EXHIBIT 10 (ii)

Dated as of
May 31, 2002
C. Martin Sowers
Family Dollar Stores, Inc.
P.O. Box 1017
Charlotte, NC  28201-1017

|Re: | Amended and Restated  Credit  Agreement dated as of May 31, 2001 among
Bank of America, N.A. ("Bank of America"),  Family Dollar Stores, Inc.
("FDSI") and Family Dollar, Inc. ("FDI") (as amended or modified prior
to the date hereof, the "Credit Agreement")
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Dear Marty:

You have requested, on
behalf of FDSI and FDI, an extension of the Tranche A Termination Date for an
additional period of one year in accordance with Section 2.14 of the Credit
Agreement. Bank of America agrees to such extension and hereby agrees to extend
the Tranche A Termination Date from May 31, 2003 to May 31, 2004.
Further, you have requested, on behalf of FDSI and FDI, an extension of the
Tranche B Termination Date for an additional period of 364 days in accordance
with Section 2.15 of the Credit Agreement. Bank of America agrees to such
extension and hereby agrees to extend the Tranche B Termination Date
from May 30, 2002 to May 29, 2003. Capitalized terms not otherwise defined
herein have the same meaning given to such terms in the Credit Agreement.

Except as expressly amended
by this letter amendment, the Credit Agreement and all of the other Loan
Documents are confirmed and ratified in all respects and shall remain in full
force and effect in accordance with their respective terms. FDSI and FDI hereby
affirm that all representations and warranties in the Credit Agreement remain
true and accurate as of the date hereof and that no Default or Event of Default
has occurred and is continuing as of the date hereof.

This amendment shall be
effective as of May 31, 2002 if each of the parties to the Credit Agreement and
the Guarantors sign counterparts of letter amendment. Please acknowledge your
agreement by signing and returning to me the enclosed copy of this letter
amendment.

Very truly yours,
BANK OF AMERICA, N.A.

By:            /s/ Dan M. Killian
Name:       DAN M. KILLIAN
Title:         Managing
Director

C. Martin Sowers
Dated as of
May 31, 2002

Acknowledged and Agreed

|Family Dollar Stores, Inc.                | Family Dollar, Inc.                      
|----------------------------------------- | -----------------------------------------
|                                          |                                          
|By:            /s/ C. Martin
Sowers       | By:            /s/ C. Martin
Sowers      
|Name:       C. MARTIN SOWERS              | Name:       C. MARTIN SOWERS             
|Title:         Sr. Vice President-Finance | Title:         Sr. Vice President-Finance

Each of the Guarantors below acknowledges and consents to this amendment and ratifies its Guaranty:

|Family Dollar Services, Inc.              | Family Dollar Operations, Inc.           
|----------------------------------------- | -----------------------------------------
|                                          |                                          
|By:            /s/ C. Martin
Sowers       | By:            /s/ C. Martin
Sowers      
|Name:       C. MARTIN SOWERS              | Name:       C. MARTIN SOWERS             
|Title:         Sr. Vice President-Finance | Title:         Sr. Vice President-Finance

Family Dollar Trucking, Inc.
By:            /s/ C. Martin Sowers
Name:       C. MARTIN SOWERS
Title:         Senior Vice President-Finance