Company Name: DANIEL GREEN COMPANY Ticker Symbol: DAGR


                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                  Quarterly Report under Section 13 or 15(d) of
                       the Securities Exchange Act of 1934

       For the quarter ended September 30, 2001 Commission File No. 0-774
                              DANIEL GREEN COMPANY
                 (Name of Small Business Issuer in its Charter)

         MASSACHUSETTS                                       15-0327010
(State or other jurisdiction of                (IRS Employer Identification No.)
Incorporation or organization)

         OLD TOWN, MAINE                                                 04468
(Address of principal executive offices)                              (Zip Code)

Issuer's telephone number, including area code: (207) 827-4431

Former  name,  former  address and former  fiscal  year,  if changed  since last
report: None.

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 twelve months (or for such
shorter period that the  registrant was required to file such reports),  and (2)
has been subject to the filing requirements for the past 90 days. YES [X] NO [_]

         CLASS                                 OUTSTANDING AT SEPTEMBER 30, 2001
Common Stock $2.50 par value                              1,946,849


Transitional Small Business Disclosure Format (Check One)  Yes [_]   No [X]


<PAGE>

                                       1

                              DANIEL GREEN COMPANY
                                      INDEX

                                                                           Page
                                                                          Number

     Index ..............................................................      1

     PART I - Financial Information

     Consolidated Balance Sheets, Assets
              September 30, 2001 and December 31, 2000 ..................      2

     Consolidated Balance Sheets, Liabilities & Stockholders' Equity
              September 30, 2001 and December 31, 2000 ..................      3

     Consolidated Statements of Operations for the three months and nine
               months ended September 30, 2001 and September 30, 2000 ...      4

     Consolidated Statements of Cash Flows for the nine months ended
              September 30, 2001 and September 30, 2000 .................      5

     Notes to Consolidated Financial Statements .........................      6

     Management Discussion & Analysis of Financial Condition and Results
              of Operations .............................................      9

     PART II - Other Information ........................................     11

<PAGE>

                                       2

                              DANIEL GREEN COMPANY
                           Consolidated Balance Sheets

                                                                ASSETS
                                                    September 30,   December 31,
                                                         2001           2000
                                                     (Unaudited)         (*)
                                                     -----------     -----------
Current Assets:
Cash                                                 $   504,508     $     1,395
Accounts Receivable, trade
less allowances of $1,646,163 in 2001
         and $2,249,000 in 1999                        9,601,332      14,601,499

Deferred Income Tax Asset                                584,234         654,491

Finished Goods Inventories, at lower of
      cost (FIFO) or market:                          19,208,643      14,758,949

Other Current Assets                                     159,226         193,757
                                                     -----------     -----------
 Total Current Assets                                 30,057,943      30,210,091

Property, plant & equipment:
Real Estate and Water Power, at cost                   1,698,581       1,698,581
Machinery & Equipment at cost                            734,330         734,330
                                                     -----------     -----------
                                                       2,432,911       2,432,911
Less: Accumulated Depreciation                           529,106         378,333
                                                     -----------     -----------
Property, plant & equipment, net                       1,903,805       2,054,578

Other Assets:
Deferred Income Tax Asset                                      0         795,038
Prepaid Pension Cost                                           0       3,610,518
Other Assets, net                                      2,866,771       1,754,176
                                                     -----------     -----------
 Total Other Assets                                    2,866,771       6,159,732
                                                     -----------     -----------
 Total Assets                                        $34,828,519     $38,424,401
                                                     ===========     ===========

(*) Derived from audited consolidated financial statements. See notes to
consolidated financial statements.

<PAGE>

                                       3

                              DANIEL GREEN COMPANY
                          Consolidated Balance Sheets

                       LIABILITIES & STOCKHOLDERS' EQUITY


                                     September 30,   December 31,
                                         2001           2000
                                     (Unaudited)         (*)
                                     ------------    ------------
Current Liabilities:

Notes Payable, line of credit        $ 10,100,365    $ 12,500,000
Notes Payable, current                  7,293,488       6,416,743
Accounts Payable, trade                 7,111,010       9,158,314
Liability to former stockholder         1,805,951       1,805,951
Income Tax Payable                         19,078         898,364
Other Accrued Liabilities                 756,385       1,038,078
                                     ------------    ------------


Total Current Liabilities              27,086,277      31,817,450

Deferred Income Taxes                     225,760               0
Notes Payable, non-current              1,008,333           9,320
Other Liability                           700,000         700,000
                                     ------------    ------------
Total Other Liabilities                 1,934,093         709,320
Total Liabilities                      29,020,370      32,526,770

 Stockholders' Equity:

Common Stock                            5,224,065       4,245,823
Paid-in-excess of par value             2,000,067         815,940
Retained Earnings                       1,120,549       1,305,759
                                     ------------    ------------
                                        8,344,681      6,367,522
Less: Treasury Stock                   (2,536,532)       (469,891)
                                     ------------    ------------
Total Stockholders' Equity              5,808,149       5,897,631
                                     ------------    ------------
 Total Liabilities & Stockholders'
         Equity                      $ 34,828,519    $ 38,424,101
                                     ============    ============

(*) Derived from audited consolidated financial statements.
See notes to consolidated financial statements.


<PAGE>

                                       4

                              DANIEL GREEN COMPANY
                      Consolidated Statements of Operations
                                   (Unaudited)

<TABLE>
<CAPTION>
                                   Three Months Ended            Nine Months Ended
                              September 30,  September 30,  September 30,    September 30,
                                  2001          2000           2001             2000
                                  ----          ----           ----             ----


<S>                            <C>           <C>           <C>             <C>
Net Sales                      $12,925,823   $11,192,226   $ 32,243,138    $ 18,746,232

Costs and Expenses
  Cost of Goods Sold             8,953,625     7,170,100     21,259,221      12,721,761
  Selling, General &
    Administrative               2,848,179     2,948,765      8,457,298       7,664,505
Other Expense-Pension                    0             0      1,713,710               0
 Interest Expense                  297,910       451,430      1,307,644         520,712
                               -----------   -----------   ------------    ------------

Total Costs and Expenses        12,099,714    10,570,295     32,737,873      20,906,978

 Income (loss) before Income
    Tax Expense (Credit)           826,109       621,931       (494,735)     (2,160,746)

Income Taxes (Credit)                8,398       186,579       (309,525)       (564,327)
                               -----------   -----------   ------------    ------------

Net Income (Loss)              $   817,711   $   435,352   $   (185,210)   $ (1,596,419)
                               ===========   ===========   ============    ============

Net Income (Loss) per Share:
  Basic                        $      0.52   $      0.27   $      (0.12)   $      (1.02)
  Diluted                      $      0.49   $      0.27   $      (0.12)   $      (1.02)

Shares Outstanding:
  Basic                          1,568,173     1,588,640      1,570,658       1,571,320
  Diluted                        1,725,697     1,588,640      1,570,658       1,571,320
</TABLE>

See notes to consolidated financial statements.


<PAGE>

                                       5

                              DANIEL GREEN COMPANY
                Consolidated Statements of Cash Flows (Unaudited)


                                                     For the Nine Months Ended
                                                   September 30,   September 30,
                                                       2001            2000
                                                    -----------    ------------
Operating Activities:
Net Loss                                            $  (185,210)   $ (1,596,419)
Adjustments to reconcile net (loss) to cash
  (used)/provided by operating activities:
     Depreciation and amortization                      611,378         167,280
Changes in assets & liabilities:
  (Increases) decreases in:
    Accounts Receivable, trade                        5,000,167      (1,808,784)
     Finished Goods Inventories                      (4,449,694)     (1,744,240)
    Deferred Income Tax Asset                            70,257
    Other Current Assets                                 34,531         (59,469)
    Other Assets                                        (17,909)       (359,569)
 Increases (decreases) in:
    Accounts Payable, trade                          (2,047,304)      2,470,128
    Accrued Salaries & Commissions                            0         (85,886)
    Other Accrued Liabilities                          (281,693)       (283,502)
    Income Taxes Payable                               (879,286)              0
    Deferred Income Taxes                              (387,304)
    Prepaid Pension                                   3,610,518               0
                                                    -----------    ------------
Net cash provided/(used) by Operating Activities      1,078,451      (3,300,461)
 Investing Activities:
  Acquisition of business less cash acquired                  0     (11,485,900)
  Sale of Marketable Securities                               0         718,000
  Purchase of property & equipment                            0        (281,834)
                                                    -----------    ------------
Net cash used in Investing Activities                         0     (11,049,734)
 Financing Activities:
  Net Borrowing/(Payment) on Line of Credit          (2,399,635)      9,916,152
  Net Borrowing of Notes Payable                      1,875,758       5,033,050
  Purchase of Treasury Stock                            (51,461)        135,785
  Other Refinancing Expenses                                  0        (649,875)
                                                    -----------    ------------
Net Cash Provided/(Used) in Financing                  (575,338)     14,435,112
                                                    -----------    ------------
 Net Increase in Cash                                   503,113          84,917
Cash at Beginning of Period                               1,395         225,079
                                                    -----------    ------------
 Cash at End of Period                              $   504,508    $    309,996
                                                    ===========    ============

<PAGE>

                                       6

                              DANIEL GREEN COMPANY
                   Notes to Consolidated Financial Statements

Note 1.
     In the opinion of the  Company,  the  accompanying  unaudited  consolidated
financial  statements  contain  adjustments,  all of which  are of a normal  and
recurring  nature,  necessary  to present  fairly the  financial  position as of
September  30, 2001 and the results of  operations  and cash flows for the three
and nine months then ended.  The results of operations for the nine months ended
September 30, 2001 are not necessarily  indicative of the results to be expected
for the full year.

Note 2.
     The accounting  policies used in preparing these statements are the same as
those used in preparing the Company's  consolidated financial statements for the
year ended December 31, 2000. These condensed  consolidated financial statements
should be read in conjunction  with the  consolidated  financial  statements and
notes thereto  included in the Company's  annual report to stockholders  for the
year ended December 31, 2000.

Note 3.
     Due to severe global competition, the Company ceased domestic manufacturing
and  transitioned  to a fully  sourced  importer  during 1999. At the same time,
several acquisition  opportunities were aggressively evaluated and pursued. This
activity  resulted in acquiring  certain assets of one of the Company's  largest
competitors,  L. B.  Evans and Son  Company  Limited  Partnership  ("Evans")  on
February 3, 2000.  In addition,  the Company  purchased  all of the  outstanding
shares of Penobscot Shoe Company ("Penobscot") from Riedman Corporation on March
30, 2000.  Penobscot Shoe Company has been making  women's  footwear for over 60
years  and is  based in Old  Town,  Maine.  Since a  significantly  more  modern
distribution facility, with excess capacity came with the Penobscot acquisition,
it was decided that relocating the Daniel Green operation to Maine would provide
the most efficient and effective  platform for optimizing the synergies from the
three businesses. During May 2000, and pursuant to a public announcement made by
the Company on March 30,  2000,  the  Company's  headquarters  and  distribution
operation  previously  located in  Dolgeville,  New York were  relocated to, and
consolidated with, the newly acquired operations in Old Town, Maine.

     The  acquisition  of Penobscot  has been  accounted  for under the purchase
method of accounting and,  accordingly,  the operation results of Penobscot have
been included in the Company's  consolidated financial statements since the date
of acquisition.


<PAGE>

                                       7

The  following  summary  presents  unaudited  proforma  consolidated  results of
operations  as if the  acquisition  had occurred at the  beginning of 2000,  and
includes   adjustments   for   estimated   amounts  of  goodwill   amortization,
depreciation of fixed assets acquired based on their estimated fair values,  and
increased  interest expense assuming the purchase  consideration had resulted in
additional borrowing during the period presented.  The pro forma results are for
illustrative  purposes  only,  and do not purport to be indicative of the actual
results which would have occurred had the transaction been consummated as of the
earlier dates,  nor are they indicative of results of operations which may occur
in the future. The results do not reflect synergies.

          Nine Months Ended September 30, 2000
          ---------------------------------------------------------------------

          In thousands, except per share amounts (unaudited)
          Net Sales                                            $25,260
          Net Loss                                             $ 1,648
          Net Loss per Common Share                            $  1.05

Note 4.
     Effective  January 1, 2001, the Company adopted the provisions of Statement
of Financial  Accounting  Standards  (SFAS) No. 133,  "Accounting for Derivative
Instruments and Hedging Activities" as amended by SFAS No. 138,  "Accounting for
Derivative  Instruments and Certain Hedging Activities." These standards require
the Company to recognize all derivatives as either assets or liabilities at fair
value in its  balance  sheet.  The  accounting  changes  in the fair  value of a
derivative depends on the use of the derivative. To the extent that a derivative
is effective as a hedge of a future exposure to changes in value, the fair value
of the  derivative  is  deferred  in other  comprehensive  income.  Any  portion
considered  to be  ineffective  is  reported  in  the  statement  of  operations
immediately.

     The  adoption  of these  standards  did not have a  material  impact on the
Company's  financial  statements and therefore,  a transition  adjustment is not
separately presented.

     The Financial  Accounting  Standards  Board issued SFAS No. 141,  "Business
Combinations",  and SFAS No. 142, "Goodwill and Other Intangible Assets".  These
statements make significant changes to the accounting for business combinations,
goodwill and intangible assets. SFAS No. 141 eliminates the pooling-of-interests
method of  accounting  for business  combinations  with limited  exceptions  for
combinations  initiated prior to July 1, 2001. In addition, it further clarifies
the criteria for recognition of intangible assets separately from goodwill. This
statement is effective for business combinations completed after June 30, 2001.


<PAGE>

                                       8

SFAS  No.  142   discontinues   the   practice  of   amortizing   goodwill   and
indefinite-lived   intangible   assets  and   initiates  an  annual  review  for
impairment.  Impairment would be examined more frequently if certain  indicators
are encountered. Intangible assets with a determinable useful life will continue
to be amortized  over their useful  lives.  SFAS No. 142 applies to goodwill and
intangible  assets acquired after June 30, 2001.  Goodwill and intangible assets
existing  prior to July 1, 2001 will be  affected  when the  Company  adopts the
statement.  SFAS No. 142 is effective for fiscal years  beginning after December
15,  2001.  The  Company  is  evaluating  the  impact of the  adoption  of these
standards  and has not yet  determined  the effect of adoption on its  financial
position and results of operations.

Note 5.

     During  the  quarter  ended  June  30,  2001,  the  Company  completed  the
termination of its defined benefit pension plan. On the date of the termination,
the Company received cash totaling $2,377,600,  which was less than the carrying
value of the prepaid  pension cost asset of  $3,734,670,  resulting in a loss of
$1,357,070.  This loss was increased by an excise tax totaling  $356,640,  which
resulted in a total loss on this transaction totaling $1,713,710. This amount is
included in other expense in the 2001 statement of operations.

     During the second  quarter  ended June 30, 2001 and the third quarter ended
September 30, 2001,  following the  termination of its defined  benefit  pension
plan, the Company contributed cash of $2,015,000 to the Company's 401(k) savings
plan ("the Plan").  Subsequently,  in June 2001 the Plan acquired 391,297 shares
of the Company's common stock at a price per share of $5.15,  which was based on
an  independent  appraisal.  There were no allocated  shares as of September 30,
2001. The unallocated  shares in the Plan have been classified as treasury stock
in stockholders'  equity.  Compensation expense will be recognized as the shares
are allocated to the participants,  which is expected to occur over a seven-year
period.


<PAGE>

                                       9

                              DANIEL GREEN COMPANY
             Management Discussion & Analysis of Financial Condition
                           and Results of Operations


1.   Liquidity and Capital Resources

     At  September  30, 2001 the Daniel  Green  Company  had working  capital of
     $2,971,666 vs. a working capital deficiency of ($1,607,359) at December 31,
     2000.

     The  consolidated  statement  of cash  flows  for  the  nine  months  ended
     September  30,  2001 shows an increase  of cash of  approximately  $503,113
     since December 31, 2000. Net cash provided from  operations was $1,078,451,
     primarily  due to the  reduction in accounts  receivable  from December 31,
     2000.  During the nine months ended  September  30, 2001  accounts  payable
     trade was reduced by $2,047,304.

     At the end of the third quarter of 2001, total indebtedness was $20,208,137
     which consisted of: line of credit balance,  current of $10,100,365,  notes
     payable,  current,  of $7,293,488  (which includes  $750,000 due to a major
     stockholder),  notes  payable  noncurrent  of  $1,008,333,  and a liability
     relating to the dissenting shareholders of Penobscot of $1,805,951.

     The Company has a revolving line of credit ("revolver"), an additional term
     loan facility in the amount of $6,000,000,  a supplemental loan facility in
     the amount of $2,800,000,  and an additional  bridge loan (amendment to the
     revolver) of  $2,000,000.  The borrowing  base for the revolver is based on
     certain  balances of accounts  receivable and inventory,  as defined in the
     agreement. The maximum credit amount under the revolver is $12,500,000, and
     the interest  rate is prime plus .75% (the prime rate was 6.0% at September
     30,  2001) and the  revolver  expires on April 1,  2003.  The  revolver  is
     secured by accounts receivable,  inventory, and equipment. The term loan is
     payable  through April 1, 2003 and is also secured by accounts  receivable,
     inventory  and  equipment.  The  supplemental  loan  facility is  available
     through April 1, 2003.  The bridge loan has an  expiration  date of May 30,
     2002. A major stockholder of the Company guarantees these facilities.


     The revolver and the term loan  agreements  contain  covenants  relative to
     average  borrowed funds to earnings ratio,  net income,  current ratio, and
     cash flow  coverage.  In addition,  the payment or declaration of dividends
     and  distributions  is  prohibited  unless a written  consent form from the
     lender is received. On May 31, 2001, the bridge loan was executed, and upon
     the effective date of this  amendment to the revolver,  the Bank waived the
     Company's  failure to comply with certain  covenants,  subject to complying
     with newly stated covenants.

<PAGE>

                                       10

     Management is not aware of any known demands,  commitments,  or events that
     would materially effect its liquidity.  There are no material  expenditures
     or commitments,  which would affect capital resources in a significant way.
     Cash generated by  operations,  supplemented  by  borrowings,  should cover
     planned requirements.

2.   Results of Operations

     Net Sales for the third  quarter of 2001 were  $12.9  million  compared  to
     $11.2 million for the same period last year. This year's results  represent
     a 15% increase  over the results for last year.  The net sales  increase is
     primarily attributable to the Trotters and Softwalk brands, which were part
     of the Penobscot Shoe Company acquisition, which took place in 2000.

     The gross margin in the current quarter was approximately  31%, compared to
     36% in the same quarter last year.  This reduction is  attributable  to the
     increased  costs  associated with returns and allowances in 2001 over 2000,
     as well as procurement  costs associated with product receipts in the third
     quarter of 2001, greater than 2000.

     Selling,  general and administrative  expenses as a percentage of net sales
     were 22% or $2.8 million for the third quarter of 2001 as compared to 26.3%
     or $2.9 million for the same  quarter in 2000.  The results in 2000 include
     amounts  associated  with  closing and securing  the  Company's  Dolgeville
     location and terminated employees' severance packages.

     For the nine months  ended  September  30,  2001,  income  before taxes and
     before other expenses associated with the pension  termination  referred to
     in Note 5 was $1,218,975 as compared to a loss of ($2,160,746) for the same
     period in the prior year.

     During the third quarter of 2001,  interest expense amounted to $297,910 as
     compared to  $451,430  for the third  quarter of 2000.  For the nine months
     ended September 30, 2001,  interest expense amounted to $1,307,644 compared
     to $520,712 for the same period last year.

     Given the  challenging  retail  environment  and the  recent  events of the
     terrorists' attacks on the country,  which has had a negative impact on the
     overall  economy,  management is pleased with the  performance  and results
     primarily as they relate to the Trotters  and  Softwalk  brands.  Our order
     backlog position continues to run ahead of last year's results.


<PAGE>

                                       11


Part II - Other Information


1.   Legal Proceedings - None.

2.   Changes in Securities - None.

3.   Default upon Senior Securities - None.

4.   Submission of matters to a vote of security holders - None.

5.   Other information - None.

6.   Exhibits and Reports on Form 8K - Exhibit index  appearing  after signature
     page is hereby incorporated by reference.


     Pursuant to the  requirements  of the Securities  Exchange Act of 1934, the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned, thereunto, duly authorized.


                              DANIEL GREEN COMPANY
                                   Registrant


Date:
      ------------------                              -------------------------
                                                      Robert M. Weedon
                                                      Chief Financial Officer


                                                      /s/ James R. Riedman
                                                      -------------------------
                                                      James R. Reidman
                                                      Chief Executive Officer