----

----

| Pennsylvania                                                   |   | 25-1001433                           |
|---------------------------------------------------------------------|--------|--------------------------------------|
| (State or other jurisdiction of incorporation or organization) |   | (I.R.S. Employer Identification No.) |

| 10011 Pines Blvd., Suite #203-C, Pembroke Pines, Florida  |   |  33024 |
|----------------------------------------------------------------|--------|-------------|
| (Address of principal executive offices)                       |   | (Zip Code)  |

| Large accelerated filer     |  o | Accelerated filer          |  o      |
|-----------------------------|---------|---------------------------------|--------------|
| Non-accelerated filer  |  o | Smaller reporting company  |  þ |

| Title of each class                     |   | Outstanding at November 16, 2010 |
|----------------------------------------------|--------|----------------------------------|
| Common Stock, Par Value $.20 Per Share  |   | 3,153,596 shares                 |

----

----

----

| ASSETS                                                      |   | October 2, 2010 |       |   | January 2, 2010 |   |
|-------------------------------------------------------------|--------|-----------------|------------|--------|-----------------|--------|
|                                                        |   | (UNAUDITED)     |       |   |            |   |
| Current Assets:                                             |   |            |       |   |            |   |
| Cash and Cash Equivalents                                   |   | $               | 746,092    |   |            | $      | 156,171 |   |
| Accounts Receivable, less allowance for                     |   |            |       |   |            |   |   |   |
| doubtful accounts ($264,333 and $269,080)                   |   |            | 1,059,174  |   |            |   | 1,164,669 |   |
| Inventories                                                 |   |            | 1,858,678  |   |            |   | 2,107,151 |   |
| Income Taxes Receivable                                     |   |            | -          |   |            |   | 1,215,000 |   |
|  Other Current Assets                                  |   |            | 395,468    |   |            |   | 366,047 |   |
| Total Current Assets                                        |   |            | 4,059,412  |   |            |   | 5,009,038 |   |
|                                                        |   |            |       |   |            |   |   |   |
| Property and Equipment                                      |   |            |       |   |            |   |   |   |
| Land, Buildings & Improvements                          |   |            | 2,872,422  |   |            |   | 2,872,421 |   |
| Machinery, Equipment, Furniture & Fixtures and Software |   |            | 7,228,162  |   |            |   | 7,270,508 |   |
| Total Property and Equipment                                |   |            | 10,100,584 |   |            |   | 10,142,929 |   |
| Less: Accumulated Depreciation and Amortization             |   |            | 7,017,783  |   |            |   | 7,075,614 |   |
| Active Assets, Net                                          |   |            | 3,082,801  |   |            |   | 3,067,315 |   |
| Property Held for Sale, Net                                 |   |            | 3,132,989  |   |            |   | 3,357,565 |   |
| Net Property and Equipment                                  |   |            | 6,215,790  |   |            |   | 6,424,880 |   |
|                                                        |   |            |       |   |            |   |   |   |
| Goodwill, less accumulated Amortization of $1,348,569       |   |            | 3,317,008  |   |            |   | 3,305,008 |   |
| Deferred Income taxes                                       |   |            | 1,516,000  |   |            |   | 1,053,000 |   |
| Other Assets                                                |   |            | 65,930     |   |            |   | 378,741 |   |
|                                                        |   |            |       |   |            |   |   |   |
| Total Assets                                                |   | $               | 15,174,140 |   |            | $      | 16,170,667 |   |
|                                                        |   |            |       |   |            |   |   |   |
| LIABILITIES & STOCKHOLDERS' EQUITY                      |   |            |       |   |            |   |   |   |
|                                                        |   |            |       |   |            |   |   |   |
| Current Liabilities:                                        |   |            |       |   |            |   |   |   |
| Accounts Payable                                            |   | $               | 629,303    |   |            | $      | 553,086 |   |
|   Current Maturities of Long-term Debt                 |   |            | 3,253,640  |   |            |   | 3,526,484 |   |
|   Checks Issued But Not Yet Presented                  |   |            | -          |   |            |   | 135,518 |   |
|   Accrued Expenses:                                    |   |            |       |   |            |   |   |   |
| Compensation                                                |   |            | 252,488    |   |            |   | 175,311 |   |
| Other                                                       |   |            | 853,849    |   |            |   | 811,234 |   |
| Total Current Liabilities                                   |   |            | 4,989,280  |   |            |   | 5,201,633 |   |
|                                                        |   |            |       |   |            |   |   |   |
| Long-Term Debt                                              |   |            | 385,000    |   |            |   | 490,000 |   |
| Total Liabilities                                           |   |            | 5,374,280  |   |            |   | 5,691,633 |   |
|                                                        |   |            |       |   |            |   |   |   |
| Stockholders' Equity                                        |   |            |       |   |            |   |   |   |
| Common Stock $.20 par value: Authorized shares, 10,000,000; |   |            |       |   |            |   |   |   |
| Issued shares, 4,867,440 and 4,808,729                      |   |            | 973,488    |   |            |   | 961,746 |   |
| Paid-in Capital                                             |   |            | 2,175,661  |   |            |   | 2,098,287  |   |
| Retained Earnings                                           |   |            | 14,963,634 |   |            |   | 15,731,924  |   |
|                                                        |   |            | 18,112,783 |   |            |   | 18,791,957 |   |
| Less: Treasury stock, at cost: 1,713,844 shares             |   |            | 8,312,923  |   |            |   | 8,312,923 |   |
| Total Stockholders' Equity                                  |   |            | 9,799,860  |   |            |   | 10,479,034 |   |
| Total Liabilities and Stockholders' Equity                  |   | $               | 15,174,140 |   |            | $      | 16,170,667 |   |

----

|                                          |   | For the Thirteen Weeks Ended |      | For the Thirty-Nine Weeks Ended |   |
|-----------------------------------------------|--------|------------------------------|-----------|---------------------------------|--------|
|                                          |   | October 2, 2010              |      | October 3, 2009                 |   | October 2, 2010 |   | October 3, 2009 |
| Net Sales                                     |   | $                            | 3,604,527 |                            |   |   | 100.0 | % |   | $ | 4,493,365 |   |   |   | 100.0 | % |   | $ | 12,324,181 |   |   |   | 100.0 | % |   | $ | 15,276,398 |   |   |   | 100.0 | % |
| Cost of Products Sold                         |   |                         | 2,846,851 |                            |   |   | 79.0 | % |   |   | 3,531,984 |   |   |   | 78.6 | % |   |   | 9,666,876 |   |   |   | 78.4 | % |   |   | 12,365,268 |   |   |   | 80.9 | % |
| Gross Profit                                  |   |                         | 757,676   |                            |   |   | 21.0 | % |   |   | 961,381 |   |   |   | 21.4 | % |   |   | 2,657,305 |   |   |   | 21.6 | % |   |   | 2,911,130 |   |   |   | 19.1 | % |
|                                          |   |                         |      |                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Selling and Administrative Expenses           |   |                         | 1,234,561 |                            |   |   | 34.2 | % |   |   | 1,473,987 |   |   |   | 32.8 | % |   |   | 3,766,027 |   |   |   | 30.6 | % |   |   | 5,793,628 |   |   |   | 37.9 | % |
| Operating Loss                                |   |                         | (476,885  | )                               |   |   | -13.2 | % |   |   | (512,606 | ) |   |   | -11.4 | % |   |   | (1,108,722 | ) |   |   | -9.0 | % |   |   | (2,882,498 | ) |   |   | -18.8 | % |
|                                          |   |                         |      |                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other Income (Expense)                        |   |                         |      |                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest, Investment and                      |   |                         |      |                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other Income                                  |   |                         | 4,823     |                            |   |   | 0.1 | % |   |   | 7,702 |   |   |   | 0.2 | % |   |   | 19,898 |   |   |   | 0.2 | % |   |   | 19,636 |   |   |   | 0.1 | % |
| Interest Expense                              |   |                         | (43,950   | )                               |   |   | -1.2 | % |   |   | (34,623 | ) |   |   | -0.8 | % |   |   | (142,466 | ) |   |   | -1.2 | % |   |   | (103,775 | ) |   |   | -0.7 | % |
| Loss Before Income Taxes                      |   |                         | (516,012  | )                               |   |   | -14.3 | % |   |   | (539,527 | ) |   |   | -12.0 | % |   |   | (1,231,290 | ) |   |   | -10.0 | % |   |   | (2,966,637 | ) |   |   | -19.4 | % |
| Provision for Income Taxes                    |   |                         | (195,000  | )                               |   |   | -5.4 | % |   |   | (71,000 | ) |   |   | -1.6 | % |   |   | (463,000 | ) |   |   | -3.8 | % |   |   | (841,000 | ) |   |   | -5.5 | % |
|                                          |   |                         |      |                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net Loss                                      |   | $                            | (321,012  | )                               |   |   | -8.9 | % |   | $ | (468,527 | ) |   |   | -10.4 | % |   | $ | (768,290 | ) |   |   | -6.2 | % |   | $ | (2,125,637 | ) |   |   | -13.9 | % |
|                                          |   |                         |      |                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                          |   |                         |      |                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| EARNINGS PER SHARE                            |   |                         |      |                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic                                         |   | $                            | (0.10     | )                               |   |   |   |   |   | $ | (0.16 | ) |   |   |   |   |   | $ | (0.25 | ) |   |   |   |   |   | $ | (0.71 | ) |   |   |   |   |
| Diluted                                       |   | $                            | (0.10     | )                               |   |   |   |   |   | $ | (0.16 | ) |   |   |   |   |   | $ | (0.25 | ) |   |   |   |   |   | $ | (0.71 | ) |   |   |   |   |
|                                          |   |                         |      |                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Weighted Average Number of Shares Outstanding |   |                         |      |                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic                                         |   |                         | 3,140,407 |                            |   |   |   |   |   |   | 3,022,493 |   |   |   |   |   |   |   | 3,121,460 |   |   |   |   |   |   |   | 2,987,849 |   |   |   |   |   |
| Diluted                                       |   |                         | 3,140,407 |                            |   |   |   |   |   |   | 3,022,493 |   |   |   |   |   |   |   | 3,121,460 |   |   |   |   |   |   |   | 2,987,849 |   |   |   |   |   |

----

| DECORATOR INDUSTRIES, INC |
|---------------------------|
| STATEMENTS OF CASH FLOWS  |
| (UNAUDITED)               |

|                                                |   | For the Thirty-Nine Weeks Ended |      |
|-----------------------------------------------------|--------|---------------------------------|-----------|
|                                                |   | October 2, 2010                 |      |   | October 3, 2009 |   |
| Cash Flows From Operating Activities:               |   |                            |      |   |   |   |
| Net Loss                                            |   | $                               | (768,290  | ) |   | $ | (2,125,637 | ) |
| Adjustments to Reconcile Net Loss to Net Cash       |   |                            |      |   |   |   |   |   |
| Used in Operating Activities                        |   |                            |      |   |   |   |   |   |
| Depreciation and Amortization                       |   |                            | 248,549   |   |   |   | 363,921 |   |
| Provision for Losses on Accounts Receivable         |   |                            | 50,000    |   |   |   | 72,651 |   |
| Deferred Taxes                                      |   |                            | (463,000  | ) |   |   | (841,000 | ) |
| Stock-Based Compensation                            |   |                            | 23,947    |   |   |   | 15,280 |   |
| Loss/(Gain) on Disposal of Assets                   |   |                            | (20,067   | ) |   |   | 77,976 |   |
| Noncash charges for asset impairment                |   |                            | -         |   |   |   | 365,500 |   |
| Increase/(Decrease) from Changes in:                |   |                            |      |   |   |   |   |   |
| Accounts Receivable                                 |   |                            | 55,495    |   |   |   | 36,737 |   |
| Inventories                                         |   |                            | 248,473   |   |   |   | 1,747,588 |   |
| Income Taxes Receivable                             |   |                            | 1,215,000 |   |   |   | - |   |
| Prepaid Expenses                                    |   |                            | (29,421   | ) |   |   | (204,211 | ) |
| Other Assets                                        |   |                            | 312,811   |   |   |   | (73,545 | ) |
| Accounts Payable                                    |   |                            | 76,217    |   |   |   | (196,680 | ) |
| Accrued Expenses                                    |   |                            | 130,823   |   |   |   | (898,190 | ) |
| Net Cash Provided by/(Used in) Operating Activities |   |                            | 1,080,537 |   |   |   | (1,659,610 | ) |
|                                                |   |                            |      |   |   |   |   |   |
| Cash Flows From Investing Activities:               |   |                            |      |   |   |   |   |   |
| Net cash paid for acquisitions                      |   |                            | (23,032   | ) |   |   | (21,410 | ) |
| Capital Expenditures                                |   |                            | (299,641  | ) |   |   | (109,144 | ) |
| Proceeds from Property Dispositions                 |   |                            | 280,250   |   |   |   | 1,462,225 |   |
| Net Cash Provided by/(Used in) Investing Activities |   |                            | (42,423   | ) |   |   | 1,331,671 |   |
|                                                |   |                            |      |   |   |   |   |   |
| Cash Flows From Financing Activities:               |   |                            |      |   |   |   |   |   |
| Long-term Debt Payments                             |   |                            | (90,000   | ) |   |   | (90,000 | ) |
| Change in Checks Issued but Not Yet Presented       |   |                            | (135,518  | ) |   |   | 17,941 |   |
| Net Borrowings under Line-of-Credit Agreement       |   |                            | (287,844  | ) |   |   | 430,400 |   |
| Issuance of Stock for Directors Trust               |   |                            | 57,249    |   |   |   | 65,109 |   |
| Proceeds from Directors' Trust Stock Purchase       |   |                            | 7,920     |   |   |   | - |   |
| Net Cash Provided by/(Used in) Financing Activities |   |                            | (448,193  | ) |   |   | 423,450 |   |
|                                                |   |                            |      |   |   |   |   |   |
| Net Increase in Cash and Cash Equivalents           |   |                            | 589,921   |   |   |   | 95,511 |   |
| Cash and Cash Equivalents at Beginning of Year      |   |                            | 156,171   |   |   |   | 16,499 |   |
|                                                |   |                            |      |   |   |   |   |   |
| Cash and Cash Equivalents at End of Period          |   | $                               | 746,092   |   |   | $ | 112,010 |   |
|                                                |   |                            |      |   |   |   |   |   |
| Supplemental Disclosures of Cash Flow Information:  |   |                            |      |   |   |   |   |   |
| Cash Paid for:                                      |   |                            |      |   |   |   |   |   |
| Interest                                            |   | $                               | 145,623   |   |   | $ | 100,991 |   |
| Income Taxes                                        |   | $                               | -         |   |   | $ | - |   |
|                                                |   |                            |      |   |   |   |   |   |
| Increase in Acquisition Cost/Goodwill               |   | $                               | 12,000    |   |   | $ | 42,410 |   |
| Working Capital, other than Cash                    |   |                            | 11,032    |   |   |   | (21,000 | ) |
| Net Cash Paid for Acquisition/Goodwill              |   | $                               | 23,032    |   |   | $ | 21,410 |   |

----

| NOTE 1. | In the opinion of management, the accompanying unaudited financial statements contain all adjustments necessary to present fairly the Company’s financial position as of October 2, 2010, the changes therein for the thirty-nine week period then ended and the results of operations for the thirty-nine week periods ended October 2, 2010 and October 3, 2009. |
|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| NOTE 2. | The financial statements included in the Form 10-Q are presented in accordance with the requirements of the Form and do not include all of the disclosures required by accounting principles generally accepted in the United States of America.  For additional information, reference is made to the Company’s annual report on Form 10-K for the year ended January 2, 2010.  The results of operations for the thirty-nine week periods ended October 2, 2010 and October 3, 2009 are not necessarily indicative of operating results for the full year. |
|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| NOTE 3. | INVENTORIES |
|---------|-------------|

|   | Inventories at October 2, 2010 and January 2, 2010 consisted of the following: |
|--------|--------------------------------------------------------------------------------|

|                          |   | October 2, 2010 |      |   | January 2, 2010 |   |
|-------------------------------|--------|-----------------|-----------|--------|-----------------|--------|
| Raw Material and Supplies     |   | $               | 1,487,773 |   |            | $      | 1,653,893 |   |
| In Process and Finished Goods |   |            | 370,905   |   |            |   | 453,258 |   |
| Total Inventory               |   | $               | 1,858,678 |   |            | $      | 2,107,151 |   |

| NOTE 4. | EARNINGS PER SHARE |
|---------|--------------------|

|   | Basic earnings per share is computed by dividing net income by the weighted-average number of shares outstanding.  Diluted earnings per share includes the dilutive effect of stock options.  No dilution is shown for all periods since the effect of the stock options on the net loss is antidilutive.  In accordance with ASC Topic 260 “Earnings per Share” (formerly SFAS No. 128), the following is a reconciliation of the numerators and denominators of the basic and diluted EPS computations: |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                |   | For the Thirteen Weeks Ended |      |   | For the Thirty-Nine Weeks Ended |   |
|-----------------------------------------------------|--------|------------------------------|-----------|--------|---------------------------------|--------|
|                                                |   | October 2, 2010              |      |   | October 3, 2009                 |   |   | October 2, 2010 |   |   | October 3, 2009 |   |
| Numerator:                                          |   |                         |      |   |                            |   |   |   |   |   |   |   |
| Net loss                                            |   | $                            | (321,012  | )      |                            | $      | (468,527 | ) |   | $ | (768,290 | ) |   | $ | (2,125,637 | ) |
| Denominator:                                        |   |                         |      |   |                            |   |   |   |   |   |   |   |   |   |   |   |
| Weighted-average number of                          |   |                         |      |   |                            |   |   |   |   |   |   |   |   |   |   |   |
|     common shares outstanding   |   |                         | 3,140,407 |   |                            |   | 3,022,493 |   |   |   | 3,121,460 |   |   |   | 2,987,849 |   |
|                                                |   |                         |      |   |                            |   |   |   |   |   |   |   |   |   |   |   |
| Dilutive effect of                                  |   |                         |      |   |                            |   |   |   |   |   |   |   |   |   |   |   |
|     stock options on net income |   |                         | 0         |   |                            |   | 0 |   |   |   | 0 |   |   |   | 0 |   |
|                                                |   |                         | 3,140,407 |   |                            |   | 3,022,493 |   |   |   | 3,121,460 |   |   |   | 2,987,849 |   |
|                                                |   |                         |      |   |                            |   |   |   |   |   |   |   |   |   |   |   |
| Diluted earnings per share:                         |   | $                            | (0.10     | )      |                            | $      | (0.16 | ) |   | $ | (0.25 | ) |   | $ | (0.71 | ) |

----

|                         | October 2, 2010 |   | January 2, 2010 |
|------------------------------|-----------------|--------|-----------------|
| Current Ratio                | 0.81:1          |   | 0.96:1          |
| Quick Ratio                  | 0.44:1          |   | 0.56:1          |
| Funded Debt to Total Capital | 27.1%           |   | 27.7%           |
| Working Capital              | $(929,868)      |   | $(192,595)      |

----

| (dollars in thousands) |   |                         |   |   |                            |   |   |            |   |   |            |   |   |   |   |   |   |   |   |   |   |   |   |   |
|------------------------|--------|------------------------------|--------|--------|---------------------------------|--------|--------|-----------------|--------|--------|-----------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
|                   |   | For the Thirteen Weeks Ended |   |   | For the Thirty-Nine Weeks Ended |   |
|                   |   | October 2, 2010              |   |   | October 3, 2009                 |   |   | October 2, 2010 |   |   | October 3, 2009 |   |
|                   |   | Net                          |   |   | % of                            |   |   | Net             |   |   | % of            |   |   | Net    |   |   | % of   |   |   | Net    |   |   | % of   |   |
|                   |   | Sales                        |   |   | total                           |   |   | Sales           |   |   | total           |   |   | Sales  |   |   | total  |   |   | Sales  |   |   | total  |   |
| Recreational Vehicle   |   | $                            | 1,091  |   |                            |   | 30     | %               |   | $      | 1,025           |   |   |   | 23     | %      |   | $      | 3,604  |   |   |   | 29     | %      |   | $ | 2,942 |   |   |   | 19 | % |
| Manufactured Housing   |   |                         | 1,094  |   |                            |   | 30     | %               |   |   | 1,299           |   |   |   | 29     | %      |   |   | 3,529  |   |   |   | 29     | %      |   |   | 3,968 |   |   |   | 26 | % |
| Hospitality            |   |                         | 1,420  |   |                            |   | 40     | %               |   |   | 2,169           |   |   |   | 48     | %      |   |   | 5,191  |   |   |   | 42     | %      |   |   | 8,366 |   |   |   | 55 | % |
|                   |   |                         |   |   |                            |   |   |            |   |   |            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total Net Sales        |   | $                            | 3,605  |   |                            |   | 100    | %               |   | $      | 4,493           |   |   |   | 100    | %      |   | $      | 12,324 |   |   |   | 100    | %      |   | $ | 15,276 |   |   |   | 100 | % |

----

|                                |   | Third Quarter |      |   | %        |   |   | Third Quarter |   |   | %         |   |   | $ Increase |   |   |     |   |
|-------------------------------------|--------|---------------|-----------|--------|----------|--------|--------|---------------|--------|--------|-----------|--------|--------|------------|--------|--------|----------|--------|
|                                |   | 2010          |      |   | of Sales |   |   | 2009          |   |   | of Sales  |   |   | (Decrease) |   |   | % Change |   |
| Net Sales                           |   | $             | 3,604,527 |   |     |   | 100    | %             |   | $      | 4,493,365 |   |   |       | 100    | %      |     | $      | (888,838 | ) |   |   | -19.8 | % |
| Cost of Products Sold               |   |          | 2,846,851 |   |     |   | 79.0   | %             |   |   | 3,531,984 |   |   |       | 78.6   | %      |     |   | (685,133 | ) |   |   | -19.4 | % |
| Gross Profit                        |   |          | 757,676   |   |     |   | 21.0   | %             |   |   | 961,381   |   |   |       | 21.4   | %      |     |   | (203,705 | ) |   |   | -21.2 | % |
|                                |   |          |      |   |     |   |   |          |   |   |      |   |   |       |   |   |     |   |   |   |   |   |   |   |
| Selling and Administrative Expenses |   |          | 1,234,561 |   |     |   | 34.2   | %             |   |   | 1,473,987 |   |   |       | 32.8   | %      |     |   | (239,426 | ) |   |   | -16.2 | % |
| Operating Loss                      |   |          | (476,885  | )      |     |   | -13.2  | %             |   |   | (512,606  | )      |   |       | -11.4  | %      |     |   | 35,721 |   |   |   | -7.0 | % |
|                                |   |          |      |   |     |   |   |          |   |   |      |   |   |       |   |   |     |   |   |   |   |   |   |   |
| Other Income/(Expense)              |   |          |      |   |     |   |   |          |   |   |      |   |   |       |   |   |     |   |   |   |   |   |   |   |
| Interest, Investment and            |   |          |      |   |     |   |   |          |   |   |      |   |   |       |   |   |     |   |   |   |   |   |   |   |
|    Other Income      |   |          | 4,823     |   |     |   | 0.1    | %             |   |   | 7,702     |   |   |       | 0.2    | %      |     |   | (2,879 | ) |   |   | -37.4 | % |
| Interest Expense                    |   |          | (43,950   | )      |     |   | -1.2   | %             |   |   | (34,623   | )      |   |       | -0.8   | %      |     |   | (9,327 | ) |   |   | 26.9 | % |
| Loss Before Income Taxes            |   |          | (516,012  | )      |     |   | -14.3  | %             |   |   | (539,527  | )      |   |       | -12.0  | %      |     |   | 23,515 |   |   |   | -4.4 | % |
| Provision for Income Taxes          |   |          | (195,000  | )      |     |   | -5.4   | %             |   |   | (71,000   | )      |   |       | -1.6   | %      |     |   | (124,000 | ) |   |   | 174.6 | % |
|                                |   |          |      |   |     |   |   |          |   |   |      |   |   |       |   |   |     |   |   |   |   |   |   |   |
| Net Loss                            |   | $             | (321,012  | )      |     |   | -8.9   | %             |   | $      | (468,527  | )      |   |       | -10.4  | %      |     | $      | 147,515 |   |   |   | -31.5 | % |

----

----

|                                |   | First       |       |   |     |   |   | First       |   |   |       |   |   |       |   |   |     |   |
|-------------------------------------|--------|-------------|------------|--------|----------|--------|--------|-------------|--------|--------|------------|--------|--------|------------|--------|--------|----------|--------|
|                                |   | Nine Months |       |   | %        |   |   | Nine Months |   |   | %          |   |   | $ Increase |   |   |     |   |
|                                |   | 2010        |       |   | of Sales |   |   | 2009        |   |   | of Sales   |   |   | (Decrease) |   |   | % Change |   |
| Net Sales                           |   | $           | 12,324,181 |   |     |   | 100    | %           |   | $      | 15,276,398 |   |   |       | 100    | %      |     | $      | (2,952,217 | ) |   |   | -19.3 | % |
| Cost of Products Sold               |   |        | 9,666,876  |   |     |   | 78.4   | %           |   |   | 12,365,268 |   |   |       | 80.9   | %      |     |   | (2,698,392 | ) |   |   | -21.8 | % |
| Gross Profit                        |   |        | 2,657,305  |   |     |   | 21.6   | %           |   |   | 2,911,130  |   |   |       | 19.1   | %      |     |   | (253,825 | ) |   |   | -8.7 | % |
|                                |   |        |       |   |     |   |   |        |   |   |       |   |   |       |   |   |     |   |   |   |   |   |   |   |
| Selling and Administrative Expenses |   |        | 3,766,027  |   |     |   | 30.6   | %           |   |   | 5,793,628  |   |   |       | 37.9   | %      |     |   | (2,027,601 | ) |   |   | -35.0 | % |
| Operating Loss                      |   |        | (1,108,722 | )      |     |   | -9.0   | %           |   |   | (2,882,498 | )      |   |       | -18.8  | %      |     |   | 1,773,776 |   |   |   | -61.5 | % |
|                                |   |        |       |   |     |   |   |        |   |   |       |   |   |       |   |   |     |   |   |   |   |   |   |   |
| Other Income/(Expense)              |   |        |       |   |     |   |   |        |   |   |       |   |   |       |   |   |     |   |   |   |   |   |   |   |
| Interest, Investment and            |   |        |       |   |     |   |   |        |   |   |       |   |   |       |   |   |     |   |   |   |   |   |   |   |
|    Other Income      |   |        | 19,898     |   |     |   | 0.2    | %           |   |   | 19,636     |   |   |       | 0.1    | %      |     |   | 262 |   |   |   | 1.3 | % |
| Interest Expense                    |   |        | (142,466   | )      |     |   | -1.2   | %           |   |   | (103,775   | )      |   |       | -0.7   | %      |     |   | (38,691 | ) |   |   | 37.3 | % |
| Loss Before Income Taxes            |   |        | (1,231,290 | )      |     |   | -10.0  | %           |   |   | (2,966,637 | )      |   |       | -19.4  | %      |     |   | 1,735,347 |   |   |   | -58.5 | % |
| Provision for Income Taxes          |   |        | (463,000   | )      |     |   | -3.8   | %           |   |   | (841,000   | )      |   |       | -5.5   | %      |     |   | 378,000 |   |   |   | -44.9 | % |
|                                |   |        |       |   |     |   |   |        |   |   |       |   |   |       |   |   |     |   |   |   |   |   |   |   |
| Net Loss                            |   | $           | (768,290   | )      |     |   | -6.2   | %           |   | $      | (2,125,637 | )      |   |       | -13.9  | %      |     | $      | 1,357,347 |   |   |   | -63.9 | % |

----

|                                      |   | For the Thirteen Weeks Ended |     |   | For the Thirty-Nine Weeks Ended |   |
|-------------------------------------------|--------|------------------------------|----------|--------|---------------------------------|--------|
|                                      |   | October 2, 2010              |     |   | October 3, 2009                 |   |   | October 2, 2010 |   |   | October 3, 2009 |   |
|  Net Loss                            |   | $                            | (321,012 | )      |                            | $      | (468,527 | ) |   | $ | (768,290 | ) |   | $ | (2,125,637 | ) |
|                                      |   |                         |     |   |                            |   |   |   |   |   |   |   |   |   |   |   |
|  Add:                                |   |                         |     |   |                            |   |   |   |   |   |   |   |   |   |   |   |
|  Interest                            |   |                         | 43,950   |   |                            |   | 34,623 |   |   |   | 142,466 |   |   |   | 103,775 |   |
|  Taxes                               |   |                         | (195,000 | )      |                            |   | (71,000 | ) |   |   | (463,000 | ) |   |   | (841,000 | ) |
|  Depreciation & Amortization     |   |                         | 84,464   |   |                            |   | 102,089 |   |   |   | 248,549 |   |   |   | 363,921 |   |
|  Loss/(Gain) on Disposal of Assets   |   |                         | (881     | )      |                            |   | (10,152 | ) |   |   | (20,067 | ) |   |   | 77,976 |   |
|  Noncash charge for Asset Impairment |   |                         | -        |   |                            |   | - |   |   |   | - |   |   |   | 365,500 |   |
|                                      |   |                         |     |   |                            |   |   |   |   |   |   |   |   |   |   |   |
|  EBITDA                              |   | $                            | (388,479 | )      |                            | $      | (412,967 | ) |   | $ | (860,342 | ) |   | $ | (2,055,465 | ) |

----

----

|   | 10AA | Revolving Promissory Note dated May 24, 2006, and Term Promissory Note of same date, and related Loan Agreement with Wachovia Bank (now, Wells Fargo Bank) of same date. |
|--------|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 10AA.3 | Modification Agreement with Wachovia Bank (now, Wells Fargo Bank) dated September 30, 2009. |
|--------|--------|---------------------------------------------------------------------------------------------|

|   | 31.1 | Certification of Principal Executive Officer. |
|--------|------|-----------------------------------------------|

|   | 31.2 | Certification of Principal Financial Officer. |
|--------|------|-----------------------------------------------|

|   | 32 | Certificate required by 18 U.S.C. §1350. |
|--------|----|-----------------------------------------------|

|                    | DECORATOR INDUSTRIES, INC.                                |                        |
|-------------------------|-----------------------------------------------------------|-----------------------------|
|                    | (Registrant)                                              |                        |
|                    |                                                      |                        |   |
| Date: December 10, 2010 | By:                                                       | /s/ William A. Johnson |   |
|                    | William A. Johnson, President and Chief Executive Officer |                        |
|                    |                                                      |                        |   |
| Date: December 10, 2010 | By:                                                       | /s/ Michael K. Solomon |   |
|                    | Michael K. Solomon, Chief Financial Officer               |                        |