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 June 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 JUNE 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..........................................17

PART II.      Other Information............................................18

Signatures        .........................................................19

Exhibit Index     .........................................................20




<PAGE>



PART I.  FINANCIAL INFORMATION

Item 1. - FINANCIAL STATEMENTS

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

<TABLE>
<CAPTION>

                                                                     June 30,        December 31,
                                                                       2000             1999
                                                                 -------------    -------------
<S>                                                              <C>              <C>
ASSETS

Cash in banks                                                    $   1,811,544    $     386,485
Subscriber receivables, net of allowance for doubtful accounts
   of $122,353 and $87,449, respectively                             4,218,382        4,431,946
Systems and equipment, net                                          89,910,142       94,568,015
Intangible assets, net                                              31,764,309       34,266,208
Prepaids and other                                                   3,698,869        3,877,975
                                                                 -------------    -------------
Total assets                                                     $ 131,403,246    $ 137,530,629
                                                                 =============    =============


LIABILITIES AND PARTNERS' DEFICIT

Accounts payable and accrued expenses                            $  17,009,196    $  17,198,650
Subscriber deposits and deferred revenue                             3,789,525        4,026,920
Long-term debt and other obligations                               150,189,407      148,176,701
                                                                 -------------    -------------
   Total liabilities                                               170,988,128      169,402,271


Partners' deficit:
  General partners                                                 (39,584,882)     (31,871,642)
  Limited partners                                                        --               --
                                                                 -------------    -------------
    Total partners' deficit                                        (39,584,882)     (31,871,642)
                                                                 -------------    -------------
Total liabilities and partners' deficit                          $ 131,403,246    $ 137,530,629
                                                                 =============    =============

</TABLE>


               The accompanying notes are an integral part of the
                       consolidated financial statements.


<PAGE>



                       GALAXY TELECOM, L.P. AND SUDSIDIARY
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)
<TABLE>
<CAPTION>

                                            For the three months ended June 30,   For the six months ended June 30,
                                            ----------------------------------    --------------------------------
                                                     2000            1999               2000           1999
                                                 ------------    ------------       ------------    ------------

<S>                                              <C>             <C>                <C>             <C>
Revenues                                         $ 13,812,885    $ 14,516,917       $ 27,803,288    $ 29,086,470
                                                 ------------    ------------       ------------    ------------
Operating expenses:
    Systems operations                              6,920,491       6,911,118         13,742,708      13,584,884
    Selling, general and administrative             1,399,451       1,405,397          2,952,269       2,905,979
    Management fee to affiliate                       413,580         568,400            833,243       1,223,077
    Depreciation and amortization                   4,364,412       5,088,515          9,137,329      10,312,791
                                                 ------------    ------------       ------------    ------------
       Total operating expenses                    13,097,934      13,973,430         26,665,549      28,026,731
                                                 ------------    ------------       ------------    ------------

          Operating income                            714,951         543,487          1,137,739       1,059,739

Interest expense                                   (5,383,970)     (4,834,458)       (10,806,473)     (9,601,780)
Gain (loss) on sale of assets                         (32,817)      6,316,733          2,030,590       7,225,912
Interest income and other, net                        (87,868)         15,938            (75,096)         34,931
                                                 ------------    ------------       ------------    ------------
    Net loss                                     $ (4,789,704)   $  2,041,700       $ (7,713,240)   $ (1,281,198)
                                                 ============    ============       ============    ============


</TABLE>

               The accompanying notes are an integral part of the
                       consolidated financial statements.


<PAGE>

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

<TABLE>
<CAPTION>
                                                                  For the six months ended June 30,
                                                                  ------------------------------
                                                                       2000             1999
                                                                   ------------    ------------
<S>                                                                <C>             <C>
Cash flows from operating activities:
    Net loss                                                       $ (7,713,240)   $ (1,281,198)
    Adjustments to reconcile net loss to net cash
       provided by operating activities:
       Depreciation expense                                           8,338,021       8,968,069
       Amortization expense                                             799,308       1,344,722
       Amortization included in interest expense                      1,448,208         659,999
       Provision for doubtful accounts receivable                       489,846         388,567
       Gain on sale of assets                                        (2,030,590)     (7,225,912)
       Changes in assets and liabilities:
          Subscriber receivables                                       (276,282)       (427,853)
          Prepaids and other                                            179,106         834,823
          Accounts payable and accrued expenses                        (189,454)      1,074,097
          Subscriber deposits and deferred revenue                     (237,395)        (60,653)
                                                                   ------------    ------------
             Net cash provided by operating activities                  807,528       4,274,661
                                                                   ------------    ------------
Cash flows from investing activities:
    Acquisition of cable systems - net of trades                           --        (9,963,947)
    Proceeds from sales of cable systems                              3,460,611      19,165,505
    Purchase of capital assets                                       (4,742,384)     (6,898,379)
    Other intangible assets                                             (37,929)       (532,065)
                                                                   ------------    ------------
             Net cash provided by (used in) investing activities     (1,319,702)      1,771,114
                                                                   ------------    ------------
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                                          (617,294)       (616,010)
    Payment of debt issue costs                                         (45,473)       (181,806)
                                                                   ------------    ------------
             Net cash provided by (used in) financing activities      1,937,233      (5,262,816)
                                                                   ------------    ------------
Net increase in cash and cash equivalents                             1,425,059         782,959

Cash and cash equivalents, beginning of period                          386,485       2,213,777
                                                                   ------------    ------------
Cash and cash equivalents, end of period                           $  1,811,544    $  2,996,736
                                                                   ============    ============

</TABLE>


               The accompanying notes are an integral part of the
                       consolidated financial statements.


<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  principles.  The
results for the six months ended June 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 six months
ended June 30, 2000 and June 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 June 30, 2000 and 1999 was
approximately $7.6 million and $8.4 million, respectively.  Interest paid during
the six months ended June 30, 2000 and 1999 was  approximately  $8.3 million and
$8.8 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  $413,580  for the three months ended June 30, 2000 and $568,400 for the
three months ended June 30, 1999.  Management fees totaled  $833,243 for the six
months  ended June 30,  2000 and  $1,223,077  for the six months  ended June 30,
1999.

4.       LONG-TERM DEBT

         Long-term debt consists of the following:
<TABLE>
<CAPTION>

                                                             June 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 2% (11.25% at June 30, 2000)      $ 22,925,000

New term loan with interest payable quarterly, at an
  ABR rate of PRIME plus 2% (11.25% at June 30, 2000)         5,000,000

12.375% senior subordinated notes, net of unamortized
  discount of $315,000 and $345,000 at June 30, 2000 and
  December 31, 1999, respectively, with interest payable
  semiannually  on April 1 and October 1                    119,685,000    119,655,000

Other, including capital leases                               2,579,407      3,196,701
                                                           ------------   ------------
                                                           $150,189,407   $148,176,701
                                                           ============   ============
</TABLE>

         Galaxy's  September  1995 Amended and Restated Loan  Agreement has been
periodically  amended and  subsequently  converted to a Term Loan ("Term Loan").
Net proceeds from any system sale must be used to reduce the outstanding balance
under the Term Loan. The Term Loan also requires  Galaxy to maintain  compliance
with certain financial ratios and other covenants,  such as annualized cash flow
to interest expense,  capital expense limits and basic subscribers to total long
term debt.  Galaxy is not  permitted to borrow  additional  funds under the Term
Loan without the prior written consent of the lenders.  The Term Loan is due the
earlier of December 31, 2000 or upon the  occurrence of certain events set forth
in the Loan Agreement.

         On March 31,  2000,  Galaxy  entered  into a new $5.0 million Term Loan
Agreement  from three of the four lenders under the Term Loan ("New Loan").  The
New Loan also  requires  Galaxy to maintain  compliance  with certain  financial
ratios and other  covenants,  such as annualized cash flow to interest  expense,
capital  expense  limits and basic  subscribers to total long term debt. The New
Loan bears  interest at the same rate as the amended term loan  agreement and is
due on December 31, 2000 or upon the  occurrence of certain  events set forth in
the  agreement.  The New Loan restricts  Galaxy's  ability to borrow without the
consent of the lenders.

         As a condition to the New Loan,  Galaxy will owe an $800,000 fee to the
lenders  that  will be due and  payable  upon  repayment  of the New  Loan.  The
$800,000  fee shall be  reduced to  $600,000  if the New Loan is paid in full by
September 15, 2000.

         Under the Term Loan and the New Loan,  it is an "Event of Default" with
respect to each 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.

         Galaxy has entered into  separate  letters of intent with Cable Direct,
L.L.C.  and Pegasus  Communications  Corporation to sell certain of its smallest
non-core systems.  These two separate  transactions  would affect  approximately
25,000 of the  Partnership's  subscribers at a combined purchase price in excess
of $30,000,000.  Galaxy has previously  entered into a  non-exclusive  letter of
intent with Mallard Cablevision, L.L.C. ("Mallard") whereby Galaxy would sell to
Mallard its interests in virtually all its remaining subscribers.

         The Partnership  has  communicated to its lenders the status of each of
the  preceding  agreements  and,  even  though the July 31,  2000  deadline  has
expired,  the  lenders  have  taken no action as of this date.  The  Partnership
continues to diligently pursue definitive agreements with any and all previously
mentioned  parties.  However,  there can be no assurances that any or all of the
agreements can be secured to the satisfaction of the lenders.

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  $3.5
million, or approximately  $2,492 per subscriber.  During the three months ended
June 30, 2000,  Galaxy used a portion of the  proceeds  from this sale to reduce
principle outstanding on the Term Loan.

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.


<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  $3.5
million,  or approximately  $2,492 per subscriber.  Galaxy will use the proceeds
from this sale to pay the principle of the Term Loan.

         On March 31, 2000  Galaxy  amended  its Term Loan  agreement  to modify
financial  covenants and change the maturity date of all  outstanding  borrowing
under  the Term  Loan  agreement  and  entered  into a new $5  million  New Loan
Agreement  from  three of the four  lenders  under the Term Loan  agreement.  As
discussed in Note 2 to Galaxy's consolidated financial statements for the period
ended  December 31,  1999,  based on current  estimates of operating  cash flow,
management  does not believe it will have  sufficient cash to fund required debt
payments under the Term Loan and the New Loan due on December 31, 2000. It is an
event of  default  under the Term  Loan and New Loan if  Galaxy  does not have a
definitive  agreement  to sell its  partnership  interests or assets by July 31,
2000.  Galaxy's  partners  are  negotiating  to sell  their  Galaxy  partnership
interests to a third party. However, closing of such transaction is not assured.
Absent the completion of the  aforementioned  transaction and 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 six
months ended June 30, 2000 and June 30, 1999. Amounts shown are in thousands.
<TABLE>
<CAPTION>

                                            For the three months ended June 30,           For the six months ended June 30,
                                          ---------------------------------------     ---------------------------------------
                                                 2000                 1999                   2000                  1999
                                          -----------------     -----------------     -----------------     -----------------

<S>                                       <C>         <C>       <C>         <C>       <C>         <C>       <C>         <C>
Revenues                                  $ 13,813    100.0%    $ 14,517    100.0%    $ 27,803    100.0%    $ 29,086    100.0%
                                          --------    -----     --------    -----     --------    -----     --------    -----
Operating expenses:
    Systems operations                       6,920     50.1%       6,911     47.6%      13,743     49.4%      13,585     46.7%
    Selling, general and administrative      1,399     10.1%       1,405      9.7%       2,952     10.6%       2,906     10.0%
    Management fee to affiliate                414      3.0%         568      3.9%         833      3.0%       1,223      4.2%
    Depreciation and amortization            4,364     31.6%       5,089     35.1%       9,137     32.9%      10,313     35.5%
                                          --------    -----     --------    -----     --------    -----     --------    -----
       Total operating expenses             13,097     94.8%      13,973     96.3%      26,665     95.9%      28,027     96.4%
                                          --------    -----     --------    -----     --------    -----     --------    -----

          Operating income                     716      5.2%         544      3.7%       1,138      4.1%       1,059      3.6%

Interest expense                            (5,384)   (39.0%)     (4,834)   (33.3%)    (10,806)   (38.9%)     (9,602)   (33.0%)
Gain (loss) on sale of assets                  (34)    (0.2%)      5,793     39.9%       2,030      7.3%       6,702     23.0%
Interest income and other, net                 (88)    (0.6%)         16      0.1%         (75)    (0.3%)         35      0.1%
                                          --------    -----     --------    -----     --------    -----     --------    -----
    Net loss                              $ (4,790)   (34.7%)   $  1,519     10.5%    $ (7,713)   (27.7%)   $ (1,806)    (6.2%)
                                          ========    =====     ========    =====     ========    =====     ========    =====
</TABLE>
         The following table sets forth demographic information as of, September
30, 1999, December 31, 1999, March 31, 2000 and June 30, 2000.
<TABLE>
<CAPTION>


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

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

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


         Galaxy generated  revenues in the amount of $13,812,885 and $27,803,288
for the three-month and six-month periods ended June 30, 2000, respectively. For
the  three-month  and six-month  periods ended June 30, 1999,  Galaxy  generated
revenues  in the  amount  of  $14,516,917  and  $29,086,470,  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 $35.94 for the three  months  ended June 30, 1999 to
$37.24  for the three  months  ended June 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 June 30, 2000 and 1999,  system  operating
expenses,   consisting  of  subscriber   costs,   technician  costs  and  system
maintenance costs, were $6,920,491 and $6,911,118, respectively. As a percentage
of revenues, these expenses increased from 47.6% for the three months ended June
30, 1999 to 50.1% in the  comparable  period of 2000.  For the six months  ended
June  30,  2000  and  1999,  system  operating  expenses  were  $13,742,708  and
$13,584,884,  respectively,  and, as a percentage  of revenues,  increased  from
46.7% for the six months ended June 30, 1999 to 49.4% 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,  decreased from
$1,405,397 to  $1,399,451  for the three months ended June 30, 2000, as compared
to the three  months ended June 30, 1999.  Selling,  general and  administrative
expenses  increased from  $2,905,979 to $2,952,269 for the six months ended June
30, 2000 as compared to the six months ended June 30, 1999. For the  three-month
period ended June 30, these  expenses  increased as a percentage of revenue from
9.7% in 1999 to 10.1% in 2000.  For the  six-month  period  ended June 30, these
expenses  increased  from 10.0% in 1999 to 10.6% in 2000.  The  increase for the
three and six month  periods is primarily  due to a decrease in co-op  marketing
reimbursements during the first quarter of 2000.

         For the three  months  ended June 30, 2000 and 1999,  depreciation  and
amortization expense was $4,364,412,  or 31.6% of revenues,  and $5,088,515,  or
35.1% of  revenues,  respectively.  For the six months  ended June 30,  2000 and
1999,  depreciation  and  amortization  expense  was  $9,137,329,  or  32.9%  of
revenues, and $10,312,791, or 35.5% 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 June 30, 2000 and 1999, interest expense was
$5,383,969 and $4,834,458,  respectively. For the six months ended June 30, 2000
and 1999, interest expense was $10,806,472 and $9,601,780,  respectively.  These
increase  were due to an  increase in interest  rates  charged to Galaxy  during
those periods.

         Gain (loss) on sale of assets went from a net gain on sale of assets of
$6,316,733  for the three months  ended June 30, 1999,  to a net loss on sale of
assets of $32,817 for the three months ended June 30, 2000.  Gain (loss) on sale
of  assets  went from a net gain on sale of  assets  of  $7,225,912  for the six
months ended June 30, 1999,  to a net gain on sale of assets of  $2,030,589  for
the six months ended June 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 $87,869 for the three  months ended
June 30,  2000 and a net income of $15,938 for the three  months  ended June 30,
1999.  For the six months ended June 30, 2000  interest  income and other,  net,
reflected a net expense of $75,097,  compared to a net income of $34,930 for the
six months ended June 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 $39.6 million at June 30, 2000.  During 2000,  the
Partnership  received net  proceeds  from sales of cable  television  systems of
approximately  $3.5 million,  which was primarily  used to pay down principle of
the Term Loan.

         On March 31, 2000 the  Partnership  amended its Term Loan  agreement to
modify  financial  covenants  and change the  maturity  date of all  outstanding
borrowings under the term loan agreement.

         Additionally,   as  part  of  this  amended  Term  Loan  and  New  Loan
agreements,  the  Partnership  must have a definitive sale agreement in force by
July  31,  2000 to  sell  substantially  all  the  interests  or  assets  of the
Partnership  sufficient for the repayment of all Partnership loans. Absence of a
definitive  agreement  to sell  substantially  all  the  assets  of the  Company
triggers an event of default  under the terms of the  amended  Term Loan and New
Loan agreements.

         Galaxy has entered into  separate  letters of intent with Cable Direct,
L.L.C.  and Pegasus  Communications  Corporation to sell certain of its smallest
non-core systems.  These two separate  transactions  would affect  approximately
25,000 of the  Partnership's  subscribers at a combined purchase price in excess
of $30,000,000.  Galaxy has previously  entered into a  non-exclusive  letter of
intent with Mallard Cablevision, L.L.C. ("Mallard") whereby Galaxy would sell to
Mallard its interests in virtually all its remaining subscribers.

         The Partnership  has  communicated to its lenders the status of each of
the  preceding  agreements  and,  even  though the July 31,  2000  deadline  has
expired,  the  lenders  have  taken no action as of this date.  The  Partnership
continues to diligently pursue definitive agreements with any and all previously
mentioned  parties.  However,  there can be no assurances that any or all of the
agreements can be secured to the satisfaction of the lenders.

         The Partnership believes that cash generated from operations alone will
not be  sufficient  to pay the Term Loan and the New Loan on  December  31, 2000
without proceeds from the sale of assets,  refinancing of the Term Loans, or the
sale of the  Partnership's  interest  in Galaxy.  Absent the  completion  of the
aforementioned transaction and the partnership's inability to meet its cash flow
needs  raises  substantial  doubt  about its ability to meet its  liquidity  and
capital resource needs.

         As  of  June  30,  2000,   Galaxy  had  $1,811,544  in  cash  and  cash
equivalents.  As of such date,  total  liabilities  (other  than notes  payable)
exceeded cash and cash  equivalents by $18,987,177.  Galaxy expects to fund this
deficiency  through its operating cash flows,  the sale of assets and new equity
or debt financing.

         Galaxy had earnings  before  interest,  depreciation  and  amortization
expense, and gain on sale of cable systems ("EBITDA") of $5,079,363, or 36.8% of
operating  revenues,  and $5,632,002,  or 38.8% of operating  revenues,  for the
three  months ended June 30, 2000 and 1999,  respectively.  Galaxy had EBITDA of
$10,275,068,  or 37.0%  of  operating  revenues,  and  $11,372,530,  or 39.1% of
operating  revenues,   for  the  six  months  ended  June  30,  2000  and  1999,
respectively.

         Galaxy had an aggregate of $150.2  million of  indebtedness  as of June
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
term loan and $2.6 million in various other obligations.

         On March 31,  2000,  Galaxy  entered  into a new $5.0 million Term Loan
Agreement  from three of the four lenders under the Term Loan ("New Loan").  The
New Loan also  requires  Galaxy to maintain  compliance  with certain  financial
ratios and other  covenants,  such as annualized cash flow to interest  expense,
capital  expense  limits and basic  subscribers to total long term debt. The New
Loan bears  interest at the same rate as the amended term loan  agreement and is
due on December 31, 2000 or upon the  occurrence of certain  events set forth in
the  agreement.  The New Loan restricts  Galaxy's  ability to borrow without the
consent of the lenders.

         As of June 30, 2000,  Galaxy had $89.9 million in systems and equipment
consisting  of $85.0  million of cable  television  systems and $4.9  million of
vehicles,  equipment,  buildings and office  equipment,  all net of  accumulated
depreciation. Galaxy had capital expenditures (exclusive of system acquisitions)
of $4.7 million for the six months ended June 30, 2000. For the six months ended
June  30,  1999,   Galaxy  had  capital   expenditures   (exclusive   of  system
acquisitions) of $6.9 million.  These capital  expenditures were financed mainly
through the sale of non-core assets and cash flows from  operations.  During the
first six 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 $807,530 and
$4,274,661  for the six months  ended June 30,  2000 and 1999,  respectively,  a
decrease in net cash  provided  by  operating  activities  of  $3,467,131.  This
decrease is mainly due to a decrease in  accounts  payable and accrued  expenses
during the periods.

         Galaxy used net cash from  investing  activities of $1,319,703  for the
six months ended June 30, 2000, and provided net cash from investing  activities
of  $1,771,114  for the six months  ended June 30,  1999, a decrease in net cash
provided in investing activities of $3,090,817. This decrease is mainly due to a
decrease in proceeds from the sale of cable systems during 2000.

         Galaxy provided net cash in financing  activities of $1,937,233 for the
six months ended June 30, 2000, and used net cash from  financing  activities of
$5,262,816  for the six months  ended June 30, 1999,  respectively,  a change in
cash flows from  investing  activities of  $7,200,049.  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 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.


<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 Term Loan.  Based on Galaxy's  variable debt at
June 30,  2000, a 1% increase in market  interest  rates would  increase  yearly
interest expense and decrease income by approximately  $305,000. This amount was
calculated using the variable interest rate in effect at June 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.


<PAGE>



PART II.  OTHER INFORMATION

Items 1 through 5.

None.

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.

         None.

<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: August 11, 2000                               /s/ J. Keith Davidson

                                            BY:     J. Keith Davidson

                                                    Vice President-Finance
                                                   (Principal Financial Officer)


<PAGE>



                                                                 EXHIBIT INDEX

Exhibit Number             Description

--------------               ----------------------------------

       27                   Financial Data Schedule