U.S. Securities and Exchange Commission
                             Washington, D.C. 20549
                                   Form 10-QSB

(Mark One)
   X    Quarterly report pursuant to Section 13 or 15(d) of the Securities
------- Exchange Act of 1934 for the quarterly period ended March 31, 2001
                                 --------------
____  Transition  report pursuant to 13 or 15(d) of the Securities  Exchange Act
      of 1934 for the transition period from _____________ to _____________.

Commission File No. 1-4385

                          DUNES HOTELS AND CASINOS INC.
           (Exact name of business issuer as specified in its charter)

             NEW YORK                                 11-1687244
-------------------------------             ----------------------------------
(State or other jurisdiction or             I.R.S. Employer Identification No.
incorporation or organization)

46735 County Road 32B, P.O. Box 130, Davis, California 95617
------------------------------------------------------------------------------
(Address of principal executive offices)

(530) 753-4890
------------------------------------------------------------------------------
(Issuer's telephone number)

                                 NOT APPLICABLE
------------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since last
report)

      Check  whether  the issuer (1) filed all  reports  required to be filed by
      Section 13 or 15(d) of the  exchange Act during the past 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 or the past
      90 days. Yes X  No
                  ---   ---

                      APPLICABLE ONLY TO CORPORATE ISSUERS
      State the number of shares  outstanding of each of the issuer's classes of
common equity,  as of the latest  practicable  date:  4,666,777 shares of common
stock, $.50 par value as of April 30, 2001.

Transitional Small Business Disclosure Format (check one): Yes         No   X
                                                                -----     -----
<PAGE>


                          DUNES HOTELS AND CASINOS INC.

                         QUARTERLY REPORT ON FORM 10-QSB

                       FOR THE PERIOD ENDED MARCH 31, 2001


                                      INDEX

                                                                          Page
Part 1. Financial Information                                             ----

       Item 1. Financial Statements

       Condensed Consolidated Balance Sheets
       March 31, 2001 and December 31, 2000                                3

       Condensed Consolidated Statements of Loss
       for the three months ended March 31, 2001
       and 2000                                                            5

       Condensed  Consolidated  Statements  of Cash  Flows For the three
       months ended March 31, 2001
       and 2000                                                            6

       Notes to Consolidated Financial
       Statement                                                           7

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

Part II.       Other Information

       Item 1. Legal Proceedings                                           14
       -------------------------
       Item 2. Changes in Securities                                       14
       -------------------------------------------
       Item 3. Defaults Upon Senior Securities                             14
       ---------------------------------------
       Item 4. Submission of Matters to a Vote of Security Holders         14
       -----------------------------------------------------------
       Item 5. Other Information                                           14
       -------------------------
       Item 6. Exhibits and Reports on Form 8-K                            14
       ----------------------------------------

       Signatures                                                          15

                                       2
<PAGE>
                 DUNES HOTELS AND CASINOS INC. AND SUBSIDIARIES

                      CONDENSED CONSOLIDATED BALANCE SHEETS

                      MARCH 31, 2001 AND DECEMBER 31, 2000
                             (Dollars in thousands)

                                     ASSETS

                                                             March      December
                                                           31, 2001     31, 2000
                                                           ---------   ---------
                                                          (Unaudited)
Cash and cash equivalents                                  $   4,009   $   4,241

Marketable securities                                            449         422

Receivables
    Trade                                                          1          37
    Real estate sales                                            790         526

Inventory of real estate held for sale                           404       1,126

Prepaid expenses                                                  42          56

Property and equipment,less accumulated depreciation
    and amortization of $895 and $862 in 2001 and 2000         3,115       3,134

Other assets                                                       2           4
                                                           ---------    --------

                                                           $   8,812    $  9,546
                                                           =========    ========


                                   (continued)

                                        3

<PAGE>
                 DUNES HOTELS AND CASINOS INC. AND SUBSIDIARIES

                CONDENSED CONSOLIDATED BALANCE SHEETS (CONTINUED)

                      MARCH 31, 2001 AND DECEMBER 31, 2000
                             (Dollars in thousands)

                      LIABILITIES AND SHAREHOLDERS' EQUITY

                                                             March      December
                                                           31, 2001     31, 2000
                                                           ----------   --------
                                                           (Unaudited)
Accounts payable                                         $      108 $       143

Accrued expenses                                                494         478

Deferred income                                                 156         159

Long-term debt and capital lease obligation                     529         589

Accrued preferred stock dividends in arrears                  1,249       1,389
                                                           ---------  ----------

                                                              2,536       2,758
                                                           ---------  ----------
Shareholders' equity
    Preferred stock - authorized 10,750,000
        shares ($.50 par); issued 10,512 shares
        Series B $7.50 cumulative preferred
        stock, outstanding 8,535 shares,
        aggregate liquidation value
        $2,316, including dividends in arrears                    5           5

    Common stock - authorized 25,000,000 shares
        ($.50 par); issued 7,799,780 shares,
        outstanding 4,666,777 shares                          3,900       3,900

    Capital in excess of par                                 25,881      25,881

    Deficit                                                 (21,013)    (20,960)
                                                           ---------  ----------
                                                              8,773       8,826
    Treasury stock at cost;  Preferred -
      Series B, 1,977 shares
        Common 3,133,003 shares                              (2,497)     (2,038)
                                                           ---------  ----------

        Total shareholders' equity                            6,276       6,788
                                                           ---------  ----------

                                                           $  8,812   $   9,546
                                                           =========  ==========

            See notes to condensed consolidated financial statements

                                        4

<PAGE>
                 DUNES HOTELS AND CASINOS INC. AND SUBSIDIARIES

                    CONDENSED CONSOLIDATED STATEMENTS OF LOSS

                   THREE MONTHS ENDED MARCH 31, 2001 AND 2000
                    (Dollars in thousands, except per share)

                                    UNAUDITED

                                                            2001         2000
                                                        -----------  -----------
Revenues
    Sales of real estate                                $      725   $      395
    Rental income, agricultural properties                      14           14
    Drying and storage revenues                                 81           13
                                                        -----------  -----------
                                                               820          422
                                                        -----------  -----------
Cost and expenses
    Cost of real estate sold                                   756          458
    Cost and expenses of rental income                           1            1
    Cost of drying and storage revenues                         82           68
    Selling, administrative and general
        Corporate                                              205          361
        Real estate operations                                  22           42
        Bad debts (recoveries), net                                          (3)
    Depreciation                                                33           33
                                                        -----------  -----------
                                                             1,099          960
                                                        -----------  -----------

Income/(loss) before other credits (charges) and
income taxes                                                  (279)        (538)

Other credits (charges)
    Interest and dividend income                                37           47
    Interest expense                                           (16)         (22)
    Other expense                                                            (1)
    Gain / (loss) on marketable securities, net                 66           22
                                                        -----------  -----------
                                                                87           46
                                                        -----------  -----------


Net loss                                                $     (192)  $     (492)
                                                        ===========  ===========

Weighted average number of shares outstanding            4,885,309    5,966,943

Basic and diluted loss per common share                 $    (0.04)  $    (0.09)
                                                        ===========  ===========


            See notes to condensed consolidated financial statements

                                        5

<PAGE>
                 DUNES HOTELS AND CASINOS INC. AND SUBSIDIARIES

                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

                   THREE MONTHS ENDED MARCH 31, 2001 AND 2000
                             (Dollars in thousands)

                                    UNAUDITED


                                                     2001          2000
                                                  ------------  ------------
Cash flows from operating activities:
    Net cash provided by operating activities     $       301   $        23
                                                  ------------  ------------

Cash flows from investing activities:
    Investment in marketable securities                                 (22)
    Purchase of property and equipment                    (14)
                                                  ------------  ------------

    Net cash used in investing activities                 (14)          (22)
                                                  ------------  ------------

Cash flows from financing activities
    Payments on long-term debt                            (60)          (53)
    Purchase of treasury stock                           (459)
                                                  ------------  ------------

    Net cash used in financing activities                (519)          (53)

Decrease in cash and cash equivalents                    (232)          (52)

Cash and cash equivalents, beginning of period          4,241         3,323
                                                  ------------  ------------

Cash and cash equivalents, end of period          $     4,009   $     3,271
                                                  ============  ============












            See notes to condensed consolidated financial statements

                                        6
<PAGE>

                DUNES HOTELS AND CASINOS INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                    UNAUDITED


1.             BASIS OF PRESENTATION:

        The condensed  consolidated  financial  information  included  herein is
        unaudited,  except  that the  balance  sheet at  December  31,  2000 was
        derived from the audited financial  statements included in the Company's
        2000 Form 10-KSB,  however,  such  information  reflects all adjustments
        (consisting  solely of normal recurring  adjustments)  which are, in the
        opinion  of  management,  necessary  for  a  fair  presentation  of  the
        financial position, results of operations and cash flows of the Company.

        The results of operations for the three months ended March 31, 2001, are
        not  necessarily  indicative  of the results to be expected for the full
        year.  Further,   certain  information  and  note  disclosures  normally
        included  in the  Company's  annual  financial  statements  prepared  in
        accordance  with  generally  accepted  accounting  principles  have been
        condensed or omitted.  These condensed consolidated financial statements
        should be read in conjunction with the consolidated financial statements
        and notes thereto  included in the  Company's  Form 10-KSB annual report
        for 2000 filed with the Securities and Exchange Commission.

2.             CONSOLIDATION:

        The accompanying condensed consolidated financial statements include the
        accounts of the Company and its  wholly-owned  subsidiaries  Continental
        California Corporation  (Continental),  M&R Corporation (MRC), and MRC's
        subsidiary M&R Investment Company, Inc. (MRI) and MRI's subsidiaries SHF
        Acquisition  Corporation  (SHF) and South Lake  Acquisition  Corporation
        (South Lake), after elimination of all material  inter-company  balances
        and transactions.

3.             LEGAL PROCEEDINGS

FDIC Litigation/Change of Control
---------------------------------

John B. Anderson  (Anderson),  the former  Chairman of the Board of Directors of
the Company,  and through ownership of Cedar Development Co. ("Cedar"),  was the
controlling  shareholder  and  President  of Baby Grand  Corp.  (BGC) and J.B.A.
Investments,  Inc. (Anderson  Entities),  which collectively owned approximately
4,280,756  shares or 67.2% of the Company's  common  stock.  Of those shares (i)
3,000,000  shares (the FDIC Pledged Shares) were pledged as collateral to secure
certain obligations owing to the FDIC described below, and (ii) 1,280,756 shares
(the BGC Pledged  Shares) were pledged as collateral in favor of a subsidiary of
the Company.

The Federal Deposit Insurance  Corporation ("FDIC") brought an action captioned,
Federal Deposit Insurance Corporation, et al. v. John B. Anderson et al., United
States District Court, District of Nevada, Case No.  CV-S-95-00679-PMP (LRL), on
July 14, 1995. Anderson, Edith Anderson

                                        7
<PAGE>
                DUNES HOTELS AND CASINOS INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                    UNAUDITED


(Anderson's  wife),  Cedar,  J.A  Inc.  (JA),  J.B.A.   Investments  Inc,  (JBA)
(collectively,  the Anderson  Parties) are  defendants in this  litigation  (the
Anderson Litigation).  This matter is more fully described in the Company's Form
10-K for the year ended  December 31,  1997,  see "Item 3. Legal  Proceedings  -
Federal Deposit Insurance  Corporation,  et al. v. John B. Anderson, et al." The
FDIC  reduced its claims to a Consent  Judgment  dated  September  12, 1995 (the
"Judgement").

In June  1999,  the FDIC  sold a portion  of its  Judgement,  together  with the
underlying security owned by the Anderson Parties to General Financial Services,
Inc. (GFS).  Included in the sale were the FDIC Pledged Shares. GFS attempted to
exercise  its rights  under the  Judgement  and  transfer  ownership of the FDIC
Pledged  Shares to it, but the Company  intervened  on behalf of  Anderson,  and
seized  the  Pledged  Shares.  The  Company  in turn  filed on July 6,  1999,  a
Complaint in  Interpleader  in Superior  Court of  California  (the  "California
Action").  The  jurisdiction  of the  action  was  removed  and  transferred  on
September  20,  1999 to the United  States  District  Court for the  District of
Nevada as DUNES HOTELS AND CASINOS INC. v. J.B.A. INVESTMENTS,  INC. et al. Case
No.  CV-S-99-1470-PMP  (RJJ) (the "Nevada  Action").  GFS and its subsidiary GFS
Acquisition  Company,  Inc. filed a  counter-claim  alleging among other things,
damages from the previous Company  management for filing the California  Action,
seizing the FDIC Pledged  Shares,  interfering  with the lawful  transfer of the
FDIC Pledged Shares and refusing to grant  shareholder  demands for an immediate
shareholder meeting to elect directors.  A more detailed discussion is described
in the Company's Form 10-KSB for the fiscal year ended December 31, 2000.

The  Nevada  Action  and  the  GFS  counterclaim  have  been  dismissed  without
prejudice.  In January  2001,  GFS  foreclosed  on the FDIC  Pledged  Shares and
acquired direct ownership of the shares. The Company has no further  involvement
in the litigation  involving the Anderson Entities.  For additional  information
regarding this information,  see Note 10 to the financial statements included in
the Company's Form 10-KSB for the fiscal year ended December 31, 2000.

Injunctive Action regarding Tender Offer
----------------------------------------

On April 3, 2000, JBA, GFS and GFS  Acquisition  filed an action against the USI
Corp.,  Barney Kreutzer and Thomas Honton  (collectively the "USI Group") in the
U.S.  District  Court for the District of Kansas  alleging,  among other things,
violations of the Williams Act,  ss.ss.13(d),  14(d) and 14(e) of the Securities
Exchange  Act of 1934,  15  U.S.C.  78a et seq.  ("Williams  Act").  The case is
captioned  J.B.A.  Investments,  Inc., et al. v. USI Corp, et al., Case No 00127
WEB (D. Kan. 2000). The plaintiffs  allege that the USI Group conducted a tender
offer for the Company's non-convertible Series B preferred stock in violation of
the Williams Act. Upon information  believed to be reliable,  USI Group was able
to purchase approximately 3000 shares of the Company's Series B preferred stock.
The plaintiffs further allege that USI Group failed to file any of the necessary
reports required under the Williams Act, failed to make material  disclosures to
the former Series B preferred  stcokholders and engaged in fraudulent  practices
in conjunction

                                       8
<PAGE>

                 DUNES HOTELS AND CASINOS INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                    UNAUDITED


with the alleged tender offer.  The plaintiffs  seek a preliminary and permanent
injunction prohibiting the USI Group from completing the tender offer, recission
of the Series B preferred stock purchases by the USI Group and damages.

The USI Group and the plaintiffs  have consented to an order halting any further
purchases of Series B preferred stock by the USI Group,  allowing the Company to
instruct its transfer agent to stop the transfer of such shares to USI Group and
precluding the USI Group from  transferring or otherwise  disposing the acquired
Series B preferred stock.

The USI Group  filed a motion to  dismiss  the  plaintiffs'  action.  Plaintiffs
opposed that motion.  By order dated February 21, 2001, the court denied the USI
Group's motion to dismiss.

On August 3, 2000,  the court  entered an agreed order  joining the Company as a
plaintiff in the action.

On March 9, 2001, the USI Group filed several  counterclaims against plaintiffs,
including the Company.  The claims being made against the Company  include:  (1)
violations of Section 13e-3 and Section 13e-4 of the Securities  Exchange Act of
1934 in conjunction  with the Company's tender offer for all of the common stock
and Series B preferred stock; (2) breach of contract relating to the USI Group's
Series B preferred stock;  and (3) injunctive  relief relating to the foregoing.
The counterclaim also includes separate derivative claims for relief asserted on
behalf of the Company, and claims against plaintiffs other than the Company. The
plaintiffs,  including the Company,  have not yet responded to the counterclaim.
The Company intends to vigorously defend all of the claims made against it.

On March 9,  2001,  the USI  Group  filed  its  answer  to  plaintiffs'  claims.
Discovery is ongoing  with regard to the claims  brought by  plaintiffs  and the
counterclaims brought by the USI Group.

While  management  believes  in the merits of the action  against the USI Group,
there can be no assurance as to the outcome of the action and ultimate ownership
of the  contested  Series B  preferred  stock or as to the outcome of the claims
against the Company.

4.             CONTINGENCIES:

(a)  At March 31, 2001, the Company has a net operating loss carry forward (NOL)
     of approximately $53,298,000. The Board of Directors believes that this NOL
     is  subject  to severe  limits  under the  Internal  Revenue  Code and as a
     result,  the Board of Directors  believes there is substantial  doubt as to
     whether  the NOL  has any  value  to the  Company.  If  there  has  been an
     ownership  change for purposes of Section 382 of the Internal  Revenue Code
     of 1986, as amended (the Code), then there is a limitation on the amount of
     income  that can be offset by NOL  carryovers.  In  general,  an  ownership
     change  occurs when a major  shareholder  of a loss  corporation  increases
     their ownership by more than 50%, which

                                       9
<PAGE>
                DUNES HOTELS AND CASINOS INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                    UNAUDITED


     is tested over a three-year period.  Depending on the interpretation of the
     IRS, an effective  change in control may have  occurred as early as January
     4, 2000, upon the order vesting voting control with GFS.

(b)  SHF was advised in 1991 of the  possible  contamination  of 40 acres at Sam
     Hamburg  Farm of  approximately  5,000  cubic yards of soil.  The  Company,
     through its chemical and toxic clean-up consultants,  has been working with
     the California State Environmental  Protection Agency, in seeking alternate
     means to the  disposal  in toxic dump sites of  chemical  and  toxics-laden
     soil.

     Because of ongoing testing,  the State has not imposed a disposal date upon
     the  Company.  The Company  has  disposed of a 1,000 cubic yards of soil to
     date.  Cost of disposal of the remaining  soil is estimated at $125 to $200
     per cubic yard or approximately $500,000 to $800,000, of which $472,000 has
     been  accrued.  However,  if on-site  remediation  can be  achieved,  it is
     estimated the cost will be no more than $170,000.  The Company is unable to
     predict  when the ongoing  testing  will be complete or what the outcome of
     these tests will be.  Accordingly,  it is reasonably possible the estimates
     will change materially in the near term as the testing and remediation work
     continues.

(c)  The Company  estimates the carrying  value of the lots at the Fairways real
     estate development approximates their fair value. It is reasonably possible
     the amounts  ultimately  realized could differ  materially in the near term
     from amounts recorded in the financial statements.

(d)  See Note 3 above  regarding  legal  proceedings  that  may have a  material
     adverse affect on the Company.

(e)  The Company had been notified that the California FTB is examining its 1995
     tax return. The FTB is questioning the Company's reporting of approximately
     $7,700,000  of income as being  exempt  from the 9.3%  California  tax.  On
     September 13, 2000, the FTB requested, and the Company granted, a six month
     extension of the period in which the FTB could make an  assessment  related
     to the 1995 tax return.  On March 13, 2001, the extension  expired  without
     any additional action being taken by the FTB.

5.             LOSS PER COMMON SHARE

     Loss per common share has been computed  using the weighted  average number
     of shares outstanding  during the quarter:  4,885,309 and 5,976,639 for the
     quarters  ended March 31,  2001 and 2000,  respectively.  Dividends  on the
     Series B  preferred  stock have been  deducted  from income or added to the
     loss  applicable  to common  shares.  Dividends on the  Company's  Series B
     preferred  stock  have not been paid since the first  quarter of 1982.  The
     Company is in arrears on such dividends in the amount of approximately

                                       10

<PAGE>

                DUNES HOTELS AND CASINOS INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                    UNAUDITED



     $1,249,493  as of March 31, 2001.  The Company has no present  intention to
     pay dividends on either its common or preferred shares.

     On January 1, 2000,  there were  6,375,096  common shares  outstanding.  On
     March 3, 2000, the Company  foreclosed on the 1,280,756  common shares that
     had been pledged as collateral in favor of a subsidiary of the Company. See
     Note 10 to the Company's  financial  statements included in the Form 10-KSB
     for the year  ended  December  31,  2000.  On March 31,  2000,  there  were
     5,094,340 common shares outstanding.

     On January 1, 2001,  there were  5,094,340  common shares  outstanding.  On
     February 15, 2001, the Company  acquired  427,563 common shares pursuant to
     its tender  offer.  See Note 7. On March 31,  2001,  there  were  4,666,777
     common shares outstanding.

     The  following  data show the amounts used in computing  loss per share and
     the effect on loss and the  weighted  average  number of shares of dilutive
     potential common stock:

                                          Three Months Ended  Three Months Ended
                                            March 31, 2001      March 31, 2000
                                          ------------------  ------------------
                                                  (Dollars in thousands)

        Loss from operations                     $   (192)         $     (492)
        Less:  preferred dividends                   ( 16)               ( 18)
                                                 ===========       ===========
        Loss to common stockholders
            used in basic loss per share         $   (208)         $     (510)
                                                 ===========       ===========

        Weighted average number of
            Common shares used in
            basic and diluted loss per share     $4,885,309        $5,976,639
                                                 ===========       ===========


6.             SEGMENT INFORMATION:

        The Company's  operations are classified into three principal  reporting
        segments that provide different  services.  Separate  management of each
        segment is required  because each  business unit is subject to different
        marketing,  production and technology  strategies.  The following  table
        shows  external  revenues,   depreciation,   loss  and  assets  for  the
        reportable segments:

                                    Reportable Segments (in thousands)

                            Grain Drying
                            And Storage   Real Estate   Farming      Total
                            -----------   -----------   -------      -----


                                       11
<PAGE>
                DUNES HOTELS AND CASINOS INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                    UNAUDITED


                                  Three Months  Ended March 31, 2001

    External revenue        $    81       $   725       $  14       $  820
    Depreciation                 33                                     33
    Loss                        (34)          (53)         13          (74)
    Assets                    3,118         1,047         146        4,311

                                    Three Months Ended March 31, 2000

    External revenue        $    13       $   395       $  14       $  422
    Depreciation                 33                                     33
    Loss                        (88)         (105)         13         (180)
    Assets                    3,105         3,291         146         6,542



                            Three Months            Three Months
                                Ended                   Ended
                            March 31, 2001          March 31, 2000

    Revenues
    Total for reportable
       segments                 $  820                  $   422
                                -------                 --------

    Total                       $  820                  $   820
                                =======                 ========

    Loss
    Total for reportable
       segments                 $  (74)                 $  (180)
    Corporate expenses            (205)                    (358)
    Interest income/
       expense & other              87                       46
                                -------                 --------

    Loss                        $ (192)                 $  (492)
                                =======                 ========

    Assets
    Total for reportable
        segments                $4,312                  $ 6,542
    Cash, securities &
        prepaids                 4,500                    3,650
                                -------                 --------

                                       12
<PAGE>
                DUNES HOTELS AND CASINOS INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                    UNAUDITED


    Total                       $8,812                  $10,192
                                =======                 ========


7.    TENDER OFFER

On October 31, 2000, the Company  commenced a tender offer for all of its common
stock at a  purchase  price  of  $1.00  per  share  and for all of its  Series B
preferred  stock at a purchase  price of $30.00 per share.  The tender offer for
the common  stock  expired on  February  15,  2001 and the tender  offer for the
Series B preferred  stock  expired on March 16, 2001.  As a result of the tender
offer, the Company acquired 427,563 shares of common stock (representing 8.4% of
the  outstanding  common  stock) and 1,075  shares of Series B  preferred  stock
(representing  11.2% of the Series B preferred stock).  The tendered shares will
be  cancelled  and as a result,  Steve K.  Miller,  indirectly  through  General
Financial Services,  Inc. and GFS Acquisition  Company,  Inc., will own 85.8% of
the common stock and 1.4% of the preferred stock.

As of  March  30,  2001,  shareholders  who  claim  to  have  lost  their  stock
certificates  have submitted  letters of  transmittal  for 82 shares of Series B
preferred  stock and 18,100  shares of common  stock.  The Company has agreed to
accept such tendered  shares if the  shareholders  satisfy the transfer  agent's
requirement for delivery of a lost stock affidavit and the payment of a transfer
service fee. These shares are not included in the above numbers or percentages.





                                       13
<PAGE>

ITEM 2.        MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

        Certain  information   included  herein  contains  statements  that  are
forward-looking,  such as  anticipated  liquidity  requirements  for the  coming
fiscal year and  anticipated  sources of liquidity  for the coming  fiscal year.
Such forward-looking information involves important risks and uncertainties that
could significantly  affect the Company's financial condition and future results
of operations, and, accordingly,  such future financial condition and results of
operation may differ from those expressed in any forward-looking statements made
herein.  These risks and  uncertainties  include,  but are not limited to, those
risks  relating to actual  costs  necessary to clean-up  certain  real  property
chemical  contamination,  real estate  market  conditions  and general  economic
conditions,  the  abilities of certain  third  parties to obtain  financing  and
otherwise  perform  under real estate  purchase  agreements,  and the outcome of
certain  litigation and other risks.  The Company  caution  readers not to place
undue  reliance on any such  forward-looking  statements,  and, such  statements
speak only as of the date made.

OVERVIEW
--------

REAL ESTATE

The  Fairways  consist of the  remaining  portion of  approximately  50 acres of
developed residential land in Rancho Murieta,  Sacramento,  County,  California.
Rancho  Murieta is a 3,500 acre  mastered  planned  unit  development  community
located  approximately  25 miles from  Sacramento,  California.  The development
consists primarily of single family homes, town houses,  commercial property and
two 18-hole championship golf courses and country club facilities.  The 50 acres
are located within the  boundaries of one of the golf courses.  The property was
subdivided  into 110  single-family  estate lots. As of April 30, 2001,  the two
remaining  lots are in escrow  pending  closing.  The Company does not expect to
realize a gain on the sale of the  remaining  lots as the  existing  cost  basis
approximates net sales proceeds.

FARMING

Sam Hamburg Farm consists of approximately  150 acres remaining from an original
4,600 acres of  agricultural  land.  The Company leases 110 acres to one tenant,
who grows various  crops.  The term of the lease is for two crop years on a cash
rent  basis.  The year 2001 is the last year of the  two-year  lease.  It is not
known at this time if the Company will lease the property to the same tenant for
the coming years.

GRAIN DRYING AND STORAGE

The Company operates a grain drying and storage facility. The drying facility is
financed by a 5-year  lease  which  commenced  in March 1998.  At the end of the
lease the Company will have the option to buy the drying  facility for $1 at the
end of the lease.

The Company has an  agreement,  which  expires on August 31, 2001,  with Pacific
International  Rice mills, Inc. (PIRMI) to store  approximately  350,000 cwt. of
dry paddy rice in the east

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warehouse.  During  the first  quarter of 2001,  all of the rice was  shipped to
PIRMI and the Company received storage revenue of approximately  $72,000.  Total
storage revenue was approximately  $144,000 with 50% paid upon filling in August
2000. In addition,  the Company had an agreement with PIRMI to dry and store wet
paddy  rice from the 2000  crop.  During  the last  quarter  of 2000 the  drying
operation  dried  approximately  345,000  cwt. of paddy rice and that rice is in
storage in the west warehouse.

Currently the Company does not have any signed  agreements to store or dry paddy
rice for the 2001 season.  Due to the large carry over of  inventory  throughout
the industry and the low market price, due to the increased inventory, it cannot
be  determined  at this time the number of acres that will be planted this year.
It appears at this time that the current  rice in storage in the west  warehouse
will be held over to the next year and if so, will generate  storage  income for
the Company.  The Company is currently  working with PIRMI and other  growers in
the area to obtain contracts to dry and store paddy rice for the 2001 season.

If the Company  were to lose its drying and storage  customers,  it would have a
material adverse effect on the Company's grain drying and storage segment.

OTHER

The Company has no present  intentions  to pay dividends on either its common or
preferred stock.


OPERATING RESULTS

Three months ended March 31, 2001 vs. the three months ended March 31, 2000.

Real Estate

The  revenues  from the sale of real estate at The Fairways for the three months
ended  March 31,  2001,  compared  with the three  months  ended  March 31, 2000
increased. Nine lots were sold in March 2001, versus five lots that were sold in
the same period  during 2000.  However,  due to the length of time in inventory,
the cost of sales  of the lots in  inventory  has  reduced  the  profit  margins
considerably.  Sales at The Fairways will soon be coming to a close. As of April
30, 2001, the two remaining lots in inventory are in escrow pending closing.

Farming

Net rental income from agricultural  properties for the three months ended March
31, 2001,  remained  constant  compared to the same period in 2000.  This is the
second year of a two-year lease at Sam Hamburg Farm.

Grain Drying and Storage

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The loss from the rice drying and storage  operation  for the three months ended
March 31, 2001, decreased by approximately  $54,000 when compared with the three
months ended March 31, 2000.  The loss  decrease was  primarily the result of an
increase in storage revenue during the three months ended March 31, 2001. During
the fall 2000 season,  the dried rice placed in storage  resulted in an increase
in storage  revenue  during the period  ended  March 31,  2001,  as the  storage
revenue is spread over a twelve-month period (October through September). During
the fall of 1999,  there  was no rice  drying  at the  facility  and no  storage
revenue during the first quarter of 2000.

General

When  compared  with the three months ended March 31, 2000,  operating  expenses
decreased  in  the  current  period  by  approximately  $156,000.   Major  items
contributing  to the  decrease  were  legal  fees  ($127,000),  accounting  fees
($60,000),  directors  consulting  fees  ($30,000)  and officers  and  directors
liability  insurance  ($15,000).  Offsetting  this  decrease  were  increases in
officers  salary/related  payroll expense ($27,000) and expenses relating to the
tender offer ($49,000).

LIQUIDITY AND CAPITAL RESOURCES

During the quarter ended March 31, 2001,  cash, cash  equivalents and marketable
securities  decreased by $205,000  from  $4,663,000  at December  31,  2000,  to
$4,458,000 at March 31, 2001. The most significant uses of cash during the three
months  ended March 31, 2001  consisted  of cash used in  operating  activities,
payment on long-term  debt and the purchase of shares of stock in the  Company's
tender offer.

On March 16,  2001,  the Company  completed  its tender  offer for shares of the
common stock and Series B preferred  stock. As a result of the tender offer, the
Company  paid  $459,813 to the former  holders of the common  stock and Series B
preferred  stock,  which  amount  was  paid  from  the  Company's  cash and cash
equivalents.

The Company  believes that its primary  requirements for liquidity in the coming
fiscal year will be to fund expenses at The Fairways, which include, among other
things,  association  dues, water and sewer fees and property taxes; to fund the
required payments due on the grain dryer financing,  to fund equipment purchases
and or  modifications  at the grain drying  facility;  to fund costs that may be
incurred  relating  to the  toxic  clean-up  at Sam  Hamburg  Farm;  to fund any
remaining  costs  associated  with the tender  offer;  and to fund  general  and
administrative expenses.

The  Company  anticipates  that  sources  of  required  liquidity  will  be cash
generated from the grain drying and storage facility, lot sales at The Fairways,
collection of notes  receivable and the cash available at March 31, 2001.  Based
on known  commitments,  the Company  believes that the sources of cash described
and the cash  available  at March  31,  2001,  will be  adequate  to fund  known
liquidity requirements.

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                           PART II - OTHER INFORMATION

ITEM 1.  Legal Proceedings
--------------------------

        See the  discussion  contained  in  footnote 3 in Notes to  Consolidated
Condensed Financial Statements.


ITEM 2.  Changes in Securities
------------------------------

        Not applicable

ITEM 3.  Default Upon Senior Securities
---------------------------------------

        Dividends  in  arrears.  See Note 5 of Notes to  Consolidated  Condensed
Financial Statements for the quarter ended March 31, 2001.

ITEM 4.  Submission of Matters to a Vote of Security Holders
------------------------------------------------------------

        Not applicable

ITEM 5.  Other Information
--------------------------

        None

ITEM 6.  Exhibits and Reports on Form 8-K
-----------------------------------------

(a)     Exhibits

        None

(b)     Reports on Form 8-K

        None



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                                 SIGNATURES
                                 ----------

        PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THE
REGISTRANT  HAS DULY  CAUSE  THIS  REPORT  TO BE  SIGNED  ON ITS  BEHALF  BY THE
UNDERSIGNED THEREUNTO DULY AUTHORIZED.


                                               DUNES HOTELS AND CASINOS INC.
                                               -----------------------------
                                                        Registrant



Date: May 15, 2001                             By:       /s/Steve K. Miller
                                                  ----------------------------
                                                  Steve K. Miller, President



                                               By:      /s/ Marvin P. Johnson
                                                  ----------------------------
                                                  Marvin P. Johnson
                                                  Chief Accounting Officer
                                       18