturers and suppliers unrelated to the Company.
Neither the retail stores nor the authorized warehouses are required to purchase
any products from the Company.

   In order to provide stores with a convenient source of approved merchandise,
the Company has arranged for a system of over 80 authorized warehouses which
purchase, inventory and sell approved food and miscellaneous supplies to stores.
In addition to the authorized warehouses, there are a number of warehouses which
are not under contract with the Company which purchase products directly from
approved manufacturers for resale to stores.

   TRAINING AND ADVISORY SERVICES. The Company provides a wide range of training
and advisory services to its franchisees. New store operators franchised by the
Company are to attend a two-week course of intensive training at the Company's
training center in Minneapolis, Minnesota. The attendees are given classroom and
practical instruction in procedures for product preparation, business and
financial management, marketing and promotion and related operational matters.
Periodic refresher training and instruction are available to all franchisees at
the Company's training center and at state, regional and national conferences
and seminars. The Company also makes available training aids and materials for
the franchisees' use in instructing store employees.

   QUALITY CONTROL. The Company conducts a periodic evaluation program designed
to insure a high standard of operation, quality and product uniformity. Through
114 field consultants and 14 regional managers, the Company furnishes
franchisees with information, advice and recommendations relating to facility
image, menu/product preparation, financial management, personnel management and
marketing.

   In order to maintain quality control, stores are generally required to use
approved products. The Company maintains a system of approved manufacturers
which are authorized to manufacture and sell products such as mix, meat,
containers, paper goods, equipment and sales promotion materials.


  THE FOLLOWING TABLE SETS FORTH CERTAIN INFORMATION AS TO THE NUMBER OF STORES
    IN THE DAIRY QUEEN, ORANGE JULIUS, KARMELKORN AND GOLDEN SKILLET SYSTEMS

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------

                                                                                              Converted
                                                            Total                              to Treat    Ownership    Total
                                                           11/30/94      Opened     Closed     Centers      Changes    11/30/95
-------------------------------------------------------------------------------------------------------------------------------
<S>                                                          <C>          <C>         <C>           <C>         <C>     <C>  
Dairy Queen system
      United States
               Franchised by the Company:
                        Dairy Queen stores                   3,195         78         (56)                     66       3,283

                        Treat Center units                     104         16                       4                     124
               Franchised by territorial operators           1,614         75         (30)                    (66)      1,593
               Company operated stores                           1                     (1)                                  0
-------------------------------------------------------------------------------------------------------------------------------
                                                             4,914        169         (87)          4           0       5,000
-------------------------------------------------------------------------------------------------------------------------------
      Canada
               Franchised by the Company:
                        Dairy Queen stores                     432         20          (5)                                447
                        Treat Center units                      20          1                                              21
-------------------------------------------------------------------------------------------------------------------------------
                                                               452         21          (5)          0           0         468
-------------------------------------------------------------------------------------------------------------------------------
      Other foreign                                            176         21         (35)                                162
-------------------------------------------------------------------------------------------------------------------------------
               Total Dairy Queen stores                      5,542        211        (127)          4           0       5,630
-------------------------------------------------------------------------------------------------------------------------------
Orange Julius stores                                           454         19         (37)(a)      (3)                    433
Karmelkorn shoppes                                              82          2         (14)         (1)                     69
Golden Skillet restaurants                                      21                                                         21
-------------------------------------------------------------------------------------------------------------------------------
Total                                                        6,099        232        (178)          0           0       6,153
===============================================================================================================================

</TABLE>

(a) The Orange Julius stores which closed in 1995 reflect the continued high
concentration of lease expirations during the 1988 through the 1995 period. The
Company's policy is not to renew its lease obligations with respect to stores
which have not achieved satisfactory operating results.


REGULATION OF FRANCHISE BUSINESS

The Company and its franchisees are subject to various federal, state and local
laws affecting their businesses. The Company and its franchisees are subject to
a variety of regulatory provisions relating to wholesomeness of food,
sanitation, health and safety.

   The Company is also subject to a substantial number of state laws regulating
the offer and sale of franchises. Such laws impose registration and disclosure
requirements on franchisors in the offer and sale of franchises and may also
regulate termination, renewal fees and other substantive aspects of the
relationship between franchisor and franchisee. The Company is also subject to
Federal Trade Commission regulations governing disclosure requirements in the
sale of franchises. The Company believes it is in compliance with applicable
laws and regulations governing its operations.

COMPETITION

All areas of the fast food service business are highly competitive, and the
Company has many competitors, some of whom are large companies selling a more
diversified line of products and having greater financial resources than the
Company. The Dairy Queen/Brazier, Orange Julius, Karmelkorn and Golden Skillet
stores compete with a large number of national chains as well as locally-owned
restaurants, drive-ins, take-home outlets and similar establishments, offering
food at low and medium prices. Extensive and active competition also exists in
the acquisition of commercial locations suitable for stores.

   A key competitive factor is the reputation and image of the system. The
Company believes that public recognition of Dairy Queen/Brazier, Orange Julius
and Karmelkorn names contributes significantly to sales by stores.

   The Company owns the Dairy Queen and Brazier trademarks registered in the
United States Patent Office and in each of the fifty states and in the Canadian
Trademarks Office. The Company also owns a number of United States and foreign
registrations of other trademarks, including Orange Julius, Karmelkorn and
Golden Skillet, and service marks used in the conduct of its business. The
Company believes that the success of its business depends to a large extent on
its trademark and service mark protection and, where and when necessary, intends
to continue to protect its trademarks by appropriate legal action.

EMPLOYEES

At November 30, 1995, the Company employed 595 persons (including 86 persons
employed by Firstaff, Inc.) primarily in sales, supervisory, clerical and
managerial activities. The Company maintains a 401(k) Retirement Savings Plan
which is available to all full-time employees with one year or more of service.
The Company also maintains a Section 125 Plan which is available to full-time
employees after 30 days of service. The Company has never experienced a work
stoppage due to labor difficulty and considers its employee relations to be
satisfactory.

ITEM 2.  PROPERTIES

The Company owns an office building aggregating approximately 114,000 square
feet, of which 75,500 square feet is utilized by the Company for its principal
administrative offices and training center. Of the remaining 38,500 square feet,
approximately 18,900 is leased to a third party under a lease expiring August
31, 1996.

   The Company also owns a mix manufacturing plant in Decatur, Georgia, a
Canadian office building/warehouse and the store facilities described below.
Warehouse space aggregating 35,023 square feet is under lease expiring in 2001
and twelve regional offices comprising 13,868 square feet are under leases
expiring from 1996 to 1999. Firstaff, Inc. has six offices in Minnesota,
aggregating 20,640 square feet, which are under leases expiring from 1996 to
2001. The aggregate rental charges for the Company's administrative, Firstaff
and operating facilities, excluding stores, were approximately $750,000 and
$670,000 for fiscal 1995 and fiscal 1994, respectively.

   At November 30, 1995, the Company owned real property relating to nine stores
with an aggregate net book value of approximately $1,830,000, all of which were
leased to franchisees. See Notes 4 and 5 of Notes to Consolidated Financial
Statements for additional information regarding the Company's properties.

ITEM 3.  LEGAL PROCEEDINGS

From time to time, and at present, the Company is subject to various claims and
lawsuits in the ordinary course of business, some of which include allegations
by franchisees and subfranchisees that the Company has violated antitrust and
other laws. Such claims sometimes arise in connection with actions by the
Company to collect amounts owed by franchisees or to enforce or terminate
franchise agreements.

   Hugh Collins, et al. v. International Dairy Queen, Inc. and American Dairy
Queen Corporation ("ADQ"), (United States District Court, Middle District of
Georgia, Macon Division, No. 94-95-4-MAC (WDO), commenced April 5, 1994). This
matter, previously reported in the Company's Annual Report (Form 10-K) for
fiscal 1994, is an action by five franchisees in the State of Georgia for
declaratory judgment, injunctive relief, actual damages in an unspecified
amount, treble damages under federal antitrust law, costs, and attorneys' fees.
Plaintiffs' claims are that ADQ's approved supplier program and procedures
constitute a tying arrangement prohibited under Section I of the Sherman
Antitrust Act (15 U.S.C. ss. 1), a breach of contract, a breach of an implied
covenant of good faith and fair dealing between the parties, and breach of a
prior settlement agreement. The Company and ADQ have filed an answer to
plaintiffs' complaint and intend to vigorously defend against plaintiffs'
claims. In December 1994, the parties filed cross-motions for summary judgement
on all issues relating to the supply of cups and lids to the "Dairy Queen"
system. The Court held an evidentiary hearing on these motions in February 1995.
Plaintiffs later filed motions to amend the complaint to add new claims under
federal antitrust law and state law, and to have the case certified as a class
action. The Company subsequently filed a motion for summary judgment dismissing
the antitrust tying claims. The Court granted plaintiffs' motion to amend their
complaint. The plaintiffs withdrew their claims for breach of the implied
covenant of good faith and fair dealing. The Company and ADQ filed an answer to
the amended complaint and are vigorously defending against plaintiffs' claims.
No ruling has been made on the cup and lid, class certification, and antitrust
tying motions. No trial date has been set.

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

Not applicable.



PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Both Class A common stock and Class B common stock are listed on the Nasdaq
National Market and trade under the symbols INDQA and INDQB, respectively.

   The following table sets forth for the periods indicated the high and low
prices for the Class A common stock and Class B common stock as reported by
Nasdaq. The prices shown below do not include retail markups, markdowns or
commissions.

                               Class A         Class B
                             Common Stock     Common Stock
                            Low      High    Low      High
Fiscal Year Ended
November 30, 1994
         First Quarter     $15.75   $18.50  $16.00   $19.50
         Second Quarter    $17.00   $18.50  $17.00   $19.50
         Third Quarter     $15.75   $18.50  $16.00   $19.00
         Fourth Quarter    $16.25   $17.75  $16.25   $18.25

Fiscal Year Ended
November 30, 1995
         First Quarter     $15.75   $18.00  $16.00   $19.00
         Second Quarter    $17.25   $19.75  $17.50   $20.00
         Third Quarter     $18.25   $22.00  $18.50   $22.37
         Fourth Quarter    $20.75   $23.25  $20.50   $22.00

   As of February 2, 1996, the approximate number of record holders of the
Company's Class A common stock was 946 and the approximate number of record
holders of the Company's Class B common stock was 441.

   The Company has not paid cash dividends on its common stock. Future dividends
will be determined by the Company's Board of Directors whose decision will be
made in light of the earnings, financial position and cash requirements of the
Company and other relevant factors existing at the time. The Company's credit
agreements contain provisions limiting the payment of dividends. See Notes 3 and
7 of Notes to Consolidated Financial Statements.

ITEM 6.  SELECTED FINANCIAL DATA

The information set forth under the caption "Selected Financial Data" on page 7
of the Registrant's 1995 Annual Report to Stockholders is incorporated herein by
reference.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND 
RESULTS OF OPERATIONS

The following table sets forth, for the periods indicated, items from the
Company's statement of income expressed as percentages of revenues, and the
percentage changes in the dollar amounts of such items from the prior period.

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------
                                                            Percentages of          Percentage Increase
                                                               Revenues                  (Decrease)
------------------------------------------------------------------------------------------------------------
                                                       Years Ended November 30,   Fiscal 1995    Fiscal 1994
                                                       1995      1994      1993    over 1994       over 1993
------------------------------------------------------------------------------------------------------------
<S>                                                    <C>       <C>       <C>       <C>             <C>   
Revenues:
     Net sales                                         80.0      78.9      77.7      10.8            11.3  
     Service fees                                      15.4      15.9      16.6       5.4             5.0  
     Franchise sales and other fees                     2.3       2.5       2.4       (.2)           13.1  
     Real estate finance and rental income              2.0       2.4       2.9      (6.7)          (10.1) 
     Other                                               .3        .3        .4     (14.0)           (9.3) 
--------------------------------------------------------------------------------
Total revenues                                        100.0     100.0     100.0       9.1             9.6  
--------------------------------------------------------------------------------
Costs and expenses:                                                                                        
     Cost of sale                                      72.0      71.1      69.8      10.5            11.6  
     Expenses applicable to real estate finance                                                            
       and rental income                                1.9       2.3       2.7      (7.2)          (10.3) 
     Selling, general and administrative               12.0      11.9      12.1       9.8             7.9  
--------------------------------------------------------------------------------
Total costs and expenses                               85.9      85.3      84.6       9.9            10.4  
--------------------------------------------------------------------------------
Interest income, net                                     .6        .5        .5      45.8            10.6  
--------------------------------------------------------------------------------
Income before income taxes                             14.7      15.2      15.9       5.7             5.1  
Income taxes                                            5.8       6.0       6.3       5.7             5.1  
--------------------------------------------------------------------------------
Net income                                              8.9       9.2       9.6       5.7             5.1  
--------------------------------------------------------------------------------
</TABLE>


RESULTS OF OPERATIONS

GENERAL. The Company's revenues are derived primarily from service and
franchise fees received from franchisees and the sale of perishable and
nonperishable supplies and equipment for use by franchised stores. Although the
Company does not allocate interest or selling, general and administrative
expenses by products sold or services rendered, it believes that a major
portion of its operating income results from service fees.

   1995 COMPARED TO 1994. The increase of $28,918,848 in net sales resulted
primarily from an increase of $22,921,941 in unit sales of frozen and non-frozen
foods, meat products (primarily chicken) and paper and plastics to authorized
warehouses (who in turn sell to franchisees), an increase of $2,324,517 in sales
of promotional items sold to Dairy Queen stores, and an increase of $3,202,205
in training and temporary placement fees by Firstaff, Inc.

   These increases were partially offset by a reduction in equipment sales to
franchisees of $1,671,845 when comparing 1995 with 1994. This decrease resulted
from the introduction of newly-designed menu boards which were offered to stores
at discounted prices during the 1994 introductory period and which resulted in
net sales of $7,303,574 in 1994.

   The decreases in real estate, finance and rental in come and related expenses
in fiscal 1995 reflect a continued number of lease expirations. It is the
Company's policy not to renew the Company's obligations with respect to store
leases, except in certain limited situations.

   Selling, general and administrative expenses increased $3,987,301 due to
additional personnel and support costs, increased marketing and research cost,
legal costs, and other costs relating to the Company's higher overall level of
operations in 1995.

   The increase in net interest income in fiscal 1995 is the result of an
increase in the funds available for short-term investments and increased
interest rates.

   The 13 cent increase in net income per share when comparing the 1995 period
with the 1994 period was due to an increase in the Company's net income and to a
decrease in the average number of common and common equivalent shares
outstanding.

   1994 COMPARED TO 1993. The increase of $27,192,317 in net sales resulted
primarily from an increase of $11,081,037 in unit sales of perishable (frozen
and non-frozen foods) supplies to authorized warehouses (who in turn sell to
franchisees), an increase in sales of equipment (primarily menu boards) of
$9,313,887, an increase of $3,444,978 in consumable and promotional supply items
sold to Dairy Queen stores, and an increase of $2,489,886 in temporary placement
and training fees by Firstaff, Inc.

   The Company introduced its newly-designed menu boards to the Dairy Queen
system during the second quarter of fiscal 1994, which were offered to stores at
discounted prices during the introductory period to encourage system-wide
utilization of the product and resulted in net sales of $7,303,574 in 1994.

   The decreases in real estate, finance and rental income and related expenses
in fiscal 1994 reflect a continued number of lease expirations.

   Selling, general and administrative expenses increased $2,978,529 due to
additional personnel and support costs, increased marketing and research costs,
legal costs, and other costs required to support and develop a higher overall
level of operations.

   The increase in net interest income was primarily the result of reduced
borrowings ($12 million in long-term debt was retired in 1994) and increased
yields on short-term investments and marketable securities.

   The 11 cent increase in net income per share when comparing the 1994 period
with the 1993 period was due to an increase in the Company's net income and to a
3.4% decrease in the average number of common and common equivalent shares
outstanding.

SEASONALITY OF BUSINESS

The Company's business is highly seasonal. Dairy Queen sales generally have been
higher during the spring and summer months, while Orange Julius and Karmelkorn
sales tend to be higher during the September to December back-to-school and
holiday shopping periods. Historically, the Company has earned a substantial
portion of its operating profit during the second and third quarters (spring and
summer months). The following table shows the Company's net income by quarter
for each of the past five fiscal years:

-------------------------------------------------------------------------------
                 First       Second         Third      Fourth
               Quarter      Quarter       Quarter      Quarter         TOTAL
-------------------------------------------------------------------------------
Net income
(in thousands)
1991            $4,374       $8,227       $10,185       $5,135       $27,921
1992             4,406        8,674        10,536        5,479        29,095
1993             4,548        8,727        10,677        5,936        29,888
1994             4,614        9,260        11,164        6,383        31,421
1995             4,910        9,848        11,747        6,712        33,217
                                                              

LIQUIDITY AND CAPITAL RESOURCES

Funds for working capital, acquisitions of territorial rights, acquisitions of
the Company's common stock and capital expenditures during the last three years
have been provided by internally-generated funds (net income plus amortization
and depreciation). Available liquid resources at November 30, 1995, included
$34,699,296 in cash and cash equivalents. The Company does not have any material
commitments for capital expenditures during fiscal year 1996 and believes that
its existing credit arrangements, along with working capital generated by
operations, will be sufficient to meet existing and presently anticipated needs.

IMPACT OF INFLATION

The Company does not believe its business is affected by inflation to a greater
extent than the general economy. Generally, the Company has been able to offset
the inflationary impact of costs and wages through a combination of productivity
gains and price increases.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

An index to the consolidated financial statements and financial statement
schedules is found on page 33 of this report.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

Not applicable.


PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Information with respect to Directors, appearing under "Election of Directors"
in the Company's Definitive Proxy Statement for the Annual Meeting of
Stockholders to be held on March 19, 1996, is incorporated herein by reference.
The names, ages, and positions of all of the officers of the Company are listed
below along with their business experience during the past five years. Officers
are normally elected annually by the Board of Directors at its annual meeting.
Charles W. Mooty is the son of John W. Mooty. There are no other family
relationships among these officers, nor any arrangement between any officer and
any person pursuant to which the officer was selected.

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------
                                                                                                     Years with
Name                                                Position with Company (1)                  Age     Company
-------------------------------------------------------------------------------------------------------------------
<S>                                   <C>                                                     <C>        <C> 
John W. Mooty                         Chairman of the Board and Chairman of the
                                       Executive Committee and Director                        73         25
Michael P. Sullivan                   President and Chief Executive Officer and Director       61         21
Edward A. Watson                      Executive Vice President and Chief Operating Officer     51         24
Charles W. Mooty                      Executive Vice President, Chief Financial and
                                       Administrative Officer and Treasurer                    35          8
David M. Bond                         Secretary, Assistant Treasurer and Controller            59         26
Mark S. Broin                         Vice President - Information Services                    50         24
George H. Fougeron                    Vice President - Franchise Operations                    50         23
Stephen M. Frances                    Vice President - Franchise Development and
                                       Lease Management Services                               46         10
John F. Hockert                       Vice President - Financial Services                      53         28
Michael J. Leary                      Vice President - Purchasing and Distribution             56         24
Glenn S. Lindsey                      Vice President - Research and Development                55         14
Srinivasa B. Murthy                   Vice President - Administrative Services                 52         24
Signe M. Pagel                        Vice President - Human Resources, Meeting and 
                                       Travel Services                                         46         25
Gary H. See                           Vice President - Marketing and Consumer Research         49         21
William R. von Hassel                 Vice President - Equipment Development                   67         26
William C. Zucco                      Vice President - Law and General Counsel                 50          7
</TABLE>

(1) Unless indicated to the contrary, each of such person's primary occupation
for at least the past five years has been as an officer of the Company or a
subsidiary of the Company. John W. Mooty is a member of the Minneapolis law firm
of Gray, Plant, Mooty, Mooty & Bennett, P.A., with which firm he has been
associated for more than five years. Charles W. Mooty has been employed by the
Company since May 1987 in various positions and has been a Vice President since
April 1992.

ITEM 11.  EXECUTIVE COMPENSATION

Information with respect to directors and officers, appearing under "Information
Concerning Directors and Officers" in the Company's Definitive Proxy Statement
for the Annual Meeting of Stockholders to be held on March 19, 1996, is
incorporated herein by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Information with respect to security ownership of certain beneficial owners and
management, appearing under "Outstanding Stock" in the Company's Definitive
Proxy Statement for the Annual Meeting of Stock holders to be held on March 19,
1996, is incorporated herein by reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Information with respect to certain relationships and related transactions,
appearing under "Information Concerning Directors and Officers" in the Company's
Definitive Proxy Statement for the Annual Meeting of Stockholders to be held on
March 19, 1996, is incorporated herein by reference.


PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

<TABLE>
<CAPTION>
(a) Index to exhibits, financial statements and financial statement schedules.                      Page
-----------------------------------------------------------------------------------------------------------
     Financial Statements:
     ------------------------------------------------------------------------------------------------------
<S>                                                                                                <C>
         Consolidated balance sheet at November 30, 1995 and 1994                                    8-9
         Consolidated statement of income for each of the three years in the period
             ended November 30, 1995                                                                  10
         Consolidated statement of stockholders' equity for each of the three years in
             the period ended November 30, 1995                                                       11
         Consolidated statement of cash flows for each of the three years in the period
             ended November 30, 1995                                                                  12
         Notes to consolidated financial statements                                                13-18
         Report of Independent Auditors                                                               19
     ------------------------------------------------------------------------------------------------------
     Financial statements schedules:
     ------------------------------------------------------------------------------------------------------
         Consolidated schedules for each of the three years in the period ended November 30, 1995
         II - Valuation and qualifying accounts
         All other schedules are omitted since the required information is not present in amounts sufficient
             to require submission of the schedule or because the information required is included in the
             financial statements and notes thereto.
     ------------------------------------------------------------------------------------------------------
     Exhibits:
     ------------------------------------------------------------------------------------------------------
         No. 3(a)   Restated Certificate of Incorporation, as amended (incorporated herein by reference to
                        Registrant's Annual Report, Form 10-K, for the fiscal year ended November 30, 1991).
         No. 3(b)   Restated By-Laws (incorporated herein by reference to Registrant's Annual Report,
                        Form 10-K, for the fiscal year ended November 30, 1986).
         No. 11     Computation of Earnings per Share.
         No. 13     Registrant's 1995 Annual Report to Stockholders. Those portions of the 1995 Annual
                        Report to Stockholders expressly incorporated by reference herein, shall be deemed 
                        filed with the commission.
         No. 21     Subsidiaries of Registrant.
         No. 23     Consent of Independent Auditors.
         No. 27     Financial Data Schedule.


(b)   Reports on Form 8-K.
-----------------------------------------------------------------------------------------------------------
      No reports on Form 8-K were filed during the last quarter of the period
      covered by this report.

</TABLE>

                                   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.

                                    INTERNATIONAL DAIRY QUEEN

                                    By /s/ Michael P. Sullivan                  
                                           Michael P. Sullivan                  
                                           President and Chief Executive Officer
                                        
Date: Feburary 14, 1996

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated:

<TABLE>

<S>                                <C>                                     <C> 
/s/ Michael P. Sullivan            President and Chief Executive           February 14, 1996
    Michael P. Sullivan            Officer (principal executive officer)
                                   and Director

/s/ Charles W. Mooty               Executive Vice President and            February 14, 1996
    Charles W. Mooty               Treasurer (principal financial officer)

/s/ David M. Bond                  Controller (principal accounting        February 14, 1996
    David M. Bond                  officer)                                

/s/ Ernest F. Dorn, Jr.            Director                                February 14, 1996
    Ernest F. Dorn, Jr.

/s/ Richard I. Giertsen            Director                                February 14, 1996
    Richard I. Giertsen

/s/ Frank L. Heit                  Director                                February 14, 1996
    Frank L. Heit

/s/ C. David Luther                Director                                February 14, 1996
    C. David Luther

/s/ Jane N. Mooty                  Director                                February 14, 1996
    Jane N. Mooty

/s/ John W. Mooty                  Director                                February 14, 1996
    John W. Mooty

</TABLE>

SCHEDULE 11 - VALUATION AND QUALIFYING ACCOUNTS
INTERNATIONAL DAIRY QUEEN, INC.


                                   Additions
                    Balance At     Charged To                  Balance At
                    Beginning      Costs And                   End Of
DESCRIPTION         Of Year        Expenses     Deductions     Year


Reserves deducted from
related assets:
  Doubtful accounts and notes:
   Years ended November 30
          1995      $610,738       $257,047       $295,785(1)    $572,000
          1994       845,071        347,771        582,104(1)     610,738
          1993       787,995        257,112        200,036(1)     845,071

(1) Write-offs of uncollectible accounts and notes, net of recoveries