UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
            ------------------------------------------------------
                                    FORM 10-Q

    X   QUARTERLY   REPORT   PURSUANT   TO   SECTION   13  OR   15(d)  OF  THE
--------
SECURITIES EXCHANGE ACT OF 1934

For the Quarterly period ended September 30, 2000

                                       OR
            ------------------------------------------------------

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

For the transition period from ___________ to  ___________

                         Commission file number 33-95298

                              GALAXY TELECOM, L.P.
 ----------------------------------------------------------------------------
            Exact name of Registrant as specified in its charter)

            Delaware                                  43-1697125
------------------------------------    -------------------------------------
 (States or other jurisdiction of       (IRS Employer Identification Number)
incorporation or organization)


 1220 North Main, Sikeston, Missouri                   63801
----------------------------------------------    ---------------------------
(Address of principal executive offices)            (zip code)

Registrant telephone number, including area code: (573) 472-8200

Indicate by check mark whether the Registrant (1) has filed all reports required
by  Section  13 or 15(d)  of the  Securities  Exchange  Act of 1934  during  the
previous 12 months (or for such shorter  period that the Registrant was required
to file such reports),  and (2) has been subject to such filing requirements for
the past 90 days:


                               Yes X No __________

<PAGE>


                             GALAXY TELECOM, L.P.
                                    FORM 10-Q

                   FOR THE QUARTER ENDED SEPTEMBER 30, 2000

                                      INDEX

                                                                      PAGE
                                                                  -----------

PART I.  Financial Information

Item 1.  Consolidated Financial Statements
            Galaxy Telecom, L.P.  ........................................3
            Notes to Consolidated Financial Statements....................6

Item 2.  Management's Discussion and Analysis of
            Financial Condition and Results of Operations................10

Item 3.  Quantitative and Qualitative Disclosures
           about Market Risk.............................................18

PART II. Other Information...............................................19

Signatures  .............................................................20

Exhibit Index............................................................21





                                       2
<PAGE>


PART I.  FINANCIAL INFORMATION

Item 1. - FINANCIAL STATEMENTS

                       GALAXY TELECOM, L.P. AND SUDSIDIARY
                        CONSOLIDATED BALANCE SHEETS...
                                   (Unaudited)

<TABLE>
<CAPTION>


                                                                 September 30,     December 31,
                                                                      2000            1999
                                                                 -------------    -------------

ASSETS

<S>                                                              <C>              <C>
Cash in banks                                                    $   3,239,746    $     386,485
Subscriber receivables, net of allowance for doubtful accounts
   of $103,840 and $87,449, respectively                             4,154,947        4,431,946
Systems and equipment, net                                          87,764,452       94,568,015
Intangible assets, net                                              31,204,250       34,266,208
Prepaids and other                                                   3,458,621        3,877,975
                                                                 -------------    -------------
Total assets                                                     $ 129,822,016    $ 137,530,629
                                                                 =============    =============


LIABILITIES AND PARTNERS' DEFICIT

Accounts payable and accrued expenses                            $  21,310,976    $  17,198,650
Subscriber deposits and deferred revenue                             3,740,144        4,026,920
Long-term debt and other obligations                               149,898,651      148,176,701
                                                                 -------------    -------------
   Total liabilities                                               174,949,771      169,402,271


Partners' deficit:
  General partners                                                 (45,127,755)     (31,871,642)
  Limited partners                                                        --               --
                                                                 -------------    -------------
    Total partners' deficit                                        (45,127,755)     (31,871,642)
                                                                 -------------    -------------
Total liabilities and partners' deficit                          $ 129,822,016    $ 137,530,629
                                                                 =============    =============


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

                                       3
<PAGE>


                       GALAXY TELECOM, L.P. AND SUDSIDIARY
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)

<TABLE>
<CAPTION>

                                               For the three months ended      For the nine months ended
                                                      September 30,                   September 30,
                                              ----------------------------    ----------------------------
                                                  2000           1999             2000            1999
                                              ------------    ------------    ------------    ------------

<S>                                          <C>             <C>             <C>             <C>
Revenues                                     $ 13,458,633    $ 14,183,681    $ 41,261,921    $ 43,270,181
                                             ------------    ------------    ------------    ------------
Operating expenses:
       Systems operations                       7,009,465       6,793,725      20,752,173      20,378,609
       Selling, general and administrative      1,678,916       1,490,154       4,631,185       4,396,163
       Management fee to affiliate                403,210         420,693       1,236,453       1,643,770
       Depreciation and amortization            4,712,872       4,772,917      13,850,201      15,085,708
                                             ------------    ------------    ------------    ------------
            Total operating expenses           13,804,463      13,477,489      40,470,012      41,504,250
                                             ------------    ------------    ------------    ------------

                  Operating income               (345,830)        706,192         791,909       1,765,931

Interest expense                               (5,154,480)     (4,603,575)    (15,960,953)    (14,205,355)
Gain (loss) on sale of assets                     (28,362)        (43,934)      2,002,228       6,658,432
Interest income and other, net                    (14,201)         40,654         (89,297)         75,585
                                             ------------    ------------    ------------    ------------
       Net loss                              $ (5,542,873)   $ (3,900,663)   $(13,256,113)   $ (5,705,407)
                                             ============    ============    ============    ============




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

</TABLE>


                                       4
<PAGE>

                      GALAXY TELECOM, L.P. AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                            For the nine months ended
                                                                                  September 30,
                                                                           ----------------------------
                                                                               2000            1999
                                                                           ------------    ------------
<S>                                                                        <C>             <C>
Cash flows from operating activities:
      Net loss                                                             $(13,256,113)   $ (5,705,407)
      Adjustments to reconcile net loss to net cash
           provided by operating activities:
           Depreciation expense                                              12,446,986      13,137,080
           Amortization expense                                               1,403,215       1,948,628
           Amortization included in interest expense                          1,463,208         990,000
           Provision for doubtful accounts receivable                         1,154,021         713,763
           Gain on sale of assets                                            (2,002,228)     (6,658,432)
           Changes in assets and liabilities:
                Subscriber receivables                                         (877,022)       (793,819)
                Prepaids and other                                              419,357       1,953,460
                Accounts payable and accrued expenses                         4,112,326       5,403,780
                Subscriber deposits and deferred revenue                       (286,776)       (202,633)
                                                                           ------------    ------------
         Net cash provided by operating activities                            4,576,974      10,786,420
                                                                           ------------    ------------
Cash flows from investing activities:
      Proceeds from sales of cable systems                                    3,432,250       9,191,149
      Purchase of capital assets                                             (6,705,660)     (9,579,037)
      Other intangible assets                                                   (61,837)       (544,860)
                                                                           ------------    ------------
         Net cash used in investing activities                               (3,335,247)       (932,748)
                                                                           ------------    ------------
Cash flows from financing activities:
      Borrowings under term debt and revolver                                 5,000,000       3,000,000
      Payments under term debt and revolver                                  (2,400,000)     (7,465,000)
      Payments under other debt, net                                           (923,050)       (658,801)
      Payment of debt issue costs                                               (65,416)       (404,869)
                                                                           ------------    ------------
         Net cash provided by (used in) financing activities                  1,611,534      (5,528,670)
                                                                           ------------    ------------
Net increase in cash and cash equivalents                                     2,853,261       4,325,002

Cash and cash equivalents, beginning of period                                  386,485       2,213,777
                                                                           ------------    ------------
Cash and cash equivalents, end of period                                   $  3,239,746    $  6,538,779
                                                                           ============    ============

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

                                       5
<PAGE>

GALAXY TELECOM, L.P. AND SUBSIDIARY
-------------------------------------------------------------------------------
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
UNAUDITED
-------------------------------------------------------------------------------

1.    STATEMENT OF ACCOUNTING PRESENTATIONS AND OTHER INFORMATION

      The accompanying  unaudited interim  consolidated  financial statements of
Galaxy  Telecom,  L.P. and its subsidiary  ("Galaxy" or the  "Partnership")  are
presented in accordance  with the  requirements  of Article 10 of Regulation S-X
and  consequently  do not include all of the footnote  disclosures  required for
audited financial  statements by generally accepted accounting  principals.  The
results  for the nine  months  ended  September  30,  2000  are not  necessarily
indicative  of the results to be expected for the entire 2000 fiscal year. It is
suggested that the  accompanying  consolidated  financial  statements be read in
conjunction with Galaxy's Annual Report on Form 10-K for the year ended December
31, 1999.

      The  following  notes,  insofar as they are  applicable to the nine months
ended  September  30,  2000  and  September  30,  1999,  are  not  audited.   In
management's  opinion,  all  adjustments,  consisting  of only normal  recurring
accruals  considered  necessary  for a fair  presentation  of such  consolidated
financial statements, are included.

2.    SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

      Interest  paid during the three months ended  September  30, 2000 and 1999
was  approximately  $2.6 million and $2.4 million,  respectively.  Interest paid
during the nine months ended September 30, 2000 and 1999 was approximately $10.2
million and $9.5 million, respectively.

3.    RELATED PARTY TRANSACTIONS

      Galaxy  incurs  management  fees and  expenses  pursuant to the terms of a
management  agreement  with Galaxy Systems  Management,  Inc., an affiliate of a
general  partner,  under which it manages  Galaxy's  business.  Management  fees
totaled  $403,210 for the three months ended September 30, 2000 and $420,693 for
the three months ended September 30, 1999.  Management  fees totaled  $1,236,453
for the nine months ended  September 30, 2000 and $1,643,770 for the nine months
ended September 30, 1999.
4.    LONG-TERM DEBT

      Long-term debt consists of the following:

<TABLE>
<CAPTION>

                                                             September 30,     December 31,
                                                                  2000             1999
                                                              ------------     ------------
<S>                                                            <C>              <C>
Term loan with interest payable monthly, at an
  adjusted LIBOR rate of LIBOR plus 3.25% (9.7% at
  December 31, 1999)                                                         $ 25,325,000

Amended term loan with interest payable quarterly, at an
  ABR rate of PRIME plus 4% (13.5% at September 30, 200$)     $ 22,925,000

New term loan with interest payable quarterly, at an
  ABR rate of PRIME plus 4% (13.5% at September 30, 2000)        5,000,000

12.375% senior subordinated  notes, net of unamortized  discount of $300,000 and
  $345,000 at June 30, 2000 and December 31, 1999,  respectively,  with interest
  payable
  semiannually  on April 1 and October 1                       119,700,000      119,655,000

Other, including capital leases                                  2,273,651        3,196,701
                                                              ------------     ------------
                                                              $149,898,651     $148,176,701
                                                              ============     ============
</TABLE>

      Leverage

            The Company is highly leveraged.  This high leverage and the lack of
unencumbered assets likely will adversely affect the Company's ability to obtain
additional  financing in the future for debt service,  working capital,  capital
expenditures or other purposes.  The Company's business strategy is to procure a
sale of all or substantially all of its assets or partnership interests. Even if
the Company is sold,  there is no assurance that the proceeds will be sufficient
to repay its existing  indebtedness under a senior credit facility provided by a
group of  commercial  banks  ("Senior  Credit  Facility")  and the $120  million
principal  amount of the  Company's 12 3/8% Senior  Subordinated  Notes Due 2005
(the "Notes").

      The Company is  currently  in default  under its  existing  Senior  Credit
Facility and under the terms of the Notes

            The Company's  Senior Credit Facility  provides that it is an "Event
of Default" if a definitive  agreement  for the sale of Galaxy and its affiliate
or system asset sales of  substantially  all the systems owned by Galaxy and its
affiliate  has not  been  executed  and  delivered  by  July  31,  2000  with an
unaffiliated third party buyer in a form reasonably satisfactory to the majority
lenders.

      Although Galaxy reached tentative  agreements with three potential buyers,
the buyers were unable to obtain board  approval or financing  for the potential
acquisition  and each buyer was unable to enter into a definitive sale agreement
with  Galaxy by July 31,  2000.  As a result,  the  senior  lenders  declared  a
"non-payment default" under the trust indenture ("Indenture") governing the $120
million principal amount of the Company's 12 3/8% Senior  Subordinated Notes Due
2005 (the "Notes").  The senior lenders provided notice to the trustee under the
Indenture  that Galaxy  would not be permitted to make any payments of principal
or interest on the Notes for up to 179 days after  September 27, 2000,  the date
of notice.

      There is also an event of default  outstanding  under the  Indenture  as a
result of the Company's failure to make the interest payment on the Notes due on
October 1, 2000 on or before  October  31,  2000.  The trustee or holders of the
Notes representing at least 25% of the outstanding principal amount of the Notes
could seek to accelerate  the Notes  whereupon the principal  amount of, and all
accrued and unpaid interest under the Notes would become due and payable. In the
event of any such acceleration, it is likely that the Company would need to seek
protection  under the  bankruptcy  laws and it is uncertain  what Holders  would
recover as the Senior Credit Facility is senior to the Notes and secured.

      Galaxy has  engaged  Credit  Suisse  First  Boston  ("CSFB") to act as its
financial  advisor.  Under the terms of the engagement,  CSFB will,  among other
things,  assist Galaxy in exploring  various strategic  alternatives,  including
raising additional  financing,  which may involve refinancing  Galaxy's existing
Senior  Credit  Facility and  soliciting  consents to amend certain terms of the
Notes to permit such a refinancing. The additional financing may also be used to
meet the  Company's  interest  payment under the Senior  Subordinated  Notes due
October 1, 2000. The Company, with the assistance of CSFB, continues to evaluate
the sale of assets or the Company as a whole.

      Galaxy is negotiating  with certain lenders to replace its existing Senior
Credit Facility with a new credit facility ("New Credit Facility").  In order to
refinance its existing debt, the Company must first seek and obtain the approval
of a majority of the Noteholders ("Required Approval"). If the Required Approval
is granted,  and if the New Credit  Facility is closed,  the Company will borrow
funds under the New Credit  Facility to  refinance  the $28.0  million of senior
indebtedness  outstanding  under the  Senior  Credit  Facility.  The New  Credit
Facility, if established,  would have an initial maximum credit line of at least
$45.0  million.  It is expected that the Company will borrow funds under the New
Credit Facility in order to make the interest  payment on the Notes that was due
on October 1, 2000, plus interest on the defaulted  interest accrued through the
payment  date.  The  implementation  of the New Credit  Facility  would have the
effect of permitting the Company to incur  additional  indebtedness  beyond that
allowed  currently  under the  Indenture  governing  the Notes.  There can be no
assurances that the Required Approval will be granted by the Noteholders or that
the New Credit Facility will be successfully closed.

5.    DISPOSITION OF CABLE SYSTEMS

      On March 31, 2000,  Galaxy sold one cable  television  system,  located in
Kansas,  representing  approximately  1,424 subscribers for  approximately  $3.4
million, or approximately $2,492 per subscriber.


                                       6
<PAGE>

6.    COMMITMENTS AND CONTINGENCIES

      LITIGATION

      Certain  customers  in  Mississippi  have filed a class action in the U.S.
District  Court for the Northern  District of  Mississippi  alleging that Galaxy
illegally  charged a late fee on  monthly  cable  bills.  Galaxy  has denied any
liability with respect to this claim and is defending this action. Similar class
actions against other cable  companies have been filed in several states,  a few
of which have been  successful.  At this point,  management is unable to predict
the likely outcome or the potential for an adverse judgment,  if any. An adverse
judgment  against  the  Galaxy  could  have a  material,  adverse  effect on the
Galaxy's  consolidated  financial  position,  or future results of operations or
cash flows.  Management  has not  recorded  any  liability  in the  consolidated
financial statements that may arise from the adjudication of this lawsuit.


7.    RECENT ACCOUNTING PRONOUNCEMENTS

In June 1998,  the  Financial  Accounting  Standards  Board  ("FASB")  issued
Statement of Financial  Accounting  Standards  ("SFAS") No. 133,  "Accounting
for  Derivative  Instruments  and Hedging  Activity."  SFAS No. 133  provides
comprehensive  and consistent  standards for the  recognition and measurement
of  derivative  and hedging  activities.  It  requires  that  derivatives  be
recorded  on the balance  sheet at fair value and  establishes  criteria  for
hedges  of  changes  in  the  fair  value  of  assets,  liabilities  or  firm
commitments,  hedges of variable cash flows of forecasted  transactions,  and
hedges  of  foreign   currency   exposures  of  net  investments  in  foreign
operations.  Changes  in the fair value of  derivatives  that do not meet the
criteria for hedges are to be  recognized  in the  Statement of  Consolidated
Income.  During  June of 1999,  FASB issued  SFAS No.  137,  "Accounting  for
Derivative  Instruments  and  Hedging  Activities-Deferral  of the  Effective
Date of FASB  Statement of No. 133," to defer the effective  date of SFAS No.
133  by  one  year.   During  June  of  2000,   FASB  issued  SFAS  No.  138,
"Accounting   for  Certain   Derivative   Instruments   and  Certain  Hedging
Activities-  an  Amendment  of FASB  Statement  No. 133." SFAS No. 138 amends
the  accounting  and  reporting   standards  of  SFAS  No.  133  for  certain
derivative  instruments  and  certain  hedging  activities.  Galaxy  does not
expect  the  adoption  of SFAS  No.  133 to  have a  material  effect  on its
consolidated financial statements

In December  1999, the  Securities  and Exchange  Commission  (SEC) issued Staff
Accounting Bulletin 101, "Revenue Recognition in Financial Statements" (SAB 101)
which provides guidance related to revenue recognition. SAB 101 allows companies
to report any changes in revenue  recognition related to adopting its provisions
as an accounting  change at the time of  implementation  in accordance  with APB
Opinion No. 20,  "Accounting  Changes."  Galaxy is  currently  in the process of
assessing whether or not there may be other revenue  recognition issues to which
SAB 101 applies.  Companies must adopt the new guidance no later than the fourth
quarter of fiscal year 2000.  Based on the analysis  performed  to date,  Galaxy
does  not  expect  the  adoption  of SAB 101 to have a  material  effect  of its
consolidated financial statements.


                                       9
<PAGE>

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

      RECENT DEVELOPMENTS

      On March 31, 2000,  Galaxy sold one cable  television  system,  located in
Kansas,  representing  approximately  1,424 subscribers for  approximately  $3.4
million,  or approximately  $2,492 per subscriber.  Galaxy will use the proceeds
from this sale to pay the principal of the Senior Credit Facility.

      The Company's financial condition is extremely distressed

      The Company has recorded  significant  net losses in each of the last five
years and at September 30, 2000 had a partner's  deficit of $45.2  million.  The
auditors' report on the Company's  financial  statements for the year ended 1999
included "going concern"  disclosure.  In this report,  the auditors stated that
the  Company's  inability to meet its cash flow needs and to comply with certain
debt covenants raises substantial doubt about its ability to continue as a going
concern.

      The Company is  currently  in default  under its  existing  Senior  Credit
Facility and under the terms of the Notes

         The Company's  existing Senior Credit  Facility  provides that it is an
"Event of  Default"  if a  definitive  agreement  for the sale of Galaxy  and an
entity  affiliated  with Galaxy or system asset sales of  substantially  all the
systems owned by Galaxy and the affiliate has not been executed and delivered by
July 31,  2000  with an  unaffiliated  third  party  buyer in a form  reasonably
satisfactory  to the  majority  lenders.  As a result of Galaxy's  inability  to
obtain a signed purchase  agreement by this date, the senior lenders  declared a
"non-payment  default"  under the Indenture  and provided  notice to the trustee
under the  Indenture  that Galaxy would not be permitted to make any payments of
principal or interest on the Notes for up to 179 days after  September 27, 2000,
the date of notice.

      There is also an event of default  outstanding  under the  Indenture  as a
result of the Company's failure to make the interest payment due October 1, 2000
on or before  October 31, 2000.  The trustee under the Indenture or  Noteholders
representing at least 25% of the outstanding principal amount of the Notes could
seek to accelerate the Notes whereupon the principal  amount of, and all accrued
and unpaid  interest under the Notes would become due and payable.  In the event
of any such  acceleration,  it is likely  that the  Company  would  need to seek
protection under the bankruptcy laws.

      Recent Actions by Company

         As described  above,  the Company has engaged CSFB to assist  Galaxy in
exploring  various   strategic   alternatives,   including  raising   additional
financing,  which  may  involve  refinancing  Galaxy's  existing  Senior  Credit
Facility and  soliciting  consents to amend certain terms of the Notes to permit
such a  refinancing.  The  additional  financing  may  also be used to meet  the
Company's  interest  payment  under the Notes due October 1, 2000.  The Company,
with the  assistance  of CSFB,  continues  to evaluate the sale of assets or the
Company as a whole.

      Galaxy is negotiating  with certain lenders to replace its existing Senior
Credit Facility with a new credit facility ("New Credit Facility").  In order to
refinance its existing debt, the Company must first seek and obtain the approval
of a majority of the Noteholders ("Required Approval"). If the Required Approval
is granted,  and if the New Credit  Facility is closed,  the Company will borrow
funds under the New Credit  Facility to  refinance  the $28.0  million of senior
indebtedness  outstanding  under the  Senior  Credit  Facility.  The New  Credit
Facility, if established,  would have an initial maximum credit line of at least
$45.0  million.  It is expected that the Company will borrow funds under the New
Credit Facility in order to make the interest  payment on the Notes that was due
on October 1, 2000, plus interest on the defaulted  interest accrued through the
payment  date.  The  implementation  of the New Credit  Facility  would have the
effect of permitting the Company to incur  additional  indebtedness  beyond that
allowed  currently  under the  Indenture  governing  the Notes.  There can be no
assurances that the Required Approval will be granted by the Noteholders or that
the New Credit Facility will be successfully closed.

      Galaxy  has  entered  into a Letter of  Intent  with  CableDirect,  L.L.C.
("CableDirect"),  dated  September  2, 2000,  pursuant to which Galaxy will sell
approximately  26,429 small,  rural subscribers in several states to CableDirect
in exchange  for  approximately  $26,429,000  in cash and  $6,607,250  in equity
interests of  CableDirect.  Galaxy also has entered into a Letter of Intent with
Pegasus Communications Corporation ("Pegasus"),  dated July 6, 2000, pursuant to
which Galaxy will sell to Pegasus lists of  approximately  6,300  subscribers in
remote or rural areas.  These  subscribers are located in areas in which Pegasus
and its affiliates  have the right to distribute  DIRECTV(R)  services.  Pegasus
will engage  Galaxy to convert  these  subscribers  to DIRECTV and to market and
sell the DIRECTV service to other homes in these areas.  The purchase price will
be largely dependent on the actual number of Galaxy's  subscribers and new homes
that convert to Pegasus' DIRECTV services. No assurances can be given that these
transactions will be completed.

       Failure to Obtain Required Approval

      In the event the Required  Approval is not obtained,  the Company will not
be able to enter into the New Credit  Facility to refinance its existing  senior
indebtedness  and it will not be able to borrow  additional  funds under the New
Credit Facility to make the October 1, 2000 interest payment on the Notes. Under
the Company's  existing Senior Credit Facility,  approximately  $28.5 million is
due and payable as of December 31, 2000. However,  this amount could be declared
immediately  due and payable by the Company's  current  senior lenders due to an
event of default that  occurred on July 31, 2000,  when Galaxy  failed to have a
signed purchase agreement for its assets or partnership interests.

         In  addition,  the  trustee  and  Noteholders  representing  25% of the
outstanding  principal  amount of the Notes are entitled to accelerate the Notes
due to an event of default that  occurred on October 31, 2000 when Galaxy failed
to make an  interest  payment.  Galaxy  would be  responsible  for the costs and
expenses of  collection.  If Galaxy  fails to pay these  amounts on demand,  the
Trustee may institute a court  proceeding to obtain a judgment  against  Galaxy.
Holders of a majority in principal amount of the Notes may elect to rescind such
acceleration  declaration  at any time  prior to  judgment  if  Galaxy  pays all
Trustee  costs and expenses  and all overdue  amounts  under the Notes,  and all
other events of default are cured or waived.

         If the current  senior lenders  declare the Company's debt  immediately
due and payable  after that date,  the Company  could be forced to make a "quick
sale" of its assets or  partnership  interests,  or the Company  could be forced
into  bankruptcy.  Even if the Company is able to sell its assets or partnership
interests to a third party,  there can be no assurances  that the proceeds would
be  sufficient  to repay its  indebtedness  under  the  existing  Senior  Credit
Facility and the Notes.

      Absent the closing of the New Credit Facility, the partnership's inability
to meet its cash flow needs raises  substantial  doubt about its ability to meet
its liquidity and capital resource needs.

      RESULTS OF OPERATIONS

      The following  table sets forth the  percentage  relationship  of selected
income  statement  items as a percent of revenues  for the three months and nine
months ended  September 30, 2000 and  September  30, 1999.  Amounts shown are in
thousands.
<TABLE>
<CAPTION>
                                          For the three months ended September 30,    For the nine months ended September 30,
                                          ---------------------------------------     ---------------------------------------
                                            2000                       1999                   2000                  1999
                                          -----------------     -----------------     -----------------     -----------------
<S>                                       <C>         <C>       <C>         <C>       <C>         <C>       <C>         <C>
Revenues                                  $ 13,459    100.0%    $ 14,184    100.0%    $ 41,262    100.0%    $ 43,270    100.0%
                                          --------    -----     --------    -----     --------    -----     --------    -----
Operating expenses:
    Systems operations                       7,010     52.1%       6,794     47.9%      20,752     50.3%      20,379     47.1%
    Selling, general and administrative      1,679     12.5%       1,490     10.5%       4,631     11.2%       4,396     10.2%
    Management fee to affiliate                403      3.0%         421      3.0%       1,236      3.0%       1,644      3.8%
    Depreciation and amortization            4,713     35.0%       4,773     33.7%      13,850     33.6%      15,086     34.9%
                                          --------    -----     --------    -----     --------    -----     --------    -----
      Total operating expenses              13,805    102.6%      13,477     95.0%      40,469     98.1%      41,504     95.9%
                                          --------    -----     --------    -----     --------    -----     --------    -----

         Operating income                     (346)    (2.6%)        706      5.0%         793      1.9%       1,766      4.1%

Interest expense                            (5,155)   (38.3%)     (4,604)   (32.5%)    (15,962)   (38.7%)    (14,205)   (32.8%)
Gain (loss) on sale of assets                  (28)    (0.2%)        (44)    (0.3%)      2,002      4.9%       6,658     15.4%
Interest income and other, net                 (14)    (0.1%)         41      0.3%         (89)    (0.2%)         76      0.2%
                                          --------    -----     --------    -----     --------    -----     --------    -----
    Net loss                              ($ 5,543)   (41.2%)   ($ 3,901)   (27.5%)   ($13,256)   (32.1%)   ($ 5,705)   (13.2%)
                                          ========    =====     ========    =====     ========    =====     ========    =====
</TABLE>

      The following table sets forth demographic  information as of December 31,
1999, March 31, 2000, June 30, 2000 and September 30, 2000.
<TABLE>
<CAPTION>

                                    June 30,      September 30,   December 31,    March 31,      June 30,
                                      1999            1999            1999          2000           2000
                                     --------       --------       --------       --------       --------            -

<S>                                  <C>            <C>            <C>            <C>            <C>
Homes Passed                         225,226        214,341        210,816        205,539        205,539
Basic Subscribers                    134,233        126,861        126,357        123,941        120,954
Basic Penetration                      59.60%         59.19%         59.94%         60.30%         58.85%
Monthly Revenue per Subscriber   $     35.94    $     36.93    $     36.11    $     37.15    $     37.24

Premium Subscribers                   61,133         57,013         56,231         53,684         49,350
Premium Penetration                    45.54%         44.94%         44.50%         43.31%         40.80%
</TABLE>

      Galaxy generated revenues in the amount of $13,458,633 and $41,261,921 for
the three-month and nine-month  periods ended September 30, 2000,  respectively.
For the  three-month  and nine-month  periods ended  September 30, 1999,  Galaxy
generated  revenues in the amount of $14,183,681 and $43,270,181,  respectively.
The  decrease  in  revenue  from  1999 to 2000 was a result  of a  reduction  in
subscribers due to the sale of non-core cable systems.  Average monthly revenues
per subscriber  increased  from $36.93 for the three months ended  September 30,
1999 to $37.35 for the three months ended September 30, 2000. Galaxy was able to
realize  additional  revenue per subscriber by increasing basic rates in certain
systems and adding  revenues  from advanced  services such as digital,  internet
access, and distance learning.

      For the three months ended September 30, 2000 and 1999,  system  operating
expenses,   consisting  of  subscriber   costs,   technician  costs  and  system
maintenance costs, were $7,009,465 and $6,793,725, respectively. As a percentage
of  revenues,  these  expenses  increased  from 47.9% for the three months ended
September  30,  1999 to 52.1% in the  comparable  period  of 2000.  For the nine
months  ended  September  30,  2000 and 1999,  system  operating  expenses  were
$20,752,173  and  $20,378,609,  respectively,  and, as a percentage of revenues,
increased  from 47.1% for the nine months ended  September  30, 1999 to 50.3% in
the  comparable  period of 2000.  These  expenses  increased as a percentage  of
revenue primarily due to increased programming costs to Galaxy.

       Selling,  general and administrative expenses, which include office rents
and  maintenance,   marketing  costs  and  corporate  expenses,  increased  from
$1,490,154  to  $1,678,916  for the three months ended  September  30, 2000,  as
compared to the three months ended  September  30,  1999.  Selling,  general and
administrative  expenses  increased  from  $4,396,163 to $4,631,185 for the nine
months ended  September 30, 2000 as compared to the nine months ended  September
30,  1999.  For the  three-month  period  ended  September  30,  these  expenses
increased  as a percentage  of revenue from 10.5% in 1999 to 12.5% in 2000.  For
the nine month period ended September 30, these expenses increased from 10.2% in
1999 to 11.2% in 2000.  The  increase  for the three and nine  month  periods is
primarily due to a decrease in co-op marketing  reimbursements  during the first
quarter of 2000.

      For the three months ended September 30, 2000 and 1999,  depreciation  and
amortization expense was $4,712,872,  or 35.0% of revenues,  and $4,772,917,  or
33.7% of revenues,  respectively.  For the nine months ended  September 30, 2000
and 1999,  depreciation  and amortization  expense was $13,850,201,  or 33.6% of
revenues, and $15,085,708, or 34.9% of revenues,  respectively.  The decrease in
these expenses is  attributable to the sale of cable  television  systems in the
Partnership's non-core areas.

      For the three months ended September 30, 2000 and 1999,  interest  expense
was $5,154,480 and $4,603,575, respectively. For the nine months ended September
30,  2000  and  1999,   interest   expense  was  $15,960,953  and   $14,205,355,
respectively.  These increases were due to an increase in interest rates charged
to Galaxy during those periods.

      Gain  (loss) on sale of  assets  went from a net loss on sale of assets of
$43,934 for the three months ended  September 30, 1999, to a net loss on sale of
assets of $28,362 for the three months ended  September 30, 2000. Gain (loss) on
sale of assets went from a net gain on sale of assets of $6,658,432 for the nine
months ended  September  30, 1999, to a net gain on sale of assets of $2,002,228
for the nine months ended  September  30, 2000.  More gain on sale of assets was
realized in 1999 as a result of the sale of non-core assets during that period.

      Interest income and other,  net, which includes  interest income and other
expenses,  reflected  a net  expense  of  $14,201  for the  three  months  ended
September  30,  2000 and a net  income of  $40,654  for the three  months  ended
September 30, 1999. For the nine months ended September 30, 2000 interest income
and other, net, reflected a net expense of $89,297,  compared to a net income of
$75,585 for the nine months ended September 30, 1999.

      Galaxy as an entity pays no income taxes,  although it is required to file
federal and state income tax returns for informational purposes only. All income
or  loss  "flows  through"  to  the  partners  of  Galaxy  as  specified  in the
Partnership agreement.

      LIQUIDITY AND CAPITAL RESOURCES

      The  Partnership has incurred losses each year since its inception and has
a Partnership  deficit of $45.2 million at September 30, 2000.  During 2000, the
Partnership  received net  proceeds  from sales of cable  television  systems of
approximately  $3.4 million,  which was primarily  used to pay down principal of
the Company's Senior Credit Facility.

      The Company believes that cash generated from operations alone will not be
sufficient  to pay the Senior  Credit  Facility due on December 31, 2000 without
proceeds from the sale of assets,  refinancing of the Senior Credit Facility, or
the sale of the Partnership's  interest in Galaxy. Unless the Company is able to
obtain the Required  Approval to amend the Indenture,  and unless the New Credit
Facility  is closed,  the  partnership's  inability  to meet its cash flow needs
raises substantial doubt about its ability to continue as a going concern.

      As of  September  30,  2000,  Galaxy  had  $3,239,746  in  cash  and  cash
equivalents.  As of such date,  total  liabilities  (other  than notes  payable)
exceeded cash and cash  equivalents by $21,811,374.  Galaxy expects to fund this
deficiency  through its  operating  cash flows,  the sale of assets and new debt
financing.

      Galaxy  had  earnings  before  interest,   depreciation  and  amortization
expense, and gain on sale of cable systems ("EBITDA") of $4,367,042, or 32.4% of
operating  revenues,  and $5,479,109,  or 38.6% of operating  revenues,  for the
three months ended September 30, 2000 and 1999, respectively.  Galaxy had EBITDA
of $14,642,110,  or 35.5% of operating  revenues,  and $16,851,639,  or 38.9% of
operating  revenues,  for the nine  months  ended  September  30, 2000 and 1999,
respectively.

      Galaxy had an aggregate of $149.9 million of  indebtedness as of September
30,  2000,  representing  $119.7  million of senior  subordinated  notes (net of
unamortized discount of $0.3 million),  $27.9 million outstanding debt under its
Senior Credit Facility and $2.3 million in various other obligations.

      As of  September  30,  2000,  Galaxy  had $87.7  million  in  systems  and
equipment  consisting  of $83.1  million of cable  television  systems  and $4.6
million of  vehicles,  equipment,  buildings  and office  equipment,  all net of
accumulated  depreciation.  Galaxy had capital expenditures (exclusive of system
acquisitions)  of $6.7 million for the nine months ended September 30, 2000. For
the nine months  ended  September  30,  1999,  Galaxy had  capital  expenditures
(exclusive of system  acquisitions) of $9.6 million.  These capital expenditures
were  financed  mainly  through the sale of non-core  assets and cash flows from
operations.  During the first nine months of 2000, Galaxy's capital expenditures
were  primarily  used to add  channels,  eliminate  headends by  interconnecting
adjacent systems with fiber-optic  cable, and construct  wide-area  networks for
distance learning and data services.

      Galaxy  provided net cash from  operating  activities  of  $4,576,974  and
$10,786,420 for the nine months ended September 30, 2000 and 1999, respectively,
a decrease in net cash  provided by operating  activities  of  $6,209,446.  This
decrease  is mainly due to a decrease  in EBITDA,  along with a decrease in cash
used to pay prepaids and other, accounts payable and accrued expenses during the
periods.

      Galaxy used net cash from investing  activities of $3,335,247 for the nine
months  ended  September  30,  2000,  and  $932,748  for the nine  months  ended
September  30,  1999,  an increase in net cash used in investing  activities  of
$2,402,499.  This  decrease is due to a decrease  in  proceeds  from the sale of
cable  systems,  offset by a decrease in the purchase of capital  assets  during
2000.

      Galaxy  provided net cash in financing  activities of  $1,611,534  for the
nine  months  ended  September  30,  2000,  and  used net  cash  from  financing
activities  of  $5,528,670  for  the  nine  months  ended  September  30,  1999,
respectively,  a change in cash flows from  financing  activities of $7,140,204.
This was mainly due to a decrease in cash used to pay down principle of the term
debt, net of borrowings.

      SAFE HARBOR UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

      The statements  contained in this Form 10-Q relating to Galaxy's operating
results, and plans and objectives of management for future operations, including
plans or  objectives  relating to Galaxy's  products  and  services,  constitute
forward  looking  statements  within  the  meaning  of  the  Private  Securities
Litigation  Reform Act of 1995.  Actual results of Galaxy may differ  materially
from those in the forward looking  statements and may be affected by a number of
factors.  These factors include  Galaxy's ability to refinance its Senior Credit
Facility and to pay interest on the Notes, the receipt of regulatory  approvals,
the  success  of  Galaxy's  implementation  of  digital  technology,  subscriber
equipment availability,  tower space availability,  the absence of interference,
as well as other factors contained herein and in Galaxy's securities filings.

      Galaxy's future revenues and profitability are difficult to predict due to
a variety of risks and  uncertainties,  including  (i) business  conditions  and
growth in Galaxy's existing  markets,  (ii) the successful launch of systems and
technologies in new and existing markets,  (iii) Galaxy's existing  indebtedness
and the need for additional  financing to fund subscriber  growth and system and
technological  development,   (iv)  government  regulation,   including  Federal
Communications  Commission  regulations,  (v)  Galaxy's  dependence  on  channel
leases,  (vi) rising interest rates, and fuel and programming  costs, along with
Galaxy's  customers'  possible  unwillingness to pay increased  charges to cover
such  increased  expenses,   (vii)  numerous  competitive   factors,   including
alternative methods of distributing and receiving video transmissions and (viii)
the ability of Galaxy to successfully implement its strategy of focusing on core
service areas while operating under a limited capital expenditures budget.

      In addition to the matters noted above,  certain other  statements made in
this Form 10-Q are forward  looking.  Such statements are based on an assessment
of a variety of factors,  contingencies  and  uncertainties  deemed  relevant by
management,  including technological changes,  competitive products and services
and management  issues. As a result, the actual results realized by Galaxy could
differ materially from the statements made herein. Readers of this Form 10-Q are
cautioned not to place undue reliance on the forward looking  statements made in
this Form 10-Q or in Galaxy's other securities filings.


                                       17
<PAGE>

      Item 3. -- QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISKS

      Galaxy is not directly  exposed to any foreign exchange rates or commodity
price fluctuations.

      Galaxy is exposed to changes in interest rates due to its variable rate of
interest (ABR plus 2%) on its Senior Credit Facility. Based on Galaxy's variable
debt at  September  30,  2000,  a 1%  increase  in market  interest  rates would
increase yearly interest expense and decrease income by approximately  $302,000.
This  amount  was  calculated  using  the  variable  interest  rate in effect at
September 30, 2000, assuming a constant level of variable-rate debt. This amount
does not include the effects of other events that could affect  interest  rates,
such as a downturn in overall  economic  activity,  or actions  management could
take to  lessen  risk.  This  also does not take into  account  any  changes  in
Galaxy's financial structure that may result from higher interest rates.



                                       18
<PAGE>

PART II.  OTHER INFORMATION

Items 1 through 5.

None.

Item 3.  Default on Senior Securities

      The  amount of default on the Notes is $7.4  million  due  October 1, 2000
      plus interest on the defaulted interest.

Item 6.  Exhibits and Reports on Form 8-K

(a)   Exhibits.  The following exhibits are included or incorporated by
---------------
      reference below.

      27.   Financial Data Schedule

(b)   Reports of Form 8-K. On January 20, 2000 Galaxy filed a report on Form 8-K
      release  announcing that it had engaged the service of Credit Suisse First
      Boston  (formerly  known  as  Donaldson,   Lufkin  &  Jenrette  Securities
      Corporation) to act as its financial advisor.


                                       19
<PAGE>

      SIGNATURES

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



                                      GALAXY TELECOM, L.P.
                                BY:   Galaxy Telecom, Inc.
                                      as General Partner




Date: November 14, 2000
                                      ---------------------------------------
                                BY:   J. Keith Davidson
                                      Vice President-Finance
(Principal Financial Officer)


                                       20
<PAGE>

                                  EXHIBIT INDEX
Exhibit Number             Description
--------------               ----------------------------------
     27            Financial Data Schedule