<PAGE>

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

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

                   For the fiscal year ended December 31, 2001
                                       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 1-2385
                                                 ------

                       THE DAYTON POWER AND LIGHT COMPANY
             (Exact name of registrant as specified in its charter)

                OHIO                                     31-0258470
   (State or other jurisdiction of          (I.R.S. Employer Identification No.)
   incorporation or organization)
   1065 Woodman Drive, Dayton, Ohio                        45432
(Address of principal executive offices)                 (Zip Code)

        Registrant's telephone number, including area code: 937-224-6000

Securities registered pursuant to Section 12(b) of the Act: NONE

Securities registered pursuant to Section 12(g) of the Act: NONE

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 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 [ ]

Number of shares of registrant's common stock outstanding as of February 28,
2002, all of which were held by DPL Inc., was 41,172,173.

<PAGE>

                       THE DAYTON POWER AND LIGHT COMPANY

                       Index to Annual Report on Form 10-K
                       Fiscal Year Ended December 31, 2001

<TABLE>
<CAPTION>
                                                                                                           Page No.
                                     Part I
<S>         <C>                                                                                              <C>
Item 1      Business......................................................................................    3
Item 2      Properties....................................................................................   14
Item 3      Legal Proceedings.............................................................................   14
Item 4      Submission of Matters to a Vote of Security Holders...........................................   14

                                     Part II

Item 5      Market for Registrant's Common Equity and Related Shareholder Matters.........................   14
Item 6      Selected Financial Data.......................................................................   15
Item 7      Management's Discussion and Analysis of Financial Condition and Results of Operations.........   15
Item 7A     Quantitative and Qualitative Disclosure about Market Risk.....................................   22
Item 8      Financial Statements and Supplementary Data...................................................   23
Item 9      Changes in and Disagreements with Accountants on Accounting and Financial Disclosure..........   45

                                    Part III

Item 10     Directors and Executive Officers of the Registrant............................................   45
Item 11     Executive Compensation........................................................................   49
Item 12     Security Ownership of Certain Beneficial Owners and Management................................   53
Item 13     Certain Relationships and Related Transactions................................................   53

                                     Part IV

Item 14     Exhibits, Financial Statement Schedules and Reports on Form 8-K...............................   54

                                      Other

            Signatures....................................................................................   58
</TABLE>

                                       2

<PAGE>

PART I

Item 1 - Business
--------------------------------------------------------------------------------

                                   THE COMPANY

The Dayton Power and Light Company ("DP&L" or "the Company") is a public utility
incorporated under the laws of Ohio in 1911. The Company sells electricity to
residential, commercial and governmental customers in a 6,000 square mile area
of West Central Ohio. Electricity for the Company's 24 county service area is
generated at eight power plants and is distributed to more than 500,000 retail
customers. Principal industries served include automotive, food processing,
paper, technology, and defense. The Company's sales reflect the general economic
conditions and seasonal weather patterns of the area.

The Company employed 1,539 persons as of December 31, 2001, of which 1,298 were
full-time employees and 241 were part-time employees.

All of the outstanding shares of common stock of the Company are held by DPL
Inc. ("DPL"), which became the Company's corporate parent, effective April 21,
1986.

The Company's principal executive and business office is located at 1065 Woodman
Drive, Dayton, Ohio 45432 - telephone (937) 224-6000.

                                   COMPETITION

In October 1999, legislation became effective in Ohio that gave electric utility
customers a choice of energy providers as of January 1, 2001. Under the
legislation, electric generation, aggregation, power marketing, and power
brokerage services supplied to retail customers in Ohio is deemed to be
competitive and is not subject to supervision and regulation by the Public
Utilities Commission of Ohio ("PUCO"). As required by the legislation, the
Company filed its transition plan at the PUCO on December 20, 1999. The Company
received PUCO approval of its plan on September 21, 2000.

The transition plan provides for a three-year transition period, which began on
January 1, 2001 and ends on December 31, 2003, at which time the Company's
generation assets will no longer be subject to Ohio regulation and will be able
to sell all capacity in the open energy market. The plan also provides for a 5%
residential rate reduction on the generation component of the rates, which
reduces revenue by approximately $13-14 million; rate certainty for the three
year period for customers that continue to purchase power from the Company;
guaranteed rates for a six-year period for transmission and delivery services;
and recovery of transition costs of approximately $600 million. Under the plan,
DPL has the organizational and financial flexibility to continue its growth
initiatives without regulatory restrictions.

On September 30, 1996, the FERC conditionally accepted the Company's
market-based sales tariff, which will allow the Company to sell wholesale
generation supply at prices that reflect current market prices.

                                       3

<PAGE>

The Company competes with privately and municipally owned electric utilities and
rural electric cooperatives, and other alternate fuel suppliers on the basis of
price and service. The Company purchases generation capacity from DPL Energy,
LLC, a wholly owned subsidiary of DPL.

Like other utilities and energy marketers, the Company from time to time may
have electric generating capacity available for sale on the wholesale market.
The Company competes with other generators to sell electricity provided by such
capacity. The ability of the Company to sell this electricity will depend on how
the Company's price, terms and conditions compare to those of other suppliers.
In addition, from time to time, the Company makes power purchases from other
suppliers.

The National Energy Policy Act of 1992, which reformed the Public Utilities
Holding Company Act of 1935, allows the federal government to mandate access by
others to a utility's electric transmission system and may accelerate
competition in the supply of electricity.

The Company provides transmission and wholesale electric service to twelve
municipal customers which distribute electricity within their corporate limits.
In addition to these municipal customers, the Company maintains an
interconnection agreement with one municipality that has the capability to
generate a portion of its energy requirements. Sales to municipalities
represented 1.7% of total electricity sales in 2001.

The municipal agreements provide, among other things, for the sale of firm power
by the Company to the municipalities on specified terms. However, the parties
disagree in their interpretation of this portion of the agreement and the
Company filed suit against the eleven municipalities on December 28, 1998. The
dispute was subsequently settled in 1999. In December 1999, the Company filed a
second suit against the municipalities to claim the municipalities' initial
failure to pay for certain services rendered under the contract. The
municipalities filed a complaint at the Federal Energy Regulatory Commission
("FERC") claiming violation of a mediation clause. On June 29, 2000 the FERC
Administrative Law Judge issued an initial decision in the case, which was
favorable to the Company; however, the FERC has not yet issued a final order.
This dispute is expected to be resolved through the FERC process, and is not
expected to result in a material impact on the Company's financial position or
results of operations.

On April 24, 1996, the FERC issued orders requiring all electric utilities that
own or control transmission facilities to file open-access transmission service
tariffs. Open-access transmission tariffs provide third parties with
non-discriminatory transmission service comparable to what the utility provides
itself. In its orders, the FERC further stated that FERC-jurisdictional stranded
costs reasonably incurred and costs of complying with the rules will be
recoverable by electric utilities. Both in 1997 and 1998, the Company reached an
agreement in principle with staff and intervenors in these tariff cases. The
FERC issued an Order accepting the Stipulation between the parties in the
Company's Open Access Transmission Tariff cases on July 30, 1999 and September
17, 1999. The Company was not materially impacted by the Order.

FERC issued a final rule on December 20, 1999 specifying the minimum
characteristics and functions for Regional Transmission Organizations ("RTO").
The rule required that

                                       4

<PAGE>

all public utilities that own, operate or control interstate transmission file a
proposal to join an RTO by October 15, 2000 or file a description of efforts
taken to participate in an RTO, reasons for not participating in an RTO, any
obstacles to participation in an RTO, and any plans for further work towards
participation. The Company filed with the FERC on October 16, 2000 to join the
Alliance RTO. On December 19, 2001, the FERC issued an Order that did not
approve the Alliance RTO as a stand-alone regional transmission organization. As
of December 31, 2001, the Company had invested approximately $6 million in its
efforts to join the Alliance RTO. The Company is exploring its operational and
financial options as a result of the FERC Order. The FERC recognized in its
Order that substantial losses were incurred to establish the Alliance RTO and
that it would consider proposals for rate recovery of prudently incurred costs.

On July 22, 1998, the PUCO approved the implementation of Minimum Electric
Service Standards for all of Ohio's investor-owned electric utilities. This
Order details minimum standards of performance for a variety of service related
functions effective July 1, 1999. On December 21, 1999, the PUCO issued
additional rules proposed by the PUCO staff, which are designed to guide the
electric utility companies as they prepare to enter into deregulation. These
rules include certification of providers of competitive retail electric
services, minimum competitive retail electric service standards, monitoring the
electric utility market, and establishing procedures for alternative dispute
resolution. There were also rules issued to amend existing rules for
noncompetitive electric service and safety standards and electric companies
long-term forecast reporting. The Company submitted comments on the proposed
rules on January 31, 2000. The rules were finalized by the PUCO in June 2000 and
did not have a material impact on the Company's financial position.

In October 2000, the Company completed the sale of its natural gas retail
distribution assets and certain liabilities for $468 million in cash.

                              CONSTRUCTION PROGRAM

Construction additions are expected to approximate $133 million in 2002, and
were $164 million in 2001 and $125 million in 2000. The capital program includes
environmental compliance, which is expected to approximate $64 million in 2002,
and was $58 and $15 million in 2001 and 2000, respectively.

Construction plans are subject to continuing review and are expected to be
revised in light of changes in financial and economic conditions, load
forecasts, legislative and regulatory developments and changing environmental
standards, among other factors. The Company's ability to complete its capital
projects and the reliability of future service will be affected by its financial
condition, the availability of external funds at reasonable cost and adequate
and timely rate recovery. The Company expects to finance its construction
program in 2002 and 2003 with internal funds.

See ENVIRONMENTAL CONSIDERATIONS for a description of environmental control
projects and regulatory proceedings, which may change the level of future
construction additions. The potential impact of these events on the Company's
operations cannot be estimated at this time.

                                       5

<PAGE>

                       ELECTRIC OPERATIONS AND FUEL SUPPLY

The Company's present winter generating capability is 3,371,000 KW. Of this
capability, 2,843,000 KW (approximately 84%) is derived from coal-fired steam
generating stations and the balance consists of combustion turbine and
diesel-powered peaking units. Approximately 87% (2,472,000 KW) of the existing
steam generating capability is provided by certain units owned as tenants in
common with The Cincinnati Gas & Electric Company ("CG&E") or with CG&E and
Columbus Southern Power Company ("CSP"). Each company owns a specified undivided
share of each of these units, is entitled to its share of capacity and energy
output, and has a capital and operating cost responsibility proportionate to its
ownership share.

The remaining steam generating capability (371,000 KW) is derived from a
generating station owned solely by the Company. The Company's all-time net peak
load was 3,130,000 KW, occurring in 1999. The present summer generating
capability is 3,269,000 KW.

<TABLE>
<CAPTION>
                                                                                    MW Rating
                                                                                ------------------
                                               Operating                                   Company
           Station               Ownership*     Company         Location        Portion     Total
-----------------------------    ----------    ---------    ----------------    -------    -------
<S>                              <C>           <C>          <C>                 <C>        <C>
Coal Units
----------
Hutchings                             W         Company     Miamisburg, OH        371         371
Killen                                C         Company     Wrightsville, OH      402         600
Stuart                                C         Company     Aberdeen, OH          820       2,340
Conesville-Unit 4                     C         CSP         Conesville, OH        129         780
Beckjord-Unit 6                       C         CG&E        New Richmond, OH      210         420
Miami Fort-Units 7 &8                 C         CG&E        North Bend, OH        360       1,000
East Bend-Unit 2                      C         CG&E        Rabbit Hash, KY       186         600
Zimmer                                C         CG&E        Moscow, OH            365       1,300

Combustion Turbines or Diesel
-----------------------------
Hutchings                             W         Company     Miamisburg, OH         33          33
Yankee Street                         W         Company     Centerville, OH       138         138
Monument                              W         Company     Dayton, OH             12          12
Tait                                  W         Company     Dayton, OH             10          10
Sidney                                W         Company     Sidney, OH             12          12
Tait Gas Turbine 1                    W         Company     Moraine, OH           100         100
Tait Gas Turbine 2                    W         Company     Moraine, OH           102         102
Tait Gas Turbine 3                    W         Company     Moraine, OH           102         102
Killen                                C         Company     Wrightsville, OH       16          24
Stuart                                C         Company     Aberdeen, OH            3          10
</TABLE>

*W = Wholly-Owned
 C = Commonly Owned

                                       6

<PAGE>

In order to transmit energy to their respective systems from their commonly
owned generating units, the companies have constructed and own, as tenants in
common, 847 circuit miles of 345,000-volt transmission lines. The Company has
several interconnections with other companies for the purchase, sale and
interchange of electricity. In July 2001, the Company completed a 40.2-mile
long, 345,000-volt circuit between CG&E's Foster Substation and DP&L's Bath
Substation. The circuit is jointly owned by DP&L and CG&E.

The Company generated over 99% of its electric output from coal-fired units in
2001. The remainder was from oil or natural gas-fired units, which were used to
meet peak demands.

The Company has contracted approximately 95% and 74% of its total coal
requirements for 2002 and 2003, respectively, with the balance to be obtained by
spot market purchases. The prices to be paid by the Company under its long-term
coal contracts are subject to adjustment in accordance with various indices.
Each contract has features that will limit price escalations in any given year.

The average fuel cost per kilowatt-hour ("kWh") generated of fuel burned for
electric generation (coal, gas and oil) for the year was 1.31(cent) in 2001,
1.18(cent) in 2000 and 1.30(cent) in 1999. With the onset of competition in
January 2001, the Electric Fuel Component became part of the Standard Offer
Generation Rate. See RATE REGULATION AND GOVERNMENT LEGISLATION and
ENVIRONMENTAL CONSIDERATIONS.

                          GAS OPERATIONS AND GAS SUPPLY

In October 2000, the Company completed the sale of its natural gas retail
distribution assets and certain liabilities for $468 million in cash. The
transaction resulted in a pre-tax gain of $183 million ($121 million net of
taxes). Proceeds from the sale were used to finance DPL's regional generation
expansion and reduce outstanding short-term debt.

                   RATE REGULATION AND GOVERNMENT LEGISLATION

The Company's sales to retail customers are subject to rate regulation by the
PUCO and various municipalities. The Company's wholesale electric rates to
municipal corporations and other distributors of electric energy are subject to
regulation by the FERC under the Federal Power Act.

Ohio law establishes the process for determining rates charged by public
utilities. Regulation of rates encompasses the timing of applications, the
effective date of rate increases, the cost basis upon which the rates are based
and other related matters. Ohio law also establishes the Office of the Ohio
Consumers' Counsel (the "OCC"), which has the authority to represent residential
consumers in state and federal judicial and administrative rate proceedings.

Ohio legislation extends the jurisdiction of the PUCO to the records and
accounts of certain public utility holding company systems, including DPL. The
legislation extends

                                       7

<PAGE>

the PUCO's supervisory powers to a holding company system's general condition
and capitalization, among other matters, to the extent that they relate to the
costs associated with the provision of public utility service.

Based on existing regulatory authorization, regulatory assets on the
Consolidated Balance Sheet include:

                                                               At December 31,
     ($ in millions)                                            2001     2000
                                                               ------   ------
     Regulatory transition costs (a) .......................   $ 97.2   $144.8
     Income taxes recoverable through
         future revenues (b) ...............................     39.2     49.4
     Other costs (b) .......................................      2.5      1.6
                                                               ------   ------
     Total .................................................   $138.9   $195.8
                                                               ======   ======

          (a) As discussed in the COMPETITION section, the Company received PUCO
     approval of its transition plan for the deregulation of its generation
     business. Accordingly, the Company discontinued the use of its regulatory
     accounting model for its generation operations. As a result, a $63.7
     million before tax benefits ($41.4 million net of taxes) reduction of
     generation-related regulatory assets was recorded in the third quarter of
     2000 as an extraordinary item and other generation-related regulatory
     assets were reclassified to the "Regulatory transition costs" asset.

          (b) Certain deferred costs remain authorized for recovery by
     regulators. These relate primarily to the Company's electric transmission
     and distribution operations and are being amortized over the recovery
     period of the assets involved.

Under the legislation passed in 1999, the percentage of income payment plan
("PIPP") for eligible low-income households was converted to a universal service
fund in 2001. The universal service program is administered by the Ohio
Department of Development and provides for full recovery of arrearages for
qualifying low income customers. As part of the Company's Electric Transition
Plan, the Company was granted authority to recover PIPP arrearages remaining as
of December 31, 2000 as part of a transition charge.

In 2000, the PUCO amended the rules for Long-Term Forecast Reports for all
investor-owned electric transmission and distribution companies in Ohio. Under
these rules, each transmission and/or distribution company must annually file a
Long-Term Electric Forecast Report, which presents 10-year energy and demand
transmission and distribution forecasts. The reports also must contain
information on the company's existing and planned transmission and distribution
systems, as well as a substantiation of the need for any system upgrades or
additions. The Company filed a combined 2000/2001 Long-Term Electric Forecast
Report under these amended rules in March 2001.

The PUCO is composed of five commissioners appointed to staggered five-year
terms. The current Commission is composed of the following members:

                                       8

<PAGE>

Name                                            Beginning of Term   End of Term
----                                            -----------------   -----------
Clarence D. Rogers...........................     February 2001      April 2006
Rhonda H. Fergus.............................       April 1995       April 2005
Chairman Alan R. Schriber....................       April 1999       April 2004
Donald L. Mason..............................       April 1998       April 2003
Judith A. Jones..............................       April 1997       April 2002

See COMPETITION for more detail regarding the impact of legislation passed in
October 1999.

                          ENVIRONMENTAL CONSIDERATIONS

The operations of the Company, including the commonly owned facilities operated
by the Company, CG&E and CSP, are subject to federal, state, and local
regulation as to air and water quality, disposal of solid waste and other
environmental matters, including the location, construction and initial
operation of new electric generating facilities and most electric transmission
lines. The possibility exists that current environmental regulations could be
revised which could change the level of estimated construction expenditures. See
CONSTRUCTION PROGRAM.

Air Quality

The Clean Air Act Amendments of 1990 (the "CAA") have limited sulfur dioxide and
nitrogen oxide emissions nationwide. The CAA restricts emissions in two phases.
Phase I compliance requirements became effective on January 1, 1995 and Phase II
requirements became effective on January 1, 2000.

The Company's environmental compliance plan ("ECP") was approved by the PUCO on
May 6, 1993 and, on November 9, 1995, the PUCO approved the continued
appropriateness of the ECP. Phase I requirements were met by switching to lower
sulfur coal at several commonly owned electric generating facilities and
increasing existing scrubber removal efficiency. Total capital expenditures to
comply with Phase I of the CAA were approximately $5.5 million. Phase II
requirements are being met primarily by switching to lower sulfur coal at all
non-scrubbed coal-fired electric generating units.

In November 1999, the United States Environmental Protection Agency ("USEPA")
filed civil complaints and Notices of Violations ("NOV's") against operators and
owners of certain generation facilities for alleged violations of the CAA.
Generation units operated by partners CG&E (Beckjord 6) and CSP (Conesville 4)
and co-owned by the Company were referenced in these actions. Numerous northeast
states have filed complaints or have indicated that they will be joining the
USEPA's action against the partners. The Company was not identified in the NOVs,
civil complaints or state actions. In December 2000, CG&E announced that it had
reached an Agreement in Principle with the USEPA and other plaintiffs in an
effort to settle the claims. Discussions on the final terms of the settlement
are ongoing. The outcome of these claims or the impact, if any, on the Company
has not been determined. In June 2000, the USEPA issued a NOV to DP&L-operated
J.M. Stuart Station (co-owned by the Company, CG&E, and CSP) for alleged
violations of the CAA. The NOV contained allegations consistent with NOV's and

                                       9

<PAGE>

complaints that the USEPA had previously brought against numerous other
coal-fired utilities in the Midwest. The Company will vigorously challenge the
NOV. At this time, the outcome of these claims or the impact, if any, on the
Company is unknown.

In September 1998, the USEPA issued a final rule requiring states to modify
their State Implementation Plans ("SIPs") under the CAA. The modified SIPs are
likely to result in further nitrogen oxide ("NOx") reduction requirements placed
on coal-fired generating units by 2003. In order to meet these NOx requirements,
the Company's total capital expenditures are estimated to be approximately $175
million, of which $94 million remains to be expended by May 2004. Industry
groups and others appealed the rules in United States District Court. The
requirement for states to submit revised implementation plans has been stayed
until the outcome of the litigation. In March 2000, the United States District
Court upheld the rule. Industry groups and others have appealed this decision.
As a result of the litigation, the Court extended the compliance date of the
rule an additional year, until May 31, 2004. In March 2001, the United States
Supreme Court refused to hear further appeals of the SIP rules. In December
1999, the USEPA issued final rules granting various CAA Section 126 petitions
filed by northeast states. The Company's facilities were identified, among many
others, in the rulemaking. In January 2002, the USEPA announced that reductions
required under the CAA Section 126 rulemaking will be extended until May 31,
2004 to be consistent with the NOx SIP rule. The Company's current NOx reduction
strategy and associated expenditures to meet the SIP call should satisfy the
rulemaking reduction requirements.

On December 14, 2000, the USEPA issued a determination that coal- and oil-fired
electric generation units should be regulated for emissions of mercury and
hazardous air pollutants. The USEPA will issue proposed rules by December 2003
and final rules by December 2004. The impact of the regulatory determination
cannot be determined at this time.

In March 2002, the United States Court of Appeals for the District of Columbia
upheld the USEPA's National Ambient Air Quality Standards for ozone and fine
particles. The USEPA is conducting a rulemaking regarding these standards. The
impact of these standards and rules can not be determined at this time.

Land Use

The Company and numerous other parties have been notified by the USEPA or the
Ohio Environmental Protection Agency ("Ohio EPA") that it considers them
Potentially Responsible Parties ("PRP's") for clean-up at three superfund sites
in Ohio: the Sanitary Landfill Site on Cardington Road in Montgomery County,
Ohio; the North Sanitary (a.k.a. Valleycrest) Landfill in Dayton, Montgomery
County, Ohio; and the Tremont City Landfill in Springfield, Ohio.

The Company received notification from the USEPA in July 1987 for the Cardington
Road site. The Company has not joined the PRP group formed at that site because
of the absence of any known evidence that the Company contributed hazardous
substances to this site. In September 2001, the Court entered and finalized
DP&L's settlements with the USEPA for this site. These settlements fully resolve
DP&L's liabilities for this site and did not have a material effect on the
Company's financial position, earnings, or cash flow.

The Company and numerous other parties received notification from the Ohio EPA
on July 27, 1994 that it considers them PRP's for clean up of hazardous
substances at the North Sanitary Landfill site in Dayton, Ohio. The Company has
not joined the PRP group formed for the site because the available information
does not demonstrate that

                                       10

<PAGE>

the Company contributed hazadous substances to the site. The Ohio EPA has not
provided an estimated cost for this site. In October 2000, the PRP group brought
an action against the Company and numerous other parties alleging that the
Company and the others are PRP's that should be liable for a portion of clean-up
costs at the site. The Company will vigorously challenge this action. The final
resolution is not expected to have a material effect on the Company's financial
position, earnings, or cash flow.

The Company and numerous other parties received notification from the USEPA in
January 2002 for the Tremont City site. The available information does not
demonstrate that the Company contributed any hazardous substances to the site.
The Company will vigorously challenge this action. The final resolution is not
expected to have a material effect on the Company's financial position,
earnings, or cash flow.

                                       11

<PAGE>

                       The Dayton Power and Light Company
                              OPERATING STATISTICS
                               ELECTRIC OPERATIONS

                                                   Years Ended December 31
                                            ------------------------------------
                                               2001         2000         1999
                                            ----------   ----------   ----------
Electric Sales (millions of kWh)
   Residential ..........................        4,909        4,816        4,725
   Commercial ...........................        3,618        3,540        3,390
   Industrial ...........................        4,568        4,851        4,876
   Other retail .........................        1,369        1,370        1,306
                                            ----------   ----------   ----------
      Total Retail ......................       14,464       14,577       14,297
   Wholesale ............................        3,591        2,946        2,570
                                            ----------   ----------   ----------
      Total .............................       18,055       17,523       16,867
                                            ==========   ==========   ==========

Electric Revenues (thousands)
   Residential ..........................   $  429,932   $  422,733   $  412,808
   Commercial ...........................      255,149      245,097      235,309
   Industrial ...........................      210,022      236,670      242,410
   Other retail .........................       92,992       93,227       88,809
                                            ----------   ----------   ----------
      Total Retail ......................      988,095      997,727      979,336
   Wholesale ............................      200,154      112,328       79,008
                                            ----------   ----------   ----------
      Total .............................   $1,188,249   $1,110,055   $1,058,344
                                            ==========   ==========   ==========

Electric Customers at End of Period
   Residential ..........................      445,969      444,683      441,468
   Commercial ...........................       46,700       46,218       45,470
   Industrial ...........................        1,903        1,928        1,917
   Other ................................        6,302        6,156        6,040
                                            ----------   ----------   ----------
      Total .............................      500,874      498,985      494,895
                                            ==========   ==========   ==========

NOTE: See Note 14 to Consolidated Financial Statements for additional
information.

                                       12

<PAGE>

                       The Dayton Power and Light Company
                              OPERATING STATISTICS
                                 GAS OPERATIONS

                                                       Years Ended December 31
                                                     --------------------------
                                                     2001     2000       1999
                                                     ----   --------   --------
Gas Sales (thousands of MCF)
   Residential ...................................     --     18,538     24,450
   Commercial ....................................     --      5,838      7,647
   Industrial ....................................     --      2,034      2,246
   Public authorities ............................     --        776      1,182
   Transportation gas delivered ..................     --     16,105     20,190
                                                     ----   --------   --------
      Total ......................................     --     43,291     55,715
                                                     ====   ========   ========

Gas Revenues (thousands)
   Residential ...................................     --   $119,460   $139,545
   Commercial ....................................     --     35,262     40,225
   Industrial ....................................     --     11,114     11,017
   Public authorities ............................     --      4,466      5,908
   Other .........................................     --     13,554     18,284
                                                     ----   --------   --------
      Total ......................................     --   $183,856   $214,979
                                                     ====   ========   ========

Gas Customers at End of Period
   Residential ...................................     --         --    282,706
   Commercial ....................................     --         --     22,635
   Industrial ....................................     --         --      1,303
   Public authorities ............................     --         --      1,173
                                                     ----   --------   --------
      Total ......................................     --         --    307,817
                                                     ====   ========   ========

NOTE:
1)   The Company completed the sale of its natural gas retail distribution
     assets and certain liabilities in October 2000.
2)   See Note 14 to Consolidated Financial Statements for additional
     information.

                                       13

<PAGE>

Item 2 - Properties
--------------------------------------------------------------------------------

Electric

Information relating to the Company's electric properties is contained in Item 1
- BUSINESS, THE COMPANY (page 3), CONSTRUCTION PROGRAM (pages 5-6), ELECTRIC
OPERATIONS AND FUEL SUPPLY (pages 6-7) and Item 8 - Notes 4 and 11 of Notes to
Consolidated Financial Statements on pages 31-32 and 39-40, respectively, which
pages are incorporated herein by reference.

Gas

Information relating to the Company's gas properties is contained in Item 1 -
BUSINESS, THE COMPANY (page 3), and GAS OPERATIONS AND GAS SUPPLY (page 7) and
Note 3 of Notes to Consolidated Financial Statements (page 31), which pages are
incorporated herein by reference.

Substantially all property and plant of the Company is subject to the lien of
the Mortgage securing the Company's First Mortgage Bonds.

Item 3 - Legal Proceedings
--------------------------------------------------------------------------------

Information relating to legal proceedings involving the Company is contained in
Item 1 - BUSINESS, THE COMPANY (page 3), COMPETITION (pages 3-5), ELECTRIC
OPERATIONS AND FUEL SUPPLY (pages 6-7), RATE REGULATION AND GOVERNMENT
LEGISLATION (pages 7-9), ENVIRONMENTAL CONSIDERATIONS (pages 9-11) and Item 8 -
Note 4 of Notes to Consolidated Financial Statements on pages 31-32, which pages
are incorporated herein by reference.

Item 4 - Submission of Matters to a Vote of Security Holders
--------------------------------------------------------------------------------

None.

PART II

Item 5 - Market for Registrant's Common Equity and Related Stockholder Matters
--------------------------------------------------------------------------------

The Company's common stock is held solely by DPL Inc. and as a result is not
listed for trading on any stock exchange.

The information required by this item of Form 10-K is set forth in Item 8 -
Selected Quarterly Information on page 42 and the Financial and Statistical
Summary on page 43, which pages are incorporated herein by reference.

As long as any Preferred Stock is outstanding, the Company's Amended Articles of
Incorporation contain provisions restricting the payment of cash dividends on
any of its

                                       14

<PAGE>

Common Stock if, after giving effect to such dividend, the aggregate of all such
dividends distributed subsequent to December 31, 1946 exceeds the net income of
the Company available for dividends on its Common Stock subsequent to December
31, 1946, plus $1,200,000. As of year-end, all earnings reinvested in the
business of the Company were available for Common Stock dividends.

Item 6 - Selected Financial Data
--------------------------------------------------------------------------------

The information required by this item of Form 10-K is set forth in Item 8 -
Financial and Statistical Summary on page 43, which page is incorporated herein
by reference.

Item 7 - Management's Discussion and Analysis of Financial Condition and Results
         of Operations
--------------------------------------------------------------------------------

Overview

The Dayton Power and Light Company ("DP&L" or "the Company") reported earnings
on common stock of $240.4 million, an increase of 9% over 2000 earnings on
common stock of $221.0 million in 2000 and up 25% from earnings on common stock
of $191.6 million in 1999. (Earnings on common stock numbers are before
extraordinary and non-recurring items.) Growth from increased wholesale sales
and sales of capacity from 2001 and 2000 peaking generation capacity additions
were the primary drivers. Results for 2001 included net non-recurring items of
$6.0 million after tax, reflecting the adoption of the new accounting standard
for derivatives in the first quarter, and charges associated with a voluntary
early retirement program completed in June 2001 and a non-union workforce
reduction program completed in November 2001.

Several events affected the Company's results in 2000 as it prepared for the
deregulation of the energy markets. In the first quarter, the Company expensed
$4.2 million before tax benefits to realign its compensation programs more fully
with shareholders' interest. In the third quarter, the Company received an order
from the Public Utilities Commission of Ohio ("PUCO") approving its deregulation
transition plan ("Transition Plan"), which resulted in an extraordinary charge
of $63.7 million before tax benefits for the elimination of regulatory
accounting for the generation business. In the fourth quarter, the Company
completed the sale of its natural gas retail distribution operations and
reported a pre-tax gain on the sale of $182.5 million. Each of these
non-recurring events affected 2000 financial results as outlined below:

                                       15

<PAGE>

$ in millions                                     2001      2000       1999
----------------------------------------------------------------------------
Earnings on Common Stock after non-
   recurring and extraordinary items .........   $234.4    $ 297.9    $191.6
         Voluntary early retirement ..........      3.2
         Non-union reduction .................      3.8
         Accounting change ...................     (1.0)
         Compensation program ................                 2.7
         Deregulation order ..................                41.4
         Gas operations - gain on sale .......              (121.0)
                                                 ------    -------    ------
Earnings on Common Stock before non-
   recurring and extraordinary items .........   $240.4    $ 221.0    $191.6

Income Statement Highlights

$ in millions                                     2001      2000       1999
-----------------------------------------------------------------------------
Electric:
     Revenues .............................    $1,188.2   $1,110.1   $1,058.3
     Fuel and purchased power .............       349.9      286.1      263.2
                                               --------   --------   --------
         Net revenues .....................       838.3      824.0      795.1

Gas Utility: (a)
     Revenues .............................          --      183.8      215.0
     Gas purchased for resale .............          --      116.9      129.9
                                               --------   --------   --------
         Net revenues .....................          --       66.9       85.1

(a)  The Company completed the sale of its natural gas retail distribution
     assets and certain liabilities in October 2000.

In 2001, net electric revenues increased $14.3 million or 2% primarily as a
result of additional peaking generation capacity sales and increased wholesale
revenues. Wholesale revenues from existing generation increased as a result of
higher sales volume and commodity prices. Growth in residential and commercial
sales of 2% was offset by declines in industrial sales of 6%, reflecting current
economic conditions and mild weather, which reduced overall retail sales by 1%.
Fuel costs for existing generation increased as a result of higher spot-market
prices for coal, and greater fuel usage and power purchases resulting from
increased wholesale sales. In 2000, net electric revenues increased $28.9
million or 4% as a result of higher wholesale and retail sales, and the addition
of peaking generation capacity sales. The effect of these increased sales on
fuel and purchased power costs were offset by lower fuel expense used in
generation.

The decline in net gas revenues for both 2001 and 2000 resulted from the sale of
the natural gas retail distribution assets and certain liabilities, which was
completed in October 2000.

Operation and maintenance expense decreased $26.8 million or 14% in 2001
primarily as a result of the sale of the natural gas retail distribution
operations, lower employee benefit and insurance costs, and general cost
containment efforts. These decreases

                                       16

<PAGE>

were partially offset by charges for a voluntary early retirement program and a
non-union workforce reduction program, totaling $10.7 million before tax
benefits. Operation and maintenance expense decreased $12.8 million or 6% in
2000 as a result of lower employee benefit costs and natural gas retail
distribution system expense, partially offset by higher insurance and claims
costs, uncollectibles, and power production costs. Year to year variances in
insurance and claims costs result primarily from adjustments to
actuarially-determined reserve requirements for risks insured through a captive
insurance company wholly-owned by DPL Inc. ("DPL").

Depreciation and amortization expense decreased 11% and 3% in 2001 and 2000,
respectively, primarily as a result of depreciation rate changes for certain
generation units in 2001 and the sale of the natural gas retail distribution
assets.

Beginning January 1, 2001, regulatory transition cost assets of $144.8 million
are being amortized over a three-year period based on transition revenues. As a
result, amortization expense increased by $30.6 million in 2001 for transition
revenues recognized during the year.

General taxes decreased $29.7 million or 23% in 2001 primarily as a result of
changes in tax laws associated with the Transition Plan and the sale of the
natural gas retail distribution assets.

Other income (deductions) decreased $144.8 million or 85% in 2001 as a result of
the pre-tax $182.5 million gain that was recognized in 2000 for the sale of the
natural gas retail distribution operations, partially offset by the 2001
recognition of a receivable for insurance claims under the Company's business
interruption policy related to deregulation (see Issues and Financial Risks -
Other Matters), and costs associated with the elimination of certain
compensation programs in 2000. Other income (deductions) increased $156.6
million in 2000 as a result of the $182.5 million gain, partially offset by
costs as described above, property donations, stock compensation expense, and
the November 1999 transfer of the Company's ownership interest in the assets and
liabilities of MVE, Inc. to Plaza Building, Inc., which is another wholly-owned
subsidiary of DPL.

Interest expense decreased 14% and 11% in 2001 and 2000, respectively, primarily
as a result of higher capitalized interest.

Pursuant to deregulation legislation enacted in Ohio and the Order issued in
September 2000 by the PUCO, the Company discontinued the use of its regulatory
accounting model for its generation operations. As a result, a $63.7 million
before tax benefits ($41.4 million net of taxes) reduction of generation-related
regulatory assets was recorded in the third quarter of 2000 as an extraordinary
item in accordance with the Financial Accounting Standard Board's ("FASB")
Statement of Financial Accounting Standards No. 101, "Regulated
Enterprises-Accounting for the Discontinuation of Application of FASB Statement
No. 71." (See Note 4 to the Consolidated Financial Statements.)

The cumulative effect of an accounting change reflects the Company's adoption of
FASB Statement No. 133, "Accounting for Derivative Instruments and Hedging
Activities," as amended ("SFAS No. 133"). SFAS No. 133 requires that all
derivatives

                                       17

<PAGE>

be recognized as either assets or liabilities in the consolidated balance sheet
and be measured at fair value, and changes in the fair value be recorded in
earnings, unless they are designated as hedges of an underlying transaction.

Construction Program and Financing

Construction additions are expected to approximate $133 million in 2002, and
were $164 million in 2001 and $125 million in 2000. The capital program includes
environmental compliance, which is expected to approximate $64 million in 2002,
and was $58 and $15 million in 2001 and 2000, respectively.

Construction plans are subject to continuing review and are expected to be
revised in light of changes in financial and economic conditions, load
forecasts, legislative and regulatory developments and changing environmental
standards, among other factors. The Company's ability to complete its capital
projects and the reliability of future service will be affected by its financial
condition, the availability of external funds at reasonable cost and adequate
and timely rate recovery. The Company expects to finance its construction
program in 2002 and 2003 with internal funds.

During 2001, investing cash flows included a cash payment of $90.9 million for
income taxes associated with the tax gain on the sale of the natural gas retail
distribution operations that occurred in October 2000.

DPL and its subsidiaries have $200 million available through revolving credit
agreements with a consortium of banks. Facility fees are approximately $0.3
million per year. The primary purpose of the revolving credit facilities is to
provide back-up liquidity for the commercial paper program. The Company had no
borrowings outstanding under these credit agreements at December 31, 2001 and
2000. The Company also has $75.0 million available in short-term informal lines
of credit. The commitment fees are not material. The Company had no borrowings
outstanding under these informal lines and no outstanding commercial paper
balances at December 31, 2001 and 2000.

Issuance of additional amounts of first mortgage bonds by the Company is limited
by provisions of its mortgage. The amounts and timing of future financings will
depend upon market and other conditions, rate increases, levels of sales and
construction plans. The Company currently has sufficient capacity to issue first
mortgage bonds to satisfy its requirements in connection with the financing of
its construction and refinancing programs during the five-year period 2002-2006.

At year-end 2001, the Company's senior debt credit ratings were as follows:

Standard & Poor's Corp...........   BBB+
Moody's Investors Service........   A2

                                       18

<PAGE>

Market Risk

The carrying value of the Company's debt was $668.1 million at December 31,
2001, consisting of the Company's first mortgage bonds and guaranteed air
quality development obligations. The fair value of this debt was $678.8 million,
based on current market prices or discounted cash flows using current rates for
similar issues with similar terms and remaining maturities. The following table
presents the principal cash repayments and related weighted average interest
rates by maturity date for long-term, fixed-rate debt at December 31, 2001.

                                        Long-term Debt
                         -------------------------------------
Expected Maturity Date   Amount ($ in millions)   Average Rate
--------------------------------------------------------------
        2002                    $  1.1                7.4%
        2003                       1.1                7.4%
        2004                       1.1                7.4%
        2005                       1.1                7.4%
        2006                       1.1                7.4%
     Thereafter                  662.6                7.5%
                                ------
        Total                   $668.1                7.5%
                                ======

     Fair Value                 $678.8
                                ======

Because the long-term debt is at a fixed rate, the primary market risk to the
Company would be short-term interest rate risk. At December 31, 2001, the
Company had no short-term debt outstanding, and therefore, no exposure to
short-term interest rate risk.

The Company's financial results are impacted by changes in electricity, coal,
and gas commodity prices. Ten percent of the Company's expected 2002 revenues
are from spot energy sales in the wholesale market and sales of peaking
capacity. Fuel and purchased power costs represented 39% of total operating
costs in 2001. The Company has contracted for 95% of its total coal needs for
2002. A 2% change in overall fuel costs would result in a $3.5 million change in
net income.

Issues and Financial Risks

This report contains certain forward-looking statements regarding plans and
expectations for the future. Investors are cautioned that actual outcomes and
results may vary materially from those projected due to various factors beyond
the Company's control, including abnormal weather, unusual maintenance or repair
requirements, changes in fuel costs, increased competition, regulatory changes
and decisions, changes in accounting rules, and adverse economic conditions.

Electric Restructuring Legislation

In October 1999, legislation became effective in Ohio that gave electric utility
customers a choice of energy providers starting January 1, 2001. Under the
legislation, electric generation, aggregation, power marketing and power
brokerage services supplied to retail customers in Ohio are deemed competitive
and are not subject to supervision and regulation by the PUCO. As required by
the legislation, the Company filed its transition plan at the PUCO on December
20, 1999. The Company received PUCO approval of its plan on September 21, 2000.

                                       19

<PAGE>

The transition plan provides for a three-year transition period, which began on
January 1, 2001 and ends on December 31, 2003, at which time the Company's
generation assets will no longer be subject to Ohio regulation and will be able
to sell all capacity in the open energy markets. The plan also provides for a 5%
residential rate reduction on the generation component of the rates, which
reduces revenue by approximately $13-14 million; rate certainty for the three
year period for customers that continue to purchase power from the Company;
guaranteed rates for a six-year period for transmission and delivery services;
and recovery of transition costs of approximately $600 million. Under the plan,
DPL has the organizational and financial flexibility to continue its growth
initiatives without regulatory restrictions.

In 1996 and 1997, the Federal Energy Regulatory Commission ("FERC") issued
orders requiring all electric utilities to file open-access transmission service
tariffs. The Company's resulting tariff case proceedings with FERC staff and
intervenors in 1997 and 1998 culminated in 1999 with the FERC issuing an Order
approving the Company's settlement with no material adverse effect to the
Company. On October 16, 2000 the Company filed with the FERC to join the
Alliance Regional Transmission Organization ("Alliance RTO"). On December 19,
2001 the FERC issued an Order that did not approve the Alliance RTO as a
stand-alone regional transmission organization. As of December 31, 2001, the
Company had invested approximately $6 million in its efforts to join the
Alliance RTO. The Company is exploring its operational and financial options as
a result of the FERC Order. The FERC recognized in its Order that substantial
losses were incurred to establish the Alliance RTO and that it would consider
proposals for rate recovery of prudently incurred costs.

Sale of Gas Operations

In October 2000, the Company completed the sale of its natural gas retail
distribution assets and certain liabilities for $468 million in cash. The
transaction resulted in a pre-tax gain of $183 million ($121 million net of
tax), which is reflected in "other income (deductions)" on the Consolidated
Statement of Results of Operations. Proceeds from the sale were used to finance
DPL's regional generation expansion and reduce outstanding short-term debt.

Environmental

In November 1999, the United States Environmental Protection Agency ("USEPA")
filed civil complaints and Notices of Violations ("NOV's") against operators and
owners of certain generation facilities for alleged violations of the Clean Air
Act ("CAA"). Generation units operated by partners Cincinnati Gas & Electric
Company (Beckjord 6) and Columbus Southern Power Company (Conesville 4) and
co-owned by the Company were referenced in these actions.

Numerous northeast states have filed complaints or have indicated that they will
be joining the USEPA's action against the partners. The Company was not
identified in the NOV's, civil complaints or state actions. In December 2000,
Cincinnati Gas & Electric Company announced that it had reached an Agreement in
Principle with the USEPA and other plaintiffs in an effort to settle the claims.
Discussions on the final terms of the settlement are ongoing. The outcome of
these claims or the impact, if any, on the

                                       20

<PAGE>

Company has not been determined. In June 2000, the USEPA issued a NOV to
DP&L-operated J.M. Stuart Station (co-owned by DP&L, Cincinnati Gas & Electric
Company, and Columbus Southern Power Company) for alleged violations of the CAA.
The NOV contained allegations consistent with NOV's and complaints that the
USEPA had recently brought against numerous other coal-fired utilities in the
Midwest. The Company will vigorously challenge the NOV. At this time, the
outcome of these claims or the impact, if any, on the Company is unknown.

The United States and Ohio EPA's have notified numerous parties, including the
Company, that they are considered Potentially Responsible Parties ("PRP's") for
clean up of three hazardous waste sites in Ohio. In September 2001, the Court
entered and finalized the Company's settlements with the USEPA for the first
site. The Company also settled with the PRP group for the site. These
settlements fully resolve the Company's liability for this site and did not have
a material effect on the Company's financial position, earnings, or cash flow.
The Ohio EPA has not provided an estimated cost for the second site. In October
2000, the PRP group at the second site brought an action against the Company and
numerous other parties to recover a portion of the clean-up costs. The Company
will vigorously challenge this action. In January 2002, the Company and
seventy-five other parties received notification from the USEPA that they might
be PRP's for clean up of hazardous substances at a third site. The available
information does not demonstrate that the Company contributed any hazardous
substances to the site. The Company will vigorously challenge this action. The
final resolution of these matters are not expected to have a material effect on
the Company's financial position, earnings, or cash flow.

In September 1998, the USEPA issued a final rule requiring states to modify
their State Implementation Plans ("SIP's") under the CAA. The modified SIP's are
likely to result in further Nitrogen Oxide ("NOx") reduction requirements placed
on coal-fired generating units by 2003. In order to meet these NOx requirements,
the Company's total capital expenditures are estimated to be approximately $175
million, of which $94 million remains to be expended by May 2004. Industry
groups and others appealed the rules in the United States District Court. The
requirement for states to submit revised implementation plans has been stayed
until the outcome of the litigation. In March 2000, the United States District
Court upheld the rule. Industry groups and others have appealed this decision.
As a result of the litigation, the Court extended the compliance date of the
rules an additional year, until May 31, 2004. In December 1999, the USEPA issued
final rules granting various CAA Section 126 petitions filed by northeast
states. The Company's facilities were identified, among many others, in the
rulemaking. In January 2002, the USEPA announced that reductions required under
the CAA Section 126 rulemaking will be extended until May 31, 2004 to be
consistent with the NOx SIP rule. The Company's current NOx reduction strategy
to meet the SIP call is expected to satisfy the rulemaking reduction
requirements.

On December 14, 2000, the USEPA issued a determination that coal- and oil-fired
electric generating units should be regulated for emissions of mercury and
hazardous air pollutants. The USEPA will issue proposed rules by December 2003
and final rules by December 2004. The impact of the regulatory determination
cannot be determined at this time.

                                       21

<PAGE>

In March 2002, the United States Court of Appeals for the District of Columbia
upheld the USEPA's National Ambient Air Quality Standards for ozone and fine
particles. The USEPA is conducting a rulemaking regarding these standards. The
impact of these standards and rules can not be determined at this time.

Other Matters

A wholly-owned captive subsidiary of DPL provides insurance coverage solely to
DPL including, among other coverages, business interruption and specific risk
coverage with respect to environmental law and electric deregulation. "Insurance
Claims and Costs" on DPL's Consolidated Balance Sheet includes insurance
reserves of approximately $87 million for this coverage based on actuarial
methods and loss experience data. Such reserves are determined, in the
aggregate, based on a reasonable estimation of probable insured events
occurring. There is uncertainty associated with the loss estimates, and actual
results could differ from the estimates. Modification of these loss estimates
based on experience and changed circumstances are reflected in the period in
which the estimate is reevaluated. As the outcome of electric deregulation
becomes known during the three-year regulatory transition period ending December
31, 2003, policy payments from the captive subsidiary to DP&L, receivables for
insurance claims for DP&L, or the release of the appropriate reserves will occur
and be reflected in income. In 2001, a $29 million receivable was recognized by
DP&L for insurance claims under its business interruption policy.

In June 2001, the FASB issued Statement of Financial Accounting Standards No.
143, "Accounting for Asset Retirement Obligations" ("SFAS No. 143") that
addresses financial accounting and reporting for obligations associated with the
retirement of tangible long-lived assets. SFAS No. 143 is effective for the
Company as of January 1, 2003. The Company has not yet determined the extent to
which its financial condition or results of operations may be affected by the
implementation of this accounting standard.

Item 7A - Quantitative and Qualitative Disclosures about Market Risk
--------------------------------------------------------------------

Information relating to Market Risk is contained in Item 7 - Management's
Discussion and Analysis (page 19).

                                       22

<PAGE>

Item 8 - Financial Statements and Supplementary Data
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
Index to Consolidated Financial Statements                                                        Page No.
------------------------------------------                                                        --------
<S>                                                                                                 <C>
Consolidated Statement of Results of Operations for the three years in
the period ended December 31, 2001................................................................   24

Consolidated Statement of Cash Flows for the three years in the period
ended December 31, 2001...........................................................................   25

Consolidated Balance Sheet as of December 31, 2001 and 2000.......................................  26-27

Consolidated Statement of Shareholder's Equity for the three years in
the period ended December 31, 2001................................................................   28

Notes to Consolidated Financial Statements........................................................  29-42

Report of Independent Accountants.................................................................   44
</TABLE>

<TABLE>
<CAPTION>
Index to Supplemental Information                                                                 Page No.
---------------------------------                                                                 --------
<S>                                                                                                  <C>
Selected Quarterly Information....................................................................   42

Financial and Statistical Summary.................................................................   43
</TABLE>

                                       23

<PAGE>

                       The Dayton Power and Light Company

                 CONSOLIDATED STATEMENT OF RESULTS OF OPERATIONS

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------
                                                                             For the years ended December 31,
$ in millions                                                                  2001       2000        1999
-------------------------------------------------------------------------------------------------------------
<S>                                                                           <C>        <C>        <C>
Revenues
Electric ..................................................................   $1,188.2   $1,110.1   $1,058.3
Gas (Note 3)...............................................................         --      183.8      215.0
                                                                              --------   --------   --------
     Total revenues........................................................    1,188.2    1,293.9    1,273.3
                                                                              --------   --------   --------

Expenses
Fuel and purchased power...................................................      349.9      286.1      263.2
Gas purchased for resale (Note 3)..........................................         --      116.9      129.9
Operation and maintenance............................................. ....      164.3      191.1      203.9
Depreciation and amortization..............................................      116.0      130.3      134.0
Amortization of regulatory assets, net (Note 4)............................       46.9       16.3       24.9
General taxes..............................................................       98.7      128.4      136.4
                                                                              --------   --------   --------
         Total expenses....................................................      775.8      869.1      892.3
                                                                              --------   --------   --------

Operating Income...........................................................      412.4      424.8      381.0

Other income (deductions) (Note 3).........................................       25.9      170.7       14.1
Interest expense...........................................................      (62.6)     (72.7)     (81.5)
                                                                              --------   --------   --------

Income Before Income taxes, Extraordinary Item, and Cumulative Effect of
Accounting Change..........................................................      375.7      522.8      313.6

Income taxes...............................................................      141.4      182.6      121.1
                                                                              --------   --------   --------

Income Before Extraordinary Item and Cumulative
     Effect of Accounting Change...........................................      234.3      340.2      192.5

Extraordinary item, net of tax........................................              --       41.4         --
Cumulative effect of accounting change, net of tax....................             1.0         --         --
                                                                              --------   --------   --------

Net Income............................................................           235.3      298.8      192.5

Preferred dividends...................................................             0.9        0.9        0.9
                                                                              --------   --------   --------

Earnings on Common Stock..............................................        $  234.4   $  297.9   $  191.6
                                                                              ========   ========   ========
</TABLE>

See Notes to Consolidated Financial Statements.

                                       24

<PAGE>

                       The Dayton Power and Light Company

                      CONSOLIDATED STATEMENT OF CASH FLOWS

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------
                                                               For the years ended December 31,
$ in millions                                                   2001       2000       1999
-----------------------------------------------------------------------------------------------
<S>                                                            <C>        <C>        <C>
Operating Activities
     Cash received from utility customers ..................   $1,185.6   $1,297.3   $1,280.1
     Other operating cash receipts .........................       64.5       22.7       30.0
     Cash paid for:
         Fuel and purchased power ..........................     (365.3)    (269.9)    (263.8)
         Purchased gas (Note 3) ............................      (51.5)    (156.5)    (135.9)
         Operation and maintenance labor ...................      (72.1)     (81.1)     (72.8)
         Nonlabor operating expenditures ...................      (99.5)    (165.9)    (113.8)
         Interest ..........................................      (57.4)     (69.2)     (79.2)
         Income taxes ......................................     (132.4)    (152.6)    (106.6)
         General taxes .....................................     (138.7)    (139.3)    (136.7)
                                                               --------   --------   --------

     Net cash provided by operating activities .............      333.2      285.5      401.3
                                                               --------   --------   --------

Investing Activities
     Capital expenditures ..................................     (161.5)    (109.9)     (80.3)
     Purchases of available-for-sale financial assets ......         --         --     (276.9)

     Sales of available-for-sale financial assets ..........         --         --       61.1

     Proceeds from sale of natural gas retail
         distribution operations, net (Note 3) .............      (90.9)     468.2         --
                                                               --------   --------   --------

     Net cash provided by (used for) investing activities...     (252.4)     358.3     (296.1)
                                                               --------   --------   --------

Financing Activities
     Dividends paid on common stock ........................      (82.4)    (606.4)    (130.3)
     Issuance (retirement) of short-term debt ..............         --     (123.0)     112.2
     Parent company capital contribution ...................         --         --      245.0
     Retirement of long-term debt ..........................       (0.4)      (0.4)    (237.6)
     Dividends paid on preferred stock .....................       (0.9)      (0.9)      (0.9)
                                                               --------   --------   --------

     Net cash used for financing activities ................      (83.7)    (730.7)     (11.6)
                                                               --------   --------   --------

Cash and temporary cash investments--

         Net change ........................................       (2.9)     (86.9)      93.6
         Balance at beginning of period ....................        8.6       95.5        1.9
                                                               --------   --------   --------

         Balance at end of period ..........................   $    5.7   $    8.6   $   95.5
                                                               ========   ========   ========
</TABLE>

See Notes to Consolidated Financial Statements.

                                       25

<PAGE>

                       The Dayton Power and Light Company

                           CONSOLIDATED BALANCE SHEET

-------------------------------------------------------------------------------
                                                             At December 31,
$ in millions                                                2001       2000
-------------------------------------------------------------------------------

Assets

Property
Property ..............................................   $ 3,684.4   $ 3,522.6
Accumulated depreciation and amortization .............    (1,670.0)   (1,560.4)
                                                          ---------   ---------

         Net property .................................     2,014.4     1,962.2
                                                          ---------   ---------

Current Assets
Cash and temporary cash investments ...................         5.7         8.6
Accounts receivable,less provision for uncollectible
     accounts of $12.4 and $6.8 respectively ..........       179.1       189.7
Inventories, at average cost ..........................        61.3        45.7
Prepaid taxes .........................................        54.8        65.4
Other .................................................        49.8        35.5
                                                          ---------   ---------

     Total current assets .............................       350.7       344.9
                                                          ---------   ---------

Other Assets
Income taxes recoverable through future
     revenues .........................................        39.2        49.4
Other regulatory assets ...............................        99.7       146.4
Trust assets ..........................................       141.1       171.8
Other assets ..........................................        75.8        76.4
                                                          ---------   ---------

     Total other assets ...............................       355.8       444.0
                                                          ---------   ---------
Total Assets                                              $ 2,720.9   $ 2,751.1
                                                          =========   =========

See Notes to Consolidated Financial Statements.

                                       26

<PAGE>

                       The Dayton Power and Light Company

                           CONSOLIDATED BALANCE SHEET
                                   (continued)

-----------------------------------------------------------------------
                                                      At December 31,
$ in millions                                         2001       2000
-----------------------------------------------------------------------

Capitalization and Liabilities

Capitalization
Common shareholder's equity
     Common stock ...............................   $    0.4   $    0.4
     Other paid-in capital ......................      771.6      769.8
     Accumulated other comprehensive income .....       15.6       37.3
     Earnings reinvested in the business ........      357.3      205.4
                                                    --------   --------

         Total common shareholder's equity ......    1,144.9    1,012.9

Preferred stock .................................       22.9       22.9
Long-term debt ..................................      666.6      666.5
                                                    --------   --------

         Total capitalization ...................    1,834.4    1,702.3
                                                    --------   --------

Current Liabilities
Accounts payable ................................      133.5      103.9
Accrued taxes ...................................      105.6      220.0
Accrued interest ................................       19.0       19.1
Other ...........................................       21.6       14.3
                                                    --------   --------

         Total current liabilities ..............      279.7      357.3
                                                    --------   --------

Deferred Credits And Other
Deferred taxes ..................................      397.0      429.9
Unamortized investment tax credit ...............       58.0       60.2
Trust obligations ...............................      102.7      113.6
Other ...........................................       49.1       87.8
                                                    --------   --------

         Total deferred credits and other .......      606.8      691.5
                                                    --------   --------

Total Capitalization and Liabilities ............   $2,720.9   $2,751.1
                                                    ========   ========

See Notes to Consolidated Financial Statements.

                                       27

<PAGE>

                       The Dayton Power and Light Company

                 CONSOLIDATED STATEMENT OF SHAREHOLDER'S EQUITY

<TABLE>
<CAPTION>
                                          Common Stock (a)                      Accumulated     Earnings
                                        --------------------                       Other       Reinvested
                                        Outstanding            Other Paid-In   Comprehensive     in the
$ in millions                             Shares      Amount      Capital         Income        Business     Total
--------------------------------------------------------------------------------------------------------------------
<S>                                      <C>           <C>         <C>              <C>          <C>        <C>
1999:
   Beginning balance                     41,172,173    $0.4        $788.2           $33.6        $450.8     $1,273.0
   Comprehensive income:
     Net income......................                                                             192.5
     Unrealized gains, net of
       reclassification adjustments,
       after tax (b).................                                                 4.1
   Total comprehensive income........                                                                          196.6
   Common stock dividends............                                                            (129.7)      (129.7)
   Dividend-in-kind (c) (Note 1).....                                               (24.1)                     (24.1)
   Dividend-in-kind (Note 1).........                              (263.6)                          1.4       (262.2)
   Preferred stock dividends.........                                                              (0.9)        (0.9)
   Parent company capital
     contribution....................                               245.0                                      245.0
   Other.............................                                 0.1                          (0.2)        (0.1)
                                         ---------------------------------------------------------------------------
   Ending balance....................    41,172,173     0.4         769.7            13.6         513.9      1,297.6

2000:
   Comprehensive income:
     Net income......................                                                             298.8
     Unrealized gains, net of
       reclassification adjustments,
       after tax (b).................                                                23.7
   Total comprehensive income........                                                                          322.5
   Common stock dividends............                                                            (606.4)      (606.4)
   Preferred stock dividends.........                                                              (0.9)        (0.9)
   Other.............................                                 0.1                                        0.1
                                         ---------------------------------------------------------------------------
   Ending balance....................    41,172,173     0.4         769.8            37.3         205.4      1,012.9

2001:
   Comprehensive income:
     Net income......................                                                             235.3
     Unrealized losses, net of
       reclassification adjustments,
       after tax (b).................                                               (21.6)
   Total comprehensive income........                                                                          213.7
   Common stock dividends............                                                             (82.4)       (82.4)
   Preferred stock dividends.........                                                              (0.9)        (0.9)
   Parent company capital
     contribution....................                                 1.7                                        1.7
   Other.............................                                 0.1            (0.1)         (0.1)        (0.1)
                                         ---------------------------------------------------------------------------
   Ending balance....................    41,172,173    $0.4        $771.6           $15.6        $357.3     $1,144.9
                                         ===========================================================================
</TABLE>

(a)  50,000,000 shares authorized.
(b)  Net of taxes of $2.2, $12.8, and $8.0 million in 1999, 2000, and 2001,
     respectively.
(c)  Net of taxes of $13.1 million in 1999.

See Notes to Consolidated Financial Statements.

                                       28

<PAGE>

                       The Dayton Power and Light Company

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.   Summary of Significant Accounting Policies

The Dayton Power and Light Company ("DP&L" or "the Company") is a wholly-owned
subsidiary of DPL Inc. ("DPL"). The accounts of the Company and its wholly-owned
subsidiaries are included in the accompanying consolidated financial statements.
In 1999, the Company transferred its ownership interests in the assets and
liabilities of MacGregor Park, Inc. and DP&L Community Urban Redevelopment
Corporation to DPL and transferred its ownership interests in the assets and
liabilities of MVE, Inc. to Plaza Building Inc., which is another wholly-owned
subsidiary of DPL, via dividends-in-kind and a repayment of inter-company debt.
Total assets and liabilities transferred were $470.1 million and $19.0 million,
respectively.

These statements are presented in accordance with accounting principles
generally accepted in the United States, which require management to make
estimates and assumptions related to future events. Reclassifications have been
made in certain prior years' amounts to conform to the current reporting
presentation. The consolidated financial statements principally reflect the
results of operations and financial condition of the Company. DPL and its other
wholly-owned subsidiaries provide certain administrative services to the
Company. These costs were $5.7 million in 2001, $6.1 million in 2000, and $12.5
million in 1999. The primary service provided by the subsidiaries is insurance.
The cost of service is either specifically identified with the Company or
allocated based upon the relationships of payroll, revenue and/or property.
Management considers the cost of service as reasonable and what would have been
incurred on a stand-alone basis.

Revenues and Fuel

For periods prior to January 1, 2001, revenues include amounts charged to
customers through fuel and gas recovery clauses, which were adjusted
periodically for changes in such costs. Related costs that were recoverable or
refundable in future periods were deferred along with the related income tax
effects. As of February 2000, the Company's Electric Fuel Component ("EFC") was
fixed at 1.30(cent) per kilowatt-hour through the end of the year and the
deferral of over/under-recovered fuel costs was no longer permitted. All
remaining deferred fuel balances were amortized to expense in 2000. All gas
deferred amounts were included in the sale of the natural gas retail
distribution operations (see Note 3). Beginning January 1, 2001, the EFC rate of
1.30(cent) became part of the base generation rate. Also included in revenues
are amounts charged to customers through a surcharge for recovery of arrearages
from certain eligible low-income households.

The Company records revenue for services provided but not yet billed to more
closely match revenues with expenses. Accounts receivable on the Consolidated
Balance Sheet includes unbilled revenue of $55.4 million in 2001 and $53.5
million in 2000.

                                       29

<PAGE>

Property, Maintenance and Depreciation

Property is shown at its original cost. Cost includes direct labor and material
and allocable overhead costs.

For the majority of the depreciable property, when a unit of property is
retired, the original cost of that property plus the cost of removal less any
salvage value is charged to accumulated depreciation.

Depreciation expense is calculated using the straight-line method, which
depreciates the cost of property over its estimated useful life, at an average
rate of 3.2%, 3.5%, and 3.6% for 2001, 2000, and 1999, respectively.

The Company leases office equipment and office space under operating leases with
varying terms. Future rental payments under these operating leases at December
31, 2001 are not material.

Repairs and Maintenance

Costs associated with all planned major work and maintenance activities,
primarily power plant outages, are recognized at the time the work is performed.
These costs are either capitalized or expensed based on Company defined
criteria. Outage costs include labor, materials and supplies and outside
services required to maintain the Company's equipment and facilities.

Income Taxes

Deferred income taxes are provided for all temporary differences between the
financial statement basis and the tax basis of assets and liabilities using the
enacted tax rate. For rate-regulated business units, additional deferred income
taxes and offsetting regulatory assets or liabilities are recorded to recognize
that the income taxes will be recoverable/refundable through future revenues.
Investment tax credits previously deferred are being amortized over the lives of
the related properties.

Consolidated Statement of Cash Flows

The temporary cash investments consist of liquid investments with an original
maturity of three months or less.

Financial Derivatives

The Company adopted the Financial Accounting Standard Board's ("FASB") Statement
of Financial Accounting Standards No. 133, "Accounting for Derivative
Instruments and Hedging activity," as amended ("SFAS No. 133") as of January 1,
2001. SFAS No. 133 requires that all derivatives be recognized as either assets
or liabilities in the consolidated balance sheet and be measured at fair value,
and changes in the fair value be recorded in earnings, unless they are
designated as a cash flow hedge of a forecasted transaction. As a result of
adopting this accounting standard, the Company recorded a cumulative effect of
accounting change of $1.0 million in income net of tax.

                                       30

<PAGE>

The Company uses forward and option purchase contracts as a hedge against the
risk of changes in cash flows associated with expected electricity purchases.
These purchases are required to meet full load requirements during times of peak
demand or during planned and unplanned generation facility outages. The Company
also holds forward sales contracts that hedge against the risk of changes in
cash flows associated with power sales during periods of projected generation
facility availability. Prior to July 1, 2001, the Company recorded the fair
value of all these contracts as "Other assets" or "Other liabilities" on the
Consolidated Balance Sheet with an offset to "Accumulated other comprehensive
income," which is recognized as earnings in the month of physical receipt or
delivery of power. In June 2001, the FASB concluded that electric utilities
could apply the normal purchases and sales exception for option-type contracts
and forward contracts in electricity subject to specific criteria for the power
buyers and sellers. Accordingly, the Company began to apply the normal purchase
and sales exception as defined in SFAS No. 133 as of July 1, 2001 and currently
accounts for these contracts upon settlement. This change did not have a
material impact on the Company's financial position or results of operations.

The Company also holds emission allowance options through 2004 that are
classified as derivatives not subject to hedge accounting. The fair value of
these contracts is reflected as "Other assets" or "Other liabilities" on the
Consolidated Balance Sheet and changes in fair value are recorded as "Other
income (deductions)" on the Consolidated Statement of Results of Operations. The
impact on net income was immaterial during 2001.

2.   Recent Accounting Standard

In June 2001, the FASB issued Statement of Financial Accounting Standards No.
143, "Accounting for Asset Retirement Obligations" ("SFAS No. 143") that
addresses financial accounting and reporting for obligations associated with the
retirement of tangible long-lived assets. SFAS No. 143 is effective for the
Company as of January 1, 2003. The Company has not yet determined the extent to
which its financial condition or results of operations may be affected by the
implementation of this accounting standard.

3.   Sale of the Gas Business

In October 2000, the Company completed the sale of its natural gas retail
distribution assets and certain liabilities for $468 million in cash. The
transaction resulted in a pre-tax gain of $183 million ($121 million net of
taxes), which is reflected in "Other income (deductions)" on the Consolidated
Statement of Results of Operations. Proceeds from the sale were used to finance
DPL's regional generation expansion and reduce outstanding short-term debt.

4.   Regulatory Matters

The Company applies the provisions FASB Statement No. 71, "Accounting for the
Effects of Certain Types of Regulation" to its regulated operations. This
accounting standard provides for the deferral of costs authorized for future
recovery by regulators.

                                       31

<PAGE>

Based on existing regulatory authorization, regulatory assets on the
Consolidated Balance Sheet include:

                                                  At December 31,
$ in million                                       2001     2000
-----------------------------------------------------------------
Regulatory transition costs (a) ...............   $ 97.2   $144.8
Income taxes recoverable through future
    revenues (b) ..............................     39.2     49.4
Other costs (b) ...............................      2.5      1.6
                                                  ------   ------
Total .........................................   $138.9   $195.8
                                                  ======   ======

(a) During 1999, legislation was enacted in Ohio, which restructures the state's
electric utility industry ("the Legislation"). Beginning in 2001, electric
generation, aggregation, power marketing and power brokerage services applied to
Ohio retail customers are not subject to regulation by the Public Utilities
Commission of Ohio ("PUCO"). As required by the Legislation, the Company filed
its transition plan ("the Plan") at the PUCO in 1999, which included an
application for the Company to receive transition revenues to recover regulatory
assets and other potentially stranded costs. Final PUCO approval of the Plan was
received in September 2000.

The Plan, which began in January 2001, provides for a three-year transition
period ("the Transition Period") ending December 31, 2003, at which time the
Company's generation business unit will be fully merchant. As a result of the
PUCO final approval of the transition plan and tariff schedules, the application
of SFAS No. 71 was discontinued for generation-related assets. Transmission and
distribution services, which continue to be regulated based on PUCO-approved
cost based rates, continue to apply SFAS No. 71. The Plan, as approved, provides
for the recovery of a portion of the Company's transition costs, including
generation-related regulatory assets, during the Transition Period. Based on the
Company's assessment of recoveries of regulatory assets during the Transition
Period, a $63.7 million before tax benefits ($41.4 million net of taxes)
reduction of generation-related regulatory assets was recorded in the third
quarter of 2000 as an extraordinary item in accordance with FASB Statement of
Accounting Standards No. 101, "Regulated Enterprises-Accounting for the
Discontinuation of Application of FASB Statement No. 71" and other
generation-related regulatory assets were reclassified to the "Regulatory
transition costs" asset.

(b) Certain deferred costs remain authorized for recovery by regulators. These
relate primarily to the Company's electric transmission and distribution
operations and are being amortized over the recovery period of the assets
involved.

                                       32

<PAGE>

5.   Income Taxes

<TABLE>
<CAPTION>
                                                                          For the years ended
                                                                              December 31,
$ in millions                                                            2001     2000     1999
------------------------------------------------------------------------------------------------
<S>                                                                     <C>      <C>      <C>
Computation of tax expense

Federal income tax (a)...............................................   $139.6   $183.0   $109.7

Increases (decreases) in tax from --
     Regulatory assets...............................................       --       --      4.4
     Depreciation....................................................      4.5      6.5     13.1
     Investment tax credit amortized.................................     (2.3)    (6.1)    (3.0)
     Other, net......................................................     (0.4)    (0.8)    (3.1)
                                                                        ------   ------   ------

         Total tax expense...........................................   $141.4   $182.6   $121.1
                                                                        ======   ======   ======

Components of Tax Expense

Taxes currently payable..............................................   $146.9   $243.0   $107.2
Deferred taxes--
     Regulatory assets...............................................    (12.5)   (13.3)    (5.8)
     Liberalized depreciation and amortization.......................     (5.7)   (29.3)     5.8
     Fuel and gas costs..............................................      1.1     (7.1)     9.2
     Other...........................................................     13.9     (4.6)     7.7
Deferred investment tax credit, net..................................     (2.3)    (6.1)    (3.0)
                                                                        ------   ------   ------

         Total tax expense...........................................   $141.4   $182.6   $121.1
                                                                        ======   ======   ======
</TABLE>

(a)  The statutory rate of 35% was applied to pre-tax income.

Components of Deferred Tax Assets and Liabilities

                                                     At December 31,
$ in millions                                        2001     2000
--------------------------------------------------------------------
Non-current Liabilities

Depreciation/property basis ....................   $(392.8)  $(403.8)
Income taxes recoverable .......................     (14.4)    (17.3)
Regulatory assets ..............................     (38.6)    (50.6)
Investment tax credit ..........................      20.7      21.1
Other ..........................................      28.1      20.7
                                                   -------   -------

     Net non-current liability .................   $(397.0)  $(429.9)
                                                   =======   =======

Net Current Asset ..............................   $   1.3   $  11.1
                                                   =======   =======

                                       33

<PAGE>

6.   Pensions and Postretirement Benefits

Pensions

Substantially all Company employees participate in pension plans paid for by the
Company. Employee benefits are based on their years of service, age,
compensation and year of retirement. The plans are funded in amounts actuarially
determined to provide for these benefits.

The following tables set forth the plans' obligations, assets and amounts
recorded in Other assets on the Consolidated Balance Sheet at December 31:

$ in millions                                               2001     2000
--------------------------------------------------------------------------

Change in Projected Benefit Obligation
--------------------------------------
Benefit obligation, January 1 ..........................   $273.7   $272.8
Service cost ...........................................      4.3      5.1
Interest cost ..........................................     17.3     18.9
Amendments .............................................      0.2     21.1
Special termination benefit (a) ........................      5.3       --
Curtailment (b) ........................................       --     (3.1)
Actuarial (gain) loss ..................................    (13.4)   (26.6)
Benefits paid ..........................................    (16.2)   (14.5)
                                                           ------   ------
Benefit obligation, December 31 ........................    271.2    273.7
                                                           ------   ------

Change in Plan Assets
---------------------
Fair value of plan assets, January 1 ...................    361.3    421.3
Actual return on plan assets ...........................    (63.8)   (45.5)
Benefits paid ..........................................    (16.2)   (14.5)
                                                           ------   ------
Fair value of plan assets, December 31 .................    281.3    361.3
                                                           ------   ------

Plan assets in excess of projected benefit
  obligation ...........................................     10.1     87.6
Unrecognized actuarial (gain) loss .....................     44.1    (45.8)
Unamortized prior service cost .........................     18.6     23.2
                                                           ------   ------
Net pension assets .....................................   $ 72.8   $ 65.0
                                                           ======   ======

Assumptions used in determining the projected benefit obligation were as
follows:

                                                2001          2000         1999
                                                -------------------------------
Discount rate for obligations ...............   7.25%         7.25%        6.25%
Expected return on plan assets ..............   9.00%         9.00%        7.50%
Average salary increases ....................   4.00%         5.00%        5.00%

                                       34

<PAGE>

The following table sets forth the components of pension expense (portions of
which were capitalized):

$ in millions                                        2001     2000     1999
----------------------------------------------------------------------------
Expense for Year
----------------
Service cost ....................................   $  4.3   $  5.1   $  5.9
Interest cost ...................................     17.3     18.9     16.2
Expected return on plan assets ..................    (32.9)   (33.9)   (25.3)
Amortization of unrecognized:
  Actuarial (gain) loss .........................     (6.6)    (5.0)    (0.5)
  Prior service cost ............................      3.5      4.2      2.1
  Transition obligation .........................       --     (2.8)    (4.3)
                                                    ------   ------   ------
Net pension cost ................................    (14.4)   (13.5)    (5.9)
Special termination benefit (a) .................      5.3       --       --
Curtailment (a) .................................      1.4      2.1       --
                                                    ------   ------   ------
Net pension cost after special
termination benefitand curtailment ..............   $ (7.7)  $(11.4)  $ (5.9)
                                                    ======   ======   ======

(a)  The special termination benefit was recognized as a result of 63 employees
     who participated in a voluntary early retirement program and retired as of
     July 1, 2001.
(b)  The curtailment in 2001 was recognized as a result of a non-union workforce
     reduction program that was completed in November 2001. The curtailment in
     2000 was recognized as a result of the completion of the sale of the
     natural gas retail distribution assets and certain liabilities in October
     2000 (see Note 3).

Postretirement Benefits

Qualified employees who retired prior to 1987 and their dependents are eligible
for health care and life insurance benefits. The Company has funded the
union-eligible health benefit using a Voluntary Employee Beneficiary Association
Trust.

The following tables set forth the accumulated postretirement benefit obligation
("APBO"), assets and funded status amounts recorded in Other Deferred Credits on
the Consolidated Balance Sheet at December 31:

$ in millions                          2001    2000
----------------------------------------------------

Change in APBO
--------------
Benefit obligation, January 1 ......   $30.8   $32.4
Interest cost ......................     2.2     2.2
Curtailment (a) ....................      --    (0.1)
Actuarial (gain) loss ..............     2.6    (1.0)
Benefits paid ......................    (2.6)   (2.7)
                                       -----   -----
Benefit obligation, December 31 ....    33.0    30.8
                                       -----   -----

                                       35

<PAGE>

$ in millions                                         2001    2000
-------------------------------------------------------------------

Change in Plan Assets
---------------------
Fair value of plan assets, January 1 .........         10.9    10.9
Actual return on plan assets .................          0.9     1.0
Company contributions ........................          1.8     1.7
Benefits paid ................................         (2.7)   (2.7)
                                                      -----   -----
Fair value of plan assets, December 31 .......         10.9    10.9
                                                      -----   -----

APBO in excess of plan assets ................         22.1    19.9
Unamortized transition obligation ............         (3.9)   (6.9)
Actuarial gain ...............................         17.6    21.8
                                                      -----   -----
Accrued postretirement benefit liability .....        $35.8   $34.8
                                                      =====   =====

Assumptions used in determining the projected benefit obligation were as
follows:

                                                 2001         2000         1999
                                                 -------------------------------
Discount rate for obligations ................   7.25%        7.25%        6.25%
Expected return on plan assets ...............   7.00%        7.00%        5.70%

The assumed health care cost trend rate used in measuring the accumulated
postretirement benefit obligation was 7.0% and 7.5% for 2001 and 2000 ,
respectively, and decreases to 5.0% by 2007. A one percentage point change in
the assumed health care trend rate would affect the service and interest cost by
$0.1 million. A one percentage point increase in the assumed health care trend
rate would increase the postretirement benefit obligation by $1.9 million; and a
one percentage point decrease would decrease the benefit obligation by $1.7
million.

The following table sets forth the components of postretirement benefit expense:

$ in millions                                            2001    2000    1999
-------------------------------------------------------------------------------

Expense for Year
----------------
Interest cost .......................................    $ 2.2   $ 2.2   $ 2.0
Expected return on plan assets ......................     (0.7)   (0.7)   (0.7)
Amortization of unrecognized:
  Actuarial (gain) loss .............................     (1.6)   (2.2)   (2.4)
  Transition obligation .............................      2.9     2.9     3.0
                                                         -----   -----   -----
Postretirement benefit cost .........................      2.8     2.2     1.9
Curtailment (a) .....................................       --     0.1      --
                                                         -----   -----   -----
Postretirement benefit cost after curtailment .......    $ 2.8   $ 2.3   $ 1.9
                                                         =====   =====   =====

(a)  The curtailment was recognized as a result of the completion of the sale of
     the natural gas retail distribution assets and certain liabilities in
     October 2000 (see Note 3).

                                       36

<PAGE>

7.   Preferred Stock

$25 par value, 4,000,000 shares authorized, no shares outstanding; and $100 par
value, 4,000,000 shares authorized, 228,508 shares without mandatory redemption
provisions outstanding.

                 Current       Current                Par Value
                Redemption     Shares      At December 31, 2001 and 2000
Series   Rate     Price      Outstanding           ($ in millions)
------------------------------------------------------------------------

  A      3.75%   $102.50        93,280                 $ 9.3
  B      3.75%   $103.00        69,398                   7.0
  C      3.90%   $101.00        65,830                   6.6
                               -------                 -----

   Total                       228,508                 $22.9
                               =======                 =====

The shares may be redeemed at the option of the Company at the per share prices
indicated, plus cumulative accrued dividends. In August 2000, the Company
announced that it would redeem the outstanding shares in conjunction with its
corporate separation plan required by the Ohio deregulation legislation. Current
market conditions and regulatory requirements regarding legal separation of the
electric operations do not justify a redemption at this time. Over the remainder
of the deregulation transition period, the Company will continue to evaluate
whether redemption of the preferred stock is warranted.

8.   Long-term Debt

                                                              At December 31,
$ in millions                                                  2001     2000
-----------------------------------------------------------------------------

First mortgage bonds maturing 2024-2026  8.01% (a) ........   $446.0   $446.0
Pollution control series maturing through 2027 6.43% (a)...    105.6    106.0
                                                              ------   ------
                                                               551.6    552.0

Guarantee of Air Quality Development Obligations
     6.10% Series Due 2030 ................................    110.0    110.0
Obligation for capital lease ..............................      5.4      4.9
Unamortized debt discount and premium (net) ...............     (0.4)    (0.4)
                                                              ------   ------
     Total ................................................   $666.6   $666.5
                                                              ======   ======

(a)  Weighted average interest rate for 2001 and 2000.

The amounts of maturities and mandatory redemptions for first mortgage bonds,
notes, and the capital lease are $1.1 million per year in 2002 through 2006.
Substantially all property of the Company is subject to the mortgage lien
securing the first mortgage bonds.

9.   Notes Payable and Compensating Balances

DPL and its subsidiaries have $200 million available through revolving credit
agreements with a consortium of banks. Facility fees are approximately $0.3
million per year. The primary purpose of the revolving credit facilities is to
provide back-up liquidity for the commercial paper program. At December 31, 2001
and 2000, DPL had no outstanding borrowings under these credit agreements.

                                       37

<PAGE>

The Company also has $75.0 million available in short-term informal lines of
credit. The commitment fees are immaterial. Borrowings at December 31, 2001 and
2000 were zero.

The Company had no outstanding commercial paper balances at December 31, 2001
and 2000.

10.  Employee Stock Plans

In 2000, DPL's Board of Directors adopted and its shareholders approved the DPL
Inc. Stock Option Plan. On February 1, 2000, options were granted at an exercise
price of $21.00, which was above the market price of $19.06 per share on that
date. The exercise price of options granted after that date approximated the
market price of the stock on the date of grant. Options granted represent
three-year awards, vest five years from the grant date, and expire ten years
from the grant date. At December 31, 2001, there were 767,500 options available
for grant.

Summarized stock option activity was as follows:

                                                        2001        2000
---------------------------------------------------------------------------

Options granted at beginning of year                 7,610,000           --
Granted.........................................       127,500    7,610,000
Exercised.......................................            --           --
Forfeited.......................................      (505,000)          --
                                                    ----------   ----------
Outstanding at year-end.........................     7,232,500    7,610,000
Exercisable at year-end.........................            --           --

Weighted average option prices per share:
   At beginning of year.........................    $    22.10   $       --
   Granted......................................         27.17        22.10
   Exercised....................................            --           --
   Forfeited....................................         24.97           --
   Outstanding at year-end......................         21.99        22.10
   Exercisable at year-end......................    $       --   $       --

The weighted-average fair value of options granted was $3.47 and $3.65 per share
in 2001 and 2000, respectively. The fair values of options were estimated as of
the date of grant using a Black-Scholes option pricing model utilizing the
following assumptions:

                                       38

<PAGE>

                           2001   2000
--------------------------------------
Volatility                 18.5%  18.5%
Expected life (years)       5.1    5.1
Dividend yield rate         3.6%   3.5%
Risk-free interest rate     4.5%   6.8%

The Company has elected to follow Accounting Principles Board Opinion No. 25,
"Accounting for Stock Issued to Employees" ("APB 25") and related
interpretations in accounting for its employee stock options. Under APB 25,
compensation expense of $2.3 million was recorded in 2001 and in 2000 for grants
issued prior to the measurement date for accounting purposes. If the Company had
used a fair-value method of accounting for stock-base compensation cost,
reported earnings on common stock for 2001 and 2000 would have been $232.8 and
$296.4 million, respectively.

The following table reflects information about stock options outstanding at
December 31, 2001:

<TABLE>
<CAPTION>
                                    Options Outstanding       Options Exercisable
                                  -----------------------   -----------------------
                                  Weighted-
                                   Average      Weighted-                 Weighted-
                                  Contractual    Average                  Average
Range of Exercise     Number         Life       Exercise      Number      Exercise
     Prices         Outstanding   (in years)     Price      Exercisable    Price
---------------------------------------------------------   -----------------------
<S>                  <C>              <C>         <C>           <C>         <C>
$21.00-$29.63        7,232,500        8.2         $21.99        --          --
</TABLE>

11.  Ownership of Facilities

The Company and other Ohio utilities have undivided ownership interests in seven
electric generating facilities and numerous transmission facilities. Certain
expenses, primarily fuel costs for the generating units, are allocable to the
owners based on their energy usage. The remaining expenses, as well as
investments in fuel inventory, plant materials and operating supplies, and
capital additions, are allocated to the owners in accordance with their
respective ownership interests. As of December 31, 2001, the Company had $133
million of construction in progress at such facilities. The Company's share of
the operating cost of such facilities is included in the Consolidated Statement
of Results of Operations, and its share of the investment in the facilities is
included in the Consolidated Balance Sheet.

                                       39

<PAGE>

The following table presents the Company's undivided ownership interest in such
facilities at December 31, 2001:

<TABLE>
<CAPTION>
                                                                                 Company
                                                        Company Share           Investment
                                                    ----------------------   ---------------
                                                                Production     Gross Plant
                                                    Ownership    Capacity       in Service
                                                       (%)         (MW)      ($ in millions)
--------------------------------------------------------------------------------------------
<S>                                                    <C>          <C>            <C>
Production Units:
     Beckjord Unit 6 ............................      50.0         210             57
     Conesville Unit 4 ..........................      16.5         129             31
     East Bend Station ..........................      31.0         186            154
     Killen Station .............................      67.0         418            381
     Miami Fort Units 7 & 8 .....................      36.0         360            129
     Stuart Station .............................      35.0         823            260
     Zimmer Station .............................      28.1         365            996
Transmission (at varying percentages) ...........                                   86
</TABLE>

12.  Fair Value of Financial Instruments

<TABLE>
<CAPTION>
                                                             At December 31,
                                               2001                                2000
                                         Gross Unrealized                     Gross Unrealized
                                         ----------------                     ----------------
                                Fair                                  Fair
$ in millions                   Value    Gains     Losses     Cost    Value    Gains    Losses   Cost
------------------------------------------------------------------------------------------------------
<S>                             <C>      <C>       <C>       <C>      <C>      <C>       <C>    <C>
Assets
Available-for-sale equity
securities ..................   $ 95.3   $43.9     $(14.4)   $ 65.8   $122.9   $58.2     $--    $ 64.7

Held-to-maturity securities:
   Debt securities (a) ......     45.8      --       (0.2)     46.0   $ 50.2     0.8      --    $ 49.4
   Temporary cash investments       --      --         --        --     11.0      --      --      11.0
                                ------   -----     ------    ------   -----    -----     ---    ------
       Total ................   $141.1   $43.9     $(14.6)   $111.8   $184.1   $59.0     $--    $125.1

Liabilities (b)
Debt ........................   $678.8                       $668.1   $661.8                    $662.4
</TABLE>

(a)  Maturities range from 2002 to 2010.
(b)  Includes current maturities.

Gross realized gains (losses) were $0.9 and $(6.2) million in 2001, $0.1 and
$(0.5) million in 2000, and $12.4 and $(1.0) million in 1999, respectively.

                                       40

<PAGE>

13.  Reconciliation of Net Income to Net Cash Provided by Operating Activities

<TABLE>
<CAPTION>
                                                       For the years ended December 31,
$ in millions                                             2001      2000       1999
---------------------------------------------------------------------------------------
<S>                                                      <C>       <C>        <C>
Net income .........................................     $235.3    $ 298.8    $192.5
Adjustments:
     Depreciation and amortization .................      116.0      130.3     134.0
     Noncash extraordinary item, net of tax ........         --       41.4        --
     Gain on sale of natural gas retail distribution
        operations .................................         --     (182.5)       --
     Deferred income taxes .........................       (5.5)     (60.5)     13.9
     Other deferred credits ........................      (49.6)      22.5       3.7
     Amortization of regulatory assets, net ........       46.9       16.3      25.8
     Operating expense provisions ..................       (0.9)      26.9     (10.3)
     Accounts receivable ...........................       10.6       (5.4)     12.6
     Accounts payable ..............................       24.4      (36.7)     24.8
     Accrued taxes payable .........................      (13.5)      63.5       3.3
     Inventory .....................................      (15.7)      (5.8)     19.3
     Other .........................................      (14.8)     (23.3)    (18.3)
                                                         ---------------------------

Net cash provided by operating activities ..........     $333.2    $ 285.5    $401.3
                                                         ===========================
</TABLE>

14.  Business Segment Reporting

The Company provides electric services to 500,000 retail customers in West
Central Ohio. The Company also sold and distributed natural gas until October
31, 2000, at which time the Company completed the sale of its natural gas retail
distribution assets and certain liabilities (see Note 3).

In prior years, the Company had two reportable operating segments: Electric and
Natural Gas. As a result of the sale of the natural gas retail distribution
operations, the Electric segment is the remaining reportable operating segment.
Assets and related costs associated with the Company's transmission and
distribution and base load and peaking generation operations are managed and
evaluated as a single operating segment.

                                       41

<PAGE>

<TABLE>
<CAPTION>
$ in millions                                                   2001       2000       1999
--------------------------------------------------------------------------------------------
<S>                                                           <C>        <C>        <C>
Net revenues:
Electric ..................................................   $  838.3   $  824.0   $  795.1
Natural Gas ...............................................         --       66.9       85.1
                                                              --------   --------   --------
   Total ..................................................   $  838.3   $  890.9   $  880.2

Operating income:
Electric ..................................................   $  415.1   $  407.7   $  352.7
Natural Gas ...............................................         --       24.2       27.2
Other (a) .................................................       (2.7)      (7.1)       1.1
                                                              --------   --------   --------
   Total operating income .................................      412.4      424.8      381.0
Other income (deductions) .................................       25.9      170.7       14.1
Interest expense ..........................................      (62.6)     (72.7)     (81.5)
                                                              --------   --------   --------
Income before income taxes, extraordinary item, and
cumulative effect of accounting change ....................   $  375.7   $  522.8   $  313.6
                                                              ========   ========   ========

Depreciation and amortization:
Electric ..................................................   $  116.0   $  122.9   $  125.9
Natural Gas ...............................................         --        7.4        8.1
                                                              --------   --------   --------
   Total ..................................................   $  116.0   $  130.3   $  134.0
                                                              ========   ========   ========

Expenditures - construction additions:
Electric ..................................................   $  164.4   $  117.8   $   69.9
Natural Gas ...............................................         --        7.1        9.6
                                                              --------   --------   --------
   Total ..................................................   $  164.4   $  124.9   $   79.5
                                                              ========   ========   ========

Assets
Electric ..................................................   $2,546.6   $2,545.7   $2,584.0
Natural Gas ...............................................         --         --      321.7
Unallocated corporate assets ..............................      174.3      205.4      247.8
                                                              --------   --------   --------
  Total assets ............................................   $2,720.9   $2,751.1   $3,153.5
                                                              ========   ========   ========
</TABLE>

(a)  Includes unallocated corporate items.

                   SELECTED QUARTERLY INFORMATION (Unaudited)

<TABLE>
<CAPTION>
                                              March 31,          June 30,        September 30,      December 31,
$ in millions                               2001      2000     2001     2000     2001     2000     2001     2000
-----------------------------------------------------------------------------------------------------------------
<S>                                        <C>      <C>       <C>      <C>      <C>      <C>      <C>      <C>
Utility service revenues ...............   $294.7   $361.0    $287.2   $293.9   $351.5   $337.2   $254.8   $301.8
Income before income taxes,
extraordinary item, and cumulative
effect of accounting change ............     94.5     88.1      72.3     73.5    136.6    104.4     72.3    256.8
Income before extraordinary item and
cumulative effect of accounting change .     56.5     56.1      45.5     47.1     85.5     67.1     46.8    169.9
Net income .............................     57.5     56.1      45.5     47.1     85.5     25.7     46.8    169.9
Earnings on common stock ...............     57.3     55.9      45.3     46.9     85.2     25.4     46.6    169.7
Cash dividends paid ....................      8.1       --      57.3    102.5     17.0     87.1       --    416.8
</TABLE>

                                       42

<PAGE>

                  FINANCIAL AND STATISTICAL SUMMARY (Unaudited)

<TABLE>
<CAPTION>
                                        2001       2000      1999     1998      1997
--------------------------------------------------------------------------------------
<S>                                   <C>        <C>       <C>       <C>       <C>
For the years ended December 31,

Utility service revenues (millions)   $1,188.2   1,293.9   1,273.3   1,284.2   1,254.4
Earnings on common stock (millions)   $  234.4     297.9     191.6     168.6     171.1

Cash dividends paid (millions) ....   $   82.4     606.4     130.3     238.8     118.5

Electric sales (millions of kWh)--
     Residential ..................      4,909     4,816     4,725     4,790     4,788
     Commercial ...................      3,618     3,539     3,390     3,518     3,408
     Industrial ...................      4,568     4,851     4,876     4,655     4,749
     Other retail .................      1,369     1,371     1,305     1,360     1,330
                                      --------   -------   -------   -------   -------
         Total retail .............     14,464    14,577    14,296    14,323    14,275
     Wholesale ....................      3,591     2,946     2,571     3,158     2,334
                                      --------   -------   -------   -------   -------
         Total ....................     18,055    17,523    16,867    17,481    16,609

Gas sales (thousands of MCF)-- (a)
     Residential ..................         --    18,538    24,450    24,877    29,277
     Commercial ...................         --     5,838     7,647     7,433     9,567
     Industrial ...................         --     2,034     2,246     1,916     2,520
     Other ........................         --       776     1,182     1,699     2,153
     Transported gas ..............         --    16,105    20,190    17,788    18,523
                                                 -------   -------   -------   -------

         Total ....................         --    43,291    55,715    53,713    62,040

At December 31,

Total assets (millions) ...........   $2,720.9   2,721.5   3,153.5   3,412.4   3,326.8
Long-term debt (millions) .........   $  666.6     666.5     661.2     885.6     886.0

First mortgage bond ratings--
     Standards & Poor's Corporation       BBB+      BBB+       AA-       AA-       AA-
     Moody's Investors Service ....         A2        A2       Aa3       Aa3       Aa3

Number of Preferred Shareholders ..        476       471       509       559       625
</TABLE>

(a)  The Company completed the sale of its natural gas retail distribution
     assets and certain liabilities in October 31, 2000.

                                       43

<PAGE>

                        Report of Independent Accountants
                        ---------------------------------

To the Board of Directors and Shareholder of The Dayton Power and Light Company

In our opinion, the consolidated financial statements listed in the index,
appearing under Item 14(a)(1) on page 54 present fairly, in all material
respects, the financial position of The Dayton Power and Light Company and its
subsidiaries at December 31, 2001 and 2000, and the results of their operations
and their cash flows for each of the three years in the period ended December
31, 2001, in conformity with accounting principles generally accepted in the
United States of America. In addition, in our opinion, the financial statement
schedule listed in the index appearing under Item 14(a)(2) on page 54 presents
fairly, in all material respects, the information set forth therein when read in
conjunction with the related consolidated financial statements. These financial
statements and financial statement schedule are the responsibility of the
Company's management; our responsibility is to express an opinion on these
financial statements and financial statement schedule based on our audits. We
conducted our audits of these statements in accordance with auditing standards
generally accepted in the United States of America, which require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.


/s/ PricewaterhouseCoopers LLP

PricewaterhouseCoopers LLP
Dayton, Ohio
January 28, 2002

                                       44

<PAGE>

Item 9 - Changes in and Disagreements with Accountants on Accounting and
         Financial Disclosure
--------------------------------------------------------------------------------

     None.

PART III

Item 10 - Directors and Executive Officers of the Registrant
--------------------------------------------------------------------------------

Directors of the Registrant

The Board is presently authorized to consist of eleven directors. These
directors are also directors of DPL Inc., the holding company of the Company.
The directors are to be elected this year to serve until the Annual Meeting of
Shareholders in 2003 or until their successors are duly elected and qualified.
Should any nominee become unable to accept nomination or election, the Board
will vote for the election of such other person as a director as the present
directors may recommend in the place of such nominee.

The following information regarding the nominees is based on information
furnished by them:

<TABLE>
<CAPTION>
                                                                          Director
                                                                           Since
----------------------------------------------------------------------------------
<S>                                                                         <C>
THOMAS J. DANIS, Age 52                                                     1989
     Chairman and Chief Executive Officer,
     The Danis Companies, Dayton, Ohio, construction,
     real estate and environmental services.
     Trustee:  Miami Valley Research Park Foundation.

JAMES F. DICKE, II, Age 56                                                  1990
     President, Crown Equipment Corporation, New Bremen, Ohio,
     international manufacturer and distributor of electric lift trucks
     and material handling products.
     Director:  Regional Boys and Girls Clubs of America,
     Anderson-Cooke, Inc., Dayton Art Institute,
     Gulf States Paper Co.
     Chairman:  Trinity University Board of Trustees.
     Secretary: Culver Educational Foundation.

PETER H. FORSTER, Age 59                                                    1979
     Chairman, DPL Inc. and The Dayton Power and Light
     Company.
     Chairman:  Miami Valley Research Foundation.
     Director:  Amcast Industrial Corp.
     Trustee:   F. M. Tait Foundation.

ERNIE GREEN, Age 63                                                         1991
     President and Chief Executive Officer, Ernie Green
     Industries, Dayton, Ohio, automotive components
     manufacturer.
     Director:  Pitney Bowes Inc., Eaton Corp.
</TABLE>

                                       45

<PAGE>

<TABLE>
<CAPTION>
                                                                          Director
                                                                           Since
----------------------------------------------------------------------------------
<S>                                                                         <C>
JANE G. HALEY, Age 71                                                       1978
     President and Chief Executive Officer, Gosiger, Inc.,
     Dayton, Ohio, national importer and distributor of
     machine tools.
     Director:  The Ultra-Met Company, Urbana, Ohio,
     ONA America, Dayton, Ohio.
     Trustee:   University of Dayton, Chaminade-Julienne
     High School, Dayton, Ohio.
     Member Miami Valley Economic Development Coalition.

ALLEN M. HILL, Age 56                                                       1989
     President and Chief Executive Officer, DPL Inc. and
     The Dayton Power and Light Company.
     Director:  Fifth Third Bancorp, Premier Health Partners.
     Trustee:   Dayton Business Committee,
     The University of Dayton, Air Force Museum Foundation,
     Alliance Community Schools.

W AUGUST HILLENBRAND, Age 61                                                1992
     Retired President and Chief Executive Officer, Hillenbrand
     Industries, Batesville, Indiana, a diversified public holding
     company that manufactures caskets, hospital furniture,
     hospital supplies and provides funeral planning services.
     Director:  Hillenbrand Industries, Pella Corporation.
     Company, Hon Industries.
     Trustee:   Batesville Girl Scouts.
     Trustee Emeritus:  Denison University.

DAVID R. HOLMES, Age 61                                                     1994
     Retired Chairman of the Board and Chief Executive Officer,
     The Reynolds and Reynolds Company, Dayton, Ohio,
     information management systems.
     Director:  NCR Corporation, Dayton, Ohio.

BURNELL R. ROBERTS, Age 74                                                  1987
     Retired Chairman of the Board and Chief Executive
     Officer, The Mead Corporation, Dayton, Ohio,
     forest products producer.
     Principal: Pembroke Associates.
     Director:  Rayonier, Inc., p4A.com Ltd.
     Trustee:   Granum Value Fund.
</TABLE>

                                       46

<PAGE>

<TABLE>
<CAPTION>
                                                                          Director
                                                                           Since
----------------------------------------------------------------------------------
<S>                                                                         <C>
GEORGE R. ROBERTS, Age 58                                                   2000
     Partner, Kohlberg Kavis Roberts & Co. L.P. and Managing
     Member of KKR & Co. LLC, New York City, investment company.
     Director:  Accuride Corporation, Amphenol Corporation, Borden,
     Inc., The Boyds Collection, Ltd., Evenflo Company Inc.,
     IDEX Corporation, KinderCare Learning Center, Inc.,
     KSL Recreation Group, Inc., Owens-Illinois, Inc., PRIMEDIA, Inc.,
     Safeway Inc., Spalding Holdings Corporation.
     Trustee:  Claremont McKenna College, Culver Military Academy.
     Member:  San Francisco Symphony, San Francisco Ballet,
     Fine Arts Museum.

SCOTT M. STUART, Age 42                                                     2000
     Member, KKR & Co. LLC, New York City, investment company.
     Director:  AEP Industries Inc., Borden, Inc., The Boyds Collection,
     Ltd.
     Board Member:  The Boys Club of New York, Greenwich Country
     Day School, WNET/Channel 13.
</TABLE>

                                       47

<PAGE>

                      EXECUTIVE OFFICERS OF THE REGISTRANT
                              (As of March 1, 2002)

<TABLE>
<CAPTION>
                                       Business Experience,
                                         Last Five Years
                                    (Positions with Registrant
        NAME             Age      Unless Otherwise Indicated)               Dates
----------------------   ---   ---------------------------------   -----------------------
<S>                      <C>   <C>                                 <C>            <C>
Allen M. Hill            56    President and Chief Executive         4/06/92 -     3/01/02
                                  Officer, DPL Inc. and
                                  the Company
                               President and Chief Executive         1/01/97 -     3/01/02
                                  Officer, DPL Inc.

Stephen F. Koziar, Jr.   57    Group Vice President and             1/31/95  -     3/01/02
                                  Secretary, DPL Inc. and
                                  the Company

Elizabeth M. McCarthy    42    Group Vice President and Chief       9/26/00  -     3/01/02
                                  Financial Officer, DPL Inc.
                                  and the Company
                               Vice President and Chief             4/01/00  -     9/26/00
                                  Accounting Officer, DPL Inc.
                                  and the Company
                               Partner, PricewaterhouseCoopers      7/01/94  -     3/31/00
                                  LLP, New York, NY

Arthur G. Meyer          51    Vice President, Legal and           11/21/97  -     3/01/02
                                  Corporate Affairs
                               Director, Corporate Relations        5/14/96  -    11/21/97

Bryce W. Nickel          45    Assistant Vice President             1/01/94  -     3/01/02

H. Ted Santo             51    Group Vice President                12/08/92  -     3/01/02

Patricia K. Swanke       42    Vice President, Operations           9/29/99  -     3/01/02
                               Managing Director                    9/08/96  -     9/29/99
</TABLE>

                                       48

<PAGE>

Item 11 - Executive Compensation
--------------------------------------------------------------------------------

COMPENSATION OF DIRECTORS

Directors of the Company who are not employees receive an annual award of 1,500
common shares units for services as a director. The annual share unit award
replaced cash director fees effective July 1, 2000. Previously, directors
received $12,000 annually plus meeting attendance and committee fees.

Non-employee directors are eligible to receive grants of stock options under the
DPL Inc. Stock Option Plan. Each non-employee director, except Mr. Forster, was
granted an option to purchase 50,000 shares on February 1, 2000 at an above
market exercise price of $21.00 per share. The closing price on February 1, 2000
was $19.06 per share. These options represent a three-year block grant, are
currently exercisable and expire on February 1, 2010.

DPL Inc. maintains a Deferred Compensation Plan for non-employee directors in
which payment of directors' fees may be deferred. Under the standard deferred
income program directors are entitled to receive a lump sum payment or payments
in installments over a period up to 20 years. Effective January 31, 2000, the
supplementary deferred income program was terminated for current directors and
the value of each director's supplementary account transferred to his or her
standard deferral account. All current directors have designated their standard
deferral account be invested in DPL Inc. common share units.

Mr. Forster, who retired as Chief Executive Officer of DPL Inc. effective
December 31, 1996, entered into a three year agreement with DPL Inc. and the
Company pursuant to which he serves as Chairman of the Board of DPL Inc. and the
Company and provides advisory and strategic planning services. The term of the
agreement is automatically extended each December 31 for an additional year
unless either party gives advance notice of nonrenewal. For these services, Mr.
Forster receives an annual fee of $600,000 (as well as such bonuses, if any, as
may be determined by the Compensation and Management Review Committee in its
discretion) and is eligible to receive grants of stock options under the DPL
Inc. Stock Option Plan. As Chairman, Mr. Forster is responsible for the
long-term strategic planning of the Company, the oversight of financial assets,
and the evaluation and recommendations relating to the merger, acquisition and
disposition of utility assets. Mr. Forster participates in an incentive program
for individuals managing financial assets.

                                       49

<PAGE>

EXECUTIVE OFFICER COMPENSATION

Summary Compensation Table

Set forth below is certain information concerning the compensation of the Chief
Executive Officer and each of the other four most highly compensated executive
officers of DPL Inc. and the Company, for the last three fiscal years, for
services rendered in all capacities.

<TABLE>
<CAPTION>

                                                           --------------------------------------------
                                                                     Long Term Compensation
                                                           --------------------------------------------
                                           Annual           Securities
                                          Compensation      Underlying      LTIP           All Other
---------------------------   ----   -------------------   -----------
    Name and Principal               Salary    Bonus (1)   Options (2)   Payouts (3)   Compensation (4)
                              ----                         -----------
         Position             Year     ($)       ($)          (#)            ($)             ($)
---------------------------   ----   -------   ---------   -----------   -----------   ----------------
<S>                           <C>    <C>        <C>         <C>           <C>               <C>
Allen M. Hill                 2001   675,000         --            --            --          1,000
 President and Chief          2000   600,000    300,000     1,350,000     2,180,000          1,000
  Executive Officer           1999   550,000    462,000            --       525,000          1,000

Peter H. Forster (5)          2001   600,000         --            --            --         43,000
  Chairman                    2000   550,000    300,000     2,400,000     3,312,000         61,000
                              1999   500,000    250,000            --     1,130,000         84,000

Judy Wyatt (6)                2001   306,000         --            --            --          1,000
  Group Vice President        2000   294,000    100,000       525,000       500,000          1,000
                              1999   280,000    180,000            --            --          1,000

Stephen F. Koziar, Jr.        2001   302,000         --            --            --          1,000
  Group Vice President        2000   272,000    100,000       495,000     1,100,000          1,000
  And Secretary               1999   259,000    166,000            --       350,000          1,000

Elizabeth M. McCarthy (7)     2001   330,000         --       125,000            --          1,000
  Group Vice President and    2000   280,000    220,000       250,000       300,000          1,000
  Chief Financial Officer
</TABLE>

(1)  Amounts in this column represent awards made under the Management Incentive
     Compensation Program ("MICP"). Awards are based on achievement of specific
     predetermined operating and management goals in the year indicated and paid
     in the year earned or in the following year.

(2)  Amounts in this column represent a three-year block grant of stock options
     to the named executive under the DPL Inc. Stock Option Plan in lieu of
     awards under the Management Stock Incentive Plan ("MSIP"). Each executive
     was granted a number of option shares equal to three times the executive's
     earned Restricted Share Units ("RSUs") held in the Master Trust under the
     MSIP. See "Option Grants in Last Fiscal Year."

(3)  Amounts shown for 2000 include the dollar value of a one-time contingent
     award of RSUs approved by the Compensation Committee in 1999 which could be
     earned only if the closing price of DPL Inc. common shares on the NYSE
     Consolidated Transactions Tape achieved $26 per share between June 1999 and
     July 1, 2001. These RSUs were earned in 2000 and settled in cash.

     Amounts in this column for 1999 also represent annualized incentives earned
     by the named executive officer under a long-term incentive program for
     individuals managing all financial assets of DPL Inc. Incentives were
     earned based on net cumulative investment performance of such assets over
     the four-year period 1996 through 1999. For 2000, incentives were earned
     based on annual performance and include $100,000 for Mr. Hill, $1.232
     million for Mr. Forster and $100,000 for Mr. Koziar. In 2001, no incentives
     were awarded under this program.

(4)  Amounts in this column represent employer matching contributions on behalf
     of each named executive under the Company Employee Savings Plan made to the
     DPL Inc. Employee Stock Ownership Plan.

                                       50

<PAGE>

(5)  Annual compensation shown for Mr. Forster for 1999, 2000 and 2001 was paid
     pursuant to an agreement with DPL Inc. and the Company. All other
     compensation shown for 2001 represents the dollar value of the annual award
     of 1,500 shares to each non-employee director in lieu of directors fees,
     and for 2000 represents directors fees of $26,700 and the dollar value of
     the annual award of 1,500 shares to each non-employee director in lieu of
     directors fees and for 1999 represents directors fees of $37,000 and an
     award of 2,700 shares under the Directors' Stock Plan. Participation in the
     Director compensation program by Mr. Forster was terminated during the year
     2000.

(6)  Ms. Wyatt retired from the Company effective January, 1, 2002 after 22
     years of service. We offer our sincere appreciation to Ms. Wyatt and wish
     her well in her future endeavors.

(7)  Ms. McCarthy joined DPL Inc. in March 2000. Ms. McCarthy has an employment
     agreement with DPL Inc. which provides for annual base salary as determined
     by the Compensation Committee, participation in the MICP, a stock option
     grant, $100,000 signing bonus subject to forfeiture and severance benefits.

Option Grants in Last Fiscal Year

The following table sets forth information concerning individual grants of stock
options made to the named executive officers during the fiscal year ended
December 31, 2001.

<TABLE>
<CAPTION>
                                                Individual Grants
                             ---------------------------------------------------------
                               Number of
                               Securities       % of Total
                               Underlying     Options Granted   Exercise
                                Options       to Employees in     Price     Expiration       Grant Date
Name                         Granted (#)(1)      Fiscal Year    ($/Share)      Date      Present Value ($)(2)
----                         --------------   ---------------   ---------   ----------   --------------------
<S>                              <C>                <C>           <C>        <C>               <C>
Allen M. Hill   ..........            --            --               --           --                --
Peter H. Forster..........            --            --               --           --                --
Judy Wyatt     ...........            --            --               --           --                --
Stephen F. Koziar, Jr.....            --            --               --           --                --
Elizabeth M. McCarthy.....       125,000            98            27.12      6/19/11           437,500
</TABLE>

(1)  Options granted pursuant to the DPL Inc. Stock Option Plan on June 19,
     2001. These options vest in five cumulative installments of 20% on December
     31, 2002, 2003, 2004, 2005 and 2006 and become exercisable on January 1,
     2007.

(2)  The grant date present value was determined using the Black-Scholes pricing
     model. Significant assumptions used in the model were: expected volatility
     18.5%, risk-free rate of return 4.53%, dividend yield 3.64% and time of
     exercise 5.1 years.

                                       51

<PAGE>

Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End Option
Values

The following table sets forth information concerning each exercise of stock
options during fiscal 2001 by each of the named executive officers and the
fiscal year-end value of unexercised options.

<TABLE>
<CAPTION>
                                Shares
                               Acquired                Number of Securities Underlying   Value of Unexercised In-the-Money
                                  On       Value       Unexercised Options at Fiscal              Options at Fiscal
                               Exercise    Realized           Year-End (#)                          Year-End ($)(1)
           Name                   (#)         ($)
           ----                --------    --------    -------------------------------------------------------------------
                                                       Exercisable       Unexercisable      Exercisable      Unexercisable
                                                       -----------     ----------------     -----------      -------------
<S>                               <C>         <C>          <C>             <C>                                 <C>
Allen M. Hill .............       --          --           --              1,350,000            --             4,158,000
Peter H. Forster ..........       --          --           --              2,400,000            --             7,392,000
Judy Wyatt ................       --          --           --                210,000            --               646,800
Stephen F. Koziar, Jr .....       --          --           --                495,000            --             1,524,600
Elizabeth M. McCarthy .....       --          --           --                375,000            --               770,000
</TABLE>

(1)  Unexercised options were in-the-money if the fair market value of the
     underlying shares exceeded the exercise price of the option at December 31,
     2001.

Change in Control Agreements

DPL Inc. has in place agreements with each of Mr. Hill, Mr. Koziar and Ms.
McCarthy providing for the payment of benefits upon the consummation of a change
in control of DPL Inc. or the Company (generally, defined as the acquisition of
50% or more of the voting securities (15% or more without board approval) or
certain mergers or other business combinations). The agreements require the
individuals to remain with DPL Inc. throughout the period during which any
change of control transaction is pending in order to help put in place the best
plan for the shareholders. The principal benefits under each agreement include
payment of the following: (i) 300% of the sum of the individual's annual base
salary at the rate in effect on the date of the change in control plus the
average amount paid to the individual under the MICP for the three preceding
years; (ii) all awarded or earned but unpaid RSUs; and (iii) continuing medical,
life, and disability insurance. In addition, upon termination of the
individual's employment under specified circumstances during the pendency of a
change of control, the individual is entitled to receive the individual's full
base salary and accrued benefits through the date of termination and the
individual's award for the current period under the MICP (or for a completed
period if no award for that period has yet been determined) fixed at an amount
equal to his average annual award paid for the preceding three years. In the
event any payments under these agreements are subject to an excise tax under the
Internal Revenue Code of 1986, the payments will be adjusted so that the total
payments received on an after-tax basis will equal the amount the individual
would have received without imposition of the excise tax. The agreements are
effective for one year but are automatically renewed each year unless DPL Inc.
or the participant notifies the other one year in advance of its or his or her
intent not to renew. DPL Inc. is obligated at the time of a change of control to
fund its obligations under the agreements and under the Directors' and Officers'
Compensation Plans by transferring required payments to a grantor trust (the
("Master Trust"). Mr. Forster's agreement with DPL Inc. and the Company contains
similar benefits provisions.

                                       52

<PAGE>

Pension Plans

The following table sets forth the estimated total annual benefits payable under
the Company retirement income plan and the supplemental executive retirement
plan to executive officers at normal retirement date (age 65) based upon years
of accredited service and final average annual compensation (including base and
incentive compensation) for the three highest years during the last ten:

                          Total Annual Retirement Benefits for
                         Years of Accredited Service at Age 65
 Final Average           --------------------------------------
Annual Earnings          10 Years      15 Years     20-30 Years
---------------          --------     ---------     -----------
$   200,000              $ 51,500      $ 77,500       $103,000
    400,000               108,500       163,000        217,000
    600,000               165,500       248,500        331,000
    800,000               222,500       334,000        445,000
  1,000,000               279,500       419,500        559,000
  1,200,000               336,500       505,000        673,000
  1,400,000               393,500       590,500        787,000

The years of accredited service for the named executive officers are Mr. Hill --
32 yrs.; Mr. Koziar -- 32 yrs.; Ms. Wyatt -- 22 yrs. and Ms. McCarthy -- 19 yrs.
Benefits are computed on a straight-life annuity basis, are subject to deduction
for Social Security benefits and may be reduced by benefits payable under
retirement plans of other employers. Mr. Forster ceased to accrue benefits under
the retirement plans effective upon his retirement as an employee of DPL Inc.
and the Company.

Participation in the supplemental plan has been terminated for all executive
officers and the benefits enumerated above reduced by 21%. The present value of
each individual's accrued benefit under the supplemental plan, determined by DPL
Inc.'s actuary, was transferred to a deferred payment account.

Item 12 - Security Ownership of Certain Beneficial Owners and Management
--------------------------------------------------------------------------------

The Company's stock is actually owned by DPL Inc.

Item 13 - Certain Relationships and Related Transactions
--------------------------------------------------------------------------------

     None.

                                       53

<PAGE>

PART IV

Item 14 - Exhibits, Financial Statement Schedule and Reports on Form 8-K
--------------------------------------------------------------------------------

     (a)  Documents filed as part of the Form 10-K

1.   Financial Statements
     --------------------

See Item 8 - Index to Consolidated Financial Statements on page 23, which page
is incorporated herein by reference.

2.   Financial Statement Schedule
     ----------------------------

For the three years in the period ended December 31, 2001:

                                                              Page No.
                                                              -------

Schedule II - Valuation and qualifying accounts                 60

The information required to be submitted in Schedules I, III, IV and V is
omitted as not applicable or not required under rules of Regulation S-X.

                                       54

<PAGE>

3.   Exhibits
     --------

The exhibits filed as a part of this Annual Report on Form 10-K are:

<TABLE>
<CAPTION>
                                                                                      Incorporated Herein by
                                                                                     Reference as Filed With
                                                                                  -----------------------------
<S>       <C>                                                                     <C>
2(a)      Copy of the Agreement of Merger among DPL Inc., Holding Sub Inc. and    Exhibit A to the 1986
          the Company dated                                                       Proxy Statement
          January 6, 1986......................................................   (File No. 1-2385)

2(b)      Copy of Asset Purchase Agreement, dated December 14, 1999 between The   Exhibit 2 to Report on Form
          Dayton Power and Light Company, Indiana Energy, Inc., and               10-Q for the quarter ended
          Number-3CHK, Inc.....................................................   September 30, 2000 (File No. 1-2385)

3(a)      Regulations and By-Laws of the Company...............................   Exhibit 2(e) to Registration
                                                                                  Statement No. 2-68136 to Form
                                                                                  S-16

3(b)      Copy of Amended Articles of Incorporation of the Company dated          Exhibit 3(b) to Report on
          January 3, 1991......................................................   Form 10-K for the year ended
                                                                                  December 31, 1991 (File No.1-2385)

4(a)      Copy of Composite Indenture dated as of October 1, 1935, between the    Exhibit 4(a) to Report on
          Company and The Bank of New York, Trustee with all amendments through   Form 10-K for the year ended
          the Twenty-Ninth Supplemental Indenture..............................   December 31, 1985 (File No.1-2385)

4(b)      Copy of the Thirtieth Supplemental Indenture dated as of March 1,       Exhibit 4(h) to Registration
          1982, between the Company and The Bank of New York, Trustee..........   Statement No. 33-53906

4(c)      Copy of the Thirty-First Supplemental Indenture dated as of             Exhibit 4(h) to Registration
          November 1, 1982, between the Company and The Bank of New York,         Statement
          Trustee..............................................................   No. 33-56162

4(d)      Copy of the Thirty-Second Supplemental Indenture dated as of            Exhibit 4(i) to Registration
          November 1, 1982, between the Company and The Bank of New York,         Statement
          Trustee..............................................................   No. 33-56162

4(e)      Copy of the Thirty-Third Supplemental Indenture dated as of December    Exhibit 4(e) to Report on
          1, 1985, between the Company and The Bank of New York, Trustee.......   Form 10-K for the year ended
                                                                                  December 31, 1985 (File No.1-2385)
</TABLE>

                                       55

<PAGE>

<TABLE>
<S>       <C>                                                                     <C>
4(f)      Copy of the Thirty-Fourth Supplemental Indenture dated as of April 1,   Exhibit 4 to Report on Form
          1986, between the Company and The Bank of New York, Trustee..........   10-Q for the quarter ended
                                                                                  June 30, 1986 (File No.1-2385)

4(g)      Copy of the Thirty-Fifth Supplemental Indenture dated as of December    Exhibit 4(h) to Report on
          1, 1986, between the Company and The Bank of New York, Trustee.......   Form 10-K for the year ended
                                                                                  December 31, 1986 (File No.1-9052)

4(h)      Copy of the Thirty-Sixth Supplemental Indenture dated as of             Exhibit 4(i) to
           August 15, 1992, between the Company and The                           Registration
          Bank of New York, Trustee ...........................................   Statement No. 33-53906

4(i)      Copy of the Thirty-Seventh Supplemental Indenture dated as of           Exhibit 4(j) to
          November 15, 1992, between the Company and The Bank of New York,        Registration Statement
          Trustee..............................................................   No. 33-56162

4(j)      Copy of the Thirty-Eighth Supplemental Indenture dated as of November   Exhibit 4(k) to Registration
          15, 1992, between the Company and The Bank of New York, Trustee......   Statement No. 33-56162

4(k)      Copy of the Thirty-Ninth Supplemental Indenture dated as of January     Exhibit 4(k) to Registration
          15, 1993, between the Company and The Bank of New York, Trustee......   Statement No. 33-57928

4(l)      Copy of the Fortieth Supplemental Indenture dated as of February 15,    Exhibit 4(m) to Report on
          1993, between the Company and The Bank of New York, Trustee..........   Form 10-K for the year ended
                                                                                  December 31, 1992 (File No.1-2385)

4(m)      Copy of the Forty-First Supplemental Indenture dated as of February     Exhibit 4(m) to Report on
          1, 1999, between the Company and The Bank of New York, Trustee.......   Form 10-K for the year ended
                                                                                  December 31, 1998 (File No.1-2385)

10(a)     Copy of Directors' Deferred Stock Compensation Plan amended December    Exhibit 10(a) to Report on
          31, 2000.............................................................   Form 10-K for the year ended
                                                                                  December 31, 2000 (File No.1-2385)

10(b)     Copy of Directors' Deferred Compensation Plan amended December 31,      Exhibit 10(b) to Report on
          2000.................................................................   Form 10-K for the year ended
                                                                                  December 31, 2000 (File No.1-2385)
</TABLE>

                                       56

<PAGE>

<TABLE>
<S>       <C>                                                                     <C>
10(c)     Copy of Management Stock Incentive Plan amended December 31, 2000....   Exhibit 10(c) to Report on
                                                                                  Form 10-K for the year ended
                                                                                  December 31, 2000 (File No.1-2385)

10(d)     Copy of Key Employees Deferred Compensation Plan amended December 31,   Exhibit 10(d) to Report on
          2000.................................................................   Form 10-K for the year ended
                                                                                  December 31, 2000 (File No.1-2385)

10(e)     Form of Change of Control Agreement with Certain Executive              Exhibit 10(e) to Report on
          Officers............................................................    Form 10-K for the year ended
                                                                                  December 31, 2000 (File No.1-2385)

10(f)     Copy of Stock Option Plan............................................   Exhibit 10(f) to Report on
                                                                                  Form 10-K for the year ended
                                                                                  December 31, 2000 (File No.1-2385)

18        Copy of preferability letter relating to change                         Exhibit 18 to Report on Form
          in accounting for unbilled revenues from Price Waterhouse LLP........   10-K for the year ended
                                                                                  December 31, 1988 (File No.1-2385)

21        Copy of List of Subsidiaries of the Company..........................   Filed herewith as Exhibit 21
                                                                                  on page 61
</TABLE>

     (b)  Reports on Form 8-K
          -------------------

          None.

                                       57

<PAGE>

                                   SIGNATURES

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

                               THE DAYTON POWER AND LIGHT COMPANY

                               Registrant


March 28, 2002                            /s/ Elizabeth M. McCarthy
                               -------------------------------------------------
                                            Elizabeth M. McCarthy
                               Group Vice President and Chief Financial Officer
                                        (principal financial officer)


March 28, 2002                                /s/ Allen M. Hill
                               -------------------------------------------------
                                                 Allen M. Hill
                                    President and Chief Executive Officer
                                        (principal executive officer)

                                       58

<PAGE>

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated.


 /s/ T. J. Danis         Director                                March 28, 2002
----------------------
  (T. J. Danis)

                         Director                                 March 28, 2002
----------------------
(J. F. Dicke, II)


 /s/ P. H. Forster       Director and Chairman                    March 28, 2002
----------------------
 (P. H. Forster)


 /s/ E. Green            Director                                 March 28, 2002
----------------------
   (E. Green)


 /s/ J. G. Haley         Director                                 March 28, 2002
----------------------
  (J. G. Haley)


 /s/ A. M. Hill          Director, President and Chief            March 26, 2002
----------------------   Executive Officer
  (A. M. Hill)


                         Director                                 March 28, 2002
----------------------
W A. Hillenbrand)


 /s/ D. R. Holmes        Director                                 March 28, 2002
----------------------
 (D. R. Holmes)


 /s/ B. R. Roberts       Director                                 March 28, 2002
----------------------
 (B. R. Roberts)


                         Director                                 March 28, 2002
----------------------
 (G. R. Roberts)


                         Director                                 March 28, 2002
----------------------
 (S. M. Stuart)


 /s/ E. M. McCarthy      Group Vice President and Chief           March 28, 2002
----------------------   Financial Officer (principal financial
(E. M. McCarthy)         officer)


 /s/ W. A. Garrett       Controller                               March 28, 2002
----------------------
 (W. A. Garrett)

                                       59

<PAGE>

Schedule II

                       The Dayton Power and Light Company
                        VALUATION AND QUALIFYING ACCOUNTS

              For the years ended December 31, 2001, 2000, and 1999

($ in thousands)

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------
                 COLUMN A                      COLUMN B         COLUMN C       COLUMN D     COLUMN E
-----------------------------------------------------------------------------------------------------

                                                               Additions
                                                            ---------------
                                              Balance at    Charged                        Balance at
                                             Beginning of     to              Deductions     End of
           Description                          Period       Income   Other      (1)         Period
-----------------------------------------------------------------------------------------------------
<S>                                             <C>         <C>        <C>      <C>          <C>
2001:
Deducted from accounts receivable--

   Provision for uncollectible accounts...      $6,847      $11,759    $--      $6,161       $12,445

2000:
Deducted from accounts receivable--

   Provision for uncollectible accounts...      $4,332      $ 9,115    $--      $6,600       $ 6,847

1999:
Deducted from accounts receivable--

   Provision for uncollectible accounts...      $4,657      $ 5,171    $--      $5,496       $ 4,332
</TABLE>

(1)  Amounts written off, net of recoveries of accounts previously written off.

                                       60