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UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

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FORM 10-Q

|ý                                                | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 
|------------------------------------------------ | ----------------------------------------------------------------------------------------
|For the quarterly period endedSeptember 30, 2002
|OR                                              
|o                                                | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|For the transition period from
 to              

Commission File Number 1-2385

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THE DAYTON POWER AND LIGHT COMPANY(Exact name of registrant as specified in its charter)

|OHIO(State or other jurisdiction of
incorporation or organization) |  | 31-0258470(I.R.S. Employer Identification No.)
|------------------------------------------------------------------ |  | ----------------------------------------------

1065 Woodman Drive
Dayton, Ohio 45432(Address of principal executive offices)

(937) 224-6000(Registrant's telephone number, including area code)

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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the
past 90 days. Yes ý    No o

Indicate
the number of shares of the issuer's classes of common stock, as of the latest practicable date.

|Common Stock, $.01 par value(Title of each class) |  | 41,172,173 Shares(Outstanding at September 30, 2002)
|------------------------------------------------- |  | ----------------------------------------------------

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THE DAYTON POWER AND LIGHT COMPANY
INDEX



|                              |                |  |                                                                                       |  | Page No.
|----------------------------- | -------------- |  | ------------------------------------------------------------------------------------- |  | --------
|Part I. Financial Information |                | 
|                              | Item 1.        |  | Financial Statements                                                                  |  |         
|                              |                |  | Consolidated Statement of Results of Operations                                       |  | 3       
|                              |                |  | Consolidated Statement of Cash Flows                                                  |  | 4       
|                              |                |  | Consolidated Balance Sheet                                                            |  | 5       
|                              |                |  | Notes to Consolidated Financial Statements                                            |  | 7       
|                              | Item 2.        |  | Management's Discussion and Analysis of Financial Condition and Results of Operations |  | 8       
|                              |                |  | Operating Statistics                                                                  |  | 12      
|                              | Item 3.        |  | Quantitative and Qualitative Disclosures about Market Risk                            |  | 12      
|                              | Item 4.        |  | Controls and Procedures                                                               |  | 12      
|Part II. Other Information    |                | 
|                              | Item 5.        |  | Other Information                                                                     |  | 12      
|                              | Item 6.        |  | Exhibits and Reports on Form 8-K                                                      |  | 14      
|                              | Signatures     |  | 16                                                                                   
|                              | Certifications |  | 17                                                                                   

2

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Part I. Financial Information

Item 1. Financial Statements

THE DAYTON POWER AND LIGHT COMPANY        CONSOLIDATED STATEMENT OF RESULTS OF OPERATIONS        (Dollars in millions)

|                                                                      |                | For the Three Months
Ended September 30, |       | For the Nine Months
Ended September 30, |  
|--------------------------------------------------------------------- | -------------- | ---------------------------------------- | ----- | --------------------------------------- | -
|
|Revenues                                                              |                |                                          |       |                                         |  
|Electric                                                              |                | $                                        | 341.7 |                                         | $
|Expenses                                                              |                |                                          |       |                                         |  
|Fuel                                                                  |                |                                          | 57.6  |                                         |  
|Purchased power                                                       |                |                                          | 38.8  |                                         |  
|Operation and maintenance                                             |                |                                          | 35.3  |                                         |  
|Depreciation and amortization                                         |                |                                          | 29.6  |                                         |  
|Amortization of regulatory assets, net                                |                |                                          | 13.6  |                                         |  
|General taxes                                                         |                |                                          | 29.7  |                                         |  
|                                                                      |                |                                          |       |                                         |  
|                                                                      | Total expenses |                                          |       | 204.6                                   |  
|                                                                      |                |                                          |       |                                         |  
|Operating Income                                                      |                |                                          | 137.1 |                                         |  
|Other income (deductions)                                             |                |                                          | 2.8   |                                         |  
|Interest expense                                                      |                |                                          | (15.9 | )                                       |  
|                                                                      |                |                                          |       |                                         |  
|Income Before Income Taxes and Cumulative Effect of Accounting Change |                |                                          | 124.0 |                                         |  
|Income taxes                                                          |                |                                          | 49.5  |                                         |  
|                                                                      |                |                                          |       |                                         |  
|Income Before Cumulative Effect of Accounting Change                  |                |                                          | 74.5  |                                         |  
|Cumulative effect of accounting change, net of tax                    |                |                                          |      |                                         |  
|                                                                      |                |                                          |       |                                         |  
|Net Income                                                            |                |                                          | 74.5  |                                         |  
|Preferred dividends                                                   |                |                                          | 0.3   |                                         |  
|                                                                      |                |                                          |       |                                         |  
|Earnings on Common Stock                                              |                | $                                        | 74.2  |                                         | $
|                                                                      |                |                                          |       |                                         |  

See
Notes to Consolidated Financial Statements.
These interim statements are unaudited.

3

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THE DAYTON POWER AND LIGHT COMPANY        CONSOLIDATED STATEMENT OF CASH FLOWS        (Dollars in millions)

|                                                                             |                                          | Nine Months Ended
September 30, |       
|---------------------------------------------------------------------------- | ---------------------------------------- | ------------------------------- | ------
|
|Operating Activities                                                         |                                          |                                 |       
|Net income                                                                   |                                          | $                               | 183.0 
|Adjustments:                                                                 |                                          |                                 |       
|                                                                             | Depreciation and amortization            |                                 |       
|                                                                             | Amortization of regulatory assets, net   |                                 |       
|                                                                             | Deferred income taxes                    |                                 |       
|Changes in working capital:                                                  |                                          |                                 |       
|                                                                             | Accounts receivable                      |                                 |       
|                                                                             | Accounts payable                         |                                 |       
|                                                                             | Net intercompany receivables from parent |                                 |       
|                                                                             | Inventories                              |                                 |       
|                                                                             | Accrued taxes payable                    |                                 |       
|                                                                             | Accrued interest payable                 |                                 |       
|Other                                                                        |                                          |                                 | (16.2 
|                                                                             |                                          |                                 |       
|Net cash provided by operating activities                                    |                                          |                                 | 220.2 
|                                                                             |                                          |                                 |       
|Investing Activities                                                         |                                          |                                 |       
|Capital expenditures                                                         |                                          |                                 | (102.1
|Income taxes on gain from sale of natural gas retail distribution operations |                                          |                                 |      
|                                                                             |                                          |                                 |       
|Net cash used for investing activities                                       |                                          |                                 | (102.1
|                                                                             |                                          |                                 |       
|Financing Activities                                                         |                                          |                                 |       
|Issuance of short-term debt, net                                             |                                          |                                 | 45.0  
|Retirement of long-term debt                                                 |                                          |                                 | (0.4  
|Dividends paid on common stock                                               |                                          |                                 | (150.0
|Dividends paid on preferred stock                                            |                                          |                                 | (0.7  
|                                                                             |                                          |                                 |       
|Net cash used for financing activities                                       |                                          |                                 | (106.1
|                                                                             |                                          |                                 |       
|Cash and temporary cash investments                                         |                                          |                                 |       
|Net change                                                                   |                                          |                                 | 12.0  
|Balance at beginning of period                                               |                                          |                                 | 0.9   
|                                                                             |                                          |                                 |       
|Balance at end of period                                                     |                                          | $                               | 12.9  
|                                                                             |                                          |                                 |       
|Cash Paid During the Period for:                                             |                                          |                                 |       
|Interest                                                                     |                                          | $                               | 48.0  
|Income taxes                                                                 |                                          | $                               | 111.2 

See Notes to Consolidated Financial Statements.
The interim statements are unaudited.

4

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THE DAYTON POWER AND LIGHT COMPANY        CONSOLIDATED BALANCE SHEET        (Dollars in millions)

|                                                                                                      |                      | At September 30,
2002 |          | At December 31,
2001 |  
|----------------------------------------------------------------------------------------------------- | -------------------- | --------------------- | -------- | -------------------- | -
|ASSETS                                                                                                |                      |                       |          |                      |  
|Property                                                                                              |                      |                       |          |                      |  
|Property                                                                                              |                      | $                     | 3,770.7  |                      | $
|Less: Accumulated depreciation and amortization                                                       |                      |                       | (1,753.2 | )                    |  
|                                                                                                      |                      |                       |          |                      |  
|                                                                                                      | Net property         |                       |          | 2,017.5              |  
|                                                                                                      |                      |                       |          |                      |  
|Current Assets                                                                                        |                      |                       |          |                      |  
|Cash and temporary cash investments                                                                   |                      |                       | 12.9     |                      |  
|Trade accounts receivable, less provision for uncollectible accounts of $11.9 and $12.4, respectively |                      |                       | 165.5    |                      |  
|Net intercompany receivables with parent company                                                      |                      |                       | 45.5     |                      |  
|Inventories, at average cost                                                                          |                      |                       | 54.5     |                      |  
|Prepaid taxes                                                                                         |                      |                       | 8.4      |                      |  
|Other                                                                                                 |                      |                       | 26.4     |                      |  
|                                                                                                      |                      |                       |          |                      |  
|                                                                                                      | Total current assets |                       |          | 313.2                |  
|                                                                                                      |                      |                       |          |                      |  
|Other Assets                                                                                          |                      |                       |          |                      |  
|Income taxes recoverable through future revenues                                                      |                      |                       | 34.6     |                      |  
|Other regulatory assets                                                                               |                      |                       | 64.0     |                      |  
|Trust assets                                                                                          |                      |                       | 117.7    |                      |  
|Other                                                                                                 |                      |                       | 115.5    |                      |  
|                                                                                                      |                      |                       |          |                      |  
|                                                                                                      | Total other assets   |                       |          | 331.8                |  
|                                                                                                      |                      |                       |          |                      |  
|Total Assets                                                                                          |                      | $                     | 2,662.5  |                      | $
|                                                                                                      |                      |                       |          |                      |  

See
Notes to Consolidated Financial Statements.
These interim statements are unaudited.

5

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THE DAYTON POWER AND LIGHT COMPANY        CONSOLIDATED BALANCE SHEET        (Dollars in millions)  (continued)

|                                     |                                        | At September 30,
2002             |         | At December 31,
2001
|------------------------------------ | -------------------------------------- | --------------------------------- | ------- | --------------------
|CAPITALIZATION AND LIABILITIES       |                                        |                                   |         |                     
|Capitalization                       |                                        |                                   |         |                     
|Common shareholder's equity         |                                        |                                   |         |                     
|                                     | Common stock                           |                                   | $       | 0.4                 
|                                     | Other paid-in capital                  |                                   |         | 771.7               
|                                     | Accumulated other comprehensive income |                                   |         | 3.0                 
|                                     | Earnings reinvested in the business    |                                   |         | 389.5               
|                                     |                                        |                                   |         |                     
|                                     |                                        | Total common shareholder's equity |         |                     
|Preferred stock                      |                                        |                                   | 22.9    |                     
|Long-term debt                       |                                        |                                   | 665.7   |                     
|                                     |                                        |                                   |         |                     
|                                     |                                        | Total capitalization              |         |                     
|                                     |                                        |                                   |         |                     
|Current Liabilities                  |                                        |                                   |         |                     
|Accounts payable                     |                                        |                                   | 89.0    |                     
|Accrued taxes                        |                                        |                                   | 83.7    |                     
|Accrued interest                     |                                        |                                   | 8.4     |                     
|Short-term debt                      |                                        |                                   | 45.0    |                     
|Other                                |                                        |                                   | 19.1    |                     
|                                     |                                        |                                   |         |                     
|                                     |                                        | Total current liabilities         |         |                     
|                                     |                                        |                                   |         |                     
|Deferred Credits and Other           |                                        |                                   |         |                     
|Deferred taxes                       |                                        |                                   | 368.1   |                     
|Unamortized investment tax credit    |                                        |                                   | 55.8    |                     
|Trust obligations                    |                                        |                                   | 100.8   |                     
|Other                                |                                        |                                   | 39.4    |                     
|                                     |                                        |                                   |         |                     
|                                     |                                        | Total deferred credits and other  |         |                     
|                                     |                                        |                                   |         |                     
|Total Capitalization and Liabilities |                                        | $                                 | 2,662.5 |                     
|                                     |                                        |                                   |         |                     

See
Notes to Consolidated Financial Statements.
These interim statements are unaudited.

6

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Notes to Consolidated Financial Statements

1.      The Dayton Power and Light Company ("DP&L" or "the Company") is a wholly owned subsidiary of DPL Inc ("DPL"). DP&L has prepared the
consolidated financial statements in this report without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. These consolidated
financial statements should be read in conjunction with the consolidated financial statements and notes thereto in the Company's 2001 Annual Report on Form 10-K.

2.      Reclassifications
have been made in the presentation of certain prior years' amounts to conform to the current reporting presentation of the Company.

In the opinion of management, the information included in this Form 10-Q reflects all adjustments that are necessary for a fair statement of
the results of operations for the periods presented. Any adjustments are of a normal recurring nature.

3.    Comprehensive
income for the three and nine months ended September 30, 2002 and 2001 consisted of the following:

|                                                                                                   |  | Three Months Ended
September 30, |       | Nine Months Ended
September 30, |  
|-------------------------------------------------------------------------------------------------- |  | -------------------------------- | ----- | ------------------------------- | -
|
|Net income                                                                                         |  | $                                | 74.5  |                                 | $
|Unrealized gains (losses) on financial instruments, net of reclassification adjustments, after tax |  |                                  | (16.0 | )                               |  
|                                                                                                   |  |                                  |       |                                 |  
|Comprehensive income                                                                               |  | $                                | 58.5  |                                 | $
|                                                                                                   |  |                                  |       |                                 |  

4.    DPL's
transmission and distribution and base load and peaking generation operations are managed and evaluated as a single operating segment, Electric.

|                                                                      |       | Three Months Ended
September 30, |       | Nine Months Ended
September 30, |  
|--------------------------------------------------------------------- | ----- | -------------------------------- | ----- | ------------------------------- | -
|
|Net revenues:                                                         |       |                                  |       |                                 |  
|Electric                                                              |       | $                                | 245.3 |                                 | $
|Operating income:                                                     |       |                                  |       |                                 |  
|Electric                                                              |       | $                                | 138.0 |                                 | $
|Other (a)                                                             |       |                                  | (0.9  | )                               |  
|                                                                      |       |                                  |       |                                 |  
|                                                                      | Total |                                  |       | 137.1                           |  
|Other income (deductions)                                             |       |                                  | 2.8   |                                 |  
|Interest expense                                                      |       |                                  | (15.9 | )                               |  
|                                                                      |       |                                  |       |                                 |  
|Income before income taxes and cumulative effect of accounting change |       | $                                | 124.0 |                                 | $
|                                                                      |       |                                  |       |                                 |  

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7

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

The
Dayton Power and Light Company ("DP&L" or "the Company") reported earnings on common stock for the third quarter of 2002 of $74.2 million, a decrease of 13%
from earnings on common stock of $85.2 million for the same quarter last year. Earnings on common stock for the current year-to-date period were $182.3 million, a
decrease of 3% from earnings on common stock of $187.8 million for the same period last year. Operating income for the quarter and year-to-date periods were down 4% to
$137.1 million and $328.6 million, respectively, primarily as a result of lower wholesale revenues and higher operating expenses as discussed below. Results for 2001 included an
operation and maintenance charge of $4.9 million before taxes for a voluntary early retirement program and the accounting change for the adoption of the new accounting standard for derivatives.
Before the effect of non-recurring items, earnings on common stock for the year-to-date period decreased 19%.

Results of Operations

|                  |                       | Three Months Ended
September 30, |       | Nine Months Ended
September 30,
|----------------- | --------------------- | -------------------------------- | ----- | -------------------------------
|
|Electric revenues |                       | $                                | 341.7 |                                
|Fuel              |                       |                                  | 57.6  |                                
|Purchased power   |                       |                                  | 38.8  |                                
|                  |                       |                                  |       |                                
|                  | Net electric revenues |                                  | $     | 245.3                          
|Operating income  |                       | $                                | 137.1 |                                

The
decrease in electric revenues in the third quarter and year-to-date periods as compared to the prior year was primarily the result of lower wholesale
revenues. Wholesale capacity and energy revenues decreased $34.4 million or 39% for the quarter and by $63.4 million or 35% for the nine months primarily as a result of lower wholesale electric
commodity prices. The decreases in wholesale revenues were partially offset by increases in retail residential and commercial revenues resulting from warmer than normal weather in the current period.
Retail residential and commercial revenues increased by $23.0 million or 13% for the quarter and by $23.4 million or 4% for the year-to-date period. Fuel and
purchased power costs decreased as compared to the prior year by $12.3 million or 11% and $30.8 million or 11% for the quarter and year-to-date periods,
respectively, as a result of lower purchased power volumes, and lower average gas and coal prices.

Operation
and maintenance expense increased $2.5 million or 8% and decreased $6.6 million or 6% compared to last year's third quarter and
year-to-date periods, respectively. Both periods benefited from lower planned outage costs and lower ash disposal costs, which were offset by higher employee benefits expense.

General
taxes increased $3.6 million or 14% and by $7.5 million or 10% compared to last year's third quarter and year-to-date periods, respectively.
The increases for both comparison periods were primarily attributable to the impact of the Ohio kWh excise tax that was first implemented in May 2001.

Other
income (deductions) decreased $6.9 million or 71% for the quarter and increased $5.1 million or 59% for the year-to-date period. The decrease
for the quarter was primarily attributable to a $14.5 million insurance claim recognized in the third quarter last year (see "Other Matters"), partially offset by a $4.4 decrease in benefits
costs, a $2.3 million increase in interest income, and a $0.7 million increase in net derivative gains. The increase for the year-to-date period was primarily
attributable to a $6.2 million increase in interest income, $4.2 million in strategic consulting expenses incurred in the first quarter of 2001, and a $1.0 million decrease in net
derivative losses. These

8

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favorable variances were partially offset by a $7.2 million decrease in insurance claims ($7.3 million was recognized in the second quarter of 2002 as compared to $14.5 million
that was recognized in the third quarter of 2001see "Other Matters").

Interest
expense decreased $1.0 million or 2% compared to the first nine months of 2001 primarily as a result of lower average short-term debt levels.

The
prior year cumulative effect of an accounting change reflected the Company's adoption of the provisions of the Financial Accounting Standard Board's ("FASB") Statement
No. 133, "Accounting for Derivative Instruments and Hedging Activities," as amended ("SFAS No. 133"). SFAS No. 133 requires that all derivatives be recognized as either assets or
liabilities in the consolidated balance sheet and be measured at fair value, and changes in the fair value be recorded in earnings, unless they are designated as hedges of an underlying transaction.

Capital Resources and Requirements

Construction additions were $88 million for the first nine months of 2002 and are expected to approximate $135 million for the year. Capital plans
are subject to continuing review and are expected to be revised in light of changes in financial and economic conditions, load forecasts, electricity and fuel price forecasts, legislative and
regulatory developments and changing environmental standards, among other factors. The Company's ability to complete its capital projects and the reliability of future service will be affected by its
financial condition, the availability of external funds at reasonable cost
and adequate and timely rate recovery. The Company expects to finance its capital program in 2002 and 2003 with internal funds.

During
the first quarter of 2001, investing cash flows included a cash payment of $90.9 million for income taxes associated with the tax gain on the sale of the natural gas retail
distribution assets and certain liabilities that was reported in October 2000.

DPL
and its subsidiaries have $200 million available through revolving credit agreements with a consortium of banks. Facility fees are approximately $0.3 million per year.
The primary purpose of the revolving credit facilities is to provide back-up liquidity for the commercial paper program. The Company had no borrowings outstanding under these credit
agreements at September 30, 2002. The Company also has $75 million available in short-term informal lines of credit. The commitment fees are not material. The Company had no
borrowings outstanding under these informal lines and $45 million in commercial paper outstanding at September 30, 2002.

Issuance
of additional amounts of first mortgage bonds by the Company is limited by provision of its mortgage. The amounts and timing of future financings will depend upon market and
other conditions, rate increases, levels of sales, and construction plans. The Company currently has sufficient capacity to issue first mortgage bonds to satisfy requirements in connection with the
financing of its construction and refinancing programs during the five-year period 2002-2006.

At
September 30, 2002, the Company's senior debt credit ratings were as follows:

|                          |  | Rating |  | Outlook 
|------------------------- |  | ------ |  | --------
|Standard & Poor's Corp.   |  | BBB    |  | Stable  
|Moody's Investors Service |  | A2     |  | Negative
|Fitch                     |  | A      |  | Negative

These
credit ratings, which were received in the third quarter as a result of annual credit reviews, are lower than prior ratings and remain investment grade. The rating agencies cited
pressure from reduced wholesale energy prices and concerns regarding the impact of the global economic downturn on the liquidity of DPL's financial asset portfolio as the reason for
their actions.

9

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Market Risk

The carrying value of the Company's debt was $668.1 million at December 31, 2001, consisting of the Company's first mortgage bonds and guaranteed
air quality development obligations. The fair value of this debt was $678.8 million on December 31, 2001, based on current market prices or discounted cash flows using current rates for
similar issues with similar terms and remaining maturities. There have been no material changes in the carrying value or fair value of the Company's long-term debt since
December 31, 2001. The following table presents the principal cash repayments and related weighted average interest rates by maturity date for long-term, fixed-rate debt
at December 31, 2001:

|               |                        | Expected Maturity Date
|-------------- | ---------------------- | ----------------------
|
|Long-term Debt |                        |                       
|               | Amount ($ in millions) |                       
|               | Average rate           |                       

Because the long-term debt is at a fixed rate, the primary market risk to the Company is short-term interest rate risk.
The carrying value and fair value of short-term debt was $45 million with a weighted-average interest rate of 2.0% at September 30, 2002. The interest expense risk resulting
from a hypothetical 10% increase/decrease in the quarterly weighted-average cost of this debt is negligible.

The
Company's financial results are impacted by changes in electricity, coal, and gas commodity prices. Ten percent of the Company's expected 2002 revenues are from spot energy sales in
the wholesale market and sales of peaking capacity. For the summer of 2002, the Company had sold forward approximately 80% of its available 1,100 megawatts of capacity. For the summer of 2003, the
Company expects to have 1,100 megawatts of peaking capacity available for the wholesale market, none of which has been sold forward at this time. Fuel and purchased power costs represented 39% of
total operating costs in 2001. The Company has fully contracted its coal needs for 2002 and approximately 90% for 2003. A 2% change in overall fuel costs would result in a $3.5 million change
in net income.

Critical Accounting Policies

The accounting policies described below are viewed by management as critical because their application is the most relevant and material to the
Company's results of operations and financial position and these policies require the use of material judgments and estimates.

Regulatory
Assets: The Company capitalizes incurred costs as deferred regulatory assets when there is a probable expectation that the costs incurred will be recovered in future revenues
as a result of the regulatory process. See Note 4 to the consolidated financial statements in the Company's 2001 Annual Report on Form 10-K for further discussion of
regulatory matters. The Company applied judgment in the use of this principle when it concluded, as of December 31, 2000, that as a result of deregulation $63.7 million of generation
related regulatory assets were no longer probable of recovery, and wrote off these assets as an extraordinary charge. These estimates are based on expected usage by customer class over the designated
recovery period. At September 30, 2002, $61.1 million of generation related regulatory assets remain on the balance sheet to be recovered over the remaining transition period ending
December 31, 2003.

Unbilled
Revenues: The Company records revenue for retail and other energy sales under the accrual method. For retail customers, revenues are recognized when the services are provided on
the basis of periodic cycle meter readings and include an estimated accrual for the value of electricity provided from the meter reading date to the end of the reporting period. These estimates are
based on the volume of energy delivered, historical usage and growth by customer class and the impact of

10

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weather variations on usage patterns. Unbilled revenues recognized at September 30, 2002 totaled $52.6 million.

Insurance
and Claims: A wholly-owned captive insurance subsidiary of DPL provides insurance coverage solely to DPL and its subsidiaries including, among other coverages, business
interruption and specific risk coverage with respect to electric deregulation. As the outcome of electric deregulation becomes known during the three-year regulatory transition period
ending December 31, 2003, policy payments from the captive subsidiary to DP&L and receivables for insurance claims for DP&L will occur and be reflected in income. As of September 30,
2002, a $36 million receivable has been recognized by DP&L for insurance claims under its business interruption policy. Of this amount, $7.3 million was reported as other income during
the first quarter of 2002.

Other Matters

In June 2001, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 143, "Accounting for Asset Retirement
Obligations" ("SFAS No. 143") that addresses financial accounting and reporting for obligations associated with the retirement of tangible long-lived assets. SFAS No. 143 is
effective for DP&L as of January 1, 2003. DP&L has not yet determined the extent to which its financial condition or results of operations may be affected by the implementation of this
accounting standard.

Forward-looking statements

This report contains certain forward-looking statements regarding plans and expectations for the future. Investors are cautioned that actual outcomes and results
may vary materially from those projected due to various factors beyond the Company's control, including abnormal weather, unusual maintenance or repair requirements, changes in fuel costs, increased
competition, regulatory changes and decisions, changes in accounting rules and adverse economic conditions.

11

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OPERATING STATISTICS

|                                    |              | For the Three Months
Ended September 30, |         | For the Nine Months
Ended September 30,
|----------------------------------- | ------------ | ---------------------------------------- | ------- | ---------------------------------------
|
|Sales (millions of kWh)            |              |                                          |         |                                        
|                                    | Residential  |                                          |         | 1,543                                  
|                                    | Commercial   |                                          |         | 1,047                                  
|                                    | Industrial   |                                          |         | 1,214                                  
|                                    | Other retail |                                          |         | 379                                    
|                                    |              |                                          |         |                                        
|                                    |              | Total retail                             |         |                                        
|                                    | Wholesale    |                                          |         | 1,357                                  
|                                    |              |                                          |         |                                        
|                                    |              | Total                                    |         |                                        
|Revenues (thousands of dollars)    |              |                                          |         |                                        
|                                    | Residential  |                                          | $       | 136,806                                
|                                    | Commercial   |                                          |         | 69,270                                 
|                                    | Industrial   |                                          |         | 55,281                                 
|                                    | Other retail |                                          |         | 25,578                                 
|                                    |              |                                          |         |                                        
|                                    |              | Total retail                             |         |                                        
|                                    | Wholesale    |                                          |         | 54,769                                 
|                                    |              |                                          |         |                                        
|                                    |              | Total                                    |         | $                                      
|Electric customers at end of period |              |                                          | 503,350 |                                        

Item 3.Quantitative and Qualitative Disclosures about Market Risk

See
the "Market Risk" section of Item 2.

Item 4.Controls and Procedures

Within
90 days prior to the filing date of this report, the Company carried out an evaluation, under the supervision and with the participation of the Company's management,
including the Company's Chief
Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company's disclosure controls and procedures. Based on that evaluation, the Chief Executive
Officer and Chief Financial Officer concluded that the Company's disclosure controls and procedures are effective to ensure that information required to be disclosed by the Company in the reports that
it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and
forms.

There
were no significant changes in the Company's internal controls or in other factors that could significantly affect internal controls subsequent to the date of their evaluation.

Part II. Other Information

Item 5.Other Information

Rate Regulation and Government Legislation

The Federal Energy Regulatory Commission ("FERC") issued a final rule on December 20, 1999 specifying the minimum characteristics and functions for
Regional Transmission Organizations ("RTO"). The rule required that all public utilities that own, operate, or control interstate transmission

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file a proposal to join an RTO by October 15, 2000 or file a description of efforts taken to participate in an RTO, reasons for not participating in an RTO, any obstacles to
participation in an RTO, and any plans for further work towards participation. The Company filed with the FERC on October 16, 2000 to join the Alliance RTO. On December 19, 2001, the
FERC issued an Order that did not approve the Alliance RTO as a stand-alone RTO. However, on April 24, 2002, the FERC approved the Alliance Companies' proposal to form an independent
transmission company that will operate under the umbrella of an existing RTO. On May 28, 2002, the Company filed with the FERC stating its intention to join the PJM Interconnection, L.L.C., an
organization responsible for the operation and control of the bulk electric power system throughout major portions of five Mid-Atlantic states and the District of Columbia. On
July 31, 2002, the FERC granted DP&L conditional approval to join PJM. On September 30, 2002, the Company signed an implementation agreement with PJM with the expectation that the
Company will be fully integrated into the PJM market by May 1, 2003.

On
July 31, 2002, the FERC issued a Standard Market Design Notice of Proposed Rulemaking ("SMD NOPR"). The SMD NOPR establishes a set of rules to standardize wholesale electric
market design to
create wholesale competition and efficient transmission systems. The impact on this rulemaking cannot be determined at this time.

The
Company was granted market-base rate authority pursuant to an Order dated September 29, 1996. On September 27, 2002, the Company filed an updated market
power analysis with the FERC in support of its authority to sell power at market-based rates.

On
September 12, 2002, the Ohio Consumers' Counsel, Industrial Energy Users-Ohio and American Municipal Power-Ohio, Inc. filed a complaint with the
Public Utilities Commission of Ohio ("PUCO"). The complaint alleges the Company has failed to join and transfer operational control to a FERC approved RTO. The Company filed a motion to dismiss the
complaint on October 24, 2002. While the Company intends to vigorously defend this case, the impact of the complaint cannot be determined at this time.

On
July 22, 1998, the PUCO approved the implementation of Minimum Electric Service Standards for all of Ohio's investor-owned electric utilities. This Order details minimum
standards of performance for a variety of service-related functions, effective July 1, 1999. On March 21, 2002, the PUCO staff issued additional modifications to rules which are designed
to guide the electric utility companies as they enter deregulation. These rules include certification of providers of competitive retail electric services, minimum competitive retail electric service
standards, monitoring the electric utility market, and noncompetitive electric service and safety. The Company submitted comments on the proposed rules on April 18, 2002. The PUCO issued the
final rules on September 26, 2002. The cost to the Company of compliance with these rules as issued but not yet adopted by the Joint Committee on Agency Rule Review is not expected to be
material.

On
October 10, 2002, the PUCO initiated a proceeding to review the financial condition of major public utilities in Ohio. The purpose of this review is to ensure that any adverse
financial consequences of parent or affiliated companies unregulated operations do not impact the financial integrity of the regulated public utility. The PUCO is not requesting any financial
information from the utilities at this time. The PUCO is accepting comments until November 11, 2002 on the scope of this review. The impact of this review cannot be determined at this time.

On
October 28, 2002, the Company filed with the PUCO requesting to extend its market development period from December 31, 2003 to December 31, 2005. If approved by
the PUCO, the extension of the market development period will continue the Company's current rate structure and provide its retail customers with rate stability.

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Environmental Considerations

The Ohio Environmental Protection Agency adopted rules that will constitute Ohio's State Implementation Plan ("SIP") for nitrogen oxide ("NOx") reductions. The
state rules are substantially similar to the reductions required under the federal Clean Air Act Section 126 rulemaking and federal NOx SIP rule. The Company's current NOx reduction strategy
and associated expenditures to meet the federal reduction requirements should satisfy the state SIP reduction requirements.

In
April 2002, the United States Environmental Protection Agency ("US EPA") issued proposed rules governing existing facilities that have cooling water intake structures. Final
rules are anticipated in August 2003. The impact of the final rules cannot be determined at this time.

In
September 2002, the Company and other parties received a special notice that the US EPA considers them to be Potentially Responsible Parties for the clean up of hazardous
substances at the South Dayton Landfill site in Dayton, Ohio. The US EPA seeks recovery of past costs and funding for a Remedial Investigation and Feasibility Study. The US EPA has not provided an
estimated clean-up cost for this site. The information available does not demonstrate that the Company contributed hazardous substances to the site. The Company will challenge this action.

On
July 29, 2002, the Bush Administration offered proposed legislation known as the "Clear Skies" initiative. The proposal calls for emissions reductions for sulfur dioxide,
nitrogen oxides, and mercury commencing between 2008 and 2010. Senator Jeffords also offered a competing multi-pollutant proposal calling for reductions in sulfur dioxide, nitrogen oxides, mercury,
and carbon dioxide emissions with earlier implementation dates. Neither proposal is expected to be passed in 2002. The impact of the potential legislation, if passed, cannot be determined at this
time.

Item 6.Exhibits and Reports on Form 8-K





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SIGNATURES

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

| | THE DAYTON POWER AND LIGHT COMPANY(Registrant)
| | ----------------------------------------------

|      |  |                  |  |                                                                                                                             
|----- |  | ---------------- |  | ----------------------------------------------------------------------------------------------------------------------------
|Date: |  | October 30, 2002 |  | /s/ELIZABETH M. MCCARTHYElizabeth M. McCarthy
Group Vice President and Chief Financial Officer
(principal financial officer)

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CERTIFICATIONS

I,
Elizabeth M. McCarthy, certify that:



|Date:       |  | October 30, 2002                                 |  | 
|----------- |  | ------------------------------------------------ |  | 
|Signature:  |  | /s/ELIZABETH M. MCCARTHY                         |  | 
|Print Name: |  | Elizabeth M. McCarthy                            |  | 
|Title:      |  | Group Vice President and Chief Financial Officer |  | 

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CERTIFICATIONS

I,
Allen M. Hill, certify that:



|Date:       |  | October 30, 2002        |  | 
|----------- |  | ----------------------- |  | 
|Signature:  |  | /s/ALLEN M. HILL        |  | 
|Print Name: |  | Allen M. Hill           |  | 
|Title:      |  | Chief Executive Officer |  | 

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