Page 1 of 18 Pages


                 UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549
                                       
                                    Form 10-Q

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

   (Mark One)
           [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                For the quarterly period ended September 26, 1998

                                       OR

          [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                        For the transition period from to

                Registration Statement (Form S-4) Number 33-56517


                              AGRILINK FOODS, INC.
             (Exact Name of Registrant as Specified in its Charter)


         New York                                        16-0845824
(State or other jurisdiction of                         (IRS Employer
incorporation or organization                        Identification Number)

             90 Linden Oaks, PO Box 20670, Rochester, NY 14602-6070
               (Address of Principal Executive Offices) (Zip Code)

        Registrant's Telephone Number, Including Area Code (716) 383-1850

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  twelve 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 X NO

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock as of October 31, 1998.

                              Common Stock: 10,000

<PAGE>


                          PART I. FINANCIAL INFORMATION

ITEM I.  FINANCIAL STATEMENTS

Agrilink Foods, Inc.
Consolidated Statement of Operations
(Dollars in Thousands)
<TABLE>

                                                                                        Quarter Ended
                                                                                September 26,   September 27,
                                                                                    1998             1997
<S>                                                                              <C>              <C>     
Net sales                                                                        $ 182,579        $176,397
Cost of sales                                                                     (135,882)       (130,748)
                                                                                 ---------        --------
Gross profit                                                                        46,697          45,649
Selling, administrative, and general expenses                                      (34,867)        (32,954)
Income from Great Lakes Kraut Company                                                  636             164
Gain on sale of aseptic operations                                                  64,202               0
                                                                                 ---------        --------
Operating income before dividing with Pro-Fac                                       76,668          12,859
Interest expense                                                                    (8,336)         (7,638)
                                                                                 ---------        --------
Pretax income before dividing with Pro-Fac and before extraordinary item            68,332           5,221
Pro-Fac share of income before extraordinary item                                   (5,658)         (2,611)
                                                                                 ---------        --------
Income before taxes and before extraordinary item                                   62,674           2,610
Tax provision                                                                      (24,334)         (1,193)
                                                                                 ---------        --------
Income before extraordinary item                                                    38,340           1,417
Extraordinary item relating to the early extinguishment of debt                    (16,366)              0
   (net of income taxes and after dividing with Pro-Fac)                         ---------        --------
Net Income                                                                       $  21,974        $  1,417
                                                                                 =========        ========

<FN>
The  accompanying  notes are an integral  part of these  consolidated  financial
statements.
</FN>
</TABLE>


<PAGE>
<TABLE>


Agrilink Foods, Inc.
Consolidated Balance Sheet
<CAPTION>
(Dollars in Thousands)
                                                               September 26,   June 27,   September 27,
                                                                    1998        1998          1997

                                     ASSETS
<S>                                                             <C>            <C>          <C>     
Current assets:
   Cash and cash equivalents                                    $    9,057     $  5,046     $  3,995
   Accounts receivable trade, net                                   98,911       55,046       65,053
   Accounts receivable, other                                       11,053        3,575        3,863
   Current deferred tax asset                                       13,129        4,642        8,198
   Inventories -
     Finished goods                                                349,451      111,153      140,056
     Raw materials and supplies                                     45,829       30,433       25,413
                                                                ----------     --------     --------
       Total inventories                                           395,280      141,586      165,469
                                                                ----------     --------     --------
   Current investment in CoBank                                      1,330        1,994          631
   Prepaid manufacturing expense                                        98        8,404           84
   Prepaid expenses and other current assets                        17,288       12,989        8,464
                                                                ----------     --------     --------
       Total current assets                                        546,146      233,282      255,757
Investment in CoBank                                                22,377       22,377       24,320
Investment in Great Lakes Kraut Company                              7,223        6,584        6,585
Property, plant and equipment, net                                 317,025      194,615      209,216
Assets held for sale at net realizable value                         2,711        2,662        3,259
Goodwill and other intangible assets, net                          327,650       94,744       95,503
Other assets                                                        24,418       12,175        7,507
Note receivable due from Pro-Fac                                     9,400            0            0
                                                                ----------     --------     --------
       Total assets                                             $1,256,950     $566,439     $602,147
                                                                ==========     ========     ========


                      LIABILITIES AND SHAREHOLDER'S EQUITY
Current liabilities:
   Notes payable                                                $   94,000    $       0     $ 64,000
   Current portion of obligations under capital leases                 256          256          558
   Current portion of long-term debt                                 1,023        8,071        8,073
   Accounts payable                                                 84,493       70,125       38,931
   Income taxes payable                                             12,420        3,943        4,234
   Accrued interest                                                    690        8,559        3,960
   Accrued employee compensation                                    14,329        8,598        7,981
   Other accrued expenses                                           89,746       19,013       21,681
Current liability due to Pro-Fac                                    27,254        6,642        9,659
                                                                ----------     --------     --------
       Total current liabilities                                   324,211      125,207      159,077
Obligations under capital leases                                       503          503          817
Long-term debt                                                     463,700       69,937       70,528
Senior subordinated notes                                               15      160,000      160,000
Subordinated bridge facility                                       200,000            0            0
Subordinated promissory note                                        30,000            0            0
Deferred income tax liabilities                                     35,341       33,154       40,902
Other non-current liabilities                                       26,626       23,053       22,967
                                                                ----------     --------     --------
       Total liabilities                                         1,080,396      411,854      454,291
                                                                ----------     --------     --------
Commitments and contingencies
Shareholder's Equity:
   Common stock, par value $.01;
     10,000 shares outstanding, owned by Pro-Fac                         0            0            0
Accumulated other comprehensive income:
   Minimum pension liability adjustment                               (608)        (608)           0
   Cumulative foreign currency adjustment                               (5)           0            0
Additional paid-in capital                                         167,071      167,071      158,317
Retained earnings (accumulated deficit)                             10,096      (11,878)     (10,461)
                                                                ----------     --------     --------
       Total shareholder's equity                                  176,554      154,585      147,856
                                                                ----------     --------     --------
       Total liabilities and shareholder's equity               $1,256,950     $566,439     $602,147
                                                                ==========     ========     ========

<FN>
The  accompanying  notes are an integral  part of these  consolidated  financial
statements.
</FN>
</TABLE>


<PAGE>

<TABLE>

Agrilink Foods, Inc.
Consolidated Statement of Cash Flows
<CAPTION>
(Dollars in Thousands)
                                                                                             Quarter Ended
                                                                                     September 26,   September 27,
                                                                                         1998            1997
                                                                                     -------------   -------------
<S>
Cash Flows From Operating Activities:                                                 <C>             <C>      
   Net income                                                                         $  21,974       $   1,417
   Adjustments to reconcile net income to net cash used in operating activities -
     Gain on the sale of the aseptic operation                                          (64,202)              0
     Extraordinary item relating to the early extinguishment of debt                     16,366               0
     Amortization of goodwill and other intangibles                                         926             990
     Amortization of debt issue costs                                                       200             199
     Depreciation                                                                         4,385           4,597
     Equity in undistributed earnings of Great Lakes Kraut Company                         (636)           (164)
     Change in assets and liabilities:
       Accounts receivable                                                              (22,222)        (17,442)
       Inventories                                                                      (72,038)        (52,739)
       Income taxes payable                                                              18,940            (918)
       Accounts payable and other accrued expenses                                      (23,305)         (9,994)
       Due to Pro-Fac                                                                    12,870           5,347
       Other assets and liabilities                                                         (26)         (2,291)
                                                                                      ---------       ---------
Net cash used in operating activities                                                  (106,768)        (70,998)
                                                                                      ---------       ---------

Cash Flows From Investing Activities:
   Purchase of property, plant and equipment                                             (4,094)         (3,231)
   Proceeds from disposals                                                               83,000             375
   Proceeds from investment in CoBank                                                       664             316
   Cash paid for acquisitions                                                          (445,918)              0
                                                                                      ---------       ---------
Net cash used in investing activities                                                  (366,348)         (2,540)
                                                                                      ---------       ---------

Cash Flows From Financing Activities:
   Proceeds from issuance of short-term debt                                            177,000          64,000
   Payments on short-term debt                                                          (83,000)              0
   Proceeds from issuance of long-term debt                                             677,100           9,000
   Proceeds from Great Lakes Kraut Company                                                    0           3,000
   Payments on long-term debt                                                          (276,450)         (1,303)
   Cash paid for debt issuance costs                                                    (17,523)              0
                                                                                      ---------       ---------
Net cash provided by financing activities                                               477,127          74,697
                                                                                      ---------       ---------
Net change in cash and cash equivalents                                                   4,011           1,159
Cash and cash equivalents at beginning of period                                          5,046           2,836
                                                                                      ---------       ---------
Cash and cash equivalents at end of period                                            $   9,057       $   3,995
                                                                                      =========       =========
</TABLE>



(Table continued on next page)


<PAGE>


<TABLE>
Agrilink Foods, Inc.
Consolidated Statement of Cash Flows
<CAPTION>
(Dollars in Thousands)

(Table continued from previous page)

                                                                     Quarter Ended
                                                            September 26,        September 27,
                                                                1998                1997
                                                            -------------        ----------

<S>                                                          <C>                   <C>
Supplemental disclosure of cash flow information:
   Acquisition of Dean Foods Vegetable Company
     Accounts receivable                                     $  28,701
     Inventories                                               191,619
     Prepaid expenses and other current assets                   2,871
     Current deferred tax asset                                  6,300
     Property, plant and equipment                             131,648
     Goodwill and other intangible assets                      230,609
     Accounts payable                                          (37,802)
     Accrued employee compensation                              (8,437)
     Other accrued expenses                                    (66,748)
     Long-term debt                                             (2,752)
     Subordinated promissory note                              (30,000)
     Other assets and liabilities, net                          (2,404)
                                                             ---------
                                                             $ 443,605
                                                             =========

   Acquisition of J.A. Hopay Distributing Co., Inc.
     Accounts receivable                                     $     420
     Inventories                                                   153
     Property, plant and equipment                                  51
     Goodwill and other intangible assets                        3,303
     Other accrued expenses                                       (251)
     Obligation for covenant not to compete                     (1,363)
                                                             ---------
                                                             $   2,313     
                                                             =========
   Investment in Great Lakes Kraut Company
     Inventories                                                                   $ 2,175
     Prepaid expenses and other current assets                                         409
     Property, plant and equipment                                                   6,966
     Other accrued expenses                                                            (62)
                                                                                   -------
                                                                                   $ 9,488
                                                                                   =======

<FN>
The  accompanying  notes are an integral  part of these  consolidated  financial
statements.
</FN>
</TABLE>



<PAGE>


                              AGRILINK FOODS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1.       SUMMARY OF ACCOUNTING POLICIES

The accompanying  unaudited consolidated financial statements have been prepared
in accordance with generally accepted accounting principles,  and in the opinion
of management,  include all  adjustments  (consisting  only of normal  recurring
adjustments)  necessary for a fair presentation of the results of operations for
these periods.  Agrilink Foods,  Inc.  ("Agrilink" or the "Company") is a wholly
owned subsidiary of Pro-Fac Cooperative,  Inc. ("Pro-Fac" or the "Cooperative").
These  financial  statements  should be read in  conjunction  with the financial
statements and  accompanying  notes contained in the Company's Form 10-K/A-1 for
the fiscal year ended June 27, 1998.

Consolidation: The consolidated financial statements include the Company and its
wholly owned  subsidiaries  after  elimination of intercompany  transactions and
balances.  Investments  in  affiliates,  owned more than 20  percent  but not in
excess of 50 percent, are recorded under the equity method of accounting.

Reclassification:  Certain  items for  fiscal  1998 have  been  reclassified  to
conform with the current presentation.

Adoption of SFAS No. 130: Effective June 28, 1998, the Company adopted Statement
of  Financial  Accounting  Standards  (SFAS) No. 130,  "Reporting  Comprehensive
Income."  Comprehensive  income is defined as the change in equity of a business
during a period  from  transactions  and other  events  and  circumstances  from
non-owner sources.  Under SFAS No. 130, the term "comprehensive  income" is used
to describe the total of net earnings plus other comprehensive  income which for
the  Company  includes  foreign  currency  translation  adjustments  and minimum
pension  liability  adjustments.  The  adoption  of SFAS No.  130 did not have a
material effect on the Company's results of operations or financial position.

Adoption of SFAS No. 131:  Effective June 28, 1998 the Company  adopted SFAS No.
131, "Disclosures about Segments of an Enterprise and Related Information." SFAS
No. 131 supersedes SFAS No. 14, "Financial  Reporting for Segments of a Business
Enterprise,"  replacing the "industry  segment"  approach with the  "management"
approach.  The management approach designates the internal  organization that is
used by management for making operating  decisions and assessing  performance as
the source of the  Company's  reportable  segments.  SFAS No. 131 also  requires
disclosures about products and services,  geographic areas, and major customers.
The adoption of SFAS No. 131 did not affect the Company's  results of operations
or financial position.

Derivative Financial  Instruments:  The Company does not engage in interest rate
speculation.  Derivative  financial  instruments  are utilized to hedge interest
rate risks and are not held for trading purposes.

The Company  enters into  interest  rate swap  agreements  to limit  exposure to
interest  rate  movements.  Net  payments or receipts  are accrued  into prepaid
expenses and other current assets and/or other accrued expenses and are recorded
as adjustments to interest  expense.  Interest rate instruments are entered into
for periods no greater than the life of the underlying transaction being hedged.
Management  anticipates  that  all  interest  rate  derivatives  will be held to
maturity.   Any  gains  or  losses  on  prematurely   terminated  interest  rate
derivatives  will  be  recognized  over  the  remaining  life,  if  any,  of the
underlying transaction as an adjustment to interest expense.

NOTE 2.       ACQUISITION OF DEAN FOODS VEGETABLE COMPANY

On  September  24, 1998,  Agrilink  acquired  the Dean Foods  Vegetable  Company
("DFVC"),  the frozen and canned vegetable business of Dean Foods Company ("Dean
Foods"),  by acquiring all the outstanding capital stock of Dean Foods Vegetable
Company and Birds Eye de Mexico SA de CV (the "Acquisition"). In connection with
the Acquisition, Agrilink sold its aseptic business to Dean Foods. Agrilink paid
$360  million in cash,  net of the sale of the Aseptic  Business,  and issued to
Dean Foods a $30 million unsecured subordinated promissory note due November 22,
2008 (the "Subordinated Promissory Note"), as consideration for the Acquisition.
The Company has the right,  exercisable  until July 15,  1999,  to require  Dean
Foods,  jointly with the Company,  to treat the Acquisition as an asset sale for
tax purposes under Section  338(h)(10) of the Internal Revenue Code. In order to
exercise that  election,  the Company will pay $13.2 million to Dean Foods.  The
Company intends to exercise that election.



<PAGE>


After  the  Acquisition,  DFVC was  merged  into  the  Company,  and Dean  Foods
Vegetable  Company became a business unit of the Company known as Agrilink Foods
Vegetable  Company  ("AFVC").  DFVC has been one of the  leading  processors  of
vegetables in the United  States,  selling its products under  well-known  brand
names, such as Birds Eye, Freshlike and Veg-All, and private labels. The Company
believes  that the  Acquisition  strengthens  its  competitive  position by: (i)
enhancing  its  brand   recognition   and  market   position,   (ii)   providing
opportunities  for cost savings and operating  efficiencies and (iii) increasing
its product and geographic diversification.

The Acquisition was accounted for under the purchase method of accounting. Under
purchase  accounting,  tangible and identifiable  intangible assets acquired and
liabilities  assumed  will be  recorded at their  respective  fair  values.  The
valuations and other studies which will provide the basis for such an allocation
have not  progressed to a stage where there is sufficient  information to make a
final  allocation in the accompanying  financial  statements.  Accordingly,  the
purchase accounting  adjustments made in the accompanying  financial  statements
are preliminary.  Once an allocation is determined, in accordance with generally
accepted accounting  principles,  any remaining excess of purchase cost over net
assets acquired will be adjusted through goodwill.

Due to  insignificance,  the  results  of  operations  of AFVC  for  the  period
September  24  through  26,  1998  have  not  been  included  in  the  Company's
Consolidated  Statement of Operations  for the three months ended  September 26,
1998.

Concurrently with the Acquisition, Agrilink refinanced its existing indebtedness
(the  "Refinancing"),  including its 12.25 percent Senior Subordinated Notes due
2005 (the "Old  Notes") and its then  existing  bank debt.  On August 24,  1998,
Agrilink commenced a tender offer (the "Tender Offer") for all the Old Notes and
consent solicitation to certain amendments under the indenture governing the Old
Notes to  eliminate  substantially  all the  restrictive  covenants  and certain
events of  default  therein.  Substantially  all of the $160  million  aggregate
principal  amount of the Old Notes were  tendered and  purchased by Agrilink for
aggregate  consideration  of  approximately  $184  million,   including  accrued
interest of $2.9 million.  Agrilink also  terminated  its existing bank facility
(including  seasonal  borrowings)  and  repaid  the  $176.5  million,  excluding
interest owed and breakage fees outstanding thereunder.

In  order to  consummate  the  Acquisition  and the  Refinancing  and to pay the
related fees and expenses, Agrilink: (i) entered into a new credit facility (the
"New Credit  Facility")  providing for $455 million of term loan borrowings (the
"Term Loan Facility") and up to $200 million of revolving credit borrowings (the
"Revolving  Credit  Facility"),  (ii) entered  into a $200  million  bridge loan
facility  (the "Bridge  Facility")  and (iii) issued a $30 million  Subordinated
Promissory Note to Dean Foods.  The Bridge  Facility will be repaid  principally
with the proceeds from a new long-term take-out  financing.  The Bridge Facility
was provided by Warburg Dillon Read LLC, as Arranger and Syndication  Agent; and
UBS AG, Stamford Branch, as  Administrative  Agent; and the Bank of Montreal and
Harris Trust and Savings Bank as additional lenders.

NOTE 3.       AGREEMENTS WITH PRO-FAC

The Company's  contractual  relationship  with Pro-Fac is defined in the Pro-Fac
Marketing and Facilitation  Agreement  ("Agreement").  Under the Agreement,  the
Company pays Pro-Fac the commercial  market value ("CMV") for all crops supplied
by  Pro-Fac.  CMV is  defined  as the  weighted  average  price  paid  by  other
commercial  processors for similar crops sold under  preseason  contracts and in
the open market in the same or competing  market area.  Although CMV is intended
to be no more than the fair market value of the crops purchased by Agrilink,  it
may be more or less than the price  Agrilink would pay in the open market in the
absence of the Agreement.

Under the  Agreement,  the Company is required to have on its board of directors
some  persons  who  are  neither   members  of  nor   affiliated   with  Pro-Fac
("Disinterested Directors"). The number of Disinterested Directors must at least
equal the number of directors who are members of Pro-Fac. The volume and type of
crops to be purchased by Agrilink under the Agreement are determined pursuant to
its annual  profit  plan,  which  requires  the  approval  of a majority  of the
Disinterested  Directors. In addition, under the Agreement, in any year in which
the Company has earnings on products which were processed from crops supplied by
Pro-Fac  ("Pro-Fac  Products"),  the  Company  pays to  Pro-Fac,  as  additional
patronage  income,  90  percent  of such  earnings,  but in no case more than 50
percent of all pretax earnings (before dividing with Pro-Fac) of the Company. In
years in which the Company has losses on Pro-Fac  Products,  the Company reduces
the CMV it would  otherwise  pay to Pro-Fac by up to 90 percent of such  losses,
but in no case by more than 50  percent of all pretax  losses  (before  dividing
with Pro-Fac) of the Company. Additional patronage income is paid to Pro-Fac for
services  provided to Agrilink,  including the provision of a long term,  stable
crop  supply,  favorable  payment  terms for crops,  and the sharing of risks of
losses of certain operations of the business. Earnings and losses are determined
at the end of the fiscal year, but are accrued on an estimated  basis during the
year.  Under the Agreement,  Pro-Fac is required to reinvest at least 70 percent
of the additional Patronage income in Agrilink.
<PAGE>
Amounts  received by Pro-Fac from Agrilink for the quarters ended  September 26,
1998 and September 27, 1997 include: commercial market value of crops delivered,
$44.3  and  $40.6   million,   respectively;   and   additional   proceeds  from
profit/(loss) sharing provisions, $4.0 million and $2.6 million, respectively.

In the first  quarter of fiscal 1999,  the Company  reclassified  a $9.4 million
demand receivable due from Pro-Fac  reflecting the conversion of such receivable
to a non-interest bearing long-term obligation due from Pro-Fac having a 10-year
maturity.

NOTE 4.       DEBT

New Credit Facility: In connection with the Acquisition, the Company has entered
into the New Credit Facility with Harris Bank as  Administrative  Agent and Bank
of  Montreal  as  Syndication  Agent,  and the  lenders  thereunder.  The Credit
Facility  consists of the $200 million  Revolving  Credit  Facility and the $455
million Term Loan  Facility.  The Term Loan  Facility is comprised of the Term A
Facility,  which has a maturity of five years, the Term B Facility,  which has a
maturity of six years,  and the Term C  Facility,  which has a maturity of seven
years. The Revolving Credit Facility has a maturity of five years.

The  New  Credit  Facility  bears  interest,  at the  Company's  option,  at the
Administrative  Agent's alternate base rate or the London Interbank Offered Rate
("LIBOR")  plus,  in  each  case,  applicable  margins  of:  (i) in the  case of
alternate base rate loans, (x) 1.00 percent for loans under the Revolving Credit
Facility  and the Term A Facility,  (y) 2.25  percent for loans under the Term B
Facility  and (z) 2.50  percent for loans under the Term C Facility  and (ii) in
the case of LIBOR loans,  (x) 2.75 percent for loans under the Revolving  Credit
Facility  and the Term A Facility,  (y) 3.25  percent for loans under the Term B
Facility  and (z)  3.50  percent  for  loans  under  the  Term C  Facility.  The
Administrative  Agent's  "alternate base rate" is defined as the greater of: (i)
the prime commercial rate as announced by the  Administrative  Agent or (ii) the
Federal  Funds rate plus 0.50  percent.  In  addition,  the  Company  will pay a
commitment  fee  calculated  at a rate of 0.50  percent  per  annum on the daily
average unused commitment under the Revolving Credit Facility.

Beginning  with the  reporting  period  ending  March 31, 1999,  the  applicable
margins for the New Credit Facility will be subject to possible reductions based
on  the  ratio  of  consolidated  debt  to  earnings  before  interest,   taxes,
depreciation  and  amortization  ("EBITDA")  (each as  defined in the New Credit
Facility).

Upon  consummation of the  Acquisition,  the Company drew $455 million under the
Term Loan Facility, consisting of $100 million, $175 million and $180 million of
loans  under  the  Term  A  Facility,  Term B  Facility  and  Term  C  Facility,
respectively.  Additionally,  the Company drew $93 million  under the  Revolving
Credit  Facility for seasonal  working capital needs and $14.3 million under the
Revolving Credit Facility was issued for letters of credit.

The Term Loan Facility will be subject to the following amortization schedule.


Fiscal Year   Term Loan A     Term Loan B       Term Loan C    Total
-----------   -----------     -----------       -----------    -----
                          (Dollars in millions)
  1999         $   0.0          $  0.2            $   0.2     $   0.4
  2000            15.0             0.4                0.4        15.8
  2001            20.0             0.4                0.4        20.8
  2002            20.0             0.4                0.4        20.8
  2003            20.0             0.4                0.4        20.8
  2004            25.0             0.4                0.4        25.8
  2005             0.0           172.8                0.4       173.2
  2006             0.0             0.0              177.4       177.4
               -------          ------            -------     -------
               $ 100.0          $175.0            $ 180.0     $ 455.0
               =======          ======            =======     =======

The Term  Loan  Facility  is  subject  to  mandatory  prepayment  under  various
scenarios as defined in the New Credit Facility.

The  Company's  obligations  under the New  Credit  Facility  are  secured  by a
first-priority lien on: (i) substantially all existing or after-acquired assets,
tangible or intangible,  (ii) the capital stock of certain of Pro-Fac's  current
and future subsidiaries, and (iii) all of the
<PAGE>
Company's  rights  (principally  indemnification  rights) under the agreement to
acquire DFVC and the Pro-Fac Marketing and Facilitation Agreement. The Company's
obligations  under the New Credit Facility are guaranteed by Pro-Fac and certain
of the Company's current and future subsidiaries, if any.

The New Credit Facility  contains  customary  covenants and  restrictions on the
Company's ability to engage in certain  activities,  including,  but not limited
to:  (i)  limitations  on  the  incurrence  of  indebtedness  and  liens,   (ii)
limitations on sale-leaseback  transactions,  consolidations,  mergers,  sale of
assets,  transactions  with affiliates and investments and (iii)  limitations on
dividend  and  other  distributions.  The  New  Credit  Facility  also  contains
financial  covenants  requiring Pro-Fac to maintain a minimum level of EBITDA, a
minimum  interest  coverage  ratio,  a minimum fixed charge  coverage  ratio,  a
maximum  leverage  ratio and a minimum  level of net  worth.  The  Company is in
compliance with all covenants,  restrictions and requirements under the terms of
the New Credit Facility.

Interest Rate Protection  Agreements:  The Company has entered into a three-year
interest rate swap agreement with the Bank of Montreal in the notional amount of
$150 million.  The swap agreement  provides for an interest rate of 4.96 percent
over the term of the swap payable by the Company in exchange for payments at the
published  three-month  LIBOR. In addition,  the Company entered into a separate
interest rate swap agreement with the Bank of Montreal in the notional amount of
$100 million for an initial period of three years, which may be extended, at the
Company's  option,  for an  additional  two-year  period.  This  swap  agreement
provides  for an  interest  rate of 5.32  percent  over  the  term of the  swap,
including the two-year extension period if the Company elects to extend, payable
by the Company in exchange for payments at the published  three-month LIBOR. The
Company entered into these  agreements in order to manage its interest rate risk
by  exchanging  its floating  rate  interest  payments  for fixed rate  interest
payments.

Subordinated  Bridge  Facility:  To complete the  Acquisition,  the Company also
entered into a Subordinated Bridge Facility (the "Bridge Facility").  The Bridge
Facility  was provided by Warburg  Dillon Read LLC, as Arranger and  Syndication
Agent; and UBS AG, Stamford  Branch,  as  Administrative  Agent; and the Bank of
Montreal and Harris Trust and Savings Bank as additional  lenders.  The interest
rate  under the  Bridge  Facility  resets  monthly  on the basis of LIBOR plus a
spread  of 5  percent  for the  first  90 days,  which  spread  increases  by an
additional  1  percent  each  subsequent  90-day  period.  In no event  will the
interest  rate exceed 16 percent per annum.  The  Company  anticipates  that the
Bridge Facility will be repaid  principally with the proceeds of a new long-term
take-out  financing.  Should the  Company be unable to  complete  its  long-term
take-out  financing,  the Bridge  Facility,  if not repaid within one year,  may
thereafter be converted to permanent  financing with  consistent  interest rates
and a maturity of September, 2006.

Subordinated Promissory Note: As partial consideration for the Acquisition,  the
Company  issued to Dean Foods a  Subordinated  Promissory  Note for $30  million
aggregate  principal amount due November 22, 2008.  Interest on the Subordinated
Promissory Note is payable quarterly in arrears commencing December 31, 1998, at
a rate per annum of 5  percent  until  November  22,  2003,  and at a rate of 10
percent  thereafter.  Interest accruing through November 22, 2003 is required to
be paid in kind through the issuance by the Company of  additional  subordinated
promissory  notes  identical  to  the  Subordinated  Promissory  Note.  Interest
accruing after November 22, 2003 is payable in cash. The Subordinated Promissory
Note may be prepaid at the Company's option without premium or penalty.

The  Subordinated  Promissory Note is expressly  subordinate to the Subordinated
Bridge Facility,  any long-term take-out financing,  and the New Credit Facility
and  contains  no  financial  covenants.  The  Subordinated  Promissory  Note is
guaranteed by Pro-Fac.

12 1/4 Percent Senior  Subordinated  Notes (due 2005):  In conjunction  with the
Acquisition,  the Company repurchased  $159,985,000  principal amount of its Old
Notes,  of  which  $160  million  aggregate   principal  amount  was  previously
outstanding.  The  Company  paid  a  total  of  approximately  $184  million  to
repurchase the Old Notes,  including  interest  accrued thereon of $2.9 million.
Holders who tendered  consented to certain  amendments to the indenture relating
to the Old Notes, which eliminated or amended  substantially all the restrictive
covenants and certain events of default contained in such indenture. The Company
may   repurchase   the  remaining  Old  Notes  in  the  future  in  open  market
transactions, privately negotiated purchases or otherwise.

NOTE 5.       OTHER MATTERS

J.A. Hopay Distributing Co, Inc.:  Effective July 21, 1998, the Company acquired
J.A. Hopay Distributing Co., Inc. ("Hopay") of Pittsburgh,  Pennsylvania.  Hopay
distributes snack products for Snyder of Berlin,  one of the Company's  business
units within its Snack Foods  Group.  The  acquisition  was  accounted  for as a
purchase. The purchase price (net of liabilities assumed) was approximately $2.3
million.  Intangibles of approximately $3.3 million were recorded in conjunction
with this transaction and are being amortized over 30 years.
<PAGE>
Formation of New  Sauerkraut  Company:  Effective  July 1, 1997, the Company and
Flanagan  Brothers,  Inc.  of  Bear  Creek,  Wisconsin,  contributed  all  their
sauerkraut  production related assets to form a new sauerkraut company. This new
company,  Great Lakes Kraut  Company,  operates as a New York limited  liability
company,  with  ownership  split equally  between the two  companies.  The joint
venture is accounted for using the equity method of accounting.

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

The purpose of this discussion is to outline the significant reasons for changes
in the Consolidated  Statement of Operations in the first quarter of fiscal 1999
versus fiscal 1998.

Agrilink  Foods,  Inc.  ("Agrilink" or the "Company") has four primary  business
units:  Curtice Burns Foods ("CBF"),  Agrilink Foods Vegetable Company ("AFVC"),
Nalley Fine Foods  ("Nalley"),  and its Snack Foods group.  Each  business  unit
offers different products and is managed separately. The majority of each of the
business units' net sales are within the United States. In addition,  all of the
Company's  operating  facilities,  except for one facility in Mexico, are within
the United States.

The CBF business unit produces  products in several food  categories,  including
fruit  fillings  and  toppings;  canned and frozen  fruits and  vegetables,  and
popcorn.  The AFVC business unit was acquired on September 24, 1998 and produces
canned and frozen  vegetables.  The Nalley  business unit  produces  canned meat
products (such as chilies and stews),  pickles, salad dressings,  peanut butter,
salsa,  and syrup.  The snack  foods  business  unit  consists  of the Snyder of
Berlin,  Husman Snack Foods,  and Tim's  Cascade  Potato Chip  businesses.  This
business unit produces and markets potato chips and other snack items.

The following tables  illustrate the Company's results of operations by business
unit for the quarters  ended  September 26, 1998 and September 27, 1997, and the
Company's  total assets by business  unit as of September 26, 1998 and September
27, 1997. As the  acquisition  of AFVC was completed on September 24, 1998,  the
operating  activities of AFVC for the period September 24 through  September 26,
1998 have not been included in the results shown below due to insignificance.

Net Sales
(Dollars in Millions)
                                            Quarter Ended
                                  September 26,      September 27,
                                      1998               1997
                                           % of                % of
                                  $        Total      $        Total
                                ------     -----    ------     ------

 CBF                            $ 96.7      53.0%   $ 87.7      49.7%
 Nalley Fine Foods                42.8      23.4      46.9      26.6
 Snack Foods Group                18.2      10.0      17.3       9.8
                                ------     -----    ------     -----
   Subtotal ongoing operations   157.7      86.4     151.9      86.1
 Businesses sold(1)               24.9      13.6      24.5      13.9
                                ------     -----    ------     -----
   Total                        $182.6     100.0%   $176.4     100.0%
                                ======     =====    ======     =====

(1)  Includes the net sales of the aseptic business. See NOTE 2 to the "Notes to
     Consolidated Financial Statements."




<PAGE>


Operating Income1
(Dollars in Millions)
                                          Quarter Ended
                                 September 26,       September 27,
                                     1998                1997
                                         % of              % of
                                  $     Total       $      Total
                                ------  -------   -----    -----

CBF                             $ 6.1    48.8%    $ 6.1     47.3%
Nalley Fine Foods                 2.2    17.6       3.7     28.7
Snack Foods Group                 2.3    18.4       2.1     16.2
Corporate                        (1.3)  (10.4)     (1.9)   (14.7)
                                -----   -----     -----    -----
  Subtotal ongoing operations     9.3    74.4      10.0     77.5
Businesses sold2                  3.2    25.6       2.9     22.5
                                -----   -----     -----    -----
  Total3                        $12.5   100.0%    $12.9    100.0%
                                =====   =====     =====    =====

1   Excludes the gain on the sale of the aseptic business.

2   Represents the operating earnings of the aseptic business.

3   Operating income less interest expense of $8.3 million and $7.6 million, for
    the first quarter of fiscal 1999 and 1998,  respectively,  results in pretax
    income before dividing with Pro-Fac and before  extraordinary item. Interest
    expense  allocated to business units is not considered a critical  component
    by management when evaluating success.

EBITDA1,2
(Dollars in Millions)

                                               Quarter Ended
                                       September 26      September 27,
                                           1998              1997
                                               % of              % of
                                      $       Total        $     Total
                                    -----     -----      -----   -----

CBF                                 $ 8.9      50.0%     $ 9.5    51.6%
Nalley Fine Foods                     3.6      20.2        5.1    27.7
Snack Foods Group                     2.8      15.7        2.6    14.1
Corporate                            (1.3)     (7.2)      (2.0)  (10.8)
                                    -----     -----      -----   -----
  Subtotal ongoing operations        14.0      78.7       15.2    82.6
Businesses sold3                      3.8      21.3        3.2    17.4
                                    -----     -----      -----   -----
  Total                             $17.8     100.0%     $18.4   100.0%
                                    =====     =====      =====   =====

1  Earnings before interest, taxes, depreciation, and amortization ("EBITDA") is
   defined as the sum of pretax income  before  dividing with Pro-Fac and before
   extraordinary  item, and interest  expense,  depreciation and amortization of
   goodwill and other intangibles.

   EBITDA should not be considered as an alternative to net income or cash flows
   from operations or any other generally accepted accounting principles measure
   of performance or as a measure of liquidity.

   EBITDA is included herein because the Company  believes EBITDA is a financial
   indicator of a company's  ability to service  debt.  EBITDA as  calculated by
   Agrilink  may  not be  comparable  to  calculations  as  presented  by  other
   companies.

2  Excludes the gain on the sale of the aseptic business.

3  Represents the operating earnings of the aseptic business.
<PAGE>
Total Assets
(Dollars in Millions)

                                            Quarter Ended
                                    September 26,      September 27,
                                        1998               1997
                                             % of               % of
                                   $         Total       $      Total
                                --------     -----    ------   ------

CBF                             $  405.0      32.2%   $346.7    57.6%
AFVC                               592.0      47.1       0.0     0.0
Nalley Fine Foods                  154.9      12.3     155.8    25.9
Snack Foods Group                   32.1       2.6      26.5     4.4
Corporate                           72.9       5.8      45.4     7.5
                                --------     -----    ------   -----
  Subtotal ongoing operations    1,256.9     100.0     574.4    95.4
Businesses sold1                     0.0       0.0      27.7     4.6
                                --------     -----    -------  ------
  Total                         $1,256.9     100.0%   $602.1   100.0%
                                ========     =====    ======   =====


1    Includes  the assets of the aseptic  business.  See NOTE 2 to the "Notes to
     Consolidated Financial Statements."

       CHANGES FROM FIRST QUARTER FISCAL 1998 TO FIRST QUARTER FISCAL 1999

Net income for the first quarter of fiscal 1999 of $22.0  million  represented a
$20.6 million  increase over the first quarter of fiscal 1998 net income of $1.4
million.  Total  EBITDA  for  the  first  quarter  of  fiscal  1999  before  the
extraordinary  charge  relating  to the early  extinguishment  of debt was $82.0
million as compared to $18.4 million in the first fiscal quarter of fiscal 1998.
Excluding the operating  results and gain from businesses  sold,  EBITDA for the
continuing  business decreased $1.2 million, or 7.9 percent, to $14.0 million in
the first  quarter of the current  fiscal  year from $15.2  million in the first
quarter of the prior fiscal year. This decline was impacted by a decrease at CBF
of $0.6  million  due to  changes  in  product  mix  within  the fruit  category
(approximately  $1.1 million);  and increase in advertising  associated with the
launch of Breakfast Toppers  (approximately $0.5 million).  These decreases were
offset by an increase within the vegetable category of $1.0 million attributable
to  improvements  in  volume.  The  decline  at Nalley of $1.5  million  was due
primarily to the recognition of a favorably  settled  outstanding tax claim with
the state of  Washington  for $1.4  million  in the first  quarter  of the prior
fiscal year. The EBITDA within the Snack Foods Group  increased $0.2 million due
to increases in net sales.

Net  Sales:  Total net sales for the  quarter  increased  $6.2  million,  or 3.5
percent,  to $182.6  million in the first  fiscal  quarter  of fiscal  1999 from
$176.4 million in the first quarter of fiscal 1998.  Excluding  businesses sold,
net sales  increased by $5.8 million,  or 3.8 percent,  to $157.7 million in the
first quarter of fiscal 1999 from $151.9  million in the first quarter of fiscal
1998.

The increase in net sales for ongoing  operations  came  primarily  from the CBF
business  unit which  reported an increase  in net sales of $9.0  million.  This
increase was  attributable  to improvements  in volume  primarily  within frozen
vegetables.  Net  sales  for the  remaining  categories  at CBF were  relatively
consistent with that of the first quarter of the prior fiscal year.

Net sales for Nalley  decreased  $4.1 million as compared with the first quarter
of the  prior  fiscal  year as gains  in the  pickle  category  were  offset  by
reductions  in the  dressings  and  canned  product  lines.  Within  the  pickle
category,  net sales for the first quarter of fiscal 1999 increased $0.6 million
as a result  of  increased  volume  in the  food  service  channel.  Competitive
pressures on volume and price  resulted in a $2.6 million  decrease in net sales
for dressings and a $2.0 million decrease in the canned category.  Net sales for
the peanut butter category were flat with that of the first quarter of the prior
fiscal year.

Net sales for the Snack Foods Group  increased by $0.9 million,  or 5.2 percent,
to $18.2 million in the first quarter of fiscal 1999 as a result of new business
in the  Northwest  and product  line  extensions,  including  Snyder of Berlin's
kettle chips.

Gross Profit:  Gross profit of $46.7 million in the quarter ended  September 26,
1998 increased approximately $1.1 million, or 2.4 percent, from $45.6 million in
the quarter ended September 27, 1997.  Excluding the impact of businesses  sold,
gross profit increased $0.7 million or 1.8 percent.


<PAGE>


The  increase in gross profit at the CBF business  unit  (excluding  the aseptic
business) was $1.0 million.  The vegetable category showed  improvements of $2.1
million  resulting from increases in volume,  while the fruit category  showed a
decline of $0.7 million  attributable to product mix and decreases  within other
categories of $0.4 million due to changes in volume.

Overall,  gross profit at Nalley  decreased  $0.8  million due  primarily to the
reductions in net sales outlined above. The Nalley gross margin  percentage has,
however,  improved  over the prior year to 35.9 percent from 34.4 percent in the
first quarter of fiscal 1998.

Increases  in net  sales  within  the  Snack  Foods  Group  resulted  in  margin
improvements of $0.5 million.

Selling,  Administrative,  and General Expenses:  Selling,  administrative,  and
general  expenses have increased $1.9 million as compared with the first quarter
of the prior fiscal year. As a percentage of net sales, selling, administrative,
and general  expenses  increased to 19.1 percent in the first  quarter of fiscal
1999 from 18.7  percent in the first  quarter of fiscal 1998.  This  increase is
primarily due to the impact of a favorably  settled  outstanding  tax claim with
the state of  Washington  for $1.4 million  recognized  in the first  quarter of
fiscal 1998. All remaining  expenses were relatively flat with that of the prior
year.

Income from Great Lakes Kraut Company:  This amount represents earnings received
from the investment in Great Lakes Kraut Company, a joint venture formed between
Agrilink and Flanagan Brothers,  Inc. See NOTE 5 - "Other Matters - Formation of
New  Sauerkraut  Company" to the "Notes to  Consolidated  Financial  Statements"
included herein.

Gain on Sale of Aseptic  Operations:  In conjunction with the  Acquisition,  the
Company sold its aseptic business to Dean Foods. A gain of  approximately  $64.2
million was recognized on this disposal  reflecting a value for this business of
approximately $83 million (based upon an appraised value given to the Company by
an independent  appraiser).  This amount was used to offset borrowings necessary
to complete the Acquisition.

Interest Expense:  Interest expense increased $0.7 million,  or 9.1 percent,  to
$8.3 million in the first  quarter of fiscal 1999 from $7.6 million in the first
quarter of fiscal 1998.  The  increase is impacted by higher  levels of seasonal
borrowings  in the first  quarter of fiscal  1999 due to the  earlier  intake of
crops in the current  year and  therefore  the  resultant  increase in inventory
levels.

Provision for Taxes:  The provision for taxes  increased  $23.2 million to $24.3
million  in the first  quarter  of fiscal  1999 from $1.1  million  in the first
quarter of fiscal 1998. Of this increase,  $25.0 million is  attributable to the
provision  associated  with the gain on the sale of the  aseptic  business.  The
remaining variance is impacted by the change in earnings before tax.  Agrilink's
effective tax rate is negatively  impacted by the  non-deductibility  of certain
amounts of goodwill.

Extraordinary  Item Relating to the Early  Extinquishment of Debt:  Concurrently
with  the  Acquisition,   the  Company  refinanced  its  existing  indebtedness,
including  its 12.25  percent  Senior  Subordinated  Notes due 2005 and its then
existing bank debt. Premiums and breakage fees associated with early redemptions
and other fees incurred  amounted to $16.4 million (net of income taxes of $10.4
million and after allocation to Pro-Fac of $1.7 million).

                         LIQUIDITY AND CAPITAL RESOURCES

The following  discussion  highlights the major  variances in the  "Consolidated
Statement  of Cash Flows" for the first  quarter of fiscal 1999  compared to the
first quarter of fiscal 1998.

Net cash used in operating  activities  increased  $35.8  million over the first
quarter of the prior fiscal year.  This  increase is primarily  due to variances
within  inventory  including:  (1) an increase of $1.5  million in  inventory to
support  additional  business  regarding the Sam's national club stores;  (2) an
increase of $2.5 million associated with the acquisition of DelAgra; and changes
in growing areas,  early harvesting of crops,  the size of the crop intake,  and
other changes in inventory necessary to support operations  (approximately $15.3
million).

In addition, cash used in operating activities increased over the prior year due
to the  timing of  liquidation  of  outstanding  accounts  payable  and  accrued
expenses.

Net  cash  used  in  investing  activities  increased  significantly  due to the
acquisition of DFVC offset by the subsequent sale of the aseptic  business.  The
purchase of property, plant and equipment increased $0.9 million to $4.1 million
for the quarter ended September 26,

<PAGE>


1998 from $3.2  million for the  quarter  ended  September  27, 1997 and was for
general operating purposes.

Net cash provided by financing  activities also increased  significantly  due to
the  acquisition  of DFVC  and the  activities  completed  concurrent  with  the
Acquisition  to  refinance  existing  indebtedness.  See further  discussion  at
"Liquidity and Capital  Resources" below and at NOTE 4 - "Debt" to the "Notes to
Consolidated Financial Statements" included herein.

New Credit  Facility:  In connection with the  Acquisition,  the Company entered
into the New Credit Facility with Harris Bank as  Administrative  Agent and Bank
of  Montreal  as  Syndication  Agent,  and the  lenders  thereunder.  The Credit
Facility  consists of the $200 million  Revolving  Credit  Facility and the $455
million Term Loan  Facility.  The Term Loan  Facility is comprised of the Term A
Facility,  which has a maturity of five years, the Term B Facility,  which has a
maturity of six years,  and the Term C  Facility,  which has a maturity of seven
years. The Revolving Credit Facility has a maturity of five years.

The  New  Credit  Facility  bears  interest,  at the  Company's  option,  at the
Administrative  Agent's  alternate  base  rate or  LIBOR  plus,  in  each  case,
applicable  margins of: (i) in the case of alternate  base rate loans,  (x) 1.00
percent for loans under the Revolving  Credit  Facility and the Term A Facility,
(y) 2.25  percent for loans under the Term B Facility  and (z) 2.50  percent for
loans under the Term C Facility  and (ii) in the case of LIBOR  loans,  (x) 2.75
percent for loans under the Revolving  Credit  Facility and the Term A Facility,
(y) 3.25  percent for loans under the Term B Facility  and (z) 3.50  percent for
loans under the Term C Facility.  The  Administrative  Agent's  "alternate  base
rate" is defined as the greater of: (i) the prime  commercial  rate as announced
by the Administrative Agent or (ii) the Federal Funds rate plus 0.50 percent. In
addition,  the Company will pay a commitment  fee  calculated  at a rate of 0.50
percent per annum on the daily  average  unused  commitment  under the Revolving
Credit Facility.

Upon  consummation of the  Acquisition,  the Company drew $455 million under the
Term Loan Facility, consisting of $100 million, $175 million and $180 million of
loans  under  the  Term  A  Facility,  Term B  Facility  and  Term  C  Facility,
respectively.  Additionally,  the Company drew $93 million  under the  Revolving
Credit  Facility for seasonal  working capital needs and $14.3 million under the
Revolving Credit Facility was issued for letters of credit.

Beginning  with the  reporting  period  ending  March 31, 1999,  the  applicable
margins for the New Credit Facility will be subject to possible reductions based
on the ratio of  consolidated  debt to EBITDA (each as defined in the New Credit
Facility).

The Term Loan Facility will be subject to the following amortization schedule.

Fiscal Year   Term Loan A         Term Loan B         Term Loan C       Total
-----------   -----------         -----------         -----------       -----
                               (Dollars in millions)
    1999        $  0.0              $  0.2              $  0.2          $  0.4
    2000          15.0                 0.4                 0.4            15.8
    2001          20.0                 0.4                 0.4            20.8
    2002          20.0                 0.4                 0.4            20.8
    2003          20.0                 0.4                 0.4            20.8
    2004          25.0                 0.4                 0.4            25.8
    2005           0.0               172.8                 0.4           173.2
    2006           0.0                 0.0               177.4           177.4
                ------              ------              ------          ------
                $100.0              $175.0              $180.0          $455.0
                ======              ======              ======          ======

The Term  Loan  Facility  is  subject  to  mandatory  prepayment  under  various
scenarios as defined in the New Credit Facility.

The  Company's  obligations  under the New  Credit  Facility  are  secured  by a
first-priority lien on: (i) substantially all existing or after-acquired assets,
tangible or intangible,  (ii) the capital stock of certain of Pro-Fac's  current
and future  subsidiaries,  and (iii) all of the  Company's  rights  (principally
indemnification  rights)  under the  agreement  to acquire  DFVC and the Pro-Fac
Marketing and Facilitation  Agreement.  The Company's  obligations under the New
Credit  Facility are guaranteed by Pro-Fac and certain of the Company's  current
and future subsidiaries, if any.

The New Credit Facility  contains  customary  covenants and  restrictions on the
Company's ability to engage in certain  activities,  including,  but not limited
to:  (i)  limitations  on  the  incurrence  of  indebtedness  and  liens,   (ii)
limitations on sale-leaseback  transactions,  consolidations,  mergers,  sale of
assets,  transactions  with affiliates and investments and (iii)  limitations on
dividend  and  other  distributions.  The  New  Credit  Facility  also  contains
financial covenants requiring Pro-Fac to maintain a minimum level of EBITDA,

<PAGE>


a minimum  interest  coverage  ratio, a minimum fixed charge  coverage  ratio, a
maximum  leverage  ratio and a minimum  level of net  worth.  The  Company is in
compliance with all covenants,  restrictions and requirements under the terms of
the New Credit Facility.

Subordinated  Bridge  Facility:  To complete the  Acquisition,  the Company also
entered into a Subordinated Bridge Facility (the "Bridge Facility").  The Bridge
Facility  was provided by Warburg  Dillon Read LLC, as Arranger and  Syndication
Agent; and UBS AG, Stamford  Branch,  as  Administrative  Agent; and the Bank of
Montreal and Harris Trust and Savings Bank as additional  lenders.  The interest
rate  under the  Bridge  Facility  resets  monthly  on the basis of LIBOR plus a
spread  of 5  percent  for the  first  90 days,  which  spread  increases  by an
additional  1  percent  each  subsequent  90-day  period.  In no event  will the
interest  rate exceed 16 percent per annum.  The  Company  anticipates  that the
Bridge Facility will be repaid  principally with the proceeds of a new long-term
take-out  financing.  Should the  Company be unable to  complete  its  long-term
take-out  financing,  the Bridge  Facility,  if not repaid within one year,  may
thereafter be converted to permanent  financing with  consistent  interest rates
and a maturity of September, 2006.

Subordinated Promissory Note: As partial consideration for the Acquisition,  the
Company  issued to Dean Foods a  Subordinated  Promissory  Note for $30  million
aggregate  principal amount due November 22, 2008.  Interest on the Subordinated
Promissory Note is payable quarterly in arrears commencing December 31, 1998, at
a rate per annum of 5  percent  until  November  22,  2003,  and at a rate of 10
percent  thereafter.  Interest accruing through November 22, 2003 is required to
be paid in kind through the issuance by the Company of  additional  subordinated
promissory  notes  identical  to  the  Subordinated  Promissory  Note.  Interest
accruing after November 22, 2003 is payable in cash. The Subordinated Promissory
Note may be prepaid at the Company's option without premium or penalty.

The  Subordinated  Promissory Note is expressly  subordinate to the Subordinated
Bridge Facility,  any long-term take-out financing,  and the New Credit Facility
and  contains  no  financial  covenants.  The  Subordinated  Promissory  Note is
guaranteed by Pro-Fac.

12 1/4 Percent Senior  Subordinated  Notes (due 2005):  In conjunction  with the
Acquisition,  the Company repurchased  $159,985,000  principal amount of its Old
Notes,  of  which  $160  million  aggregate   principal  amount  was  previously
outstanding.  The  Company  paid  a  total  of  approximately  $184  million  to
repurchase the Old Notes,  including  interest  accrued thereon of $2.9 million.
Holders who tendered  consented to certain  amendments to the indenture relating
to the Old Notes, which eliminated or amended  substantially all the restrictive
covenants and certain events of default contained in such indenture. The Company
may   repurchase   the  remaining  Old  Notes  in  the  future  in  open  market
transactions, privately negotiated purchases or otherwise.

Interest Rate Risk Management:

The Company is subject to market risk from exposure to changes in interest rates
based  on its  financing  activities.  The  Company  has  entered  into  certain
financial  instrument  transactions to maintain the desired level of exposure to
the risk of interest rate fluctuations and to minimize  interest  expense.  More
specifically,  the Company has entered  into two interest  rate swap  agreements
with the Bank of  Montreal.  The  agreements  provide  for fixed  interest  rate
payments by the Company in exchange  for  payments  received at the  three-month
LIBOR rate.

The  following is a summary of the Company's  interest  rate swap  agreements by
major type:

                                        October 5, 1998    Maturities through
Interest Rate Swap:
Variable to Fixed - notional amount      $250,000,000              2001
   Average pay rate                       4.96-5.32%
   Average receive rate                     5.3125%

The  Company  has  the  option  of  extending  one of  the  interest  rate  swap
agreements,  with a  notional  amount of  $100,000,000  and  expiration  date of
October 5, 2001, for an additional two years through October 5, 2003.

While there is potential  that interest  rates will fall, and hence minimize the
benefits of the Company's hedge position, it is the Company's position that on a
long-term  basis,  the  possibility  of interest  rates  increasing  exceeds the
likelihood of interest  rates  decreasing.  The Company will,  however,  monitor
market conditions to adjust its position as it considers necessary.



<PAGE>


                                  OTHER MATTERS

Short- and Long-Term  Trends:  The vegetable and fruit  portions of the business
can be positively or negatively  affected by weather  conditions  nationally and
the resulting impact on crop yields.  Favorable  weather  conditions can produce
high crop yields and an oversupply situation.  This results in depressed selling
prices and reduced  profitability  on the  inventory  produced  from that year's
crops.  Excessive  rain or drought  conditions can produce low crop yields and a
shortage  situation.  This  typically  results  in  higher  selling  prices  and
increased  profitability.  While the  national  supply  situation  controls  the
pricing, the supply can differ regionally because of variations in weather.

The effect of the 1998 growing season on fiscal 1999 financial results cannot be
estimated until late 1998 or early calendar 1999 when harvesting is complete and
when local and national supplies can be determined.

Year 2000 and Information Services Reorganization: A full inventory and analysis
of business  applications  and related  software was  performed  and the Company
determined that it will be required to modify or replace certain portions of its
software  so that  its  computer  systems  will be Year  2000  compliant.  These
modifications  and  replacements  are  being  and  will  continue  to be made in
conjunction with the Company's overall information systems initiatives. No major
delay in these initiatives is anticipated.

In  addition,  the Company is  contacting  non-IT  vendors to ensure that any of
their products that are currently in use can adequately  deal with the change in
century. Areas being addressed include full reviews of manufacturing  equipment,
telephone  and voice  mail  systems,  security  systems,  and other  office/site
support  systems.  Based upon preliminary  information,  the costs of addressing
potential  problems  are not expected to have a material  adverse  impact on the
Company's  financial  position,  results of operations,  or cash flows in future
periods.  Accordingly, the cost of the project is being funded through operating
cash flows.

The Company has initiated formal  communications with significant  suppliers and
customers to determine  the extent to which the Company is  vulnerable  to those
third parties' failure to remediate their own Year 2000 issues.  However,  there
can be no guarantee  that the systems of other  companies on which the Company's
systems rely will be timely  converted,  or that a failure to convert by another
company, or a conversion that is incompatible with the Company's systems,  would
not have material adverse effect on the Company.  Accordingly, the Company plans
to devote the necessary resources to resolve all significant Year 2000 issues in
a timely manner.

The Company  expects to complete the Year 2000 project  during the fall of 1999.
Based on the progress made to date (which  includes  compliant  systems in place
and in  production),  the  Company  does not believe  any  material  exposure to
significant  business  interruption  exists.  In the event some of the remaining
elements of the Company's Year 2000 compliance  project are delayed,  procedures
have been addressed to ensure alternative workaround initiatives are completed.

On June 19,  1997,  Systems & Computer  Technology  Corporation  ("SCT") and the
Company announced a major outsourcing  services and software agreement effective
June 30, 1997. The ten-year  agreement,  valued at approximately $50 million, is
for SCT's OnSite  outsourcing  services,  ADAGE ERP software and  implementation
services and assistance in solving the Year 2000 issue.

               CAUTIONARY STATEMENT ON FORWARD-LOOKING STATEMENTS

From time to time,  the  Company  makes  oral and  written  statements  that may
constitute  "forward-looking  statements"  as defined in the Private  Securities
Litigation  Reform Act of 1995 (the  "Act") or by the  Securities  and  Exchange
Commission ("SEC") in its rules, regulations,  and releases. The Company desires
to take advantage of the "safe harbor" provisions in the Act for forward-looking
statements  made  from  time  to  time,  including,  but  not  limited  to,  the
forward-looking   information  contained  in  the  Management's  Discussion  and
Analysis  (pages 10 to 15 and other  statements  made in this Form  10-Q) and in
other filings with the SEC.

The Company cautions readers that any such forward-looking statements made by or
on behalf of the  Company are based on  management's  current  expectations  and
beliefs but are not  guarantees  of future  performance.  Actual  results  could
differ materially

<PAGE>


from those  expressed or implied in the  forward-looking  statements.  Among the
factors that could impact the Company's ability to achieve its goals are:

     the impact of strong competition in the food industry;

     the impact of weather on the volume and quality of raw product;

     the  inherent  risks  in  the  marketplace   associated  with  new  product
     introductions, including uncertainties about trade and consumer acceptance;

     the continuation of the Company's success in integrating operations and the
     availability of acquisition and alliance opportunities;

     the Company's  ability to achieve gains in productivity and improvements in
     capacity utilization; and

     the  ability to  integrate  DFVC into the  business  of the Company and the
     extent to which anticipated cost savings in connection with the Acquisition
     will be realized and the timing of any such realization.

ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K

     (a) Exhibits

          Exhibit Number   Description

            10.1        Credit  Agreement  Among Agrilink Foods,  Inc.,  Pro-Fac
                        Cooperative, Inc. and Harris Trust and Savings Bank, and
                        Bank of Montreal,  Chicago  Branch,  and the Lender from
                        Time to Time To Parties  Hereto,  dated as of  September
                        23, 1998

            10.2        $200,000,000  Senior Subordinated Credit Agreement Among
                        Agrilink  Foods,  Inc., Pro- Fac  Cooperative,  Inc. and
                        Warburg Dillon Read LLC and UBS AG,  Stamford Branch and
                        the  Lenders  From  Time to  Time  Party  Hereto,  dated
                        September 23, 1998

            10.3        Subordinated  Promissory Note Among Agrilink Foods, Inc.
                        and Dean Foods Company, dated as of September 23, 1998

            27          Financial Data Schedule

     (b) The following reports on Form 8-K were filed during the period to which
this report relates:

          Date                                   Item

      July 28, 1998               Item 5 - Other Events
      October 5, 1998             Item 2 - Acquisition or Disposition of Assets

<PAGE>









                                   SIGNATURES


Pursuant to the  requirements of Section 13 or 15(d) of the Securities  Exchange
Act of 1934,  the  Registrant  has duly  caused  this report to be signed on its
behalf by the undersigned, thereunto duly authorized.



                                              AGRILINK FOODS, INC.



Date:  November 6, 1998                     By:/s/ Earl L. Powers
                                                   EARL L. POWERS
                                             VICE PRESIDENT FINANCE AND
                                               CHIEF FINANCIAL OFFICER
                                          (Principal Financial Officer and
                                            Principal Accounting Officer)